Stamp Duty relief not extended for buyers – what you need to know before rules change
In Labour’s first Budget since taking office, the Chancellor announced her plans to fix the so-called ‘black hole’ in the UK’s public finances and increase investment in public services, setting out £40 billion worth of tax rises.
While changes to stamp duty did form part of her plans, an extension or permanent change to stamp duty relief for movers and first-time buyers was sadly not included. So, what does this mean for those looking to move or buy?
What is stamp duty?
Stamp Duty Land Tax (SDLT) is the tax you pay when you buy a property or piece of land. How much you pay depends on the value of the property, whether it is your first home or if you own any other property. It is also a devolved tax, meaning costs and bandings are slightly different in Scotland and Wales as they are able to set their own rules.
How much is stamp duty now?
Currently, if you buy a property worth less than £250,000, you do not have to pay stamp duty. This was doubled from £125,000 by Liz Truss in the mini-budget. At the same time, the threshold was also raised for first-time buyers, meaning they do not pay stamp duty on purchases of up to £425,000.
This discount is due to end on the 31st March 2025, with many hoping the Chancellor would make this permanent in the Budget, or at the very least extend the relief. This sadly was not the case and the thresholds will now revert back.
What is changing?
With the thresholds returning to £125,000 and to £300,000 for first-time buyers, stamp duty will be charged at 5% on any amount above this. If you buy a house for £250,000 for example in April 2025, you will pay stamp duty on the additional £125,000. For first-timers, it is on the amount above the £300,000 threshold.
According to research by Leeds Building Society, the move will mean that stamp duty will be paid on 93% of properties for sale in England, and will cost house buyers up to £2,500 - according to The Times.
What does this mean for buyers?
For those looking to avoid paying this extra tax, purchases need to be completed before the end of March 2025. While this date may seem far away now, it’s important to remember that transactions can take from 6 weeks to 6 months to complete.
As we have seen previously with other stamp duty deadlines, the rush of buyers all looking to complete can gum up the house buying process and place additional pressures on the wider chain and key government departments, such as HM Land Registry. For those intending to buy, the advice would be to bring forward your moving plans to avoid any delay or disappointment.
For those looking to move or buy, staying on top of changes to the likes of stamp duty is really important, especially as it could help bring down the cost of your overall move. No matter your situation, mortgage and protection advisers are best placed to help you explore the options available and answer any questions you may have about stamp duty.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 31/10/24.
Here's how financial protection can offer security for parents
Serious illness can place immense stress on our families. The cost of caring for an unwell child, worry over access to essential services, and the emotional toll of serious illness are all things that no parent wants to think about.
We can’t predict what the future will hold for the health of our families, but we can take proactive steps to prepare for the risk that we or our children might become critically unwell.
Appropriate financial protection can be a vital safety net for parents, providing essential cover for children and easing the pressure of caring for them.
Critical illness payouts can help you care for your child
No parent wants to consider the possibility of their child becoming seriously ill, but planning for the worst can offer the greatest peace of mind. Robust and appropriate financial protection can help shore up your finances and allow you to focus on caring for your child.
Critical illness cover pays out a lump sum if you are diagnosed with an illness covered by the policy. Many of these policies include cover for a child of the policyholder, paying out a proportion of the full amount if they become seriously ill. This payout provides a financial safety net, covering your expenses and allowing you to take time away from work to care for your child.
Critical illness cover may also come with other benefits that can offer further support for your family, such as:
- A payout if your child is hospitalised because of an accident.
- Cover for the cost of accommodation so that you can be close to your child if they’re in hospital.
- Childcare costs if you’re diagnosed with a serious illness that’s covered by your policy.
The cost of critical illness cover varies depending on how large you want a potential payout to be, as well as other factors like your age and general health. It’s important to note that you’ll only be covered as long as you keep paying your premiums.
Children are often automatically included in critical illness cover but this isn’t guaranteed. Contact your provider for clarification and be aware that your premiums could rise if you add a child to a policy that doesn’t already cover them.
Cover for a child typically starts from the first few weeks after birth and lasts until they’re 18, or 21 if they’re in full-time education, but this can vary between providers. There may be other restrictions to critical illness cover that you should be aware of – some policies will only allow one claim per child whilst others might exclude certain conditions that are present from birth.
It’s important to check the details of critical illness cover thoroughly when comparing your option to make sure that you’re buying the right cover for your circumstances.
Private medical insurance could help provide better care for your family
You may want to consider taking out private medical insurance to complement the security that financial protection could offer you. The Guardian reports that the private health insurance market has grown by £385 million in the last year. At the same time, rising wait times and staff shortages are causing public satisfaction with the NHS to slump according to the long-running British Social Attitudes survey.
Private medical insurance can help to put your mind at ease by reducing waiting times for a range of services (like tests and consultations) whilst giving you a wider choice of treatment providers. It could also help to cover the cost of a private room, giving you and your family greater privacy if you need to stay in hospital overnight.
Private health insurance can cover much more than just physical illness. Some providers offer access to counselling and mental health services which are becoming increasingly important for the wellbeing of younger generations – the number of children and young people seeking support for their mental health increased by 25% from 2022 to 2023 according to data from Aviva.
The cost of private health insurance and the level of cover you’ll receive are influenced by a range of factors, including who you want the policy to cover, your lifestyle, and family medical history. It’s important to take the time to understand how comprehensive your options are and any exclusions that might affect your family.
Talk to us to see how we can help protect your family
Financial protection is just one way that you can prepare for the unexpected. Get in touch if you’d like to know more about financial protection for your family against serious illness.
Please note: Financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. Cover will lapse if premiums are unpaid. Cover is subject to terms and conditions and may have exclusions. Definition of illnesses vary between providers and will be explained in policy documentation.
OW5421
Expires - 16 Jun 2025
Approved by The Openwork Partnership on 17/06/2024.
Should I consider private medical insurance?
Life can be full of surprises. You can’t be prepared for everything. You may have some insurance to support you financially if the unexpected happens, but have you considered how private medical insurance might offer you and your family the peace of mind you need if your health takes a turn for the worst?
A growing trend
According to data published by The Telegraph, close to half a million people have taken out private medical insurance over the past year, as NHS waiting lists hit record levels this autumn. According to government statistics almost 7.8 million people were waiting to start routine hospital treatment in September 2023.
Against this backdrop, it’s hardly a surprise that more people than ever are considering the benefits of private medical insurance including faster access to medical treatment for themselves and their families.
It’s not just speed of access, it’s also about the quality of care you receive, the flexibility of choosing where and when you would like to receive treatment, and the range of treatments, medicines, facilities and consultants available to you. Cost-restrictions in an already stretched NHS mean that not all breakthrough treatments are accessible. With private medical insurance you can sleep easy, safe in the knowledge that the very best care is available.
It’s more affordable than you think
Avoiding lengthy waits for treatment and quality of care are just two of the biggest attractions of taking a route which has traditionally been seen as too expensive for most. But through our specially selected health insurance partner we can help you find the right policy for your budget. If you already have private medical insurance, we may be able to find you cheaper premiums for your circumstances, and all with a free no obligation quote.
The pandemic provided a reminder to us all of just how precious good health is – and acted as a reset for many. Health became a priority, and continues to be so. Spending money on private medical insurance may not have previously been a priority but protecting you and your family over the long-term means a growing number of people are taking the time to consider a more proactive approach to getting the treatment they may need.
We love our NHS but we know the pressure it’s under
We have nothing but respect for the hard-working and talented individuals who make the NHS what it is. But we also know that the service that has given so much to so many is under unprecedented pressure. We also know that there is often a faster and better alternative.
We can make sure you get all the information you need to decide whether private health insurance is the right option for you.
Approved by The Openwork Partnership on 30/10/2023
5 Practical Ways To Protection Your Money During The Cost Of Living Crisis
With inflation at its highest level in 41 years and energy prices skyrocketing, the cost of living crisis has dominated headlines since inflation began to creep up from historic lows in mid-2021. While the Covid pandemic began the inflationary increase, this was further exacerbated by the war in Ukraine pushing up energy and food prices even further. Following such an extended period of price rises, you may be concerned about your household finances and long-term plans. So, here are five ways to protect your finances during the cost of living crisis.
01 Review your budget and personal inflation rate
Reviewing your spending will clarify where your money is going and highlight potential areas to cut costs and make savings. Despite a lot of noise about inflation and its impact on UK households, the good news is that your personal rate of inflation depends on how you spend your money. It won’t necessarily match the official inflation rate and so changing your spending habits can help bring it down. For example, since much of the rise in prices has been caused by soaring fuel prices, your personal inflation rate may be lower than the average if you don’t drive or own a car. Recently, energy prices have also risen significantly. However, if your home is especially energy-efficient, you may use less energy than an average household.
This could bring your personal inflation rate below the average. You can use an online calculator – such as this one from the ONS website https://www.ons.gov.uk/visualisations/dvc1833/calculator/index.html to help you work out your personal inflation rate online.
02 Manage debt
Higher interest rates mean increased borrowing costs. So, check the rates and see if you can reduce the interest you’re paying. Focus on repaying credit card debt first. Credit cards typically charge high levels of interest and the negative compounding effects can be difficult to escape.
If you have high credit card debt, transferring to a limited-period nil-interest rate account could help you repay the debt sooner.
03 Ensure your savings are working hard for you
Around £160 billion in savings accounts pay less than 0.5% interest, so it’s worth shopping around for higher interest rates on your savings. Alternatively, the Insignis cash management solution can help you secure some of the best cash savings rates. As interest rates change, our cash management solution moves your money to secure optimal rates. The one-time sign-up is quick and easy to set up, plus you’ll never need to open or close another account again.
04 Resist the temptation to dip into your investments or stop saving for your future
You may be tempted to dip into your pension or investments to tide you over but consider the long-term effect on your retirement plans. Selling investments or drawing from your pension could leave you worse off in the long run, so assess every option before you act. It’s important to continue to pay your future self first, too; be sure to maintain regular, tax-efficient contributions to your pension and ISAs.
05 Remember your long-term financial plan
Making rash financial decisions during the current crisis could jeopardise your long-term financial security. If you’re worried about the rising costs of living and what you can do to protect your short and long-term financial plans, we can help.
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both.
The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Figures quoted correct as of 02.10.2023
Get in touch
If you’re worried about the rising cost of living and would like to discuss ways to protect your finances from the effects of inflation, we’re here to help. Please get in touch to arrange a time to chat.
Approved by The Openwork Partnership on 04.04.2023
Is now a good time to remortgage as the Bank of England base rate stays the same?
Whilst the Bank of England base rate remains the same, interest rates are still the highest they have been in 15 years. So if you are one of the thousands coming to the end of your fixed rate deal over the next few months it’s very likely you’ll see your payments increase as a result of higher mortgage rates but it’s a common misunderstanding that the Bank of England base rate is directly linked to the mortgage rates on offer. There are many factors that determine mortgage rate pricing.
Lots of factors determine mortgage pricing – not just interest rates
Even though the base-rate hasn’t changed, we have seen interest rates steadily increasing and it’s likely you will have noticed that mortgage lenders have been decreasing their rates slightly. This is because mortgage lenders use a number of factors to determine mortgage rates and one of these is something called ‘swap rates’ which lenders use to reflect expectations for future interest rates.
Consequently, many mortgage lenders have already priced the latest base-rate increases or non-movement into their rates so the impact on new mortgage deals is likely to be minimal.
In addition, after the UK annual rate of inflation reached 11.1% in October 2022, a 41-year high, it has been falling ever since and this gives banks and building societies more confidence that interest rates could fall in the longer term.
We can help you navigate the mortgage market
If you need to remortgage, we can help you navigate the mortgage market effectively. We continuously monitor the mortgage and wider financial market and can compare a huge range of lenders and mortgages on your behalf, finding a solution that’s completely tailored to your needs.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Approved by The Openwork Partnership on 21/09/2023
A little change you can make today can safeguard your biggest investment - your home
If you’re a homeowner, your mortgage payments are likely to take up a large part of your income each month.
You’ve made sure that your loved-ones will have financial protection to cover the mortgage you leave behind if you were to die with life insurance but what about if you became seriously ill or injured, and unable to work? Would you be able to keep up your mortgage repayments?
Statistically, you’re much more likely to be diagnosed with a critical illness than die during your working life. For example, a man aged 40 is 4.1 times more likely to be diagnosed with a critical illness than die before retiring at 65 years old.
As buying a home is likely to be your biggest investment, it pays to protect yourself, so you’re covered should you die as well as if you become too ill to work.
We know the little things in life can be life-changing. It could be a phone call from the doctor with serious news about your health, or a stepladder that wobbled once too often when you were standing on it – serious illness and injury can happen when we’re least expecting it.
How would you pay your mortgage if you were too ill to work?
There are different types of insurance available which can provide financial protection. These include income protection which provides a monthly income if you’re too ill to work and critical illness which pays out a tax-free lump sum if you’re diagnosed with a specific serious illness or injury.
It will be a huge relief to you and your loved-ones to know that you will still be able to pay your mortgage and other essential bills if you are too ill to work, leaving you to focus on what’s important – getting better.
Here’s one little thing you can do to protect your financial future, so get in touch with an adviser from Clear Vision Financial Services today
Your different options can be discussed with your adviser – so you can make sure you have the right protection in place for you and your family.
Call Sophie on 07860 353 014 or drop them an email on sophie.grose@theopenworkpartnership.com
Approved by The Openwork Partnership on 11/07/2023.
In this blog, we'll debunk five misconceptions about investing.
Understanding investments can be daunting, and there are several myths that are likely to put you off if you are new to investing. In this blog, we'll debunk five misconceptions about investing. By unravelling these myths, you'll gain a clearer perspective on how to navigate the world of finance and make informed investment decisions.
You need to be wealthy
You can invest with less than you may think. Making small regular investments can provide more benefits than investing a lump sum. You can invest a small amount into the markets every month. One big benefit of investing a small regular sum is that, instead of saving your cash until you have a lump sum, you're putting your money to work straightaway. Even with rising interest rates, leaving money sitting in a bank account can be less profitable than investing it in the market.
It’s too much of a risk
With any type of investment, there is a risk of losing your money. It’s all a balance between risk and reward, meaning the greater the risk, the greater the potential reward. If you understand the risks involved and the level of risk you’re comfortable with, you’ll be able to make an educated decision as to whether it’s worthwhile.
You need to know the best time to buy
Most people think you need to invest when stocks are low and sell when they’re high, but there are so many factors that can change the stock market, it’s pretty much impossible to predict the outcome. The best thing to do is start investing as soon as you can for as long as you can. There may be fluctuation, some good and some bad, but the longer you’re able to hold onto your investment, the more time you’ll have to recover from any lows.
Your money will be inaccessible
It is true that the longer you keep your money invested, the more chance you have of making a return, however this doesn’t have to mean your money is inaccessible. There are lots of investment options where you can access your money at any time. You should leave your investments untouched for them to have the most potential, but should a situation arise where you may need your funds, you will be able to access them.
You have to monitor your investments everyday
Checking your investments every day can lead to risky decisions such as changing investments or withdrawing funds altogether. Investments usually span over a long period of time, so it’s best not to make potentially harmful decisions based on short-term market performance. If you’re opting for a low-risk investment, you won’t need to check it often. It’s recommended to monitor your investments every three months just to see how they’re doing.
Get in touch
If you’re interested in finding out more about how you could invest your money wisely, we’re here to help.
The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
Past Performance is not a guide to future performance and should not be relied upon.
Approved by The Openwork Partnership on 30/06/2023
Lenders encouraged to support struggling borrowers
Banks and Building Societies have been encouraged by Chancellor Jeremy Hunt to offer more flexibility to struggling mortgage holders. Following a meeting with the Chancellor, banks and building societies have agreed to offer more flexibility to borrowers impacted by increasing rates and struggling with payments, including:
- Being able to talk to their mortgage lender about their ability to afford payments with it having no impact whatsoever on their credit score
- Switching to interest-only for six months without impacting credit score
- Implementing a 12-month minimum before repossessing homes
Mr Hunt said that lenders agreed to allow struggling borrowers to extend the term of their mortgages or move to an interest-only plan temporarily "no questions asked".
The meeting between the Chancellor and lenders follows the recent decision by the Bank of England to increase its Base Rate to 5.00%, up from 4.5% as the Bank tries to tackle inflation. Millions of UK households will see their budget squeezed as a result.
If the interest rate rises or the cost of living are causing you concern about your repayments, you should speak directly to your lender. We’re also here to help offer advice and guidance when you need it.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Approved by The Openwork Partnership on 30/06/2023
Expiry 30/09/2023