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  • I was reading an interesting article recently about how technological change has always historically seen a struggle between fear and hope.

    When we think of technology, we tend to think of electronic devices such as computers, mobile phones, tablets, TVs and the like. However, as far back as four hundred years ago, technology was seen with as much fear as some have with the latest electronic gadgets today.

    In fact, you may be surprised to learn that in 1589, the first stocking knitting frame was denied a patent by the then Queen, Elizabeth I, on the grounds it would threaten existing hosiers and bring them ruin by depriving them of employment.

    At the time trains were invented, physicians issued stark health warnings as they believed that seeing and even breathing may be difficult for our bodies that weren't used to such velocity!

    When the first electric light bulbs were introduced, The New York Times warned customers that they may go blind. Of course, this wasn't the case and it seems unbelievable now how many people believed this at the time.

    The New York Times also published an article in 1985, at the start of the computer generation, adamant that people would never want to lug a computer to the beach or on a train let alone wanting to fritter away hours looking at it as people would rather read a newspaper! Jump forward to today and technology forms many people's everyday lives especially since smartphones were invented. Many people now read the news on their phone and can do so at home, on the beach or on the train. We can also use it for online shopping, banking and keeping in touch with family, friends and work.

    As technology has advanced so much, societal fears now tend to be more aimed at identity theft and identity fraud with cybercrime becoming more and more heard of.

    I attended a security seminar recently and was surprised to learn that the most common method of identity fraud actually occurs via post with email following in second place. Identity fraud is something that we at Financial Management Bureau are very aware of and are taking further steps to address. Our client's data and confidentiality are of the utmost priority to us, so later this year we are introducing a new web portal call PFP (Personal Finance Portal) that will allow messages and documents to be sent back and forth securely. It is fully encrypted and will give that added reassurance to our clients when sending emails and also to those who prefer to receive documents electronically rather than by post.

    The portal also has a lot of other features that our clients can utilise too, such as live valuations of their portfolio, net worth, achievements of financial goals against objectives as well as the ability to update any of their personal data. There is also an option if they wish, to securely link it to their credit cards and bank accounts so that they can see all of their money in one place and assess their spending against any specific budgeting that they may have.

    Of course, the web portal will not be for everyone and we will continue to deal with our clients in the way they are most comfortable with. But rest assured, Financial Management Bureau are always looking for new and improved ways to bring value and reassurance to our clients and minimise any fear they may have with the ever changing world of technology.

  • ‘Second Measure’ the tapes confirm the blue bowl belonging to Dan Varcoe wins this end. Dan goes on to win the semi against no 2 seed Martin Gilpin of Kendal.
    Caption: ‘Second Measure’ the tapes confirm the blue bowl belonging to Dan Varcoe wins this end. Dan goes on to win the semi against no 2 seed Martin Gilpin of Kendal.
    Eventual Winner Mark Ashburn closely scrutinises his Holme club mate Dan Varcoe in the final.
    Caption: Eventual Winner Mark Ashburn closely scrutinises his Holme club mate Dan Varcoe in the final.

    The Kendal and District Bowling League began on Sunday 3rd April with the third annual FMB sponsored Super 32 competition, hosted by Burneside Bowing Club. The 32 invited players had been selected from their successes in 2015 across all divisions of the KDBL - and they did not disappoint! With the sun shining there were excellent matches from the start. Two of note were Steve Carruthers Windermere A seeded 7 against fellow club mate Chris West Windermere C - last year’s Division Five merit winner, Steve just pulling away at the end of the match 21:19. Also Andrew Atkinson Staveley A Division Two merit place against Ian Nicholson Victoria A and number 1 seed. Andrew played some excellent bowls ending up losing 18:21 against the more experience Ian.

    The standard of bowling did not diminish all through the day, culminating in excellent semi-finals. Dan Varcoe Holme A seeded 3 against Martin Gilpin Victoria A seeded 2; the game went to the last end with Dan Varcoe just pinching the last point. Similarly, Mark Ashburn Holme A seeded 4 played James Dennison Levens A seeded 9 battling to the end, just a couple of doubles in the middle of the game separated these two. In the end, Mark won 21:19.

    After such intense semi-finals, the players did not fail to produce more fine form in the final. With both finalists being teammates at Holme A the final proceeded to be a nip and tuck affair with the lead changing hands many times. However, Mark managed to edge away in the last couple of ends to win 21:18.

    Thanks were given to Burneside Bowling Club for hosting the event and to FMB, who sponsor the event. Another excellent start to the Kendal and District Bowling League season with league matches due to start on Tuesday 5th.

  • Angela Nottingham
    Caption: Angela Nottingham

    On 16th March 2016, Chancellor George Osborne presented his Budget to the House of Commons.

    He confirmed that the UK economy is showing slower growth than he anticipated since his Autumn statement.

    The Office for National Statistics has revised down the UK’s GDP forecast and thus the government’s potential tax base. This has left Mr Osborne with the need to find further revenue raisers and some spending cuts.

    He confirmed the world outlook has also slowed down and “the world is now more uncertain”.

    In short, the Budget has provided the UK population with a few tax tweaks, but no major shocks.

    I would like to highlight some of the changes and how these might affect you/our clients.

    Flood Victims

    There is to be a 0.5% increase in Insurance Premium Tax, which was also raised in November 2015. This additional revenue is expected to raise £700 million which will be allocated to Flood defences. Around half of this sum is to be allocated to Cumbria and as the majority of FMB’s clients live in Cumbria, this is welcome and reassuring news.

    Income Tax

    The personal allowance will be increasing to £11,000 from 6th April 2016. Any income above this amount will be liable to income tax. The threshold will increase to £11,500 from April 2017, with the aim of reaching £12,500 by 2020. This announcement will benefit all of our clients.

    In addition the higher rate tax threshold has been increased to £45,000, reducing the number of people who pay high rate tax.

    Capital Gains Tax

    For disposals on or after 6th April 2016, the highest rate of Capital Gains Tax (CGT) for individuals will reduce from 28% to 20%, and the basic rate will be reduced from 18% to 10%. CGT paid by Trustees will also reduce from 28% to 20%. Careful planning by our Financial Planners and regular use of the annual exempt amount should deliver long term tax efficiency for both FMB’s clients and Trustees.

    This reduction should benefit many of FMB’s clients. However, for those clients who rent out properties, which do not qualify for Private Residence Relief, the CGT will continue to be taxed at 28% and 18%.

    Inheritance Tax

    Although Inheritance Tax was not mentioned in this particular Budget, the current nil rate band will remain frozen at £325,000 until April 2021. As announced in the Summer 2015 Budget, an additional nil rate band will apply where a residence is passed on death to a direct descendant.

    Nevertheless, these thresholds are still very low and as many of our clients have an Inheritance Tax ‘problem’ it is even more important they see their FMB Financial Planner, who can arrange suitable ways of mitigating this tax liability.

    Pension Plans

    With a sigh of relief, there were no major changes to pension legislation. Prior to this Budget there were concerns in the Financial Services Industry that Mr Osborne might reduce the tax advantages of pension schemes. This would have been very unpopular and therefore pensions continue to remain a suitable tax efficient method of saving for retirement for many FMB clients.

    ISAs

    Most of FMB’s clients use their annual tax free ISA allowance, currently £15,240 per individual. There will be a welcome and significant increase to £20,000 a year from April 2017. Hence our clients will be able to shelter more of their assets from income and capital gains tax.

    For those clients, aged 18 to 40, there is to be a new Lifetime ISA with a limit of £4,000 per year. This ISA will enable investors to use the capital to either purchase their first home or use for their retirement. The capital can be withdrawn without penalty for a person’s first house purchase. Otherwise the capital cannot be accessed until age 60.

    Unlike standard ISA’s the government will pay in £1 for every £4 the individual contributes, up to a maximum of £1,000 per year. If the investor encashes the ISA before age 60 and does not use the proceeds for their first house purchase there will be a 5% penalty, plus all the government contributions will be lost.

    Summary

    The UK recovery will take place, despite rather than because of the Budget.

    Decisions over pension reform, delaying state pension age further and national insurance simplification were all ignored.

    It is clear that this was a political Budget and Brexit remains the main question du jour and therefore other decisions have been left for another day.

  • I’ll be honest; I haven’t yet made up my mind about how to vote in the EU referendum, and I am listening closely to all sides of the argument.

    Interestingly, my weekly financial digest, “Moneyweek” came out in favour of Brexit last week and for me, this is massively influential. The magazine is, of course, focussed on the economic argument (the clue is in the title!) but for me, economics is a massive factor in making this decision.

    David Cameron is choosing to focus on security which is probably wise given the complexity of the economics and the strength of the UK economy compared to the rest of Europe. I think for Cumbrians, the thought of an international border at Gretna is quite sobering. Should Scotland push for a second referendum and chose to stay with Europe, we could have barbed wire at Gretna Green never mind Calais. Maybe Scotland will think twice about splitting from the UK as a result? That’s a hard one to call; nothing is a given. It’s hard to imagine all the possible scenarios and consequences.

    Last year I had the pleasure of hearing John Longworth, the Direct General of the British Chamber of Commerce speak at a Cumbria Chamber Dinner. He was very pragmatic, suggesting that whatever the result, Britain would survive and prosper. He has since come out in favour of Brexit and as we go to press this morning, he has, in fact, mutually agreed to resign so the BCC can retain its non-partisan stance.

    It seems strange that given my upbringing as a French-speaking, well-travelled, open minded European; I’m even considering this. Isn’t there a cultural and social dimension here, can we be Europeans outside of the EU? There is an argument for strength in numbers and certainly something to be said for the status quo, but it’s not as appealing to argue for this position as was found in the Scottish Referendum.

    I think the problem is that there are too many variables to know whether we will be better to stay or go. Once we make the decision on June 23rd, in the years to come we will never be sure that it was the right decision because this is not Star Trek and there is no parallel universe where we can look and see how things panned out for the other side of the coin!

    There is an element of better the devil you know, but wouldn’t it be interesting to see what that parallel universe looks like? I shall probably go into the polling booth on the day and make a decision based on my heart because, for me, the argument is just too close to call.

    There are some useful links below with more on the topic.

    BBC - Everything you need to know

    In Campaign

    Out Campaign

    Moneyweek

  • 29 February 2016

    Are You Ready for April 6th?

    Once again all eyes are on 11 Downing Street as we anticipate the budget. As usual, speculation about George Osborne’s next move is all over the financial pages. There is no doubt public pressure to increase tax revenue from the wealthy to mitigate the pain felt from the effects of “austerity” is building a head of steam. The signs are that there will be measures to decrease benefits from tax relief on pensions. You can read about some of the likely outcomes here.

    The Pensions industry is certainly on the edge of its seat once again; the last couple of years the Chancellor really has been looking to reform the way we save for retirement. Let’s remind ourselves of the changes that will come into effect THIS APRIL as a result of the last budget...

    Savings Tax

    From April 6th, interest on most savings accounts will be paid gross. Instead of having to claim tax back where necessary, basic rate tax payers will only need to declare interest over £1,000. This will also apply to cash within a pension.

    Dividend Income

    This has become more complex; dividend tax credit has gone, and a new annual allowance of £5,000 has taken its place. On any excess over £5,000, tax will be paid on the excess at the following rates:

    • 7.5% for basic rate taxpayers;
    • 32.5% for higher rate taxpayers; and,
    • 38.1% for additional rate taxpayers

    Regarding receiving dividend income from investments, this will hit those with considerable assets hard and may encourage consideration for restructuring. For small business owners who use dividends as remuneration, this is going to sting!

    ISA’s

    The ISA allowance will be £15,240, and this has been set for the following tax year too.

    So where does that leave us?

    With the favourable changes to savings tax, the question to be asked is, are ISA’s still relevant? Aviva have some useful information and comparisons which show that ISA’s and Pensions are still the most tax efficient ways to save in the PDF document at the bottom of the page. We will have to wait and see whether that remains the case after March 16th!

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