- Shell House
- Wine St. Sligo
- Ireland
- Tel: + 353 71-9159222
- Fax: + 353 71-9145134
DNG report significantly improved sales activity at DNG National Conference held last Tuesday in Galway
Network offices of property company Douglas Newman Good Offices reported positive signs of recovery in the property market with an increase in sales and viewing levels across Ireland at its annual National Conference in the Carlton Shearwater Hotel in Ballinasloe, Co Galway. Attendees at the conference also reported that the rate of price decline has sharply decreased over the last quarter of 2009 and that the market appears to be very close to stabilisation. However this was after large price reductions were seen across all sectors of the market for the first three quarters of 2009.
DNG also noted positive signs in the property market with a large drop in the number of customers requesting the return of their booking deposits paid down to 5% from a high of 30% during the height of the property crisis.
According to Keith Lowe CEO, DNG Nationwide “This is very significant and our agency has not experienced a statistic like this since the boom years. Since the property market started to experience a re-alignment in late 2006 the number of buyers who paid our agency booking deposits on homes and then changed their buying decision was as high as 30%. This important statistic indicates that buyer confidence has improved and that prospective purchasers are not finding better value elsewhere in addition to not having problems arranging their mortgage. Many buyers are also advising us that they are keen to purchase now and take advantage of low long term fixed interest rates.”
It was also reported that property prices in the greater Dublin area have dropped by an average of 48% since peak in late 2006 but that the level of drop of 4% in the last quarter of 2009 was much less than the three previous quarters. According to the organisation this indicates that property prices in the greater Dublin area are close to stabilisation and the agency is predicting some level of price growth in certain areas of the market as early as next year if not before.
Attendees also heard that the number of new properties coming to the market for sale throughout the country has also reduced and that this reduced choice for buyers should also assist recovery of the property market.
The conference also reported that it is imperative that the government continue to ensure that there are sufficient levels of finance available through Irish financial institutions for property transactions as a vibrant property market is essential to assist economic recovery.
Keith Lowe also added “Following the very sharp countrywide price falls in property prices over the last three years it is encouraging to see much increased viewing and sales activity in the property market. Sales in our Dublin network have increased by over 30% this year compared to the same period in 2009. There is normally a time lag between market changes in Dublin and the rest of Ireland and it is encouraging to see evidence of improved activity already being experienced throughout the DNG nationwide network”
Speaking at the conference Shane Flanagan of DNG Flanagan Ford commented on the increased level of activity in the Sligo area. “Since December 2009 we have seen a notable increase in not only the quantity of viewings we have, but also the quality of viewings, ie the majority of viewers are genuinely interested in purchasing a property. We feel that prospective purchasers now recognise that there is excellent value to be had at present in Sligo & surrounding villages & towns. We have Sale Agreed numerous properties over the past few months & almost all of these sales are expected to conclude successfully.” Shane added “Some of the lending institutions are now lending funds especially to first time buyers & we have already seen the positive impact this is having on the local property market. Many sellers are now far more realistic about the price they wish their property to be placed on the market at & this has been a massive factor in attracting increased viewing numbers. This is a trend we expect to continue over the coming months.”
About Douglas Newman Good & DNG Nationwide.
Douglas Newman Good (DNG) are the largest seller of residential property in the greater Dublin area and operate a network of 67 real estate offices throughout the Ireland.
National Pensions Framework Summary
1. New Auto-Enrolment Scheme – to be introduced in 2014 – subject to economic conditions
• Employees (aged 22 or over) will be automatically enrolled once they enter employment or change employment unless they are a member of their employer’s scheme which must be:
- a DB scheme, or
- a DC scheme with a ‘ee contribution rate greater than or equal to the new scheme and an ‘er contribution rate greater than or equal to the new scheme
• Contributions to the new auto-enrolment scheme will be collected through the PRSI system via a central processing agency.
• Contributions to the new auto-enrolment scheme will be made within a band of earnings which has yet to be decided e.g. must be earning €350 per week and paying contributions on earnings up to €1,000 per week.
• Employees will be required to make a fixed percentage contribution of 4%. Contributions will qualify for PRSI and Health Levy relief.
• There will be matching State contribution of 2% and an employer contribution of 2%. The State contribution will equal 33% tax relief – the delivery mechanism for this has yet to be decided.
• A range of funds, including a low-risk default option, will be available. There will be no Government guarantees on investment returns.
• Employer contribution is mandatory.
• Employees can opt out but they will be re-enrolled every two years.
• Once an employee remains in the scheme for six months, their contribution will be held in a pension account and no withdrawals will be allowed.
• Once-off bonus payment for people who remain in the scheme for more than five years continuously.
• Intended that benefit withdrawals will be similar to PRSAs
• Small DC funds (probably €10,000 but exact figure yet to be agreed) may be transferred into the scheme – no matching contribution from the State or employer will be provided.
2. Current Pension Arrangements – implementation dates not agreed
• The State contribution will equal 33% tax relief – the delivery mechanism for this has yet to be decided. Tax relief on employer contributions and tax-free investment income to remain.
• Access to Approved Retirement Funds will be provided for defined contribution scheme members with effect from 2011.
• Specified income test to be increased from €12,700 to 1.5 times the State Pension (Contributory). AMRF option no longer to apply for new retirees. For existing retirees, the AMRF can become an ARF once the then specified income test is satisfied.
• Tax-free lump sum exceeding €200,000 to be taxed
• The range of personal pension vehicles available will be reviewed with a view to rationalising provision in this area.
• Regulations will be introduced to increase the transparency of pension charges;
• A revised and more secure defined benefit (DB) model is proposed which schemes may wish to consider if restructuring in the future.
3. Social Welfare Pensions
• Mandatory social welfare pension coverage will continue. The Government will seek to maintain the rate at 35% of average earnings.
• The system will be simplified with a move to a total contributions approach in 2020.
• Retirement age for State Pension age will increase to 66 in 2014 [(with the abolition of the State Pension (Transition)], 67 in 2021 and 68 in 2028.
• Arrangements will be put in place to allow people to postpone receipt of the State pension and to make up contribution shortfalls.
4. Public Service Pensions
• A single new pension scheme will be introduced for all new entrants, with effect from 2010.
SLIGO WINNER OF IAVI ACADEMIC EXCELLENCE MEDAL
On Friday 22nd January at the Irish Auctioneers and Valuers Institute (IAVI) Annual Conference in the Burlington Hotel, Marie McDonald from Carraroe was presented with the Owen O’Riordan Memorial Medal for academic excellence in the Institute’s Higher Certificate course by IAVI President Ms Aine Myler.
The IAVI has supported, and insisted upon, high academic standards in the property profession for many years. In partnership with the Dublin Institute of Technology it runs two property courses – an Honours Degree and a Higher Certificate in property studies.
To recognise the achievements of two students who achieve academic excellence in these programmes, the IAVI awards a medal to the student who achieves first place in each course. For the Higher Certificate course, the Institute awards the Owen O’Riordan Memorial Medal, the 2009 winner is Marie McDonald who works with DNG Flanagan Ford in Sligo.
For the Higher Certificate course, the Institute awards the Owen O’Riordan Memorial Medal. Owen was a student on the IAVI Residential and Land Agency course, (the forerunner of the Higher Certificate). Whilst on the course, Owen was diagnosed with a serious illness. Despite this, he battled on and continued his studies until he died aged 21, still attending lectures on the course, in 2005. The winner of this for 2009 is Marie McDonald who works with DNG Flanagan Ford in Sligo.
Pictured left to right are: IAVI President Ms Aine Myler, Chairman of Sunderland AFC Mr Niall Quinn, medal winner Marie Mc Donald and Shane Flanagan, Director DNG Flanagan Ford.
Marie joined DNG Flanagan Ford in 2001, initially working in the financial services side of the business for the first 3 years & during this time studied with the Institute of Bankers & received her QFA qualification along with a Certificate in Investment Advice. However in 2004 Marie took a keen interest in the auctioneering side of the business. DNG Flanagan Ford have always placed strong emphasis on all members of staff attaining the highest standards of qualifications relevant to their work. “We at DNG Flanagan Ford are absolutely thrilled for Marie. We saw at first hand the effort she was putting in & we knew that with her dedication & excellent work ethic she was always going to do well in this course. To come Number 1 in the country when so many are attending was an absolutely massive achievement & we are all so proud of her” said Shane Flanagan of DNG Flanagan Ford. “Marie brings this level of enthusiasm & dedication to work everyday of the week & this award will serve as not only a huge confidence boost for Marie, but will also I think, give her great satisfaction for the huge effort she put in while attending this course which included many weekends & mid week journeys to Dublin to attend long lectures.”
The Hawthorns, Carraroe, Sligo – Reduced Property Prices
New Houses in Carraroe only €199,750!
It will be hard to beat this for value, 3 Bed Semi Detached Homes in Carraroe, Sligo for only €199,750. The remaining 3 bed semi detached houses in The Hawthorns are now on release at this rockbottom price & with just 10 properties remaining demand is already high. Buyers in the current climate are seeking value for money, affordable prices, excellent locations & high standard of finish. Recent purchasers of homes in The Hawthorns quite clearly had all of these expectations met, are delighted with their new homes & will be well settled in in time for Christmas. Denise Church purchased a property in The Hawthorns & moved into her new home recently. “I felt that this was the right time to take the first step onto the property ladder. With mortgage interest rates at their lowest ever & prices also reduced to such an affordable level it made absolute sense to take advantage of this & purchase my own place. I have rented for a number of years & I got to the stage where it felt like money down the drain every month. But I thought that the only way I could afford my own home was to buy outside of Sligo & that’s not where I want to be. So when I noticed the reduced prices of the properties in The Hawthorns I had no hesitation in booking a property there. The standard of finish in the house is second to none & the development itself is always so well kept & tidy. I would definitely recommend anyone thinking of buying to go for it now, with just a few houses left in The Hawthorns we’re not going to see value like this again in Sligo town.”
Laura Mannion, pictured here at her new home, had spent the last year or so viewing properties, new & second-hand, and like all of us was waiting for the market to ‘bottom out’ before making the decision to buy her first home. “When I first starting seriously looking for my first home The Hawthorns ticked every box, but unfortunately the price was over my budget, which led me to consider buying in new developments outside Sligo in commuter towns. But living in Sligo has always been my preference for convenience & less of a commute so I found it difficult to commit to purchasing in a development so far out from town, even though the prices were at a level which I could afford. I noticed recently that the prices in The Hawthorns had been reduced & just couldn’t believe my luck! I booked my house with DNG Flanagan Ford & I have never looked back. My house will be ready to move into in a matter of days & the builders have been fantastic to deal with & so accommodating with any requests I have made. I am thrilled to have my own house in Sligo town without having to blow the budget & can’t even comprehend having to commute a long distance into town every day!!”
Viewings & further information on Phase 3 can be obtained by contacting joint selling agents:
DNG Flanagan Ford 071 9159222, 087 2721367, marie@dngflanaganford.ie, www.dngflanaganford.ie
John Leyden & Sons Auctioneers 071 9167655, 086 2538254, info@leydenauctioneers.com, www.leydenauctioneers.com
LOCAL GOVERNMENT (CHARGES) ACT 2009 – NON PRINCIPAL PRIVATE RESIDENCE CHARGE
The Local Government (Charges) Act 2009 gives effect to the Government’s decision to introduce a €200 charge for non principal private residences. The liability for the charge arises mainly in respect of rental, holiday and vacant properties, and the revenue stream will flow to city and county councils. Liability will arise for owners of the property concerned at a point in time, being one day in each calendar year to be known as the “liability date”. 31 July will be the liability date in 2009 and 31 march in subsequent years. Failure to pay the charge within one month of the date it falls due will result in a liability for a late payment fee calculated at the rate of €20 for each month or part of a month that the charge remains unpaid.
Provision is also made for ancillary provisions such as: agreements between local authorities or between local authorities and the either or both the Local Government Computer Services Board and the Local Government Management Services Board; data sharing; and offences and penalties.
The Act represents a significant broadening of the revenue base for local authorities. Certain residential property will now provide a revenue stream to local authorities for the first time in over thirty years since the abolition of domestic rates in 1977. Longer term, the taxation of domestic property is likely to be guided by the report of the Commission on Taxation which is due later this year.
Main features of Act
· The Act provides for the introduction of a charge of €200 per annum on non principal private residences.
· The Act is relatively short and straightforward. The charge arises at a point in time each year called the ‘liability date’. It applies to residential property with certain exceptions, the most important being principal private residences. Owners (not occupiers) are liable to pay it, and the funds will be paid to local authorities (county and city councils). It can be said to be a form of self-assessment in that it is for the owners of residential property to assess whether they are liable to pay the charge, and local authorities are not required to issue bills. Failure to pay within one month of the due date incurs a late payment fee of €20 a month.
· The interpretation sections (1 and 2) are the most complex and substantive in the Act. These define “building”, “dwelling” and “residential property”. Together, these definitions represent the cornerstone of the Act: “building” defines structures; “dwelling” defines use; and together these form the core of the definition of “residential property” which is what the charge will apply to.
· Liability will arise at a point in time each year, and this day is called the ‘liability date’. 31 July has been prescribed as the liability date for 2009 and 31 March will be the liability date in subsequent years. Payment falls due two months after the liability date.
· The Act exempts certain types of property and owners from the charge. The most important exemption relates to principal private residences. Other types of buildings exempted are those: newly constructed but unsold; with heritage merit; let directly or indirectly by local authorities for social housing; let by voluntary housing bodies; the subject of a shared ownership arrangement with local authorities.
· Other exemptions apply where: a person purchases a property for use as a principal private residence provided they dispose of their existing property within 6 months; a charity owns the property; and where a spouse or ex spouse has an interest in a property after a divorce or separation agreement but does not reside there. The Act also provides that mobile homes are exempt, and that certain ‘granny flats’ and principal private residences vacated due to illness resulting in incapacitation are exempt
· The Act provides that payment of the charge shall be made to county and city councils. The Budget estimated the annual yield from the charge at €40 million but it is estimated from census and other data that there may be 400,000 properties in the state liable for the charge. The full potential yield would, therefore, be closer to €80 million. It is likely that collection levels from rental properties (200,000) will be higher than holiday homes and vacant homes because PRTB data will assist local authorities to identify rental properties.
· In the event of non payment of a charge for which a person is liable by the due date, a late payment fee of €20 will apply for each month or part of a month for which the charge remains unpaid. An unpaid charge and late payment fee will be a charge against the property in respect of which the liability arose.
· Local authorities can delegate functions to the Local Government Computer Services Board and/or the Local Government Management Services Board. In practice the LGCSB will design and operate a web-site facilitating electronic payment of the charge.
· Provision is made for data exchange between local authorities and the PRTB, ESB and the Revenue Commissioners. This data should assist local authorities to identify properties liable for the charge but there is no comprehensive database of residential property within the State that is liable for this €200 charge. The PRTB hold data in relation to rental properties, the ESB’s systems can generate data in relation to residential properties where a relatively low quantum of electricity is used (indicating the possibility of a holiday or a vacant property) and the Revenue Commissioners hold data in relation to certain property transactions (stamp duty, VAT and capital gains taxes).
Is your greatest asset protected?
We don’t usually think of our current income and our future earnings as an asset. However, if you take a moment to think about it, the money you earn pays for almost everything you have….mortgage, car loan, bills, children’s education, insurance and so on. Without it, you are faced with a pretty worrying picture.
Nobody wants to think about what life would be like should disability or illness strike. But the reality is that 1 in 6 Irish people will be out of work for more than 6 months at least once during their career. With those who are out of work the average length of claim is 5.5 years. It is surprising then that we protect ourselves against so many of life’s eventualities, yet so few of us protect our salaries.
This is where an Income Protection plan is so important and is appropriate to anyone earning a salary, both the self-employed as well as other employees, regardless of their age or stage of life. With Income Protection you pay a monthly premium which is based on your occupation and the state of your health. This ensures that in the event of an accident or illness, which leaves you unable to work, the policy will pay you a regular income. As there are no restrictions on the type of injury, illness or disability that an income protection plan policy covers, you get complete peace of mind. Best of all, you get to choose and tailor an income protection plan that suits your individual circumstances, with a range of cover types. What’s more, as your needs and circumstances change, you can adapt your income protection policy to suit changes in your life.
In general, we tend to be overly optimistic about how we would manage if we were unable to work due to illness or injury. We over-estimate sick pay arrangements and the support provided by the State. Some employers will cover sick pay for the first 6 months of illness, however, they are not obliged to. The State Illness benefit for 2009 is only just €10,900. And if you are self-employed you don’t even qualify for this.
The reality for most people is that their level of “outgoings” either matches or exceeds their income. So, for a person who no longer is earning that income there will be a significantly negative impact on their lifestyle. But what can you do to protect your salary?
Take an example of a male, who is a sales rep, 38 next birthday is a non smoker and would like to take out an income protection policy which would pay him €500 per week after a deferred period of 26 weeks and up until age 65. The net cost after tax relief would only be €50.49 per month*. If he were to cover himself to age 60 the quote would be cheaper again.
Income Protection should form a core part of any financial plan.
* Quote used is based on the rates applicable to Friends First Guaranteed protection product as at 13/08/2009
Dark clouds hang over the property market, however there is a silver lining
The property market continues to endure a difficult time at present, with the slides in values which commenced in 2007 yielding between 20% & 30% falls in property across the country. This has lead to property in many areas becoming far more affordable & within more buyers reach. This more difficult property market is causing buyers to be far more discerning & choosy about the particular properties they wish to acquire.
The old adage of the three most important things to consider when buying a property are location, location and location has never been more relevant than it is today. What we are finding here at DNG Flanagan Ford is that appropriately priced property in good locations can still find buyers. We do have some properties on our books that have been there for quite a considerable length of time with very few viewings being attracted even when prices are moderately reduced. However in the more popular locations when prices are reduced to reflect the current levels in the market, viewers are forthcoming & we are making successful sales. It is important, I think, for people to realise that all that is happening in the market place is a correction in property prices. Vendors wishing to make sales need to reposition themselves in the current market to reflect prices which the market is prepared to pay. Luckily we have many of those vendors on our books who are prepared to be both realistic & honest about the value of their property.
An example of this is a development called The Hawthorns which is located behind the Carraroe Retail Park here in Sligo city. This scheme saw property prices reduced from a high of €320,000 for a 3 bedroom semi detached down to €200,000 in February of this year. Since that date in February we have successfully sold no fewer than 20 new homes in this scheme. There are many other examples similar to this, such as Dorrins Strand in Strandhill etc. The second hand market continues to endure a tough time, however again at realistic levels sales continue to happen. In the past two weeks our office has sold – 6 second hand properties in the Sligo area. It has also been reported in the DNG offices based in the Greater Dublin area that sales for the month of June of this year were at a record high for the past 2 years. This can be put down to the dramatic correction in prices allowing properties to be far more affordable.
A brief example to explain how much more affordable property has become is to consider The Hawthorns. When we were selling 3 bedroom semi detached houses in this scheme for €320,000 interest rates were running at approximately 5.3%, now that prices have been reduced to €200,000 interest rates are also down to a record all time low of 2.4%. The difference in monthly mortgage repayments as a result of the price reduction & the interest rate reduction is almost €900 per month. The old repayment would have been in excess of €1,542 per month & the new repayments are less than €650 per month.
In relation to market sentiment overall, none of us are living in a cocoon or are immune to the constant barrage of bad news being reported in all sectors of the media. Some of this reporting is pure honest reporting & some if it may be described as sensationalising. However, there is no way of avoiding the fact that we are going through one of the most difficult economic times that the country has ever experienced. Like the constant rise with property, it is important for all of us to realise that falls in property cannot continue either. The difficulty - from a buyers prospective is that we will not know when property prices have bottomed out until they start rising again. Buyers who wish to put off their decision until they know that the property market has bottomed out will surely miss that point in the market by continuing to wait. The only way we will know that the property market has bottomed out is if property prices start to rise. In my opinion the cost of buying a home in the current market has never been more affordable & there are excellent opportunities out there for those buyers prepared to put time & effort in to seek out a suitable property to suit their requirements. My advise would be to start looking and look carefully …………
Meet Sligo’s Rose!!
You may not be aware of this but Sinead McGill who works with us here is representing Sligo in this year’s Rose of Tralee festival.
Sinead joined Flanagan Ford Financial Ltd in September 2006 and has recently become a qualified financial advisor, having already obtained a Bachelor Degree in Business Studies from Sligo Institute of Technology.
She is actively involved in their local GAA club; Eastern Harps, where Sinead plays on the Ladies team and is also the public relations officer for the club. The 25-year-old enjoys singing and acting and has been involved with the Gurteen Drama Society and has helped to raise money for local charities by taking part in numerous ‘Stars in Your Eyes’ fundraisers. Sinead has a keen interest in keeping fit and socializing.
Representing Sligo as the 2009 Sligo Rose of Tralee, Sinead will be the first ever Sligo Rose on stage in Tralee having progressed through the regional Finals in Portlaoise on the June bank holiday weekend where she was put through her paces in individual and group judging! Sinead was a hit on stage with Ray Darcy and the audience.
The festival itself runs from Friday 21st August to Wednesday 26th. Check out RTE on Tuesday 25th and Wednesday 26thto see Sinead on stage with Ray and hopefully this time Sligo (with the aid of Sinead) with leave Tralee victorious!! Why not go to the dome on the nights in question if you are holidaying in Tralee at that time. Click here to order tickets http://www.roseoftralee.ie/catalog/index.php/cPath/152 .
Make your Money Work Harder!
Were you ever disappointed when you got your deposit book updated or received your statement in the post with the amount of interest your bank gave you? We might have a solution!
Interest rates are at an all time low. It is good for those of us who have a mortgage but not so well for those of you who have money on deposit. Low interest rates coupled with an increase in DIRT tax means that it is so important for you to make sure your money is earning as much interest as possible. Below are some keen rates available to you through Flanagan Ford Financial Advisors.
- Anglo Irish Bank Premium Demand Account (instant access) 3.10% AER
- Anglo Irish Bank 1 Year Fixed Account 3.80% AER
- Investec Bank UK (Ireland) Ltd 1 year Fixed account 3.50% AER
- Permanent TSB 9 Months Fixed account 3.50% AER
(rates applicable and correct as at 30/07/2009 and are subject to change)
Both Anglo and PTSB are covered under the government guarantee scheme for deposits up until Sept 2010. With Investec bank you have a bank guarantee up to £50,000 Stg.
- We also have an excellent capital guarantee investment bond over 3 ½ years through BCP. With this investment you are guaranteed to get a 5% return paid back to you on a quarter of your investment amount after 12 months. The remaining 75% of your investment is invested in a basket of 25 shares. You can earn up to 35% on this portion of your investment depending on the average performance of the 25 shares. Click this link to read the key features of this investment http://www.bcp.ie/pdf_docs/June_09/Red_Key_Features.pdf .
If you would like to discuss these options or more please do not hesitate to contact us on 0719159222.
Save yourself money or enhance policy benefits!!!
We mentioned it before in an April blog and we believe very strongly about it so we are mentioning it again.
REVIEW, REVIEW, REVIEW!!
Reviewing various financial products and policies you own can lead to a saving in valuable euros. In some cases it might lead to enhanced benefits for the same cost but most of all after carrying out a review you will go away fully understanding what you have and how you and your family will benefit from it.
Whether by design or not, some products have names which could in the eyes of the customer, be readily termed as misleading. For example one could be forgiven for assuming that a whole of life policy covered you, based on current premiums, for the whole of your life. Unfortunately, in many situations this is not the case.
3 key ingredients for making sure that the product you have is right for you are;
1. Expertise – deal with a QFA who is truly independent and one that you can trust to build a long term relationship with.
2. Transparency for all parties – in terms of charges but also in terms of product knowledge. What a customer purchases should be exactly what the customer thought they purchased.
3. Alignment of goals – client and advisor working together with a common goal without a conflict of interest.
Products are changing constantly, customer’s needs and circumstances are changing constantly and the financial services industry is changing constantly. Therefore what you took out some years back might have been the right product at the right price then but today you might be able to achieve better terms.
Review the financial products that you have to make sure that none of the following usual suspects are lurking:
· Mortgage repayment protection policies – these policies are meant to safe-guard loan repayments if a borrower loses their job or is unable to work due to illness. This cover can be expensive and there have been very mixed experiences when people have tried to make a claim. Very much a bank product and usually sold as part of the mortgage. In Britain lenders are not allowed to sell these products at the same time as the loan is been agreed to allow people more time to shop around.
· Bid offer charges – A bid offer charge is usually 5% and it means that although your product may have stated a 100% allocation rate, only 95% of your money was invested on your behalf. Many older pension contracts would have this charge while newer ones may not.
· Older products – this is really the be all and end all of why someone should have a financial check up. What was good and competitive in days gone by might not be the case not. Open the old files gather the information and make an appointment.
· Unit linked whole of life products – Even saying it is hard never mind getting an explanation on what it means. It can be sold as a low cost whole of life policy which would be a good thing but in reality the policy is dependent on too many factors to remain “low cost”. How it works is this. Your premiums are paid into an investment fund, with the idea that as you get older and the cost of your cover increases, the future investment gains pay for your protection benefits. What happens when markets fall and to the scale that we have witnessed over the last 18 months? Well the client is hit with an unexpected jump in premium or reduction in benefits which is not good if the purpose of the policy was to cover a mortgage. If you need a protection plan that should last for 20 years or more you are better off with a term product, where you know what you will pay over the period chosen.
· Non disclosure of commission – on some products like company pensions there is no obligation by the intermediary to disclose the commissions being earned. To be on the safe side and so that it will never become an issue into the future, ask for voluntary disclosure. If you don’t get it, it might be something you need to think about.
· Lack of review/update – As mentioned earlier in this article, our financial circumstances are always changing, it only makes sense to review your affairs regularly.
Call us to arrange a review of your financial well being today 0719159222.