MORTGAGES WITH NO MINIMUM INCOME

The Lifetime Mortgage provides a facility for borrowing based solely on your age and the value of the property. The older you are, the more you can borrow and you have the options of either paying just the interest for as long as you wish; making payments now and then; making regular payments so as to reduce the amount borrowed (as with a standard repayment mortgage); or letting the interest build up and be paid from the eventual sale of the property. Here is a sample of the maximum borrowing possible at various ages on a property with a value of £200,000:

Age 55       21% of value £42,000

Age 60       26% of value £52,000

Age 65       31% of value £62,000

Age 70       36% of value £72,000

Age 75       41% of value £82,000

Age 80       46% of value £92,000

Note: These are not guaranteed levels of borrowing. In some cases it may be possible to borrow

somewhat more than shown above, and in other cases, the borrowing may be less.

MORTGAGES FOR THE OVER 55s

There is more flexibility now for those over 55 to be able to take out a mortgage. You still need to meet the lender’s income requirements but earned income in many cases can be accepted up to age 70. Beyond age 70 the income the lenders will take into account usually needs to be pension income or income from property rental or investments.

AUTUMN BUDGET

There was not much excitement in the Chancellor’s Autumn Budget but the removal of Stamp Duty for First Time Buyers on purchases of up to £300,000 (£500,000 in the London area) should help boost the property market. Many tax matters were not changed.

For example, the total that can be put in ISAs (Individual Savings Accounts) each year was not changed. There were some other tweaks in the Budget and here is a brief summary:

The Personal Tax Allowance is increasing from the 6th of April 2018 from £11,500 to £11,850. This

is the amount you can earn before you have to pay any tax. You will pay tax at 20% on earnings

you make above this £11,850 up to a further £34,500. This means that in the tax year 6 April

2018 to 5 April 2019 you would not start paying higher rate tax (40%) until your total earnings

exceeded £46,350 (£11,850 plus £33,500). Those with earnings in excess of £100,000 still face the

progressive loss of their Personal Tax Allowance and those earning over £150,000 will pay the

Additional Rate (45%) on any income they have in excess of £150,000.

Some additional changes were:

• Pension Lifetime Allowance increasing from £1,000,000 to £1,030,000;

• Capital Gains Tax Annual exemption increasing from £11,300 to £11,700;

• The Inheritance Tax nil-rate band will stay at £325,000 but the Residence Nil-Rate Band (the rather complicated allowance for those who, when they die, pass their private residence on to family members) was increased to £125,000. So a couple who die and pass the property they have lived in to their family would not have to pay any Inheritance Tax unless the value of their joint estate exceeded £900,000;

• Those receiving the State Pension will be pleased at the 3% increase in their pension payments. If they also have savings, the Bank Base Rate increase could mean that they also might receive a bit more income from their savings;

One useful allowance that has been continued is the Rent-A-Room scheme whereby you can rent out furnished rooms in the home you live in and make up to £7,500 free of tax. You can let as much of the house as you wish as long as you live there as your residence.

PENSION FREEDOMS

Generally you are now able to access some or all of your private pension benefits from age 55. You are entitled to make the decisions as to how you us the pension benefits you have.

We would be happy to make those options clear to you. Also, if you lost touch with a pension benefit you feel you had from a past job, you can use the Government’s free Pension Tracing Service to track it down. For further details ring the Service on 0800 1223104.