What would happen to your mortgage costs if interest rates rise?

Dear ,

The only way for interest rates is up – so you should think about this if you have a variable rate mortgage or a tracker mortgage.

We recently reported that the Bank of England kept interest rates at 0.5% for another month. Interest rates have been at this record low point for over a year, so we are concerned that people might get overly confident that these rates are here to stay. However, this is unlikely as in recent years the average has been somewhere around the 5% mark.

Find out more about the effects of a rise in interest rates here, and calculate how this could affect you.

Do you have these worries about your investments?

• Am I at risk of losing money?
• Could I improve my investment returns?
• Are my goals at risk because I’m not invested in the right types of product?

You’re probably saying yes if you manage these investments yourself; you won’t have the time or professional tools to manage risk, maximise returns and ensure your objectives are met.

You may also be agreeing if your financial advisor does not provide a regular review; you will be unaware
of performance or your changing exposure to risk.

We can provide you with a FREE review of your investments and indicate areas where you could make improvements. In our initial meeting we will review your investment objectives and assess your attitude to risk.

We will then send to you a report which:

• reviews your investment portfolio
• assesses how well it fits with your financial objectives and attitude to risk
• provides guidance on rebalancing the portfolio to improve returns and manage risk
  
  A sample report is available for download by clicking this link.

Questions & Answers
Here we seek to answer the questions you have on financial matters. To submit a question, click here.

My dad has just moved into a home for the elderly. He sold his house to fund his care and now wants to give me some of this money. Will this affect his care fees assessment?
Mr W - Essex

Answer
The short answer is 'yes'. The Local Authority will assess anyone who applies for help with their care fees, and this will look at the capital and income position of the individual. If your dad wants to give you some of his money, it is likely that the Local Authority will view this as an attempt to deliberately deprive himself of assets in order to obtain more help from the State. If at a later date he applies for help, they may decide that they will treat him as if he still had the money, or they may ask you to pay the money back.

This is a complex area, and you should seek advice before making such decisions.

The Government recently announced a review of the funding for later life care. Click here for more information.

I am about to reach age 65, but would like to carry on working. Can my employer force me to retire?
Mrs L - Essex

Answer
At the moment, yes, but not for much longer.

The Government recently announced that this discriminatory practice will no longer apply. From April 2011 it is anticipated that employers will no longer be able to force employees to retire at a certain date.

Click here to read more about this.

The Explainer
This seeks to bring you an easy to understand explanation of some of the jargon used in the financial news.

The NEST pension scheme
If you are an employer, you will probably have heard about the NEST pension scheme, which will go live in October 2012. These proposals are expected to go into force, although some there is a review underway at present, which is due to report back in September 2010.

Under the new rules, employers will have greater responsibilities to provide workplace access to pensions for their employees.

You will be required to enroll your employees into a scheme which meets the new standards. There will be a minimum contribution amount for employers and employees, which will reach 3% for employers, 4% for employees and 1% for the Government. This will be staged in according to the size of the company.

Click here to read more information on NEST.

Which of these had the biggest growth over the last 5 years?

1. UK property
2. UK shares
3. US shares
4. European shares
5. Asian shares
6. Emerging markets shares

Click whichever link you think is the correct answer. The data is based on the average investment fund return to the end of June.

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© Woodruff Financial Planning
The Colchester Centre, Hawkins Road, Colchester, Essex, CO2 8JX
Telephone: 01206 266882 Email: click here.

This newsletter is for information purposes only and should not be relied upon as financial advice. The newsletters are topical in their nature and are accurate at their date of issue, but we do not undertake any obligation to update articles. Legislation is subject to change at any time.

Principal: D Woodruff
Woodruff Financial Planning is Authorised and Regulated by the Financial Services Authority.