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Reading Time | < 1 min 03 Mar 2016

Businesses lacking leadership skills

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Shortages of leadership and management skills have had an adverse effect on business growth and productivity, according to the report by the Federation of Small Businesses (FSB).

Just under half of all UK start-ups fail in their first 3 years and the UK currently has the widest productivity gap in the G7. Poor leadership and management skills are held up by many as a leading factor behind this.

The FSB report found that 59% of business owners update their business knowledge at least once a year, but fall short on skills and management training.

25% of business owners had undertaken management training in the last 12 months and 19% pursued external management training for their employees.

The cost and availability of training were identified as key factors in the fall of leadership and management.

43% of businesses listed the cost of training as a major factor while 34% listed availability of training as a problem.

FSB has recommended the following to improve leadership and management growth:

  • leadership and management taster courses which are flexible and available online
  • more involvement from finance providers and professional associations
  • business supporting business through peer networks.

Mike Cherry, policy director for the FSB, said:

“The UK is well known as being a great place to start a business, but we need to get better at helping small firms reach the next level. A key aspect of this is making sure the right management and leadership capabilities are in place, and that these grow in line with the business.”

Talk to us today to discuss business management.

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Reading Time | < 1 min 02 Mar 2016

Review into state pension retirement age

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The government has launched a review into the retirement age for people aged under 55.

A review of the state pension age has been conducted by former CBI boss John Cridland to consider changes in life expectancy and wider changes in society to ensure a more sustainable and affordable state pension.

The state pension age is set to reach 67 for men and women from April 2028. 

The new state pension is due to come into effect from 6 April 2016. 

Public sector workers who reach the new state pension age from 6 April and before the 6 December 2018 will receive a fully indexed public service pension for their whole lifetime.

This will ensure that pension payments are equal for both men and women.

CBI director of Employment, Skills and Public Services, Neil Carberry, said:

“Business has supported both automatic enrolment and plans to increase the state pension age over time. It’s right to look at how we deliver an increased state pension age effectively and fairly.

“At the same time, the critical role of businesses in providing pensions over and above the state minimum needs to be supported. “

Talk to us today to discuss about your state pension.

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Reading Time | < 1 min 01 Mar 2016

Scotland Help to Buy scheme launched

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A new Help to Buy scheme has launched, providing interest-free equity loans to first-time buyers and people moving home in Scotland.

The Affordable Home Ownership scheme could provide loans of up to 15% on the purchase price of a new home.

Buyers will need a deposit of at least 5% and a mortgage that covers at least another 80%.

The new scheme also introduces price changes on properties each year until the scheme closes. 

For example if you purchase a home before 31 March 2017, you can spend the maximum price of £230,000. The limit then reduces to £200,000 until 2018 and to £175,000 until 2019 (end of scheme).

Mortgages will also be means-tested under the new scheme, at the level of 3.5 times your joint income for those buying with a partner or 4.5 times if you’re purchasing alone.

To apply for Help to Buy Scheme, follow these steps:

  • contact a participating house builder and view a property
  • speak to a financial adviser/agent that administers the scheme
  • request an application from the agent
  • reserve a property and obtain a reservation agreement
  • submit application to agent.

Contact us today to find out more on Help to Buy schemes.

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Reading Time | < 1 min 29 Feb 2016

Savers underestimating how much they need for retirement

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8 out of 10 people are unaware of how much they need to save to achieve their target for retirement, according to research by Seven Investment Management (7IM).

According to research findings, people believe that the comfortable retirement annual income for an individual is £23,400.

The maximum state pension is just over £6,000 a year, so based on retirement income people would need to be saving enough to generate £17,400 a year in retirement.

When asked on how much they need to save for retirement, 1 in 6 people said they were saving enough while 3 out of 10 said they were saving nothing.

More than half said they were anxious about their savings, increasing concerns of the scale of the savings challenges they could face.

7IM reported that the conservative estimate of saving for retirement would be £348,000 – over twice as much as many people estimated. 

7IM co-founder Justin Urquhart Stewart, said: 

“We’re living longer so its inevitable most of us will have to work longer. But if we’re to avoid working till we drop we have 3 options – save more, save longer and take more investment risk. The earlier you address the problem, the less drastic the solution.”

Talk to us today to discuss about your retirement plan.

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Reading Time | < 1 min 26 Feb 2016

Business broadband review announced

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A new review on business broadband has been launched to attempt to improve businesses access to broadband.

This follows from results published by the Digital Economy and Society Index (DESI) which measures the progress of EU countries towards a digital economy based on key policy areas such as connectivity, digital skills, internet use and the ‘digitalisation’ of public services.

The UK scored above the EU average but is lagging behind compared to other countries on digital development.

The review will look to improve the quality and affordability of broadband to businesses, providing more choice and competition which will help drive down prices and services.

The government’s wider plans on superfast broadband have already provided digital speeds to 3.5 million businesses and homes – this is on track to cover 95% of the UK by 2017.

Business secretary Sajid Javid, said:

“Developing new technologies, an extensive digital infrastructure, vibrant competition and consumer choice are all vital for UK businesses and central to the UK being at the forefront of ‘Industry 4.0’”

Contact us today to discuss about your business plan.

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Reading Time | < 1 min 25 Feb 2016

Investors expect dividend cuts

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56% of personal investors are concerned that businesses may cut their dividends, according to research by The Share Centre (SC).

2,000 investors responded to the research which was undertaken shortly before a number of FTSE 100 companies announced that they are planning to cut their dividends income by as much as 75%.

SC found that 70% of investors are looking for income from their savings, either as the principal goal (15%) or in a balanced portfolio alongside growth (55%).

Investors nearing retirement and looking to collect income from their savings have been effected by low interest rates. Cash savings have also delivered little income, leading to investors to use stock markets as an alternative, and riskier, source of revenue.

Richard Stone, chief executive of SC, said:

“As investors turn their attention to ISAs and making the best use of their ISA allowances, with little prospect of returns on cash increasing and with dividends coming under pressure, those seeking income are left with an uncomfortable choice. 

“The danger is that investors, in their quest for income, are tempted by the returns offered by riskier activities such as crowdfunding or peer-to-peer lending.”

Dividend tax changes

For investors, the 10% tax credit will be replaced with a new dividend tax allowance of £5,000 from April 2016. The annual allowance will not reduce total income for tax purposes and will only apply to dividend income.

Income exceeding the annual allowance will be taxed at the following rates:

basic rate – 7.5%

higher rate – 32.5%

additional rate – 38.1%

Talk to us today to discuss your dividend income.

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Reading Time | 2 mins 24 Feb 2016

Learnings From Leicester City FC’s Success Over The Last 12 Months?

Reading Time • 2 minsBefore the Barclays Premiership battle even started in 2015, most people had already written off Leicester City. By the middle of September however, things were looking up for the Foxes – though of course, it was too early at that stage to make any predictions.
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Reading Time | < 1 min 24 Feb 2016

Retired household income remains steady

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Retired household income was largely unaffected by the economic downturn, according to the Office for National Statistics (ONS).

However, state pension income activity has changed over the last 16 years with retired households now receiving their retirement income from private pensions and annuities

The ONS found that state pension was the largest source of income for retired households until 1999/2000. The proportion of retirement income coming from cash benefits including the state pension decreased from 65% in 1977 to 47% in 2015. Conversely, the proportion coming from private pensions and annuities increased from 45% to 80% between 1977 and 2014/15.

Between 2007/08 and 2014/15, the median income of retired households rose by £1,500 (7.7%) while in contrast, non-retired households income remained at £900 (3.1%) below its level in 2007/08.

Since the economic downturn in 2007/08, incomes of retired households increased in comparison to non-retired households. 

Median income for retired households rose to £21,000 in 2014/15, £1,500 more than in 2007/08. In contrast, income for non-retired households was £2,600 lower in 2012/13 than in 2007/08.

Since 2012/13, the value of income for non-retired households has risen to £28,300, but remains £900 below the economic downturn levels (£29,200).

Talk to us today to discuss your retirement income.

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Reading Time | < 1 min 23 Feb 2016

Stamp duty tax changes concern for joint buyers

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The 3% higher rate stamp duty land tax (SDLT) on second homes and buy-to-lets coming into effect 1 April 2016, could adversely impact parents buying jointly with their children to help them into the housing market.

The Chartered Institute of Taxation (CIOT) commented ahead of the changes that joint buyers who are not replacing their main property will face the 3% charge on the entire price. 

CIOT focused on the higher SDLT rates on additional residential properties sold for more than £40,000. 

Key points were:

  • the increased complexity of the higher rates will fall on landlords who may not have tax expertise
  • imposing higher rates on joint purchases that have a clear social value could be inequitable
  • the valuation of a lease on property interest worth less than £40,000 may present difficulties. 

CIOT have suggested a carve out from the new rates for joint buyers who are parents buying a home for their children.

Brian Slater, chair of the CIOT’s property taxes sub-committee, said: 

“Life is complex and there are many situations where parents want to support their adult children in buying a home. 

“Taking even a small interest (while owning another property) means that the extra three per cent is payable on the whole of the purchase price. This will substantially increase the SDLT bill, but there are cases - like supported living – where it is absolutely right for parents to have an equity interest.”

Contact us today to find out about the upcoming stamp duty changes.

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