Month: July 2017

Week 30 in Review: IMF Lowers US Growth Outlook

 

 

 

 

 

 

 

 

 

  • US growth sees modest Q2 bounce-back
  • Greece returns to the Bond Markets
  • Fed: Balance sheet run off to commence “relatively soon”
  • IMF lowers US growth outlook, raises others’
  • Abe’s support slides as scandals mount
  • Trump backs corporate, middle-class tax cuts

A busy week of corporate earnings injected volatility into the major European indexes. Soft manufacturing data, notably in Germany and France, at the start of the week weighed on the market. But by midweek, as earnings season was in full swing, telecommunication, technology, and utility stocks led the markets higher. However, by the end of the week, European technology stocks, hurt by earnings misses and profit taking, were a drag on Germany’s Dax and France’s CAC 40. The pan-European index Stoxx 600 finished the week lower along with the US S&P 500.

 

MACRO NEWS

 

US GDP rebounds from sluggish start to year

US economic growth accelerated in the second quarter, rising 2.6%, up from the first quarter’s 1.2% pace. Economists had expected a slightly stronger rebound, and the bounce is well short of expectations from earlier in the quarter. Wage pressures remain muted as hopes for sustained faster growth fade, given that pro-growth policies from Washington are looking less likely by the day. Modest growth averaging around 2% looks to be in the cards again in 2017. This should keep the US Federal Reserve on a gradual rate hiking path.

Greece returns to the Bond Markets

The financially strapped country returned to the financial markets for the first time since 2014 and sold about €3 billion of five-year bonds at an interest rate of 4.625%, a relatively high yield, to account for the inherent riskiness in holding Greek bonds. Greece is the rare sovereign that issues sovereign debt at a higher yield than some Greek corporates. The extra yield reflects the political risk posed by Greece’s relatively market-unfriendly Syriza government. Yields across most eurozone government bond markets broadly tracked U.S. Treasuries as they fell in the second half of the week following the Federal Reserve’s policy meeting on Wednesday.

Fed signals it’s ready to cut balance sheet soon

In a statement released after Wednesday’s Federal Open Market Committee meeting, the Fed indicated it is ready to begin trimming its balance sheet, which enlarged in the wake of the global financial crisis. In a statement, the Fed said it expects to begin allowing some of its bond holdings to mature “relatively soon.” This is a shift from earlier language, released after the June FOMC meeting, that indicated a move by the end of the year. Many expect an announcement to come at the September FOMC meeting. The Fed held rates steady while acknowledging that inflation is running below its 2% target.

IMF affirms global growth view

In a mid-year review, the International Monetary Fund maintained its forecast for 3.5% growth in gross domestic product this year. The fund lowered its outlook for US growth to 2.1% from a previous reading of 2.3% while raising its outlook for the eurozone and Japan. It downgraded its outlook for UK growth.

US health care push fizzles

Despite their effort being pronounced dead on several occasions, US Senate Republicans took up health care reform again this week after a dramatic return to the Capitol by Senator John McCain, who was recently diagnosed with brain cancer. Vice President Mike Pence broke a 50–50 tie to allow the Senate to begin debate on several Republican-sponsored legislative options. Ironically, McCain helped scuttle the final alternative, a “skinny repeal” bill that would have ended Obamacare’s individual mandate, among other provisions. Now that the health care bill has been defeated, Senate leaders hope to move on to tax reform and to passing a spending bill in order to avoid a government shutdown at the end of September.

Japan’s defense minister forced to step down

While much of the world has been focused on goings on in Washington, Japan has had to deal with a series of scandals that have undermined Prime Minister Shinzo Abe. Abe has been accused of cronyism, having helped a friend secure a license to open a veterinary school. Meanwhile, defense minister Tomomi Inada was forced to resign this week over an alleged cover-up of military documents from UN peacekeeping operations in South Sudan. Inada’s ministry is accused of concealing logs which show that Japanese troops were in increasing danger during their mission. The departure comes as support for Abe hovers near 20% in opinion polls. Despite Abe’s slide in popularity, the opposition Democratic Party has been unable to gain support, prompting the resignation this week of party leader Renho Murata after 10 months at the helm.

Trump talks taxes

Amid a swirl of controversy, US president Donald Trump, in an interview with the Wall Street Journal this week, reiterated his desire to slash the US corporate tax rate to 15% from 35% while lowering the tax burden on the middle class. Additionally, Trump kept open the option of raising taxes on upper-income earners. The president did not rule out reappointing Fed chair Janet Yellen, but said that economic advisor Gary Cohn, former president of Goldman Sachs, is also under consideration for the post. In a press release on tax reform on Thursday, congressional leaders and administration officials agreed to table the border-adjustment tax that would have taxed US imports.

Moody’s sees less China bank risk

Credit rating agency Moody’s has upgraded its outlook on the Chinese banking system to stable from negative. Moody’s sees receding concerns over China’s massive shadow banking sector following action from regulators to curb systemic imbalances. It also expects nonperforming loans to stabilize near current levels.

EARNINGS NEWS

According to Thomson Reuters I/E/B/S, with 48% of the members of the S&P 500 Index reporting, second-quarter earnings are expected to rise 10.7% versus Q2 2016. Excluding the energy sector, the rise is 8%. Revenues are expected to climb 4.9%. Excluding energy, a 4.1% earnings rise is expected

 

Week Ahead

 

 

 

 

 

 

 

All the Best and have a great week ahead

Stuart

CEO

Farringdon Group

+60 3 2026 0286

 

 

 

FinTech: First Robo-Adviser in Asia to offer Shariah-Compliant Investments

Robo-advisers are typically seen as a more transparent, convenient and low-cost alternative to human financial advisers. However, these platforms have limited options when it comes to shariah-compliant investments due to the lack of investable assets in this space.

To tackle this issue and offer investors who use robo-advisory services another option, Farringdon Group has launched Algebra — Asia’s first robo-adviser to offer shariah-compliant investments. According to managing director and CEO Stuart Yeomans, the company’s Virtual Mutual Fund Technology (VMFT) allows robo-advisory services for shariah-compliant investments to be offered at a lower price point.

“Before us, there were no shariah-compliant robo-advisory services in the region despite the growing demand. That is why we developed VMFT,” says Yeomans.

“Instead of buying into an existing fund or exchange-traded fund (ETF) for clients, we use the technology to create a virtual fund. It allows us to hold various baskets of securities and divide the holdings across different clients — just like a fund or an ETF — but with virtually zero cost. We can do this because we spread out the cost among our clients, unlike our competitors who usually charge every client.”

As VMFT enables the company to handle transactions with almost any brokerage firm in the world, Algebra can offer a wider range of investments and asset classes than other robo-advisory platforms. It adopts a smart beta strategy, which uses algorithms to derive its active equity portfolio before blending with fixed-income ETFs or sukuk funds.

The strategy was developed by Singapore-based Farringdon Asset Management. “The company has been using this strategy for the last 10 years and it outperforms the S&P Shariah Index by about 2% each year,” says Yeomans.

“What we are doing is making it digital. We have done the security checks, upgraded our servers and spent money on the infrastructure. But apart from that, there are no extra costs. All of these are done internally.”

Farringdon Group, a private wealth management and personal tax planning company regulated by the Labuan Financial Services Authority, has mainly served high-net-worth individuals

(HNWIs) since 2007. It has about US$170 million under management.

Algebra was developed to meet the demand for shariah-compliant investments. According to Yeomans, this market is worth US$11.5 trillion. The shariah-compliant strategy used by the platform has been approved by Kuala Lumpur-based shariah advisory firm Amanie Advisors.

As Farringdon Group is based in Labuan, its transactions are done in US dollars. Algebra’s minimum investment amount is currently US$4,000 while its total expense ratio (TER) is about 0.85% per year.

“It is already cheap, but it is possible for us to drive down the cost. Realistically speaking, we may be able to offer our services at 0.4% to 0.6% if our application to be a custodian is approved. As we continue to expand the technology, we may be able to offer our services with a minimum investment amount of only US$100, which we aim to do in the next two years,” says Yeomans.

Although Algebra offers mainly shariah-compliant investments, the platform’s users also have the option of investing in the conventional space. The robo-adviser invests in iShares ETFs and stocks listed on the S&P 500 index.

 

Enabling the Region

Even among HNWIs, there is a growing consensus globally that investment products and services should not be as expensive as they are, says Yeomans. With technological advancements in the industry, consumers expect lower price points for all types of products and services, especially with the commission-based model being phased out.

“I know a lot of financial advisers and private bankers who get large commissions from clients. But their services are really not worth the price,” says Yeomans.

“For example, some mutual fund agents charge about 3%. I have dealt with these people before. They are basically salespeople who ask you a few questions. Why can’t a computer do that?

“We understand that this should stop and we decided to take a step back to develop the platform. It is not something revolutionary. We have been doing the same thing for the past 10 years. It is just that it is a platform instead of human interaction.

“Cost is key here. If we charge just 0.85% TER while other players charge up to 5%, would clients go back [to services with high upfront charges] if we can prove Algebra’s performance?”

Farringdon Asset Management holds a capital markets services licence, issued by the Monetary Authority of Singapore in October last year, but it does not have the licence to offer ringgit-denominated investments in Malaysia. Yeomans says the company is looking to get white label partners for its platform, which is made possible with VMFT.

“Once these players see how many of their clients Algebra is bringing on board, they will think of jumping on the bandwagon. What we can do for our partners is redo the back-end and front-end of the platform, according to what they want,” says Yeomans.

“For example, if the bank is called X bank, then we can call it X bank robo. It is entirely up to them. One of the local banks that I am talking to right now is planning to charge 1.2% TER with the white label, which is still very cheap compared with what they normally charge for such transactions.”

Apart from talking to major banks in Malaysia and Singapore, Yeomans is looking forward to partnering financial institutions in other countries with a high Muslim population, such as Indonesia, India, Qatar and Bahrain. “This will happen eventually and we will get the regulators on board as well. For example, if we see a lot of clients are from Indonesia, we will discuss with the regulators there and ask them to recommend the best party for us to partner to bring back business to their shores,” he says.

The white label product will come with an annual fee of RM100,000 in the first year and RM200,000 in the second year for Malaysian players while for Singaporean players, the fee will be S$100,000 in the first year and S$200,000 in the second. Yeomans says this is three times cheaper than the rate offered by other providers.

“What sets us apart is that we are not a technology firm. We are a financial advisory firm and we build our product by outsourcing to technology firms,” he says.

“The technology firms that are coming out with these solutions are facing huge glaring holes because they have never given advice in their lives. Unlike us, they do not understand financial planning.

“This has been ingrained in us for many years. We understand how financial products work. That is why we wanted to come out with the platform. While it is not difficult to create a product, the solution and strategy will require more than just programming and development.”

 

FinTech Lab

Algebra aims to get 1,000 users on board in the next 12 months. Its target assets under management (AUM) is US$50 million by the end of the first year.

Yeomans says there is a high possibility that the platform will achieve its objectives in the first quarter. He expects to get at least 100 users on board every month.

“We are trying to be as realistic as we can. It probably won’t happen, but I genuinely think that we can get US$100 million in AUM in the first year. We have a strong team, we are advised by Amanie Advisors and we have a good strategy running,” he says.

Farringdon Group will introduce a steady stream of products after Algebra. These include Mercury, a product developed for ultra-high-net-worth individuals (UHNWIs). Yeomans says the product is being developed to cater for the growing population of UHNWIs globally.

According to the World Ultra Wealth Report 2017, published by Wealth-X, the world’s UHNW population grew 3.5% to 226,450 last year. Asia accounted for more than 26% of the total population, up from just above 18% a decade earlier.

“This product will not be the same as Algebra because people are not going to let robots manage US$10 million deals. Our sister company in Singapore is managing clients with up to US$40 million of assets, and we know that they would rather do everything face to face. But I believe that Mercury will be something very beneficial for UHNWIs,” says Yeomans.

To develop its products, Farringdon Group has started building a financial technology (fintech) lab in Labuan and hiring locals to develop its fintech wealth management solutions. It has a 20-year road map to build financial products and services with a digital banking model.

“I think the people who are going to lead this market will be those who set up Fintech firms and think like Fintech players. For conventional players, we are really thinking outside the box in terms of our products and services. There is so much more that we can build with the platform using our white labelling model,” says Yeomans.

“The possibilities are endless. We will develop the app into something that can be plugged and played such as mortgage financing, bitcoin investing and house insurance application functions.”

In the future, he hopes the company will be able to push the minimum investment amount to as low as US$10 so that the platform will be accessible to the entire Asian population.

 

Written & Distributed by;

http://www.theedgemarkets.com

Are You Returning ‘Home’ to the UK ?

Making the move back to the UK after spending time living abroad is not nearly as easy as one would think. There are a number of reasons why people decide to return ‘home’, most commonly, homesickness, new position and missing family members.

 

Your decision to move home has likely took months to reach and moving home after spending an extended period of time living and working abroad can give way to a number of challenges, both emotional and difficult never mind the change of climate and way of life.

The process of repatriating can become a stressful experience. Think of it as being similar to when you started your expat adventure, just without the hassle spending hours in a bank, opening up a new account in a foreign country!

 

When considering repatriation, one must consider whether they are still a UK Resident or an Overseas Resident.

 

This list of Criteria is helpful in determining which category you fit in. This should be step one when considering moving back to the UK.

 

You are still considered a UK resident if you;

  • Present in the UK for 183 days or more in a tax year; or
  • There is at least one period of 91 consecutive days, at least 30 days of which fall in the tax year, when:
  • you have a home in the UK in which you spend a sufficient amount of time (typically 30 days), and either you:
  • have no overseas home, or
  • have an overseas home in which you spend no more than a permitted amount of time (typically 30 days)
  • Work full time (typically 35 hours per week) in the UK, as assessed over a period of 365 days with no significant break (typically 31 days of less than 3 hours work) (also consider relevant jobs)or
  • The 30-day presence rules operate on each home separately and independently

You are now considered an overseas resident if you;

  • Resident in the UK in all of the previous three tax years and present in the UK for fewer than 16 days in the current tax year; or
  • Not resident in the UK in all of the previous three tax years and present in the UK for fewer than 46 days in the current tax year; or
  • Work “full time overseas” (typically 35 hours), in the year of assessment and there are
no significant breaks from overseas work (typically 31 days of less than 3 hours work), the number of days on which more than 3 hours are worked in the UK is less than 31 and the number of days spent in the UK is less than 91

Now it’s time to acknowledge what has changed since you left

A list of changes would include;

  • Changes to State Pension
  • Changes in personal tax allowances
  • Changes to lifetime allowance
  • Changes to inheritance tax
  • The closing of capital gain loopholes

Regarding state pension,

After April 2017, people will have to work longer, needing to make 35 years’ worth of National Insurance (NI) contributions, rather than the current 30, to qualify for the full state pension.

Whether or not you will be awarded the UK State Pension is usually based on the UK qualifying years you have worked. You can however accrue qualifying years in the European Economic Area, Switzerland, or certain bilateral countries that have a social security agreement with the UK. We can assist by sending you a quick and easy 5 step guide to checking your NI contributions, just email me for details.

 

Regarding changes to personal tax allowance,

The amount of money you are allowed to
earn before income tax becomes payable has increased to £11,000, up from £10,600. From 6th April 2017 it will rise again to £11,500.

Those who fall into the 40% tax rate bracket can now earn £43,000 a year, up slightly from £42,385 in 2015/16, before having to pay the higher-rate of income tax. This is set to rise further to £45,000 in April 2017 with the Government stating its commitment to raising it to £50,000 by 2020.

 

Regarding changes to lifetime allowance,

On the 6th April 2016 the standard pensions Lifetime Allowance (LTA) was reduced again, this time from £1.25 million to £1 million. Having peaked at £1.8m in 2010/11 anybody with an estimated pension portfolio approaching £700,000 or a projected retirement income of £35,000, must review their retirement plans now.

Those who do nothing risk being taxed at a rate of 55% for any excess (amount above the lifetime allowance) taken as a lump sum, or 25% for any excess taken as income (in addition to your marginal UK income tax rate). We can assist with a free pension review, please email me for more details.

 

Regarding changes to inheritance tax,

The idea of working your whole life and then having to pass
a large slice over to the state can leave a bitter taste in many people’s mouths. However, with careful planning there are ways
to minimise or even eradicate any such liability and ensure that your life’s wealth goes to the people you want it to.

Unfortunately, it is all too common to see forced property sales and huge
tax payments simply because people did not seek proper advice at the right time. There are some very simple steps to protecting your wealth and they could end up saving you and your family a fortune.

 

Regarding closing of Capital Gains Tax loopholes,

As of April 6 2015, all non-UK residents must pay CGT when selling UK residential property of any value. If you currently own a UK property, be it for residential or investment purposes, it is important that you are up to speed with the new Capital Gains Tax Rules introduced in 2015. When an asset, such as a house is sold or disposed of, Capital Gains Tax (CGT) is paid on any realised profits.

The total gain is calculated by subtracting the sale value from the property’s when the rule change came into effect. If you haven’t already, you should consider obtaining a valuation of your property, even if you don’t intend on selling it in the near future.

How you are impacted by UK CGT can differ based on your residency status. The tax rules in your current jurisdiction might make it advantageous to dispose of your assets before returning to the UK.

 

If you have any questions or queries on ANYTHING above I would be more than happy to advise and speak to you on a one to one basis, either email or call me direct.

All the best and have a great day

Stuart

CEO

Farringdon Group

+60 3 2026 0286

Week 29 in Review

 

S&P 500 and MSCI World among record-setters

Foreign investment in US real estate hits new high

Trump’s pro-growth agenda further snagged

BOJ pushes inflation deadline back again

ECB to discuss QE this autumn

 

 

Global equities set records this week as a Goldilocks environment of moderate growth and accommodating central banks prevailed. European shares have been relative laggards, perhaps constrained by the recent rise in the euro, which hurts export competitiveness. The yield on the US 10- year Treasury note fell on the week to 2.24% from last week’s 2.32%. The price of a barrel of West Texas Intermediate crude oil remained unchanged at $46.35. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (VIX), was steady at a historically low 9.9.

 

GLOBAL MACRO NEWS

Equities extend record rally
Though the US business cycle is set to enter its ninth year in the weeks ahead, equity prices continue to advance, underpinned by a solid start to earnings season and steady interest rates. Among the indices setting records this week were the US bellwether S&P 500, the MSCI World, the Russell 2000 and the Nasdaq Composite.

Foreign purchases of US homes hits record
For the year ended March 2017, foreign investment in US residential real estate hit a high, according to the National Association of Realtors. Foreign buyers accounted for fully 10% of the dollar value of US homes purchased over the year, up from 7% the year before, amounting to $153 billion in purchases. Buyers from China and Canada led the list, followed by those from the United Kingdom, Mexico and India. Sales were concentrated largely in Florida, California and Texas.

McCain illness adds to Trump’s legislative woes
Efforts by Senate Republicans to repeal and replace Obamacare went down to defeat this week, and work to repeal the 2010 health care law and replace it at a later date has been complicated by news that Arizona senator John McCain was recently diagnosed with an aggressive form of brain cancer, making his return to Washington, D.C., any time soon uncertain. Republicans hold a narrow 52–48 advantage in the Senate, so McCain’s absence narrows the margin further, making it less likely that pro-growth reforms will advance this legislative session. After health care, the Senate is expected to take up tax reform, though there is not yet a consensus among Republicans on how to approach the issue.

Elusive BOJ inflation target slips further into future
The Bank of Japan postponed by another year the date it expects to achieve its 2% inflation target, now forecasting that the goal will be achieved in March 2020. This is the sixth time the BOJ has pushed the target out into the future. The central bank projects that consumer prices, excluding food and energy, will rise only 1.1% in the year ending March 2018.

ECB delays taper discussion
European Central Bank President Mario Draghi said the bank did not discuss tapering asset purchases at its meeting on Thursday but would address the issue this fall. Draghi’s tone was less hawkish than in late June, when he suggested the ECB could begin to wind down its asset purchase program soon. Since that speech, inflation data globally have softened, reducing the urgency of beginning to normalize monetary policy. Draghi is scheduled to speak in late August at the annual Jackson Hole central banking conference, where he might lay out his tapering plans.

UK eyeing transition deal?
The British government is rumored to be considering accepting the free movement of European Union citizens into the United Kingdom for a four-year period following its departure from the EU. Such a concession is thought to be part of a transition deal that will ease the impact of Brexit on UK-based businesses. Negotiators from the EU and UK met in a four-day session this week. Progress thus far has been slow, with the UK still formulating its Brexit strategy despite having triggered Article 50, which began the Brexit process, nearly three months ago. EU negotiator Michel Barnier has asked the UK to clarify its negotiating position.

 

EARNINGS NEWS

Earnings season off to a solid start
With 21% of S&P 500 companies having reported, the Q2 earnings season seems to have gotten off to a solid start. Seventy-six companies reported an 8.6% rise in earnings on 5.4% revenue growth. Earnings growth cooled from Q1’s torrid pace, however, as those 76 companies reported a 16.5% earnings gain during the period, according to Zacks Investment Research.

 

THE WEEK AHEAD

Date Country/Area Release/Event
Mon, 24 Jul Global July flash purchasing managers’ indices
Mon, 24 Jul United States Existing home sales
Tue, 25 Jul Germany Ifo business sentiment survey
Wed, 26 Jul United Kingdom Preliminary Q2 gross domestic product
Thu, 27 Jul US Fed interest-rate decision
Thu, 27 Jul US Durable goods orders
 Fri, 28 Jul US Preliminary Q2 gross domestic product

 

All the Best and have a great week ahead

Stuart

CEO

Farringdon Group

+60 3 2026 0286

Five Common Mistakes UK Expats Make About Domicile And Tax

British expats still have some crucial misunderstandings about their domicile status and tax position that could leave them and their loved ones financially exposed and even land them in trouble with HM Revenue & Customs, warns Rachael Griffin, financial planning expert at Old Mutual Wealth.

The research from Old Mutual International, part of OMW, shows that a lack of knowledge can lead to unexpected consequences.

Griffin said: “It is essential advisers understand the domicile status of their clients and their plans for the future.

“Inheritance tax will be a concern for many UK expats and appropriate planning needs to be in place to mitigate any on-going liability.”

Click through to find out what the common knowledge gaps were among UK expats currently living overseas.

 

British expats mistakenly believe they are no longer UK domiciled

 

OMI’s research shows 74% of UK expats who consider themselves no longer UK domiciled still hold assets in the UK, and 81% have not ruled out returning to the UK in the future.

This means HMRC is likely to still consider them to be deemed UK domiciled.

Griffin explained: “British expats are likely to have a UK domicile of origin, acquired at birth. They can try to acquire a new domicile (a domicile of choice) by settling in a new country with the intention of living there permanently.

“However, it is very difficult for someone to lose their UK domiciled status and acquire a new one.

“There are no fixed rules as to what is required to do this and the burden falls on the individual to prove they have acquired a new domicile, and often this isn’t finally decided by HMRC until someone passes away.”

She continued: “Living in another country for a long time, although an important factor, does not prove a new domicile has been acquired. Among the many conditions that HMRC list, it states that all links with the UK must be severed and they must have no intention of returning to the UK.”

 

British expats mistakenly believe they are only liable to UK inheritance tax (IHT) on their UK assets

 

A staggering 82% of UK expats do not realise that both their UK and world-wide assets could be subject to UK IHT, OMI found.

Griffin explained: “As most British expats will still be deemed UK domiciled on death, it is important that they understand that this means their worldwide assets will become subject to UK IHT.

“A common misconception is that just UK assets are caught. This lack of knowledge could have a profound impact on beneficiaries.

“Before probate can be granted, the probate fee and any inheritance tax due on an estate must be paid.

“With UK IHT currently set at 40%, there could be a significant bill for beneficiaries to pay before they can access their inheritance. Setting up a life insurance policy could help ensure beneficiaries have access to cash to pay the required fees.

“Advisers setting up policies specifically for this purpose must ensure they place the policy in trust to enable funds to be paid out instantly without the need for probate.”

 

British expats mistakenly believe they are no longer subject to UK taxes when they leave the UK

 

Research shows 11% of UK expats with UK property did not know that UK income tax may need to be paid if their property is rented out, and 27% were unaware that Capital Gains Tax may need to be paid if the property is sold.

Griffin explained: “All income and gains generated from UK assets or property continue to be subject to UK taxes.

“Some expats seem to think that just because they no longer live in the UK they don’t need to declare their income or capital gains from savings and investments or property held in the UK.

“By not declaring the correct taxes people can find they end up being investigated by HMRC, and the sanctions for non-disclosure are getting tougher.”

 

British expats mistakenly believe that their spouse can sign documents on their behalf should anything happen to them

 

OMI’s research shows 44% of UK expats wrongly believe their spouse will be able to sign on their behalf should they become mentally incapacitated.

Griffin explained: “The misconception that a spouse or child or a professional will be able to manage their affairs should they become mentally incapacitated is leading people to think they don’t need a power of attorney (POA) in place.

“This could result in families being left in a vulnerable position as their loved ones will not automatically be able to step in and act on their behalf.

“Instead, there will be a delay whilst they apply to the Court of Protection to obtain the necessary authority.

“This extra complication is all avoidable by completing a lasting POA form and registering it with the Court of Protection.”

 

British expats unsure if their will is automatically recognised in the country they have moved to

 

Half of UK expats do not know if a will or power of attorney (POA) is legally recognised in the country they have moved to, OMI found.

Griffin explained: “It is wrong to assume a will or POA document is automatically recognised in the country in which they move to.

“Often overseas law is driven by where the person is habitually resident, and the laws of that country will apply.

“Therefore, people may require a UK will and POA for their UK assets and a separate one covering their assets in the country they live.

“The wills also need to acknowledge each other so as not to supersede each other.”

This is the area we specialise in so I hope you find this informative, if you would like to learn more please contact me directly.

Have a great day

Stuart

CEO

Farringdon Group

+60 3 2026 0286

 

Source: International Adviser

Changes to UK State Pension

Six million men and women will have to wait a year longer than they expected to get their state pension, the government has announced.

The rise in the pension age to 68 will now be phased in between 2037 and 2039, rather than from 2044 as was originally proposed.

Those affected are currently between the ages of 39 and 47.

The announcement was made in the Commons by the Secretary of State for Work and Pensions, David Gauke. He said the government had decided to accept the recommendations of the Cridland report, which proposed the change.

“As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations,” he told MPs.

Anyone younger than 39 will have to wait for future announcements to learn what their precise pension age will be.

‘Cocktail of ill health’

The change will affect those born between 6 April 1970 and 5 April 1978.

The government said the new rules would save the taxpayer £74bn by 2045/46. While it had been due to spend 6.5% of GDP on the state pension by 2039/40, this change will reduce that figure to 6.1% of GDP.

Labour said the move was “astonishing”, given recent reports suggesting increases in life expectancy were beginning to stall, and long-standing health inequalities between different income groups and regions in retirement.

State pension calculator – check your age and entitlement

Shadow work and pensions secretary Debbie Abrahams told MPs that many men and women were beginning to suffer ill health in the early 60s, well before they were entitled to their state pension.

“Most pensioners will now spend their retirement battling a toxic cocktail of ill-health,” she said.

“The government talks about making Britain fairer but their pension’s policy, whether it is the injustice that 1950s-born women are facing, or today’s proposals, is anything but fair.”

TUC general secretary Frances O’Grady said the government risked creating “second-class citizens”.

“In large parts of the country, the state pension age will be higher than healthy life expectancy,” she said.

“And low-paid workers at risk of insecurity in their working lives will now face greater insecurity in old age too.

“Rather than hiking the pension age, the government must do more for older workers who want to keep working and paying taxes.”

Age UK was also critical of the change.

“In bringing forward a rise in the state pension age by seven years, the government is picking the pockets of everyone in their late forties and younger, despite there being no objective case in Age UK’s view to support it at this point in time,” said Caroline Abrahams, charity director at Age UK.

“Indeed, it is astonishing that this is being announced the day after new authoritative research suggested that the long term improvement in life expectancy is stalling.”

Pensions Commission

The government has also committed to regular reviews of the state pension age in the years ahead.

That raises the prospect of further rises. Indeed a report by the government’s actuary department in March suggested that workers now under the age of 30 may have to wait until 70 before they qualify for a state pension.

Tom McPhail, head of policy at Hargreaves Lansdown, said the government would need to do more to encourage saving, particularly amongst younger people.

“For anyone yet to reach age 47, there is still time to adjust their retirement plans by looking to contribute more,” he said.

“We feel it is important the government meets them halfway; we need a national savings strategy to help people save and invest for their future. A good starting point would be for the government to look at a savings commission.”

The SNP said it remained opposed to raising the pension age beyond 66 and reiterated its call for an independent pensions commission to be set up to look at “demographic differences across the UK”.

In response, Mr Gauke said the Scottish government would have the power to provide extra financial help for those approaching retirement if they so chose

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Stuart

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