Morfitt's Mailshot Issue 33...          Can't see this email properly? View in browser

Morfitt & Turnbull

Issue 33   

Interesting Times
Interest rates are always topical these days and therefore I thought I would take a closer look at this issue for our latest mailshot.
The Bank of England Monetary Policy Committee voted unanimously to hold the Bank Rate at a record low of 0.25% on February 2nd 2017, saying inflation is likely to return to around the 2% target later in February then rise above it in the following months. The Committee also raised growth forecasts to 2% from the previous 1.4% for this year.

The interest rate in the UK averaged 7.76% from 1971 to 2017, reaching an all time high of 17% in November of 1979 which many of you will no doubt remember! You may also remember the 16th September 1992 when the UK left the ERM and interest rates increased from 10 to 15% on that day!
  Bank of England Base Rate
So how does the level of our interest rate look in comparison to other countries? The data makes some interesting reading, currently at the time of writing at the top of the “league table” is Ghana with a whopping rate of 25.5% closely followed by Argentina at 24.75% and Malawi at 24%, whilst at the other end of the spectrum there are 25 countries who have zero or negative interest rates with Switzerland being the lowest at -0.75%.

As we are talking about dream holidays later on in this mailshot I’ve included the interest rates in some popular holiday destinations as follows.
  • Seychelles 12.42%
  • Turkey 8%
  • Maldives 7%
  • South Africa 7%
  • Mexico 6.25%
  • Jamaica 5%
  • China 4.35%
  • Mauritius 4%
  • Australia 1.5%
  • USA 0.75%
  • Greece 0%
  • Spain 0%
  Popular destinations
So for those of you who have not yet used all your ISA allowance and are looking for an alternative to Cash here are a few of the benefits of equity ISAs that we’d be happy to talk through with you:
  • Every person aged 18 and over and UK resident receives an ISA allowance each tax year - currently £15,240 (2016/17).
  • No Capital Gains Tax on gains when fund(s) are sold and no tax to pay on dividends.
  • Potential to build up a significant sum that is your own personal "tax haven". HMRC doesn't need to be told about any lump sums or income received whatever your age.
  • Investments can now be transferred from an equity ISA to a cash ISA or vice versa. Previously it could only be done from cash to equity.

Pension Technical...  Don't miss the deadline!
The introduction of automatic enrolment for pensions in 2012 has the aim of getting as many employees as possible saving into a pension which can then be used to provide an income once retired.
Auto enrolment started with the largest companies, in terms of employees, moving down in number until the smallest companies go through the process.

The pensions regulator had to put rules in place to warn and ultimately penalise those companies that don’t adhere to the rules. Setting up a pension scheme for employees is nearly always compulsory.

The regulator first issues a warning letter with the aim of trying to help the company comply. If this is ignored, a statutory notice will be issued explaining the action that needs to be taken.

If this doesn’t result in compliance then a penalty notice will be issued. This starts with a fixed fine of £400, which then escalates to between £50 and £10,000 (depending on number of employees) every day until the statutory notice is followed. It may ultimately lead to prosecution.
Automatic Enrolment
Since the start of auto enrolment there has been a total of 26,040 compliance notices issued with 15,073 of these being sent in the third quarter of 2016. Of these notices 6,779 were a £400 fixed penalty and 741 were issued escalating notices of between £50 and £10,000 per day.

The regulator has reported that a football club was the first employer to be issued with an escalating penalty notice. Before they complied with the regulations fines had been incurred totalling £22,900. They also had to invest backdated pension contributions of just over £13,600.

If you want to discuss pensions auto enrolment, please ‘phone Craig Greenall on 01565 624370.

Gareth Says... 

Many clients have invested in Premium Bonds and/or National Savings Income Bonds. From May 1st 2017 the rates will fall. The Income bond will reduce from 1% to 0.75% and Premium Bonds from 1.25% to 1.15%, however, this is tax free and better than most accounts, but you do need to be 'averagely lucky', whatever that means?

On the other hand, there is good news regarding the amount you can put with a UK regulated institute. The amount of compensation has risen to £85,000 per individual under the Financial Services Compensation Scheme (FSCS).

Staff Matters
As Winter is now hopefully drawing to a close many of us turn our attention to holidays so I’ve done a survey here at the office for everyone’s dream holiday destination, which turned up some interesting results!
Gareth – South Africa & New Zealand.
Adam – Ponta Delgada in Portugal.
Stuart – Iceland (not the store).
Craig – Zante (not much choice for me seeing as I’m getting married there in June!), followed by Australia.
Annie – Safari in Kenya, Zambia, Tanzania, must be a luxury lodge though!
Zara – Iceland, Northern Lights a must see.
Bev – Trekking around Italy for just a year!
Pauline - Turks & Caicos Islands.
Lisa - Wine tasting in the Marlborough region of New Zealand and total relaxation on the Island of Mauritius.
  Dream holiday


No. 1 Booths Park, Chelford Road, Knutsford, WA16 8GS
Tel: 01565 624 370   Email: 

Morfitt and Turnbull (Management Services) Limited 
Authorised and Regulated by the Financial Conduct Authority.
Registered Number 740613 England

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