Back-to-work mums left out of pocket (Churchill Financial Advisor)

Mothers of young children returning to work face huge financial penalties, says the Sunday Times. The cost of childcare is so high that a mother of two youngsters needing full-day nursery care needs to earn over £40,000 a year to be left with a surplus after all the bills – including tax – have been paid. However, those childcare costs should fall next year when a new system will provide a subsidy of up to £2,000 per year per child.

Check the ingredients in family protection package 

A mother who had planned her family’s protection used the Sunday Times to check out her recipe. It included pure life assurance to pay off the mortgage, family

Graduates who took degrees in medicine and economics were the highest earners ten years after graduation, reported the BBC. The Institute of Fiscal Studies used data on student loan repayments to work out the numbers. Male medical graduates were earning £55,000 (females £45,000) and economics graduates £42,000 (females £38,000) while for creative arts graduates the figures were £18,000 and £14,500 respectively. Other top subjects for earnings were law, engineering and physical sciences.

Cut out of estate by second wife

A Daily Telegraph reader told the story of how his father’s second wife cut him out of a £300,000 inheritance. She and the reader’s father had made Wills where they each left all their assets to each other, with an agreement that on the second death, their children by former marriages would get equal shares. But after her husband’s death, she remade her Will leaving his son nothing. Experts said you would have to create a trust leaving only a life interest to the wife to avoid this problem and many company owners chose to take higher dividends before this date to reduce their tax bills.

Landlords will survive

Landlords face an extra 3% Stamp Duty on property purchases. From next year, higher rate tax relief on mortgage interest will be progressively withdrawn. And the Bank of England has tightened ‘affordability’ rules for BTL mortgages. But the FT says this will have little effect on what is a huge trend in property ownership. Between 2007 and 2016 the proportion of households in rented property rose from 11.5% to 16.3%.  With property prices as high as they are, that trend is unlikely to change. Moreover, Bank of England data show that two-thirds of landlords only pay the basic rate of income tax so they will be unaffected by the change in rules on mortgage interest. The FT concludes that Mr Osborne has huffed and puffed but he hasn’t blown BTL down.

(IFA Compliance, Newsletter April 2016)

Churchill Financial Advisor

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About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.