Holiday fines to continue (IFA Advice)

A debate in parliament, prompted by an online petition, about fines for parents generated plenty of emotion, but the government said the current system, where local authorities can fine parents for taking children out of school to go on holiday, would not be changed (IFA Advice).

A survey found that holidays booked in the first week after the schools’ summer holiday started cost 36% more than those booked the week before term ended. The government did promise clarification of the rules, and legal cases are also continuing where parents contest the fines (IFA Advice).

Leaseholders can face big problems

UK law is unfriendly to leaseholders, said the Financial Times in a lengthy expose of the problems leaseholders can face. Management charges can be excessive – the average for the UK is now £2,777 per year on new-build properties – and managing agents often force leaseholders to pay over the odds for insurance as well as for repairs. There are almost no controls on ground rents, which have been rising sharply in recent years. Leaseholders in blocks of flats can form their own management company if two-thirds of them want this, and then can usually save money. But in London, with so many absentee landlords, securing that level of agreement is very difficult (IFA Advice).

Why NOT to pay off your children’s’ student loans

If your child leaves university with the current average of £44,000 of student debt, they will need to get a first job paying £40,000 and get inflation-plus-2% a year pay rises for the next 30 years in order to pay off their debt in full. For those who don’t achieve this, a chunk of the debt will remain at the end of 30 years – at which point it will be written off. In fact, it’s better not to think of it as debt, says the FT – think of it as a ‘graduate contribution’ instead. Illness, time off work, periods abroad – these are all things that could cause more of the debt to remain unpaid at the end of 30 years. Rather than student debt, says the FT, help your children pay off other debts or contribute to the fund they need for a deposit on a home. After all, if they lose the job with Goldman Sachs, they’ll still have mortgage interest to pay (IFA Advice).

Demand for equity release grows as more homeowners rely on home to fund retirement

Hundreds of thousands of older homeowners are already relying on their properties to keep them afloat throughout their retirement – and demand for “equity release” is growing, say the Telegraph. Latest figures show that in the three months to June £514m property wealth was released by older homeowners, with an average loan size of around £30,000. The funds are being used to top up pension incomes, as well to help children and grandchildren buy their first properties. With retirees living longer than expected and children needing as much as £38,000 for a deposit on their first home – before tax and solicitor fees – the trend is likely to continue (IFA Advice).

Policyholders with reviewable life cover face dramatic cuts on review

Last year, the Financial Ombudsman Service upheld just under a fifth of the 1,500 or so complaints received about increased premiums or cuts to the sum assured from policyholders who had taken out reviewable life cover, reports the Telegraph. Apparently, numerous policyholders have contacted the paper saying they had no idea that their policies could change so dramatically – some having seen reductions of as much as 75 per cent at the ten year review. What initially appears to be an affordable way to get substantial life cover could turn into a “nasty surprise around the corner” warned one financial expert (IFA Advice).