TMPE2014: Pensions not a committed expense, says FCA
Andy Wilson
It’s a tough one for lenders to get right. Where do you draw the line on what could be removed from an applicant’s budget without over-compromising lifestyle or their futures, but which are ‘non-essential’?
Is a mobile phone essential? Is it essential the parent applicant pays for their 12 year old child to have one? Is a gym membership essential? Is making a pension payment more or less important than having a mortgage on a property which meets the applicant’s needs?
We all know that budget planners will usually reveal a massive surplus of income over expenditure in most cases – because people naturally play down their expenditure for fear of being refused a mortgage. I had one client who lives locally and whose Christmas celebrations resemble those of a Spanish Fiesta, with lights, fireworks and lavish parties. Then they tried to tell me their total expenditure on Christmas was ‘about £200’, Of course it was. But who would dare produce all of the receipts that relate to the cost of Christmas and birthday presents?
Such estimates have to be realistic, but are easily abused. Unless we can prove a particular expense then lenders have to look towards those expenses that can be proved. Pension payments are one of them.
Mervyn
Retirement planning is important but so too is to have decent
housing, there appears to be a lot of posturing going on with regard to
retirement planning, as if some people think they have to put on a front of
good solid thinking.
Bearing in mind pension savings in the UK collapsed following
the introduction of stakeholder and the withdrawal of many employers from final salary schemes, 2013 saw the worst pension contributions since 1950s, it is clearly not the first priority, good housing for the family is.
Pension saving is a discretionary spend, savers can turn it off when they want and turn it back on when incomes improve or other costs go down. The public’s vote is for a decent home today.
Good Mortgage Man
And a decent home that should rise significantly in value over the next 25 years or so. An appreciating asset that when cashed in will attract no tax. The property in itself can play a big part in their retirement provision..
Estate agency misrepresented as house purchasers – ASA
Phil Martin
If Eclectic Financial Solutions via www.webuyanyhouse.co.uk is merely introducing buyers then they are in law an estate agent and the ASA is only one organisation to single them out, there will be others.
If they do the work of an agent (i.e. introducing a buyer to a seller or a seller to a buyer, or acting on behalf of either) then in law they are an agent and are subject to a regulatory regime.
Property sourcers, buyers agents and selling agents are regulated under the Estate Agents Act 1979 and the Consumer Protection From Unfair Trading Regulations 2008.
All agents (including sourcers) must register with HMRC for carrying out estate agency work (since April 2014) and may also require a consumer credit licence, obtainable from the FCA (since 2014).
Agents must belong to a redress scheme, comply with their Ombudsman’s code of conduct and hold indemnity insurance.
In reality however they are most likely paying money to the seller to buy an interest as principal buyers in each transaction and then just selling their interest before completion.
In this manner their website claims are entirely defensible, (despite the occasional spelling mistake).
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