Friday, 30 January 2009

Be wary with your cash

Customers who want to avoid being left in the lurch when a store goes bust should make sure they buy wisely.

Chris Detheridge, who is based at our offices in Euston Way, Telford, said: “As the recession deepens, experts are predicting that up to 200 shops a day may close this year. This means more and more people could find themselves struggling to get their hands on goods they have already paid for if a store goes under.

“And the bad news is that customers have surprisingly few rights if a firm disappears, so it’s vital to think carefully about what you buy and how you buy it.”

Administration is a legal process that lets companies and individuals claim some or all of the money they are owed by the firm that has gone bust.

“But the problem arises when there are not enough assets to pay off everyone, and the amount of protection you have in this situation will depend on how you bought the item.

“If you paid for something with cash but the goods were never delivered, you will have to go to the administrators for a refund. Your purchase may well be packed and clearly marked with your name in a warehouse somewhere. If so, you are entitled to receive the item as ownership has technically passed to you.

“The best protection will be available if you paid for the goods on credit, either by credit card or with in-store finance. This will mean you can claim back the value of any item worth between £100 and £30,000 directly from the credit company.

“Given the current climate, be wary and think carefully before you make any major purchases – you don’t want to risk your hard-earned cash in these difficult times.”

Growing interest in equity release

More and more Shropshire residents are turning to the equity tied up in their homes to beat the credit crunch. And for many people, taking a lump sum from the investment they’ve made over several decades, may well be the only option they have.

Simon Wagner, who is based at our head office in Telford, said: “The profile and popularity of Equity Release is growing rapidly, and now this method has been given an extra boost on a national scale with debates even taking place in the House of Lords.”

“They looked at the way Equity Release was linked to retirement planning, and the role of Safe Home Income Plans (SHIP), the trade body representing over 90 per cent of the equity release sector. The aim was to come up with a consultation document on how to best achieve a result where significantly more people were using safe equity release,” said Simon.

“Many people are struggling to finance their retirement, and yet may be unaware they are sitting on a valuable asset they could use to make their life easier. By raising the profile of Equity Release, we hope to encourage people to use it safely, and they could find they are able to stay in their own homes for longer, rather than being forced to downsize because they can’t afford to live their lives.

“But it’s important to seek advice from a reputable independent financial adviser, and make sure you instruct lawyers who have a real knowledge of the process."

To find out more about our Equishield service, which guides clients through the complicated equity release process, visit www.equishield.co.uk

Thursday, 29 January 2009

De-mystifying home reversion plans

At a time when the concept of equity release is slowly beginning to win over the sceptics, home reversion plans continue to be viewed with suspicion by many commentators. Why is this the case? Well, it may be because home ownership is such an emotive subject in the UK, especially among the older generation who view owning their house as the culmination of many years hard work. It may also be because there is a popular misconception about the nature of home ownership and the legal rights attached to a home reversion, that serve to feed people’s fears.

And yet in certain circumstances it is an option that should be given due consideration, especially if the clients have a positive view of their life expectancy, want to leave a guaranteed inheritance, need to release the maximum sum available and house price uncertainty continues to prevail.

Under a reversionary scheme, the clients sell all or part of their property at a discounted rate to a provider in exchange for a lump sum or regular income. The clients are given a lifetime right to remain living in the property and remain as beneficial owners with their rights of occupation protected by a lifetime lease. The legal title passes to the provider essentially for practical purposes as they have to be able to deal with the property at the point at which it has to be sold. Contrary to popular belief, holding the legal title does not confer any financial benefits upon the provider.

So it may well be a matter of showing clients the bigger picture; an experienced advisor should have conviction in their recommendation and be capable of reassuring the most cynical of clients, and if they work closely with a similarly experienced lawyer the clients should be given the correct advice to enable an informed decision to be made.