A financial plan not only helps you to provide adequate resources for your current needs, but also helps you save enough to meet future financial goals of your family. The primary purpose of a financial plan is to ensure that your and your loved ones’ lifestyle and life stage goals are fulfilled.

Are you sure what life has in store for you on the next turn? Are we aware of where the next turn in our life is? For all, the unknown is the only certainty in life. If the next turn brings happy tidings, there is nothing but joy and all is right in our world. However, when it delivers a shock, the need for and the readiness to be suitably prepared comes to the fore and is truly put to the test. Therefore, given the uncertainties of life, it is imperative to have a financial plan and be financially ready to ensure that all your life stage goals are met.

A financial plan not only helps you to provide adequate resources for your current needs, but also helps you save enough to meet future financial goals of your family. The primary purpose of a financial plan is to ensure that the lifestyle and life stage goals of you and your loved ones are fulfilled.

However, people often get pre-occupied with the investment and “returns” aspect of a financial plan, and more often than not overlook their financial “protection” needs. Even though insurance is synonymous with protection, insurance is often purchased more from either an investment/tax-saving perspective rather than its true purpose of protection.

Not being adequately protected through a life cover before chalking out investment and wealth creation plans is a cardinal financial sin. It is our primary responsibility to safeguard the future of our families in case something was to happen to us. Without a life insurance policy in place, if the breadwinner is not around anymore, any and all grandiose wealth creation plans will remain incomplete.

Hence, before anything else, it is critical to determine your life insurance need for the sake of your family. How much cover you need The rule of thumb says that you should have enough life insurance cover that is approximately equivalent to 10 times your current annual income. However, this is merely a rough barometer while trying to arrive at the actual amount of cover needed to take care of one’s life stage goals.

It is important to take into account matters such as your current and future financial obligations, the rate of inflation, the health and financial condition of your dependents and the amount of current liabilities to arrive at an estimate of how much total life insurance will be needed.

Life Insurance is not just about protecting loved ones from the risk of financial stress due to the breadwinner dying too early. It also plays an important role in building a corpus to meet various life-stage needs through disciplined savings. To meet the dual purpose of savings and long-term protection, there are many efficient endowment plans which provide life cover, create long-term wealth, provide financial support to enjoy peace of mind and serve the purpose of an effective tax-saving instrument.

Add riders, get more benefits To widen the scope of coverage at a fairly affordable cost, it is financially prudent to consider adding “riders” to the base life insurance policy. These riders help to cover unforeseen calamities such as disabilities arising from accidents that can adversely impact income earning ability or a critical illness cover that pays out a lump sum if diagnosed with a serious ailment that may require long-term care.While looking to purchase a life insurance policy, bear in mind that the insurance plan you choose should ideally offers a combination of adequate protection from risk while ensuring that your family’s financial liabilities are met without causing additional financial burden.

Empirical evidence in India suggests that life insurance needs to become the cornerstone of every Indian’s financial plan.Unfortunately for many, life insurance enters the consumer’s “consideration set” as just another financial instrument that is purchased without giving it the due thought and importance one’s life cover deserves. In order for this to change, we must realise that life insurance is uniquely different from all other financial products because it has the protection of your financial interests as its core proposition and thus, should be the foundation of everyone’s financial plan. credited to : http://www.tribuneindia.com/news/business/life-insurance-is-must-have-for-your-financial-plan/307304.html

More than one in 10 people who remortgaged in August managed to save more than £500 a month on their repayments, according to financial data website Moneyfacts. There are many reasons why people want to remortgage aside from the potential of savingon your repayments.

Others do it to raise money. You may want to borrow more money by increasing the size of your mortgage debt or release some of the equity built up in your home to pay for things like home improvements or to consolidate other more expensive debts (though this is risky).

And some do it because their current mortgage just doesn’t fit anymore. You may want to switch from an interest-only deal to a repayment mortgage, be thinking of trading in a variable rate deal for the security of a fixed rate or just want greater flexibility with the option to make overpayments and reduce the term of your loan. The good news is remortgaging is simpler than getting a mortgage to purchase a new home. If you’re considering doing it here are some steps to help you through the process.

Get organised

The first step to remortgaging should be getting to grips with your current situation.

It’s a good idea to get together any paperwork on your existing deal so that you can make a note of the interest rate you currently pay as well as the SVR your lender has in place for when your offer comes to an end. You’ll also need to find out what you have left to pay on your loan.

This information can be found on your annual mortgage statement or by contacting your mortgage provider. As well as this information you should check what charges apply for leaving your deal. Your current deal might come with Early Repayment Charges (ERCs). ERCs tend to apply up until your fixed or variable deal ends, but these can carry on after this period with some mortgages so double check.

They usually apply to your whole mortgage debt so can cost thousands of pounds. You should also find out the exit fee your provider will charge you to leave your current deal. This can be between £50 and £200 and will be applied on top of any ERCs, but can only be charged according to what was stated on your original mortgage contract. It’s also worth mentioning the stricter mortgage lending rules, which mean you’ll need to provide evidence you can afford your new mortgage, not just now but in the future when rates rise.

Lenders will look at your income and want detail of your outgoings. So check your spendinghabits won’t let you down before you come to apply. Using an overdraft or taking out a payday loan won’t look good. You should try to reduce your outgoings and boost your disposable income at least three months before you plan to apply for the new deal.

Take a look at what’s on offer

Once you know a bit more about where you stand you should shop around for a remortgage deal to see what’s on offer. You’ll need to have an idea of the type of mortgage you want to go for (interest-only or repayment, fixed or variable, flexible or offset) as well as your loan-to-value or LTV, which represents what you are borrowing as a percentage of the value of your property.

You can calculate your current LTV by dividing your outstanding mortgage debt by your property’s current value (check Zoopla or Rightmove for an indication if you don’t have a recent valuation from a lender or estate agent) and multiplying the result by 100. For example a £150,000 mortgage debt on a property valued at £200,000 the current LTV is 75% (£150,000 / £200,000 x 100).

Be aware that your LTV band may have changed since you first got your deal. It may have improved as a result of your regular payments and/or the property increasing in value. Or it may have got worse as a result of a fall in the value of your property. If you have less than 5% of equity (which means you need to borrow more than 95% of what your property is worth) or you are in negative equity (where your loan exceeds the value of your property) you will find it difficult to remortgage. Armed with your LTV range you can browse for an appropriate remortgage deal (remember these deals are different to deals for new purchases).

To compare deals you can check out lenders directly, see if your current account provider can offer a special deal (existing customer deals tend to be more competitive) and use comparison sites. Or you may appreciate the help of a mortgage broker in your search to find the best deal for your situation and fight your corner with the lenders. However bear in mind that HSBC, First Direct, Yorkshire Building Society and Britannia don’t work with brokers so make sure you check out these deals too. If you’re confident you can do it solo, pick out a deal and continue with these steps! Looking for a mortgage? Compare rates from just 0.99%

Challenge your existing lender

Once you’ve picked out a deal you can challenge your existing lender to beat it. Mortgage lenders don’t want to lose customers, so yours might make you an offer you can’t refuse. Lenders have specific mortgages called product transfers specifically designed to keep borrowers that are thinking of leaving.

These just change the terms of your current deal, which is usually quicker and cheaper especially if you haven’t asked to increase your mortgage debt. It will be simpler and cheaper to stick with your current lender than go elsewhere as you can avoid certain fees and charges. But don’t let this sway your judgement.

Work out the cost of switching and the savings

Before you make the decision to remortgage it’s important that you work out the costs of leaving your existing deal and moving to a new one as well as finding out how much you will actually save (especially if this is your objective for the remortgage). Use the information you gathered in step one to work out the cost of leaving your deal and whether you’ll have to pay an exit fee and any ERC on the date you do it (you’ll save thousands by switching after ERCs no longer apply).

Then you’ve also got to consider the fees associated with the switch and the new mortgage. You might need to pay legal fees to solicitors as well as charges associated with setting up a new mortgage like valuation fees, arrangement fees, booking fees and in some cases a higher lending charge and transfer fee. Rather than raid your savings to pay for these upfront you may be able to find fee-free deals or deals that have some of these costs (like legal and valuation fees) included.

Alternatively you could add the fees to your new mortgage, but this can be expensive as you’ll be paying interest on the extra debt for the duration of your deal. Once you’ve decided which deal you think you want to switch to, you should also do a savings comparison to ensure you’ve picked the right one.

There are a host of mortgage calculators available online. You can input the cost of your current deal (or its future SVR) and compare it against the cost of a new deal to see what sort of savings you will get over the introductory period and over the term of the deal. Once you’ve taken a closer look at your situation, the deals available to you and the costs and savings you should be able to decide if remortgaging will benefit you.

Apply for your new deal

Before applying you should check you and the property are eligible for the deal. You should also double check your credit record is in good shape as this is something lenders will check as part of their assessment. It’s also worth getting together the additional paperwork you’ll need like your last three month’s bank statements, last three month’s payslips (or two or three years’ worth of accounts if you are self-employed) and proof of bonus/commission.

You should also get a copy of your latest P60 or SA302 tax return (mainly for self-employed). Ideally you should apply before your existing deal ends to ensure you don’t spend an extended amount of time on your lender’s SVR. You’ll also want to time it right so you don’t end up paying early repayment charges for leaving your current deal too early. You should aim to apply three to six months before your current deal ends as lenders will make an offer that remains valid for at least this long.

When you are ready to switch you can continue with the process which can take around four to eight weeks. Credited to: http://money.aol.co.uk/2016/10/10/why-remortgaging-now-could-save-you-a-small-fortune/

What is negative equity?

If you have an interest-only mortgage you are more at risk of negative equity than if you have a repayment mortgage. That’s because your monthly payments don’t go towards reducing the value of your debt, only towards the interest.

A property is in negative equity if it’s worth less than the mortgage secured on it, and it’s normally caused by falling property prices. For example, if you had bought a property for £150,000, with a mortgage for £120,000 and the property is now worth £100,000, you would be in negative equity. However, if you had bought a property for £150,000 with a mortgage for £120,000 and it’s now worth £130,000, you would not be in negative equity. It’s estimated that there are around half a million properties in negative equity in the UK, although some areas are affected far more than others. It’s a particular problem in Northern Ireland, where up to two out of every five properties bought after 2005 are in negative equity.

How do I know if I’m in negative equity?

You may not know whether or not you’re in negative equity. First of all, ring your lender to find out how much you owe now. Next, ask a local estate agent to value your home or instruct a surveyor (who will charge for this). If the value of the property is below what you owe, then you are in negative equity.

Problems that come with negative equity

It’s an immediate problem if you want to sell your home. Unless you have savings that you can use to repay the difference between the value of your home and the mortgage, you may find it difficult to move. It can also be difficult if you want to remortgage; perhaps to a fixed rate or a cheaper deal. Most lenders will not let people with negative equity switch to a new mortgage deal when their existing one ends. Instead, they will normally be moved onto the lender’s standard variable rate.

Moving house if you’re in negative equity

How easy it is to move will depend on several factors, such as:

How much negative equity you have

If you are up-to-date with your existing mortgage

How much of a deposit you can raise for the new property

The value of the property you want to move to.

Talk to your lender in the first instance and find out what help they can give you. A very small number of lenders offer a ‘negative equity mortgage’. This will let you transfer your negative equity to your new property, but you will still be expected to pay a deposit.

Pros and cons of negative equity mortgages

Pros:

You can move house without having to pay off the negative equity on your mortgage. This is particularly useful if you need to move for work or family reasons and can’t put it off.

Cons:

You may have to pay early repayment charges on your existing mortgage.

There may be extra fees and charges, and your new mortgage may have a higher interest rate than your existing one.

Very few lenders offer them.

Reducing your negative equity

If possible, it’s a good idea to try and reduce your negative equity by overpaying your mortgage. Firstly, check whether your existing mortgage will let you make overpayments and, if so, how much you can overpay without incurring an early repayment charge. Next, work out how much extra you can afford to pay every month or as a one-off.

Use our Budget planner to draw up a budget.

Try our Quick cash finder to see where you can make savings.

Look online for a mortgage overpayment calculator. This will tell you how much difference your extra payments could make. Several mortgage brokers and lenders have these tools.

Renting out your home if you are in negative equity

Another option may be to rent out your home if your lender will agree to this. This would mean you keep the existing mortgage, although you will probably have to pay a higher interest rate. You would also have to tell your insurer. Credited to: https://www.moneyadviceservice.org.uk/en/articles/negative-equity-what-it-means-and-what-you-can-do-about-it

If you’re in negative equity you could find it hard to move house or remortgage. Find out what you can do and the help that’s available.

What is negative equity?

If you have an interest-only mortgage you are more at risk of negative equity than if you have a repayment mortgage. That’s because your monthly payments don’t go towards reducing the value of your debt, only towards the interest.

A property is in negative equity if it’s worth less than the mortgage secured on it, and it’s normally caused by falling property prices. For example, if you had bought a property for £150,000, with a mortgage for £120,000 and the property is now worth £100,000, you would be in negative equity. However, if you had bought a property for £150,000 with a mortgage for £120,000 and it’s now worth £130,000, you would not be in negative equity. It’s estimated that there are around half a million properties in negative equity in the UK, although some areas are affected far more than others. It’s a particular problem in Northern Ireland, where up to two out of every five properties bought after 2005 are in negative equity.

How do I know if I’m in negative equity?

You may not know whether or not you’re in negative equity. First of all, ring your lender to find out how much you owe now. Next, ask a local estate agent to value your home or instruct a surveyor (who will charge for this). If the value of the property is below what you owe, then you are in negative equity.

Problems that come with negative equity

It’s an immediate problem if you want to sell your home. Unless you have savings that you can use to repay the difference between the value of your home and the mortgage, you may find it difficult to move. It can also be difficult if you want to remortgage; perhaps to a fixed rate or a cheaper deal. Most lenders will not let people with negative equity switch to a new mortgage deal when their existing one ends. Instead, they will normally be moved onto the lender’s standard variable rate.

Moving house if you’re in negative equity

How easy it is to move will depend on several factors, such as:

How much negative equity you have

If you are up-to-date with your existing mortgage

How much of a deposit you can raise for the new property

The value of the property you want to move to.

Talk to your lender in the first instance and find out what help they can give you. A very small number of lenders offer a ‘negative equity mortgage’. This will let you transfer your negative equity to your new property, but you will still be expected to pay a deposit.

Pros and cons of negative equity mortgages

Pros:

You can move house without having to pay off the negative equity on your mortgage. This is particularly useful if you need to move for work or family reasons and can’t put it off.

Cons:

You may have to pay early repayment charges on your existing mortgage.

There may be extra fees and charges, and your new mortgage may have a higher interest rate than your existing one.

Very few lenders offer them.

Reducing your negative equity

If possible, it’s a good idea to try and reduce your negative equity by overpaying your mortgage. Firstly, check whether your existing mortgage will let you make overpayments and, if so, how much you can overpay without incurring an early repayment charge. Next, work out how much extra you can afford to pay every month or as a one-off.

Use our Budget planner to draw up a budget.

Try our Quick cash finder to see where you can make savings.

Look online for a mortgage overpayment calculator. This will tell you how much difference your extra payments could make. Several mortgage brokers and lenders have these tools.

Renting out your home if you are in negative equity

Another option may be to rent out your home if your lender will agree to this. This would mean you keep the existing mortgage, although you will probably have to pay a higher interest rate. You would also have to tell your insurer. Credited

The City could have a bright future if it seizes the opportunities offered by Brexit CREDIT: TIM IRELAND/PA WIRE

It seems like now is the right time to propose a new word – Brexitology. There is a growth industry of people applying the power of hindsight to the question of what Brexit means, and what happens next. How do we execute the clear democratic mandate for change without losing the internationally-focused businesses which provide so much employment across the country?

It is a particularly acute question for those of us in financial and related professional services. We rely on a specific blend of Anglo-Saxon law and culture, geographic and legal ties to Europe, and a uniquely global outlook. It is an alchemy which is hard to replicate, harder to invent, but easier to lose. We have to start by recognising stagnancy was never an option. We cannot just rely on the advantages which made us the world’s number one financial centre after the Big Bang. The capabilities that will drive tomorrow’s growth and success will be very different from those of today.

As well as heading TheCity UK, John McFarlane is also the chairman of BarclaysCREDIT: CHRIS RATCLIFFE/BLOOMBERG

If we want to remain at the top, staying the same would never have been enough. We must act now – using Brexit as a change agent to address the challenges of the next phase of the global economy, and its implications for nations and society. What the referendum vote has done is magnify the impact and urgency of that change, and deliver new opportunities that will define our nation’s economic future.

It has also made clear that there needs to be a collaborative effort between the industry, policymakers and regulators to bring forward policies that support growth across the industry. We cannot ignore the subtext to June’s vote – we have to be clear about how we help the UK, just as much as how the UK can help us. Let’s not forget we are talking about a national strategic asset.

Financial and related professional services employ over two million people right across the country, generated a £66bn tax contribution and a £72bn trade surplus in 2014 and attract more foreign direct investment into the UK than any other industry in the economy.

This is an industry which underpins communities and businesses across the UK. Maintaining this ecosystem is a complex task with many moving parts, but it is achievable. TheCityUK’s latest report sets out in detail the way ahead for the industry to stay competitive.

Bankers including Mr McFarlane met then-Chancellor George Osborne in the days after the referendum to promise to keep on lending CREDIT: STEFAN ROUSSEAU/REUTERS

As I see it, there are five broad priorities. First, global connectivity. The UK is a truly global financial centre and our international trade and investment partnerships are key. We must maintain an effective UK-EU relationship and sustain mutual market access, while also focusing on strengthening ties with developed economies such as the US and Japan, and enhancing links with key emerging markets such as China and India. Second, drive national growth.

The industry’s regional footprint is strong, but we need to build more connected regional centres, with specialist capabilities and expertise in priority areas such as emerging technology skills such as cyber and analytics, as well as more traditional areas like back and middle office.

We also need to have the right educational institutions and enterprise partnerships in place to ensure long- term success. And we must be clear about the impact of the supply chains we anchor. The number of jobs which ultimately rely on global finance should never be underestimated. Third, expand our services. New sources of growth in the industry are fast emerging and, with clear partnership, we can ensure the UK retains and grows its position as the global leader in areas such as capital markets, insurance products innovation, investment management, legal services and infrastructure financing. Fourth, embrace disruption.

Technology is rapidly changing the industry, offering the opportunity to engage differently with our customers and employees. The positive momentum we’ve already gained in FinTech needs to be harnessed to ensure that the UK becomes the place where the next generation of financial and related professional services is made a reality. Capabilities, networks and regulations need to be developed in areas that could redefine the industry, such as blockchain.

Fifth, build skills and attract talent. A changing industry means a shift in the skills and expertise needed to drive it. We need to develop and retain access to a diverse and global workforce that is skilled in areas such as data science, artificial intelligence and cybersecurity.

This means effective partnerships with educators, and agreeing an approach to immigration to ensure we are able to attract and retain the brightest talent from across the world. It does also mean recognising that a skills-positive approach has to be reconciled with a broader constraint on migration. We often say that we have strong foundations to our success, and that is true.

If we build on those foundations, the wider economy will reap the benefits. Competition to host the highly-skilled and globally-mobile financial and related professional services industry is growing, and Brexit uncertainty could pose additional challenges.

We must now push harder and faster to embrace the opportunities, specialist skills and technology to maintain the global strength of the industry and safeguard the UK’s continued attractiveness. It will require real energy from industry, policymakers and regulators, but the prize, I believe, is worth fighting for. Credit: http://www.telegraph.co.uk/business/2016/08/07/the-financial-sector-must-look-ahead-to-remain-a-world-leader/

Kevin Dowd, professor of finance and economics at Durham University, argues the Bank’s tests, which model various adverse economic scenarios, have a series of ‘fatal flaws’

The Bank of England’s annual stress tests of the UK’s banks, designed to ensure Britain’s lenders will not be at the heart of another destructive financial crisis, have been branded “worse than useless”, by a new report.

Kevin Dowd, professor of finance and economics at Durham University, argues in a paper published today by the Adam Smith Institute that the Bank’s tests, which model various adverse economic scenarios each year such as a major fall in UK house prices or a Chinese property crash, have a series of “fatal flaws” and that the central bank is “asleep at the wheel”.

“The purpose of the stress-testing programme should be to highlight the vulnerability of our banking system and the need to rebuild it. Instead, it has achieved the exact opposite, portraying a weak banking system as strong”.

Professor Dowd warns that the eurozone banking system is on the precipice of another crisis, which will also engulf the UK’s major lenders. “Once contagion spreads from Italy to Germany and then to the UK, we will have a new banking crisis but on a much grander scale than 2007-08” he said.

“The Bank of England is asleep at the wheel again, and we will be back to beleaguered banksters begging for bailouts – and the taxpayer will be ripped off yet again, but bigger this time. Recession warning Among the flaws in the Bank’s testing exercise identified by Professor Dowd are the fact that the stress tests rely on analytical “risk weights” for banks’ assets, which have been much criticised for potentially underplaying the true riskiness of various assets such as mortgages and sovereign debt.

Professor Dowd also cites the use of questionable estimates of the scale of banks’ true exposures and the fact that the Bank of England, unrealistically, only models a single stress scenario at a time. In addition, he says the Bank’s tests are less rigorous than those of the US central bank, and that if UK lenders were tested by the Federal Reserve all of them would fail. Other former regulators have raised questions about the Bank’s reliance on stress tests to gauge the resilience of UK banks.

In a speech last year Robert Jenkins, a former member of the Bank’s Financial Policy Committee and now a senior fellow at Better Markets, said: “For stress testing to be effective regulators must know which risks to stress and by what degree to do so. However hardworking and intelligent they may be they are also human. They, like the bankers they regulate will at some point get it wrong.” Mr Jenkins, along with Professor Dowd, argues that regulators’ efforts should be focused on requiring banks to raise considerably larger equity cushions to protect them against future risks that are simply unforeseeable to regulators today.

In relation to their total assets regulators such as the Bank of England are only requiring private banks to have equity cushions of up to 5 per cent. This would imply that if their assets fell by just 5 per cent they would be insolvent and, potentially, need a public bailout.

The European Banking Authority – a separate regulator – published the results of its ownlatest stress test exercise for 51 or the continent’s largest banks last Friday, including the Royal Bank of Scotland, Barclays, HSBC and Lloyds. This found that in an “adverse” scenario HSBC’s capital cushion falls to 8.7 per cent, RBS to 8 per cent and Barclays to 7.3 per cent – all well above the level at which they would have been pressured to raise more equity.

Two previous EBA stress tests in 2011 and 2014 have been roundly criticised for giving a host of eurozone lenders, which subsequently needed to be rescued, a clean bill of health. European bank stocks have fallen sharply this week, suggesting that investors are unconvinced by the latest EBA results too.

In its own latest stress test scenario for 2016 the Bank of England is modelling a fall in the price of oil to $20 a barrel, a 33 per cent slide in global property prices and a 4.3 per cent fall in UK GDP. The results are due to be published in the final quarter of this year. Credit to: http://www.independent.co.uk/news/business/news/bank-of-england-s-stress-tests-for-lenders-branded-worse-than-useless-a7168851.html

FSCS rethinks how to raise funds across the Finance Industry

In his latest industry blog, Financial Services Compensation Scheme chief executive Mark Neale stated that the Financial Advice Market Review final report has given his organisation “plenty to get our teeth into”.

“The trouble is that failures, when they do occur, can be very expensive, and continuing consumer confidence and trust in the industry depends on FSCS protection.”

He pointed out that since 2009 to 2010, the FSCS has paid out £1.5bn for claims against advisers.

http://www.ftadviser.com/2016/04/11/ifa-industry/your-business/fscs-backs-risk-based-levy-for-professional-advisers-P5GO7rM7iQpt1J3opuSMZP/article.html

US Tackles Negative Equity Head On – Ireland and the UK should follow this lead. It’s not often that we look across the pond and complement our American cousins however we must give them credit for tackling the Negative Equity Crisis that persists in the US ….at long last .

Being trapped in Negative Equity is a lonely and challenging situation , yet it is important to remember that you are not in fact alone. Millions of homes around the world bear the burden of crushing negative equity, and for home-owners it seems an insurmountable challenge.

While the governments in the UK and Ireland have remained deafeningly silent on the issue other attempts have begun around the world to tackle the problem head on. The Federal Housing Finance Agency in the United States has announced measures to reduce the balances of mortgages which are greater than the value of the Properties they’re secured to.

This has been mainly aimed at mortgages held with two of the global financial crisis’ biggest causalities, Freddie Mae and Fannie Mac. The idea behind eradicating this Negative Equity is that it will act as a catalyst which will stimulate the once fiery property markets of the US.

Many are calling the move too little, too late however as the scheme will only target 33,000 Negative Equity Homes while the scale of the problem in the US is estimated to effect almost 6 million homeowners. With hundreds of thousands of homes trapped in Negative Equity across Ireland and the UK it is now time that the respective governments step up to the plate and tackle the issue head on. Economic growth in regions such as the North West of England and Northern Ireland has been very definitely stunted by the anchor of Negative Equity and it is clear that this is having a real world impact on the hundreds of thousands facing the unprecedented problem.

The Financial Conduct Authority (FCA) is considering a change to consumer compensation limits after suggestions that insurance and investment limits should be aligned. In a policy statement (25 April 2016) the FCA said it will look at a possible increase in the amount of compensation investment customers can claim from the Financial Services Compensation Scheme (FSCS). Currently, those who claim for an insurance policy from a failed insurer are eligible for 90% of compensation (100% for mandatory products such as car insurance), while investment claimants face a £50,000 limit (per person, per claim). The FCA said it wanted to look at the issue in the context of the pension reforms, which gave all direct contribution savers over the age of 55 freedom to purchase what they wanted and meant many more were opting for investment-type products. The FSCS had already said in its annual report for 2014-15 it was keen to discuss increasing the current £50,000 protection limit. Annuities (traditional products purchased by a matured pension) are seen as long-term insurance contracts and as such qualify for 100% protection. However, adviceon the products is classed as investment advice, subjecting the claimant to the lower £50,000 investment limit. The FCA and Prudential Regulation Authority (PRA) do not differentiate between investment claims in connection with pension related-deposits, long-term insurance contracts or investments, and similar non-pensions-related activities. For instance, a person who purchases an investment product is in the same position with regard to FSCS limits whether the investment product is held in an ISA, in a self-invested personal pension (SIPP), or a defined contribution occupational pension scheme.