Month: October 2010

Pre-nuptial and post-nuptial agreements revisited

I refer you back to my blog posted on the 11th March 2010 regarding pre-nuptial and post-nuptial agreements where I promised to keep you up-to-date with the ruling of the Supreme Court when it took place. 

Well, the Court has now made a landmark ruling by upholding a pre-nuptial agreement not recognised by British law.  The ex-husband involved in the case has had his divorce settlement significantly reduced after the court upheld the pre-nup and the ruling now falls in line with an agreement made under German law (relevant because his ex-wife is German), that he would not make a claim on his wife’s £100 million fortune in the event of a split. 

Until now courts in England and Wales have not considered pre-nups made abroad to binding.

 So it would seem that it would still be beneficial to have both agreements in place as well as trusts to be as safe as possible.  The potential benefits should be considered by most wealthy people for their children and for themselves.  As financial planners we continue to include these arrangements in our estate planning discussions with our clients and can arrange meetings with the recommended law firm if required.

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Protection to increase for savers in January 2011

The protection limit for those who are lucky enough to have savings is to increase from £50,000 to the equivalent of €100,000 in January 2011. 

Under the Financial Services Compensation Scheme (FSCS) people in the UK are currently entitled to £50,000 worth of protection per UK regulated institution. This means that if your bank goes bust, up to £50,000 of your money is safe – £100,000 in the case of joint accounts.

However, following European legislation, the FSCS has said that this limit will increase to the sterling equivalent of €100,000 on 1 January 2011.

The exact limit is not yet known but the FSCS has confirmed that once the Financial Services Authority decides what exchange rate is to be used, the limit will be fixed and so will change as the pound fluctuates against the euro. The FSA plans to issue a consultation in October.

The value to which people are protected against the downfall of financial companies became a matter of concern during the credit crunch as high street institutions such as Northern Rock, HBOS and Lloyds TSB were all in a precarious position and the collapse of investment firms such as Keydata has added to the public’s concern.

On the back of ‘inaccurate’ media reports suggesting that the FSCS had plans to reduce the compensation protection for investments, the FSCS has said: ‘The FSCS has no plans to reduce compensation protection for investments as suggested, nor is it able to do so. The rules that the FSCS applies when assessing clams are made by the Financial Services Authority. These include rules that set the FSCS compensation limits. The FSCS cannot depart from these rules’.

All of this is good news for those considering their estate planning and investments, whether they are small business owners, employed, self-employed or retired.

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RICS survey suggest house prices are heading for a fall

44% of 265 Royal Institute of Chartered Surveyors working as Estate Agents surveyed said they had seen house prices fall during the past 3 months.  Out of the 265 members surveyed 6% had seen a rise whilst 50% reported prices had been stable.

The Council of Mortgage Lenders figures reported 51,600 mortgages were approved last month, a figure that had fallen by 8% in August despite the fall it was still 3% up on the same period in 2009.

Figures from RICS only highlight the overall picture illustrated by other surveys indicating prices have drifted downward in recent months, despite the gloomy outlook, new data from the government released on Tuesday 5th October saw prices had risen by 0.7% in August from July.

Other respondents to RICS survey suggest the down turn pointing to forthcoming Government cuts in public spending undermining consuming confidence and potential buyers.

Government figures also published Tuesday illustrated a rise of 0.7% in UK house prices in August compared with July, the average value of a home stood at £213.116 in August compared with July according to the Department of Communities and Local Government.

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