Tag Archives: financial-planning
Older home owners in UK underestimate the value of their home by almost £90,000
Older home owners in the UK underestimate what their property is worth with 60% not having it valued since first buying it, new research shows. It leaves many over 55s with far greater housing wealth than they realise, which could be used in later life to help fund a more comfortable retirement, according to the research from the Equity Release Council. The study found that the average UK home owner aged 55 and over paid £100,756 for their existing home. Having lived there for an average of 17 years and 10 months, they now estimate it is worth £257,584. This equates to an overall house price rise of 156%, leaving them with an extra £156,828 of equity even before mortgage repayments are accounted for. However, the analysis suggests even this may underestimate the individual housing wealth as according to the Office for National Statistics (ONS), the average UK house price has risen by 244% over the last 17 years and 10 months. Having originally been bought for £100,756 at the start of this period, the average property among over 55 home owners could therefore have a value of £346,861 today, almost £90,000 more than they estimate. By examining market trends, the research suggests people's tendency to misjudge their housing wealth may be linked to low awareness of how price rises have affected the property market in the region where they live. Even those who have had their property valued since first buying it did so four and a half years ago on average. Asked to consider the role of pension savings and property wealth in funding later life, the research suggests that 80% of home owners aged 55 plus would consider using housing wealth to get the most from their retirement. Some 31% said that they feel the best solution is to use their pension savings before their property wealth, 10% said they would prefer to use their savings and property wealth at the same time and 9% said they would rely solely on property wealth or use it before their savings. This leaves 11% who want guidance or advice on the best option for them, while 19% say they do not care which approach they take so long as it gives them the best outcome. The remaining 20% feel the best outcome for their retirement will rely solely on pension savings. The research also found that 38% think unlocking money from the value of their home is likely to benefit them financially in later life, while another 29% are unsure. Among those who would consider using their housing wealth to help pay for retirement, downsizing is the main preference, cited by 42%. However, 22% would prefer to stay in their current home and use a lifetime mortgage to release some equity. The remaining 36% said they are open to either option based on their circumstances. ‘It is no secret that the property market has been kind to… Continue reading
In Agriculture, Uncertainty Is Certain
By Glen Cope For the Capital Press Published: September 26. 2013 Any farmer will tell you that with agriculture things don’t always go as planned. In fact, farmers often refer to farming as a gamble. We never know from the beginning of each growing season if our efforts will pay off in the end. A farm, like any business, is subject to many different variables that can each be vital factors in achieving a profit. One variable that sets agriculture apart is Mother Nature. The weather, when cooperative, can be a farmer’s best friend in terms of raising successful crops and providing ample forage for livestock. However, many times it has proven to be one of agriculture’s biggest adversaries. Both the widespread drought of 2012 and the more regional droughts during the previous year are prime examples of what a lack of moisture can do to food production. The flip side of that extreme is too much moisture. What farmer in the Midwest could forget the Mississippi River flood of 1993, which completely covered entire fields with water, drowning 20 million acres across nine states. Other examples of the tough hand Mother Nature can deal are frost, wind and hail damage to crops and infrastructure, which can also be common occurrences on the farm. Another uncertainty that many farmers find equally as frustrating as the weather is market fluctuations for the crops they grow. Aside from normal supply and demand pressures on the market, other influences include the state of both the global and U.S. economies, growing conditions in competing countries and even hedge fund managers, who may find agriculture commodities attractive investments one day and completely pull money from them the next. Farmers always try to plan for a small profit after crops and livestock are sold. However, one can imagine the disappointment when something completely out of a farmer’s control causes the market to plunge. This uncertainty can make financial planning difficult for the best of farmers. This is why the phrase “farmers are price takers not price makers” is often heard among the people who make their living off the land. With all the unknowns related to farming, it is extremely important that some of the risk be reduced. It is high time that our policymakers give farmers some assurance that if another bad weather year occurs, they won’t be financially ruined because of the high cost to put out a crop. If it were not for crop insurance, it would have been nearly impossible for even a debt-free family farm to survive a year like 2012. Crop insurance allows farmers to farm for another year. If another 1993 or 2012 occurs, many farmers will be forced to sell out because they have so much invested in the crop before it is even harvested. In light of all the uncertainty of farming, farmers need Congress to pass the farm bill and save the farm when disaster strikes again. Glen Cope is a fourth-generation cattle rancher from Missouri. In 2012, he served as chairman of the American Farm Bureau Federation’s Young Farmers & Ranchers Committee. – See more at: http://www.capitalpress.com/article/20130926/ARTICLE/130929927/1009#sthash.whf7ksKZ.dpuf Continue reading
