If you own a holiday or investment property in Europe, should you be panicking?.
One of my dearest friends spent some of his retirement capital on a plot of land in Spain. This was to be the site of the dream holiday home, plus a handy source of income from lettings. Ten years on, he has his house, but it has cost him a fortune. He has successfully sued the agent who set up what turned out to be a rather poor deal, but the trustee in bankruptcy still has not managed to secure funds to pay him what the court says he is owed.
He would take a big hit on his capital if he sold the place, always assuming he could find a buyer at any price. That hit could get bigger if the Eurozone falls apart, and Spain devalues to try to get out of the hole it is clearly in right now.
So what are the odds? Those of us who never believed in the currency without a Government, and who got very fed up by the intellectual arrogance of the Europhiles on all political fronts, might be tempted to shout “I told you so” from the rooftops. This would not be a good idea. We in the UK have been profoundly influenced for over 1,000 years by what happens on the mainland of Europe, and it ain’t about to change.
The Eurozone is between a rock and a hard place. No outcome looks great for us. But if you have property in the Eurozone, or if you are spending pounds to buy Euros to live there, I hope you have nerves of steel, because I think you’ll need them.
Pensions - RPI or CPI?
This Government appears to be just as bad as its predecessor when it comes to fiddling about with Pensions policy. It does not seem to be able to decide whether RPI or CPI should govern some, or all, pension increases. Either way, most occupational schemes limit increases to 5%, and inflation is tracking to go past that some time soon.
The answer, according to The Daily Telegraph, is for savers to pile into equities. I am not brave enough to make a big asset allocation bet, and I think it is irresponsible to suggest it. If you’re retired, and you have savings, and you have a strategy, you’re best advised to stick to it until an adviser can convince you that there is a better alternative.
The Treasury's simple dreamers...
Somewhere in HM Treasury is a unit of dreamers. They came up with Stakeholder Pensions. Failed. They came up with CAT marks. Failed. They came up with a new investment vehicle for personal pensions. Didn’t see the light of day so had no chance to fail. They came up with more Stakeholder products and a ‘basic advice’ regime. Failed and failed.
And now they think it would be a good thing if someone produced some simple products, so that untutored people could understand them and thus want to buy them. This is patronising tripe. Some poor people save. Some do not. Their decisions are very personal. No-one has demonstrated that the people who do not save would do so if one of these simple products suddenly appeared.
But daftest of all is the contention in the consultative paper that the industry should produce simple versions of income protection and critical illness insurance. These products are complicated, by definition, since they involve medical judgements. The dreamers do not tell how they think this little difficulty can be overcome.
Read this article at http://www.candidmoney.com/articles/article181.aspx
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