Verum Wealth Autumn 2021

Printed on paper produced using wood fibre and manufactured at a mill that has been awarded the ISO14001 and EMAS certificates for environmental management. Lee Giles APFS Chartered Financial Planner and Partner Verum Financial LLP The Bramley Suite Orchard House Court Hill Littlebourne Kent CT3 1TX Verum Financial LLP is an appointed representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority Verum Financial LLP is entered into the FCA register under reference 915016 Registered in England and Wales no OC429082. Registered offices: Camburgh House, 27 New Dover Road, Canterbury CT1 3DN t: 01227 949044 m: 07909 695994 e: info@verumfinancial.co.uk w: www.verumfinancial.co.uk Most students in England, Wales and Northern Ireland now take out loans to cover tuition fees and living costs, with an average debt of £45,000 for 2020 graduates. Focusing on this figure, however, can be misleading. The way these loans are structured means the majority will never repay the full amount, so the actual cost is far less. GRADUATE TAX Student debt is more akin to a tax, with graduates on higher salaries paying more. Students in England, Wales and Northern Ireland only start repaying their loans once their earnings reach a certain level – currently £27,295. In Scotland the rules are different – see below. Repayments are equivalent to 9% of earnings above the threshold. Graduates earning £30,000, for example, repay 9% of £2,705 – £243.45 for that year and any outstanding debt is cancelled after 30 years. WHAT CAN YOU BORROW? n Tuition fees loan: Students in England can apply for a loan of up to £9,250 a year to cover tuition fees. n Maintenance loan: Students in England can apply for a maximum of £9,488 (£12,382 in London) to cover living costs if they are studying away from home. This is means-tested against parental income, so many will get significantly less. REGIONAL DIFFERENCES The rules differ within the UK depending on where you reside. n Scottish students don’t pay tuition fees if they study at a Scottish institution. They can apply for a means-tested student loan and bursary to help with living costs. Repayment of the loan begins once earnings reach £25,000 a year for students taking out loans in 2021/22. ■ The maximum tuition fee for Welsh students studying in Wales is £9,000. ■ Northern Ireland residents studying in the country pay a maximum £4,530 in tuition fees. All outstanding debt is cancelled after 25 years. 8 EDUCATION Managing student finance With Freshers’ Week looming, another round of families will grapple with the prospect of financing a university degree. 8 Stop Press: Tax rises and Autumn Budget On 7 September the government announced their policy for the reform and funding of health and social care in England. The measures include an additional 1.25% levy on NICs from 2022/23. Tax on dividends will also rise by 1.25%. The Treasury also confirmed an Autumn Budget and Spending Review on 27 October. ISA cash boom HMRC statistics from June show that close to £50bn was contributed to cash ISAs in 2019/20, more than double the amount placed in stocks and shares ISAs. However, the personal savings allowance (£1,000 for basic rate taxpayers) means those investors may not need an ISA to obtain tax-free interest. HMRC loses HICBC case The Upper Tribunal decided that a discovery assessment could not be used to collect the High Income Child Benefit Charge in a recent case brought by HMRC. HMRC could appeal, but either way more people will continue to be caught by the charge as its income threshold is currently fixed at £50,000. B The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. NEWS ROUND UP G o r o d e n k o f f / S h u t t e r s t o c k . c o m