The National Institute Economic Review (NIER) says that growth will run below its normal trend at 3.3% this year and rise slightly to 3.7% in 2014.

Trade around the world will also grow but only at a slightly faster rate, again below trend.

A NIER spokesman said: “It has been more than five years since the global economic crisis hit and the world’s economies remain weak.

“Advanced economies are still seeing high rates of unemployment but there are signs of improvement and there are still some risks to recovery remaining.”

Low interest rates

The NEIR forecast also predicts that growth in the Eurozone will be ‘slight’ this year, in Japan it will grow by 1.4%; in the US the figure is to increase by 2.4% and China by an impressive 7.3%.

Around the world interest rates will remain low compared to their historic standards and inflationary pressure will also remain ‘subdued’.

The NEIR also highlights that tensions on global markets have eased in recent months, especially in Europe.

They also say that the firm policy decisions to support the Euro have soothed fears of an imminent break-up of the currency.

However, the move has brought the yields on the Eurozone’s sovereign bonds down but this has calmed concerns of a widespread banking crisis.

Analysts at NEIS also applaud the aggressive monetary policies being pursued in Japan and the US to start their economies moving upwards again.

Lack of confidence

America is also praised for its actions to avert the ‘fiscal cliff’ debacle which would have pushed the economy back into recession.

The spokesman added: “While these actions have helped reduce the risks to the economy our main forecast is that the global economy remains fragile.

“The improvements to market indicators have done little to address the main issues which could affect recovery and they are an impaired and opaque banking system, severe fiscal austerity being implemented across Europe and economic uncertainty among politicians.”

A lack of confidence among business and individuals continues since they have been ‘disappointed by apparent short-term economic improvements’ which in turn has affected the risk people are prepared to make when saving and investing.

People shouldn’t be blamed for having a lack of confidence, says the NEIS, because world trade has slowed down markedly ‘than expected’ and this will affect growth in countries which rely on exports for a successful economy, most notably Germany and Japan.

The post Sluggish Global Economy Is Stuck In A Rut appeared first on QNUPS Information & Advice.

The call comes after new research shows that most people over the age of 50 are over optimistic about their finances in retirement – and fail to save enough to last their lifetime.

And with annuities paying low incomes in retirement, many over 50s could face financial problems because they have too little money to last.

The report by the Institute for Fiscal Studies (IFS) and the National Association of Pension Funds (NAPF) says those with a ‘defined contribution’ (DC) pension are particularly at risk.

Joanne Segars, NAPF chief executive, said: “Most savers with a defined contribution pension are being over optimistic because they will need to grow their pension pot by 80% to match their life expectation without adding in the extra years.

Financial difficulties

“And a third of people have no idea what their pensions might pay out and with people living more years than they thought, they will find savings and pensions will run out or leave them in financial difficulties. It’s a big ask for them to save the extra needed to fund their retirement properly.”

She cautioned: “Many over-50s are sleepwalking into old age, expecting they will be better off than they actually will be and it doesn’t help that the annuity market is now so tough.”

NAPF is urging people to give their workplace pensions an annual ‘health check’ to see what it will deliver and make any extra savings or adjustments needed to pay for their retirement.

The report highlights that women in their 50s underestimate by four years their life expectancy – they predict 84 instead of 88 years while men do so by two years – 83 years instead of 85.

Life expectancy

But the real worry is for anyone with a DC pension because the average that such a pension pot would have to grow by to meet their expectations is a massive 77% – or £20,200.

However, the report also highlights the importance of shopping around for the best annuity rate at retirement – something the vast majority of people never do – because they usually get better annuity rates than they would from the company providing their pension.

Pensions experts says this appreciation of life expectancy which should fuel any decisions made – whether to buy the annuity from another company or whether to avoid taking tax free pension cash so retirement savings can provide the income needed.

The post Over-50s ‘Sleepwalk’ In To Retirement Nightmare appeared first on QNUPS Information & Advice.

In the past financial year, the average increase for an executive was 12 % despite the aftershocks of the banking crisis and recession gripping the economy.

The findings come from the High Pay Centre, a think tank which is urging the government to act to control executive pay as shareholders are struggling to rein in salaries.

High Pay Centre director Deborah Hargreaves said: “Such pay increases are not only damaging to the economy but also to the morale of those struggling to make ends meet.

“Executives are failing to realise that taking these pay rises is not acceptable.”

Boardroom culture

She called for a change in boardroom culture and said the banking crisis had meant that people had not noticed the ‘big bonus and inflated awards culture’ carried out by chief executives.

Ms Hargreaves added: “Executives picking up more pay even as their companies decrease, employees are seeing their pay frozen and jobs are axed. That is wrong.”

The report highlights ‘innovative’ wage structures which masked the real growth in chief executive pay by increasing the amount paid in bonuses, shares and incentive plans.

The think tank also warns that most companies are ‘not getting what they pay for’ and the new schemes are not an efficient way to reward performance.

Their research reveals that the average FTSE 100 chief executive defied the climate of austerity by seeing their pay rocket by 27% last year.

Shareholder revolts

Most of these bosses collected pay and benefits worth around £4 million each, even though such high wages and the bonus culture was heavily criticised by the public.

Though there have been several high profile shareholder revolts against some major companies this year over the pay for their chief executive, there are calls for stronger government action.

There are measures in place which gives shareholders the power to reject executive pay rises, but the High Pay Centre says that having a vote once every three years isn’t going to achieve ‘significant change’.

Fair pay campaigners are asking for legislation which compels remuneration committees to include a representative from the workforce in negotiations and for executive pay to be simplified without a confusing bonus or incentive package.

A Department for Business spokesman said it wasn’t the role of government to interfere in how companies are managed but conceded there was an issue in ensuring that shareholders could challenge excessive pay packages more effectively to help rectify the situation in some firms.

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Obama and Congress are at stalemate horse trading policy options and will eventually come to an agreement – but at what cost to the rest of the world is the question other countries are asking.

The fiscal cliff is a deadline shortly after the 2013 New Year when several tax breaks for families and business in the US end, leaving a massive budget hole to fix.

If Obama can pull off a solution, then the global economy will stutter to a recovery over the next two years, predicts the OECD.

But prevaricating politicians in Washington DC have to act decisively to replace the billions of dollar going out of the economy in to welfare payments and tax breaks.

World may slip in to recession

The lack of movement has caused stock markets and currencies to stall worldwide as investors wait for the president to take control and announce behind-the-scenes bargaining has at last led to both sides avoiding the impasse.

Failure to act could help plunge the world economy back in to recession.

At the launch of the OECD’s latest Economic Outlook in Paris, the group’s general secretary Angel Gurria expressed concerns about the fragile state of the US and Eurozone economies and called on governments to take quick and resolute action to resolve the issues.

His comments come as the OECD forecasts for the global economy is upbeat.

The findings expect GDP growth in 2013 to match this year’s figure of 1.4% and then rise to 2.3% in 2014.

Grim economic outlook

Should the US avoid the ‘fiscal cliff’, then the economy should grow 2% next year and 2.8% in 2014.

The eurozone outlook is even less hopeful – with experts forecasting recession in to 2013 – creating a ‘mild contraction’ of 0.1% in GDP – and then picking up to 1.4% in 2014.

The OECD is concerned that even if Obama resolves the fiscal cliff, the eurozone still threatens recovery around the globe unless more strong action is taken by the single currency countries..

The OECD urges ‘decisive policy actions’ which will help improve business and consumer confidence which will then help boost growth and jobs around the world. They add that structural reforms to labour and product markets are key to any positive scenario.

The OECD is a steering group for international economic and tax policy consisting of nearly 40 of the world’s leading developed nations.

The post Obama Must Stop World Slipping Off The Fiscal Cliff appeared first on QNUPS Information & Advice.

Britain’s biggest corporate student landlord Unite Group is issuing a corporate bond paying 6.125% interest over 90 months.

Unite is a FTSE 250 company letting out around 42,000 beds to students living in 124 properties in 24 of the UK’s key university towns and cities.

Just over half of the firm’s £1.3 billion property portfolio is in London.

Unite reports annual occupancy of 98%, and in recent annual results, expects rents to rise at 3% – 4% a year due to strong demand from overseas students in the capital.

£50 million target

The company wants to raise £50 million from the issue – with a minimum investment of £2,000.

The bonds will trade through the London Stock Exchange’s Order Book for Retail Bonds in multiples of £100. Trading is expected to open on December 12, 2012.

Interest is paid six monthly in arrears, with the first payment on June 12, 2013.

James Martin of Investec, which is one of the joint lead managers for the bond, said: “We are finding this a common theme and a popular way for companies to issue debt. The issue has been raised in order to replace existing debt that is maturing shortly.”

Investors will be repaid 100% face value on maturity, providing:

• The firm is still in business and can to pay any debts in full
• The bonds have not been redeemed or bought back or cancelled

UNITE can redeem the bonds on demand 100% face value or at the prevailing yield of UK 3.75% gilts due in 2020 plus 0.5% plus accrued interest.

Student letting leads property sector

Unite chief executive officer Mark Allan said this is in case the company restructures debt, but explained this would involve paying a significant premium to investors.

Allan explained UNITE has tracked the retail bond market for several months and has been impressed by demand from investors.

“It has really evolved over the past few issues and it makes sense for issuers and for investors,” he said.

“UNITE wants to diversify sourcing capital with the aim of bringing the company to a 40% level of non-bank finance.”

Student letting is a key UK property sector – with independent consultants CBRE recently reporting record £2 billion investment in the third quarter of 2012, which was a massive 145% increase over the same quarter 12 months earlier.

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Unfortunately, however much many expats would really love to leave their old life behind them, some things need sorting out – and one is a pension.

Forgetting about the cash stashed in an old personal or workplace savings plan a poor decision, especially when expats can make so much more from the same money.

The deciding factor is your expat status. To understand the basics of this expat pension scheme, head on over to iExpats.com and read about QROPS Pensions

For all the best tax and investment breaks, you need to have broken all ties with Britain and moved abroad permanently. That means completely ditching your old life.

A clean break includes not having a bolt-hole home to return to and moving your personal and financial affairs abroad.

Enhanced tax and investments

If that applies to you, then look at a qualifying recognised overseas pension (QROPS).

These are offshore pensions that accept transfers from UK pension plans and offer enhanced tax and retirement savings benefits for many expats.

The best way to buy a QROPS is to link up with an international independent financial adviser who has plenty of experience in offshore pension transfers.

You want an IFA who has professional tax and investment support – not just a slick salesman who has links with a firm that will take your money.

The offshore pensions market is complicated. QROPS are not the only product, and shifting your money to one may not be right for you.

30% tax-free lump sum

Most QROPS are based on the same blueprint drafted by HM Revenue & Customs in the UK – giving retirement savers:

• Up to a 30% tax-free lump sum drawdown as opposed to 25% in the UK
• Flexible investment options offering a wider range of markets, commodities and currencies
• Payments taxed at local rates, not UK rates
• Retirement from 55 years old – earlier on medical grounds
• No UK inheritance tax on uncrystallised benefits

QROPS pensions are available in around 50 countries, but expats do not have to take a QROPS in the the country where they live. ‘Third party’ plans let expats set up their pension in one offshore financial centre while they live in another.

For instance, an expat can take a Malta QROPS and live in Spain or France, providing they follow the tax rules in both countries.

The post What to do with Your Pension as an Expat appeared first on QNUPS Information & Advice.

If you are parting with hard-earned cash to start a fledgling property empire, the first problem is what type of home to purchase.

Here are six tips to help you make the decision:

Avoid renovation projects

The plan is to add value by renovation – but unless you adding rooms this rarely works.

Putting in a stylish kitchen or bathroom and sprucing up the rooms with a coat of paint and new flooring may make the property sell a little quicker than a drabber neighbour, but it won’t add value.

Leave renovation projects to developers. Instead buy homes that need little work so you can rent them quickly and start receiving income, instead of paying out.

Location, location location!

So important, they say it three times. Property professionals do not buy expensive homes in high rent neighbourhoods because rental voids are expensive to cover and the homes are harder to let out.

Better are simple homes in moderately priced neighbourhoods where real people with jobs and money want to live.

Don’t buy problems

Leaseholds, communities run by committees and the like take away your control over your property and can lead to big bills for service and management charges. Invest in property you control and make your own spending decisions.

Sitting tenants

If the tenant is already in the home, happy and paying the rent on time, then that cuts a lot of hassle. Don’t be worried of a sitting tenant – but do run a credit check and other references before finalising the purchase

Second home neighbourhoods

Look around tourist towns out of season. The shops are shut and the lights are not on and no one is in. Buy a second home if you are going to use it, but expect a lot of maintenance, vandalism and security issues.

Buy investments not homes for yourself

Investments are just that – long term holdings that produce an income and appreciate in value.

Don’t buy a duff property because you would like to live there, or ignore a diamond because you would not move in. It’s not about you but the return on investment. Make the home as nice or nicer than your average tenant could afford, but don’t waste cash on unnecessary fixtures and fittings.

The post Six tips for buying the right investment property appeared first on QNUPS Information & Advice.

Home prices dropped 1.1% between August and September – to an average NZ$585,838, according to the latest monthly price report from estate agents Barfoot & Thompson.

The drop in home values is blames on buyers holding off purchases because they feel sellers are asking too much for their properties and are waiting for more realistic figures.

Nevertheless, despite the fall, home prices in Auckland are up 6.9% year-on-year when many other city markets across the world are returning growth at a much slower rate, and many markets in Europe are falling as a result of the continuing Eurozone crisis.

Yo-yo property market

“The most significant factor still affecting the market at present remains the low number of properties for sale. Restricted choice has been an influencing factor all year, but whereas in the past four months it has contributed to rising prices, in September buyers were cautious about paying more than their assessment of market value,” said managing director Peter Thompson.

“That combination of elements trimmed about $6,000 off the average selling price during the month,’ he said, adding that compared to the average selling price in September last year, prices were up 6.9%.”

The real estate firm, which is the largest in the region, listed 1,266 new properties for sale in September, down 10.7% on August but reflecting the same level for September over the past two years.

The yo-yo state of the market was reflected in sales figures – with just under 1,000 homes sold – the best September figure for five years, but 4.6% down on August, which peaked with the most sales in August for eight years.

Listings lowest for a decade

Luxury prime homes sold well in September, with 78 homes valued at NZ$1 million or more changing hands, adding up to 8% of all homes sold during the month.

However, nearly half of all homes sold for less than $500,000, with 456 homes taking a 47.1% of the market.

“At the end of September we had 3,733 properties on our books, so we are starting the month with available listings remaining at their lowest in a decade,” said Thompson. “Demand for property remains high and until there is a significant increase in the number of homes built, property in Auckland will remain in tight supply.

The post Auckland property bubble may soon burst appeared first on QNUPS Information & Advice.

The new law lets buyers from outside Turkey invest in homes – where old laws only allowed buyers from countries where Turks could purchase property in to the market.

The change has seen the focus shift from holidaymakers buying second homes along coasts edging the Aegean and Mediterranean seas to a major trend of foreigners purchasing properties in Istanbul.

All this is against a backdrop of a booming economy averaging a 3% increase in GDP over the first six months of 2012.

Home prices up more than 10%

Official figures show Turkey is not only a magnet for European buyers, but the nation is seen as a haven for investment that come from political stability and close ties with NATO.

House prices are showing steady year-on-year capital appreciation, according to the Turkish central bank, with the latest figures for July 2012 showing a healthy 10.76% increase in prices year-on-year.

With the prospect of a housing boom, developers are gearing up for a sales frenzy that could see 1 million homes to change over the next 12 months,  says Vice President and Antalya Organization of Constructors President  Deniz Karatas.

Real estate industry insiders are expecting prices to rise due to the broader base of buyers, now investors are coming in from outside Turkey.

Popular holiday destinations

Relaxing property laws has also opened up the sale of agricultural land to foreigners as well – especially for investors from Georgia, Greece, and Bulgaria, who were banned from buying property under the old laws.

The only hindrance to the market is a clause in the new legislation that stops foreigners buying coastal property – with the government citing border security as the reason to hold back this land.

Apartments in Istanbul sell for between £10,000 and £50,000, with a reported high demand in the city from outsiders moving in to rent to take advantage of higher pay scales.

Other popular destinations are Fethiye, nestling only a few minutes drive from the Dalaman Airport and popular Olu Deniz beach, and Antalya – Turkey’s prime holiday destination with more than 600 kilometres of beaches, in excess of 300 five star hotels and millions of tourists a year.

Apartment prices in Antalya start from around £30,000.

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In April 2012, tough new HMRC QROPS tax rules led to many New Zealand Kiwisaver pensions closing for new business from UK expats.

However, New Zealand QROPS are still open for transfers from British expats or international workers with UK pension rights.

Those offering enhanced tax incentives, like withdrawing cash before the age of 55, are no longer in the market, but Kiwisaver QROPS are still worth considering for expats moving to New Zealand, which is a favourite destination to start a new life for many Brits abroad.

Consolidating UK funds in to a NZ QROPS

Not all Kiwisaver pensions are QROPS, but HMRC publishes a monthly list of schemes that have self-certified they meet the requirements. Currently, 34 schemes are accepting transfers from UK pension funds.

New Zealand QROPS follow the same rules as schemes in other countries, which are supervised by HMRC in the UK. These include reporting withdrawals from the fund for 10 years – and unauthorised drawings can attract tax penalties starting at 55% of the transfer fund value.

The cash value of a transfer fund is translated from Pounds to New Zealand Dollars on the day they are switched between funds.

Most UK pensions can be transferred to a New Zealand QROPS, while several small pots can be consolidated in to a single offshore pension. The UK state pension cannot be switched in a QROPS.

The pension transfer value will include any tax relieved contributions paid in the UK, so it makes sense to top up your pension before moving the money across to a QROPS to gain maximum pension contribution relief in Britain.

Kiwisaver tax credits

If you are working in New Zealand, the government pays member tax credits (MTC) of up to NZ$521 each 12 months until June 30.

In the first year, the QROPS transfer fund counts as a Kiwisaver contribution, so will attract the full MTC payment, as the minimum contribution for the full allowance is NZ$521.

Expats who move to New Zealand and continue working should check their MTC account in the summer each year to make sure the correct amount is credited.

Expats in New Zealand can draw their pension benefits in NZ Dollars to avoid currency exchange rate fluctuation.

The post Time to revisit New Zealand Kiwisaver QROPS appeared first on QNUPS Information & Advice.