Latest news with #financial services
Times
16 hours ago
- Business
- Times
Chancellor told to rethink inheritance tax raid on pensions
Savers with pensions worth less than £90,000 should be able to pass on their pots free from inheritance and income tax to spare grieving families the confusion of complex rules, the government has been told. From April 2027 most retirement pots and death benefits will be included in someone's estate for the purpose of calculating inheritance tax (IHT), leaving more families facing hefty tax bills of up to 40 per cent. The change will close a loophole that gives savers a uniquely tax-efficient way of passing on wealth to the next generation — those who can afford it can use other assets to live off in retirement, leaving their pension savings untouched to be passed on inheritance tax-free when they die. But critics have warned that bringing pensions into the IHT net will put a significant administrative strain on grieving relatives. The Investing and Saving Alliance, which represents more than 270 financial services firms, has urged the government to rethink its plans and spare smaller pensions from its tax raid. You can pass on £325,000 of assets from your estate without your benefactors paying any inheritance tax (£500,000 if you leave your main home to a direct descendant and your estate is worth less than £2 million). Any assets above those thresholds are usually taxed at 40 per cent. Anything left to a spouse or civil partner is inheritance tax-free, and they can also inherit any unused allowances, meaning a couple can leave £1 million tax-free between them. This will continue from April 2027. • Surge in wealthy using insurance to beat inheritance tax hit At the moment, pensions are inheritance-tax free, so if you die with a pension pot, you can pass it on to whoever you like and they will not pay any IHT. If you die before 75, they will not even have to pay income tax on withdrawals. Under Reeves's plans, those pension pots will become part of your estate, removing a valuable tax perk. You will still be able to leave a pot IHT-free pot to a spouse or civil partner, but they will not in turn be able to leave it to your children without them having to pay tax on it. One proposal from the Investing and Saving Alliance and the consultancy Oxford Economics is to keep the IHT exemption on inherited pension pots but to only protect those worth less than £90,000 from income tax, regardless of when the pension holder died. If, however, the beneficiary was a dependent of the deceased they would be able to make withdrawals from the pot over time, allowing them to manage the income so they paid less tax. If they were not a dependent, they would have to take the full value as a lump sum. A second proposal is for a tax on inherited pension pots above a certain threshold, with no exemption for spouses or civil partners, which could prove unpopular. The Alliance and Oxford Economics suggested three scenarios that they said would raise the same amount: an inheritance tax of 25 per cent on the value of pots above £150,000; a charge of 30 per cent on values above £200,000; or 35 per cent on values above £250,000. They said that each proposal would raise about £1.3 billion in their first year and £2 billion a year after that. The government estimates that its plan will raise £1.46 billion a year by 2029-30. The Office for Budget Responsibility predicts that IHT receipts, including those from pensions, will rise to £14.3 billion by 2029-30, up from £7.5 billion in 2023-24. The Times understands that the Alliance submitted the second proposal to HM Revenue & Customs during its IHT consultation with the pensions industry between October and January. Renny Biggins from the Alliance said: 'The government's proposal to include pension funds within IHT risks creating unnecessary stress and delays for grieving families, and causing long-term behavioural change among consumers that we don't yet fully understand, particularly around pension contribution levels and withdrawals. 'We show that the government's fiscal and policy goals can still be met without creating additional issues and concerns for people at the worst possible time.' • Why a wealth tax won't work When IHT on pensions is introduced it is expected that pension schemes will have to liaise with the executors of an estate to calculate and pay any IHT due on savings pots. Meanwhile the clock will tick on the six-month deadline in which IHT must be paid to avoid interest being charged on overdue payments. Rachel Vahey from the investment platform AJ Bell said: 'Of the hundreds of replies to the consultation, many in the industry we have spoken to have shared one central message — the IHT proposals are simply unworkable and have the potential to wreak havoc for grieving families. 'There are better solutions out there that don't cause confusion and high costs for executors and beneficiaries, mean swifter payment of benefits to loved ones and tax to HMRC. These solutions would ultimately make it easier for clients to plan how to spend their pension pot and make sure that their loved ones also have enough money to live on.' The Treasury said: 'We continue to incentivise pension savings for their intended purpose — of funding retirement instead of them being openly used as a vehicle to transfer wealth — and more than 90 per cent of estates each year will continue to pay no inheritance tax after these and other changes.'
Yahoo
2 days ago
- Business
- Yahoo
ICAEW urges Chancellor to prioritise pension reforms for economic growth
The Institute of Chartered Accountants in England and Wales (ICAEW) has urged the UK's Chancellor of the Exchequer Rachel Reeves to prioritise pension reforms to unlock the £3trn ($4.04trn) potential held by pension funds. Ahead of the Chancellor's Mansion House speech this week, ICAEW emphasised the significant economic impact of these funds compared to the relatively minor £300bn held in cash Individual Savings Accounts (ISAs). ICAEW highlighted that focusing on cash ISAs would not significantly contribute to economic growth. The institute welcomed the shift away from this focus but stressed that any reserve powers to mandate asset allocation should include strict transparency, oversight, and safeguards to mitigate risks, especially in higher-risk or less liquid asset classes. ICAEW chief executive Alan Vallance said: 'A year after the general election, growth remains the government's most pressing mission and we hope the Chancellor will use her Mansion House speech as an opportunity to reduce the regulatory burden on financial services. 'In our view, a change to cash ISAs would have been misplaced, and instead a focus on improving conditions for the much greater funds held by institutions would yield the most benefit to UK plc. 'Cash deposits by individual savers support mortgage lending, and a limit to that supply would raise the cost of capital for building societies, resulting in higher mortgage rates and higher inflation.' ICAEW also pointed out that the current regulatory burden is hindering innovation and growth. It called for more proportionate, transparent, and forward-looking regulatory regimes to boost the economy. This includes implementing the reformed UK prospectus regime to streamline capital access and increasing private capital mobilisation with appropriate protections. ICAEW expects the government's upcoming financial services sector plan to outline concrete steps to reduce regulatory costs for businesses by 25%. The plan should also address inefficiencies, eliminate duplication, and streamline data collection to enhance competition in UK capital markets, thereby encouraging listings and risk-taking. Vallance added: 'Meanwhile, a concrete plan to cut the cost of red tape by a quarter and to ensure regulation is proportionate, transparent and forward-looking will help reduce the burden on business. 'It is vital that the Chancellor uses her speech on Tuesday to outline measures to boost flows from both institutional and private investors back into the UK's capital markets and remind global business why London is the world's top financial centre.' The institute stressed the importance of supporting the repositioning of AIM as a growth market. In addition, ICAEW emphasised that the assurance of information supporting capital markets must evolve to maintain investor confidence with trusted and reliable information. Earlier in July 2025, ICAEW's Business Confidence Monitor for Q2 2025 revealed that the business confidence index in the UK dropped to -4.2, its lowest since Q4 2022. "ICAEW urges Chancellor to prioritise pension reforms for economic growth " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-07-2025
- Business
- Yahoo
Cathay Financial Holdings and Cathay United Bank Sweep 8 Awards at the Asian Banking & Finance Awards
TAIPEI, July 9, 2025 /PRNewswire/ -- At the Asian Banking & Finance Awards held on July 3, Cathay Financial Holdings and Cathay United Bank swept 8 awards: Analytics Initiative of the Year - Taiwan, Taiwan Domestic Cash Management Bank of the Year, Taiwan Domestic Trade Finance Bank of the Year, Customer Experience Initiative of the Year - Taiwan, Debit Card Initiative of the Year - Taiwan, Investment Product Innovation of the Year - Taiwan, Customer Experience Solution Award - Taiwan, and Mobile App Award - Taiwan. These accolades underscore Cathay Group's customer-centric approach and its commitment to delivering secure and convenient financial services. To meet the growing demand for digital lending solutions in Vietnam, Cathay United Bank launched the "CUB Vietnam APP" in 2024, a fast and secure mobile-based platform that includes a revolving credit facility feature. Easy and simple to use, the app enables users to access multiple loans within the approved credit facility, which remains valid for up to 5 years and takes as little as 5 minutes! As of June 2025, the app boasts over 350,000 registered users and has over 2.5 million downloads. The app utilizes data from Vietnam's business registration and financial statement databases, social media fraud scoring, geographic information systems, combining them with the Bank's internal data analytics. This fully digital credit assessment and risk control model successfully addresses the challenges faced by the Ho Chi Minh City Branch in consumer finance – earning the Cathay Group the Customer Experience Initiative of the Year and Analytics Initiative of the Year. Cathay United Bank's "CUBE App," with over 7 million users, was also highly acclaimed at this year's awards. Reaching out to "Strive for What's Possible", this app integrates information across product lines to deliver highly personalized financial services, earning the Bank 2 awards for its excellence in digital innovation: the Customer Experience Solution Award and the Mobile App Award. As a longtime supporter for inclusion, the Bank launched Taiwan's first debit card designed for the visually impaired in 2004 - the "CUBE Touch Card". With a round notch on the card edge and "CUBE" boldly embossed, the card allows its users to identify their cards with ease – securing the Bank the Debit Card Initiative of the Year. In wealth management, Cathay United Bank partnered with First Securities Investment Trust and VIVO Capital to launch Taiwan's first private securities investment trust fund focused on biotechnology private equity funds – providing investor access to diverse investment opportunities. By leveraging big data analytics to integrate online and offline service channels, the Bank provides customers with a highly personalized wealth management experience. With client assets well-guarded from fraud thanks to the Bank's extensive use of technology, the Bank's clients and assets under management have grown steadily. Notably, the annual growth of high-net-worth clients increased by over 20% - resulting in the Bank being awarded the Investment Product Innovation of the Year. Cathay United Bank showcased its financial expertise by offering diverse cross-border solutions in corporate banking, such as global fund management, cross-border deposits, and secured lending. These solutions are designed to assist corporate clients in mitigating the impact of currency fluctuations while streamlining cross-border transactions. Incorporating data insights to create a new visualized transaction platform, the Bank has been able to collaborate with local customs systems and clearance networks to digitize trade transactions, reducing lengthy paper-based procedures while enhancing security, operational efficiency, and client experience – earning the Bank the Taiwan Domestic Cash Management Bank of the Year and Taiwan Domestic Trade Finance Bank of the Year. View original content to download multimedia: SOURCE Cathay United Bank Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CBS News
12-05-2025
- Business
- CBS News
Amid recent changes, what's a good HELOC rate right now? Here's what experts say.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. HELOC interest rates have steadily declined in recent months. Getty Images In an effort to curb inflation, the Federal Reserve has once again decided to keep the federal funds rate the same after its May meeting. As inflation and economic uncertainty persist, so do elevated interest rates. This has created a challenging borrowing environment for people who need extra funding. Credit cards, while convenient, now have interest rates above 20%. Personal loans, which offer flexibility, are closer to 12%. But homeowners have two affordable options to consider: home equity loans and home equity lines of credit (HELOCs). These home equity borrowing options typically have lower interest rates, which can make a meaningful difference over the course of repayment. HELOCs, in particular, have been attractive borrowing tools as they offer flexibility and lower rates than home equity loan interest rates. Despite this, borrowers who want to tap their home equity should research options to find the best interest rate possible. Scoring a good HELOC rate can reduce borrower costs by saving you money on interest. But first, you need a benchmark and to know what a good HELOC rate is right now. Considering that rates are down by more than two full percentage points since September 2024, it may not be so obvious what a good rate is right now. We spoke to home lending experts about what's considered a good HELOC rate in today's economic environment. See what HELOC rate you could qualify for here now. What's a good HELOC rate right now? HELOC borrowing provides a flexible structure, with a draw period and a repayment period. Recently, HELOC rates have fallen to a two-year low, providing an attractive alternative to more expensive borrowing options. Here we take a look at what a good HELOC rate is and what factors come into play when qualifying for a competitive rate: A good HELOC rate is around 8% HELOC interest rates typically follow the direction of the Federal Reserve's federal funds rate, among other factors. Based on that, what's a good HELOC rate right now, in mid-May 2025? "It's going to depend on credit…I think that the first thing to look at is the prime rate. And the prime rate right now is 7.5%. I would say with a good credit profile, you're probably looking at around 8%," says Rose Krieger, senior home loan officer at Churchill Mortgage. Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, says, "As of now, May 2025, the competitive HELOC rate is typically in the range of 7.5 to 8%." Explore your HELOC rate offers online here. Many factors play into your HELOC rate HELOC lenders review many different factors as part of the underwriting process and to assess risk. As a whole, these factors influence the HELOC interest rates you qualify for and what might be a "good" rate for you. "It's going to depend on credit, the amount of equity that you're taking out, the amount of equity you're going to have left in your home, that percentage, we call it the loan-to-value," says Krieger. "You're going to have to have a debt-to-income ratio within the parameters of the company and so that could be 50%, that could be maybe 43%. It just depends on the company." To qualify for a good HELOC rate at around 8% or just shy of it, you'll need to meet specific eligibility requirements. "From my experience, the 'best' rate depends on your financial profile. If you've got a credit score above 740, a solid income, and plenty of home equity, you might even see offers closer to the prime rate with a small margin added, especially if you're an existing customer at a bank offering discounts," says Steven Glick, director of mortgage sales at HomeAbroad, a real estate investment fintech company. Shop around for HELOC rates The rock-bottom interest rates from several years ago have long been gone, leading to a high-rate environment, but you can still find something affordable by doing some research and shopping around. "Today's rates are nearly twice as high as they were just a few years ago in 2022," says Evangelou. "It's better than the past year…But with rates still elevated, it's more important than ever to compare lenders and look for the most competitive terms available." HELOC interest rates have luckily been falling over the past year. As a variable-rate product with interest rates that change periodically, this is good news for prospective borrowers. While there were major changes toward the end of last year, currently we're in bit of a holding pattern until future rate cuts. "The Fed's three cuts in 2024 lowered rates, but with fewer cuts expected in 2025, big drops aren't likely. Lender competition and local markets also play a role, so shopping around is a must," says Glick. The bottom line In the current high-rate environment, borrowers looking for affordable financing may have trouble as the Federal Reserve keeps rates elevated. Rates across the board aren't historically low like we saw several years ago. But HELOC interest rates, comparatively speaking, have dipped in the past year and are lower than many other borrowing options. "From a cost of borrowing perspective, HELOCS are still a relatively efficient way to access funds," says Evangelou. To avoid putting your home at risk, ensure you're clear on why you're borrowing and how you'll repay it. Looking at various home lenders and options can help you qualify for a good HELOC rate based on your situation.
