It's carnage in the housing market

Forget about making money in the current volatile environment. The best most of us can hope for is wealth preservation.

With the global equity markets facing never-ending turmoil, mounting sovereign debt fears and rock-bottom interest rates, savers and investors have been having a torrid time.

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Homeowners: avert your eyes

It is not looking good for homeowners. The economy is recovering and the stock market has bounced back but the housing market is stuck in the doldrums.

The crazed bubble that coated bricks and mortar with a gilded veneer did not properly deflate when the rest of the economy imploded in 2008-09; it was artificially propped up by low interest rates, quantitative easing and cash from abroad.

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The UK job situation is one to celebrate

One of the great, widely-believed myths about the UK recovery is that it is jobless. Yet the reverse is true.

Job creation has been consistently robust over the past six months, repeatedly taking most commentators by surprise; unemployment is going down, albeit slowly.

The great news is that the private sector is bouncing back fast enough to create far more jobs than the public sector has been shedding. This is a result of the government's much-needed austerity measures.

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Time to tough it out as market declines

Over a few weeks in May the MSCI World share index lost 13 per cent of its value. A sovereign debt crisis in Europe, new concerns about the prospects for growth in China, regulatory government initiatives aimed at curbing financial institutions, and even technical glitches all seemed to conspire to bring markets down in a hurry. Investors were surely baffled by the downward impetus and many may have wondered out loud: " I thought we were coming out of the terrible recession of yesteryear."

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Finally, some positive news about pensions

A new government brings a new era for our finances and, despite the desperate need to reduce public-sector debts, there is actually some good news on taxes and pensions.

Although not immediately affordable, the government says that it will substantially increase income tax thresholds and eventually everyone earning below £10,000 will pay no tax. Another piece of excellent news is that Equitable Life investors will at last receive compensation. This huge scandal should have been sorted out years ago and the sooner victims receive money, the better.

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What we now know

If most commentators were to be believed, the causes of the financial crisis were straightforward: it was all about greed, stupidity and even corruption. But as economists continue to study what really happened, it is becoming increasingly clear that the forces that caused the irrational exuberance and stupid decisions of the bubble years were far more complex than usually understood.

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Savers: good news and bad

Last year was a roller-coaster ride for investors. For savers, it was a disaster.

The Bank of England slashed base rates to half a per cent as it tried to stimulate the economy, so base rate tracker savings accounts generate virtually no income. For example, £25,000 in an account offering 6 per cent interest last year, paid nearly £30 a week. But with interest rates at 2 per cent, income falls below £10 a week, and, if your account just pays the 0.5 per cent base rate, you will receive only £2.50.

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Got cash overseas? Time to declare it

UK taxpayers with overseas bank accounts face some tough decisions this month. Since September 2009, HM Revenue and Customs (HMRC) has been offering individuals the chance to come clean about any unpaid taxes under the New Disclosure Opportunity (“NDO”).

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Personal Finance: Review your pension

Retirement at 65 is becoming a thing of the past. Major changes are under way and you need to be prepared.

At the moment, the state pension age is 65 for men and 60 for women. From next year women’s pension age will rise gradually to reach 65 in 2020. By 2026, pension age will increase to 66 for everyone and keep rising thereafter. The Conservatives have proposed establishing a review to accelerate this timetable, bringing men’s state pension age up to 66 in 2016 and for women by 2022. Any men over 59 and women over 54 will be affected.

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Computer says no: the big tax botch

There is an old adage that “In this world, nothing can be said to be certain, except death and taxes.” I was reminded of this recently after learning that, following a software update, HMRC’s records show a number of taxpayers as being deceased — despite the fact that they are very much alive.

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Personal Finance: Don't let inflation catch you off guard

Is it time to start worrying about inflation? Over the past year, inflation fears have faded and concerns have focussed on deflation dangers. In fact, the Bank of England’s latest policy of so-called “quantitative easing” — a rather fancy name for printing money — aims to fight deflation, but has potentially significant inflation risks.

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Personal Finance: Is this really a bull run in a bear market?

Over the past six months or so equity markets have had a very nice run. The MSCI World Index is up more than 50 per cent since the March lows. It is not surprising then that some investment gurus are offering strong recommendations as to how to handle this new situation.

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Personal Finance: Tax schemes: sort kosher from treif

Appearances can be deceptive, wouldn’t you agree?

On the one hand, the taxman is not always as bad as some might think. Recently, HM Revenue & Customs (HMRC) has been issuing warnings about email scams. It seems that some bad guys have been sending emails that purport to come from HMRC and which tell you about tax rebates.

The real purpose of the emails is to gain access to your credit card or bank details. So delete any such email you receive and do not click the links or complete the forms. HMRC say they would never inform us about tax rebates by email.

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Personal Finance: The pension problem

Are pensions worth the bother? As employers close their pension schemes and stock markets have plunged, the pensions crisis has worsened. Pensions were traditionally a key part of financial planning, especially as our state pension is about the lowest in the developed world. In fact, Britain has more money in private pensions than the rest of Europe put together. However, increasing numbers of people have abandoned pensions. Many will regret this in years to come. Although not right for everyone, pensions can still offer tremendous opportunities.

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Use China to predict the future of equities

At the start of the century, strong economic growth in places like China and India prompted a new investment perspective.

The BRICs (Brazil, Russia, India and China) concept was born and equity funds were developed to accommodate a new desire to invest in those countries. Soon, some economists proposed that a decoupling between BRICs and developed countries was occurring.

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