Infographic: A look back at arranging insurance for this year’s Gumball 3000 rally

PK Partnership look back at the journey of this year’s Gumball 3000 rally.

As the official insurance partner for the annual Gumball 3000 rally, which started in London and went through Europe and on to the finish line in Tokyo, we look at some key facts from the event that attracted celebrities such as David Hasselhoff and Usher. An eclectic mix of vehicles were entered into the rally with the highest insured vehicle valued at £1.5m.

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Click here to read about our logistical challenges.

 

Image Courtesy of Flickr_Ishan Manjrekar

What are my digital assets?

How many things in your life do you manage or store on your computer, tablet, smartphone or online? Like many people today you probably access photos, videos, music, e-books, blogs, movies, emails, conversations, social media, games, bank accounts, medical records, and even maintain your identity – all online. All of these are called “digital assets” and they may be of financial or sentimental value to you and your family. They can be just as precious and important as physical assets that you can touch. They should be part of your general planning for what happens when you die or if at any time you lose mental capacity to manage your own affairs.

Why are my digital assets important?

Within just a few years, digital assets have become important in many areas of our lives. We must plan for what happens to our digital assets on death or when we lose mental capacity, for a number of reasons:

  • Financial Value; such as PayPal accounts, virtual bank accounts, online gaming accounts; bitcoin; photographs; popular domain names or online businesses.
  • Sentimental Value; in this “digital age” personal assets such as photos or emails may not be in physical form, instead they may be stored on a smartphone, a flash drive, an online photo sharing website, a cloud storage server or a social networking account. If you die or lose mental capacity and no one can control or access these treasured memories the emotional impact on family and friends can be significant.
  • Privacy & Confidentiality; private information that other people should be restricted or prevented from seeing. For example, email or Facebook accounts may reveal the existence of relationships or interests that are not widely or otherwise known.
  • Identity Theft; recent statistics estimate that more than 20 people have their identity stolen through online hacking every minute of every day. When you die or lose your mental capacity, you are no longer monitoring the use of your digital assets, and so the risk of identity theft is greatly increased.

How should I plan my digital legacy?

  • Make an inventory list of your digital assets, to provide your representative (agent, executor, personal representative, guardian, attorney, etc.) with details of these assets and where to find them.
  • Appoint a representative – someone you can trust if you are mentally disabled or die.
  • Tell them what you want to do and achieve.
  • Make sure your representative knows how to access your accounts and passwords.
  • Make sure the appointment is effective – different providers and terms of service agreements have different requirements so be specific.

Where can I get help?

Laws in this area are unsettled and vary between countries and even between states within a country. The service agreements you have entered into with various service providers may govern how your representative can work with your digital assets. For information and advice go to the STEP website where you will find more information and links to knowledgeable professionals who can help you through this process.

 

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Gumball 3000 20th Anniversary Rally from London to Tokyo

Insuring the Gumball 3000 Rally

Gumball 1As the official insurance partner for the annual Gumball 3000 rally, PK Partnership have just returned from Japan celebrating their 20th event.

This year’s rally started in London’s Covent Garden with thousands of spectators turning out to see the cars leave and spot some faces attending the rally such as David Hasselhoff and Usher. The passion and enthusiasm of all participants is unprecedented, and the event is attended by largely skilled and experienced drivers with a desire for high performance cars.

Driver and insurance registration took place in London where Anjana and Fabio, the dedicated Gumball 3000 team at PK Partnership, were on hand to ensure all drivers and vehicles met the required level of insurance.

An eclectic mix of vehicles were entered into the rally including a Ferrari 288 GTO, Bugatti Chiron and David Hasslehoff’s KITT Pontiac Firebird.

The final destination was Tokyo, Japan via France, Switzerland and Italy, and this brought along a number of challenges from finding insurers who would cover different territories.

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There were a number of logistical challenges such as transporting the cars via air freight from Italy to Japan – no mean feat for more than 140 vehicles. Along the way there were a number of highs and lows, but PK Partnership were en route from London to Tokyo to ensure that any risk management obstacles could be overcome.

Once again the Gumball 3000 team created a truly world-class event.

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Amit Patel, Director of PK Partnership said, “we were delighted to insure the majority of the cars on this year’s rally. Hats off to Max and the fantastic Gumball team for organising such a spectacular event. Work has already started on planning the insurance aspect of next year’s rally.”

The rally and high net worth market is an important and specialist focus for PK Partnership. Our next adventure is next month on the Verve Rally starting at the prestigious London Home House private members club.

Gumball 3000 – Our Journey of Specialist Personal Insurance

The countdown to Gumball 3000 is on! Are you correctly insured?

This year’s 20th Anniversary Gumball rally begins on Sunday 5 August in London’s Covent Garden and finishes in Tokyo some 3000 miles away!

Our team at PK Partnership have been hard at work, quoting and placing on cover many of the vehicles taking part this year ranging from rare expensive classics such a Ferrari 288 GTO to customised vehicles that would be hard to identify with the naked eye.

PK Partnership Private Clients Manager, Anjana Pankhania said, “We have been working around the clock to provide every driver with an insurance quotation tailored to meet the strict requirements of the rally. It is natural for people to only think about specialist rally insurance a short time before their adventure and if you haven’t already contacted us we advise you to get in touch this week to make sure you are not delayed at registration.”

Anjana Pankhania continued, “If you have decided to seek a quotation from your existing insurance broker please do check the small print as in our experience most insurers do not cover this rally!”

PK Partnership is the official insurance partner for the Gumball 3000. The rally and high net worth market is an important and specialist focus for PK Partnership. We understand that people taking part in such events are by nature usually passionate advanced drivers who are sensibly minded to protect their investments, which makes events such as this possible.

Should you have any questions or to obtain a quotation please contact Anjana Pankhania on 020 8681 4994.

PK Partnership Mortgage

Scams and Cold Calling: Pensions

Be wary of cold-callers who offer a ‘free’ pension review — it could cost you more than you think.

There has been an increase in the number of cold calls since pension freedoms were introduced in 2015, including from fraudsters trying to persuade people to move their pension into unregulated investments.

The government has proposed legislation banning these calls, but this has yet to take effect. Government figures suggest pension savers have lost more than £43 million through such scams. Pensions transfers potentially put your savings at risk, and if you are under 55 you may face additional tax charges. Some cold-callers aren’t trying to pocket your pensions savings, but may recommend higher charging pensions, from which they receive an ‘introducers’ fee.

Please get in touch if you want to review existing pension arrangements, particularly older company schemes.

Occupational pension schemes are regulated by The Pensions Regulator.

Image courtesy of Flickr_Pink Sherbert Photography

Interest Rates Set to Rise

The Bank of England is indicating the interest rate will increase in the coming months, so it may be a good time to review your investments.

The Bank of England held the interest rate at 0.5% in May, but its Governor, Mark Carney, reiterated the view that rates will probably need to increase if the inflation goal is to be met. These future increases are likely to be “at a gradual pace and to a limited extent”.

Interest rates are already increasing in the US. Short-term rates (for loans with a maturity of less than one year) there could reach around 3.4% by the end of 2020, double their current level, according to forecasts from rate setting members of the US central bank, the Federal Reserve.

Normalisation

The economists’ term for what is expected to happen to interest rates in the UK and US is ‘normalisation’. For the rest of us, it means a steady increase. The current rate of 0.5% was once thought of as an ‘emergency rate’ where 3–6% would be more representative in the long term.

The Federal Reserve started raising rates from its historic low at the end of 2015. Despite many threats to do the same, the Bank of England cut rates in August 2016 in response to the Brexit vote. With hindsight that was probably an unnecessary move, a point arguably confirmed by the reversal of the cut last November.

Impacts of Rate Rises

Increases in short-term UK interest rates could have a variety of consequences:

- The values of fixed interest securities, such as government bonds (gilts), could fall. Much will depend upon how long-term interest rates, for ten-year government bonds, react – these may not necessarily follow the short term rates.

- Share values could fluctuate further. Banks traditionally benefit from rising interest rates, while companies that have borrowed heavily can suffer.

- The value of commercial property could come under pressure, although rental yields are currently comfortably above the income available from gilts.

If you have not done so already, it may make sense to review your investments now in preparation for rising interest rates.

The value of your investments, and any income from them, 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.

 

Image Courtesy of Flickr_Ishan Manjrekar

Stuck in Frozen Tax Thresholds?

The value of key tax thresholds is being eroded, as elements of the income tax system lag behind inflation.

The erosion in the values of tax thresholds is known as ‘fiscal drag’, and is a highly-effective form of stealth tax used by Chancellors from successive governments. Fiscal drag is the result of not adjusting tax thresholds (or allowances) in line with inflation.

Because incomes and values usually rise with inflation, the consequence of freezing a threshold or allowance is a real (inflation adjusted) tax increase. From the politician’s viewpoint, however, the numbers do not change so they can claim that taxes are not being increased.

Three key thresholds relating to income tax have been subject to fiscal drag:

- High income child benefit tax charge

This tax charge, introduced in January 2013, effectively claws back child benefit at the rate of 1% for each £100 of income over £50,000 (based on the higher of the two parental incomes). The £50,000 threshold has not changed since its introduction.

- Personal allowance tapering

The personal allowance is reduced by £1 for each £2 you earn over £100,000. The net result is that

for each £2 of excess income, you pay tax on £3 until your personal allowance is nil. In 2018/19 that generally means an effective marginal rate of 60% (61.5% in Scotland) on income between £100,000 and £123,700.

The £100,000 threshold was announced by Alastair Darling in 2009 and neither of his successors have revised it.

- Additional/Top rate tax starting point

The additional tax rate started in 2010/11 with a threshold of £150,000. Whilst it has since been reduced from 50% to45% (or the 46% top rate in Scotland), the threshold has not increased. It would now be about 20% higher had it been CPI-linked, as would the personal allowance tapering threshold.

One way to limit the effect of these income based thresholds is to reduce the income being measured, through tax-efficient uses of income, savings & investment. For specialist advice please refer to your accountant or tax specialist. Some options include:

- Tax-efficient financial planning

You may be able to reduce your income by transferring investments to your spouse or civil partner.

Even if you both pay the same marginal rate of tax, a switch could reduce your joint tax bill.

- Change the type of income

If you are a business owner, drawing more income as dividends rather than salary can help reduce

taxation. However, the dividend allowance was reduced to £2,000 in April 2018.

- Make pension contributions

Personal pension contributions reduce your income for tax purposes. Because of the way the tax relief operates, you could find a 60% marginal tax rate means 60% tax relief on pension contributions.

- Tax-efficient investments

There is no income tax payable on investment income held in ISAs, and they don’t have to be declared on your tax return.

As it is early in the tax year, there is more scope for reducing your personal fiscal drag in 2018/19, with professional advice.

Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. The Financial Conduct Authority does not regulate tax advice.

 

Image courtesy of smee.bruce, Flickr

Reduced protection for mortgage payments

What would happen if you were unable to pay your mortgage?

Changes to the government’s scheme supporting people unable to make their mortgage repayments – Support for Mortgage Interest or SMI – could have significant consequences for struggling home owners. From 6 April 2018 SMI ceased to be a benefit payment and became a loan secured against the mortgaged property.

That SMI loan carries interest which is rolled up at a rate linked to government borrowing costs (currently 1.5%). It becomes repayable if the recipient moves home, dies or transfers the property in any way. SMI only helps to pay a claimant’s mortgage interest – there’s no support given for capital repayments of the amount borrowed. While the nature of the payments has changed, some aspects of SMI are unaltered:

- The maximum mortgage covered is still £200,000 (£100,000 if you claim Pension Credit), which was set in January 2009.

Since then UK house prices have increased by over 40% according to Nationwide.

- The waiting period remains at 39 weeks.

- The standard rate for mortgage interest is unchanged at 2.61%, based on Bank of England average mortgage rate data. SMI loan payments to the lender may therefore not cover all the mortgage interest due, particularly if the mortgage has reverted to the lender’s standard variable rate.

- Eligibility is still means-tested. You can only claim SMI if you are in receipt of Income Support, Universal Credit, Pension Credit or the income-related versions of Jobseekers’ Allowance or Employment and Support Allowance. In most instances this means you will not be eligible to claim SMI if you have capital of over £16,000.

Reforms to SMI were announced in the July 2015 Budget, as part of a set of measures to constrain government expenditure. However, as is often the case with unwelcome adjustments, the most significant change to SMI was deferred, and only took effect this year. The change means benefit payments under SMI ceased from 5 April 2018, including for current recipients. You will not have to repay any amounts received as a benefit, but to continue receiving support you must agree to take an SMI loan. The Department for Work and Pensions should have contacted those affected.

Reduced Protection

The new form of SMI will leave recipients with a debt. Even if you are eligible to claim, payments only start after nine months and they may not cover all of your mortgage interest. As safety nets go, the mesh is extremely wide.

Given the new SMI rules, it could be wise to arrange your own cover. You may not have such protection in place, particularly if your mortgage is more than two years old and started when the waiting period was thirteen weeks.

You may want to review your mortgage arrangements now. The alternative could be to learn the hard way that the warning below is more than just a standard regulatory requirement.

Protection

Reduced protection for mortgage payments

From 6 April 2018 SMI ceased to be a benefit payment and became a loan secured against the mortgaged property. Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured on it. Think carefully before securing other debts against your home.

 

Image courtesy of Flickr_Sheila Sund

UK Dividends continue to Perform

UK dividend yields are better than you might imagine.

Dividends have been rising. UK companies paid out £94.4 billion in dividends in 2017, a 10.5% increase over the previous year. The increase for 2018 is expected to be markedly smaller, as last year’s payouts benefited from exchange rate gains that are unlikely to be repeated.

Nevertheless, UK shares are well worth considering if you are looking for income from your investments. The overall dividend yield for the UK stock market is currently about 3.6%, with shares in the FTSE 100 offering an average yield of 3.7%, in part because of the rise in dividends and the fall in share prices since the start of the year. And don’t forget personal tax on dividends is less than on interest.

There is a wide range of UK Equity Income funds to choose from, so care is necessary when making a selection.

Last year 60% of dividend payments by value were accounted for by just 15 companies. This can mean funds have highly-concentrated portfolios.

For advice on fund selection don’t just look for the highest yield, talk to us on 020 8681 4994.

The value of your investments, and the income from them, 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.

Congratulations to Fabio Carta who has successfully gained his Certificate in Insurance

FABIO

We are delighted that our newest recruit, Broker Support Handler Fabio Carta has passed his Certificate in Insurance professional examinations and is now progressing towards a Diploma in Insurance.

The certificate in insurance is a core qualification for insurance staff working across all sectors of the industry which develops core knowledge providing a grounding of the regulatory environment, key disciplines of underwriting and claims.

Amit Patel, Director of PK Partnership commented: “Huge congratulations to Fabio who has progressed exceptionally quickly since joining PK Partnership. Qualified individuals set us apart from the competition as an independent broker in a competitive environment and our in-house personal development programme has helped to attract and retain quality people.”

 

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