Equilibrium’s finance and investment news roundup Feb 06, 2018

This week’s roundup includes news that the number of British millionaires has increased, a rise in annual house price growth in January, a warning that thousands face fines from late tax returns and concerns that many households could be paying over the odds by failing to switch household suppliers.

This week’s roundup includes news that the number of British millionaires has increased, a rise in annual house price growth in January, a warning that thousands face fines from late tax returns and concerns that many households could be paying over the odds by failing to switch household suppliers.

The number of British millionaires increases

The number of British households that consider themselves millionaires has risen by nearly a third in two years, official data has shown. According to the Office for National Statistics (ONS), 3.6 million households in Britain held wealth of more than £1 million by June 2016.

Data released by the ONS revealed the median wealth per British household, after borrowing is taken into account, was £259,400 by July 2016. This was 15% higher compared with two years earlier, the official figures show.

Wealth includes pension savings, investments, belongings and property values less any outstanding mortgage.

While the wealth of those at the top end of the scale has risen, driven by growth of private pensions and property values, those at the other end have suffered a fall over the same period, the figures showed.

Annual house price growth ‘up in January’

Annual house price growth increased to 3.2% in January – up from 2.6% compared to December’s annual figure, according to Nationwide.

The building society said January’s figure was “a little surprising”, due to signs of weakening consumer activity elsewhere.

It also stated that mortgage approvals were at their weakest in three years in December, with 61,000 granted, compared with an average of 67,000 approvals during the previous 12 months.

Robert Gardner, Nationwide’s Chief Economist, said: “Retail sales were relatively soft over the Christmas period, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”

Looking ahead, Nationwide said slow growth in the UK economy and a squeeze on household budgets is likely to keep a lid on house price rises. However, the lender did say that low unemployment and relatively cheap mortgages mean that activity would not drop away entirely.

Thousands face fine for late tax returns

A total of 746,000 people missed the deadline to file their self-assessment tax return, risking a fine of £100, it has been revealed.

The deadline for those filling in paper forms was the end of October 2017, while online returns should have been completed by 31st January 2018.

Some 11.4 million people, primarily those with more than a single source of income and the self-employed, were required to complete returns.

HM Revenue & Customs (HMRC) said 10.7 million people submitted details on time, but 6.5% missed the deadline, compared with 7% last year.

Angela MacDonald, director general for customer services at HMRC, said: “We want the number missing the deadline to be zero, and we will continue to adapt the process to make it easier and simpler for all our customers until every return is in on time and without avoidable errors.”

Customers ‘failing to switch suppliers face higher costs’

Households failing to switch their energy, broadband or insurance providers could be paying up to £1,000 extra each year. This is according to Citizens Advice, which has called for an investigation by the UK’s competition watchdog into what it refers to as the additional cost of “loyalty”.

Customers who do not switch suppliers are often moved on to default tariffs, which can be more expensive, while newer customers are regularly offered cheaper alternatives.

Sectors affected included energy, mobile phones, broadband, home insurance, fixed-rate mortgages and cash ISA savings accounts.

Citizens Advice said long-standing customers could be paying £987 more a year by not switching. Many considered unlikely or unable to switch were those aged 65 and individuals on low incomes.