Finance

Background / Overview

Increasingly financial advisers, mortgage brokers, providers and others are finding themselves needing to take account of the complex financial situation of their clients and customers. Where, traditionally, clients have been likely to have come from the more prosperous end of the spectrum, the situation has now changed.

The benefits system can affect many more people than is often realised. It is not uncommon to be qualified for benefits with capital of over £100,000. Equally, tax is a very real factor for many people receiving benefits. It is perfectly feasible for somebody to receive a sum in tax credits which exactly matches the tax they must then pay back.

The FCA, and its predecessors such as the FSA, have been concerned that some financial products are potentially able to impact badly on people because of their effect, particularly on means tested benefits.

Ferret’s financial services products help advisers and others to protect and inform their clients about the potential impacts on, and about entitlement to, a wide range of benefits.

October 2004 saw the introduction of rules, under the mortgage regulatory regime of the Financial Services Authority (FSA), applied to lifetime mortgages.

The rules required those selling lifetime mortgages to consider:

• whether someone will be worse off in terms of tax and benefits, if they take out an equity release loan
• alternative methods of raising funds such as local authority grants and advise them appropriately.

That led to Ferret, Europe's leading specialist in the provision of benefits advice systems in partnership with the Council of Mortgage Lenders (CML), developing FINTAL, the industry-leading product, for lenders and intermediaries to use to assess the impact of different equity release schemes on an individual's tax and benefits.

Since then, Ferret have extended their work with different providers, advisers and trade organisations to ensure that the most accurate, up-to-date and simple tools are available to the market. The combination of comprehensive benefits and tax assessments, together with the specialised calculations to meet precise requirements, have ensured that systems meet real needs.

The latest generation FINTAL 2 takes that further forward with more comprehensive tax coverage and enhanced capabilities.

Ferret’s newest products pensionForward and incomeForward provide further support into new areas of the market.

pensionForward is the system that’s needed by all those working with the new pensions freedoms. It provides, in one easy-to-use, inexpensive, package, the information and calculations that needed to properly inform clients.

Comprehensive, automatically updated, benefits assessments are joined by sophisticated tax calculations to provide a basis for advice to those considering what to do with their pension savings. With the modelling of the effects of taking capital or income from a pension pot, on tax and benefits, over a range of amounts chosen by the user any areas of concern or note can easily be seen. With supplementary calculations of emergency tax, notional income from pensions, and a unique net to gross calculator, pensionForward is the essential tool in this area of work.

incomeForward brings these two systems together into one integrated advice tool. The attractive pricing of the joint system enhances its utility.

Recognising the rate of change in this area the systems come not only with Ferret’s unique helpline service but also with free access to e-learning courses covering, in detail, the background of the benefits system, a comprehensive coverage of tax, benefits and pensions and an e-learning course in the use of the system.