How 2014 Sets for Your Finances in 2015?

It’s time when we are preparing to celebrate the New Year 2015. Some of us have already booked for parties while some of us will plan to have family get together at home. Each one of us have our own way of celebrating. But all of us would be making some new resolutions to make our life better in 2015. It can be your career, your personal life or even your  finances.

While you are planning to improve your financial life it should always start with reviewing your past year. This should analyze what you did, where you had the best, where you lagged and so where you need improvement.This will give you enough areas where you will have to work in 2015. Within these review are important regulations, changes in existing provisions, new initiatives and policy decisions by the government which impact your personal finance.

Here is a review of few changes in 2014 which will impact your financial planning in 2015 :

 Retirement Planning  Gets Better

The biggest concern in retirement planning is that the options are very few. Even within the options available today there are many areas which lags in providing a satisfactory benefit to consumers. This got improved in 2014. The first and biggest change we saw in Employee Provident Fund wherein EPFO introduced host of good features benefiting large number of its subscribers. You can  now view your EPF statement online with hardly any dependency on your employer. This will get more interesting when EPFO will introduce real time access to your EPF account. Also, transfer of your EPF balance form one company to other, which was a nuisance and main reason of dissatisfaction, got smoother. Now you  can do it online and can track the status of your transfer.  You can even ask your employer if at some point it is getting delayed. This and many more features have made contribution to your EPF more likable . Expect much more happening fir you from EPFO.

The second and most important change took place in  mutual funds wherein budget 2014 allowed retirement linked plans from mutual funds. These plans will come under benefit of Sec 80C which actually gives a much needed options in retirement planning. Although we haven’t seen any product from AMCs in 2014 but you may expect these plans  in 2015.

The third important product for retirement planning today is NPS which also went through spat of changes in 2014. Although it has not picked up as per expectation but it still provides a low cost option to many investors.

So in a nutshell retirement planning will get better in 2015.

Benefits From Insurance Bill

After much hue and cry Insurance Laws (Amendment) Bill 2008 ordinance was signed by the Indian President. There are many benefits which will accrue to you in coming years. The first and foremost is that the FDI has been increased to 49% which gives the much needed capital to these companies. You can expect improvement in services going forward. Then clause 45 of insurance act has been amended. As per the amendment insurance companies will not be able to reject any claim after 3 years of policy issuance. The other proposal where you benefit is linked to record maintenance. Many claims get rejected or delayed due to poor record maintenance by companies where the previous information is seeked from policyholders only. This will change since insurance companies will have to maintain records in electronic forms going forward. There is also provision of imposing  higher penalties in case of misselling which actually makes insurance companies more liable. The other amendments relates to more distribution channels, more agents workforce, capping of commissions etc. All these changes are going to be beneficial for consumers.

Higher Accountability To Investment advice

The investment adviser regulations was implemented in 2013 and one year has passed. Many who are serious about their business have transformed themselves to this role and SEBI is also aiming to implement this regulation by cracking down on bogus advisors.  The larger benefit for you is emergence of fee only planners  giving you more options to seek trusted and unbiased advice. Expect more such professionals in the coming year.

Uniform KYC and Single Demat Account

Budget 2014 has proposed uniform KYC across  financial sector. This will mean that you won’t need to deal with different regulators like IRDA, Sebi or RBI. With uniform KYC, if you have done your KYC with any  financial institution it will get accepted across financial sector. Also proposed is dematerialization of all financial investment and a single demat account to hold them. Both these norms are welcome move and it will make investing a smoother experience.

Mutual Fund Utility

The MF utility was finally announced by AMFI. It will not be long when this will become functional for all investors. The benefit of this utility is more to investors in direct plans as with a single platform you will be able to invest across all AMCs. No more you will have to run to different companies for investing your money. Hopefully in 2015 this utility will become fully functional giving investors a much needed ease to invest their money.

Banking Services Cost

This was disappointing news for all of us. RBI gave go ahead to banks to charge customers post a minimum usage of ATMs even within their network. Some banks started levying it while some especially PSUs has restrained from levying charges on its own ATMs. If it happens across banking sector then it will force us to visit branches to make our transactions beyond a certain stage. How many would like to do it considering there is  long waiting queue in PSU banks?. How and when different banks will levy more charges will be a wait and watch in 2015?.

Disabled Friendly Decisions

Disability has never seen an economic consideration in India and hardly had a place in UNION budget. But it did started in 2013 and in 2014  new schemes for disabled were introduced. The outlay expenditure towards this has also been enhanced. RBI too came forward for making Indian banking services disabled friendly and host of measures were introduced, ATMs being the primary one. RBI gave clear mandate to banks to make their ATMs disabled friendly. Coming 2015 you can expect more such measures or provisions with a clear focus on disability. But what expected are greater provisions for special needs children families wherein they can bring more security for their child future. Hopefully, with government and banking regulator leading a larger focus towards disabled one can expect some good measures going forward.

There are many more changes that occurred in 2014 such as the taxation of long term capital gains from debt funds which got changed with holding period enhanced to three years. Then there were increase in tax benefits and exemptions. The roll out of GST, DTC  and economic reforms  in various sectors are in waiting to get our economy on progress lane. Hopefully with a stable government we might see this happening.

Although celebrations will be all around for welcoming new year my heart goes to the most heinous crime of mass killing by terrorists. Hope India and rest of the world will fight with terrorism in 2015 by taking more strong measures.

Enjoy the New Year celebrations and plan for your financial well-being as you step in the 2015.

Wish you all a very Happy And Prosperous New Year!!!!

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