June 7th, 2016 | Andrew Hagger | News

New research released by Zopa shows Brits are renovating their properties to create their dream home for the long-term, with over two thirds (67 per cent) of people undertaking renovations saying they plan to stay in their property for five years or more.

Far from viewing their homes as just a financial investment, Brits are opting to create their dream home by investing in improvements to live in for longer, making the UK a nation of improvers not movers. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that only a quarter (27 per cent) either have had or plan to get their home revalued after renovations, and less than one in ten (9 per cent) said they would need to move to be in their ideal home.

So far in 2016, Zopa customers have borrowed over £50 million to improve their homes, a 54% increase on home improvement loans compared to the same period last year. The figures show that more and more people are choosing to use a Zopa loan to improve their most important asset: their home.

With personal loan rates at record low rates, an unsecured loan, currently offers one of the best value options for those looking to undertake a home improvement. Home improvers can spread their loan costs evenly over a number of years, and for the vast majority it can be much quicker than re-mortgaging which typically can take up to two months and can be a far cheaper option than using a credit card with typical purchase interest rates well above 20% APR when compared to a typical personal loan from Zopa that averages 8% APR and with an online process that takes under 2 days, Zopa’s current loan rates start from 3.3% APR.

In line with latest ONS data suggesting more people are choosing to entertain at home, space to host family and friends is high up on the list for people’s ideal home. A third (34 per cent) used their home improvement loan to revamp their kitchens and, of those who said their homes are not yet perfect, a fifth (19 per cent) cited a bigger kitchen as top of their wish list. This reflects recent data from HMRC that suggests home transactions for April 2016 are down 14% compared to same month last years, highlighting that people are opting not to move and sell up.

Far from heading to the estate agents after renovations, two out of five people say they are now in their perfect home. Of those who still don’t think their property is perfect, only one in five (22 per cent) said they would need to move. The most commonly cited areas for improvement were better décor (31 per cent), bigger kitchens (19 per cent) and more bedrooms (19 per cent).

June 7th, 2016 | Andrew Hagger | News

Nearly four million energy consumers were overcharged a total of £270 million or £72 each due to billing mistakes by suppliers in the last year, according to new research from uSwitch.

Over a third (36%) of those whose supplier had made a mistake said the wrong tariff or product details had been applied. Other blunders include providers applying incorrect fees (31%), using the wrong meter reading (27%) and setting inaccurate Direct Debit amounts (24%).

Breakdown of bill error types

Source: uSwitch.com survey, May 2016

Not only are billing blunders hitting consumers’ pockets, but also their time. Nearly a fifth (19%) waited between one and two months before the issue was resolved, with more than one in ten (12%) waiting over two months. Worse still, nearly one in ten (9%) consumers who were overcharged as a result of a mistake are yet to receive any money back from their supplier^[3].

A spokesman for uSwitch said: “Consumers have a right to expect correct bills. It’s unacceptable in this day and age that customers are picking up the cost of suppliers’ mistakes. Households are already trying to cope with the high cost of energy and can’t afford the additional cost of simple blunders.

“Accurate bills are essential if consumers stand any hope of taking control of their energy use and spend. Recent upgrades by some suppliers to billing systems have resulted in teething problems, but today’s figures show there’s still more for the industry to do.

“We urge customers to always check their bills carefully, and speak immediately to their supplier if they think they have been short-changed. Consumers should also always provide up to date meter readings to avoid estimated bills, and check that the figure they provided has been used.”

June 2nd, 2016 | Andrew Hagger | News

Almost two thirds (62%) of the over 50s say they would be unlikely to take advantage of the suggestion from a recent government proposal to allow people to use their pension savings to pay for advice, according to new research from Retirement Advantage¹.

The research also finds that people who are not planning to use a financial adviser are put off by the cost of advice (38%) and the extent to which they can trust advisers (38%).

This new insight comes as the industry is beginning to question whether the £500 proposed allowance is actually going to be sufficient to pay for a comprehensive look at people’s pensions.

Andrew Tully, pensions technical director at Retirement Advantage, said: ‘While it sounds like a good idea to let people use their pension savings to pay for advice, it appears not only are people unlikely to take up the offer, but £500 won’t actually go that far.

‘Cost is clearly still a big issue when you ask people what the barriers are to seeking advice, alongside trust. On a positive note it is good to see government supporting advice and recognising the real value in people getting help and advice at retirement. The trick will now be to create a market which can service a wider range of consumers cost-effectively and also evidence the value of the advice being provided.’

The research also shows that the most common sources for financial advice among the over 50s are the internet (43%), financial advisers (43%) and the Government’s Pension Wise service (38%).

Andrew Tully added: ‘The internet is clearly a force to be reckoned with as consumers self-direct or simply use it to check facts and figures. What we’ve found from speaking to consumers is that many are using a combination of web research and professional advice. Far from posing a challenge, we could be on the brink of creating a real opportunity for advisers who are digital-savvy.’ 

1.    Research was conducted by YouGov Plc. Quantitative fieldwork conducted between 24 and 30 March 2016, surveying 1000 UK adults aged 50+ who have a DC pension and who are not in retirement.

June 2nd, 2016 | Andrew Hagger | News

Brits’ budgets continue to feel the squeeze, with regular household bills having increased by 20 per cent since 2007, according to the Bacs Bill Tracker.

The Tracker, created by Bacs Payment Schemes Limited (Bacs), the people behind Direct Debit in the UK, shows that by the end of Q1 2016 the average amount paid out by households in the UK to cover essential bills had grown to £674. This is up from £562 in March 2007 and represents an increase of 20 per cent, or £112 per month, equating to a hefty annual rise of £1,340.

Unfortunately for bill payers, average wage levels have failed to keep pace with these increases. In fact, over the period between 2007 and 2015, data from the Office for National Statistics (ONS)* shows that average wages grew by 12.4 per cent in comparison.

The Bacs Bill Tracker data is drawn from 100 million actual anonymised monthly transactions processed by Bacs as householders use Direct Debits to pay for their essential household bills, including energy, water, mortgages and rent, council tax, broadband and phone, TV licensing, and household insurances. It does not include elective personal bills such as gym memberships or mobile phone payments.

Mike Hutchinson, from Bacs, said: “These latest figures reflect the financial burden being faced as the cost of household bills increases steadily, while wages fail to keep pace.

“With 73 per cent of regular household bills paid by Direct Debit, this data gives a clear indication of the upward financial pressures across a basket of core bills. Splitting costs across the year could relieve some of the strain on hard-pressed family budgets and, with the discounts offered from many billers and service providers for paying by Direct Debit, there’s an opportunity to save some vital pounds.”

June 2nd, 2016 | Andrew Hagger | News

Half of the UK’s drivers believe that motor insurance is too confusing, with the overwhelming majority (86%)* believing that it needs to be easier to understand.

Research from the Co-op Insurance has found that over half (51%) don’t understand how their premium is calculated, two fifths are unclear why their premium price may fluctuate year to year and over a third (36%) don’t understand their policy price, in relation to their vehicle.

Research has also revealed that many people aren’t aware of some of the fundamental things that their premium is for. For example, 42% of drivers don’t realise it is in case another driver claims for personal injury, as a result of an accident that is their fault.

For two fifths of drivers, motor insurance is a grudge purchase, with over a tenth (15%) of drivers saying that they would not buy motor insurance if it wasn’t a legal requirement.
In response to this, the Co-op Insurance is today (2 June) launching the first, in a series of three, animated videos which has been designed to explain how insurance pricing works, to improve transparency for its customers.

The Co-op insurance is committed to improving transparency for its customers and members and this is the second part of a series of activity it has undertaken to do this, and make insurance easier to understand. Earlier this year it launched an online tool which was sent to over 10,000 home insurance customers, which was positively received, and fully explained how home insurance premiums are calculated.

The video aims to answer why premium prices cost what they do, in relation to the value of a vehicle. It explains what percentage of a motor insurance premium goes towards costs if a driver injured others, with a quarter going towards this. It also explains how about a fifth of the policy premium price goes towards repairing damage to other people’s property. A fifth also goes towards a policyholders own car for things such as, theft of the vehicle or repairs to fix damage to a policyholder’s own car in case of damage. It also outlines business costs and Insurance Premium Tax.