The Ministry of Justice has decided to reduce the discount rate used in calculations for compensation payments for those who suffer long-term injuries, and the net result could well be higher insurance premiums for drivers.

Matt Oliver from Gocompare.com Car Insurance, commented:  “First IPT increases and now this!  Drivers are being hit with news about rising costs left, right and centre at the moment.  In terms of their insurance, there are likely to be only two things that motorists need to understand – car insurance premiums are going up this year and the only way to be sure you get the best price possible for your specific circumstances is to shop around when your renewal comes through.

“In general, we are expecting car insurance prices to continue rising this year, but different insurers will always take a slightly different view of you and your car, when it comes to insurance risk.  Therefore, when prices are rising, it is more important than ever not to accept the premium your current insurer is offering, but check to see if you can get a better deal elsewhere.  The savings from shopping around this year could be significant and drivers need to give themselves enough time at renewal to do a proper job, rather than just letting their insurer role them over for another year.”

STEP has condemned the sharp increase in probate fees due to come in this May as a new tax on bereaved families.

The new fees will now be pro-rata, and apply to all estates worth GBP50,000 and over. An estate of GBP300,000-GBP500,000 will now pay GBP1000, and estates of GBP2m or more will pay as much as GBP20,000.

This represents an extraordinary increase over the current fees, which are GBP155 if made by a solicitor, and GBP215 if made by an individual, whatever the value of the estate.

A consultation set up by the Ministry of Justice was met with strong opposition from STEP and many others. You can view our full response via the link below.

As STEP Chief Executive George Hodgson said: ‘STEP is very disappointed that the Ministry of Justice has decided to ignore the view of both STEP and the overwhelming majority of respondents to this consultation and press ahead with what represents a new tax on bereaved families.

‘In many cases the probate ‘fee’ will rise very sharply indeed. A family with an estate worth just over GBP1million, not at all unusual given the current housing market, will not only have to pay a large inheritance tax bill (GBP270,000), but then pay an additional probate ‘fee’ of GBP8000, as opposed to the current fee of GBP155.

‘This is back door taxation and we note that there is not even an attempt in the MoJ’s response to justify the fairness of these new charges.’

STEP notes that the proposed fees bear no relation to the cost of processing the application, and appear to be intended to subsidise other civil claims, which, unlike, probate fees, are voluntary.

In addition, paying a fee running into thousands will be hugely problematic for law firms which normally pay such fees up front on behalf of the executors. Obtaining funds will only incur further cost and delays, and add to the stress of bereaved families. Many will have no choice but to sell their homes.

•           STEP comments on the consultation on fee proposals for grants of probate dated 18 February 2016 by the Ministry of Justice

ENDS

With excitement revving up for the release of ‘17’ number plates on 1 March, buying a car is a significant purchase. A new study from American Express® has found that 19% of adults will spend an average of £11,094 buying a brand new or second hand car this year, equating to a bumper £108 billion across the UK as a whole.

In addition, it’s not just the outlay for the purchase to consider as the research reveals that drivers will spend an average of £1,492 per car this year on running costs.

American Express offers the following finance tips when it comes to buying and running a car:

1)     Think outside your local area – while popping down to your local car dealership might seem like the easiest option, it is always worth broadening your search further afield to make sure you are paying the best price for your new wheels.

2)     Think about the future – Before you start browsing the forecourts think about what you really need from a new car. There’s no point buying a two-seater convertible if you’re thinking about starting a family, so work out what is realistic.

 

3)     Set a budget – While many Brits balance the books before buying a car itself, it’s also important to consider the financial commitment that continues after you’ve driven out of the dealership. Setting a monthly budget for those regular costs such as fuel, road tax and toll payments can help put the brakes on any overspending.

 

4)     Shop around – Whether you’re purchasing insurance or booking a service, make sure you shop around for the best deals and choose the option most suited to your circumstances. For instance, if you will only be occasionally driving, pay as you go insurance might be a better fit, whereas families who have adult children behind the wheel can make savings by taking out multi-car policies.

ENDS

The biggest home running cost for most people is gas and electricity, just as the biggest car running cost can be fuel, according to AA Home Services.

Today the AA launches a radical new boiler cover and energy switching service, which guarantees to save members £200 on their gas and electricity costs and non-members £150.

It not only protects a user’s gas boiler – the largest consumer of energy in the home – against breakdown, but ensures that it burns the cheapest energy available while the home also benefits from the cheapest electricity supply, too.

The ‘big six’ energy providers have made £ billions in profits over the last six years according to Ofgem.

A recent report indicated that two thirds of UK households are still on the standard variable tariffs of the ‘big six’ suppliers which can be hundreds of pounds more expensive than the best deals. It is estimated that last year households paid up to £2 billion a year too much. Some of these profits are due to customer complacency, so the AA wants to get better deals for families.

Why the big idea

One of the biggest expenses for consumers is energy bills and many people are in the dark on how to get the best deal.

Not only are millions of families significantly over-paying for their energy, if their boiler breaks they often don’t get the service they deserve to keep their heating working and hot water flowing.  A boiler breakdown can be one of the most disruptive events for a household – especially for vulnerable people.

Consumers don’t realise there are options to keep them warm; their heating running reliably and save money.

That’s why the AA is launching an imaginative new energy switching service that both ensures customers never overpay for their energy again and provides prompt help if their boiler breaks down.

Customers buying an AA boiler cover product will be guaranteed to save at least £150 on their energy bills by using the AA to find and switch them to the cheapest energy supplier on the market. If a cheaper tariff becomes available, the AA will let them know and switch them again.

If a customer who is also an AA roadside member doesn’t make £200 of savings (£150 non-members) on their energy bills, the AA will refund the difference.

How it works:

The AA makes no charge and takes no commission from energy companies for this service.  And, it is completely independent – unlike price comparison sites that do take commission so may not always show the cheapest option.

By calculating actual energy usage, the best available deal is found and consumers are switched to the cheapest provider. Tariffs are regularly compared, ensuring that the best possible deal is always found.

On the guarantee there are no catches – if a customer doesn’t save £150 (£200 if an AA member), they will be refunded the difference (so the boiler cover could effectively be paid for too).

James Hosking, director of home services for the AA, said: “Because anything can happen, we want to give consumers a better energy deal while also continuing to ensure that they enjoy first-class boiler cover.

“The savings customers make by us switching their energy suppliers will pay for their boiler cover or we will top it up. Consumers can put their trust in the AA to save them money and get brilliant boiler cover.

“In our trial the average saving was £250 – the lowest was £79 and the highest an eye-watering £934.

“It really is a win win situation.”

Aspirations for dream homes and cars are not just for the young, many of us live this dream after we turn 50 by carrying out major spending on homes, cars and holidays*. Part of this could well be driven by retirement as almost half of people say they notice more repairs that need to be done to their home since retiring. Two thirds have bought a new kitchen, the same number have bought a new bathroom and two thirds say they have carried out major work to their home.

According to the research by Saga Personal Loans amongst over 8,000 over 50s, these home projects do not come cheap; typically people said they spent around £17,000 on renovations, they spend around £5,000 on a new bathroom and £13,000 on a new kitchen.  People seem keen to continually revamp their homes, with one in eight typically refitting the bathroom twice and carrying out three-six major home improvements.

And the spending does not just stop at home – people over 50 account for almost half of the UK’s spend on motoring. Having a reliable car is a key concern whether they need it for commuting, shopping or for leisure, which could explain why a people in their 70s say they have bought three new cars since turning 50.

Wanderlust also kicks in once the children have left home or people stop working.  People are keen to spend their extra time travelling the world, typically taking 7 foreign holidays in their 50s, whilst people in their 70s said they had had 22 foreign holidays since turning 50.

When it comes to paying to achieve their dreams, much of this is achieved by diligent saving throughout their working lives, others use income by continuing to work for longer either full or part time, some use the equity they have built up in their homes and many use loans to pay for maintaining their lifestyle.

 

Britons haven’t lost their appetite for saving – despite the current low interest rate environment and economic uncertainty over issues such as Brexit.

A survey conducted by one of the UK’s leading building societies, the West Brom,  shows that 72 per cent of the nation still class themselves as regular savers.

Out of more than 1,300 adults questioned, some 69 per cent expected to save the same amount of money in the next 12 months as they did last year, while 53 per cent said they would like to save more but currently don’t have enough disposable income to do so.

In contrast, only one in five said they would prefer to live for today rather than save for tomorrow, although this increased to more than a third among 18-24 year olds who are more likely to put spending first.

Across the board, only 25 per cent of respondents were prepared to take greater risks with their money to increase their chances of a better return.

However, middle-aged Brits – between 35 and 44 – admitted they were hoping to save more as a precaution in the next 12 months because they are worried about the future.

David Taylor, the West Brom’s Head of Products, said: “It is reassuring to see that the majority of people in the UK, particularly in these uncertain economic times, see themselves as savers.

“Putting money aside figures strongly in people’s minds and they believe it’s important to build themselves a financial buffer.”

The study also revealed how people were starting to think beyond the humble savings account, showing a willingness to consider investing money in alternative ways.

A third were prepared to look at investing in stocks and shares and 25 per cent agreed property might provide a means of boosting their cash pot.  Peer to peer lending, Premium Bonds and even investing in material goods such as classic cars and fine art were also mentioned. 

David added: “Diversifying their investments can help some people get more out of their money, albeit with careful consideration for any risks involved. 

“Our survey showed that people do generally have a strong grip on their finances and regularly review their financial position, something we would strongly advocate at the West Brom.”

 

The Government’s new Lifetime ISA is set to be a hit with parents and grandparents who are keen to get younger generations into the saving habit, according to new research by The Share Centre.

The Lifetime ISA, which will be available from 6 April 2017, is a new type of saving account aimed at 18- to 40-year-olds. You can save up to £4,000 a year, and any savings you put into the account before your 50th birthday will receive an added 25% bonus (up to £1,000 per year) from the Government. However, if you take out any money before the age of 60 there is a 25% penalty charge based on the amount withdrawn. The exceptions to this are if the money is withdrawn for a first home purchase, or in the event of terminal illness or death.

A survey by The Share Centre has found that 64% of investors over 40* will be encouraging their children or grandchildren to open a Lifetime ISA account, and a further 30% would consider doing so. Just 6% said they would not recommend the product.

The most popular feature of the Lifetime ISA among the over-40s is the government bonus, with 77% saying that this is a reason for recommending the product to younger generations. Far from being put off by a penalty charge for early withdrawal, one in five said that this would be a reason for encouraging children or grandchildren to open a Lifetime ISA, as they wouldn’t be tempted to take out their money too soon.

The over-40s also like the flexibility of the Lifetime ISA product, with 65% saying they would recommend it to younger generations because it helps them to save both for a first home and for retirement. Nearly half the respondents (48%) can see younger family members continuing to use a Lifetime ISA after taking money out for a house purchase.

Having recommended a Lifetime ISA to younger generations, the Bank of Mum and Dad (and indeed the Bank of Grandma and Grandad) are set to help them to fund their account. Nearly two thirds of over-40s (64%) said they will give younger family members money to pay into a Lifetime ISA. Among these, 41% see themselves giving ad hoc lump sums and one in five expect to give payments on a regular basis.

Nearly three quarters (72%) of over-40s believe the new product will be effective in helping more young people to save for their future. In a further endorsement of the Lifetime ISA, 79% say they would have opened one if it had been available to them between the ages of 18 and 40.

Thousands of homeowners could unknowingly be living in a high flood risk area, significantly increasing their chances of unexpected and costly damage, new analysis from home insurer Policy Expert has revealed.

Of the 5,443 people surveyed, almost half (44%) did not know whether they lived in a flood risk area. This is despite the fact that an overwhelming majority (95%) stated they wouldn’t even consider buying a home if they knew it was on a floodplain. Furthermore, one in five of those surveyed stated they would consider emigrating if they knew the weather was going to continue to get worse in the UK in the future.

Despite people’s concerns, nearly one in five (19%) admitted they wouldn’t know what steps to take to protect their home if they knew it was going to be flooded, further increasing the potential scale of damage. Half of homeowners would think to clear gutters, drains and downspouts, and move electrical equipment high above ground level if a flood was imminent. Additionally 85% of people would know to seek out and place important documents upstairs. A further 84% state they would think to source a supply of sandbags and plastic sheeting to protect their home if a flood warning was issued.

Adam Powell, Head of Operations, Policy Expert commented: “Floods can have a devastating impact and are happening more often than ever, all over the country. For that reason, it is vital homeowners are aware they could be at risk and have appropriate precautions in place.

“It’s also sensible to check you have the correct level of insurance. While most standard home insurance policies cover you for flooding, nearly all insurers expect you to know if your address or your neighbours’ has flooded in the past. A good place to find this information is on the Environment Agency website: its interactive postcode search tool will allow you to see how susceptible where you live is to flood, and how severe the risk is.

“However, what’s most important is being prepared. Being vigilant and taking precautionary steps before and after a potential flood can go a long way to mitigate the long lasting and costly damage it can cause.”

 

Tips on protecting your home from flood:

  1. Flood warnings– The Environment Agency, your local council and even your insurer provide a wealth of information regarding flood warnings to help you prepare. You can sign up for text, twitter and email alerts.
  2. Move your possessions upstairs– Some insurers will insist you move items upstairs as part of your policy’s terms. Whether that’s the case or not, it’s a good idea as a lot of flood damage occurs at ground level, such as to sofas, electrical and white goods and carpets.
  3. DIY protection products– Items such as window and door flood guards, airbrick covers, sand bags and other free-standing water barriers are available on the market.
  4. Clear your drains– The difference between being flooded or not can be down to your drains. Blocked drains prevent water running away, so keep them well-maintained and clear of debris.
  5. Consider placing white goods on supports– This could raise them off the floor enough to save damage occurring.
  6. Tile flooring– Tiles are much easier to clean and aren’t damaged as easily as rugs and carpet.
  7. Important documents– It’s costly to replace passports, driver’s licences and other documents so consider keeping them in water-proof bags. When a flood warning is issued, remember to move these upstairs or on top of furniture so they’re off ground level.
  8. Cars and other motor vehicles– It’s easy to forget vehicles you own in the panic of facing a possible flood. But moving cars, motorbikes, vans, trucks, ride on mowers and other vehicles to safer areas is a sensible precaution.
  9. Electric, gas and water supplies– Make sure you know how to switch these off in the event of a flood occurring.
  10. Maintain your home– You need to keep your property in a good state of repair. Many claims are rejected as its deemed water damage wouldn’t have occurred if the home had been looked after better.

Making small sacrifices, such as cutting out your daily cappuccino, could transform your finances, according to figures calculated by Fidelity International.

By simply ditching your daily shop-bought coffee at £2.50 a day, five days a week, you can easily find £50 a month to invest in an ISA. And growing even that apparently small sum in the stock market can quickly generate a meaningful investment pot.

Over time, this ISA Cappuccino Plan could lead to significant returns of nearly £7,000 after 10 years, and more than £17,000 after 20 years.

If the thought of giving up your shop-bought coffee makes you twitch, or you just want to reach your investment goals sooner, there are a number of other easy lifestyle changes you could make.

For example, by bringing your lunch to work, cancelling that gym membership you never use or giving up smoking, you could reach the £10,000 mark much sooner.

Tom Stevenson, investment director for Personal Investing at Fidelity International, comments: “Many investors may struggle to stump up a lump sum to get their ISA portfolio started. But don’t let this put you off. In fact, you could quickly build up a significant ISA pot by simply saving on small daily expenses, such as the cost of your daily cappuccino. The longer you can save for, and the sooner you start, the better your results will be, given the snowball effect of compounding.

“Furthermore, a monthly savings plan, where you drip-feed your money into your portfolio, can be a more prudent approach than investing in one lump sum. By investing your money into the market regularly, you will benefit from a process known as pound-cost averaging. This means that you buy more units in your investments when prices are low and fewer when prices are high. Buying at a variety of prices, and spreading ongoing investments over time, helps to cushion your ISA portfolio from dips in the stock market.”

Two thirds (64%) of 18-25 year olds in the UK now use a mobile wallet, according to research released today by social money transfer app Moneymailme.

The research reveals that 48% of 18-25 year olds believe that physical money will be obsolete within 20 years, while more than a third (38%) say that we will no longer need it in 15 years’ time. Less than three in ten (28%) say that they don’t think cash will ever stop being used or produced.

The research, which surveyed 1,000 18-25 year olds across the UK, known as Gen Z, revealed that young people prefer alternative methods of payments to cash, even for small purchases. Eight in ten (79%) say that they make purchases under £20 at least once a day, but when asked how they feel when faced with a ‘cash only’ sign at a bar or a shop nearly two thirds (62%) say that they felt frustrated. One in seven (14%) said that they would be frustrated enough to leave and go elsewhere.

In terms of mobile wallet preference, PayPal seems to remain one of the most frequently used online payment services among 18-25-year old’s (52%), while newer entrants to the market like Apple Pay (18%) and Google Wallet (9%) are starting to gain more market share.

While 36% say that they currently don’t use a mobile wallet only 14% say that they have no interest in having one, suggesting there is room for considerable growth in this market for services that appeal to the younger generation.

Nearly half of respondents (49%) say that they pay back their friends up to £10 per month, but almost a quarter (22%) wouldn’t consider a bank transfer for under £10, which currently leaves them reliant on cash to share money unless they have access to a mobile wallet.

A moneymailme spokesman said: “This generation of young people has grown up with mobile technology and for many of them using cash seems like a very dated concept, especially with the range of alternatives available to them. In 2015 electronic payments overtook cash for the first time in the UK and as this generation gets older this trend is only going to continue until producing physical cash is no longer desirable.”