31 Jan 2018 Coconut has today launched a new smart current account combining banking and accounting services, designed specifically for the UK’s ever-growing freelance and self-employed workforce.

The app-based business current account will prepare customers for HMRC’s ‘Making Tax Digital’ which starts rolling out from April 2019. Coconut features automated tax management and expense tools, giving customers visibility into how much tax they owe with a real-time estimate, while also categorising their expenses for tax and allowing them to stay on top of client payments with instant notifications.

The Coconut Start account which ultimately aims to eliminate tax returns, is free and can be opened in minutes on a mobile – instead of waiting for weeks which is the current norm. The app will offer optional extra services, such as VAT management.

Recent data from Coconut’s Self-Employment Survey highlights how money becomes complicated business when you work for yourself. Unexpected tax bills, unpaid invoices and financial admin are holding people back from finding financial security, with a quarter of respondents admitting that budgeting for taxes is one of the top five headaches when working for yourself. Keeping track of expenses (24%) and completing tax returns (22%) were also high on the list of challenges that self-employed people face, with almost a quarter storing their receipts in a box waiting to be sorted at the end of the year.

Sam O’Connor, Co-Founder and CEO of Coconut said:

The growth of self-employment in the UK is one of the biggest structural changes in our workforce of our time, but self-employed people are still one of the most underserved groups of businesses when it comes to banking products and services that meet their specific needs.

“Staying on top of tax and expenses, getting paid on-time or managing an unpredictable flow of income is a big worry and time-suck for customers. And this is only going to become a bigger burden with Making Tax Digital requiring digital tax submissions quarterly instead of annually. We created Coconut to sort out these challenges for freelancers and we ultimately aim to eliminate the need for tax returns, removing a huge amount of stress for business owners.”

27 Jan 2018 Co-op Insurance has today entered the Travel Insurance market, seeking to disrupt the sector by offering a new product shaped by its members.

The new travel insurance product offers cashless medical expenses, for all ages and medical conditions, meaning customers will not have to pay out themselves for any medical treatment – a first for the general insurance market.

Highlighting a need for this change, Co-op’s new study reveals two thirds (62%) of holidaymakers who have claimed on their travel insurance, said they had to cover the costs upfront themselves and then claim these costs back at a later date from their insurer.

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.

A further quarter (25%) had to take money out of their savings and a tenth (10%) ended up in debt as a result of having to pay the claim themselves and then claim this back from their insurer.

Furthermore, the new travel insurance product will offer Co-op customers access to an online medical consultation with a General Medical Council (GMC) registered doctor, 24 hours a day, seven days a week, from anywhere in the world.

Customers can use their smart phones or tablets to speak to doctors both prior to jetting off and during their holidays. Users can also receive prescriptions, referrals and fit-for-work notes, avoiding the need to navigate unfamiliar health systems and overcome language barriers.

Mark Summerfield, CEO, Co-op Insurance said: “This is an exciting time for the Co-op as we introduce Travel Insurance to our portfolio of products. Having recognised a gap in the market, we’ve worked with our members across the Co-op, to build a product which is fair, inclusive of all ages and medical conditions.

Andrew Hagger, Personal Finance Expert from Moneycomms said:“It’s great news for consumers that a respected brand such as Co-op will be competing in the travel insurance sector with such an attractive proposition”

When you’re choosing insurance of any kind, the price of cover in isolation shouldn’t be your reason for purchase, yes value is important, but so is the suitability of the cover you’re buying”
 
Co-op has come up with something a little different and whilst it is competitively priced and offers a comprehensive and generous range of individual benefits, the unique promise that customers won’t have to pay for medical treatment up front is a game changer”

“Furthermore, we’re the first general insurer to pay medical expenses up front, ensuring that our customers are not left out of pocket at what can already be a stressful time.”

For more information on Co-op Travel insurance visit www.co-opinsurance.co.uk

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.

26 Jan 2018 Car insurance bills have increased by 9.6% in the past year, but the relentless rise has gone into reverse following a Government U-turn, new analysis from insurance research experts Consumer Intelligence shows.

Its data reveals the average most competitive premiums rose by three times inflation – 3% ­to – £837 but overall prices dropped in the last quarter of 2017.

The Government review of the discount or Ogden rate, which sets pay-outs for major personal injury claims, has enabled insurers to reverse rises; confirmation of the new rate of between 0% and 1% could spell further cuts.

Average premiums dropped by 1.7% in the three months ending December, with under-25s benefiting the most – their average premiums are up just 2% in the past year to £1,953.

Younger motorists are also limiting their insurance bills thanks to black box technology – so-called telematics – which rewards improved driving. Around 59% of the most competitive quotes are from telematics providers.

Over-50s drivers are experiencing the biggest increases in premiums at 11.8% but still pay average prices of just £395 a year. Motorists in London pay the highest premiums at £1,217 which is more than double the cheapest at £606 for the South West of England.

25 Jan 2018 Just 17% of UK SMEs feel their high street bank fully understands the specific challenges of their business, according to Close Brothers Group’s quarterly business barometer of 900 UK SMEs.

Close Brothers research revealed that UK SMEs were concerned that their high street bank was not well enough equipped to offer bespoke advice and support for their business, with just 24% saying that they offered a range of products suitable for their business.

A recent report from Close Brothers, The Power of Productivity: Measuring, understanding and improving productivity for SMEs revealed that only 26% of SMEs thought that their high street bank was able to meet their funding needs. Previous research found that just 41% of UK SMEs accessed funding through their chosen source of finance last year, and 34% felt that it wasn’t enough for their investment plans.

Having access to the right finance is imperative for SMEs to grow their business, but the latest barometer results suggest that high street banks are lacking the specialist knowledge needed to support small businesses. Many SMEs are unaware of all the finance options available to them and will therefore go to the biggest banks as the first port of call when looking for finance.  With the high street bank rejection rate for first time borrowers at 50%, and a third of SMEs reportedly giving up after their first rejection for funding, this is a big cause for concern.

In addition to many SMEs giving up after rejection from high street banks, those who do go on to access finance often opt for the wrong type of products. This product unsuitability may put them at risk and hinder their growth. For example, an SME may choose an overdraft to finance new equipment or technology and run the risk of the bank being able to withdraw the facility at any time, leaving little or no time to repay the money.

Credit card use is also prevalent among SMEs, with 47% using a personal card for business purposes and, whilst the majority will pay their card off regularly, this need for short term finance could put businesses at risk should the interest accumulate.

A spokesman for Close Brothers Group plc said“SMEs need to receive the right support, particularly when it relates to financial decisions, and this research suggests that high street banks may not always be the best option.

“Every small business is unique and their challenges and requirements vary considerably.  They rely on advice and support on how best to deal with their specific finance needs and this is where a lender with the relevant specialist knowledge and experience is invaluable. Explaining the options available, providing funds and helping overcome issues are all areas where the right finance provider can make a real difference.

Working with lenders who understand and recognise the importance of the SME market is always likely to result in a better outcome.”

22 Jan 2018 Short term saving is dominating Brit’s savings habits, with two in five (35%) prioritising saving for a rainy day fund over any other financial milestone, according to the latest sentiment research from Foresters Friendly Society.

The findings reveal that less than a third of consumers (29%) view saving to provide a retirement income as a priority, while around a quarter are prioritising saving for a holiday. This long term saving gap is particularly significant amongst millennials (those aged between 18-34) who stand most to gain when thinking longer-term, where saving for retirement ranked even lower on their list of priorities with just 16% building up ‘nest eggs’ for their future.

This short-termism is reflected in their savings choices, highlighting a significant lack of understanding when it comes to deciding how best to achieve these financial goals. More than a third of UK adults use a standard savings account as their preferred way to save while 27% opt for cash ISAs and 15% just use their current accounts. In the current low interest environment, none of these vehicles is likely to deliver significant returns but shares based options, best suited to early saving, offering the potential for superior returns are not being embraced in significant numbers, with take-up of the Lifetime ISA at 9% and Stocks and shares at just 10%.

This attitude calls for improved education, amongst younger savers particularly, on the importance and benefits of saving early in order to avoid them hampering their future saving progress. Fewer than one in ten, for example, are taking advantage of the benefits from the Lifetime ISA (LISA) which was developed specifically to help those under 40 years old achieve their long-term savings goals.

Paul Osborn, Chief Executive for Foresters Friendly Society commented:

“There’s a lot of talk about economic uncertainty, and we’re seeing inflation continue to outpace wage growth, so it’s little surprise that people are putting something away for a rainy day. But there’s a real worry that this is being done at the expense of their longer-term saving.

“Saving early and often is a great habit to get in to, but that’s only part of the savings puzzle. The next step is to identify the best way to achieve your goal. Interest rates continue to deliver meagre returns, so whether you’re saving for a house deposit or for retirement, it’s important that you give yourself the best chance. This means making use of government bonuses through schemes such as the Lifetime ISA, and taking the investment risks appropriate for your stage of the saving cycle. Savvy investing can make your savings goals much more achievable and can make your financial future much more secure.”

16 Jan 2018 More than a third (37%) of Brits will go abroad to seek out the sun this winter, according to new research from Halifax, spending an average of £840 per person.

38% of Brits surveyed admit that the cold weather brings out a bad mood, with this figure rising to 42% for women, compared to 34% for men. By contrast, 70% say that warmer weather puts a spring in their step, encouraging the desire for a winter holiday.

In comparison, while 37% intend to catch the rays, just 11% take a winter holiday in order to enjoy winter sports, while 32% travel to see family and friends, and 31% are motivated by the opportunity to enjoy other cultures during the winter months.

A third of those surveyed (35%) have taken a winter break in the past year, with the average cost coming in at £840 per person. This rises to £969 for the over 55s, while 18-34s are the savvy sun-seekers, spending an average of £754.

Jon Roberts, Managing Director of Credit Cards for Halifax, said: “When the dark nights draw in and the cold weather is upon us it’s hard not to think of an escape to the winter sun. For those who do choose to travel, it’s important to consider not just the cost of the holiday itself, but how you will finance expenses while you’re away. With the Halifax Clarity card, there is no fee for spending abroad in the local currency, meaning cardholders don’t need to worry about carrying their holiday cash around.”

Halifax’s Clarity card is a great option for those traveling abroad, with one simple rate and no usage fees. A £20 cashback offer is currently available for accounts opened until 28 February 2018. For more information and to check eligibility visit: www.halifax.co.uk/creditcards/clarity-card/

15 Jan 2018 Millions of people are risking their financial future by not checking their credit score, according to Amigo Loans.

New research from the UK’s largest guarantor lender has revealed over half of Brits have never checked their credit file, meaning millions could be jeopardising their financial freedom. There are approximately 51.7 million adults in the UK, meaning that 26 million may be at risk from not checking their credit rating.

Worryingly, 2.5 million (5%) Brits are too scared to look, while almost a fifth believe there’s no point checking as nothing can be done to improve their score.

Simply not knowing how to go about it was the a common reason (24%) for people not checking their record and an even larger number (36%) hadn’t thought about doing it. 12% said they only check when applying for a new form of credit. 3% confessed they don’t even know what a credit score is.

Following the research that highlights people’s fear and misunderstanding of credit, Amigo Loans is calling for a better system that’s more accessible for people, where information is displayed clearly.

Kelly Davies, Chief Communications Officer at Amigo Loans said: “Understanding their credit profile and correcting any mistakes could be one of the most financially beneficial things people can do for themselves in 2018. They’re one of the most important pieces of documentation held in our names, yet people are intimidated by them – but they shouldn’t be.

“It’s confusing for people because there isn’t one central source, and we don’t have one single credit score. The companies that hold our files use different systems, and methods of scoring. We’d recommend customers start with something easy and free like Noddle.co.uk to get to grips with it all.”

There are a number of other credit reference agencies available which allow people to check their score before applying for credit including EquifaxExperian and Callcredit, while Noddle and Clearscore and TotallyMoney provide customers with the ability to see their data for free.

Top tips for improving your credit score:

  1. Double check you’re on the electoral register. Lenders use the electoral register to confirm an individual’s address and location and fight against identity fraud.
  2. Try not to have a high balance on your credit card. Lenders may view this as excessive debt and think you have an inability to repay.
  3. Make sure to pay your bills on time, or ahead of time, a good credit score will be built up over time.
  4. Do not make multiple applications for credit as this can impact your record negatively.
  5. If you notice anything unexpected on your credit report you could be a victim of identity fraud, i.e. someone could have applied for credit in your name, contact the credit reference agency who will try to resolve the issue, alongside the lender.
  6. Only apply for credit which is necessary – applying for more than four a year can lower your score.
  7. Cancel old credit card agreements and out of date credit cards, such as store cards you no longer use, as this will still show on your file. Lenders will be cautious about the possible size of your debt.
  8. If you are divorced or separated, cut all financial ties and make sure your former partner’s details are eliminated from any joint accounts. The credit history of anyone you are financially associated with, such as on a joint bank account with a spouse, can affect your credit rating.

15 Jan 2018  Up to 1.3 million recipients of pension advice could miss out on £236m of potential tax savings, if advisers and employers do not act on new legislation in time for April.

Employees can now sacrifice up to £500 taxable salary p.a., in return for a tax-free payment from their employer, reimbursing them for any fees paid for pension advice. Salary sacrifice schemes – such as Childcare Vouchers or Cycle to Work schemes – allow employees to swap taxable salary for a non-taxable benefit in kind. In the case of pension advice, this can save people up to £310 p.a. in tax and national insurance.

However, the new legislation has gone largely unnoticed since receiving Royal Assent in November. No Employee Benefits Platform has built a scheme to help employers in the same way as they have with Childcare Vouchers and Cycle to Work, due to the complexities involved. Consequently, very few employers have plans to offer this benefit.

If this does not change in time for the end of this tax year, 1.3m clients could miss out on an average saving of £187 for the 2017-18 tax year.

Pension Advice Vouchers – launched by VouchedFor in December – is the only pension advice salary sacrifice scheme to have launched in the wake of this new legislation. Adam Price, MD, comments “Access to good financial advice is so important right now, and this government initiative reduces the cost by up to 62%. But very few employers yet offer this benefit. It’s especially urgent for the 1.3m employees who already pay for advice each year – they only have until April if they want to capture their first year’s savings.”

Adam continues with this advice:

  • Employees – should urge their employer to join the Pension Advice Voucher scheme. Most easily, they can submit a request through the website. We will then work with both their employer and adviser to put everything in place.”
  • Employers – can register with Pension Advice Vouchers and start promoting the scheme with just a few clicks.”
  • Advisers – can register with VouchedFor free-of-charge, then login to invite their clients to claim vouchers from their employer. They can also encourage their corporate clients to join the scheme”

Commenting on VouchedFor’s innovation, Adam adds “We found we had all the necessary ingredients to bring this scheme to market quickly, just in time for the first April deadline. Our VouchedFor verification system makes it possible for us to contact any UK IFA on an employee’s behalf and verify the validity of their request for fee reimbursement. And of course, VouchedFor makes it easy for any employee who needs a good IFA to find one. Finally, with Hatch – our new hybrid robo-coach financial planning service – we have a low cost solution for those employees who fall below advisers’ minimum criteria.”

12 Jan 2018 With almost 900,000 National Savings ‘Pensioner Bonds’ due to mature over the next four months, savers may be looking for inspiration as to where to put their money in today’s market.

At the time the 3 year Pensioner Bonds from NS&I were launched offering a fixed 4% return,  the offer rate was way above market rates at the time and is even more so today.

Andrew Hagger of the website Moneycomms said:”To be brutally honest, there’s no chance of earning anywhere near that figure today without taking an element of risk.”

“The stock market has performed well in recent years but potential volatility means it’s not going to be suitable for many pensioners particularly if this money represents the bulk of their savings nest egg.”

“For some it may be worth looking a little more closely at some of the more established peer to peer options – for example RateSetter is paying 3.1% on 30 day money today – although nobody has lost any money since it started over 7 years ago it’s important that you understand that your capital is at risk and is not covered by the Financial Services Compensation Scheme (FSCS) guarantee.”

As for standard fixed rate options please see the best buys below – some of these names may not be familiar with some savers but they are all banks covered by UK FSCS so your money is as safe as it is with a high street bank or NS&I.

The decision is whether you put all your cash away for three years or perhaps split it so half in for three years and half for a shorter term – with interest rates possibly rising again later in 2018 or early 2019 we may see fixed rates creep up so maybe better to avoid locking all your cash away for 3 years as you may miss out on slightly higher returns.

Best Buys – fixed rate bonds as at 12 January 2018

  • Charter Savings Bank 1.87% for 18 months
  • Aldermore Bank 2.00% for 2 years
  • Masthaven Bank 2.08% for 30 months
  • NS&I and United Trust Bank both 2.20% for 3 years
  • Paragon Bank 2.40% for 5 years.

11 Jan 2018 Research from GoCompare Travel has found that 69% of UK holidaymakers wrongly expect an EHIC to provide free emergency medical treatment in Europe and 7% expect it to pay for an air ambulance to fly them back to the UK.

Thousands of British skiers and snowboarders are heading to Europe this winter to get their annual fix of downhill thrills. Unfortunately, many will be travelling under the misapprehension that having a European Health Insurance Card (EHIC) will give them all the medical cover they need.

Research from GoCompare Travel has found that 69% of UK holidaymakers wrongly expect an EHIC to provide free emergency medical treatment in Europe and 7% expect it to pay for an air ambulance to fly them back to the UK. 27% of Brits who had travelled abroad admitted they didn’t always have travel insurance cover and 6% said they never did. The worrying fact is that anyone relying on an EHIC to pick up their medical costs for a skiing or snowboarding accident could be left battered and bruised and with a very large bill to boot.

According to the Association of British Insurers (ABI), in 2016 UK insurers paid out £1m a day to travel insurance policyholders with claims for medical costs totaling £199m. Around 480,000 travelers made claims for medical expenses with the average payout being around £1,300, but some accidents can cost a lot more. The following are real-life examples of winter sports medical claims**

Accident 1 – A man was accidentally hit by a snowboard whilst skiing in France and suffered serious bruising. He was evacuated off the mountain by helicopter running up a bill of £5,425.

 

Accident 2 – A woman had a nasty fall while skiing in Austria, tearing her anterior and interior cruciate ligaments and needing surgery to repair them. Her bill for treatment was £9,439.

 

Accident 3 – A man suffered a spinal injury in a fall whilst skiing in France. He was airlifted off the mountain to the resort clinic and later transferred to a bigger hospital. The total bill was £8,978.

An EHIC is extremely useful and can save you money on emergency medical expenses, but its benefits are not as comprehensive as many people think.

The EHIC facts – The European Health Insurance Card (EHIC) is free to most UK residents. However, residents of the Channel Islands and the Isle of Man are not eligible for EHICs. Parents and guardians can apply for EHICs for those aged under 16 and each member of a travel party must have their own EHIC.

An EHIC entitles the bearer to the same level of state medical care provided to eligible nationals of the EEA country they’re in. This means that the treatment may be provided for free, or at a reduced cost, in all European Economic Area (EEA) countries including Switzerland. The EEA includes all 27 members of the European Union (EU) plus Iceland, Norway and Liechtenstein. The EHIC is not accepted in Turkey as it is not a member of the EU or the EEA.

However, the provision of state care varies from country to country and does not mean you should expect to be treated as you would if you visited your NHS doctor or hospital. Few EU countries pay the full cost of medical treatment as you’d expect from the NHS. For example, in France a patient may be expected to pay for a consultation with a doctor but will have up to 70% of the cost reimbursed later. The patient may also be expected to contribute to the cost of staying in a hospital overnight.

There are also no guarantees that you will be taken to a state hospital for emergency treatment, and many of the smaller hospitals and clinics found in ski resorts are private. If you end up at a private clinic or hospital your EHIC may not be accepted at all.

Mountain rescue and medical repatriation

If you’re unfortunate enough to need mountain rescue or medical repatriation, the EHIC provides no cover at all. An EHIC does not cover the cost of being brought down a mountain by a mountain rescue team or helicopter and it doesn’t cover the cost of being flown home under medical supervision from any destination. The UK Government generally does not pay for British holidaymakers to be flown home but may do so if there are very unusual circumstances, such as terrorism.