31 May 2018 New figures from personal loan provider, Hitachi Personal Finance, have revealed a significant increase in the number of loan applications in motoring, home improvements and leisure over the previous three years.

The lending data shows an increase of 94% in motoring loan applications and 4% in home improvements. Average loan amounts have also seen an increase across the board:

  1. Motoring: +8.67%
  2. Leisure: +7.02%
  3. Home improvements: +1.78%

The insight comes from Hitachi Personal Finance’s new ‘History of Household Expenditure’ analysis, which looks at ONS data from the previous ten years to identify trends in individual and household expenditure, versus income.

The data shows that at the end of 2017, household expenditure was 3.9% higher than the previous year, meaning British residents had gone from spending £533 per week in 2016, to £554 per week in 2017 on their everyday needs, from rent and bills, to food and clothing [1]. This is the biggest increase in the cost of household expenditure in ten years.

Analysis also showed that the individual average weekly expenditure in 2017 was 3.4% higher than 2016’s figures (£226.20 a week compared to £233.80), a difference of £7.60. Again, this is the biggest increase in the past decade.

The UK’s average weekly household expenditure has continually increased since 2014 and has seen a 1.4% overall increase in the last ten years, from spending £230.50 in 2007, to £233.80 in 2017.

However, Hitachi Personal Finance also revealed that average weekly income has remained stagnant, or even decreased, every month since December 2016. What’s more, the average weekly income in March 2008 was at £503, with new figures released this month showing a 2.8% drop to £489 per week.

The categories that have seen the largest increase in expenditure over the previous decade are clothing and footwear, increasing by 27% from £19.80 – £25.10, along with recreation and culture, which has seen a 22% increase from £60.20 – £73.50 per week.

However, the nation hasn’t been splashing the cash in every department, with education (-61%) and alcoholic drinks and tobacco (-30%) seeing a significant drop in expenditure.

The top five growth areas for household expenditure since 2007 are:

  1. Clothing and footwear – 27% increase
  2. Recreation and culture – 22% increase
  3. Communication – 18% increase
  4. Household Goods and Services –  8% increase
  5. Miscellaneous goods and services (personal care and products, accessories, childcare products and services) – 2% increase

30 May 2018  A fifth of people with pensions in the UK (20%) have no idea who will inherit their pension pot when they die, according to research released by Scottish Widows. Surprisingly, 17% of divorcees don’t know who stands to inherit their pension, even though this could be their ex-partner. This figure rises to 28% among people who are separated from their partner.

Of those who were formerly in a relationship that has since broken down, just 24% say they updated their pension policy immediately, while half (50%) said they had no idea they needed to update their personal information. A further 16% did eventually update their policy, but waited for over three months to do so, with men more likely to update a pension policy when a relationship ends. More than a quarter (28%) of men do so straight away, versus just 20% of women. Three fifths of women (60%) don’t know they should be updating a policy, compared to 42% of men. 

Co-habitees are also leaving themselves exposed as there is no guarantee a partner would receive pension savings if they are not named as a beneficiary on the policy. Over a quarter (28%) of co-habitees are unsure who will inherit their pension if the worst were to happen.

Catherine Stewart, Retirement Expert at Scottish Widows, said: “A relationship ending can be a really stressful time and sorting out your pension may not be the biggest priority. However, it is important that you know who stands to inherit a pension when you die – for all you know, it could be an ex from many years ago.

“Likewise, just because you and your partner live together and are in a committed relationship, there is no guarantee they’ll receive your pension savings when you die unless you make specific requirements.

“We know that in general terms, women’s retirement prospects are worse than men’s. This is largely because of the persistent gender pay gap and maternity and other career breaks, which can all hold back women’s earning potential. That’s why it is even more important that women review their finances and who will benefit from pensions. Taking a few small actions can financially insure their future, and that of any dependents who could benefit from pensions after they’re gone.”

 

Scottish Widows has prepared the following top tips to ensuring you stay on top of your finances:

 

  1. Make sure you know who stands to inherit your pension pot when you die
  2. If you are co-habiting, many pension policies will require you to name that person on your policy as the beneficiary upon your death
  3. Periodically check all finances including pension pots, bank accounts and insurance schemes and ensure the right dependents and beneficiaries are named.

29 May 2018 Aviva, the UK’s largest insurer, has reported a 5.4% increase in the value of detected fraud in 2017, worth £90m (2016: £85m) – or £246,000 of fraud every day. This increase has been driven by a 6.3% growth in the number of fraudulent claims Aviva detected.

This is the second consecutive year in which the value and volume of fraudulent claims detected by Aviva has grown. By detecting and avoiding paying fraudulent claims, Aviva is helping to keep premiums low for genuine customers.

Whiplash fraud still dominant

Motor insurance remains of particular concern, representing two-thirds (£59m) of the total value of fraud detected, and an increase of £9m over Aviva’s 2016 figures. Highlighting the scale of the problem, Aviva now rejects around one out of eight whiplash claims it receives which are suspect or fradulent.

Despite recent industry figures showing a drop in the number of motor claims paid, these figures show that the UK’s largest insurer is not seeing any let-up in the number of bogus personal injury claims it is dealing with. In fact, the insurer is currently investigating nearly 17,000 personal injury claims for suspected fraud – 1,000 more than last year.

Aviva’s fraud figures demonstrate the importance of the Civil Liability Bill which is making its way through Parliament. The proposed legislation would, if passed, reduce financial compensation for minor personal injury claims such as whiplash, as happens in other countries. It is intended that this will remove the financial incentive for opportunistic fraud and bring down the cost of motor insurance. The proposed legislation should also remove the financial incentives behind the nearly 900m nuisance calls and texts made chasing an injury or insurance issue.

One improvement from 2016 is that the level of organised motor fraud has declined. However, the insurer still has nearly 3,000 suspect claims under investigation linked to organised fraud or gangs. This decrease was offset by an increase in the numbers of low-speed accidents which have resulted in bogus injury claims. Aviva’s case involving a champion cage fighter* who was knocked out by the court for an exaggerated whiplash injury is one of thousands of examples of this type of exaggerated or fake claim.

Tom Gardiner, Head of Fraud at Aviva, said, “Whilst it’s good news that the number of accidents is falling, we are still detecting more fraudulent claims than before. Whiplash fraud continues to present the biggest threat to customers – not just in terms of pushing premiums up, but by fraudsters putting innocent motorists at the risk of real harm by deliberately causing accidents to make bogus whiplash claims. 

“Change is urgently needed. The proposed Civil Liability Bill will deter fraudsters from pursuing their campaign of crash for cash, simply to line their pockets. The good news in the meantime is that we are detecting, disrupting and prosecuting more fraud.”

Detecting Fraud and Defending Customers

In addition to detecting fraud, Aviva is working closely with the Police to bring fraudsters to justice. This action has widely been supported by the courts: last year Aviva helped to bring 68 successful criminal prosecutions for fraud, carrying 143 years of prison sentences.

Aviva is also investing in defending customers who have been wrongly accused of being at fault in an accident. The majority (80%) of fraud that Aviva detects is committed by  other people against its customers. This helps to protect customers’ premiums and excesses from the impact an ‘at-fault’ claim can have. Aviva defended its customers against more than 800 spurious claims at court in 2017 and in the last two years has had more than 250 claims against its customers ‘struck out’ due to findings of fundamental dishonesty. Such a ruling means the entire claim can be thrown out, and the claimant faces paying the costs of the action, which often exceed £10,000.

23 May 2018 Brits are woefully under-protected should serious illness strike, according to new research from Scottish Widows. Despite more than a fifth (21%) of people admitting their household wouldn’t survive financially if they lost their income due to long-term illness, fewer than one in 10 have a critical illness policy. People are, in fact, more likely to insure their mobile phones than to protect their own health.

Taking out life insurance also appears to be falling down the population’s priority list, with just 27% having a life policy, equivalent to 14 million people.Worryingly, this has dropped by 7 percent compared with 2017, a year-on-year decrease of 3.6 million individuals.

Leaving households at risk

This is an especially precarious position for the two-fifths (42%) of UK households that are reliant on just one income, and it’s clear that many are in lack of a ‘Plan B’. Despite 43% of people saying they’d rely on their savings if they or their partner were ill and unable to work, a third (35%) admit their savings would last no more than three months if unable to work and more than half (54%) say they’d last no longer than a year. Three in ten (30%) – or 15.5 million people – say they aren’t saving anything at all.

One in five say they’d rely on state benefits if they or their partner were unable to work for 6 months, but at a time when welfare reform is resulting in significant changes to benefits such as child and working tax credits, income-based job seeker’s allowance, income support, housing benefits and bereavement benefits, Scottish Widows says that families need to do all they can to protect themselves and their families.

On top of this, people are leaving themselves and their families unprepared for other aspects of illness or bereavement. One in five (20%) people aren’t sure who would take care of them if they fell ill, and nearly half don’t have the protection of a will, power of attorney, guardianship or trust arrangement in place for their families.

When asked why they haven’t taken out life or critical illness insurance, almost a third (30%) of the UK’s primary breadwinners say they don’t see the need for cover, raising concerns over their financial resilience should the unexpected happen.

Lack of trust and understanding

The research also reveals that a lack of trust and understanding could be contributing to the UK’s protection gap. On average, people think that just a third (34%) of individual protection claims are paid out by insurance providers each year, based on the misconception that insurers will do anything not to pay. In reality, however, virtually all protection insurance claims (97.8%) were paid in 2017.[4] In addition, almost four-fifths (78%) of people are unaware that cover often comes with practical advice and emotional care, as well as financial support, without having to make a claim.

Gary Burchett from Scottish Widows, said, “It’s a worrying truth that people are more likely to insure their mobile phones than their own health. On a societal level, we increasingly think in the short-term, caring more about tangible things in our day-to-day lives.  On a more fundamental level, we’re programmed not to think about the worst happening. Together, these are dangerous inclinations, as people aren’t thinking about insuring their health or life until it’s too late.

21 May 2018 An investigation comparing two years of summer holiday prices has revealed that families taking kids out of school to avoid summer holiday price hikes are also being penalised with prices inflating as much as 32% for term-time holidays, travel currency expert FairFX has revealed.​

As part of FairFX’s long-running campaign investigating the school holiday price scandal, the travel currency firm compared over 350 package holidays from four holiday operators to four destinations flying from 7 UK airports in 2018 and 2016 to reveal where families are being ripped off.

The analysis showed the cost of holidays during term-time have gone up by 32% in some family holiday destinations, costing families more than £700 more in 2018 than in 2016 and rising at a faster rate than trips taken in the official school holidays.

On average, the cost of term-time holidays have increased by 21% over the last two years, compared with an 11% increase in the cost of holidays taken during the official summer break.

The new research shows that parents taking their children out of school to avoid official summer holiday dates and the associated price hikes continue to be at the mercy of travel operators.

 

Package price hike: How average holiday costs have risen since 2016

 

 

Term Time July

Summer Holiday July

Term Time July

Summer Holiday July

Term Time July 2016 v 2018

% Increase

School Holidays July 2016 v 2018

% increase

09-Jul-16

23-Jul-16

14-Jul-18

28-Jul-18

Majorca

 £2,161

 £2,917

 £2,639

 £3,438

 £478

22%

 £521

18%

Tenerife

 £2,299

 £2,829

 £3,038

 £3,705

 £739

32%

 £876

31%

Costa

del Sol

 £2,383

 £3,339

 £2,775

 £3,393

 £393

16%

 £54

2%

Algarve

 £2,426

 £3,359

 £2,766

 £3,221

 £340

14%

 £139

-4%

Overall

Average

 £2,317

 £3,111

 £2,805

 £3,439

 £487

21%

 £328

11%

 

In terms of individual destinations, Tenerife has seen the highest increase in prices over the last two years, with the average family trip increasing by32% during term time and 31% for holidays in the summer break since 2016.

Trips to the Costa del Sol during term time have gone up by 16% while trips during the school summer holidays have seen a 2% price increase over the last two years.

Looking into the cost of holidays in 2018, families travelling abroad this year face paying an average of 22% extra for a holiday taken within the summer break, compared to the same package holiday just two weeks earlier within term-time.

FairFX found that prices shot up by an average of 22% for trips departing the weekend of July 28th 2018, than trips leaving two weeks earlier on July 14th 2018. These price hikes mean families face paying nearly £650 extra on average for holidaying during the official summer break in some instances.

18 May 2018 UK motorists could save £1.8bn thanks to the first ever MOT test repair cost calculator for drivers ahead of the new MOT changes, which come into effect on 20th May.

To help motorists estimate MOT repair test costs, WhoCanFixMyCar.com has created the first online calculator where drivers enter in their postcode and find out how much it costs to repair defects in their local area.

The new MOT test changes include how car defects are classified, in three categories; dangerous, major and minor – with dangerous and major defects resulting in an immediate MOT test fail. These defects render the car illegal to drive in the UK and will need to be repaired and retested before the driver can drive it on the road again.

Drivers can use the calculator here: https://www.whocanfixmycar.com/car-service-cost-calculator

Diesel cars will be targeted more under the new rules, with a focus on pollution and emissions. Instead of visually checking the diesel particulate filter, mechanics will need to remove and examine it to determine whether it passes, and diesel cars that do not have one or have tampered with it will incur an automatic fail. A car exhaust that emits ‘visible smoke of any colour’ will also be issued with a major fault and will fail the test.

MOT testers will focus more on steering systems, lights and brake pads, with a steering box leak, worn brake pads and blown out bulbs all resulting in a test fail.

The new MOT laws will put more pressure on motorists to have any unsafe defects repaired either instantly if the vehicle has failed the test or quickly if advisories or minors have been given.

WhoCanFixMyCar.com is an online car garage and repair marketplace connecting 11,000 garage and repair centres with drivers around the UK. The site has 1m users and recently processed more than 170,000 quotes through the site in one month.

Al Preston, co-founder of WhoCanFixMyCar.com, said,

I’m sure many drivers are nervous about the new MOT legislation coming into effect, however the stricter guidelines will ensure the safety of all motorists in the UK, which can only be a good thing. My advice would be to have your car checked over by a professional before the MOT, so you’re not surprised by any defects that can leave you carless for a while.

11 May 2018 M&S Bank research reveals that a third of people with a garden shed admit to leaving it unlocked, with nearly one in five (17 per cent) saying they never secure it, despite the contents of a typical shed being valued at £550 on average. More than 15 per cent of respondents revealed that their shed contained more than £1,000 worth of items such as gardening goods and equipment.

Nearly a third say either they or someone they know has fallen victim to theft or damage to items stored in their shed; rising to 40 per cent for those in the North. Half of shed owners with home insurance said items stored in their shed either weren’t covered by their home insurance, or they didn’t know if they were covered.

It isn’t just sheds that are targeted by thieves or vandals; more than one in ten UK adults (14 per cent) say either they and/or someone they know, has had their garden greenery damaged or stolen.

Despite the average garden containing £369 worth of plants, bushes, trees and shrubs, it’s perhaps surprising that many garden owners didn’t know whether their garden is insured. Only ten per cent were confident that their plants, bushes, shrubs and trees were covered under their home insurance.

Paul Stokes, from M&S Bank, said: “People often invest significant time and money into their garden, and the value of items, whether in the shed or in the garden itself, can quickly mount up.

“That’s why it’s surprising that a significant proportion of homeowners still don’t know whether they have adequate cover for theft or damage to both the shed and garden, should the worst happen. As we head into spring, we would urge households to review what measures they may need to secure their garden, as well as what is included within their policy, to ensure they are covered.”

10 May 2018 Research by Yolt, the money app backed by ING, claims that 70% of UK consumers now use a financial app to manage their finances – a figure which rises to 89% of millennials.

A marked increase from 2016 research which, showed nearly 40% of adults used apps to manage their money.

The Yolt research also found that nearly half of over-55s use an app to manage their money.  This increased interest in financial apps comes alongside the introduction of Open Banking, which promises to change the way the nation banks.

Consumers using a financial app to manage their finances have already seen benefits from Open Banking, according to the Yolt survey.  6% think there is now more competition between banks and financial service providers since Open Banking was introduced and 20% of respondents said that they are now able to see their different accounts in one place.

However, there is still a lot of work to do before all financial app consumers are aware of the potential benefits of Open Banking. Although 22% of respondents are aware of Open Banking, the majority of consumers haven’t yet seen any changes to the way they manage their money.  60% of consumers said their main bank hadn’t yet communicated the Open Banking changes to them and 22% didn’t know if they’d had any information about Open Banking from their bank.

Leon Muis, from Yolt, said:

“The UK is switched on to the benefits of money apps, from managing their finances, making payments, comparing products and much more.  Nearly three quarters of Brits are now using some kind of app to manage their money.

09 May 2018 New research by wealth management group Tilney reveals the extent to which many peoples’ retirement preparations are in disarray, with nearly one in five UK adults admitting they have lost track of at least one pension pot.

This is a problem exacerbated by changes in the employment market with few people now sticking to one job for life, meaning most of us end up with multiple pension plans. According to Tilney’s research, the average person has worked for 5.8 employers by the time they are over 55 but this is set to rise significantly as 18-34 year olds have already had, on average, over 4 jobs and even small businesses are now required under law to auto-enrol new staff into a workplace pension. Projections by the Department of Work & Pensions estimate that the average person will have 11 employers over their working lives.

Tilney’s research has found that nearly 1 in 5 admit they have lost track of a pension at some point, the main reasons being they have “never kept an interest”, “lost paperwork” or “forgotten to notify providers of address changes”. Of those who have moved home, 13% admit they have never notified their pension providers of their change of address and a further 12% confess they are unsure. When asked how they would go about finding a lost pension, most (32%) would contact their previous employer but a fifth (20%) said they would have no idea how to find it.

One solution to this mess would be to consolidate scattered pensions into a single plan. This allows for simpler administration and oversight and the pension could then be taken from job to job, providing the employer agrees to pay into the scheme instead of their own. Most individuals (72%) have never consolidated plans and the key reasons people are they’ve never thought about it (23%) and don’t know how (20%).

The research also highlights just how disengaged much of the British public are with their retirement plans, despite the importance these assets are going to be in financing their future lifestyles. One in five respondents admit they have never checked their current workplace pension, 13% have no idea as to what their pension is worth, and a quarter of those asked were unable to differentiate whether their current pension is a defined contribution or defined benefit scheme.

Further, 47% of men and 62% of women with pension plans admit they do not know where their pension is invested and 38% don’t even know which company are managing their current plan. 62% have no idea what the annual pension allowance is, while 67% admit they find the language of pensions confusing – especially women (75%).

Andy James, Head of Retirement planning at Tilney, commented: “The research shows the worrying level to which the private pensions of millions of Britons are in complete disarray. Alongside property, pensions represent one of the largest forms of private wealth in the UK and for most people these are going to be critical in funding their lifestyles in later life. Despite this, many UK adults are not sufficiently in control of these important financial assets, which are often scattered across multiple plans, forgotten about entirely or the paperwork has disappeared down the back of a sofa. This is a problem set to worsen materially as the employment market evolves and people will end up with an increasing number of pension pots.

“It is all too easy to lose track of a pension due to a combination of inertia, disinterest fuelled by excessive technical jargon and absent minded administration. Tracking down missing workplace pensions can be particularly problematic where a previous employer from many years past has been acquired or gone bust, moved or re-branded. But it really is vital to track down these pots of assets and to determine whether they remain fit for purpose.

“One place to start when trying to track down missing pension is the UK Government’s Pensions Tracing Service,” explained James. “This is an online database which provides current contact details for past and present pension schemes and it therefore requires the individual to know the name of their former employer, pension scheme or provider. The Department of Work & Pensions is also working with the pensions industry, regulators and technology firms with a view to launching Pensions Dashboards – the aim of which is to provide a consolidated view of all pensions owned by a saver alongside the State pension. Such a development is urgently needed, however there are serious concerns about whether this will be able to be achieved by the targeted launch date of April 2019.

01 May 2018 An army of have-a-go builders is expected to cause damage to their properties, wallets and potentially themselves as Brits get serious about ‘Do-it-Yourself’ this May Day.

A national poll commissioned by Nationwide Current Accounts reveals that May 7 could be an expensive time for DIY enthusiasts, with the research pointing towards bodged jobs, accidents, and repeated visits to the store as the nation struggles to get jobs right first time.

The survey of more than 2,000 UK adults shows that six in ten are planning home improvements next week, and for a variety of reasons too. More than a third (34%) say it’s the only time they get to do things, while just under a fifth say the three-day weekend gives them time to correct if they get it wrong.

Nationwide data reveals customers made a million transactions across the big four home improvement stores* on the last May Day Bank Holiday – one of the most popular times to do home improvements. The average spend across debt and credit cards was £40.29 per transaction, with 76 per cent more transactions than a regular Monday in May.

Costly disasters:

DIY jobs often end in disaster, with more than one in five (23%) stating they resorted to professional help in order to rectify a bungled job, with the average cost of repair being £166.76. More than one in ten (10%) have called on experts on multiple occasions.

Londoners are much more likely to suffer a disaster according to the research, with just under a fifth (18%) paying for a professional compared to just six per cent in Yorkshire and the Humber.  Equally, some 19 per cent of those aged 16-24 received help compared to four per cent of those aged 55-plus.

Of those who have experienced home improvement disasters, the top calamities include:

  • Short circuit/ electricity problems: 34% have experienced
  • Plaster fell off wall: 28%
  • Blown a fuse/ broke appliance: 26%
  • Flooding from damaged water pipe: 19%
  • Fell through the ceiling: 12%
  • Ruined structure of the house: 10%
  • Caused a fire in the home: 9%

Despite more than half of Brits believing men and women are equal when it comes to DIY, more than a third (35%) believe men are typically more proficient, versus 10 per cent for women. However, the poll shows women are around half as likely as men to have an accident or bodge a job, at 16 per cent versus 30 per cent.

A poor worker blames their tools:

It is perhaps little wonder that DIY jobs are often calamitous. A quarter (25%) of respondents say they attempt jobs using whatever they can find lying around rather than go to the shops. Lack of preparation is also higher when younger according to the poll, with more than a third (35%) of those aged 16-24 using whatever they can find compared to a fifth (20%) of those aged 55 and above.

A further 20% of people fail to properly ‘cost’ a job, making repeated trips to the shop because they always forget something.

When it comes to jobs, Brits are willing to give most things a go. The top ten jobs that the nation feels comfortable doing themselves include:

  1. Change a lightbulb: 76% comfortable
  2. Hanging pictures: 71%
  3. Painting and decorating: 69%
  4. Change a plug: 60%
  5. Putting up shelves: 54%
  6. Bleed a radiator: 53%
  7. Lay carpet: 24%
  8. Woodwork: 23%
  9. Hanging doors: 23%
  10. Laminate/ wooden flooring: 22%

Carl Burke, Nationwide’s Head of Product Management, Current Accounts, said: “Do-it-yourself is as much a part of a May Bank Holiday as going to the seaside or getting stuck in traffic. As a nation we spend millions of pounds on tools and materials across Britain’s home improvement stores and online, with our data showing the average spend as slightly over £40.

“But as our research shows, the actual costs could be much higher, particularly as we often misjudge routine jobs around the house. Luckily it’s easier than ever to pay for goods, with contactless and online payments, which is just as well given that a fifth of us end up dashing to the stores multiple times because we’ve forgot that all important screw or spanner.

“Whatever the project, plan for the cost accordingly and ensure you are confident of not only attempting the job but also that it will be done properly and to budget.”