27 Sep 2018 Car insurance price cuts are speeding up with drivers seeing premiums drop by 9.1% in the past 12 months, new analysis from insurance research experts Consumer Intelligence (CI) shows.

Its data shows average car insurance bills have fallen to £766 with black box technology – so-called telematics – which rewards safer driving adding to the increased competition across the market. 

Under-25s are the biggest beneficiaries and can expect annual premium quotes of £1,608 after prices fell 15.4% in the past year. The over-50s only saw prices drop 6.8% in the past year but they have the comfort of annual bills of £392.

Across the market 22% of all the top five cheapest quotes came from telematics providers. For under-25s around 60% of the most competitive policies are telematics while just 7% of the most competitive for over-50s are telematics. 

All parts of the country are benefiting with the biggest annual price cuts in the North West at 14.9%. Drivers in London still see the highest annual bills at £1,150 – more than double the lowest at £510 in Scotland.

But premiums are still 20.4% higher than February 2014 when Consumer Intelligence – whose figures are used to calculate official inflation statistics – first started collecting the data.

John Blevins, Consumer Intelligence pricing expert said: “The trend in quoted premiums is down which may be partly due to insurers passing on the anticipated benefits of whiplash reforms now.

“It’s another sign of the increased competition for business and it is likely premiums will continue to fall unless there are any major shocks in claims or tax rises.

“The influence of telematics is a major factor with increased use of it by the over-50s and a 3% rise since March according to our data.

“Generally over-50s experience the biggest price rises as a percentage and the smallest price cuts so older drivers should explore telematics if they want to beat the demographic trend.”

26 Sep 2018 New research from Charter Savings Bank shows grandparents are collectively worth over £5 trillion – the equivalent of £350,634 each – and expect their children and grandchildren to be as well off as them when they reach the same age.

Despite owing much of their wealth to being part of the property-owning generation the study found 52% of grandparents believe that their children will accumulate more wealth than them compared to a quarter who think the younger generation will be worse off.

Grandparents acknowledge that they are worth more now than their parents were at the same age; over half (56 per cent) believe this to be the case versus 25% who think they’re worth less now than their parents.

In a sign of how many pensioners are sharing their money with younger generations during their lifetimes, four in ten grandparents are either already gifting cash to their children and grandchildren or plan to do so.  Three-quarters (74%) and half (50%) of grandparents plan to pass down their wealth to their children and grandchildren respectively.

The main source of grandparents’ wealth is their home worth an average of £225,623 which accounts for almost two-thirds of the value of their assets.  Their pension pots (£32,652), investments (£32,013) and bank savings (£29,725) are the other major sources of wealth.

Grandparents are not entirely debt-free – around one in five (19%) still have mortgages on their main home and one in three owe money on loans and credit cards. On average,  they have £14,810 in liabilities predominately due to outstanding mortgages of £11,130 with £2,211 in unsecured debt through loans and credit cards.

Paul Whitlock, Director of Savings, Charter Savings Bank, said: “Baby boomers may be the richest generation ever, but they are optimistic that their families will in time be better off than them.  This may be difficult to believe for millennials struggling to reach the property ladder but much of their grandparents’ wealth will eventually find its way to them either through gifting or inheritance.

 “While houses are the biggest source of wealth, the savings accumulated by the average grandparent almost match the size of their pensions and investments, demonstrating the role that a healthy savings habit plays in any balanced portfolio.

“Whether you are lucky enough to be expecting to inherit all or part of your parents or grandparent’s wealth or not, it’s important for people of all ages to make regular cash savings and seek out the best rates to live the lifestyle you aspire to have in later life.”

21 Sep 2018 Holidays should be a time of rest and relaxation but some find the summer months expensive and hectic, so for many Brits, going on holiday after the summer rush is the preferred option. New research from Sainsbury’s Bank reveals 12% of Brits prefer to take their main holiday in September, equating to 6.2 million holiday makers taking a post-summer break.

Over half of Brits holidaying in September choose it because it is a quieter time of year for a getaway, with holidaymakers from across Europe and the world having already had their summer break. Two in five holidaymakers are savvy spenders, citing good offers and deals meaning September breaks are good for both wallet and wellbeing. Furthermore, 20% of holidaymakers choose September as their nearest and dearest are available to come with them.

Top reasons why Brits love September holidays:

Reason

Percentage of Brits who travel in September for this reason

It’s a quieter time of year

54%

It’s a cheaper time of year

40%

It’s the best season/weather for the places I am visiting

31%

My family and friends are available

20%

It’s easier to get time off work

17%

 

Despite the summer months being over, beach holidays are the most popular type of September escape (27%), 17% are family breaks and 14% travel to a country retreat. It appears travellers are also comfortable spending more on their holidays. In September 2017, Sainsbury’s Bank recorded a 7% increase  in the average amount of foreign currency exchanged at their travel bureaux compared to the previous year.

Simon Taylor, Head of Travel Money at Sainsbury’s Bank said:  “Our research shows consumers are becoming savvier – choosing September to take advantage of deals and offers. With this in mind, it’s increasingly important to think about holiday currency and how to make your money go further. A pre-paid holiday card is a good idea because it helps you manage your budget while enjoying your trip and our multi-currency travel money card comes with a handy app to help you keep track of transactions.”

18 Sep 2018 Three in 10 drivers have left themselves short after buying a used car outright, according to research from AA Cars, the AA’s used car website.

Of those that used their own money to pick up secondhand cars and then found themselves in hot water, 55% say they had to dip into savings put aside for something other than a car; 35% say that the purchase left them without a rainy day fund; 33% admitted that buying the car meant they had to cut back on recreational expenseslike nights out and gym memberships; while a quarter said that it meant not taking a holiday.

While only 6% of those buying outright didn’t know that you could get dedicated motor finance (such as PCPs or HP) for secondhand cars, a number of car buyers felt that using their own money had meant they’d run into issues down the line – according to the AA-Populus poll of over 10,000 drivers.

Millennials were by far more likely to express regret at buying a used car outright than other age groups, with 48% of 18-24 year olds running into trouble afterwards, 50% of 25-34 year olds and 50% of 55-64 year olds.

A number of older drivers have taken advantage of the 2015 pension freedom reforms to pay for the car, with 4% of 55-64 year olds saying they’ve dipped into their pensions to buy cars outright. Among those firmly over state pension age (65+), 6% have used their pensions to buy used cars outright.

James Fairclough, CEO of AA Carscomments: “Buying a car, whether used or new, is a big financial commitment. Lots of drivers prefer to use their own savings to pick up their next car as they might be reluctant about having any ongoing financial repayments, paying off interest or having a commitment on their credit score – but there can be downsides to relying purely on your own cash to buy your next car.

“Buying a car outright can be a great option for many, but you should be careful not to dedicate all your savings to one single purchase and potentially leave yourself short further down the line. Unfortunately in some cases, spending your cash savings on a car might mean depleting your rainy day fund and having to seek another source of finance should you need to call on emergency rations. This can be problematic as unsecured loans from the bank can be tougher to justify than a car finance loan.

“Before taking the leap and dipping into your hard-earned savings to buy your next car, it’s worth thinking about saving up more funds or shopping around to see if there are better suited car finance deals to be had first. If you do, you can frequently get a much better deal than you would expect that spreads the cost over a long period. More and more providers, such as the AA, host a soft credit check service which won’t leave footprints on your credit record.

“That means you can glance at what you qualify for, see what your total commitment is over the course of the term and then make a call as to whether the option of using your savings is going to save you in the long term.

“Whatever finance you choose, it’s always worth getting a second opinion from someone you trust before committing to the deal.”

13 Sep 2018 First-time buyers are missing out on Government bonuses available through Lifetime ISAs and Help to Buy ISAs despite making major sacrifices to achieve their property dream, new research from The Nottingham Building Society shows.

More than one in four would-be first-time buyers say they’ve moved back in with parents so they can save as much as possible while 30% have stopped going on costly holidays.

Around 61% say they have cut back on socialising while over half have cut general spending on themselves and loved ones. Around one in 12 (8%) have even postponed starting a family or getting married while 7% have sold their car and now rely on public transport so they can maximise their savings.

But The Nottingham’s research found 32% saving to buy their first home in the next five years have not heard of helpful accounts that can boost their savings, such as the Help to Buy ISA, and less than half (48%) have taken advantage of a Government scheme. Savers aged 18 to 24 are the least likely to know about financial benefits of ISAs that are available with 44% admitting they’re not aware.

HMRC figures show 166,000 Lifetime ISAs (LISAs) worth £517 million and averaging £3,144 per account were opened in the 2017/18 tax year but hundreds of thousands are missing out.

The Nottingham is supporting first-time buyers further by providing free access to its whole of market mortgage service, that usually costs £249, to its LISA savers following the launch last month.

The Nottingham’s Chief Operating Officer, Simon Taylor, commented: “First-time buyers face a lot of challenges getting a deposit together, so it’s important to us to raise awareness of all the help and financial benefits that are on offer with the right accounts.

“Our research shows people are making financial sacrifices to get on the ladder and they deserve some help. Thanks to the significant bonuses available, paying into a government-backed savings account, such as a Lifetime or Help-to-buy ISA, will enable first-time buyers to save a deposit more quickly or put down a larger deposit which can increase their options.

“The help isn’t just for there for first-time buyers either as the Lifetime ISAs can be used by savers wanting to boost their retirement savings also.”

First-time buyers are eligible for up to £1,000 of cash bonuses every year and The Nottingham is one of just two providers to offer the Cash LISA, and the only provider that allows customers to open the account with just £10 face-to-face via one of its 67 branches. As well as the 25% bonus, The Nottingham will pay 1.00% AER interest tax free, on the savings balance every year.

The account was created for those aged 18-39, who are either saving for their first home or retirement (3). Account holders can save up to £4,000 every year, with a 25% state bonus being paid monthly, on funds deposited in the previous month, until the account holder turns 50, when they will no longer be able to make deposits, but interest will continue to accrue.

For example, an individual saving to buy their first home of £184,000[3 (UK average) would need to save a 10% deposit of £18,400. After saving the maximum annual amount of £4,000 for four years a customer would have a balance of over £20,000 in their LISA. A couple saving for a 10% deposit (where both are first time buyers), who collectively add £8,000 to their savings (Sole accounts as LISAs cannot be held in joint names) each year would reach their goal after just over two years with a Lifetime ISA.

10 Sept 2018  New data out today from the UK’s largest funeral provider – the Co-op, shows almost four times as many families are now opting for lower cost funerals.

Figures from the Co-op also show over a third (34%) of people think cost is the most important part of a funeral.  This figure increases with age, with over two fifths (42%) of those over the age of 80 citing cost as the most important factor.

Responding to the changes in the market, Co-op has been focussed on tackling funeral affordability over the last three years and today is announcing a wave of new initiatives aimed at combatting the issue and leading the way on affordability.

Firstly, from Monday 10th September, Co-op will ’guarantee to beat’ other funeral providers on like for like funeral costs.

The funeral provider will be further lowering the cost of its Simple Funeral by £100, undercutting other national providers by taking it to £1,895 plus third party costs and £1,675 in Scotland.

Finally, changes to funeral price will be made to support Co-op’s 4.7 million members. Members will now receive an increased discount of £200 (or 5% if greater) on all of Co-op’s core funeral options.

This will take the member price of a Simple Funeral to £1,695 plus third party costs.

Commenting on the changes, Robert Maclachlan, Managing Director of Co-op Funeralcare and Life Planning said: “The fact that 4 million Brits have suffered financial hardship after a bereavement is startling. As a member owned organisation, the changes we are making form part of a long term focus we have on leading the market to further assist the bereaved in tackling funeral affordability.

“Funerals are becoming increasingly price sensitive and in the last two years we have seen a huge shift in the number of clients seeking affordable funeral choices. Our new guarantee to beat on price means that families choosing a funeral with the Co-op can be assured that they are receiving a competitively priced funeral, with no compromise on our high standards of care.”

05 Sep 2018  New research from Royal London reveals the average cost of a funeral is £3,757, with costs having stabilised this year (£3,784 in 2017).

The Royal London National Funeral Cost Index, in its fifth year, shows that London has consistently been the most expensive region in the UK for a funeral, with the average funeral costing £4,838.

Kensal Green, in London, remains the most expensive location, with the average cost of a funeral at £7,489. Burial funerals in Kensal Green have also increased and now cost almost £12,000. Northern Ireland also remains the least expensive region, with a funeral in Belfast costing an average of £2,950.

Funeral Debt

One in 10 took on debt to pay for a loved one’s funeral, with the average amount of debt taken on by individuals rising to an all-time high of £1,744. Of those who struggled with funeral costs, 28% of people borrowed money from friends and family and one in five took on debt. Sadly, one in 10(9%) continue to sell possessions to give their loved ones a decent send-off.

Families struggling with funeral costs could be entitled to help from the Government to pay for necessary costs but the research found that the support offered is inadequate. Funeral director’s fees, a coffin, hearse and collection and care of the deceased are not seen as necessary costs by the Government and only up to £700 is offered to bereaved families to cover costs. This leaves bereaved families with an average shortfall of £1,500 if they use the services of a funeral director.

Five years of funerals

In the fifth year of Royal London’s research into funeral costs, the average cost of a UK funeral has risen by 6%, from £3,551 in 2014 to £3,757 in 2018.

Individual funeral debt has increased at a much higher rate – 34% – in the last five years, with people now taking on an average debt of £1,744, compared to £1,305 in 2014.

Royal London’s funeral cost expert, Louise Eaton-Terry, said:

“High funeral costs have left many families taking on a mountain of debt, with our research showing a huge increase in the amount being borrowed by the bereaved over the last five years. More support needs to be offered to families struggling to pay for funeral costs, and as a result being forced into debt. 

“The funeral payment is seriously lacking, and it’s shocking that the government do not consider funeral director’s fees and a coffin to be a “necessary” cost. We want the social fund to cover the cost of a basic funeral, as no one should have to struggle to give their loved ones a decent send-off.”

Director of Quaker Social Action, Judith Moran, said:

“Funeral costs have risen way out of line with incomes but, understandably, people will do all they can to provide a decent send-off for a loved one. Funeral-related debt is at an all-time high and the cost of providing a decent send-off for a loved one comes with a heavy financial – and emotional – burden.

“Funeral debt can hinder the grieving process, and for many people the debt they take on may take months or even years to pay off. Everyone wants to be able to provide a meaningful, dignified funeral for someone they love. In a fair society, everyone should have access to a respectful funeral. “

04 Sept 2018 This September, children will go back to school each carrying an average of £242 worth of valuables in their backpacks, new research from home insurer Policy Expert has revealed.

There are over 8.7 million children aged between six and 16 at school in the UK – meaning there are more than £2.1 billion worth of valuables in school bags alone.

Breaking this down, parents admit to sending their kids aged six and under to school with an average of £245 worth of valuables, 59% more than those aged 6-10, who carry an average of £101. Children aged 15-16 carry the most amount of valuables to school, taking with them an average of £392, followed by those aged 11-14 costing an average of £247. 17-18 year olds in sixth form or college, carry an average of £652 in their bags.

Age Value of items (£)
Under 6 £245
6-10 £101
11-14 £247
15-16 £392
17-18 £652

Though parents seem to be happy to send children off to the classroom with expensive gadgets, the research also found that a third have lost an item taken to school, 8% have had something stolen, and 22% have damaged a valuable.

Despite this, 35% do not have away-from-home cover included as part of their home insurance, which would protect valuables financially if lost, damaged or stolen when away from the home. A further three in 10 aren’t sure if they do or not, and two thirds don’t have separate insurance for their gadgets, risking a potentially costly ordeal.

The study of over 3,700 adults revealed that 11 is the age when the majority – one in five (22%) – would let their child start taking a mobile phone to school, closely followed by aged 12 (20%).

Over two thirds of children aged under six will be carrying technology, such as a laptop, iPad or tablet, and handheld games consoles to school. Overall, sporting equipment topped the list of the most popular items in the playground this school term, with almost two-thirds (63%) carrying kit in their bags. This was closely followed by watches (42%), cash (41%) and mobile phones (38%). And it’s not just gadgets and games that parents need to worry about. The average school uniform costs parents £122, with well over a tenth of adults spending more than £200.

Item Child under 6 Child 6-10 Child 11-14 Child 15-16
Laptop 3% 1% 3% 8%
iPad/tablet 3% 1% 4% 8%
Wearable tech (e.g Fitbit) 2% 4% 6% 6%
Mobile phone 2% 2% 19% 14%
Jewellery 3% 4% 6% 8%
Watch 8% 17% 10% 7%
Handheld games console 3% 2% 3% 4%
Cash 5% 10% 14% 12%
Kindle 2% 2% 3% 5%
Purse/wallet 6% 8% 11% 11%
Musical instrument 8% 15% 7% 5%
Sporting equipment 20% 23% 11% 9%

 

Adam Powell, Operations Director at Policy Expert, commented: “Hidden on the playground this September will be £2.1 billion worth of valuables. While it’s common to see kids carrying a mobile phone or laptop, some parents might be surprised at the actual value of the contents of their child’s backpack. If you are sending your child to school with high cost items, it’s best to make sure you have away-from-home cover included in your home insurance policy. Doing so will not only help avoid tears on the playground but will soften any financial loss as well.”

03 Sept 2018 They may have a reputation for being more concerned with planning big nights out on the town than getting down to serious study, yet according to new research money is the single biggest cause of stress for the current crop of students.

For the majority of students an overdraft is essential, with around two thirds (65%) of students living off them, as they balance studies, socialising and surviving on a diet of pasta and beans on toast.

But when it comes to overspending, the poll from Nationwide FlexStudent – the UK’s only completely fee-free student account – reveals four in ten (44%) parents cover their children’s overdrafts as a student, either in part or full, with boys twice as likely to be bailed out by the Bank of Mum and Dad when they finish university. One in five boys get their parents to pay off the entirety of their overdrafts versus just one in ten girls.

The survey of 1,000 students also shows that since money management is new to them, close to two thirds (62%) think of their overdraft as an extension of their bank balance.

However, students are also savvy when the going gets tough, with nearly half of those surveyed having missed out on social activities to cut back on spending, while more than a third (38%) have got a job to stave off further borrowing.

The national poll reveals money as the biggest cause of sleepless nights for students, ahead of workloads, social life and relationship issues. Around two thirds (64%) listed money as one of their biggest burdens, with workload bothering just over half (53%), accommodation preoccupying just over a quarter and social life impacting just over one in five (22%).

The top five biggest university causes of stress are:

Top 5 stresses at University % worrying
1 Money and Finances 64%
2 Workload 53%
3 Accommodation Issues 28%
4 Social Life 22%
5 Relationship Issues 20%

When asked why students find their finances so hard going, a lack of experience was the main theme. One in five (20%) confessed to not being prepared to manage their money, while more than half admitted having no idea where to find financial help while away from home.

Around two thirds of students wish that they had been taught how to budget more effectively before moving to university, and more than a third didn’t realise how much it costs to live away from home. Worryingly, almost a quarter (23%) had failed to budget enough to cover their basic household bills.

Carl Burke, Nationwide’s Head of Current Account Products, said: “Starting university can be a daunting time without the added pressure of managing money on your own. As our research shows, money is the single biggest worry for students, with many not having had experience of budgeting.

“That’s why Nationwide has created a student current account that is simple and flexible to use, with an interest-free and fee-free overdraft that allows students to stay in control and help relieve one of the main pressures of student life.”