28 Feb 2019 Ahead of Free Wills Month in March, research from Royal London reveals a quarter (26%) of people with a will do not discuss it as they do not want to think about dying. The research also found that one in four (27%) do not want to upset beneficiaries by discussing the contents of their will.

Talking about death can often be uncomfortable and difficult. By overcoming ‘death anxiety’, the natural fear of talking about death and the emotions associated with it, these important conversations can ensure your beneficiaries are aware of your wishes and understand them.

Royal London’s research found that nearly half (45%) of UK parents with adult children believe their will to be ‘no one’s business’ but their own or a partners.  Sharing the contents of a will makes the financial and practical consequences of death easier for those left behind. Losing someone can have a huge impact on finances for months or even years to come, so it is crucial for families to be prepared.

Mona Patel, Royal London’s consumer spokesperson, said:

Talking about dying can be seen as ‘taboo’ and it is not always easy to bring it up. Discussing your will with beneficiaries means they are better prepared when the time comes. It is also hugely important for family members to be aware of vital decisions in your will, such as who will look after your children.”

Royal London has five top tips on how to approach the ‘When I’m gone’ conversation with your partner or family:

  • Avoid talking to someone when they’re busy. Look for opportunities to broach the subject such as when you’re discussing the future or perhaps following the death of someone close to you.
  • Consider beginning the conversation with a question such as, “Have you ever wondered what would happen…?”; “Do you think we should talk about…?”.
  • Think about how you would manage financially should the worst happen. What impact would losing a partner or family member have on your household income and your expenses? Be aware that your financial situation may change in the future.
  • Make sure you know where all important documents such as wills, bank details, insurance policies etc are kept, so that you have all the information you might need.
  • Prepare in advance; would you know how to manage the day-to-day finances? If not, consider how you could start to learn about them now so this doesn’t come as a shock.

For more information on death and important money matters, Royal London has created a ‘When I’m gone’ booklet for an easy place to write everything down. This can be downloaded from the Royal London website.

26 Feb 2019 An increasing number of people are choosing to borrow more money through their mortgage to improve their home rather than move home, according to new data released by Yorkshire Building Society.

Figures from the Yorkshire show there was a 12% increase in the number of homeowners choosing additional borrowing last year compared to 2017, and recent data from UK Finance reveals the number of home-movers has reduced 48% since 2006. This suggests that some homeowners are looking to use some of the value in their home to make their current property work better for them as an alternative to moving.

Borrowers in a position to refinance their property could consider raising money by remortgaging. Yorkshire Building Society recently increased its maximum remortgage loan amount to 95% of a property’s value, to give borrowers more choice when financing improvements.

Janice Barber, mortgage manager at Yorkshire Building Society, said: “It’s perhaps not surprising that we’re seeing homeowners borrow more on their mortgage or remortgage to raise funds for home improvements as people look to improve their home rather than move while Brexit is still uncertain and the housing market cools.

“Whether it’s building an extension to accommodate a growing family or a desire to renovate the kitchen, homeowners may naturally turn to personal loans or credit cards to finance home renovations. But our data shows an increasing number of borrowers could also be looking to the value in their property.

“Anyone considering a significant spend on home improvements that requires additional funds may want to discuss remortgaging or additional loans with a mortgage advisor. 

“That way they’ll have all the necessary details and facts to make an informed decision about the best way to fund their new project.”

The Yorkshire’s 95% remortgage options include a two-year fixed rate of 3.34%, which has no upfront fee, free standard valuation and free legal fees.

How can borrowers best unlock their home’s potential?

1.    Look up, down and out – there may be space for a loft or basement conversion, or perhaps a side extension? Look at underused space around your home to see if there are any areas that can be turned into a better use of space. Don’t forget though, if you plan to make significant home improvements you might need to seek approval from your mortgage lender.

2.    Garage full of junk? – have a clear out, sort and sell or donate your goods to make way for an alternative space. You might even make some money in the process to help contribute to the cost of the improvements.

3.    Don’t just get one quote – if you decide to go ahead with any improvements get a number of local builders round to give you a free, no obligation quote.

4.    Be creative, but original – you might not want to move now, but bear in mind that original house features can help with future selling potential. Creating a fresh, new space while keeping original doors, windows and fireplaces could maintain your property’s charm and personality.

5.    Sense check your plans – speak to your local estate agent about what you’re planning to do to make sure it has the potential to add, not lose, value in your home. That is unless you value making the space work for you and your family now, and aren’t worried about getting your money back at a later date. 

21 Feb 2019 With the number of adult children sharing the family home with parents at an all-time high, new research from Charter Savings Bank1 shows they are not always quite so good about sharing details on their finances.

The nationwide study found nearly 69% of parents are open about their finances with their adult children and a further 21% would be happy to discuss money with their adult children, but are never asked. Adult children mainly reciprocate with 69% saying their parents know how much they earn.

But when it comes to debts and savings the 26%2 of 20 to 34-year-olds who live with parents – around 3.4 million people – are not as forthcoming. Nearly half (45%) have either debts, savings accounts or both, which their parents are unaware of.

Nearly one in five (18%) have both savings accounts and debts their parents do not know about, while some have secret savings accounts (15%) and others have secret debts (12%).

Adult children living at home are on a good deal, the research shows. Nearly half (47%) of parents do not charge rent for living with them, and the average rent charged by those who do is just £161 a month – a significant saving on average private sector rents.

This reduction in rent is highly beneficial to young adults, as three in ten (30%) admit they would not be able to save for a home if they did not live with their parents. It can, however, be difficult agreeing how much to contribute towards living costs between parents and their adult children, and there are vast differences between families.

Some parents ask for contributions towards food (31%), energy bills (23%), phone and broadband (17%), for example, but a third (33%) do not ask for any contributions at all.

This is at odds with what their children believe they are contributing towards, with 85% believing they put money towards food bills, and a high proportion saying they help parents towards TV and entertainment subscriptions (67%), maintenance (66%) and energy bills (62%).

Table one: What parents and adult children say

Bill Percentage of parents who ask for contributions from adult children Percentage of adult children who believe they contribute
Food 31% 85%
Energy bills 23% 62%
Phone / broadband 17% 60%
TV or entertainment subscription 15% 67%
Council tax 13% 49%
Other utilities 8% 61%
Insurance 5% 55%
Maintenance 4% 66%
Car costs / petrol 3% 60%

The study found that, on the whole, children are honest with their parents about general spending, although sometimes this is only because they are asked directly. Just over a third (35%) openly tell their parents how much they spend on gym or health club memberships, and a further 52% would do if asked.

The aspect of their spending that adult children are least forthcoming about with their parents is transport costs, with a sixth (15%) admitting they wouldn’t tell their parents how much they spend on their car, or taxis and Ubers.

Paul Whitlock, Executive Director, Charter Savings Bank, said: “Keeping debt a secret from close family may be tempting, but a problem shared can be a problem halved, as discussing finances may help alleviate stress.

“While living at home, young people have a fantastic opportunity to work towards clearing debt and start saving towards their goals, whether that be buying a property, travelling or further education.

“Saving as much as possible from an early age is a great habit to get into; even a small amount will soon grow. It also means people are used to setting aside some of their income each month, which is good practice for when they move out of the family home.”

17 Feb 2019 Alastair Douglas, CEO of credit experts TotallyMoney, comments on the high cost of solely making minimum credit card repayments, urging borrowers to adopt a simple fixed-payment strategy that could save them thousands.

“Paying a bit less each month on your card balance may seem like a great gesture from your credit card company — and might even leave some extra cash in your bank account. The overall cost of this strategy, though, is scary.

“Some people think that a bit less won’t make much difference, but they’re wrong.

“We asked consumers** how long they thought it would take to clear a £2,000 balance at an 18% APR, making just a 2% minimum repayment. Only 1 in 5 realised it would take over 20 years to clear, and 1 in 4 of those expected it to take less than half that time.”

Douglas added: “We understand not everyone can pay their balance in full. However, sticking to a fixed minimum repayment — rather than reducing the payment monthly — can make a huge difference and save a small fortune in interest charges.”

To help people better understand the minimum repayment trap TotallyMoney has created this embeddable interactive:

https://www.totallymoney.com/minimum-payment-trap/

TotallyMoney recommends customers adopt a fixed monthly-repayment strategy, which can slash interest costs and the time it takes to clear the balance, as highlighted by the example below:

Fixed monthly repayments versus reducing monthly repayments

Customer A and Customer B both have a credit card balance of £5,000 charged at an interest rate of 19.9% APR and must pay a minimum of 3% of the balance or £10, whichever is greater.

Customer A pays the required £150 minimum in month 1 (3% of £5k), but then each month reduces their minimum payment as suggested by their credit card company, based on the outstanding balance. After month 12, the minimum repayment is £128.53; after 24 months, it’s £108.70; and after 36 months, it’s £91.88, and so on…

By carrying on paying a reduced minimum balance month after month, it will take 19 years and 2 months to clear the debt and cost £4,954 in interest.

Customer B also pays the £150 minimum in month one, but continues to pay £150 each month thereafter — even though their card company offers them the opportunity to make a smaller minimum repayment.

This is a simple and much smarter strategy and results in a balance that’s fully repaid in 3 years and 11 months at a much lower cost of £2,035 in interest — saving Customer B £2,919 in interest costs when compared with Customer A.

Douglas warned: “These figures are frightening enough, but customers offered even lower monthly minimum repayments and/or a higher interest rate will face even more extreme costs”.

Andrew Hagger, Personal Finance Expert from Moneycomms.co.uk said: “Card providers make maximum profit from borrowers who continually take up the option to pay the minimum statement balance, and more needs to be done to highlight this costly trap.

“Some people don’t appreciate how much they can save by simply sticking to the monthly repayment they managed to afford in month one. They end up being in debt longer than they need be — and at a huge cost.”

12 Feb 2019 Peer-to-peer lending platform RateSetter’s ISA has exceeded expectations in its first year, having attracted £175m of subscriptions, and currently accounts for one-fifth of the platform’s £830m funds under management.

Almost one-quarter of RateSetter investors have opened an ISA with 16,500 people currently enjoying their returns tax-free within the ISA wrapper.

In contrast to all other mainstream investments which fell in value last year, investments with RateSetter continued to generate steady returns averaging an annualised 4.5% throughout 2018.

Mario Lupori, Chief Investments Officer at RateSetter, said:

“We have always been confident that investing with RateSetter delivers excellent value and that the tax-free ISA wrapper makes investing more attractive still – but we have been blown away by the popularity of the RateSetter ISA in its first year!

With even the best Cash ISAs barely matching inflation and the volatility of Stocks & Shares testing investors’ nerves, the healthy and steady performance of the RateSetter ISA makes it stand out. 2019 could be the year that we see the Innovative Finance ISA really take off.”

RateSetter launched its ISA in February 2018. The Innovative Finance ISA allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.

To date, every individual investor has received all the capital and interest that they expected thanks to the Provision Fund which spreads each investor’s risk across the whole loan portfolio and provides a buffer against poorly performing loans. The track record over the last eight years is impressive, but it is not a guarantee for the future and capital is at risk.

In total, more than 600,000 customers have used RateSetter to invest or borrow, making it the UK’s most popular peer-to-peer lender. RateSetter recently announced it had passed the milestone of originating more than £3 billion of loans since launch.

11 Feb 2019 British holidaymakers are routinely turning up at airports without their passports causing holiday headaches before they have even seen an inflight menu.

A new study from Sainsbury’s Bank Travel Insurance reveals that 1.4 million holidaymakers have forgotten their crucial travel documents before leaving the UK. In fact Britons admit they are more likely to check their holiday destination weather than their passport the week before they travel (64% vs 52%). Sainsbury’s Bank is urging holidaymakers to make sure they have all the relevant documents before they leave home as travel insurance policies do not typically cover forgotten passports.

A further 2.7 million people have seen dream trips turn to disaster by missing flights at the start of their holiday. With the study finding 2.3 million(4) people also go away without travel insurance, holidaymakers need to spend time planning ahead to ensure their getaways get off to a flying start.

Holiday hazards lead to people feeling stressed (47%) and upset (31%) and one in 10 (11%) admitted they felt like they had ruined their holiday.

Preparation is key to minimising stress at the security gate. More than a third (36%) of people do as much online preparation as possible and prepare everything in advance (32%). And nearly one in 10 (8%) holidaymakers turn to calming activities such as meditation to combat travel trauma.

Karen Hogg, Head of Insurance at Sainsbury’s Bank, said: “Holidays should mean a break from the stress of everyday life. Making sure you have all of your travel documents in place, and with you when you leave the house is as important as having good quality travel insurance in place. It’s worth noting that insurers are unlikely to cover you if you’ve left your passport at home.

“With recent issues such as flight disruption at airports and adverse weather conditions in parts of Europe, you may want to ensure that your travel insurance policy provides disruption cover, particularly if you have connecting flights. We offer a range of insurance policies to cover different travel needs.”

Students are guilty of leaving planning to the last minute and are most likely to miss flights and leave their travel documents behind (10%). Families typically make it to their destination stress-free but are more likely to leave valuables such as medicine and jewellery at home (8%).

Sainsbury’s Bank offers five top tips on travel preparation

  1. Schedule a diary reminder: Write on your wall calendar or put in a diary reminder in your phone to check all travel documents at least a couple of weeks before you travel.
  2. Locate your passport: It’s easy to put your passport in a ‘safe place’ and forget where it is. Don’t get caught and check your passport before you pack your suitcase. Don’t forget many countries need a visa such as an ESTA if you’re going to the States and you will need to have at least six months remaining on your passport for many countries. If your passport is damaged you may also be refused travel.
  3. Check cover for travel disruption: Check your travel insurance policy covers for any unforeseen changes to your holiday plans, such as being unable to get home due to poor weather.
  4. Consider weather woes and more: Make sure you leave in plenty of time to get to the airport, especially in adverse weather conditions. You should also check if your travel insurance policy covers you missing a flight as a result. If you’re heading to the slopes this year, check your travel insurance has winter sports cover and also covers weather delays, road closures and lift passes.
  5. Create a checklist: Holidays can be stress-free with a good checklist. Create a to-do list at least a week before you travel so you don’t leave anything you need behind.

08 Feb 2019 While Valentine’s Day is a day full of romance and encourages us to do something special with our loved ones, it’s important we don’t blow our budgets on one day and remember the real reason for the celebration.  It’s very easy to overspend, but  being smart about the impact this has on our wallets is key – and that doesn’t mean you and your special someone miss out on the day – here are some useful tips from the Foresters Friendly Society

St Valentine didn’t intend to break the bank

There is nothing wrong with you both spending the evening in with an M&S meal deal in the comfort of your own home. If you’re feeling a bit more adventurous, head to your local farmer’s market to pick up ingredients and make your other half’s favourite meal from scratch.

Buy a gift but shop around first!

From online discount codes to cashback sites and price-comparison sites, there are plenty of ways to get the lowest price tag. Don’t forget to check out if there are any pitfalls, it is easy to get stung if you’re unaware of hidden charges or long-term subscriptions.

Try something new

Why not use Valentine’s to do something different? According to our members, dining out, visiting the theatre and participating in quiz nights were the top 3 favourite pastimes.

There’s something for everyone

Whether you choose to spend Valentine’s with friends, your family or even your beloved pet -there’s more than enough love to go around! If you want to keep the cost down, consider splitting travel costs, meals and additional expenses so you’re not having to fork out amounts typically costed for couples. 

Consider your loved ones

With love in the air, it may be a good time to consider your loved one’s futures. Whether saving for a dream holiday together, your first dream home or even your child’s future, setting up an ISA could help you get one step closer to a big financial milestone and enable you to keep topping it up for the following months.

07 Feb 2019 As everyone feels the January pinch on finances, new research from Charter Savings Bank1 reveals many will be relying on family and friends to tide them over. Its nationwide study found that one in four (25%) adults have borrowed from their loved ones in the past year.

The handouts from family and friends are not trivial – the average amount borrowed adds up to £1,093 in the past year. And the money is not always repaid – just 54% of those who borrow cash say they always pay it back.

A quarter (25%) of those who rely on others’ generosity try to pay it back most of the time and 10% say they occasionally pay it back, but 4% admit they never pay it back. Women are better than men at paying cash back – 58% say they always repay family handouts, compared with 49% of men.

Partners and spouses are the most likely to be asked for a loan – 22% of those who borrow say they ask their partner or spouse for cash at least once a month. Around 65% of those who borrow from their partner ask them for cash at least a couple of times a year.

Over a third (36%) of those who ask for money from friends and family borrow from their parents at least twice a year – and it is 18-34-year-olds who are most likely to borrow from them, with 11% saying they ask for money at least once a month.

The study found regional differences in the amount of savings borrowed from our nearest and dearest. Those in the South East are the most likely to borrow money – averaging £1,873 borrowed each year, with those in the East of England least likely to – averaging just £445 borrowed each year.

The research found that of all adults who have asked for money from family at some point – 30% have asked parents and 14% have asked partners or spouses, while a further 8% have asked friends.

Paul Whitlock, Executive Director, Charter Savings Bank, said: “The rising cost of living and squeezed family incomes, particularly at this time of year, can mean that many are increasingly leaning on friends and family to come to their financial rescue. 

“In many cases our loved ones are happy to help-out financially, but that can come at a cost, particularly if the recipient isn’t able to pay it back.

“There are many different ways to save; even setting aside what may seem like an insignificant amount each month will see your savings pot grow. Starting a regular savings habit at the beginning of the year will set you in good stead to reach your savings goals for 2019 and leave you less reliant on raiding the savings of others.”

04 Feb 2019 The ‘squeezed middle’ are spending £3.7bn on life insurance before having their policies cancelled by providers because they have fallen into financial difficulties, according to research by Co-op Insurance.

According to the findings, the average 30-60 year old in the UK had paid out £2,050 before their insurance was cancelled after holding policies for 8 years and 4 months paying £20.50 per month.

Only 48% of the ‘squeezed middle’ hold life insurance in the UK. Of those who have life insurance, nearly a third (31%) say they have struggled to pay for their life cover and, of these, two thirds (67%) have missed direct debit payments. This has led to over four fifths (87%) finding themselves in arrears.

78% of life insurance policyholders who found themselves in arrears had their policies cancelled by their insurer either automatically after the first missed payment or after a period of time.

Despite this, 87% of the ‘squeezed middle’ who have found themselves in financial difficulties have missed their own life insurance payments to pay relatives’ bills.

Over a quarter (27%) of the UK adults aged 30-60 with dependents are actually supporting their parents financially, with 78% supporting their children. Parents are depending on the children for the most money every month, an average of £235 whilst dependent children receive £177. Those who support both pay out an average of £186 per month.

Nearly half (49%) of UK adults aged 30-60 feel this is unfair and 80% want to see insurers doing more to help people who end up in arrears after paying for policies for often a prolonged period. Nearly two thirds (63%) think people should be treated on an individual basis and 58% want to see extended payment holiday periods.

Co-op Insurance has re-entered the life market and launched Co-op Life Cover alongside its partner Royal London which will offer a solution designed by Co-op Members, not widely offered in the market, to policyholders who may at times have periods of financial difficulty.

The product offers a level term, decreasing term or family income benefit and:

·         Includes the option to take two six month payment holidays throughout the lifetime of the policy after a 12 month qualifying period, allowing their policy to remain in force

·         Customers can also opt to reduce their cover level rather than pay back any shortfall at the end of the payment holiday window

Charles Offord, Director of Co-op Insurance, said: “There is a clear life insurance gap in the UK, especially for those who are foregoing payments or not taking out cover to support relatives with their day to day finances.

“It just isn’t right that billions of pounds in premiums are being paid by customers on time, every month, for their policies to be cancelled when finances are stretched. At the Co-op we are keen to fill this gap and appreciate that sometimes finances can be stretched and people have to prioritise what gets paid, and what doesn’t.

“All too often, life insurance is seen as the least important payment, when really nothing could be further from the truth if something bad happens. This is why we have created up to six month payment holidays, alongside our partner Royal London, to help policyholders out in their time of need. We’ll also allow customers to reduce their insured amount rather than pay back any shortfalls to further lessen the financial pressure.”