25 Sep 2019 Stamp Duty, home improvements or immediately starting to pay down their new mortgage are all ways homebuyers would spend cashback from lenders, Leeds Building Society has discovered.

The Society carried out national research* into mortgage cashback deals to find out whether borrowers valued this option and how they would spend this cash, which becomes available on completion.

Practical-minded respondents had four top priorities overall when it came to using cashback from their mortgage deal:

  • 25% would use cashback to cover the costs of removals or storage;
  • 24% would pay legal or other professional fees with their cashback;
  • 24% would put the money straight into overpaying their new mortgage; and
  • 23% would use their cashback to cover maintenance or improvements they were expecting in their new home, such as a boiler service.

There was a difference in behaviour between residential purchasers and Buy to Let landlords.

Borrowers buying a residential property were most likely (32%) to settle professional services’ bills with their cashback, whereas 51% of Buy to Let purchasers favoured putting the cashback straight into overpaying their loan.

Matt Bartle, Leeds Building Society’s Director of Products, said selecting a mortgage is always a personal choice.

He said: “Everyone’s requirements will be individual to them, which is why we offer different combinations of fees, features and incentives across our mortgage product range.

“For that reason we offer incentive packages which give borrowers plenty of choice, not only on the rate and term of their mortgage, but also to help with the other costs of moving home or remortgaging.

“Building on our market knowledge and long experience of mortgage lending, we continue to test ideas and ask borrowers what they need, so we can develop the product deals and lending criteria which will help more people to have the home they want.

“Of course, borrowers can choose how to spend their cashback and it’s positive to see that people would use the funds to cover costs associated with moving and in some cases overpay to reduce the size of a loan immediately.”

20 Sep 2019 New European legislation brings in Strong Customer Authentication (SCA) to limit the amount of contactless payments someone can make, in an effort to reduce instances of fraud.

  • Strong Customer Authentication (SCA) came into force on 14 September 2019 to help prevent fraud
  • £108m is potentially lost from fraud in the UK, as 1 in 12 (5.4 million*) Brits wouldn’t spot a rogue £20 entry on their main current account
  • 50% of people haven’t got their free credit report, an easy way to detect possible fraudulent activity

SCA came into force on 14th September 2019 and means that one in every five contactless card transactions — whether debit or credit — will be blocked, requiring the card owner to enter their PIN.

A contactless payment will also be blocked when the number of payments add up to more than €100 — even if it isn’t your fifth contactless payment in a row.

This is a form of two-factor authentication, a common example of which is the touch ID on your phone when making card payments.

How does it help?

SCA is an effort to help reduce cases of fraud. This is especially important as earlier this year, credit experts TotallyMoney revealed a staggering £108m is potentially lost from fraud in UK as many Brits wouldn’t notice a rogue £20 entry on their bank statement.*

The idea is that even if someone steals your card, it’s still highly unlikely that they’ll know your PIN. By requiring your four-digit number, it in theory limits the amount of purchases a fraudster can make with a stolen card.

What are the exceptions to SCA?

If you make your card payment through Apple or Google Pay, you won’t have to re-enter your PIN for every one-in-five contactless transactions that would ordinarily be blocked, as there is already a high level of security involved in these payment methods. Furthermore, if you use your card to pay for public transport, SCA won’t apply.

It’s now part of UK law, so SCA will remain after the UK’s exit from the European Union on the 31st October 2019.

Alastair Douglas, CEO of credit experts TotallyMoney, comments:

“The introduction of Strong Customer Authentication is a welcome sign that more is being done to tackle instances of fraud across the UK.

“We understand all too well how fraud can have a debilitating effect on not just your credit score, but also your wellbeing. Although the new one-in-five policy may cause annoyance, reducing the possibility of fraudulent transactions occurring offers consumers a bit more reassurance.

“The adage “prevention is better than cure” certainly applies here, for even though you can take action to rectify the damage and restore things to how they used to be, doing so is no small task and won’t happen overnight. The best way is to stop it in its tracks.

“Another way to keep an eye out for any fraud is to get your TotallyMoney free credit report. Our customers see any financial activity in their name, as well their balances and any payments they’ve made, making it easy to spot anything that’s not right. That means they can then take the appropriate measures to sort things out — before they become a serious problem.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking your free report is the first step towards making sure your score doesn’t suffer at the hands of fraud. With this, customers can easily make sure everything is as it should be — helping them move towards a better financial future.”

TotallyMoney’s five tips for staying ahead of the battle against fraud:

  1. Use Online Banking
    Download your bank’s mobile app, or use online banking, to check your statement every couple of days. You can often even set up alerts to get notified every time a transaction is made.
  2. Hold on to Receipts
    Keep tabs of your contactless card transactions, by keeping the paper receipts until the money is taken out of your account.
  3. Check your Direct Debits
    Be aware of future direct debits and regular payments due before payday, so you know how much ‘spare spending money’ you’ve got available — a good way to avoid hefty overdraft charges, too.
  4. Review your Statements
    Don’t ignore your monthly credit card and bank statements. Check that everything is as you’d expect.
  5. Check your Free Credit Report
    Ensure you recognise everything on your credit report — especially credit searches.

*According to the CMA personal current accounts market study update in July 2014 there are 65 million active personal current accounts in the UK – TotallyMoney research via OnePoll 11-16 April 2019 revealed that 1 in 12 people wouldn’t spot a £20 rogue entry on their bank account – 1 in 12 of 65 million = 5.4 million; assuming 1 person has 1 bank account.

16 Sep 2019 Christmas may be 100 days away but 39% of people have yet to start saving for the festive period, according to research conducted by Leeds Building Society.

As part of its ongoing efforts to understand the savings habits and attitudes of UK adults, the Society ran a national YouGov survey to find out how far people who celebrate Christmas plan ahead.

Just 27% of people have already been putting money away to cover festive expenses, with January the most popular month to start building a Christmas spending pot – cited by 15% of respondents as the month they start saving for Christmas.

Almost a quarter said they don’t save money ahead of Christmas, but the majority (39%) leave their saving to the final four months of the year.

The research found September to be the month people begin to seriously consider their Christmas plans, with people thinking about the gifts they need to buy.  

Starting now still leaves time to save for gifts, as Christmas shopping peaks in November and December when 32% and 24% respectively said they get round to buying their presents.

Making plans to meet people over the Christmas period also starts in September, with people booking travel for the festive period and organising Christmas parties.

Matt Bartle, Leeds Building Society’s Director of Products, said: “With just 100 days left until Christmas people are understandably beginning to think about the festive period and the expense that can come with it.

“Those starting to save now will be able to put something aside to cover the expenses of the holiday period, although there may not be enough time to fully cover the costs via savings. 

“When there’s a big annual expenditure – whether that’s Christmas or a holiday – saving little and often helps to spread the cost to make it more manageable. It’s satisfying seeing your savings grow and know that you are in a position to cover the cost.”

Almost two in five (18%) of people said they relied on credit to cover previous festive expenses, with 71% of those taking up to six months to repay their debts, while 23% needed longer.

Matt Bartle added: “It is worrying that those who use credit to pay for Christmas can take up to six months to pay it off, which will incur fees and could end up costing them a lot more.”

12 Sept 2019 NatWest is offering £150 to new and existing customers switching their main bank account. The limited time offer runs until 6 December 2019.

NatWest’s Select account has no monthly fee and also has the benefit of GetCash which enables customers to withdraw money from a cash machine without their bank card using a passcode sent to their mobile phone.

NatWest’s Reward, Reward Silver, Platinum and Black accounts are also eligible for the offer.

Bruno Genovese, Head of NatWest Current Accounts, said: “We are seeing more and more consumers taking advantage of our account benefits and our switcher offer gives consumers the opportunity to change accounts simply and easily using the Switcher Service.”

Switching bank accounts is simple and can be done through the Current Account Switch Service. Payments, such as Direct Debits and Standing Orders are automatically transferred to the newly opened account within seven days.

An account can be opened online at  www.natwest.com or in any NatWest branch.

Switchers are required to use the Current Account Switch Service, close their existing account and transfer their main current account to NatWest. Customers will then receive £150 by 21 February 2020.

It is simple to obtain the switcher offer. Customers must pay in £1500 to the account and log into online or mobile banking through the NatWest mobile app before 24 January 2020. Customers must be 18 or over and must not have received a cash offer from NatWest for opening a new current account and switching after October 2017.

11 Sep 2019 Making sense of the many complicated inheritance tax rules can be tricky and an added challenge at an already testing emotional time. The Office of Tax Simplification has proposed a radical shake-up, recommending that the seven-year gifting rule should be cut down to five years along with simplification of the link between IHT and capital gains tax.  If this is seen through, it could make a huge difference to how people choose to pass down their wealth. 

What is more, as younger generations increasingly seek the help of the ‘Bank of Mum and Dad’ and the possibility of inheritance now plays a large role in individual financial plans, there appears an apparent inheritance disconnect between Brits as many assume they will inherit thousands more than the reality.  New research from Zurich has found not only people don’t know how much money can be passed on IHT free, but also don’t know exactly how much they are due to inherit.

Key statistics

·         40% of people don’t know how much money can be passed on inheritance tax free

o    Even amongst those over the age 55, 36% don’t know how much they can pass on

·         Married couples and civil partners can pass their estate to their spouse tax-free when they die. An annual tax gift allowance of £3,000 per person (for the year 2018/19) means money can also be given away to children. For larger sums, the individual must live seven years after making that gift for it to remain tax free.

·         However, 84% of people haven’t heard of this £3,000 allowance, just 6% have taken advantage of it and only 15% say they plan to gift in the future.

·         Furthermore, 29% of people wrongly believe they can gift large sums of money to people on their birthday, 20% believe they can gift large sums to cover care costs without paying inheritance tax and 40% don’t know of any occasions when they can pass on large lump sums of money.

·         34% of those aged 55+ with children don’t plan on gifting in the future, and 37% of this group haven’t considered it.

  • But, Brits think they are in line to inherit an average of £218,000 more than the reality.
  • Those aged 25-34 think they will receive £358,020 – higher than any other age group.
  • It’s parents who will be fuelling this transfer of wealth through the generations with 84% of people expecting to receive inheritance from a parent and 14% expecting to receive inheritance from a grandparent.

Alistair Wilson, Head of Retail Platform Strategy at Zurich, commented: “Everyone wants to leave as much of their wealth as possible to their loved ones, but could be losing thousands by falling into the many traps. The rules are particularly complex, leaving people baffled as to what they can pass on, how, and when. The rules do need to be simplified, but better communication of the options available is also crucial to ensure future generations aren’t cut short. Speaking to a financial adviser can help identify the best financial strategy that won’t lead to the tax man at every turn.”

10 Sep 2019 The pound has weakened considerably since the UK voted to leave the EU in June 2016, due to a combination of business uncertainty and lack of confidence during the extended Brexit negotiations.

This has impacted many goods and services, but the one thing that irks many brits the most is the extra they now must pay for a beer when outside the UK.

Holidaymakers will have noticed the impact on their bar bills whether they visited European holiday hotspots or more exotic locations further afield.

A beer in Thailand may only cost the equivalent of £2.25, but that’s an increase of 38% on exchange rate difference alone from the £1.63 in 2016.

Visitors to the USA have seen the cost of a beer rocket by a fifth in the same period, with a typical beer now £4.18 – up over 20% in a little over 3 years.

If you’re heading to Scandinavia and the Nordic region, be prepared for some eye watering beer prices with Norway up 9% to £7.66 and Iceland up almost 16% to £7.07 – it’s enough to make you go tea total!

One of the cheapest countries for a beer is the Czech Republic at £1.30, but that’s still over 22% more than the bargain £1.06 in June 2016.

Oktoberfest in Munich begins on 21st September. The sixteen-day beer festival and travelling funfair is like no other, but the tables loaded with steins will set UK drinkers back an extra 16% compared with when the Brexit bargaining began.

Alana Parsons from international payments and foreign exchange firm Caxton comments; “Many brits are fed up with the seemingly never-ending Brexit wrangles, and for many it has tested their patience to the limit.”

“As if the constant arguments amongst our own MPs and withtheir European counterparts wasn’t enough, the impact it’s having on a beer abroad is just rubbing salt into the wound for holidaying brits who simply want to switch-off, relax and enjoy a well-earned break.”

Alana added, “these extra costs, unlike the beer, are hard to swallow, but holidaymakers can keep the additional expense to a minimum by thinking about their currency needs and overall holiday costs from the moment a trip is booked.

“Using a free Caxton multi-currency card can certainly help manage the holiday budget as it can be pre-loaded with a currency of your choice so you can keep track of exactly what you’re spending. Whatever you do, never leave travel money to the last minute by buying it at the airport and remember to always pay in the local currency of the travel destination you’re in”.

05 Sept 2019 New research suggests, if they were to move tomorrow, millions of people would cut costs by taking a more hands-on approach to selling their home and undertaking their own house removal. 

Estate agents’ fees make up a sizable chunk of the cost of selling a property.  Depending on the contract and the agreed selling price, fees can run to thousands of pounds. 

The research, commissioned by GoCompare Home Insurance, found that 42% of sellers, that’s an estimated 7.3 million homeowners, would shun a traditional high-street estate agent.  35% would now use an online agent such as Purple Bricks, Tepilo, or Emoov. 

Online agents charge much lower fees to market properties than traditional estate agents but, homeowners are required to conduct viewings and handle negotiations.    The survey also found that a handful of sellers would cut costs by taking a complete DIY approach to selling their property; 8% would sell privately through advertisements on social media or in newspapers, 1% would even consider raffling their home.Traditional estate agents remain the preferred choice of most (57%) homeowners, particularly those in older age groups.

Homeowners aged 55 and older were the most likely to make a future sale through a traditional estate agent.  Older homeowners are more likely to be involved in a complex chain of house sales, which might require more time and expertise to keep the sale together.    
 Removal costs also make up a large portion of the cost of a house move.  The research revealed that 49% of people would try to save money by undertaking a DIY house removal.  Over a third (38%) said they would hire a van and move themselves while 12% would use their own vehicle or enlist help from friends.       

GoCompare Home Insurance compared just under 400 home contents insurance policies, which revealed that not all provide cover for house removals. And, where cover is available, it varies widely between policies.  Most (78%) policies cover the insured’s belongings during a house removal as standard, 12% only did so if the policyholder had chosen to top-up their cover to include accidental damage.  One in ten policies didn’t provide any cover for removals.

The comparison also revealed that cover is typically only valid if the removal is undertaken by a professional firm. Fragile items such as glassware and china are usually only insured if they have been professionally packed.  Cover for valuables such as personal money, jewellery, stamps and coins is typically excluded and not all policies cover possessions left in storage.       

Commenting on the research, GoCompare’s home insurance expert Ryan Fulthorpe said, “Whether you rent or own your home, moving can be an expensive and stressful business.  People can make substantial savings by doing more of the work themselves.  But, with a lot to organise, making sure their possessions are insured during the move probably isn’t something most people consider.“Whether you decide to move yourself or employ a professional firm, you’ll need to contact your home contents insurer in advance of your moving date.  They’ll be able to let you know what cover, if any, is provided for your possessions while they are in transit and highlight any limits or restrictions which may apply.” 

03 Sept 2019 New research from Shawbrook Bank’s Personal Loans Division reveals for millions of Brits, annual trips abroad with the family can have a long-lasting effect on their finances.

The study shows that covering the cost of flights, hotels, car hire and other expenses for an annual getaway can stretch over several months for many families.

Holidaymakers are juggling these costs while dealing with opaque pricing and misleading advertising which makes managing their money more difficult.

Some 2.6 million Brits, or 5% of the adult population, say past holidays have taken them up to a year to pay off, while a further 1.6 million say that it has impacted their finances for two years or more after jetting away.

As many as 11.2 million holidaymakers say it has taken them anything between one and six months to sort all the costs from a previous holiday.

Official data from the ONS reveals August is the busiest month of the year for trips abroad by UK residents with 9.28 million visits recorded in August 2018.

Some travel companies wishing to take advantage of this increased demand advertise ultra-cheap deals to lure in customers, but these ‘teaser’ prices can often be in short supply. Moreover, the final sales price can end up being much higher than the one advertised which can cause frustration to customers.

Analysis by Shawbrook shows that this marketing trick can bump up the cost of flights, train fares and car hire by up to 641%, 213% and 295%, respectively. 60% of Brits surveyed feel cheated by this practice as it means they could end up forking out much more than they anticipated.

ONS figures also show Brits’ spending abroad tends to spike during August which is traditionally the only complete month of the UK school summer holidays. In August 2018, Brits spent £6.3 billion on overseas visits compared to £4.4 billion in July 2018.

Sadly, holidaymakers have been hit hard by the falling value of the pound against the US dollar and the euro in recent weeks. For those families looking to jet off before the start of term they could find they get less than they bargained for when they arrive.

Paul Went, Managing Director, Consumer at Shawbrook Bank says: “A family holiday to a warmer climate is the highlight of the year for most people. But it’s clear that for many, it may also leave them fretting over their finances for months or, in some cases, years afterwards. That’s why it’s so important that companies are transparent about costs right from the outset so that families can budget accordingly. Sadly, this practice is not limited to the travel industry and misleading ‘teaser’ rates can be seen in the advertising of products like personal loans, train fares and festival tickets. By advertising misleading prices companies risk putting households under financial strain as they end up having to pay more than they bargained for.

“To make matters worse, many of those hoping to jet off before school starts could find they get even less value for money than usual, thanks to the recent fall in the pound. By planning ahead, you can ease the pain a little. Shopping around for the best deals, using any air miles you have, staying a little further away from the centre, making your own food while you’re away – there are several ways you can lower the final cost of your holiday. If you plan well, your dream holiday needn’t turn into a financial burden.”

02 Sept 2019 Section 75 of the Consumer Credit Act makes both lenders and retailers responsible for when a service or product isn’t delivered. However, the latest survey results shockingly reveal that many people don’t know what it protects them for. 

  • Nearly 1 in 3 people (29%) don’t realise they’re covered at all
  • Over a half (55%) aren’t aware they’re protected by Section 75 for the cost of a hotel when they book direct
  • A third of people (34%) falsely believe they are covered for PayPal transactions over £100
  • To help you stay ahead, TotallyMoney has pulled together the top 10 things you need to know about Section 75

A OnePoll survey of 2,000 UK adults commissioned by credit experts TotallyMoney, showed many people don’t fully understand the cover they get through their credit card.

If the item you pay for is worth over £100, but less than £30,000, you are covered by Section 75 if you make any of that purchase with your credit card — even £1.

Your claim will only be successful if the Debtor-Creditor-Supplier (DCS) Link isn’t broken.

This means that the exchange of money between you, your credit card company, and the service provider, must be maintained.

So, when the DCS link is broken, often when using a third party such as PayPal, Section 75 wouldn’t apply.

You’re covered on a purchase made with Apple Pay, though, which nearly three quarters of people (71%) don’t realise. But, if you book a hotel through a travel agent, you won’t be covered if it the hotel folds, as over a third (41%) of people wrongly thought. You should, however, be ATOL protected in that instance.

If your airline goes bust before you fly, or your brand-new phone arrives with a cracked screen, you could make a claim to get your money back — provided everything is in order as above.

Alastair Douglas, CEO of credit experts TotallyMoney, comments “In a world where many feel the credit system is rigged against them, Section 75 is a safety net. But, many don’t realise it exists.

“A holiday can be the highlight of your year, or maybe you’ve spent months saving for your dream laptop. But, if it happens you can’t jet off, or the laptop doesn’t even turn on, you can be left feeling like there’s nothing you can do.

“That’s where Section 75 steps in. It gives you comfort in knowing that if you feel you haven’t received what was promised, that there’s something you can do to get your money back.

“Section 75 doesn’t mean we should be care-free about our credit card spending, though. One way to know how much you should be spending on your credit card is by getting your TotallyMoney free credit report. You’ll get regular updates on the effect your credit card spending is having on your credit score. 

“On top of that, so you’re never caught out, here are 10 points anyone shopping with a credit card should know about Section 75.”

Section 75 Top Ten Tips

1. Limits on claims

Individual items and purchases costing more than £100 and up to £30,000 are covered under Section 75. So, whether it’s a pair of £100 shoes that fall apart on the first wear, or a swanky new £20k car that comes complete with faults, as long as you paid on credit card you could be reimbursed the full amount.

2. We’re talking credit, not debit

Section 75 doesn’t cover anything bought using a debit card. Chargeback protection is as good as you’ll get with debit.

3. They’re bust. You’re not broke

Buying from a company that goes bust before they deliver, doesn’t mean your money’s lost. Section 75 requires credit card companies to get your money back.

4. Pay a deposit, get full value cover

When a deposit for goods or services is required, use a credit card — even when the deposit is less than £100. Should anything prevent you from settling the balance (like the company goes bust or the seller vanishes), Section 75 lets you claim the full amount. Not just the paid deposit.

5. Pay part credit and part cheque, get full value cover

The same goes if you decide to pay part of the balance by credit card and the rest by cheque. Consumers can reclaim the full value of the qualifying goods and services even if the total balance wasn’t paid using credit card. 

6. Stay protected on closed cards

Say you buy an item, close the credit card you bought it with, but something goes wrong with the qualifying goods or services, Section 75 means you can still make a claim.

7. Extra expense cover

If you book a holiday and the flight is cancelled, through Section 75 you could claim back additional accommodation and food expenses, providing those consequential losses were reasonable.

8. The Section 75 loopholes

Buying through a third party (like online marketplaces or travel agents), additional cardholder purchases, or cash that’s withdrawn from your credit card account won’t offer Section 75 protection. You need to have paid the company directly (so purchases made through PayPal, for example, aren’t covered).

9. Section 75 applies to all credit cards

When it comes to Section 75 there’s not one rule for one credit card company and something different for another. All credit cards come with Section 75 benefits.

10. The claim process

First port of call: the retailer you bought the goods or services from. Failing that, go to the credit card company — this might be your bank or building society, not Visa, Mastercard or AMEX. They’ll get you to fill out a claim form and voila! Your money is back where it belongs.