26 Nov 2018 Paragon Bank has introduced new competition to the Lifetime ISA market, launching a Cash Lifetime ISA (LISA).

The Lifetime ISA currently pays 1.15% and can be opened between the ages of 18 and 39, allowing customers to save up to £4,000 a year tax-free and receive a 25% government bonus until they turn 50.

If they are willing to lock their cash up for longer, savers can earn more, as funds cannot be withdrawn without being subject to a 25% government charge, unless they are to be used for the purchase of a first home or for retirement.

If used for retirement, the funds can be withdrawn free of charge once the account holder reaches the age of 60, however the savings will stop earning the 25% government bonus and cannot be added to once the account holder turns 50.

Derek Sprawling, Savings Director at Paragon said: “The Lifetime ISA is a fantastic opportunity for savers to earn a considerable amount of money on their savings towards their first home or retirement.

“If you save the maximum amount into a LISA every year between 18 and 50, you will have earned a £32,000 government bonus alone.

“The imminent end of the Help to Buy ISA should increase the appeal of the Lifetime ISA scheme.”

Further information on Paragon Bank’s Lifetime ISA can be found here.

25 Nov 2019 Credit experts TotallyMoney reveal their top 10 tips for customers to keep their purchases protected under Section 75 of the Consumer Credit Act ahead of the season’s busiest shopping period. The experts say:

  • Section 75 of the Consumer Credit Act protects credit card purchases from £100 to £30,000
  • Section 75 gives people extra protection on faulty goods, items that never arrive, and services never fulfilled, including when companies go out of business
  • Nearly 1 in 3 people (29%) don’t realise they’re covered at all, according to a TotallyMoney survey
  • Shoppers forecast to spend £7 billion across Black Friday and Cyber Monday
  • 62% of adults plan to take advantage of Black Friday and Cyber Monday deals

Section 75 of the Consumer Credit Act means credit card companies and retailers are jointly and severally liable when a product or service isn’t delivered. With 62% of adults planning on making a purchase over this hectic shopping period, the extra protection afforded to credit card purchases could prove invaluable in recouping losses should retailers renege on their promises.

TotallMoney says that Section 75 claims should be honoured providing the Debtor Supplier Chain isn’t broken. This means the exchange of money between customers, the credit card company, and the service provider must be maintained. Transactions through third-party sites such as PayPal would therefore not be covered.

Customers left in the dark

The credit experts are keen to spread the word about Section 75, following a OnePoll survey of 2,000 UK adults commissioned by TotallyMoney that revealed nearly a third of adults don’t realise such protection exists.

In light of the research, TotallyMoney has put together 10 tips on what Section 75 is and what shoppers need to do to make a claim.

TotallyMoney also warns that while Section 75 does provide extra protection, shoppers still need to use their credit card responsibly — especially when shopping online.

They advise only spending what you can afford, paying off the full credit card balance using the money saved in your bank account for such spending, and only buying from reputable sites that have the padlock symbol in the web browser, to show the site is secure.

Alastair Douglas, CEO of credit experts TotallyMoney, comments:

“In the lead-up to Christmas, it’s only natural for people to spend a bit more than usual, which is why it’s so important for customers to make sure they protect themselves as much as possible during this busy shopping period.

“With more and more of us poised to snap up bargains online, the potential for fraud is greater than ever. At this time of year, there’s nothing worse than your goods not turning up or being charged for something you didn’t buy, and being left out of pocket as a result. Section 75 gives consumers an extra level of security.

“Section 75 doesn’t mean you can be care-free with your credit card spending, though. You should only buy what you can afford and use the money left in your bank account to pay off your full balance.

“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.”

Top 10 Section 75 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.

19 Nov 2019 In October 2018 there was a total of 17 credit cards offering interest-free periods lasting more than 20 months. The top 10 leading cards avoided adding interest for at least 26 months (Clydesdale Bank), while the best deal delivered 30 months (Santander).

A year later only five credit card companies offer shoppers 0% purchase terms greater than 20 months: MBNA (26 months), Santander (26 months), Barclaycard (25 months), Sainsbury’s Bank (25 months) and Tesco Bank (24 months). 

Extended interest-free periods give shoppers greater financial flexibility when using a credit card to buy big ticket items or during times of increased shopping activity. For example, around Black Friday and in the lead up to Christmas.

Last year consumers could spread the cost of major purchases — cars, house renovations, holidays, Christmas shopping — over the course of two years or longer, potentially easing any financial strain.

A year later, TotallyMoney and Moneycomms’ research shows the average 0% purchase duration time has dropped to just 9.8 months. The average in October 2018 was 13.5 months. This is a fall of 27%, suggesting credit companies are squeezing consumer finances harder as they look to recoup payments in full, in less time.

Despite cutting the number of interest-free months offered, consumers can still find favourable terms. With the average credit card rate at 19.9% APR, putting £1,000 on an interest-free card for 24 months, for example, may result in £398 saved in interest charges.

TotallyMoney is working to improve the UK’s credit score and help people move on up to a better future. With the help of a free credit report, customers can better understand their position in the credit market and understand if and where credit score improvements are needed.

Armed with this knowledge, there’s a higher chance of someone being accepted for purchase cards with longer offers, making it easier to spread the costs of any festive spending or upcoming big purchase.

Alastair Douglas, CEO of credit experts TotallyMoney, comments:

“Seeing a fall in the number of credit cards offering a 0% purchase deal and a drop in the number of interest-free months is disheartening. There’s little doubt both of these factors will impact some shoppers.

“Christmas is already a financially stressful time. People may spend more in the next few months than at any other time of the year and, as such, they may choose to lean on their credit card. It’s during these times that 0% offers come into their own and really benefit customers.”

He continues: “Used sensibly, these cards give you more breathing space as you can spread big expenses over longer periods of time, without worrying about interest. Just remember to make repayments in full and on time. This way you avoid late payment fees and get to enjoy the maximum number of months of your interest-free offer.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking a report is the first step of this process and can help people to understand their score. With this, they can get better rates and more choice — helping them work towards a better financial future.”

18 Nov 2019 Money remains one of the UK’s least favourite topics of conversation, it’s unsurprising then that research has found that 54% of UK adults don’t have an appropriate will; either they’ve never had one or their current will is out of date.  For many people, thinking about what will happen once you’ve passed on can feel too hard, unnecessary or just not a priority amid busy lives and careers.

Shona Lowe from 1825 discusses the most common reasons people have for not making a will and why these shouldn’t be an excuse.

  • I’m too young/I’ve not got anything to leave: It can seem unnecessary to think about what will happen in years to come but you’re never too young to take control of what will happen in the future. Even if you don’t own a property and have no money in the bank, whatever age you are, you do have things to leave.  It might not be money or property but what about the photos on your phone, your online bank account or your social media accounts? Our digital assets take many forms and can have real value, not only sentimental value Making a will allows you to have the final say on who inherits your possessions, no matter how small.
  • I’m single and don’t know who to leave it to: Whether it’s a brother or sister, a parent, a niece or nephew, a godchild, a friend or a charity, we all have people or causes we care about. A will allows you to clearly state who you want your estate to go to and can be amended at any time, should your circumstances and wishes change.
  • My partner and I have lived together for years, so everything will automatically pass to them:  There’s no such thing as a common law spouse so your partner will only get what you say in your Will you want them to get.  If you don’t have a Will or it doesn’t include them as a beneficiary, they’ll have to go to court and make a claim instead.
  • I’m married so I don’t need a Will for my spouse/civil partner to get everything:That might work in some cases, but certainly shouldn’t be relied upon.  The value of your estate and whether you have children can affect that so don’t take the chance – if you want your spouse or civil partner to get everything, say so in a Will.
  • I’ve got a young family and don’t have time: Life can be hectic with school trips, days out and sports clubs taking up a lot of parent’s time, however, making a will is crucial to ensure that your children are properly supported if you were to die before they reach 18 (16 in Scotland). A will allows you to appoint guardians and makes sure that  Social Services or the family courts won’t be left having to decide what’s best for your children. This could end up being someone that you wouldn’t have chosen.
  • I’m separated so don’t need a will to make sure my ex doesn’t inherit: While you may have separated your physical assets and no longer live together estranged spouses can still have an entitlement to part of your estate. If you made a will previously but have not updated it to reflect your new circumstances, there’s a risk that your ex may be able to inherit what you have previously said you wanted them to have or make a claim on your estate.  And even if you’ve got divorced, if you live in Scotland, that doesn’t invalidate your Will so you have to make a new one to override it.

When you decide to make a will it’s important to get it right. While you can write a will yourself or do it online, speaking to a professional that understands the intricacies of will writing and can advise you based on your needs both now and in the future gives you the peace of mind that your wishes will be carried out accordingly when the time comes.

To find out more information about the financial planning services 1825 offers please find further information at www.1825.com

13 Nov 2019 Individuals who look after both children and elderly parents, described as being part of the ‘sandwich generation’, are struggling the most to save money, according to Aldermore’s Annual Saving’s Tracker research.

Almost a third (32%) of individuals who have adult children living at home and who care for elderly parents, are unable to save money, the highest proportion of non-savers of any group.

On average, last year individuals within the ‘sandwich generation’ saved 7% of their annual income, a measure known as the savings ratio. In comparison, the population on average saved 9%.

Aldermore says that saving even small amounts of money can be hugely beneficial for individuals in later life, especially when they come to retire. Such is the stress of being stretched financially that one in five individuals within the sandwich generation say they are kept up at night worrying about their lack of savings.

Many within the sandwich generation for instance (35%) are worried their children are not saving enough with 78% believing it is their responsibility to teach them the importance of saving.

Not only are parents educating their children about money, they are also tangibly helping them too. 28% of parents aged 45-54, regularly give their children money to help them save, while one in four (25%) have helped or plan to help their children with a deposit on their first home.

Ewan Edwards, Head of Savings at Aldermore comments:  “Many individuals are finding their finances stretched wafer thin by supporting both their children and elderly parents.”

“Added to the difficulty for people is having their children still living in the family home after the age of 18, which can often place a further financial strain if they are not yet working.”

“We find it is concerning that such a high percentage (34%) of this group feel they are unable to save enough to ensure a stable financial future. It is crucial that when facing such demands, people prioritise their financial security and make small changes to their savings habits, in order to provide protection for their own future.”

12 Nov 2019 Halifax customers can now benefit from a service feature to protect themselves from gambling-related harm. The gambling card freeze, which is a feature of the banks’ mobile app[s], was developed in recognition of the ways in which the bank can support customers to manage their money and gamble responsibly.

Halifax is the first UK bank to enable customers to apply the gambling freeze to any of their debit and credit cards, with an accompanying ‘defrost’ period that means if customers want to reverse their decision to freeze gambling transactions, they must wait 48 hours.  This time period allows customers to thinking time to ensure their decision isn’t made in haste or under duress.

This is part of a broad set of activities to protect customers from gambling related harm. This includes providing additional training to customer facing colleagues the branch network and telephony services, and sharing further support information for customers online. Halifax is also working with Warwick University to review and analyse the impact of gambling related harm and will be sharing findings with the Gambling Commission and other external organisations in the coming months.

Elyn Corfield, Managing Director, Consumer Finance, says: “We know that people who gamble a higher proportion of their income are more likely to face financial pressure – so we’ve introduced the freeze tool to help them manage that. Importantly, by also introducing a defrost period we’re helping to protect those who might otherwise make an impulsive return to gambling.”

Lloyds Bank, Bank of Scotland and MBNA also offer card freeze features providing customers more choice and support in this area. Over 15,000 debit and credit card customers across these four brands have already signed up to the new gambling card controls since launch at the end of October.

06 Nov 2019 Research by mutual insurer, Royal London, found nearly three in five (57%) of UK adults do not have a Will in place.

November is Will Aid Month and Royal London tested the public’s knowledge of Wills – this revealed five misconceptions.

1. – My children will be cared for by my immediate family if I die.

Two in five (39%) people incorrectly believe that the legal responsibility for children will automatically go to the immediate family if their parent(s) were to die without a Will. Without a Will in place the legal responsibility for any dependent children under 18 would fall to the courts, until a decision is made on who will become guardians.

2. – If I separate from my spouse my assets won’t go to them.

A third (31%) of people didn’t know what would happen to their assets if they separated from their spouse. A Will is technically valid even if you separate from your spouse. Until you divorce, your spouse could still be entitled to your assets.

3. – I’m cohabiting with my partner, so they’ll inherit my assets when I die.

If you are cohabiting with a partner and not married, they would not be entitled to assets only owned by you if you were to die without a Will. If there are jointly owned assets, the other owner would normally inherit them.

Children would have a claim on the assets but if there are no children, the assets would be passed on to parents and siblings. A cohabitee has no rights under the law of intestacy (dying without a Will in place).

Royal London asked the public who would inherit the assets of someone who is cohabiting with their partner but has children from a previous marriage. Three in four (74%) either gave an incorrect answer or did not know.

4. – My Will is valid across the UK.

The research also found that around nine in ten (87%) people are not aware that a Will written in England may not be valid in Scotland. If you have written a Will in England and since moved to Scotland or vice versa, you should consider taking advice.

5. – If I’m estranged from my family, they won’t inherit my assets.

In Scotland, you cannot legally remove your spouse or children as beneficiaries even if you have a Will which doesn’t include them. Even if you are estranged from your family, they can still claim on your assets. Research reveals that two thirds (65%) of UK adults do not know this is the case in Scots law, and only one in five (21%) of those living in Scotland are aware that this rule applies in Scotland, compared to 8% of all UK adults.

Mona Patel, consumer spokesperson at Royal London, said:

“Not having a Will in place can lead to all sorts of complications, many of which the general public are not aware of. But even with a Will in place, there are misconceptions around what happens to your assets when you die. It’s important to not only write a Will, but also to make sure it reflects your wishes and to keep it up to date if your circumstances change.”

04 Nov 2019 Homeowners could be mortgage free sooner than they initially planned thanks to flexible mortgages that allow borrowers to overpay each month. 

Data from Yorkshire Building Society shows a fifth (23%) of borrowers are in credit on their mortgage after making overpayments on their account.

For some, overpayments can be a way to pay off their mortgage sooner than they had originally planned; potentially reducing the amount of interest they pay over the term of the mortgage. 

For others, regularly repaying more than the fixed monthly amount can help to pre-empt an expensive period in the future that could allow a payment holiday – an agreed temporary break in repayments – if the mortgage account is in sufficient credit.

Charles Mungroo, Senior Mortgage Manager at Yorkshire Building Society, said: “While it’s great to see so many borrowers value the option of managing their mortgage flexibly, it’s really important people understand the facts and implications of making overpayments to decide if it’s right for their circumstances.

“For example, while it could help reduce the amount of interest you pay, you can’t retrieve an overpayment if you need the money back. Likewise, it may mean you can pay off your mortgage quicker but if done wrong, could mean you incur fees. There’s a lot for borrowers to weigh up.”

Typically, lenders allow borrowers to overpay by up to 10% of the total outstanding mortgage balance each year either through regular, smaller overpayments each month or a larger one-off deduction when circumstances allow, for example receiving an inheritance.

However, borrowers unwittingly paying any more than the allowance would likely trigger early repayment charges (ERCs) on the overpayment, the amount of which varies depending on the terms of the mortgage.

For example on a £200,000 mortgage, borrowers could overpay an extra £20,000 each year before they would incur any financial penalty, but a miscalculation could see the mortgage holder charged a percentage of any additional payment over the agreed limit. 

Charles added: “If your mortgage terms allow overpayments and you can afford to make any additional contributions, no matter how small, over time you could really start to see some benefit.

“However, taking on a mortgage is likely to be one of the biggest financial commitments you will make in your life so it’s essential you understand all the facts before making use of flexible features on your mortgage to help you manage your finances in the future.”

To help borrowers understand how overpaying on their mortgage could help them, the Yorkshire has launched a new calculator that enables them to quickly and easily see how even the smallest overpayments could reduce the amount of interest they pay and how much sooner they could be mortgage free. 

The Yorkshire is offering tips for borrowers to consider before making overpayments:

1.    Do your research: Always check your existing mortgage deal to understand the terms of your mortgage and find out any potential fees that may be applied in the event you pay off your mortgage early. Most mortgage providers will allow you to overpay by a certain percentage (usually 10% but this will vary between different lenders and depend on the type of mortgage you have) and if you go over this amount, a charge is applied.

2.    Speak to your lender: if you think overpayments could work for you, speak to your mortgage provider to find out if this is something you could make use of, and on what terms. They know your mortgage better than anyone else so will be able to discuss your options with you.

3.    Clear any debt: Typically the interest charged on unsecured debt, such as loans and credit cards is more than that charged for a mortgage – so it’s a good idea to try and pay existing debts before you begin to overpay on your mortgage.

4.    Are your savings paying?: If the interest rate you earn on your savings is higher than the interest rate charged on your mortgage you might be better leaving it where it is, than overpaying on your mortgage.

5.   Don’t run on empty: Before committing any spare cash or savings to overpayments, make sure you have enough in reserve to support you in an emergency, such as boiler repairs or car breakdown. Once it’s used as an overpayment, you can’t get the cash back.