Online car finance purchases are expected to rise by 33%, accounting for more than half (56%) of transactions for the first time ever. The move away from the traditional dealership model comes as Brits become more open to shopping around for their own finance deals, with 60% saying searching online for car finance is their preferred option and 63% think shopping online for car finance is more convenient.

And the financial rewards of the online alternatives are clear: those who arrange car finance options online could save up to £797, according to new figures released by car finance provider Zopa.

Potential buyers are also put off by the traditional process of a car dealership offering the finance deal as half admit they’re nervous about the prospect of negotiating costs with a dealer face to face. A further 49% of Brits surveyed suggest haggling simply isn’t a part of modern life and 13% of Brits say they’ve never negotiated when buying something.

And being uncomfortable can cause people to make uninformed decisions. More than one in 10 people who bought a car in the last five years admit they accepted a deal on car finance from a dealer that they didn’t feel was good value and nearly one in five decided to avoid the process altogether and put off buying a car.

The shift online comes as more people see the benefits of organising car finance themselves, with 61% of Brits saying shopping online gives them greater control and 72% preferring to shop at their own pace. The ease comes from access to information too, with a third (36%) valuing the transparency of comparing deals online and 28% the ability to research running costs at the same time as the car finance options, allowing them to manage the financial decision better. The Coronavirus was also a consideration, with nearly half of those questioned (45%) saying they would be more likely to shop online for their finance now than before the pandemic.

In line with consumer demands to take control and avoid the hassle of added negotiations with car dealers, Zopa now offers a ‘mortgage-style’ car finance product with the loan secured against the car. Customers arrange finance on the vehicle prior to going into a dealership. Zopa’s offering puts the customer in control of financing their car as it carries out all background checks, paperwork online and contacts the dealership about the money directly. This enables the customer to have peace of mind and certainty of how much the car will cost them before stepping foot on the forecourt.

Tim Waterman from Zopa says: “For a long time, dealers had control of the customers’ finance deal, and until recent restrictions put in place by the FCA, could be incentivised to offer a higher loan APR. While of course not all dealers are the same, this situation has caused consumer mistrust. Wider availability of online finance deals such as Zopa’s has shifted the control, making it possible for consumers to find a deal that truly works for them.

“A car isn’t a frequent or low value purchase, so it’s understandable that people want to take their time when finding the right deal and do it on their own terms. Zopa’s secured car finance aims to increase transparency and convenience as people can sort out their finance online before going to a dealership, putting them in complete control of how they finance their next car.”

Consumers are able to find a finance option from the comfort of their own sofa as drivers can go directly to Zopa’s website and apply for a Hire Purchase car loan in as little as 3 minutes. The customer also has certainty of price as Zopa provides them with a guaranteed loan rate and monthly breakdown before a full application is submitted. These personalised pre-approved details are provided on a soft search without marking the customer’s credit file, giving them added certainty and the ability to continue to shop around.

Zopa shares its tips for how to secure a good deal on a second-hand car and car finance: 

  1. Start by exploring all your options  with the range of different options available to customers, it can often feel overwhelming. Make sure to explore all options available to you via soft search and opt for one which offers complete transparency and aligns with your financial situation. Not all providers offer soft search, so you’ll need to check before you get a quotation.
  2. Get a pre-approved loan sorted – this allows you to know what options are open to you and you can be confident you’re getting the best deal available. Look at providers that do an initial soft search to give you confidence on approval and the rate you’ll receive.
  3. Think about timing – March and September see new cars released, which are often bought through part-exchange deals. This means dealers will have lots of cars to sell, which puts the consumer in a strong bargaining position.
  4. Research costs and see how much the vehicle you want is going for elsewhere – you will know what a good deal is if you’ve been able to compare costs yourself, so make sure you look around and see what other dealers are offering on similar vehicles to make sure you’re happy with the price that is being offered.
  5. If you want to go direct to a dealer, do your homework – it’s important to remember that not all dealers are the same. Ask friends and family for their recommendations or check out reviews online via Autotrader or Trustpilot.

Aldermore bank has today increased the rates on a range of its fixed rate business savings products.

The following business savings rates will be available immediately:

  • 6 Month Fixed Rate – increase from 0.55% to 0.75%
  • 1 Year Fixed Rate – increase from 0.75% to 1.00%

Ewan Edwards, director of savings, Aldermore comments: “We’re committed to offering competitive rates to savers and are pleased to be able to increase interest rates across our fixed rate business savings offering. Running a business comes with many different challenges at the moment, so it’s vital business owners get the most out of any surplus cash.

“Fixed rate accounts can be particularly useful as they enable businesses to get their money working harder for them until it is time to be used. For example, for new IT equipment in six months time, or to put towards those bigger costs you know are coming further down the line.”

Finance experts TotallyMoney have warned that consumers could be unwittingly losing hundreds of pounds by using certain financial products against their advantage. Research reveals:

A massive 20% drop in income and 10 million people on the furlough scheme during coronavirus has seen many turn to credit to get by.│

However, TotallyMoney has warned that with interest-free overdrafts and payment holidays coming to an end, recovering from the financial effects of coronavirus may be costlier than many realise.

True cost of borrowing exposed

The finance experts have said that increased awareness of more expensive types of borrowing could allow customers to find cheaper alternatives, which can help prevent them from spending more than they need to.

For example, some of the 27 million people offered an interest-free overdraft when the coronavirus pandemic started could soon face higher interest rates than before it began, with many reaching highs of 40%.

Furthermore, despite credit cards often being a cheaper alternative, many don’t realise the majority will accrue an average of £445 in interest due to not having a interest-free promotional offer.

Credit card fees further soar when a card is used for a cash advance transaction, which not only incurs a withdrawal fee, but also starts  accumulating interest the moment the transaction is complete.

Shining a light on borrowing blind spots 

TotallyMoney has launched a free and exclusive app-first feature to give customers an overview of how they use credit, including flagging types of borrowing that could be expensive, such as frequently using an overdraft, using a credit card for cash advance transactions, and carrying a balance on a card with no promotional rate.

Credit Assistant summarises why these could be expensive ways to borrow, so consumers can better understand how to use their credit and get more money in their pocket.

Alastair Douglas, CEO of TotallyMoney, comments:

For millions of people in the UK right now, finance is a real struggle. The uncertainty of coronavirus is still present and many people may have taken out extra credit products, or taken payment holidays, to help manage spending.

“However, credit can be confusing, and it’s not surprising that consumers don’t know what classifies as a cash transaction, what their interest rate is, or even how often they use their overdraft. With greater transparency about these types of borrowing, consumers can avoid unnecessarily paying out extra. 

“Looking at debt and borrowing habits can be daunting, though. With Credit Assistant, we’ve enabled customers to see their credit and how they’ve used it over time in a clear and meaningful way.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Credit Assistant can help people look at all their borrowing behaviour, understand how they can make better decisions, and move on up to a better financial future.”

NS&I has this week announced that, starting from the December 2020 prize draw, it will start to move customers to having Premium Bonds prizes paid directly into their bank accounts – a quicker, easier and more secure way for customers to receive prizes. The issuing of paper warrants (like a cheque) for the payment of prizes won in the monthly Premium Bonds prize draws will be phased out completely by March 2021.

Premium Bonds customers can also continue to choose to have any prizes reinvested into more Premium Bonds, up to the maximum holding of £50,000. Customers will be notified of any prize win via their choice of email or text message.

Since 2011, Premium Bonds holders have been able to have their prizes paid directly into a UK bank account in their name. In the September 2020 prize draw, almost three quarters (74%) of the 3,856,040 prizes were paid directly into customers’ bank accounts or reinvested into more Premium Bonds.

Customers can check the Premium Bonds results by using the online prize checker at nsandi.com, the official NS&I prize checker app, and the Premium Bonds Alexa skill.

Ian Ackerley, NS&I Chief Executive, said:

“Paying Premium Bonds prizes directly into customers’ bank accounts is quicker, easier and more secure for everyone. It will also mean that we can reduce the number of Premium Bonds prizes that go unclaimed where we don’t have a current address for the winner. Customers can also continue to have any prize wins reinvested into more Premium Bonds up to the £50,000 limit to increase their chances of winning in future draws.

“There is an understandable affection for prizes being received by post, but since March, nearly half a million customers have switched from receiving paper warrants to having their prizes paid directly into their bank account or automatically reinvested. As well as being beneficial to our customers, this change will allow NS&I to manage Premium Bonds prize distribution more cost-effectively and with a much lower environmental impact.”

Customers need to provide NS&I with their bank account and contact details

To ensure the swift and easy transfer of prizes, Premium Bonds customers will need to ensure NS&I has their up-to-date UK bank account details along with an email address or UK mobile phone number, so that they can be notified of any prize wins. NS&I is urging customers to do this as soon as possible as the issuing of paper prize warrants will be phased out from December 2020, and will stop completely from March 2021. NS&I will never call customers and ask for their bank details.

As NS&I is phasing out the use of prize warrants, some Premium Bonds customers will not receive prize warrants from December 2020, with all customers not receiving prize warrants from March 2021. These customers will instead be issued with a prize claim letter, telling them how to arrange payment of their prize. The February 2021 Premium Bonds prize draw will be the last prize draw in which prize warrants will be issued by NS&I.

Customers already registered for NS&I’s online and phone services can input their bank account details quickly, easily and securely by logging into their account on NS&I’s website. They should visit nsandi.com and use the secure log in. They should go to ’Your profile’ and select ‘Your prize options’ and choose to have prizes paid directly to their bank account or to have prizes automatically reinvested into more Premium Bonds.

Customers who have not previously registered to manage their account online should register for NS&I’s online and phone services at www.nsandi.com/online-registration. They will then be able to manage their prize options.

Customers without internet access should call NS&I on 08085 007 007 to either provide NS&I with their bank details or register to manage their savings, including Premium Bonds, with NS&I.

Fears and concerns around financial scams has increased over the past three months as over a third (36%) of UK adults say they their worry levels have increased – this compares to 26% when Canada Life, the financial services firm, last ran the data in May.

The data reveals the situation is getting worse as the pandemic continues, with on average six suspicious or fraudulent messages having been received by people since March, up from three suspicious contacts reported in May.

The scamming activity has led to one in 10 (11%) UK adults either knowing someone or admitting they have fallen for a scam since the start of the Covid-19 outbreak. On average, of those who have been scammed, people lost £587, although nearly one in ten has lost over £1000.

The research also reveals the most common type of scams people have fallen victim to are banking related ones, with more than  one in three (38%) reporting this type. Pension related fraud is also common with over one in four (28%) of people stating this type of scam.  22% of victims cited an insurance scam as the cause, followed by romance scams at 15%. The Governments Track and Trace service has also been used as a platform to scam people with over one in ten (15%) of people reporting they were either a victim of knew someone who had fallen for this type of scam.

Being scammed or knowing someone who has during the outbreak has left many feeling foolish (52%), although over half of those polled (62%) felt the scams are so convincing they are hard to spot. This experience has an impact beyond the financial consequences; with two-thirds (68%) agreeing that it’s taken a toll on their mental health and one in two (50%) feeling like their trust in people has completely gone.

 

Andrew Tully, technical director at Canada Life, said:

“The scamming frenzy appears to be gathering pace as fraudsters use the cover of Covid-19 to prey on innocent victims. Falling prey to scams hits victims financially, but there are also hidden costs with people’s ability to trust others shattered and, for some, a detrimental affect on mental health. Despite the public message campaigns and the ban on cold-calling, the scammers are either simply ignoring the law or using increasingly sophisticated ways of finding convincing ways to con people. The rise of romance scams and using the Track and Trace service only serves to show we all need to be vigilant, scam aware and follow the simple rule of thumb – if it appears too good to be true, it inevitably is. Simply walk away, hang up, or delete the email or text.”

Tips to help avoid financial scams

  1. If you receive an offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for example if you are very ill, so always check with your pension provider before making any decisions.
  2. Warnings that the deal is limited and you must act now. This is a pressure tactic, and making any financial decisions should not be done under pressure.
  3. HMRC will never contact you by email, phone or text informing you of a tax refund, so simply delete or ignore any contact made this way – HMRC will only contact you via post.
  4. You are discouraged from seeking professional financial advice or talking to Pension Wise or The Pensions Advisory Service (TPAS). An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.
  5. A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it elsewhere. Seek professional financial advice, and be very wary of unsolicited offers of ‘amazing investment returns’

The latest data from Admiral home insurance reveals the average value of a contents claim for university students is more than £700, with the most common items claimed for being laptops and phones, as well as personal valuables such as bikes, Jewellery and games consoles.

With students heading off to university over the next few weeks, the insurer is urging them to make sure their personal belongings are protected, before leaving home, to avoid being left out of pocket.

Noel Summerfield, Head of Home at Admiral, said: “Thousands of students across the UK will be heading away to university over the next few weeks, many for the first time. But with most likely to be taking expensive belongings like laptops, bikes and games consoles with them, it’s vital they have the right insurance in place to protect them against accidental damage, loss or theft.

“Our home insurance data from the last two years shows students could be out of pocket if their personal property is damaged or stolen, with the average value of a contents claim for students more than £700. The most common items claimed for include student essentials like laptops and mobile phones, so it’s worth being extra vigilant when it comes to taking care of high-value items like these.

“Personal valuables like bikes, Jewellery and games consoles are also frequently claimed for, which is why it’s so important for university students to take out insurance to cover their belongings. Without it, they could end up with the unexpected cost of having to replace their missing or damaged items.

“Students also shouldn’t assume their belongings at their university accommodation are covered by their parent’s insurance – it’s always best to double check first. More specific cover, such as Admiral’s tenants insurance could be a worthwhile option, as this would cover contents or personal belongings in a shared home or flat, or university halls.

“Although heading to university is an exciting venture, it can also be daunting as it may be the first time many students are living away from home. With lots of new responsibilities, perhaps insurance isn’t a priority, but it’s important that they leave home feeling secure in case the unexpected happens. By having the right cover in place, students will be protected from the stress of paying out to replace their belongings.”

According to Admiral data, the most common items claimed for by students are:

  • Laptops
  • Bikes and cycling accessories
  • Mobile phones
  • Jewellery
  • Games consoles

Research from Hodge has revealed that those under the age of 35 are the least likely to seek professional financial advice, with just 20% saying that they have previously sought advice from an IFA.

According to the research – which asked over 3000 people about their attitudes to finances – family and friends are the biggest source of financial advice for those under 35, with 70% of this age group claiming that this is where they seek guidance.

In contrast, the number of people who seek financial advice from an IFA doubles to 40% for those over the age of 55. In turn, the number of people in this age group who consult with family and friends about their finances drops to 53%.

Emma Graham, Business Development Director at Hodge said on the findings, “It’s clear from the research that family and friends have a huge influence on all generations when it comes to finances, and in particular, the younger generations. However, it’s important to remember that well-meaning views or personal experiences doesn’t necessarily mean good advice.

“Seeking advice from family and friends is the most subjective form of guidance, as those closest to you often have thoughts or opinions on how you should live your life, that don’t always match up with your own plans.

“Getting independent advice from a qualified and experienced financial adviser not only ensures you receive objective advice that takes into consideration your own personal circumstances and plans, you’ll receive real value from accessing their expertise and can make those important decisions confidently, knowing you have considered and looked at all the options available to you.”

The findings come from an intergenerational study conducted by Hodge, who interviewed over 3000 people about their attitudes towards finances and their aspirations for the future. The study “It’s all relative” is part of a campaign from Hodge to get families being more open about their finances. The full research findings can be found at https://hodgebank.co.uk/2020/05/19/money-its-all-relative/.

The economic impact of the coronavirus crisis has been far reaching with millions of people unable to work due to lockdown restrictions.  New research shows that nearly a third (31%) of UK adults have seen their income cut as a direct result of the crisis.

The research, commissioned by GoCompare Money, reveals that 8% of people are seriously worried about their future, with 7% concerned that they won’t be able to pay their bills.   Almost 1 in 10 are worried about losing their job.

Faced with economic uncertainty, most (71%) Brits have tried to find ways to reduce their monthly outgoings.  Popular tactics people have used to save money involve finding ways to buy the same products for less, either by swapping branded goods for supermarket own-brands or by downshifting supermarket, and making the most out of loyalty schemes, cashback offers and other discounts.

Collectively, the nation’s money saving tactics could have netted up to £3.5bn a month.  The average monthly saving is £95 but just over a fifth (21%) estimate they have reduced their monthly outgoings by more than £100.

Rank Money saving tactic used %
1. Bought supermarket/shop own-brand label goods 27
2. Cut down on take-away meals 27
3. Used loyalty and cashback schemes, vouchers, coupons, and apps 19
4. Downshifted to a cheaper supermarket 11
5. Drew-up a budget 11
6. Cancelled subscriptions for goods and services 10
7. Switched to a cheaper energy deal 9
8. Switched energy supplier 8
9. Cancelled gym or leisure club membership 8
10. Bought second-hand items rather than new ones 7

The financial uncertainty caused by the pandemic has changed many people’s attitudes to money, 13% said they now think more carefully about their finances.

Commenting on the research, Lee Griffin, founder and CEO of GoCompare said, “While the coronavirus is primarily a health crisis, lockdown measures have had far reaching economic consequences, with millions unable to work and living on reduced incomes.  The resulting economic slump has officially pushed the UK into recession and, with the winding down of the Government’s furlough scheme along with ongoing restrictions, further redundancies are likely if businesses are forced to close or downsize.

“Our research shows that many people are worried about their jobs and financial security, and have used their time in lockdown to take a fresh look at their finances to find ways to make their money go further.  Whether it’s reducing grocery bills, cutting take-outs or cancelling subscription services, people are embracing a wide range of money saving tactics.

Metro Bank has announced its first ever ‘Refer a Friend’ switching offer. Existing Metro Bank customers can receive up to £250 each by referring their friends to open a Metro Bank account using the Current Account Switch Service (CASS).

The bank – which recently celebrated its 10th birthday after becoming the UK’s first new high street bank in more than 100 years back in 2010 – is on a mission to become the UK’s best community bank.

Existing customers will receive £50 for every friend that switches, up to a maximum of £250 if five friends switch. New customers that switch to the bank will also receive £50 as a warm welcome to Metro Bank.

To get involved, existing Metro Bank customers must register via the bank’s website here. Once registered, customers receive a unique code to share with friends and family. The offer runs until 11 December 2020, with full terms and conditions available on the bank’s website.

Kat Robinson, Director of Bank Accounts at Metro Bank, adds: “At Metro Bank our purpose has always been to create fans and bring the banking revolution to more people. We’re excited to launch our new ‘Refer a Friend’ switching offer to do just that, helping us give something back to our existing customers whilst welcoming new customers too.”

New research from Caxton, the travel money specialists, reveals how the coronavirus pandemic has changed the way people are managing their finances.

In a survey response from almost 16,000 cardholders, the key findings were as follows:

  • 39% of people say they are deliberately saving more.
  • 59% of those aged 18-25 say they are deliberately saving more, whilst for those in the 56-65 bracket the figure is less than half at just 26% whilst the percentage for over 65’s is only 19%.
  • Young people may be saving more, but 61% of 18-25’s still hope to travel abroad on holiday this year.
  • One in five 18-25’s said the crisis had made saving more difficult, compared with just 6% of those aged 65 or over.
  • However, in response to the question ‘have your finances been impacted by the pandemic’ only a fifth of 18-25’s said their finances hadn’t been affected, compared with 55% in the 56-65 age group and 70% for over 65’s
  • Older customers have not been affected as much financially but are the most nervous about going overseas on holiday – with only 1 in 3 hoping to travel abroad in 2020

 

Alana Parsons, Chief Operating Officer at Caxton FX commented on the findings: “It’s positive to see younger people making a conscious effort to save more, although the uncertainty of employment after the furlough scheme ends is no doubt a factor here.”

Despite the financial and economic disruption our customers are facing, there remains an eagerness to holiday overseas, with 52% of respondents still hoping to travel abroad this year”.