M&S Bank is urging holidaymakers to check their car insurance policy before hitting the roads this summer as research reveals that nearly a quarter (23 per cent) of those planning to drive their car in mainland Europe believe they either aren’t, or don’t know if they are, insured to drive in the EU.

When it comes to breakdown cover, more than a third (34%) either don’t know, or say they wouldn’t be covered, if they broke down on one of mainland Europe’s roads this summer. While many policies will offer some form of cover when driving in the EU, the level of protection offered may not be the same as when driving in the UK.

M&S Bank research into car insurance amongst British motorists planning to drive on the Continent this summer revealed that, of those planning to drive in mainland Europe, the vast majority (96 per cent) said that their main purpose for taking to these roads was for a holiday, mini-break, or to visit friends / family.

Paul Stokes, Head of Products at M&S Bank, said: “As British holidaymakers get ready to take to Europe’s roads this summer, it’s important that they check whether they have adequate car insurance, but also breakdown cover in place, before they go on holiday, as some policies don’t offer like-for-like cover outside of the UK; only then will they have total peace of mind, should the worst happen.”

In addition, more than a quarter (26 per cent) either don’t plan to, or don’t know if they will familiarise themselves with the driving rules and regulations of the country they are in, with more than one in ten (11 per cent) saying they don’t have time and six per cent believing that driving in the mainland Europe is the same as driving in the UK.

However, many drivers may be surprised to find that driving regulations can differ widely across many EU countries. For example, if you are travelling in France, vehicles driving through Paris, Lyon and Grenoble must display a ‘Vignette’ (sticker) in the windscreen due to recently introduced low emission zones; failure to purchase and display the vignette when driving in these areas could result in fine between €68 and €135.

In addition, if you are travelling in Austria or Croatia, you would need to carry a first aid kit and warning triangle at all times, while those who require glasses for driving must always ensure they carry a spare pair with them when driving on Portuguese roads.

Paul Stokes continued: “Self-drive holidays are a popular option for many British tourists, so we would urge motorists to do some research into the driving laws of all the countries they will be travelling to before setting off.

“As part of their research, drivers should also consider the length of time they will be away; while some insurance policies include extended EU travel cover as standard, drivers should not assume this is always the case. By taking the necessary precautions before setting off, motorists can help to avoid unnecessary stress and further delays on the roads.”

Top tips for driving overseas this summer:

  • Check the car before setting off, ensuring the oil, screen wash, coolant and tyre pressures are at the correct levels
  • Plan your journey beforehand so you know exactly which regions / countries you’ll be travelling through and then familiariseyourself with the local driving laws
  • Have a travel guide to hand that contains local phrases in case you need to ask for directions or for recommendations of places to stop
  • Make sure you have some local currency to pay for toll booths etc.
  • Bring games / entertainment when travelling with children to ensure they are kept occupied and do not distract the driver
  • Have refreshments in the car to avoid dehydration in the heat

 

The UK’s smaller businesses are facing a total bill of £2.16 billion to chase overdue payments, according to Bacs Payment Schemes Limited (Bacs), the company behind Direct Debit and Bacs Direct Credit in the UK.

That’s in spite of a dramatic drop in the overall late payment debt, with new figures showing that UK small to medium size enterprises (SMEs) are owed £14.2 billion in contrast with five years ago when the total was double that, at £30.2 billion.

Out of the 1.7 million SMEs in the UK, almost 640,000 say they have to wait beyond agreed terms for payments. Scotland has the highest percentage of SMEs reporting late payment issues (46 per cent), followed by Northern Ireland (39 per cent), England close behind (37 per cent) while just over a third of Welsh SMEs (34 per cent) say they experience late payments.

Thirty nine per cent of companies are spending up to four hours a week chasing late payers, while 12 per cent of SMEs employ someone specifically to pursue outstanding invoices.  But there is light at the end of the tunnel – more than two thirds of those who don’t have a late payments problem say being paid by Bacs Direct Credit helps, while 29 per cent say the same about collecting monies owed by Direct Debit.

Almost one in five (19 per cent) of SMEs affected by overdue settlement admit that being owed between £20,000 and £50,000 would be enough to drive them into bankruptcy, with seven per cent of businesses saying they are already in that danger zone.

Of those facing late payments, some 16 per cent struggle to pay their staff on time, while 28 per cent of company directors reduce their own salaries in order to keep essential working capital inside their businesses. And nearly a third (32 per cent) say that overdue invoice settlement forces them to pay their own suppliers late. A quarter (25 per cent)  rely on bank overdrafts to make essential payments, and  15 per cent find it difficult to pay business bills like energy, rates, and rent when they’re due.

A significant issue for SMEs is the amount of time they are being kept waiting beyond their previously agreed payment terms. Almost a third of companies face delays of at least a month beyond their terms and nearly 20 per cent are having to wait more than 60 days before being paid.

Mike Hutchinson, from Bacs, said: “Falling late payment totals is welcome news for small to medium size businesses and for the wider economy. It’s good to hear that relatively simple measures like collecting money by Direct Debit or insisting on payment by Bacs Direct Credit are helping to keep SMEs out of the late payments trap. We’d advise all businesses to investigate if automated payments can help them control their cashflow more effectively.”

As Brits count down the days until their summer holiday begins, a new study by American Express has revealed that holidaymakers are likely to spend an average of £273 before they have even left their front door, stocking up on holiday items ranging from goggles and gadgets to games.

As a nation, Britons take an average of two holidays a year, either abroad or in the UK, equating to an average £546 spent on holiday preparations – more than the average UK weekly wage.

Holidaymakers spend the most on looking the part for their trip, spending £69 on clothing, shoes and accessories. This is followed by purchases on toys to keep the children occupied (£36), and then make up (£33).

More than two thirds (67%) of holidaymakers start buying treats a month before they depart for their trip. Popular items include clothing, magazines and snacks, and one in five (20%) purchase their loved ones or themselves a treat to celebrate the start of a trip.

Jenny Cheung, Director at American Express says “As the holiday season approaches, suitcases are already being piled high with travel related goodies as Brits prepare for their getaways. With many people working hard all year to earn their break, it’s understandable that special treats make it onto the shopping list. These little luxuries can go even further by putting related expenditure on a card that earns rewards or cashback, so you can treat yourself a bit more either during your holiday or after you return.”

American Express offers the following tips for those heading off on holiday:

1)     Plan in advance: if you are planning a holiday several months ahead, make a list of all the practical items you need and buy them ahead of time. After all, we usually book flights or train tickets in advance, so there’s no reason why you can’t gradually build up your holiday supplies, while having time to shop for bargains in the sales.

2)     Ask for holiday contributions: if your birthday is before, during or even after a holiday, ask family and friends to contribute towards items for your trip, such as clothes, travel guides or headphones.

3)     Don’t leave packing to the last minute: packing at least two days before your departure means you’re less likely to forget basic but useful essentials. Even if you are departing late in the day, travel schedules can always change so it pays to be organised in case the plan changes.

4)     Don’t panic: if you forget something, remember that it’s likely you will be able to buy the item on your travels, or borrow from one of your companions!

5)     Points make presents: check how many rewards points you have on your credit, charge or store card. You may have enough to treat yourself with your points at the airport or on your holiday.

Lloyds Banking Group has announced that it is revamping the overdraft charges for customers of Halifax, Bank of Scotland and Lloyds Bank with effect from November this year.

The banking giant has decided to ditch the £6 monthly overdraft charge for Lloyds Bank and Bank of Scotland customers and will no longer charge unauthorised overdraft fees for these two banks and customers of Halifax too.

Although the revised charges tariff for overdrafts is easier to understand it doesn’t mean it’s the best value account if you’re someone who dips into the red now and again, as the table at the bottom of this article shows.

Personal finance expert, Andrew Hagger of Moneycomms said: “The new overdraft tariff is quite different to anything else on the market as it will charge 1 pence per for every £7 of overdrawn balance per day – plus the charges will be debited to the account at the end of each day rather than as a lump sum a once a month – a move that should help customers with their budgeting.”

“Although 1p per £7 may sound a small amount, it actually equates to an equivalent interest rate of around 52% so it’s definitely worth shopping around to ensure you have the cheapest overdraft for the way you manage your bank account.”

There is not one account that’s best for everybody – in fact the account which offers the best overdraft will depend on how much you need to borrow and for how long – if you’re not sure which account would be most suitable, this table should help.

Overdraft comparison table

The regulator, The Financial Conduct Authority has been focusing on the cost of short term credit, so son’t be surprised if other banks follow suit in the coming months.

Four out of 10 UK holidaymakers have lost, or had stolen, an item of value while on holiday, a study from Aviva insurance reveals.
A survey of 2,000 UK adults who have taken a break in the last two years found that 18% had lost an important personal possession while on holiday, while 17% had had something stolen. An unlucky 3% of holidaymakers had experienced both mishaps during their travels.

The average value of items lost or stolen on holiday in this study was £249, although one in five (19%) respondents who had seen possessions disappear said their item was worth more than £300.

Half of holidaymakers (50%) who had experienced losing items or having possessions stolen on holiday said they had claimed on home or travel insurance to help recoup their losses. However, 41% said they didn’t make a claim and one in 10 (9%) said they didn’t have insurance.

Simon Warsop, Chief Underwriting Office, Aviva General Insurance says: “Holidays are a time to relax and enjoy life away from home, but unfortunately this doesn’t mean people can let their guard down completely. Losing a possession or having one stolen can really spoil a trip, particularly if the item is costly or has particular sentimental value – and it can be quite the holiday headache if important documents such as tickets or passports go missing.

“Prevention is the key, so it really pays for people to be aware of their surroundings, keep an eye on their possessions and leave valuable items in a secure place such as a safe whenever possible. It’s also a great idea to have suitable cover in place, such as baggage cover within travel insurance or personal belongings as part of home contents cover. It’s better to be safe than sorry, but insurance can help to cover the cost and put matters right if items do go missing.”

 

Aviva hints and tips for holidaymakers

  1. Keep your wallet, purse or phone in a zipped-up pocket – not in the back pocket of your trousers.
  2. Use a safe. Many hotels and apartments have them, so keep your valuables and important documents locked away when you don’t need them.
  3. Use a handbag with a strap that goes across your body and over the shoulder – muggers can quickly snatch a shoulder bag.
  4. Put purchases in a back pack when shopping on holiday – it’s easy to put down shopping bags and forget to pick them up.
  5. Put your camera on a strap around your neck.
  6. Avoid carrying large amounts of cash and share it out so it’s not in one place.
  7. Don’t take valuables to the beach and only take enough cash for the day. When going for a dip in the sea, tie or clip your bag to something like a sun lounger and put a padlock on the zip.
  8. If you hire a car, keep your belongings locked in the boot.
  9. If you do experience a theft, report it to the local police – don’t wait until you get home. You should also let your insurance company know as soon as possible, ideally within 24 hours.
  10. Only leave luggage with the hotel if it is kept in locked luggage storage. Unlocked luggage rooms are vulnerable to anyone walking it and helping themselves.

 

Nearly one in six adults rely on their plastic for financial survival as debt worries grow, new research from financial services insight specialist Consumer Intelligence shows.

Its study found that 80% of the population has a credit card. Of those, 19% of credit card customers admit they cannot get through a month without their cards with around 31% juggling three or more cards.

The shock figures show 11% of card holders are maxed out to the limit on one card, painting a picture of growing financial strain for millions of households.

Bank of England figures show total unsecured debt on credit cards, car loans and overdrafts is now £198 billion – the highest level since the 2008 financial crisis.

Consumer Intelligence’s research found 42% of adults worry about unsecured debts they have in addition to mortgages with 11% admitting they worry a lot about how deep in the red they are.

Around one in five adults (18%) have debts of £10,000 or more, on top of their mortgages, the study found, with one in four owing at least £5,000

One in six adults (17%) have exceeded their agreed overdraft limit in the past three years, while a fifth (19%) admitted they have had to borrow money from family or friends in the past three years.

Debt problems affect higher earners just as much, the study found. Around 23% of adults with a household income of more than £50,000 do not usually clear their credit cards.

Seven in ten energy customers in Britain (17 million) are languishing on expensive deals known as standard variable tariffs (SVTs), potentially throwing away nearly £300 each but half of all customers don’t think they’re on one.

The new research from uSwitch.com, the price comparison and switching service, demonstrates a distinct lack of awareness amongst consumers, with over three quarters (85%) admitting to never having heard of the phrase ‘SVT’. When shown a list of possible phrases that it could refer to, only 1% could correctly identify SVT as an energy plan.

Once they had the term explained to them, 35% of respondents said they realised that SVTs are amongst the most expensive deals on the market, but just one fifth (21%) of customers knew for definite that they were on one while 52% of customers were sure they weren’t.  Furthermore, only 26% recalled being contacted by their energy supplier in the last 12 months to inform them that they could be saving money by moving to a cheaper deal.

The majority of consumers feel that the responsibility for alerting them to changes to their tariff and possible savings should lie with their energy company. Over half of bill payers (56%) believe that energy suppliers should send an annual reminder that they could save money by switching, whilst almost a third (31%) feel that consumers should be given more information about the tariff they are signing up to.

Other initiatives that would motivate more people to switch to a better energy deal include being sent a letter that is difficult to ignore (e.g. in a red envelope) advising them they are on the most expensive tariff (29%) or changing the name of a tariff to reflect the fact it is more expensive (37%). Popular suggestions included ‘rip-off tariff’ (24%) and ‘out of contract tariff’ (14%).

Searching and switching to a better deal can be done in minutes and consumers can save an average of £357 per year, with some households saving up to £618..

British motorists who drive their cars abroad are being urged take care, as Admiral reveals the number of overseas insurance claims it has dealt with has risen 160% in the last five years.

With millions of Brits taking their car abroad each year, the car insurance specialist has identified the most common destinations for accidents as part of its new campaign to ensure drivers have a safe summer, including advice and tips for those who have accidents on their road trips.

The study of Admiral insured drivers by the insurer looked at ten years of motor accidents abroad and shows Londoners aged 30-39 and driving a VW Golf in France are the most likely to have an accident whilst driving oversees. The most common type of car to be involved in an accident abroad is a BMW (11%) followed by a Volkswagen (9%) and the Audi (9%). 

Over the last ten years, drivers aged 30-39 have made the most driving abroad car insurance claims (30%), followed by those aged 40-49 (24%). Interestingly, drivers aged 20-29 accounted for 19% of accidents.

When it comes to who’s at fault for the accidents, the 2016 data shows British drivers insured with Admiral were responsible for 51% of accidents abroad claimed for while the most common month is August, the height of summer. In 2016, a quarter of all claims for driving accidents abroad were made in the month of August.

Commenting on the figures, Lorna Connelly, head of Claims at Admiral said: “Driving abroad is a great way to have the freedom to explore new places, without the cost of flights. There’s no reason it shouldn’t be a really enjoyable experience, but just as accidents can happen at home, they can happen abroad too, and different laws and languages can cause additional stress.

“To ensure an accident doesn’t ruin your holiday we’re calling on all drivers to make sure they’re well informed, so if the worst should happen, they are properly prepared.  You can do this by having the right documentation on you, by being aware of the rules of the road in the country you’re visiting and finally by knowing what to do and where to report details of any accidents.”

Drivers are facing accelerating increases in car insurance taking average premiums to £666 as Government compensation rules come into effect, new research from insurance research experts Consumer Intelligence shows.

Average car insurance bills have increased by 15.7% in the past year – more than five times inflation – with nearly half the rise happening in the three months to May.

Action by regulators to cut the discount rate governing payouts in major personal injury claims to minus 0.75% from 2.5% effective from March 20th is driving the rise in bills. June’s Insurance Premium Tax rise will further add to the pressure.

Average motor insurance premiums have increased by 34.6% since October 2013, Consumer Intelligence, whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics, estimates.

Drivers aged between 21 and 24 pay the highest prices at £1,202 but have seen slightly lower annual premium increases at 13.1%. Over-50s motorists are experiencing the biggest rises at 17.9% but pay premiums of £418.

Motorists in London pay the highest average premiums of £1,000 across the country – more than double the £474 bill in Scotland and the South West – and are seeing average increases of 16.7% as claim costs grow.

John Blevins, Consumer Intelligence pricing expert said: “Price rises had been levelling off at the end of last year but are now rising rapidly as the full impact of the discount rate cut comes into effect.

“Government plans to review the Ogden rate have so far taken a backseat following the Election although there is some relief from plans to push ahead with whiplash reforms announced in the Queen’s Speech.

“However with the impact of the latest Insurance Premium Tax rise still to come into effect drivers need to shop around to limit increases in premiums”

Research by Saga Travel Insurance has revealed that 350,000 over 50s have travelled without insurance in the last 5 years.

With reports suggesting that the weakening of the pound is resulting in a rise in so-called ‘staycations’, the survey of almost 12,000 shows that of those not taking out cover almost eight in ten were travelling in the UK (79%) and two in five (43%) said that UK travel was the main reason for not taking out cover.

Almost half of UK trips taken without insurance (47%) included a pre-booked hotel stay and with the average hotel in the UK costing £82 per night2 the losses can add up if people find they are no longer able to travel. Combine this with ever increasing UK rail fares and people could find themselves hundreds of pounds out of pocket should they have to cancel or cut their trip short.

Other popular staycations for people citing a UK trip as the reason for not taking out insurance include coach tours (59%), river cruises (50%), trekking holidays (43%) and city breaks (41%). Many providers of UK breaks will have cancellation charges which range from the loss of a deposit to forfeiting the full cost of a trip.

Analysis of Saga claims data from 20163 shows that almost seven in ten (68%) insurance claims for UK trips were as a result of illness or hospital visits forcing, in many cases, a trip to be cancelled or curtailed with the average claim costing £728.

And whilst the NHS will cover the cost of medical treatment within the UK, it won’t pay for friends or family members to stay by their loved one’s side, or travel to be with them if they fall ill whilst away and require a stay in hospital.

Kevin McMullan, Head of Saga Travel Insurance, commented: 

“Whilst it’s great to see people boosting the economy by experiencing the beauty of the UK as an alternative to going abroad, it is concerning that many think they do not need travel insurance for UK trips. Whilst medical bills will be covered by the NHS it would be wise to make sure you are covered for any pre-paid accommodation and travel costs in case of cancellation and for the costs incurred by friends and family who will want to be by your side if the worst happens and you’re admitted to a hospital many miles from home.”