New research from Aldermore bank reveals the significant social impact on Brits from the cancellation of major plans in 2020 due to the pandemic. The large scale of refunds means that in total £51.7bn has been received back due to major plans not going ahead.

The most common cancellation for Brits was from holidays, with refunds received from planned holidays abroad totalling £23.1bn, £7.1bn for UK-based holidays, and £6.8bn given back for weekend breaks and trips. Unsurprisingly, due to social distancing measures, the events industry has also been heavily hit, with cancelled sporting events leading to £3.9bn in refunds, cancelled concerts causing £2.3bn in reimbursements and festivals £2.4bn.

Major plans this year that have been cancelled due to the Covid-19 outbreak Percentage of Brits that had plans cancelled Percentage that received refunds for cancelled plans Average amount refunded Extrapolated to UK population
A holiday abroad 37% 62% £1,172 £23.1bn
A planned trip/weekend break 29% 52% £445 £6.8bn
A holiday in the UK 27% 56% £494 £7.1bn
Attending a concert 19% 53% £420 £2.3bn
Hosting a party 13% 43% £566 £3.9bn
A sporting event 13% 65% £507 £3.5bn
A festival 9% 59% £500 £2.4bn
Wedding 4% 77% £1,299 £2.5bn

Saving is a top priority with pandemic refunds

Two fifths (38%) of those that have received money back from cancelled events put the whole refund into their savings, with an additional 15% putting at least some of the refund into savings. Over 55s were most focused on saving with half (48%) putting all their refund into their savings, compared to only a third (33%) of 18 to 34 years olds that did so.

Other uses of refunds included putting it towards a holiday abroad next year (15%), for Christmas spending money (13%), for a UK break (12%) or spending it to treat themselves (10%).

Ewan Edwards, director of savings at Aldermore, said: It has been a lost year of many of our best laid plans, and the continuous cancellation and delays to trips and big events in people’s lives has been a deflating experience in 2020. Encouragingly the data shows that many Brits are turning disappointment into opportunity, by putting their refunds into savings for the future. Products like notice period and limited access savings accounts are perfect vehicles for delayed plans. They allow people to put money away at a rate better than easy access accounts, but also provide flexibility so people can get their funds for when that delayed holiday or trip comes around in 2021.”

New research from Direct Line Home Insurance reveals more than £5 billion has been spent on bikes since the start of lockdown. In fact, a huge 14.5 million bikes have been acquired in the last seven months alone, with a total of 9.1 million people purchasing at least one bike in the UK since March.

With people increasingly choosing cycling as their preferred mode of transport, more bikes than ever are being left throughout the day, becoming a target for opportunistic thieves. Between April and August this year, 32,700 bikes were reported stolen to police forces across the UK, approximately 215 every day. However, the actual number of bikes stolen could be as high as 112,600, as 71 per cent of bike owners do not report them as stolen. Direct Line reports the average claim for a bike now stands at £8004, an increase of 27 per cent since 2019.

The City of London has the highest volume of bike theft in the UK, with an equivalent 2,385 bikes stolen per 100,000 residents, accounting for 10 per cent of all crimes reported in London. This is a significant difference on second placed Cambridgeshire which reported 158 thefts per 100,000 residents.

Dan Simson, Head of Direct Line Home Insurance, said: “It’s great to see that so many people have found solace in cycling this year. With many people avoiding public transport due to coronavirus, it’s easy to see why cycling is so popular, whether for commuting, exercise or as a general mode of transport.

“However, bikes can be expensive and often catch the eye of thieves when left unattended, especially if not well secured. With so many now relying heavily on their two wheels for travel and exercise, we would recommend investing in a strong D lock to deter thieves. As well as having home insurance with cover for personal possessions away from home included to reduce the risk of being hit with a hefty bill to get you back on the road.”

Not only has the country seen an increase in bike ownership, the number of miles pedalled for work and pleasure has increased too. Britons are now collectively cycling 16 million more miles every week – taking the total UK weekly miles ridden past one billion. This increase is being fuelled by commuters, who are now riding an average 7.3 miles per week, an increase of 28 per cent compared to before lockdown and accounting for around a seventh of all miles cycled on a weekly basis. Other popular reasons for cycling such as exercise (up four per cent) and leisure (up two per cent) have also increased since the start of lockdown, although visiting friends and family has understandably fallen (down five per cent).

The most common place people are storing bikes when at home is in a locked shed or garage (47 per cent), followed by inside the home (18 per cent) and an unlocked shed or garage (10 per cent). Locked outside in the garden (eight per cent) and unlocked in the garden (six per cent) complete the top five storage locations.

Away from the home, cable locks, U-locks or chain locks are the most popular safety method for securing bikes, with a third of cyclists using these. A D-lock (26 per cent) and chaining to another bike using a cable lock, U-lock or chain lock (14 per cent) are other common techniques being used. One in nine (11 per cent) think leaving their bike in a well-lit area is sufficient and nine per cent remove accessories when leaving their bike unattended.

With less than half (43 per cent) of bike owners having insurance cover, Direct Line is offering some helpful tips to keep them safe:

 

Tips for keeping your bike safe

  • Registration – There are bike schemes available, such as BikeRegister which are free to sign up for and provide security marking kits and warning signs to deter thieves
  • Parking – Keep your bike parked in a well-lit public area where it’s busy throughout the day
  • Lock it up – Ensure that you always keep your bike locked when unattended. D-locks are the most secure and it will pay in the long run to invest in a high-quality lock
  • Home – Even when your bike is kept in your garage or shed, be sure to lock it up and consider investing in a ground lock or secure wall mount so you know it is safe when out of sight
  • Insurance – Check with your insurance provider that your bike is covered. Some insurers offer an add-on to their usual cover which is always worth investing in. If you have a high-value bike it is also worth reading the terms and conditions to be sure your bike value is covered
  • Direct Line home plus insurance covers bikes for up to £1,000 as standard5
  • Photograph – When purchasing a new bike, it is always recommended to take photographs of the bike and capturing frame numbers and any unique features

For more information please visit https://www.directline.com/home-cover/how-to-prevent-your-bike-from-being-stolen

The British public is more than twice as likely to feel anxious about their finances than they
are to be content with them, leading to sleeping problems and distraction at work.

A survey of 2,000 UK adults revealed the average person loses almost 22 hours of sleep each
year thinking about their money woes in the middle of the night.

These financial worries then filter out into their wider lives, with 15 per cent distracted when driving
and 24 per cent struggling to concentrate in the workplace.

For many this creates tension, with more than a quarter (27 per cent) admitting they have had a
big falling out with a partner due to money.

And 16 per cent of those surveyed are currently keeping financial secrets, such as how much they
owe on their credit cards, from their loved ones.

The research, carried out by Paragon Bank, revealed 32 per cent of Brits feel anxious when
thinking of money, but just 13 per cent feel content.

And it is the 18 to 24-year-olds who struggle the most – with this age range four-and-a-half times
more likely to feel anxious (44 per cent) than content (nine per cent) when thinking about money.
Overall, it is when lying in bed (30 per cent) that the public is most distracted by worries about their
finances.

However, 40 per cent of 25 to 34-year olds admit money issues distract them while they’re
working, while 35 per cent of 35 to 44-year olds have the same problem.
And it is the 35 to 44-year-old age group which is most likely to wake up in the middle of the night
due to money concerns – losing 36 hours of sleep over the course of the year as a result.

Derek Sprawling, savings director at Paragon Bank, said: “We know that the pandemic has had a
devastating impact on people’s mental wellbeing, and our research shows that money worries are
certainly contributing to this.
“The average person is thinking about their finances several times a day and often losing sleep
over this.
“Many people trying to plan for the future during this time of economic uncertainty might not know
where to turn for help.
“There is a wealth of free resources available online that can support people, including planning
guides, digital budget spreadsheets and general guidance and tips. We’ve also launched a new
educational section on our website to help our savers manage their money.”

The study also found that more than a third (37 per cent) of people surveyed by OnePoll for
Paragon admitted they were worried about losing their job and therefore their income.
Six per cent of respondents said they have been made redundant this year, while 11 per cent took
a pay cut.
A third (33 per cent) have also sought advice about their financial situation over the past six
months.

One in 20 said they have taken out a loan this year to help them cover costs, while seven per cent
have been forced to ask friends or family for financial help.

Paragon’s digital guide to recession-proofing finances is available to download:
https://www.paragonbank.co.uk/personal/savings/helping-you-manage-your-money

RoosterMoney, the pocket money app and debit card, forecasts what’s going to top kids’ Christmas lists this year, based on what they’ve been saving their pocket money towards in the last few months. Unlike most Christmas list predictions, RoosterMoney’s data is based on what kids are actually doing with their own money, and what they’re saving it towards; the statistics are drawn from real wish lists, entered into the RoosterMoney app by children across the UK. Lego & Phones top the list, followed by online games Fortnite & Roblox, and consoles such as Nintendo Switch & PlayStation. The humble bicycle manages to creep in at number 10.

 

RoosterMoney’s Pocket Money Index, based on 40,000 kids, also looked at preferences by age and gender. High on both agendas are Lego, phones and Nintendo Switches, with boys prioritising Lego and girls prioritising phones. Boys appear to lean towards gaming consoles such as Xbox, PlayStation and Computers, while girls preferred tablets. Of the games themselves, Roblox was the most popular amongst girls, and Fortnite amongst the boys.

 

Looking at fluctuations by age group, Lego starts to wane in popularity after 10, just as phones, computers & consoles take over. Roblox & Fortnite are most popular between 6 and 12. Nintendo Switch has the broadest age appeal, spanning 4 to 12.

Top 10 wants. Overall, Boys, Girls.
Overall:

  1. Lego
  2. Phones
  3. Fortnite
  4. Roblox
  5. Nintendo Switch
  6. PlayStation
  7. Dolls
  8. Xbox
  9. Computer
  10. Bike
Boys:

  1. Lego
  2. Fortnite
  3. PlayStation
  4. Xbox
  5. Nintendo Switch
  6. Computer
  7. Roblox
  8. Phones
  9. Pokemon
  10. Minecraft
Girls:

  1. Phones
  2. Dolls
  3. Roblox
  4. Lego
  5. Clothes
  6. Tablet
  7. Holiday Money
  8. Books & Magazines
  9. Nintendo Switch
  10. Bike

Other key facts from the Pocket Money Index:

  • Average weekly pocket money: £4.81
  • Average saved: 34%
  • Top 3 chores: Clean bedroom, Make the bed, Do the laundry

 

Will Carmichael, CEO of RoosterMoney said:

“The Pocket Money Index provides a fun snapshot of the workings of the family pocket money economy, but it can also be a useful tool to help parents ahead of Christmas. Looking at what kids’ are actually saving towards is probably the best insight we have into what’s going to be on their wish lists this year.

As parents, there is an opportunity to turn these wants into lessons, for example offering to match kids’ savings once they hit a certain milestone is a great way to encourage them to save towards a goal.

Ultimately, for us the important thing is seeing these kids actively engaging with their money, setting themselves goals, earning money towards those goals, and becoming confident with money.  Christmas can be a time for a lot of expense and gifting, but it can also be an opportunity to talk about money and start new habits.”

A new study by GoCompare reveals that 9.7million households are facing Christmas on a reduced income, compared with this time last year, with 13% saying that Christmas is going to be financially very difficult indeed.

The research carried out ahead of the festive season, found that 35% of UK households are living on less money than last year. 54% said their household income is roughly the same, while 11% have seen their income increase in the last 12 months.

The financial impact of Covid has hit the household income of adults aged 18 to 44-years old the hardest.  Nearly half (49%) of those aged 18 to 24-years, 48% of 25 to 34-year olds and 43% of 35 to 44-year olds have seen their income drop – compared with the average figure of 35%.  At the other end of the scale, the household income for people aged 65 and over has stayed stable with 73% saying it is about the same as this time last year.  Only 14% of people in this age group said they had experienced a drop in income.

The squeeze on household budgets will see over a third (34%) cutting their Christmas spending.  A quarter of respondents said they ‘will have to be very careful with money this Christmas’.  Worryingly, 8% admit they are going to be spending money they haven’t got, to spread some festive cheer this year.

When asked about how they will pay for their Christmas, 52% plan to do so from income, while 30% have saved money throughout the year for their festive spending.  Credit cards will account for 16% of spending.  Some (5%) of those surveyed said they would borrow money to cover the cost of Christmas, while 5% admitted that they will probably go overdrawn.

Lee Griffin, CEO and founder of Gocompare Money commented, “Lockdown and other restrictions aimed at halting the spread of the coronavirus have plunged the UK into recession, leaving millions of households struggling to manage on reduced incomes.  On top of everyday money worries, Christmas is adding to the financial pressure on millions of households.

“If you are struggling to make ends meet, don’t ignore the problem in the hope it will go away.  There is financial help available.  Check to see what Government benefits you are entitled to and find out how to access them.  And, if you’re having difficulty in making bill payments or repaying loans, contact the relevant organisation as soon as possible to make more affordable arrangements.”

Finance experts TotallyMoney have warned that those experiencing financial hurt due to coronavirus could see their credit scores suffer for six years as protections are taken away for over quarter of a million people still on payment holidays. The finance experts reveal:

  • A blanket end to protections on 31st October will see lenders contacting the 323,700 borrowers on payment holidays1 to discuss tailormade repayment options
  • Those unable to meet their full repayments in accordance with what’s agreed with lenders will likely see missed payments and defaults on their credit report
  • Late payments and defaults remain on credit files for a lengthy six years, making it harder to get accepted for credit cards and mobile phone contracts
  • Despite government Job Support Scheme, incomes remain considerably reducedunemployment is at three-year high2, and over half of people fear losing their job3 over the next 12 months
  • Devastating 12 million people thought to have low financial resilience4, says Financial Conduct Authority
  • Reassessment of the current protections necessary, says TotallyMoney, to ensure consumers aren’t left out in the cold

A blanket end on 31st October to granting payment holidays on mortgages, credit cards, loans, and overdrafts will see lenders contact the 323,7005 people who took advantage of the protections. This will be to discuss repayment options.

Although lenders must make assessments on a case-by-case basis, in most instances they will likely take monies owed from payment holidays, add this to the outstanding balance, and recalculate monthly payments accordingly.

However, anyone unable to make full repayments as agreed with lenders will probably see missed payments and defaults appear on their credit report, TotallyMoney warns.

Vulnerable consumers will therefore be left reeling from these financial effects of coronavirus for over half a decade, as missed payments and defaults remain on credit reports for six years.

This will make it significantly harder to get accepted for credit cards, loans, mortgages, mobile phone contracts, and even paying for utilities by direct debit. It could also drive up the cost of car insurance6.

The end of payment holidays also comes at an inopportune time, TotallyMoney says, as it coincides with the end of the furlough scheme.

 

All out, little in

Despite the chancellor’s new Job Support Scheme7, there are ever-growing concerns that the dramatic drop in support compared with what was offered at the beginning of lockdown will mean many won’t be able to afford to live day-to-day, as well as keep up with full repayments.

It is suggested that a devastating 12 million8 people have low financial resilience, meaning they struggle to pay bills and loans.

Furthermore, with unemployment at a three-year high9 and over half of people concerned they’ll lose their jobs over the next 12 months10, fears are intensifying that consumers will have no choice but to take the hit to their credit scores.

 

Commenting on the troubling changes, TotallyMoney CEO, Alastair Douglas, said: 

“With so many trying to make ends meet while protecting their health, the last thing anyone needs right now is more worry about how their finances could be affected further by these drastic changes.

“That’s why it’s unfortunate that consumer credit scores will suffer for such a long time for anyone unable to keep up with their repayments. A lot has changed over the past three months, so a reassessment to see what more can be done to protect the public would be ideal.

“In the meantime, if you see any missed payments or defaults on your credit report, you can contact each credit bureau and add a notice of correction to your file. While this won’t remove the missed payments or defaults, it does give you a chance to explain any mitigating circumstances that may have led to them, such as coronavirus.

“Lenders must then take this into account when you apply for credit, which could help you get accepted in future.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score, and it’s important to us that our customers’ financial futures aren’t negatively affected due to the unpredictable effects of the virus.”

At the end of last week, the Chancellor announced improvements to the winter support package to help small businesses struggling in the crisis. However, research from Tommys Tax app (www.tommystax.com) has revealed that nearly three quarters (73%) of people find the support from government ‘confusing’ and 85% say that the new package is still not enough.

On the Self Employed Business Support Group on Facebook, managed by Tommys Tax, many of the 11.5k small business owners in the group ranted about the new grant being a ‘disgrace’, as the support covered just 40% of their average monthly trading profits across three months, (with a limit of £3,750 in total), while many said they still weren’t eligible for any support at all.

With talks of tax rising by up to two or three percentage points soon, 55% of people thought they would really struggle to pay the extra costs, with 4% saying they would stop working completely as they could get more money on benefits.

Tommy McNally, Tax Expert and Founder of Tommys Tax says: “The new measures are welcomed as an improvement, but 40% still leaves the self-employed struggling to survive and too many (around a third) will be excluded due to the eligibility criteria. Small businesses and freelancers have seen their income drop dramatically during the pandemic. It’s a tough situation for everyone, but my clients believe they’re being treated unfairly compared to others. When you look at how little they’re still being offered, I have to agree with them.”

Tommys Tax (www.tommystax.com) was founded in 2015 and has since secured a total of £20 million in tax refunds for clients. They launched their free app in April 2020 and it so far has helped over 10,000 people. On average, they currently secure refunds of £3,000 for those on PAYE and £2,800 for the self-employed.

Tommy concluded: “It’s great that the government is helping small businesses but with the prospect of a rise in tax, they need to do more or we’re going to see a huge number of small businesses closing for good, which is not only bad for the economy, but devastating for individuals and their families who have worked so hard over the years.”

Tommys Tax App gives business owners all the tools they need to manage their finances – including bookkeeping, invoicing, tax calculators and the ability to get a tax refund that can come within as little as 72 hours.

As part of a survey of more than 8,000 customers, Paragon found that 40% of savers now want to prioritise spending money on experiences they can share with loved ones over material possessions, whilst more than a quarter (27%) felt they were less materialistic as a direct result of the pandemic.

Bank of England data showed that net new household deposits soared during the lockdown period, averaging around £17.2 billion per month between March and June.

Following this period of reduced spending, Paragon found that one in seven savers (15%) now felt they could live a fulfilling life on a reduced budget and would rather prioritise savings for the long-term.

Derek Sprawling, Savings Director at Paragon Bank, said:

“The ‘experience economy’ trend was on the rise long before Covid-19, but it looks like the pandemic has certainly accelerated this. It’s no surprise that the restrictions around socialising have made people value time with loved ones more, with 60% of our savers seeing their priorities change.

“This preference for spending money on experiences with our nearest and dearest over material goods is usually predominantly linked to the younger generation. Our data shows that this trend is indeed strongest amongst 18-24 years-olds, with half of young savers agreeing with the claim against an average of 40%, however it is also consistent across all age groups.”

A shift in spending priorities 

This change in attitude was reflected in spending habits across specific product categories during lockdown.

Paragon’s savers claimed to spend less on online clothes shopping now than before the pandemic, with 35% cutting down spending. The areas that people spent more money on during lockdown included groceries (42%), home improvements (33%), gardening (22%) and media entertainment (21%).

Sainsbury’s Bank has enhanced its Nectar Credit Card  with a new, enriched Nectar offer. Sainsbury’s customers can collect 10,000 Nectar points, worth £50, when they spend over £400 in Sainsbury’s, Tu Clothing or Argos in the first two months after opening the account.

The new credit card offer ranks highest for earning rewards compared to other no-fee reward credit cards on the market, according to top personal finance expert, Andrew Hagger, from Moneycomms.co.uk. 

The boosted credit card offering also enables customers to collect up to three Nectar points per £1 spent at Sainsbury’s, Tu Clothing and now also at Argos, when they use their Sainsbury’s Bank Nectar Credit Card and swipe their Nectar card . In other retailers, customers earn one Nectar point per £5 spent.

Jason King, Customer Director at Sainsbury’s Bank said:  “We’re committed to helping Sainsbury’s customers get the best value from their credit cards. Our new Sainsbury’s Bank Nectar Credit Card offer means customers could be collecting significantly more points on their everyday shopping, whether this is buying their weekly groceries or getting ahead on the Christmas list.”

Andrew Hagger, Personal Finance Expert from Moneycomms.co.uk said: “The new Sainsbury’s Bank Nectar Credit Card deal is very competitive in the current market and ranks highest amongst the no-fee rewards based credit cards. The card offers good long term rewards value for those customers shopping with the Sainsbury’s and Argos brands.

“It’s a good all round card, not only offering generous own brand rewards value but also up to 17 months interest free on balance transfers and purchases. Unlike a growing number of rewards based credit cards, this new deal doesn’t come with a monthly or annual fee.”

To apply for a Sainsbury’s Bank Nectar Credit Card customers should visit: https://www.sainsburysbank.co.uk/credit-cards/nectar-reward

Finance experts TotallyMoney reveal how much customers could save by avoiding finance options at car dealerships amid the Financial Conduct Authority’s (FCA) crackdown on unfair commission agreements.

  • A staggering £300m is being lost every year across the UK due to commission-focused dealerships, FCA reports*
  • The majority of new car registrations (9 in 10) were financed through dealerships in 2018†
  • Nearly three quarters of people (68%) have accepted the first car finance deal offered to them at a dealership‡
  • Customers could pay an unnecessary £1,100 extra in interest over a four-year loan*

Figures from 2018-9 report the majority of people buying a car (91%) were persuaded by car dealerships into taking out credit to help them with their purchase.†

Research by the FCA found that buyers are typically sold a finance product based on a broker’s commission, rather than the customer’s creditworthiness. Dealerships receive their commission from lenders based on the interest rate a customer gets, therefore incentivising the broker to increase the rate to earn more.

This often results in customers getting a car finance deal that costs them more than they need to pay.

As a result, the FCA estimates that a customer could end up paying an extra £1,100 in interest on a four-year £10,000 finance agreement.

In light of their findings, the FCA has now put the brakes on these practices in the car finance market. Commencing in January 2021, discretionary commission models that are not in the customer’s best interests are banned.

 

A steer in the right direction 

The finance experts are shifting gears on the traditional, commision-based model by allowing TotallyMoney customers to check their eligibility for more affordable finance options before they head to the dealership, and all results are based on what’s best for the customer, not best for the dealership.

Customers can see a larger and more varied range of products than they would find at a dealership.

At a time when many people’s financial situation has changed due to coronavirus, finding the cheapest option, with the easiest payment plan, can make a considerable difference.

 

Alastair Douglas, CEO of finance experts TotallyMoney, comments:

“A car is often a lifelong necessity and a large portion of someone’s monthly expenses. This is particularly important at the moment, as more people may be keen to avoid public transport amid the coronavirus crisis. 

“But, car dealerships can sometimes seem unfair. The industry currently lacks competition, and at the point of sale the main focus is on the broker’s commission, rather than what is right for the customer. 

“We wanted to change this. Our new car finance eligibility platform brings in creditworthiness as a top priority, so customers can get finance options that are right for their situation. We work closely with our lenders, so that customers see market-leading products that will work for them.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score and help our customers move on up to a better financial future. Checking your free credit report to better understand your financial situation could help you improve your credit rating, and help you find the best deals for your next car.”