01 Nov 2018 More than 80% of parents and relatives have been investing in JISAs for children or young relatives since they were less than five years of age. However, nearly all plan to wait until their recipients are 16 or over before telling them they have money invested, a new survey by Willis Owen reveals.

Of those investors waiting until the child is 18, nearly two in five say this is because they would like to surprise their recipients while over a third (34%) are worried they will not be responsible enough to be informed earlier. Almost a quarter (23%) say they do not want their children to feel spoilt by being made aware of their JISA money before their eighteenth birthday.

Almost half of all those saving into JISAs hope the money will be used for university or higher education, while 43% would like the funds to contribute towards a deposit for a property. A further 42% would like the money to remain invested while 34% would like it to be used to pay for a car and 22% hope it will cover the cost of travelling the world.

Adrian Lowcock, Head of Personal Investing, Willis Owen says:

“When a child turns 16, he or she becomes entitled to manage their junior ISA investments and can access the money from their eighteenth birthday. However, our survey suggests that almost half of parents or relatives wait until their children are 18 or over to discuss JISAs invested on their behalf.

“This statistic sheds light on a very worrying issue; the fact that most people are leaving it too late to have conversations about personal finances with the younger generation. Learning about money and becoming financially aware is a long process, but it should start as early as possible.”

Lowcock adds:

“Most of our financial behaviours and disciplines come from our families so if you want to instil good behaviour you will need to practice what you preach. One technique is to start giving your child small amounts of change when shopping to buy goods, so they are involved in the whole process and understand the value attached to different items and services. Having a piggy bank is another engaging way to help them save for something in the future, but they need to set a goal that is achievable to ensure they appreciate the process and don’t get discouraged along the way.”

 

31 Oct 2018 Yorkshire Building Society is urging UK tax payers to increase their financial resilience by cashing in on the Chancellor’s Budget income tax giveaways and saving the money they would have had to pay to the Inland Revenue.

Chancellor Philip Hammond announced on Monday that the Personal Allowance will rise to £12,500 from April 2019, saving UK basic and higher rate tax payers £130 per year, while the higher rate tax threshold will increase to £50,000, saving those playing the 40% rate a further £730 annually (£860 in total).

Since 2010, successive Budget announcements have seen the threshold for paying basic rate (20%) tax rise from £6,475 to £11,850 in April this year.4 Meanwhile, over the past five years, the higher tax rate threshold has increased from £41,451 to £46,350.

Yorkshire Building Society has calculated that basic rate tax payers who had managed to save all the tax they would have paid with each increase in the personal allowance since 2010 would have accumulated over £5,000 extra in savings.

This is an opportunity for thousands to take steps towards achieving what the Prime Minister described as the “peace of mind” which comes with savings.

Although other fiscal changes in those Budgets will have affected household incomes, the Yorkshire says putting away the Personal Allowance giveaway is a good opportunity to get into the savings habit.

Tanya Jackson, Head of Corporate Affairs, at Yorkshire Building Society, said: “Today’s change to the personal allowance means that UK workers who pay basic rate tax will be £130 better off from April next year.

“Yorkshire Building Society is urging workers who can to save their tax breaks. A basic-rate taxpayer who had deposited the money they’d saved from changes to the personal allowance since 2010 would now have an extra £5,434 in their savings account.

“Savings in relation to household disposable income are at the lowest levels since 1963 and 16.8m people have less than £100 in savings. As a mutual provider committed to helping our members overcome any financial hurdles they may encounter, we want to help people establish a regular savings habit to build their financial resilience.”

Savers can use this interactive calculator to see how much the personal allowance changes could help them save.

31 Oct 2018 Credit experts and FinTech scale-up TotallyMoney have asserted their position as key players in the credit report industry by acquiring over one million Free Credit Report customers since its launch last year.

The rapid growth has been largely attributed to an array of features that have made a debut appearance in the credit report industry.

In addition to a full Free Credit Report, TotallyMoney gives customers a live credit score that gets updated whenever they log in, for the most up-to-date view of their financial health. This live score also includes reasons why the score goes up and down — the only provider currently available that offers this service for free.

Customers are able to use this information to understand their credit position better, so they can take the appropriate steps to improve their credit rating.

The Free Credit Report company further distinguishes itself from its competitors with a unique, proprietary Borrowing Power algorithm. Developed by TotallyMoney, Borrowing Power combines customer credit profile data with real-time, market-wide lending criteria.

It then finds the best credit offers for customers and shows them how likely they are to get accepted for them, without harming their credit rating.

This allows customers to apply for the best credit products for their credit rating and credit profile.

TotallyMoney CEO Alastair Douglas said: “Our significant growth marks a true step change in consumer attitudes towards credit reports and the credit industry in general. It shows that there’s a definite appetite for a service that not only provides customers with their credit information, but tells them what it means for their personal circumstances.

“It’s at the heart of our mission — to make credit better by putting customers in control of their data and helping them make smart borrowing decisions — and informs our plans for 2019.

“We’re working with more lenders to show customers the true rate of borrowing, as well as creating more experiences to help customers understand and improve their personal credit position.

“We’re doing this to enhance the financial lives for not just this million customers, but for the millions of customers to follow.”

26 Oct 2018 As the clocks go back, the winter nights draw in, home insurer Policy Expert urges homeowners to be vigilant and take precautions to protect their homes.

The warning comes as new research of almost 4,000 people found that 28% of workers get home past 6pm. There are approximately 32.4 million workers in the UK – this means there could be as many as 9 million people leaving their homes in the dark for longer. As the afternoons and evenings get gloomier, 14% of Brits say they are more concerned about leaving their property due to a potential burglary whilst they’re at work.

The research also found that the average time to get home from work is 5.09pm. At present, that means people are arriving home in daylight hours. However as of Sunday 28th October it will get dark at 4.41pm, meaning that from Monday 29th October, homes could be empty and unattended in darkness for 28 minutes. The length of time will increase by one to two minutes every day until mid-December when the average home could be left empty and unattended in darkness for a full hour and 15 minutes.

Despite this, the research revealed that many homes do not have adequate security in place to protect them while they’re empty. In fact, a quarter of people don’t take any security measures at all to protect their home from theft.

Only two in five of those surveyed have timed lights and just 39% install extra security lighting. A third (32%) close their curtains, one in five (18%) leave the TV/radio on and just over one in eight (12%) improve their locks. Yet, almost one in ten make an extra effort to leave work earlier or on time.

Homeowners have the current security measures in place:

  • External lighting – 69%
  • Tall fences – 49%
  • Plants/ Hedges – 40%
  • Lights on timers 39%
  • A dog – 34%
  • Burglar alarm – 32%
  • Neighbourhood watch membership – 17%
  • Surveillance cameras – 16%

Adam Powell, Head of Operations at Policy Expert commented“The winter months are a tempting time for opportunistic burglars. Longer nights and shorter days mean that there are more opportunities for crime to take place under the cover of darkness, so it’s important to remain vigilant and ensure your home is adequately protected. Any way to make your home look occupied or visible deterrents, such as lights on timers, CCTV cameras and burglar alarms should go some way in preventing a break in. Finally, check your home insurance policy to ensure it’s up to date and any valuables are declared to ensure you’re fully covered should the worst happen.”

Tips on protecting your home this Autumn:

  • Install a timer to set lights inside your home to come on once it gets dark – choose a light in a visible room at the front of the house, not the hallway, as this will create the impression that someone is inside
  • Invest in sensor-activated, external lighting for the garden and around the front of the home
  • Install a burglar alarm – not only is this a visible deterrent, if someone does attempt to break in the alarm would alert neighbours and the police before any damage could be done
  • Don’t leave curtains closed – during the day this makes it look like there’s no-one at home
  • Make sure any outbuildings or sheds are locked and that any tools are hidden away – these could be used to break into your home
  • Ensure any valuables are out of sight – remove the temptation and make sure these items cannot be seen from outside the house through the windows
  • Never leave a spare key anywhere near the front door, for example under a doormat, flower pot – thieves know all the usual hiding places
  • Similarly, don’t store house/car keys just inside your front door, as burglars could try to fish for the keys through the letterbox

23 Oct 2018 Holidaymakers are warming up to prepaid cards for overseas spending as the switch from cash continues, new research from financial data analytics experts Consumer Intelligence shows.

More than 27% of people heading abroad for winter holidays this year plan to use prepaid cards for some of their spending compared with 23% who used prepaid cards on winter breaks last year.

Nearly three-quarters (74%) heading overseas will still use some cash, the study found, but that is down from 76% last year with the data also showing a rise in the use of credit and debit cards for holiday spending. Pre-paid cards are now nearly as popular as debit cards which are used by 28%.

The gradual switch to pre-paid cards is an opportunity for providers to expand their range and Consumer Intelligence’s research on winter holiday destinations is another indicator of potential growth areas.

Its study found Spain remains the top choice for UK holidaymakers in the winter with 22% planning to visit. But Canada and the US are now the joint second destination chosen by 11%. France and Germany make up the rest of the top five.

Advantages for holidaymakers using prepaid cards include potentially better exchange rates plus less risk for their money if they lose the cards. But customers need to watch out for fees and debit cards can also offer good deals.

A spokesman for Consumer Intelligence said: “It is plain that card spending, for winter travellers, is definitely gaining ground.

“Providers must ensure they are offering the right deals, including prepaid cards, for the winter season, as well as taking note of the new popular destinations.”

19 Oct 2018 New research from Charter Savings Bank reveals that 40% (over 5.8 million) of grandparents give their families cash handouts every year worth an average of £1,475 each, as well as the equivalent of one month’s free childcare.

Children and stepchildren are the main beneficiaries, receiving £743 a year, while grandchildren collect around £450.

Of those grandparents who gift money, the majority (61%) do so because they want to pass their wealth to their family during their lifetime, while a third extend a helping hand to help family members who are struggling to make ends meet.

Grandparents’ cash is most likely to go towards the younger generation’s living costs (30%), holidays (21%) and home improvements (19%). One in six (15%) say they are helping towards a home deposit, while 12% are clearing university debt.

It’s not just the younger generation receiving a helping hand; the research shows that 5% of grandparents are also providing financial support to their parents too.

On a regional basis, the most generous grandparents are based in Yorkshire and Humberside who donate a whopping £2,298 every year. In a close second are grandparents living in London (£2,043) followed by the East Midlands (£1,929) and the South East (£1,723).

Grandparents contribute one month’s worth of childcare

As well as cash, two-thirds (65%) of grandparents have given up their time to look after grandchildren and great-grandchildren, spending an average of four hours per week. When rolled out over the course of a year, and assuming a 7.5 hour working day, grandparents are providing 28 working days of free childcare annually. Assuming the national minimum wage of £7.83 per hour2, grandparents are providing £1,629 of free childcare – collectively worth £4.3 billion.

While most grandparents can afford to be generous, over a third (37%) admit to having to make lifestyle changes including fewer holidays (58%) and postponed or cancelled home improvement plans (37%).

Paul Whitlock, Director of Savings, Charter Savings Bank, said: “Rising living costs and squeezed family incomes mean that grandparents are having to ride to the younger generation’s financial rescue. In many cases grandparents find it hard to say no and while they like being hands-on, the risk is that they compromise their own standard of living.

“Savings accounts play a key role in grandparents’ ability to finance the younger generation, so it’s important to check they’re getting a competitive rate.  Many grandparents have built up sizeable nest eggs thanks to years of saving regularly. Passing this habit down through the family will help to ensure that future generations can also benefit from a financial leg-up.”

 Regional breakdown of financial contributions

Region Financial support given by grandparents each year
Yorkshire and Humberside £2,298
London £2,043
East Midlands £1,929
South East £1,723
West Midlands £1,530
North West £1,501
Scotland £945
East of England £877
Wales £837
North East £817
South West £771

 

Source: Charter Savings Bank, 2018

17 Oct 2018 Today’s publication of the inflation rate for September means that the government now has all the information that it needs to set pension and benefit rates for April 2019.  Under the terms of the pensions ‘triple lock’ policy, the pension has to be increased by the highest of:

–          The growth in earnings, which was 2.7% in August 2018 (based on seasonally adjusted average earnings including bonuses);

–          The growth in prices, measured by the CPI, which is 2.4%;

–          A minimum of 2.5%;

With today’s fall in price inflation, the pension will rise in line with the growth in average earnings (2.7%).   The key figures (rounded to nearest 5p) are:

  2017/18 2018/19
Full ‘new state pension’ £164.35 £168.80
Old ‘basic state pension’ £125.95 £129.35

Pensioners on the old state pension system will see an increase in other elements of their pension, such as the state earnings related pension scheme (SERPS) in line with the increase in the CPI.

The main rate of the Guarantee Credit for the poorest pensioners is linked by law to the growth in average earnings so will also rise by 2.7%.

Commenting, Steve Webb, Director of Policy at Royal London said:

“Whilst the rates of working age benefits have been squeezed for many years, pensioners look set to enjoy another above-inflation increase.   Those receiving the full rate of the new state pension should get an extra £4.45 per week or just over £230 per year”.

 

ENDS

16 Oct 2018 While losing money is common, with those prone to misplacing things often finding spare change in pockets (66%), bags (37%) and drawers/cupboards (34%), new research from NS&I reveals that 14% of Britons (7 million people) think they may have lost track of a financial product, highlighting the staggering amount of money left dormant with UK financial services providers. And it’s not just savings accounts, with a fifth (20%) admitting there is a possibility that they have lost track of a pension.

Paper or provider: what’s the problem?

Nearly two-thirds of Britons (63%) admit to losing or misplacing things from time to time, but many admit that this could stretch beyond occasionally misplacing items such as keys. A quarter of Britons (25%) who admit to misplacing things tend to lose important paperwork, which could lead to losing track of bank or savings accounts, direct debits or signed agreements.

Now that many financial products are available to manage online, the requirement to remember security details or passwords is higher than ever before. Just over half of Britons think that misplacing passwords or codes for accounts is a cause for losing track of financial products, yet 78% believe that digital technology has improved the ability to stay in touch with financial products. This figure reaches 89% of 16-24 year olds, and steadily decreases with age, however over two thirds of those aged over 65 still agree that digital technology has improved their ability to keep track of finances.

While most Britons hold savings and investments with 1-3 financial providers 17% use between four and six providers. Nearly half of the population believe that people can lose track of financial products because they use too many financial providers.

As a way to combat the complication of paperwork that may come with using multiple providers, 45% of people believe that offering a single banking platform to view all accounts would help prevent people from losing track of their financial products.

Tracing could be easier than you think

While looking for lost change is easy, only half  (50%) of those who believe they have lost a financial product have ever attempted to track it down, and just over a third (34%) of these are unaware of the ways in which to do so.

NS&I offers a free tracing service for their products, and additionally works alongside UK Finance and the Building Societies Association to provide MyLostAccount.org.uk – a free service dedicated to reuniting customers with lost funds held in banks, building societies and NS&I. While the process may take up to three months to perform a successful trace, the reward could be worth the wait. To date, NS&I’s tracing service and My Lost Account combined have reunited over £770 million with customers.

Just over one in ten (13%) of Britons have heard of My Lost Account, while only 3% of Britons have ever used the service.

Ian Ackerley, Chief Executive at NS&I, said:

“Misplacing things from time to time, including money, is common, yet searching for something you may not know exists could appear like a waste of time.

“Our research shows that 14% of us think they have lost a financial product at least once and yet only 3% have ever undertaken a trace using My Lost Account to try to find them. It can be daunting to know where to start, but if you suspect you have funds with a financial institution, you should start by contacting them directly or by using services like My Lost Account.  Both NS&I’s tracing service and My Lost Account do the hard work for you, leaving you with time to spend on things that matter to you.”

16 Oct 2018 Holidaymakers are losing up to 13% exchanging unused foreign currency after trips abroad due to the rates on offer from foreign exchange providers, financial data analytics experts Consumer Intelligence warn.

One of the biggest gaps between buying and selling rates is offered by the Post Office – customers buying £100.99 of US dollars at the Post Office receive $130 but would only receive £87.25 for selling the $130.

There are better rates on offer than the 13% loss on buying and then selling but Consumer Intelligence advises holidaymakers to consider buyback guarantees.

There is potentially huge demand – its research shows one in three holidaymakers intend to exchange left over foreign currency after overseas trips and 38% take more than £500 of cash abroad.

Providers offering buyback guarantees on unused currency include Asda, Travelex and Moneycorp who charge £3.99 for the service while Caxton charges £4.99 for the buyback on its prepaid cards. 

Eurochange uses a sliding scale offering to buy back 20% of the original amount for £2 after 20 days; 30% for £3 after 30 days; or 30% for £5 after 50 days. The Post Office does not offer a buy back guarantee. 

Andy Buller, from Consumer Intelligence said: “Buyback guarantees can be good value for customers planning to sell back currency particularly when compared with the buy and sell rates offered by travel money providers.

“Holidaymakers are often coming back with large amounts of unused cash and there is a real opportunity for currency providers to win more business by offering good rates on buyback schemes.

“There is certainly a lot of leftover foreign currency around in the UK and it’s all money that could be better used for something else.”

11 Oct 2018 Android owners are more likely to clumsily crack, crush and smash their devices than iPhone users are, according to new data which has been revealed by gadget insurance provider Protect Your Bubble.

More than three quarters of Android and non-IOS users who submitted a claim to the insurance provider cited ‘accidental damage’ as the reason behind their device’s plight.

By comparison, just 62% of iPhone owners who claimed on their insurance cited the same reason.

But while the analysis of mobile phone claims made to Protect Your Bubble in 2017 suggests iPhone owners are, on the whole, more careful, the insurer’s data reveals Apple fans were more likely to water-damage their phones.

Just 4.4% of Android owners claimed for water damage, while 11.1% of iPhone owners did so during the same period.

Intriguingly, female iPhone owners were the most likely group to drown their devices, with 12.6% citing ‘liquid damage’ as the reason for their claim. Meanwhile, just 8.9% of male iPhone owners claimed for water damage, while 5.2% of female Android owners did so as well as just 3.6% of male Android users.

Protect Your Bubble also found Millennials were clumsier than pensioners, with 80% of 21 to 35-year-olds claiming for ‘accidental damage’ and ‘loss’ combined. By contrast, only 73% of over-65s submitted claims to Protect Your Bubble for the same reasons.

However, the older generation was still more likely to drop their devices in water, with 10.7% of pensioners claiming for water damage, compared to just 7.8% of Millennials.

James Brown, director of gadget insurance provider Protect Your Bubble, comments: “Our research shows that we are unquestionably a nation of butter-fingered Brits. There are few feelings worse than scooping up a once pristine smartphone from the ground and flipping it over to reveal a smashed screen or worse. Sadly, our data proves ‘accidental damage’ is the overwhelming cause of gadget mortality, with 65.2% of our customers submitting claims for this reason in 2017.

“But what raises eyebrows further is that iPhone owners are clearly substantially worse at keeping their devices above water level. One of the many causes of liquid damage is dropping a phone in the loo. Not only is someone confronted with the unpleasant task of fishing around in toilet for their device, but their phone is often rendered useless after.