20 Feb 2018 New research from Charter Savings Bank shows Cash ISA savers are missing out on transferring their accounts to gain more competitive rates and increased flexibility because they value convenience over better returns and fear the transfer will be too complicated.

The research indicates that half of Cash ISA savers aged 55-plus have never moved their accounts to another provider, with more than two out of five (43%) saying they don’t transfer their savings because they want all their money in one place.

However, nearly one in 10 say they have never transferred because they think the switch will be too complicated, while 42% believe they will not be able to secure a more competitive deal.

HMRC data shows around 10.3 million over-55s have money in Cash ISAs, with around 3.9 million opening new accounts each year. Under current ISA rules, most providers only allow savers to deposit their annual allowance into one type of Cash ISA account per year, limiting options for savers.

Charter Savings Bank is offering more choice with its Mix & Match ISA platform, enabling savers to spread their annual allowance within multiple Cash ISAs.

Most providers only offer a Fixed Cash ISA or Easy Access Cash ISA as an option to their customers and lock them in, whereas the Mix & Match ISA gives the customer flexibility.

With the Mix & Match ISA, customers don’t have to put all of their annual allowance into one single Cash ISA. They could for example open an Easy Access Cash ISA with £5,000 and then the following month deposit £10,000 in a 1 Year Fixed Rate Cash ISA product. If they have more money available they could open a third Cash ISA product using the remaining £5,000 of their annual allowance.

Charter Savings Bank has also adopted the industry’s ELSA system to ensure most savers switching will benefit from a quick and simple transfer.

Its research shows the main motivation for transferring Cash ISA accounts from their existing provider is a rate reduction: 51% of over-55s who have moved said they switched because of a reduction.

Just 35% of over-55s say they always assess the Cash ISA offers each year and move if they find a better rate, while one in three (33%) say they move when the fixed rate term on their Cash ISA expires.

Charter Savings Bank’s research found the age group most likely to transfer Cash ISAs are those aged between 25 and 44 – around 62% of them have switched their Cash ISAs.

Paul Whitlock, Director of Savings, Charter Savings Bank says: “Transferring Cash ISA accounts is a straightforward process, now that the industry has signed up to new standards and is utilising new technology and systems.

“People regularly shop around for more competitive deals on a wide range of goods and services, and that should also be the case in the Cash ISA market. Those who don’t move are risking missing out on more competitive rates, greater flexibility and access to their savings when needed.

“The Charter Savings Bank Mix & Match ISA provides flexibility for savers and enables them to split their allowance across multiple accounts, all with competitive rates.”

16 Feb 2018 Nearly one in four primary school children have used their parents’ card to make purchases and one in five know their parents’ credit or debit card PINs, research from Prudential shows.

The study coincides with the introduction of a new free online educational resource, Cha-Ching (www.cha-chingeducation.co.uk), which is designed to improve the financial capability of Key Stage 2 pupils across the UK.

Prudential’s research found that nearly 16 per cent of  parents let children pay for items with their contactless card.

Emergency cash

Kids who are allowed to use their parents cards are mainly given permission so that they have access to money in an emergency. Parents also argue that it helps them to keep track of what their children are spending. The vast majority (92 per cent) say they set a limit on how much their children can spend. 

Jane Rawnsley, Group Head of Corporate Responsibility at Prudential Plc, said: “The survey suggests that the way children use and understand money is changing very fast. It’s important that parents and teachers are given the tools to ensure that the opportunities created by digital payment technology are accompanied by an understanding of the responsibilities that come with it. That is why we are launching Cha-Ching in the UK, a digital-first financial education programme built around mobile, tablet and online resources which can also be integrated into the real environment of a classroom and home.”

Cashless worries

Prudential’s research went on to show even if spending on contactless cards is soaring teachers and parents are worried that relying on contactless cards means children are not learning the value of money. Around 78 per cent of teachers and 37 per cent of parents say the rise of the cashless society is damaging to children’s understanding of money.

However, the majority of children themselves (87 per cent), still prefer their pocket money in cash.

14 Feb 2018 One in seven young Britons (14 per cent) say they would buy a home with a stranger in a bid to get on the property ladder, according to nationwide research.

A new study of 2,000 Brits (aged 18 – 40) by HSBC has revealed the true extent to which buying a property now feels increasingly out of reach for the younger generation, with 83 per cent claiming they may never be able to afford to buy their own property.

According to the report, 80 per cent would co-own a property with someone who is not their partner, with a further 59 per cent saying they’re at least “open to the idea” of buying with a stranger – if they ticked all the right boxes.

4 per cent said they would be prepared to move in with “someone they met in the pub”, while just under one in twenty would even consider buying with an ex.

13 Feb 2018 Retired homeowners have gained more than £7,900 each in property wealth in the past year despite uncertainty in the housing market, analysis* from leading over-55s financial specialist Key Retirement shows.

Total property wealth owned by over-65s who have paid off their mortgages is near a record high of more than £1.101 trillion after growing £37 billion in the past year, Key’s Pensioner Property Equity Index reveals.

Owning a home outright has been worth nearly £660 a month on average for retired homeowners. Over-65s in the South East and East Anglia have been the biggest winners with gains of more than £1,000 a month while retired homeowners in the West Midlands have made £960 a month.

The long-term value of home ownership is underlined by Key’s index – since the group started analysing over-65s housing wealth in 2010 retired homeowners have seen growth of 41% or £321 billion which is worth around £68,500 on average for every over-65 homeowner.

The strength of the housing market means property wealth is making a major contribution to retirement standards of living as the equity release market expands with customers** releasing an average £77,380 of property wealth and nearly £134,000 in London and £91,000 in the South East.

Dean Mirfin, Chief Product Officer at Key Retirement said: “The long-term strength of the housing market is delivering for retired homeowners who have made around £7,900 in the past year.

“Total property wealth of more than £1 trillion means pensioners who have paid off mortgages can rely on using their homes to generate tax-free returns no matter what happens in the short and medium term.

“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”

08 Feb 2018  Although the Bank of England kept the base rate at 0.50% at it’s monthly meeting today, it intimated that rates may rise again soon and more quickly than previously predicted.

Some analysts are suggesting that the base rate will increase from today’s level of 0.50% to as much as 1.75% by 2020.

Personal finance expert Andrew Hagger of Moneycomms said: “There are still some excellent credit card and personal loan deals available, but with the next rate rise getting ever closer they won’t be around much longer, so grab them while you can.”

Hagger points out some of the top products currently on offer as follows:

  • 0% purchases credit card for 31 months from Sainsbury’s Bank
  • 4.9% APR Credit Card with rate fixed for up to 5 years from MBNA 5
  • Credit card offering up to 30 months 0% on both purchases and balance transfers from Nuba
  • Personal loan from M&S Bank at 2.8% APR representative for £7,500 to £15,000

He added: “You will need a good credit record to be accepted for these products as they are amongst the best in market and will be in great demand.”

“Borrowers have had it good over the last decade, but it looks as if the tide is about to turn and the cost of borrowing whether by mortgage, personal loan or credit card is likely to become more costly in the not too distant future.”

08 Feb 2018 More than three quarters of parents with children aged 18-40 said they still felt responsible for their child’s financial security some or all of the time, according to new research from Legal & General.

The insurer surveyed over 1000 parents with children aged between 18-40, with the findings showing that the majority of parents (90%) felt responsible some or all of the time for their adult child’s overall well being.

The new figures come as part of Legal & General’s ‘Forever a Parent’ campaign, which aims to highlight the importance of parents taking steps to safeguard their children financially, including by having appropriate protection policies in place. Despite this, less than half of those who said they felt financially responsible some or all of the time had taken out a life insurance policy.

The survey also found that parents were putting their money where their mouth is, by continuing to support their adult children financially. Two-thirds had provided financial assistance within the past year, with nearly a quarter (24%) gifting more than £1000. Worryingly,33% of p arents had helped with general living costs in the last year and one in ten  had helped   with mortgage or rental payments in the last five years.

However, despite the considerable support provided on housing by the Bank of Mum and Dad, which last year Legal & General research found would lend £6.5bn, less than one in ten (9%) parents had helped their children with a house deposit since their child became an adult.

Of the 87% of respondents who had provided their child with some form of financial assistance, the top 5 reasons were:

  • General Living costs (43%)
  • To pay a bill (23%)
  • Grocery shopping (23%)
  • University education fees (20%)
  • To pay for commuting or travel costs (16%)

 

Since their children had turned 18, parents had been asked to provide support on:

  • Financial advice (46%)
  • Career plans (40%)
  • Cooking (37%)
  • Car trouble (29%)

Finally, highlighting the valuable support parents continue to provide their adult children, a fifth (20%) of parents had been turned to by their children for financial advice within the last month.

John Hyde, Managing Director, Legal & General, Direct Insurance, comments:

“No matter their age, as parents we always feel a sense of responsibility for the wellbeing of our children. Whether it’s making sure they’re financially secure or helping them with life’s big moments, such as buying their first home, our research shows that parents continue to support their children, aged 18 or 40. Perhaps more worryingly, parents are still relied upon for more pressing financial matters, such as paying credit card bills and grocery shopping.

“However, no matter what support we provide, being a parent doesn’t stop after we’re gone and the question we all need to ask is whether that security will continue should the worst happen.

“With our Forever a Parent campaign, we want to encourage more parents to think about how they can safeguard their children, whether it’s making sure there’s an emergency fund if a tragedy strikes or by taking out a life insurance policy to help their families when they’re no longer around. After all, family is the most important factor in our lives and making sure they’re looked after and are financially secure is the top priority for any parent.”

06 Feb 2018 As forecasters warn that Britain is set to have the coldest week of the year as temperatures continue to plummet. Leading breakdown provider Green Flag predicts more than 114,000 breakdowns will occur on Britain’s roads this week, as the difficult weather conditions take hold.

An abundance of ice and snow showers are set to hit the UK over the coming days – and with weather conditions causing havoc on British roads, 11 breakdowns a minute are predicted to take place across the country.

In response to the adverse weather conditions, Green Flag has issued a set of tips on how to drive in snowy and icy conditions, to encourage drivers to stay safe on the roads.

A spokesman for Green Flag, said: “The plunging temperatures and icy conditions may take some drivers by surprise this week, so it’s important that drivers do all they can to stay safe in the more challenging conditions.

“By thoroughly checking their cars before they leave home, and approaching the roads with caution, drivers will decrease the risk of encountering a problem on the roads this week.”

Winter Driving Tips

  1. Check your speed and use gentle driver inputs – even if the roads have been gritted they’re likely to be slippery.
  2. Give more warning than usual to other drivers – when turning, stopping or changing lane.
  3. Keep plenty of distance between cars – you never know when you’ll hit an icy patch. If you pass the same landmarks as the car in front of you within three seconds, you’re following too closely.
  4. Check whether your car has ABS anti-lock brakes. In the unlikely event that it doesn’t, pump the brake pedal slowly to prevent the wheels locking up and skidding.
  5. Be extra-wary of black ice. It’s an invisible danger that can catch out even the most careful driver.
  6. Approach corners at a steady speed, in as low a gear as possible. Don’t touch the clutch unless it’s absolutely necessary, steer smoothly and avoid braking on bends.
  7. Ensure you’re familiar with your car’s ventilation system to prevent windows from steaming up. Air conditioning will keep windows free from mist and condensation.

02 Feb 2018 Analysis of over 11,000 UK personal current accounts (PCA) has revealed that the average holder was charged £152 in bank fees last year which, if incurred by every one of the 65 million active current accounts in the UK, suggests banks made £9.9 billion from charges in 2017.

The data, collated by Plum, the automated money management chatbot, coincides with launch of its Fee Fighters function, a free tool that enables users to check in exactly what fees they are being charged by their banks. This functionality is made possible due to the implementation of Open Banking, which aims to encourage fair competition and comparison. The European-wide regulation orders banks and credit card companies to share a customer’s data with other regulated companies if requested to do so by a customer, removing the banks monopoly on customer data.

The average £152 paid per year by current account holders includes overdrafts, foreign exchange, and transactions fees, as well other unspecified fees, such as monthly account charges. This £152 average rises significantly when considering personal current accounts with an overdraft function. In this case, total bank charges were closer to £221 per current account holder with those that have at least 1 overdraft transaction per year.

In terms of what charges were applied by the banks, 56% were due to overdrafts, both from planned and unplanned usage. Foreign exchange fees accounted for 11% of the total charges, while late transaction fees made up 6%. Over a quarter, however, (27%) of the total charges were classed as “other” which included monthly account fee, unspecified bank fees, or bank subscriptions. Some of these charges can be fairly high, with an average of £5-£10 charged per bounced back transaction it is not uncommon for users to accumulate these charges without realising it, getting charges up to £75 in “Unpaid Transaction Fee”.

To help consumers be alerted to and understand the culprits of the charges, Plum has developed a free Fee Fighter tool, first of its kind that alerts users to fees. With the implementation of Open Banking, in the coming months Plum hopes to go beyond raising awareness about hidden fees and provide solutions, helping users to identify smarter deals and more cost effective products with alternative providers bespoke to their financial requirements.

31 Jan 2018 Coconut has today launched a new smart current account combining banking and accounting services, designed specifically for the UK’s ever-growing freelance and self-employed workforce.

The app-based business current account will prepare customers for HMRC’s ‘Making Tax Digital’ which starts rolling out from April 2019. Coconut features automated tax management and expense tools, giving customers visibility into how much tax they owe with a real-time estimate, while also categorising their expenses for tax and allowing them to stay on top of client payments with instant notifications.

The Coconut Start account which ultimately aims to eliminate tax returns, is free and can be opened in minutes on a mobile – instead of waiting for weeks which is the current norm. The app will offer optional extra services, such as VAT management.

Recent data from Coconut’s Self-Employment Survey highlights how money becomes complicated business when you work for yourself. Unexpected tax bills, unpaid invoices and financial admin are holding people back from finding financial security, with a quarter of respondents admitting that budgeting for taxes is one of the top five headaches when working for yourself. Keeping track of expenses (24%) and completing tax returns (22%) were also high on the list of challenges that self-employed people face, with almost a quarter storing their receipts in a box waiting to be sorted at the end of the year.

Sam O’Connor, Co-Founder and CEO of Coconut said:

The growth of self-employment in the UK is one of the biggest structural changes in our workforce of our time, but self-employed people are still one of the most underserved groups of businesses when it comes to banking products and services that meet their specific needs.

“Staying on top of tax and expenses, getting paid on-time or managing an unpredictable flow of income is a big worry and time-suck for customers. And this is only going to become a bigger burden with Making Tax Digital requiring digital tax submissions quarterly instead of annually. We created Coconut to sort out these challenges for freelancers and we ultimately aim to eliminate the need for tax returns, removing a huge amount of stress for business owners.”

27 Jan 2018 Co-op Insurance has today entered the Travel Insurance market, seeking to disrupt the sector by offering a new product shaped by its members.

The new travel insurance product offers cashless medical expenses, for all ages and medical conditions, meaning customers will not have to pay out themselves for any medical treatment – a first for the general insurance market.

Highlighting a need for this change, Co-op’s new study reveals two thirds (62%) of holidaymakers who have claimed on their travel insurance, said they had to cover the costs upfront themselves and then claim these costs back at a later date from their insurer.

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.

A further quarter (25%) had to take money out of their savings and a tenth (10%) ended up in debt as a result of having to pay the claim themselves and then claim this back from their insurer.

Furthermore, the new travel insurance product will offer Co-op customers access to an online medical consultation with a General Medical Council (GMC) registered doctor, 24 hours a day, seven days a week, from anywhere in the world.

Customers can use their smart phones or tablets to speak to doctors both prior to jetting off and during their holidays. Users can also receive prescriptions, referrals and fit-for-work notes, avoiding the need to navigate unfamiliar health systems and overcome language barriers.

Mark Summerfield, CEO, Co-op Insurance said: “This is an exciting time for the Co-op as we introduce Travel Insurance to our portfolio of products. Having recognised a gap in the market, we’ve worked with our members across the Co-op, to build a product which is fair, inclusive of all ages and medical conditions.

Andrew Hagger, Personal Finance Expert from Moneycomms said:“It’s great news for consumers that a respected brand such as Co-op will be competing in the travel insurance sector with such an attractive proposition”

When you’re choosing insurance of any kind, the price of cover in isolation shouldn’t be your reason for purchase, yes value is important, but so is the suitability of the cover you’re buying”
 
Co-op has come up with something a little different and whilst it is competitively priced and offers a comprehensive and generous range of individual benefits, the unique promise that customers won’t have to pay for medical treatment up front is a game changer”

“Furthermore, we’re the first general insurer to pay medical expenses up front, ensuring that our customers are not left out of pocket at what can already be a stressful time.”

For more information on Co-op Travel insurance visit www.co-opinsurance.co.uk

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.