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2017 A Year To Reignite The UK’s Savings Habit

December 29th, 2016 | Andrew Hagger | News

As the UK starts on its resolution list, money matters are firmly on the agenda with the majority of people (78%) saying they plan to save in 2017 and a third of that group, (34%) saying they will save more than in 2016.  The research, from new challenger bank Masthaven, finds that many people will be saving with distinct goals in mind, with an estimated £4,000 each being put aside.
 
Of those with a clear goal in mind, holidays are the key reason to save (26%), followed by home improvements (11%) and housing deposits (10%).  Yet saving for financial security (45%) and for a rainy day (23%) are also key drivers for many.  Those looking for a new savings account next year say that good interest rates will be top of their shopping list (45%).
Jon Hall, Managing Director, Masthaven said: “For several years now the conventional wisdom has been that around a third of people in the UK don’t save.  This research shows a more positive outlook and one we are keen to ensure happens.  As a new challenger bank we are helping people meet their goals by creating new ways of saving.”
According to the Masthaven research among 2,009 UK adults, 78% say they plan to save next year, with 34% saying they will save more and 28% saying they will continue to save at the same levels.   A further 16% will continue to save but less than they have done this year.  Just under one in five (18%) say they don’t save and won’t start and 3% say they will stop saving.
 
The Masthaven Flexible Term Saver account challenges banking convention by allowing people to decide the date when their savings account matures. The combination of competitive rates and ease of use means savers can take advantage of a fixed term rate over a time frame that suits their lifestyle. 
 
Designed to help savers meet their short or long-term goals – whether that’s a holiday or wedding anniversary or a future event such as university fees or house deposit – customers can use a sliding scale to pick any date between six months and five years to create their personalised fixed term end date. They can also decide whether they prefer to receive interest annually or monthly.

MBNA launches UK’s longest ever 0% balance transfer card with £20 cash back offer

December 29th, 2016 | Andrew Hagger | News

MBNA is offering customers looking to consolidate their post-Christmas debts and card balances its longest ever balance transfer credit card.
In line with recent years, over half a million UK consumers are likely to make in excess of £1.3bn worth of balance transfers during January to help them get their finances fit for 2017, MBNA has launched the new “MBNA Balance Transfer Credit Card”, which includes:
  1. A market-leading zero per cent term of up to 43 months on balance transfers.
  2. A competitive 3.29 per cent balance transfer handling fee.
  3. A £20 cash back offer when customers balance transfer £1,000 or more in the first 60 days of opening an account.
“Many people’s new year’s resolutions are focused on consolidating their debts and card balances at this time of year, so we’ve looked to offer a compelling new option in time for January – and it’s our best ever balance transfer offer”, said Richard Whatmough, Marketing and Digital director at MBNA.
“Not only is 43 months at zero per cent our longest ever, but we’ve added a special £20 cash back offer and retained competitively low handling fees for customers looking to manage down the cost of borrowing in the new year and beyond.”
To transfer a balance of £1,000 to be eligible for the cash back offer, new customers
would pay a one-time fee of just under £33. They would then benefit from zero per cent interest for 43 months if the transfer is made at the beginning of the offer window. That is equivalent to paying no interest for more than three-and-a-half years, around 1,308 days, 31,390 hours or 1,883,400 minutes.
“When the value of this offer is put into these types of numbers, we think this is an incredibly attractive option for many people aiming to improve their financial fitness this January”, Whatmough added. “And anyone applying for the card can see if they’re eligible before they go on to make a full application.”
The new MBNA Balance Transfer Credit Card offer also enables new customers to transfer money into their current account and pay no interest for 20 months (a 4.00 per cent handling fee applies). These “money transfers” could then help new customers pay down other higher interest-bearing balances and loans they hold elsewhere, such as expensive store cards or overdrafts.

More people spreading the cost of train season tickets with interest free credit cards

December 28th, 2016 | Andrew Hagger | News

Sainsbury’s Bank has launched a new free online ‘train-inflation’ digital tool, which reveals that the average train ticket increased by 59% between 2005 and 2011, and by 16.9% between 2011 and 2016.  Its ‘train-inflation’ barometer allows people to see what their new standard train ticket will be next year, and estimate how their fares have increased over the past 10 years.

Regulated rail fares in England and Wales and regulated peak-time fares in Scotland will rise by 1.9% next year. The rise is determined by July’s Retail Prices Index (RPI) inflation measure and will take effect from 2 January 2017.

New research from Sainsbury’s Bank reveals that 32% of people who commute to work by train are planning to use interest free credit cards to buy their next annual travel cards to save money.  Indeed the bank, which offers a credit card with one of the longest interest free purchase periods available for 28 months, says that in 2015 it saw a 40% increase in the number of people using its credit card to buy train tickets compared to 12 months earlier.

Analysis of Sainsbury’s Bank’s credit card data reveals a huge increase in both transactions and expenditure on train travel over the past five years. From 2011 to 2015 there was a 98% rise in transactions and the total spend increased by 104%. The average transaction on train travel last year was 3% higher than in 2011.

Simon Ranson, from Sainsbury’s Bank said:  “Locking in 2016’s season ticket price might even be an option for some, those who haven’t purchased one before, or whose season ticket is up for renewal in the next few days. Using an interest free credit card will mean you can lock in the price and pay it up over time.”

1.5 million people have lived more than 45 years having never borrowed a penny

December 19th, 2016 | Andrew Hagger | News

More than 1.5 million people have lived more than 45 years having never borrowed a penny from a bank or lender.  However, this commendable existence could come back to bite as many of these credit virgins may struggle to secure a mortgage or even a mobile phone contract.

A credit score is a three digit number between 0 and 999 which is allocated to every adult in the UK and is used by banks to determine whether they should trust someone to pay back a mortgage, loan or credit card

However, there is a common misconception that opting not to use a credit card or loan makes you a more trust worthy borrower to a bank.  In fact, it does the opposite.

According to the research from Amigo loans, more than 13 million UK adults are oblivious to the fact that it is actually more difficult to secure credit, including a mortgage, if you’ve never used credit in the past.

The reason for this is that banks want trustworthy borrowers with a proven history of paying back debts – credit virgins simply don’t have the credentials.

The ignorance surrounding credit scores is apparent on a wide scale with only 12% of people in the UK having ever checked their own personal credit score.

With increasing financial pressure, families are buckling under the costs of everyday life. Missing bills may seem menial, but these can dramatically affect your credit score.  Nearly a quarter (22%) of those in the 45-54 age bracket have missed a payment, such as mobile phone payment or gas bill, which has affected their credit score and one in 20 have held a joint account with someone with

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: “It’s so often that we hear customers ask why their bank wouldn’t lend to them when they’re so good with money – they’ve never had a credit card in their life, they’d say.  However, as ironic as it sounds, if you’ve never used credit, it’s often hard to access it.

“Many banks and lenders use credit scores as an indication of how likely you’d be to repay a debt, whether that be a £5,000 loan or a £5 overdraft.  But, if like millions of credit virgins, you’ve never demonstrated that you can be trusted, they shut the door. This is unfair and leaves lots of deserving, trustworthy people without access to finance such as a mortgage.” 

 

Half a million people are expected to lose their bank card over the festive period

December 19th, 2016 | Andrew Hagger | News

Metro Bank, the UK’s newest high street bank, today reveals that half a million people are expected to lose, misplace or have their debit or credit cards stolen over the festive period. In addition to the stress of not being able to access cash, consumers could have to wait up to ten days for a replacement card from other high street banks.

Almost a quarter of Brits have lost, misplaced or had a bank card stolen within the last five years, losing an average of two cards per year. Of those that have lost their card, one million (9%) did so between Christmas and New Year. Over 800,000 were at a Christmas party and more than 600,000 did so when out Christmas shopping. As the festive party season heats up, Metro Bank’s research revealed 18 – 34 years olds are the worst culprits, losing an average of three cards a year.

Just over half of those who lost their card (52%) got it back, however almost a third (31%) were unable to use it as they had already cancelled it, often causing huge frustration. What’s more, a massive five million people (11%) have had a banking issue over Christmas, most commonly not being able to access cash or deposit their Christmas money into their account as their branch was shut.

Paul Riseborough at Metro Bank commented: “We know how easy it can be to misplace your card or even worse have it stolen. Not being able to access your cash when you need it most is undoubtedly frustrating, and what’s worse is having to wait up to ten days or more over the festive period for a replacement card. Today’s research highlights a disconnect between the needs of customers and the priorities of many banks.

“Unlike any other high street bank, Metro Bank is able to print cards instantly in-store and through our mobile app customers can block and unblock their card in one swipe, giving them the flexibility to safely retrieve misplaced cards, rather than being forced to cancel cards that they may later find.”

 

 

7 million homes vulnerable to theft this Xmas

December 19th, 2016 | Andrew Hagger | News

Nearly 7 million  homes could be at risk of burglary this Christmas, as one in four people plan to spend the festivities outside of the home, according to new research from Policy Expert.

Of the 5,619 people surveyed, 21% will be celebrating Christmas at a friend or family members’ home, with a further 4% stating they will be at a restaurant, or holidaying abroad or elsewhere in the UK, meaning millions of homes will be left empty and unattended on Christmas Day.

Furthermore, over half of people put presents under Christmas Trees before Christmas Eve, potentially leaving hundreds of pounds worth of items on display for over a week. 31% put their presents out in the third week of December, 12% in the second week and 6% in the first week. 31 people even admitted they get into the festive spirit as early as November and put presents out then.

Despite this, Policy Expert research has also revealed that many homes do not have adequate security measures in place to protect their homes while they’re empty. Only two in five (40%) of those surveyed have timed lights and just a third (35%) have a burglar alarm fitted, while 5% admitted they had no security in place at all.

Adam Powell, Head of Operations, Policy Expert commented: “Christmas can be a tempting time for opportunistic burglars, who know Brits’ generosity means homes will be filled with even more valuables than usual, so it’s unsurprising we see thefts rise over this time. Longer winter 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 any visible deterrents, such as lights on timers, CCTV and burglar alarms should go some way in preventing a break in. It’s likely the value of contents in your home will increase over the festive period, so it’s important to remember to check any valuables or big ticket items are covered in your home insurance policy. Policy Expert offers an additional 10% contents cover during December as standard, preventing a nightmare before or after Christmas.”

 

Tips on protecting your home:

  • 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

 

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Cost of Living Squeeze Hitting Pension Saving

December 14th, 2016 | Andrew Hagger | News

The cost of living is the most common single factor preventing people who live in cities in the UK from saving more into their pensions – and it is savers in Brighton, Bristol and Cardiff who are feeling the pinch the most, according to new research by Prudential.

The findings – which are taken from Prudential’s exclusive research comparing attitudes to finance and the preparations workers are making for retirement in the UK’s biggest cities – show that nearly half of pension savers blame the cost of living for not being able to save more. However, in some places around the country the picture is much worse, for example, the figure for those living in Bristol is 66 per cent, in Brighton it’s 62 per cent and 60 per cent in Cardiff.

The research identified Sheffield as the city where savers contribute the highest proportion of their monthly income to their retirement savings. Savers in the South Yorkshire city pay on average 11 pence out of every pound they earn into a pension, totalling £211 per month.  Meanwhile, up the M1 in Leeds, savers contribute the smallest proportion of their income to pensions – under five pence per pound earned.

Across the UK’s largest cities the average monthly pension contribution is £150, representing 6.5 per cent of the average monthly wage of just over £2,300.

Stan Russell, a retirement income expert at Prudential, said: “Saving for retirement can seem like a luxury when the cost of living is putting household income under pressure. However, it is important to remember that pension saving is for the long term and even the smallest amounts saved have the opportunity to grow significantly over your working life.

“With a large proportion of people in some cities admitting that they could afford to save more towards their retirement, many could benefit from a consultation with a professional financial adviser to help them set a savings budget and a retirement income goal.

Only one in four mortgage borrowers understand how the base rate affects their monthly payments

December 13th, 2016 | Andrew Hagger | News

Just one in four mortgage-paying homeowners understand how cuts to the Bank of England’s (BoE) base rate could affect their mortgage payments, according to new research from Trussle, the UK’s first online mortgage broker.

In August 2016, the BoE made the first adjustment to the rate in over seven years, cutting it from 0.5% to 0.25%, and mortgage rates soon fell as a result. Tracker rates dropped by 0.25% in line with the BoE’s action, while fixed rates also hit record lows, with two-year fixed rates available for as little as 1.39%.

However lender SVRs, the ‘default’ rates that borrowers often find themselves on as soon as an initial rate has ended, did not drop nearly as far. The average SVR before August’s base rate change was 4.8%, but by November had fallen only 0.17% to 4.63%.

 

Borrowers could save £3,500 a year by remortgaging

As a result of the widening gap between the best and worst rates on the market, people stuck on expensive Standard Variable Rates (SVRs) could now save a further £380 per year by switching to a market leading fixed rate. What had been an average annual saving of £3,120 has grown to £3,500, as a result of August’s base rate cut.

Just over one in 20 have considered switching mortgage

In the study, borrowers were also asked if they were happy with their mortgage. Only a third (36%) of borrowers said they were content with what they were paying in the current environment of rock-bottom mortgage rates. This could be explained by the one in three borrowers currently on an SVR. Despite the high proportion of people unhappy with their mortgage, just over one in 20 borrowers have considered switching to a better rate since the Bank of England cut the base rate to 0.25% in August. When asked what had ever stopped them from switching, 20% said the process would be too much hassle, while 14% said that it all seemed too complicated.

Don’t put your Christmas shopping at risk from car thieves

December 13th, 2016 | Andrew Hagger | News

M&S Bank is encouraging motorists to check their car insurance before heading out shopping this festive period, ensuring the Christmas gifts they’ve purchased aren’t at risk from opportunistic thieves.

Research from M&S Bank has shown that the average Christmas shopper is expecting to spend just over £600 this year (£364 on presents and £241 on food and drink), which could be put at risk if left in an underinsured car.

Paul Stokes, Head of Products at M&S Bank explained: “The Christmas shopping period is now well under way and the festive excitement is building for many.

“However, the contents of the vehicle can prove a target for opportunistic thieves, particularly at this time of year. That’s why it’s crucial that shoppers make sure they’ve got adequate car insurance in place to cover their Christmas shopping, should the worst happen.”

On average, festive shoppers will make at least three trips to the shops to stock up for Christmas this year. The main shopping trip for presents alone is expected to increase the vehicle’s contents by £216, with the main outing for food and drink likely to boost its value by an average of £189.

However, nearly two in five (38 per cent) will put their Christmas shopping at risk over the next few weeks by leaving it in the car. This includes taking presents back to the car in between shops to reduce the amount they have to carry (26 per cent), taking presents back to the car before heading out to dinner, to the cinema or to Christmas markets (7 per cent), or keeping presents hidden in the car when they get home (5 per cent).

 

Top tips for keeping your shopping safe this Christmas:

  • Keep shopping bags covered and locked in the car boot – they could be tempting for opportunistic thieves if left visible
  • Don’t leave expensive electrical items in view – make sure smartphones, tablets or satnavs are safely locked away or removed from the vehicle
  • Don’t make it easy for thieves – be sure to fully close all windows and roof panels and always lock the vehicle, even if you’re just getting a ticket for the car park
  • Don’t leave receipts in shopping bags – that way, you’ve got them to hand should the worst happen
  • Check your car insurance policy – make sure you know what your policy covers

71% of pay TV customers watch fewer than half their channels, yet spend over £500 a year

December 7th, 2016 | Andrew Hagger | News

Almost half of premium digital pay TV customers in the UK are watching less than a fifth of the channels included in their TV packages, according to new research by uSwitch.com.

And yet, the average yearly spend for premium pay TV is £508, or £42.30 per month, with almost a third (32%) spending more than £50 a month. A quarter of Sky customers and 28% of Virgin Media customers pay more than £60 a month per household for their packages.

TV customers signed up to Sky, Virgin and BT say that, on average, they only watch a third of the channels included in their packages. Almost four in 10 watch less than 10% of the channels on offer, while 71% are watching less than half of the channels they pay for, suggesting many people may be signed up to the wrong service for their telly watching habits.

TV series and box sets have proved most popular on pay TV, with 54% of customers naming these as their favourite genre to watch, closely followed by films (51%). Less than a third of viewers say that they watch sports most, falling to 26% among 18-34 year olds and rising to 36% amongst viewers aged 55 and over.

Ewan Taylor-Gibson, TV and broadband expert at uSwitch.com, says: “It’s irksome to have to flick through dozens of channels you never watch. If you’ve found yourself sitting on the sofa questioning whether you’ve made the wrong decision to sign up to a bells and whistles pay TV package, you know it’s time to look at other options.

“Providers have recognised our appetite for greater flexibility when it comes to both content and payments and are responding accordingly. Sky Q, Virgin’s V6 and Netflix allow you to  download some content and watch it on the move, while Sky is now advancing on streaming services with its Now TV Combo available on monthly rolling contracts.