June 7th, 2016 | Andrew Hagger | News

New research released by Zopa shows Brits are renovating their properties to create their dream home for the long-term, with over two thirds (67 per cent) of people undertaking renovations saying they plan to stay in their property for five years or more.

Far from viewing their homes as just a financial investment, Brits are opting to create their dream home by investing in improvements to live in for longer, making the UK a nation of improvers not movers. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that only a quarter (27 per cent) either have had or plan to get their home revalued after renovations, and less than one in ten (9 per cent) said they would need to move to be in their ideal home.

So far in 2016, Zopa customers have borrowed over £50 million to improve their homes, a 54% increase on home improvement loans compared to the same period last year. The figures show that more and more people are choosing to use a Zopa loan to improve their most important asset: their home.

With personal loan rates at record low rates, an unsecured loan, currently offers one of the best value options for those looking to undertake a home improvement. Home improvers can spread their loan costs evenly over a number of years, and for the vast majority it can be much quicker than re-mortgaging which typically can take up to two months and can be a far cheaper option than using a credit card with typical purchase interest rates well above 20% APR when compared to a typical personal loan from Zopa that averages 8% APR and with an online process that takes under 2 days, Zopa’s current loan rates start from 3.3% APR.

In line with latest ONS data suggesting more people are choosing to entertain at home, space to host family and friends is high up on the list for people’s ideal home. A third (34 per cent) used their home improvement loan to revamp their kitchens and, of those who said their homes are not yet perfect, a fifth (19 per cent) cited a bigger kitchen as top of their wish list. This reflects recent data from HMRC that suggests home transactions for April 2016 are down 14% compared to same month last years, highlighting that people are opting not to move and sell up.

Far from heading to the estate agents after renovations, two out of five people say they are now in their perfect home. Of those who still don’t think their property is perfect, only one in five (22 per cent) said they would need to move. The most commonly cited areas for improvement were better décor (31 per cent), bigger kitchens (19 per cent) and more bedrooms (19 per cent).

June 7th, 2016 | Andrew Hagger | News

Nearly four million energy consumers were overcharged a total of £270 million or £72 each due to billing mistakes by suppliers in the last year, according to new research from uSwitch.

Over a third (36%) of those whose supplier had made a mistake said the wrong tariff or product details had been applied. Other blunders include providers applying incorrect fees (31%), using the wrong meter reading (27%) and setting inaccurate Direct Debit amounts (24%).

Breakdown of bill error types

Source: uSwitch.com survey, May 2016

Not only are billing blunders hitting consumers’ pockets, but also their time. Nearly a fifth (19%) waited between one and two months before the issue was resolved, with more than one in ten (12%) waiting over two months. Worse still, nearly one in ten (9%) consumers who were overcharged as a result of a mistake are yet to receive any money back from their supplier^[3].

A spokesman for uSwitch said: “Consumers have a right to expect correct bills. It’s unacceptable in this day and age that customers are picking up the cost of suppliers’ mistakes. Households are already trying to cope with the high cost of energy and can’t afford the additional cost of simple blunders.

“Accurate bills are essential if consumers stand any hope of taking control of their energy use and spend. Recent upgrades by some suppliers to billing systems have resulted in teething problems, but today’s figures show there’s still more for the industry to do.

“We urge customers to always check their bills carefully, and speak immediately to their supplier if they think they have been short-changed. Consumers should also always provide up to date meter readings to avoid estimated bills, and check that the figure they provided has been used.”

June 2nd, 2016 | Andrew Hagger | News

Almost two thirds (62%) of the over 50s say they would be unlikely to take advantage of the suggestion from a recent government proposal to allow people to use their pension savings to pay for advice, according to new research from Retirement Advantage¹.

The research also finds that people who are not planning to use a financial adviser are put off by the cost of advice (38%) and the extent to which they can trust advisers (38%).

This new insight comes as the industry is beginning to question whether the £500 proposed allowance is actually going to be sufficient to pay for a comprehensive look at people’s pensions.

Andrew Tully, pensions technical director at Retirement Advantage, said: ‘While it sounds like a good idea to let people use their pension savings to pay for advice, it appears not only are people unlikely to take up the offer, but £500 won’t actually go that far.

‘Cost is clearly still a big issue when you ask people what the barriers are to seeking advice, alongside trust. On a positive note it is good to see government supporting advice and recognising the real value in people getting help and advice at retirement. The trick will now be to create a market which can service a wider range of consumers cost-effectively and also evidence the value of the advice being provided.’

The research also shows that the most common sources for financial advice among the over 50s are the internet (43%), financial advisers (43%) and the Government’s Pension Wise service (38%).

Andrew Tully added: ‘The internet is clearly a force to be reckoned with as consumers self-direct or simply use it to check facts and figures. What we’ve found from speaking to consumers is that many are using a combination of web research and professional advice. Far from posing a challenge, we could be on the brink of creating a real opportunity for advisers who are digital-savvy.’ 

1.    Research was conducted by YouGov Plc. Quantitative fieldwork conducted between 24 and 30 March 2016, surveying 1000 UK adults aged 50+ who have a DC pension and who are not in retirement.

June 2nd, 2016 | Andrew Hagger | News

Brits’ budgets continue to feel the squeeze, with regular household bills having increased by 20 per cent since 2007, according to the Bacs Bill Tracker.

The Tracker, created by Bacs Payment Schemes Limited (Bacs), the people behind Direct Debit in the UK, shows that by the end of Q1 2016 the average amount paid out by households in the UK to cover essential bills had grown to £674. This is up from £562 in March 2007 and represents an increase of 20 per cent, or £112 per month, equating to a hefty annual rise of £1,340.

Unfortunately for bill payers, average wage levels have failed to keep pace with these increases. In fact, over the period between 2007 and 2015, data from the Office for National Statistics (ONS)* shows that average wages grew by 12.4 per cent in comparison.

The Bacs Bill Tracker data is drawn from 100 million actual anonymised monthly transactions processed by Bacs as householders use Direct Debits to pay for their essential household bills, including energy, water, mortgages and rent, council tax, broadband and phone, TV licensing, and household insurances. It does not include elective personal bills such as gym memberships or mobile phone payments.

Mike Hutchinson, from Bacs, said: “These latest figures reflect the financial burden being faced as the cost of household bills increases steadily, while wages fail to keep pace.

“With 73 per cent of regular household bills paid by Direct Debit, this data gives a clear indication of the upward financial pressures across a basket of core bills. Splitting costs across the year could relieve some of the strain on hard-pressed family budgets and, with the discounts offered from many billers and service providers for paying by Direct Debit, there’s an opportunity to save some vital pounds.”

June 2nd, 2016 | Andrew Hagger | News

Half of the UK’s drivers believe that motor insurance is too confusing, with the overwhelming majority (86%)* believing that it needs to be easier to understand.

Research from the Co-op Insurance has found that over half (51%) don’t understand how their premium is calculated, two fifths are unclear why their premium price may fluctuate year to year and over a third (36%) don’t understand their policy price, in relation to their vehicle.

Research has also revealed that many people aren’t aware of some of the fundamental things that their premium is for. For example, 42% of drivers don’t realise it is in case another driver claims for personal injury, as a result of an accident that is their fault.

For two fifths of drivers, motor insurance is a grudge purchase, with over a tenth (15%) of drivers saying that they would not buy motor insurance if it wasn’t a legal requirement.
In response to this, the Co-op Insurance is today (2 June) launching the first, in a series of three, animated videos which has been designed to explain how insurance pricing works, to improve transparency for its customers.

The Co-op insurance is committed to improving transparency for its customers and members and this is the second part of a series of activity it has undertaken to do this, and make insurance easier to understand. Earlier this year it launched an online tool which was sent to over 10,000 home insurance customers, which was positively received, and fully explained how home insurance premiums are calculated.

The video aims to answer why premium prices cost what they do, in relation to the value of a vehicle. It explains what percentage of a motor insurance premium goes towards costs if a driver injured others, with a quarter going towards this. It also explains how about a fifth of the policy premium price goes towards repairing damage to other people’s property. A fifth also goes towards a policyholders own car for things such as, theft of the vehicle or repairs to fix damage to a policyholder’s own car in case of damage. It also outlines business costs and Insurance Premium Tax.

May 26th, 2016 | Andrew Hagger | News

 iCarhireinsurance.com, the leading provider of standalone excess insurance, this week launched its ‘Car Hire Hit List’, featuring ten top tips to save drivers up to £760* on a week’s hire.

The hit list is based on the hire of a compact family car for a week.  

1. Book early – iCarhireinsurance.com research found that in 2015 holidaymakers saved on average £100 if they booked their summer hire car in February instead of waiting until June. Last minute deals do exist but to guarantee a good price, and the car you want, book as soon as you can – Saving approx £100. 
2. Use price comparison sites – The price charged by car hire companies varies significantly so always shop around to make sure you get the best deal. E.g., Hiring a car for a week in 2015 (6-13 Aug) in Crete cost £291 with Europcar and £468 with Sixt. However hiring in Barcelona for the same week Sixt charged £245, and Hertz charged £369. Use a price comparison site to shop around as the price between companies can vary by hundreds of pounds – Saving approx £150 
3. Get the right sized hire car for you – Being unable to fit in that pushchair or extra bag could cost you over £100 to upgrade to a bigger car.  E.g., booking a compact car to pick up from Alicante Airport for a week in Aug (6 – 13 Aug) costs £233 if booked in advance, but if you need a Ford C-Max, which can carry three large suitcases and two small cases, on arrival, you would pay £456 at the location, compared with £314 if you’d booked it online in the first place – Saving approx £140. 
4. Shop around for car hire excess insurance – If a hire car is stolen or damaged even if it isn’t the hirer’s fault means they are liable for the excess which can be as much as £2,000.  Hire car companies charge on average £16 a day for excess insurance/waiver to protect drivers from this, but this can be as much as £28 a day!  Buy a standalone policy from £2.99 a day or £37.99 for an annual policy from iCahireinsurance.com – Saving approx £90 on a week’s holiday. If you travel more than once a year, an annual policy could save even more.
5. Take a spare credit card – If you don’t buy the car hire company’s excess / waiver policy they will often insist that the excess is held on a credit card until the car is returned undamaged. Take a spare credit card with you, as having £2,000 held on your one credit card could seriously limit your holiday spending. – Saving £110. 
6. Protect your tyres and windscreen – Often rental desks’ excess policies exclude damage to windows, tyres and undercarriage, and sell a separate Tyres and Windscreen excess policy for around £32 a week.  All iCarhireinsurance.com policies include, as standard, cover for vulnerable parts of the vehicle including windscreens, tyres, roof and undercarriage – Saving approx. £30. 
7. Sharing the driving increases the costs – Adding a named driver to your rental agreement could cost almost £10 per day and if the driver is under 25 this could be as much as £30 per day. If one of you is going to do 90% of the driving is it really worth the extra cost? Different companies charge different amounts, so if this is important to you, factor it in when making the booking. – Saving approx £70. 
8. Do you need a SatNav? – It can cost over £80[vii] to hire one for a week, and often this cost is not disclosed to you when you book. If you have a detachable SatNav at home, it is normally cheaper to upgrade to European mapping and take it with you, or consider getting a SatNav app for your smart phone – Savings approx £80 if you take one with you (or £30 if you buy one for £69.99). 
9. Hiring a car seat for your child can cost up to £70 for the week – Many airlines will take car seats in their hold for free, so consider taking yours with you. For older children why not purchase an inflatable booster child seat? Saving approx £70.   
10. Check the exchange rate – Some companies let you pay for your extras when you book your hire car, but others cannot be paid for until you arrive at your destination.  Changes in the value of the pound against the Euro can make a big difference in price so keep this in mind when making your booking. With theaverage cost of extras totalling £276 a 10% change in the value of the pound against the Euro can add or remove £30 from your bill. Saving approx. £30

Ernesto Suarez, Founder and CEO, iCarhireinsurance.com said, “When hiring a car the headline price is often not the price you actually end up paying, and often the prices for extras are not available until drivers reach the rental desk. We created this ‘Hire Car Hit List’ to help drivers get the best deal and avoid the pitfalls.” 

May 26th, 2016 | Andrew Hagger | News

Thousands of people in the UK are in the dark about when they’ll be credit checked for life events and financial products, according to a study from Amigo.

The research revealed being credit checked for a job (80 per cent), monthly insurance instalments (63 per cent) and renting a flat are among the top things consumers are not aware they’ll be credit checked for.

More seriously, 18 per cent didn’t know they would be credit checked when applying for a credit card, meaning they’re potentially hindering their chances of getting one. This was closely followed by submitting a mortgage application and a securing a personal loan. 

The life events and financial products Brits were unaware they’d be credit checked for

 Job – 80%

Monthly insurance instalments – 63%

Electricity and Gas direct debit payment – 56%

Flat rental – 50%

Mobile phone monthly contract – 37%

Overdraft extension – 49%

Store cards – 42%

Retail finance – 37%

Car finance – 27%

Personal loan – 24%

Mortgage application – 22%

Credit card – 19%

With only 12% of people actually knowing their exact rating, thousands could be in for a nasty shock when applying for a job, loan, mortgage or even renting a flat.

What’s worse, if you are credit checked and are declined, that process can actually damage your credit score even further.

A damaged credit score severely impacts an individual’s ability to borrow from a lender, especially a mortgage and a loan. If your credit score is poor, it indicates that you are less trustworthy when it comes to paying back a loan.

There are a number of credit reference agencies available which allow people to check their score before applying for credit including Equifax, Experian and Callcredit.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: “There is a huge lack of understanding about when you’ll be credit checked and for which products. The days when you would be checked for just mortgage are long gone, even some employers are conducting full credit checks nowadays.

“It’s never been so crucial that people who think they do have a chequered financial history, take positive actions to improve their credit file so they avoid disappointment down the line.”

May 26th, 2016 | Andrew Hagger | News

Aviva has revealed it paid out over £19.2 million last year to UK holidaymakers whose holidays had to be cancelled before they started.

Despite the number of holiday cancellations, just a quarter of would-be holidaymakers take out insurance at the same time as booking their trip.  A third (32%), buy it the month before their trip and 10% of travellers don’t bother with  insurance at all, leaving  themselves at risk from hefty medical bills or losing their holidays altogether.

Across its travel insurance business, the insurer received 30,000 claims from disappointed travellers whose holiday plans had to be put on hold due to family bereavements, illness or other circumstances.  The data also revealed:

• The average cancellation claim was £640
• It received over 60 claims for cancelled trips worth over £10,000
• The highest claim was for £26,000

However, Aviva research also shows that only 40% of people say they  always take out travel cover when going on family holidays and a further 20% say they only take out cover when travelling abroad.

Commenting on the findings, Adam Beckett, director of products at Aviva’s UK general insurance business, said: “As the peak holiday season approaches, it’s important holidaymakers make sure they have enough cover in place if the worst happens and they’re not able to travel.

“Many travellers assume travel insurance just protects them while they’re on holiday and they might not take out cover until just before they jet off for sunnier climes.  While we hope the worst never happens, it’s a sad reality that sometimes our plans have to be changed or cancelled due to illness or other unforeseen events. Taking out travel insurance at the same time as booking the holiday will avoid any unnecessary and added stress if holidaymakers aren’t able to travel.”

To help holidaymakers make the most of their break away, Aviva has put together the following travel insurance tips:

• Be protected from the start: take out your policy when you book your holiday
• Make sure you inform your insurer of any pre-existing medical conditions
• Check you have the right documentation before you go and check visa/passport requirements.  Recent changes to entry requirements in America mean travellers without biometric passports could be left stranded and denied entry to the country
• If you have personal belongings cover as part of your home insurance, you may not need additional baggage cover on your travel insurance
• Check before you go – visit https://www.gov.uk/foreign-travel-advice and follow the latest travel advice from the Foreign and Commonwealth Office for your holiday destination

May 19th, 2016 | Andrew Hagger | News

May 19th, 2016 | Andrew Hagger | News

More than 5 million people in Britain have no idea how much their mortgage is costing them, according to research released today by habito, the world’s only digital mortgage broker.

With 7.6 million active mortgages in Britain, the study found one-third (33%) of UK mortgage holders don’t know what interest rate they are paying – despite it being one of the biggest financial commitments that most Brits have. The research has exposed the widespread lack of knowledge among homeowners over the basic details of their mortgage, potentially caused by the complexity and hassle of the mortgage application process, and a reluctance to manage mortgages effectively over the long-term. This is estimated to cost consumers £29 billion a year.

The research also revealed of the mortgage owners surveyed:

• One in eight (over 1.8 million mortgage holders) don’t know if they have an interest only mortgage;
• Almost one in ten (over 1.4 million mortgage holders) don’t know if their mortgage is a fixed or variable rate;
• Almost one in ten (over 1.3 million mortgage holders) don’t know how long their mortgage term is;
• One in every 20 mortgage holders (over 700,000 mortgage holders) cannot even name their lender

Mortgage holders in Wales are the savviest in UK when it comes to knowing what interest rate they are paying on their mortgage, with far more people in the region (79%) knowing this than in other areas of UK. That compares to just 65% of mortgage holders in London and 63% in the South East, where house prices are often higher. The research also revealed a stark gender gap. Less than two-third of women (61%) know how much interest they pay on their mortgage, which rises to almost three quarters (73%) among men.

Daniel Hegarty, CEO of habito, said: “For most people, a mortgage is the biggest financial commitment of their lives, yet the application process is opaque, slow and untouched by technology. It’s no wonder there is such a widespread lack of awareness among existing mortgage holders and such reluctance to manage their mortgages over the long-term. Applying for a mortgage with a traditional broker is stressful and confusing – people just want it to be over as quickly as possible and then forget about it.