August 17th, 2016 | Andrew Hagger | News

Banks are shutting the door on more than 4.2m people in the UK who are looking for mortgages and credit.

However, many could be being unfairly judged as more than a third (34%) of people who’ve checked their credit score have found glaring errors on their report.

The research of over 2,000 individuals from Amigo Loans finds that over 4 million people have credit score of less than 720.  This is judged as a ‘poor’ or ‘very poor’ by the banks and as a result, their computers will say no.

While most people strive to stay on top of their finances, very few are as diligent with nurturing their credit score – a key factor in securing a mortgage or loan.  In fact, only one in eight people in the UK have ever checked their credit score.

Of those who have, 76% have a score of less than 720.  This puts them in the ‘poor credit rating’ category and deems them ‘untrustworthy’ by the banks.

Industry figures* show that more than half of the UK general public – over 20 million people –  are at risk of being declined credit, yet the vast majority (88%) have never checked their score and are completely oblivious to this pending sting in the tail.

This means there could be an additional 16 million unwitting borrowers who could be shunned by their local branch for a mortgage, credit card or loan.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said:

“Whether you’re male or female, from Penzance or St Ives, there is a computer says no culture that runs rife within UK financial services. Once your credit record is tarnished, high street lenders will close the door on you, regardless of who you are, what you do for a living or how much you earn.

This is a pandemic credit gap.  Over 20 million people in the UK could have a poor credit score.  And what’s worse, the majority have no idea.  The issue here, lies in education.  I’ve heard countless people say that if you have a poor credit score you don’t deserve to borrow money.  That’s a completely flawed argument.  Some people have never borrowed before, some people have errors on their credit records, and some people have been out of the country serving with the forces.  They could all be completely trustworthy but could be turned down because of a number on a computer screen.  Judging someone on a credit score alone is like deciding to marry someone based on their dating profile picture – it’s not enough information.”

August 9th, 2016 | Andrew Hagger | News

British holidaymakers are starting to feel the effects of Brexit and weaker exchange rates on their holiday spending according to a survey of summer holidaymakers.

The average holidaymaker heading to the EU is £51 worse off per person, per week, according to the survey undertaken by Prepaid International Forum (PIF), the not-for-profit trade body for the prepaid financial services sector.

This is based on the average UK holidaymaker spending £241 per week while on holiday and exchange rates plummeting 17.5% (from a high of 1.43 to 1.18) since the vote to leave the EU.

This means an average family of four, taking a fortnight’s holiday in the EU, needs an extra £408 to match their spending on the same holiday last year.

As if to rub salt into their wounds, it is ‘Remain’ voters who are hardest hit, according to the survey.  54% of those suffering from weaker exchange rates on foreign summer holidays are ‘Remain’ voters, compared to 46% ‘Leave’ voters.  ‘Remain’ voters also reported spending more while on holiday (£258 per person, per week compared to £221) further increasing their post-Brexit losses.

According to experts, increased holiday spending costs are encouraging travel money providers to look at new ways to help holidaymakers get better deals.

Alastair Graham, spokesperson for PIF, says:

“Holidaymakers have always been subjected to poor exchange rates and extra charges when spending their money abroad.  The recent fluctuations in exchange rates have made them even more aware of such costs and are increasing appetites for alternative solutions.

“Prepaid financial services companies are seeing increased demand from travelers wanting to store travel money at times when rates are favourable, locking in their holiday spending sometimes months ahead of time.

“Using prepaid travel money cards to store currency is a popular way to guarantee the price of holiday spending in advance.

August 9th, 2016 | Andrew Hagger | News

We lose a staggering £40 a year from unpaid loans to friends and family, equating to £2,500 in a lifetime according to new research released by Nationwide Building Society.

Asking a relative or friend to repay money is often an awkward experience and over two thirds (73%) of Brits don’t trust all of their friends and colleagues to pay their way fairly during group events.

The research of 2,000 UK adults was conducted to discover how we split bills during social activities and attitudes towards borrowing and lending money. A fifth (21%) claim they have ended up paying more than their share because it’s socially awkward to pay separately and 20% have missed out on getting their fair share due to buying rounds.

So, how small an amount is acceptable to ask a friend or colleague for? On average, the smallest amount people would feel comfortable chasing is £4, with over 80% starting to chase before the debt reaches £6. The main reasons for not repaying borrowed money is that they simply forgot (47%), they didn’t have the cash on them at the time (34%) and not having the relevant payment details to transfer (12%).

Head of Payments at Nationwide Building Society, Paul Horlock said: “It is shocking that we are collectively losing this amount of money from lending to friends and family or from splitting the bill when sharing lunch. We can be just too embarrassed or often don’t have money on us to pay back those small debts, it is very socially awkward.”

With advances in online and mobile banking, a mobile number is now enough information to send and receive money securely, to and from friends and family – potentially saving Brits time, money and the effort of chasing down borrowed money, or sparing them the embarrassment of forgetting to repay.

Paul added: “The good thing about Nationwide’s Paym app is that you can exchange money with your mobile phone number – you don’t have to give out your bank details, go to an ATM or write a cheque. This can really help situations such as group meals when not everyone has cash on them and people want to pay by alternate methods. It makes it so much easier to settle those small debts, whilst also ensuring that everyone has the right amount.”

August 9th, 2016 | Andrew Hagger | News

New research from Sainsbury’s Bank Credit Cards reveals on average, each person planning a summer holiday this year is likely to spend £974 on it. Many people would consider booking the vacation itself as being the most expensive part of the holiday, however the research reveals that it’s just over a third of the total spend.

On average, UK holidaymakers say they’ll spend £288 on spending money; £96 will go on buying new clothes; and £58 getting to and from the airport or train station.

Holidaymakers also say they’ll spend an average of £21 paying for a home-sitter whilst they are away.  Those with pets also face extra costs, as the research reveals an average of £32 will be spent on kennels or catteries.

Around 23% of the total holiday spend will be placed on credit cards. A quarter (25%) of people using a credit card plan to transfer some of their balance to a 0% interest free balance transfer card after their holiday, with these people estimating they will transfer over half (54%) of their spend after their summer holiday. This equates to a total of £2 billion that holidaymakers intend to transfer to an interest free balance transfer cards after their summer vacation.

Simon Ranson, Head of Banking at Sainsbury’s Bank, commented: “The true cost of a holiday is much greater than just the upfront cost of booking it in the first place, with lots of add-ons to consider by the time you’re ready to set off. Holidaymakers choosing to use a credit card should carefully consider their options. Some cards may be more cost-effective for overseas spend, some are better for large purchases, like the holiday itself, and others if you’re transferring a balance.”

August 2nd, 2016 | Andrew Hagger | News

1.    Make sure you are on the electoral register. Lenders use the electoral register to help fight identity fraud and confirm a person is who they say they are and that they reside at that address.

2.    Pay bills on time or ahead of schedule, a good credit score needs to be built up over time – lenders will look favourably on this.

3.    If you notice anything on your credit report that could be incorrect or you think you might be the victim of identity fraud, i.e. you think someone has applied for credit in your name, contact the credit reference agency who will work with the lender to try and resolve the issue.

4.    Avoid keeping a high balance on your credit card. Lenders may view it as excessive debt and be concerned about your ability to repay.

5.    Only apply for products when you really need them – applying for more than four forms of credit in a year can lower your credit score.

6.    Do not make multiple applications for credit as this can have a negative impact on a credit record.

7.    Close down out of date credit cards and make sure you cancel old agreements, such as store cards you never use, as these will still appear on your file. Lenders may be wary about the potential size of your debt.

8.    Sever old financial relationships if you are divorced or separated, making sure your former partner’s details are removed from any joint accounts. The credit history of all financial associations such as a spouse or anyone else you have a joint bank account or loan with can affect your credit rating.

August 2nd, 2016 | Andrew Hagger | News

More than 16,000 people failed to get on the property ladder last year because of their poor credit score, according to a study from Amigo. Most affected are those who embarked on higher education who are 10% more likely to be rejected for a mortgage because of poor credit scores than those with just A-levels

In 2015, there were around 310,000 successful first-time buyers – however 5% of all applicants were rejected for a mortgage because of their shabby credit rating.

Common reasons for being turned down include previous unauthorised overdrafts and blank credit histories, but the late payment of a bill dating back years is also enough to produce a rejection – even if the money owed is just a few pounds.

According to the research, a staggering three quarters (76%) of all first time buyer applicants admit they were turned down by at least one provider because of their poor score.

While most went on to be successful with other providers, the vast number of initial rejections highlights a major lapse in knowledge when it comes to the credit scoring system.

Each mortgage rejection can damage an applicant’s score, meaning those that apply to several lenders could be hampering their prospects of getting on the property ladder.

The lack of understanding around credit scores is most profound among 18-24-year-olds – with a third (33%) claiming they were unaware that having no credit history could affect their chances of getting a mortgage.

Interestingly, higher education seems to lessen your chances of being granted a mortgage. The research shows that Undergraduates, Masters and Doctorate graduates are 10% more likely to be rejected because of poor credit scores than those with just A-levels, possibly a result of the higher levels of debt associated with student life.

Broken down by family status, those with one child were 30% more likely to have suffered mortgage rejection because of a poor credit rating than those with no children.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: “Owning your own home is an aspiration many people have, but actually getting on the property ladder is becoming more and more unachievable. Ensuring people are aware of what can affect their chances has never been so important, as this is difference between having the key to your dream property and being declined for a mortgage. What many people don’t realise is that having no credit history can be just as damaging as having missed payments on your record, this is why it’s paramount that people begin using credit responsibly at the earliest possible stage.”

August 2nd, 2016 | Andrew Hagger | News

Over one in five people who have hired a car (21%) said they had found damage on the car which was not highlighted on the check-out sheet, according to a new YouGov survey, commissioned by iCarhireinsurance.com, the leading provider of stand-alone car hire excess insurance.

Any damage to a hire car, even if it isn’t your fault, can lead to the hirer having to pay the first part of the cost of repair, up to the excess amount, which can be as much as £1200.  

The survey found that whilst half (57%) of hire car drivers always check their car for damage before they drive it, and almost a quarter (24%) have taken a picture of the hire car to prove it was damaged before they used it, only 38% check the condition of the wheels and tyres, despite the fact that these items can account for approximately one in five charges for minor damage made at the rental desk.  

Claims for damage to wheels and tyres, for instance, can cost from €120 to €400 so they are just as important as the rest of the car to check before driving the car away.

It isn’t just on pick-up that drivers need to be vigilant.  A quarter have had to return their hire car without seeing a hire car representative.  With 7% of renters believing they have been wrongly accused of damaging a rental car, not getting it signed off by a company representative is a risky move that could end up costing a small fortune.

The survey found that one in ten drivers have returned a rental car with damage which wasn’t their fault, and 6% have returned a rental car with damage which was their fault.

Excess insurance can be bought to protect drivers from paying for damage, but the rental company policies cost up to £17 a day, five times more expensive than a policy from iCarhireinsurance.com (from £2.99 a day).  Rental company policies also often exclude damage to windows, tyres and undercarriages, areas that are most likely to be damaged, but iCarhireinsurance.com policies automatically include these vulnerable areas as standard.

“When you pick up a hire car always check it thoroughly. Make sure that you note down every mark, no matter how insignificant on the checkout sheet, including damage and scuffs to the wheels. We hear of many people getting charged for minor damage, which they say was on the car when they picked it up, but which they didn’t mark on the paperwork. Sadly in the modern world of vehicle rental this can be tantamount to writing a blank check to the rental desk,” said a spokesman for iCarhireinsurance.com.

He added: “Many people protect themselves by buying a stand-alone excess insurance policy in advance. These policies are usually much better value than those offered by the rental companies and, in addition to the bodywork, they also cover tyres, wheels, roofs and windscreens, which are often excluded from the rental desk policies. It’s still important to check the car for damage though, as whilst claiming is easy it’s always easier not to have to claim at all.”

July 26th, 2016 | Andrew Hagger | News

A new survey has given a snapshot of the UK’s banking habits and revealed that the British public has never been so in touch with their bank balance. The results show that technological advances within banking have resulted in people using online and mobile banking apps to check their spending more than ever.

This fast, instant access means more people are now keeping on top of their finances regularly with four in five (83%) now checking their bank balance once a week or more and over half (52%) like to check their spending all the time, wherever they are, meaning people no longer have to wait for a statement to fall through their door.

The rise of mobile banking allows people to organise their finances easily, and in 2015 a total of £2.9 billion* was transferred each week alone with mobile and tablet banking. With this rise, Nationwide Building Society has uncovered the five places that people are now most likely to check their finances;

1) 68% use mobile banking from the comfort of their sofa

2) 50% do their online banking from their bed

3) 42% use work time to sort their finances using mobile banking

4) 21% like to keep on track of their spending whilst they’re shopping

5) 4% like to browse at the gym

The survey of 2,000 UK adults found that Brits believe they would have greater control of their money if they were able to see how much they spend daily on impulse purchases such as coffee (15%). Searching transactions by dates and periods of time (14%) and being able to search transactions by location (13%) would also allow more financial control. A further 1 in 4 (25%) admit they have a fair to non-existent ability to stay on top of their finances.

New banking apps are allowing consumers to keep on top of their spending – and saving – with constantly evolving new features. Nationwide’s Impulse Saver service enables customers to save up to £100 into their savings account without the need to log in. Since its launch, over £18.5m has been saved this way. The research also found that on average we spend £55.77 per month on things we hadn’t budgeted or accounted for, which is almost £700 a year.

July 26th, 2016 | Andrew Hagger | News

7 in 10 people taking trips in the UK this summer could be doing so uninsured, leaving thousands of pounds worth of valuables at risk of theft, loss and damage, according to new research from home insurance provider Policy Expert.

Of the 2,500 people surveyed, 63% admitted they didn’t have away from home cover included in their home insurance policy, while only a third (32%) would take out travel insurance for ‘staycations’ in the UK, such as camping, festivals or walking holidays.

Despite a quarter of people taking trips in the UK to keep costs down (24%), day-trippers and holidaymakers risk expensive dilemmas by travelling with an average £676 worth of valuables uninsured. Other reasons for holidaying in the UK included because it’s easier (46%), visiting family in the UK (28%), because there are great places on our doorstep (60%) and a worry about terrorism/safety abroad (11%).

8% of those surveyed have damaged, lost or had valuables stolen while travelling in the UK, of which a third (31%) didn’t claim on their insurance. The most common items were mobile phones, cameras, wallets/purses and jewellery.

A spokesman for Policy Expert commented: “Wherever you’re holidaying this summer, whether that be on the white shores of the Caribbean or a pebbled beach in Wales, it’s important to ensure you’re properly insured and that your belongings are covered against loss and theft. If you don’t want to take out a separate travel insurance policy, checking the small print in your home insurance to make sure it includes away from home cover is a good place to start.”

July 26th, 2016 | Andrew Hagger | News

Holidaymakers planning to go to Europe in the summer months – June, July, and August – could be collectively missing out on €265 million by not buying their money in advance, according to new analysis by Sainsbury’s Bank Travel Money.

The supermarket bank found that Euros are on average 7.3% cheaper bought from a local bureau than from an airport kiosk, highlighting the importance of purchasing holiday money in advance and not leaving it until the very last minute.

Sainsbury’s Bank Travel Money estimates that in 2015, €8.4bn was purchased by people in the UK with 43% of these sales taking place in June, July and August.

A spokesman for Sainsbury’s Bank said: “As peak holiday season is here we’d encourage anyone travelling to Europe this summer to plan ahead so they don’t miss out on the best rates. Our analysis shows on average holidaymakers could save €42 per transaction by getting their money in advance – enough for a lunch for two in Spain or perhaps a few drinks in France.”