March 15th, 2017 | Andrew Hagger | News

New analysis from Santander UK reveals that 10.3 million Brits (20 per cent) have no savings, leaving them exposed to unexpected expenditure. Although the average Brit saves £150 per month, a collective £81.8 billion a year, almost a fifth (18 per cent) save £50 or less.

The study, which investigates the savings habits of the nation, reveals that 52 per cent of people wish they could save more, on average an additional £388 each month. The most popular way to put money aside is in a savings account (53 per cent) followed by a Cash ISA (27 per cent). However, many Brits overlook investing as a way to manage their money with only one in 10 (12 per cent) saying they invest and utilise Stocks and Shares ISAs.

In fact, half of Brits (53 per cent) wish they had received more money advice at a younger age, rising to two thirds (66 per cent) for those aged 18 to 34, and decreasing to 42 per cent for those aged 55 and over. A quarter of UK adults (26 per cent) wish they had been taught more about investments and 21 per cent about budgeting, while almost one in five (19 per cent) wish they had received more advice about the different savings options available to them.

Helen Bierton, Head of Savings at Santander, said: “Our research shows that although many of us are saving, there is still a significant number who have no savings to fall back on or are not aware of all the options available. Developing a savings habit – no matter how small – is so important as it not only provides a safety net but is a way of providing for your future, and those of your loved ones.

“Santander offers a range of savings products with different options to suit individual customer needs and to help people achieve their savings goals, including both Cash and Stocks and Shares ISAs. For those considering investments, we recently launched our Investment Hub to make investing more accessible with investments from as little as £20 a month.”

The findings also highlight that more than three quarters of UK adults (78 per cent) believe that being “good with money” is a learned behaviour that anyone can pick up with practice. In comparison, only 13 per cent believe that being either good or bad with money comes naturally and is a behaviour that cannot be learned or influenced in any way.

March 14th, 2017 | Andrew Hagger | News

Research shows that 5.2 million UK pet owners did no research before buying their pet, leading many to underestimate the true cost of ownership. Satsuma’s survey, which covered 2000 respondents, found 40% were relying on borrowing or credit to cover unexpected expenses such as Vet bills.

Keeping an animal can be an expensive exercise, with 98% of pet owners incorrectly estimating the lifetime cost of owning a pet. A recent survey from Satsuma found that 18% of those questioned said the cost was the hardest part of ownership.

Unexpected vet bills were one of the most notable expenses and one that owners were least prepared for. Of those surveyed, 25% had encountered an unexpected bill and 42% of those said the average cost was over £100. 40% of respondents reported that they relied on borrowing money, whether on a credit card, borrowing off friends or taking out a loan to cover the expense. A further 24.5% had to dip into their savings.

Less than half the people (43%) questioned had pet insurance in place.

It seems that the key to a stress-free life as a pet owner is doing thorough research before you buy or adopt. Having realistic expectations of how much you’re likely to be spending over the pet’s lifetime is key. But more important still is making sure that you choose the right pet to suit you and your lifestyle.

Some of the key findings from the research were:

• 43.5% spent more than £20 per month on essential goods for their pets including food etc..
• 4.95% spent over £20 per month on non-essentials such as treats and clothes.
• 24.9% of those asked have had an unexpected Vet bill in the previous year. Of those, 47.19% had more than one.
• 41.5% said the average cost of those unexpected bills was more than £100.
• 35-44 year olds are the least prepared for an unexpected vet’s bill. 52.63% of them borrowed from the bank, credit card or family and friends to pay for the bill.
• Over 55s were the most prepared. Only 31.16% of those had to borrow money to pay an unexpected vets bill.
• 18.4% said cost was the biggest difficulty in having a pet.
• 24.8% of people pay money to a pet sitter or to leave their pet at a kennels when going on holiday

Satsuma also have some interesting online tools for pet lovers including the Pet Selector and  Amazing Pet Facts

March 13th, 2017 | Andrew Hagger | News

Official crime data reveals that, on average, 1,220 mobile phones are stolen every day in the UK, but better security systems are having a huge impact on mobile phone theft with the numbers stolen at their lowest level for 10 years.

Analysis of the latest crime data, commissioned by mobile insurer Protect Your Bubble, shows that around 1% of mobile phone owners had a handset stolen in the year from April 2015 to March 2016. But as 94% of people over 16 have a mobile that still means that 446,000 phones were stolen.

The data from the Crime Survey for England and Wales reveals the rates of theft are twice as high for younger people as the general population. 2% of 22-24 year olds have had their mobile stolen and 2.4% aged 18-21. Women in this age group are the most vulnerable to mobile phone theft.

The favourite methods of the thieves are pickpocketing and snatch theft, where a phone is grabbed from the victim’s hand. More than 40% of phones are stolen this way compared to just 5% that are taken during a mugging.

But just over a third (35%) of stolen mobiles go missing when they are left out and unattended. Figures show this happens on public transport and other public places more often than it does in bars and clubs. And 15% of such thefts happen at work.

The theft of mobiles peaked at 897,000 in April 2008 to March 2009, according to the data in the Crime Survey of England and Wales, which is used by the government to track trends in crime.

The numbers declined sharply the following year and once again fell substantially between 2013 and early 2015. They are now at 50% of the peak in 2008.

Research for the Home Office1 suggests the reductions are linked to the introduction of better manufacturer security systems. It says the introduction of better security since late 2013 by the likes of Apple and Samsung had an impact on the black market value of phones, which made them less attractive to thieves.

Many people do little to protect themselves. Just over half (53%) the owners surveyed use a PIN code and around a fifth (21%) use apps to track their phone if it is lost or stolen. Nearly a third (31%) of people take out mobile phone insurance, but nearly the same proportion (32%) takes no security measures at all.

March 8th, 2017 | Andrew Hagger | News

• There are 30 fixed dual fuel tariffs ending on March 31.
• Households could see their energy bills rise by more than a quarter (27%).
• Two of the ‘big six’ suppliers have deals ending that will result in price increases: EDF Energy and Npower.

Families could be set for a shock a 30 fixed dual fuel deals expire on March 31^st, resulting in an average rise of £269 (27%). However, customers could save as much as £305 by shopping around for a better deal.

Research by Gocompare.com Energy found that a range of fixed dual fuel energy tariffs, including deals from energy giants Npower and EDF Energy, are due to expire at the end of the month.

Unless they take action now, customers who are currently on these tariffs will be automatically rolled onto a standard variable rate (SVR) which, in the majority of cases, are more expensive than the deal they are currently on.

March 7th, 2017 | Andrew Hagger | News

The British public wants banks to lend to organisations and projects that benefit society, but most people do not know what happens to their savings while they are deposited with their bank.

This is one of the findings of a new piece of research conducted by Charity Bank, the ethical bank with a mission to use money for good, as it launches its campaign to persuade the public to transfer their Cash ISA to an ethical provider.

Charity Bank commissioned Opinium to research the attitudes of the general public towards various aspects of banking. This research found that:

• 74% of the British public don’t know how the money they save in their bank is being used or invested;
• 71% would like their bank to make it clearer where their money is invested;
• 56% would like to be an offered an ethical option when choosing a savings account; and
• 61% would consider opening a savings account that paid a fair rate of interest and lent money to charities and other good causes.

Patrick Crawford, Charity Bank’s Chief Executive, said, “People don’t know what banks do with their money but the findings tell us that there is an appetite to find out and that people would like their savings to be used for good causes.

“Wherever it’s invested, money takes a journey. This might be around the globe, around the big banks or on the stock markets. Sometimes it does good along the way; sometimes it doesn’t.

“When you open a Cash ISA with Charity Bank, we give you a fair rate of interest, whilst making sure your money takes a shorter journey. It spends less time travelling and is invested directly in charities and projects that benefit people across the UK.

March 7th, 2017 | Andrew Hagger | News

Despite the Government’s pension freedoms giving us more control over our money in retirement, new research shows that 40% of people over 40 have no idea of the cost of even a basic lifestyle in retirement, suggesting that more needs to be done to show people how much they need to save in order to be able to afford a decent retirement.¹

According to research by Saga Investment Services, four in ten over 40s said they had no idea of the cost of even a basic lifestyle in retirement, with women much more likely to say this than men.  When it comes to understanding the size of the total pension pot they would need to fund retirement, 80% of people admitted they no idea how big this would need to be.

Experts recommend that people should aim in retirement to have two thirds of the income they enjoy while working in order to have the same lifestyle.

Although some people are good at understanding the annual cost of these different lifestyles, when it came to translating that into the size of retirement pot they would need people really struggled, underestimating by around 50%.  One in ten thought you could afford a basic lifestyle on a pension pot of up to £25,000, which would pay £987 a year, but on average people thought you could afford this with a pot of £126,000, which in reality would get you just £6,904 a year.  This demonstrates the retirement leap people need to make in order to make up the difference between ambition and reality.  People in the North East are most likely to underestimate the cost of a basic retirement, thinking this could be achieved with a pot of just £74,000.

When it comes to affording a comfortable retirement, people on average thought this could be achieved with a pension pot of £244,000, which would actually only give an annual income of £13,300, some £7,000 short of target.  Eight out of ten people said they did not know how big a pension pot you would need to achieve a comfortable retirement.

Typically people thought it would take a pension pot of £500,000 to afford a luxury lifestyle in retirement, but this would just pay £27,000 a year, which would leave people two thirds below the real income needed to enjoy a lavish retirement.

Sally Merritt, head of product, Saga Investment Services, commented: “The research proves just how desperately affordable advice and guidance is needed and we urge the regulator to address this.  It is a real concern that people in their 40s and beyond are so unaware of what they need in their pension pot to give them the lifestyle they want in retirement.  People are in danger of becoming pothole pensioners, who face a bumpy road ahead because they didn’t invest well enough when they had the opportunity.

February 28th, 2017 | Andrew Hagger | News

The Ministry of Justice has decided to reduce the discount rate used in calculations for compensation payments for those who suffer long-term injuries, and the net result could well be higher insurance premiums for drivers.

Matt Oliver from Gocompare.com Car Insurance, commented:  “First IPT increases and now this!  Drivers are being hit with news about rising costs left, right and centre at the moment.  In terms of their insurance, there are likely to be only two things that motorists need to understand – car insurance premiums are going up this year and the only way to be sure you get the best price possible for your specific circumstances is to shop around when your renewal comes through.

“In general, we are expecting car insurance prices to continue rising this year, but different insurers will always take a slightly different view of you and your car, when it comes to insurance risk.  Therefore, when prices are rising, it is more important than ever not to accept the premium your current insurer is offering, but check to see if you can get a better deal elsewhere.  The savings from shopping around this year could be significant and drivers need to give themselves enough time at renewal to do a proper job, rather than just letting their insurer role them over for another year.”

February 28th, 2017 | Andrew Hagger | News

STEP has condemned the sharp increase in probate fees due to come in this May as a new tax on bereaved families.

The new fees will now be pro-rata, and apply to all estates worth GBP50,000 and over. An estate of GBP300,000-GBP500,000 will now pay GBP1000, and estates of GBP2m or more will pay as much as GBP20,000.

This represents an extraordinary increase over the current fees, which are GBP155 if made by a solicitor, and GBP215 if made by an individual, whatever the value of the estate.

A consultation set up by the Ministry of Justice was met with strong opposition from STEP and many others. You can view our full response via the link below.

As STEP Chief Executive George Hodgson said: ‘STEP is very disappointed that the Ministry of Justice has decided to ignore the view of both STEP and the overwhelming majority of respondents to this consultation and press ahead with what represents a new tax on bereaved families.

‘In many cases the probate ‘fee’ will rise very sharply indeed. A family with an estate worth just over GBP1million, not at all unusual given the current housing market, will not only have to pay a large inheritance tax bill (GBP270,000), but then pay an additional probate ‘fee’ of GBP8000, as opposed to the current fee of GBP155.

‘This is back door taxation and we note that there is not even an attempt in the MoJ’s response to justify the fairness of these new charges.’

STEP notes that the proposed fees bear no relation to the cost of processing the application, and appear to be intended to subsidise other civil claims, which, unlike, probate fees, are voluntary.

In addition, paying a fee running into thousands will be hugely problematic for law firms which normally pay such fees up front on behalf of the executors. Obtaining funds will only incur further cost and delays, and add to the stress of bereaved families. Many will have no choice but to sell their homes.

•           STEP comments on the consultation on fee proposals for grants of probate dated 18 February 2016 by the Ministry of Justice

ENDS

February 28th, 2017 | Andrew Hagger | News

With excitement revving up for the release of ‘17’ number plates on 1 March, buying a car is a significant purchase. A new study from American Express^® has found that 19% of adults will spend an average of £11,094 buying a brand new or second hand car this year, equating to a bumper £108 billion across the UK as a whole.

In addition, it’s not just the outlay for the purchase to consider as the research reveals that drivers will spend an average of £1,492 per car this year on running costs.

American Express offers the following finance tips when it comes to buying and running a car:

1)     Think outside your local area – while popping down to your local car dealership might seem like the easiest option, it is always worth broadening your search further afield to make sure you are paying the best price for your new wheels.

2)     Think about the future – Before you start browsing the forecourts think about what you really need from a new car. There’s no point buying a two-seater convertible if you’re thinking about starting a family, so work out what is realistic.

3)     Set a budget – While many Brits balance the books before buying a car itself, it’s also important to consider the financial commitment that continues after you’ve driven out of the dealership. Setting a monthly budget for those regular costs such as fuel, road tax and toll payments can help put the brakes on any overspending.

4)     Shop around – Whether you’re purchasing insurance or booking a service, make sure you shop around for the best deals and choose the option most suited to your circumstances. For instance, if you will only be occasionally driving, pay as you go insurance might be a better fit, whereas families who have adult children behind the wheel can make savings by taking out multi-car policies.

ENDS

February 21st, 2017 | Andrew Hagger | News

The biggest home running cost for most people is gas and electricity, just as the biggest car running cost can be fuel, according to AA Home Services.

Today the AA launches a radical new boiler cover and energy switching service, which guarantees to save members £200 on their gas and electricity costs and non-members £150.

It not only protects a user’s gas boiler – the largest consumer of energy in the home – against breakdown, but ensures that it burns the cheapest energy available while the home also benefits from the cheapest electricity supply, too.

The ‘big six’ energy providers have made £ billions in profits over the last six years according to Ofgem.

A recent report indicated that two thirds of UK households are still on the standard variable tariffs of the ‘big six’ suppliers which can be hundreds of pounds more expensive than the best deals. It is estimated that last year households paid up to £2 billion a year too much. Some of these profits are due to customer complacency, so the AA wants to get better deals for families.

Why the big idea

One of the biggest expenses for consumers is energy bills and many people are in the dark on how to get the best deal.

Not only are millions of families significantly over-paying for their energy, if their boiler breaks they often don’t get the service they deserve to keep their heating working and hot water flowing.  A boiler breakdown can be one of the most disruptive events for a household – especially for vulnerable people.

Consumers don’t realise there are options to keep them warm; their heating running reliably and save money.

That’s why the AA is launching an imaginative new energy switching service that both ensures customers never overpay for their energy again and provides prompt help if their boiler breaks down.

Customers buying an AA boiler cover product will be guaranteed to save at least £150 on their energy bills by using the AA to find and switch them to the cheapest energy supplier on the market. If a cheaper tariff becomes available, the AA will let them know and switch them again.

If a customer who is also an AA roadside member doesn’t make £200 of savings (£150 non-members) on their energy bills, the AA will refund the difference.

How it works:

The AA makes no charge and takes no commission from energy companies for this service.  And, it is completely independent – unlike price comparison sites that do take commission so may not always show the cheapest option.

By calculating actual energy usage, the best available deal is found and consumers are switched to the cheapest provider. Tariffs are regularly compared, ensuring that the best possible deal is always found.

On the guarantee there are no catches – if a customer doesn’t save £150 (£200 if an AA member), they will be refunded the difference (so the boiler cover could effectively be paid for too).

James Hosking, director of home services for the AA, said: “Because anything can happen, we want to give consumers a better energy deal while also continuing to ensure that they enjoy first-class boiler cover.

“The savings customers make by us switching their energy suppliers will pay for their boiler cover or we will top it up. Consumers can put their trust in the AA to save them money and get brilliant boiler cover.

“In our trial the average saving was £250 – the lowest was £79 and the highest an eye-watering £934.

“It really is a win win situation.”