February 21st, 2017 | Andrew Hagger | News

Aspirations for dream homes and cars are not just for the young, many of us live this dream after we turn 50 by carrying out major spending on homes, cars and holidays*. Part of this could well be driven by retirement as almost half of people say they notice more repairs that need to be done to their home since retiring. Two thirds have bought a new kitchen, the same number have bought a new bathroom and two thirds say they have carried out major work to their home.

According to the research by Saga Personal Loans amongst over 8,000 over 50s, these home projects do not come cheap; typically people said they spent around £17,000 on renovations, they spend around £5,000 on a new bathroom and £13,000 on a new kitchen.  People seem keen to continually revamp their homes, with one in eight typically refitting the bathroom twice and carrying out three-six major home improvements.

And the spending does not just stop at home – people over 50 account for almost half of the UK’s spend on motoring. Having a reliable car is a key concern whether they need it for commuting, shopping or for leisure, which could explain why a people in their 70s say they have bought three new cars since turning 50.

Wanderlust also kicks in once the children have left home or people stop working.  People are keen to spend their extra time travelling the world, typically taking 7 foreign holidays in their 50s, whilst people in their 70s said they had had 22 foreign holidays since turning 50.

When it comes to paying to achieve their dreams, much of this is achieved by diligent saving throughout their working lives, others use income by continuing to work for longer either full or part time, some use the equity they have built up in their homes and many use loans to pay for maintaining their lifestyle.

February 21st, 2017 | Andrew Hagger | News

Britons haven’t lost their appetite for saving – despite the current low interest rate environment and economic uncertainty over issues such as Brexit.

A survey conducted by one of the UK’s leading building societies, the West Brom,  shows that 72 per cent of the nation still class themselves as regular savers.

Out of more than 1,300 adults questioned, some 69 per cent expected to save the same amount of money in the next 12 months as they did last year, while 53 per cent said they would like to save more but currently don’t have enough disposable income to do so.

In contrast, only one in five said they would prefer to live for today rather than save for tomorrow, although this increased to more than a third among 18-24 year olds who are more likely to put spending first.

Across the board, only 25 per cent of respondents were prepared to take greater risks with their money to increase their chances of a better return.

However, middle-aged Brits – between 35 and 44 – admitted they were hoping to save more as a precaution in the next 12 months because they are worried about the future.

David Taylor, the West Brom’s Head of Products, said: “It is reassuring to see that the majority of people in the UK, particularly in these uncertain economic times, see themselves as savers.

“Putting money aside figures strongly in people’s minds and they believe it’s important to build themselves a financial buffer.”

The study also revealed how people were starting to think beyond the humble savings account, showing a willingness to consider investing money in alternative ways.

A third were prepared to look at investing in stocks and shares and 25 per cent agreed property might provide a means of boosting their cash pot.  Peer to peer lending, Premium Bonds and even investing in material goods such as classic cars and fine art were also mentioned. 

David added: “Diversifying their investments can help some people get more out of their money, albeit with careful consideration for any risks involved. 

“Our survey showed that people do generally have a strong grip on their finances and regularly review their financial position, something we would strongly advocate at the West Brom.”

February 14th, 2017 | Andrew Hagger | News

The Government’s new Lifetime ISA is set to be a hit with parents and grandparents who are keen to get younger generations into the saving habit, according to new research by The Share Centre.

The Lifetime ISA, which will be available from 6 April 2017, is a new type of saving account aimed at 18- to 40-year-olds. You can save up to £4,000 a year, and any savings you put into the account before your 50th birthday will receive an added 25% bonus (up to £1,000 per year) from the Government. However, if you take out any money before the age of 60 there is a 25% penalty charge based on the amount withdrawn. The exceptions to this are if the money is withdrawn for a first home purchase, or in the event of terminal illness or death.

A survey by The Share Centre has found that 64% of investors over 40* will be encouraging their children or grandchildren to open a Lifetime ISA account, and a further 30% would consider doing so. Just 6% said they would not recommend the product.

The most popular feature of the Lifetime ISA among the over-40s is the government bonus, with 77% saying that this is a reason for recommending the product to younger generations. Far from being put off by a penalty charge for early withdrawal, one in five said that this would be a reason for encouraging children or grandchildren to open a Lifetime ISA, as they wouldn’t be tempted to take out their money too soon.

The over-40s also like the flexibility of the Lifetime ISA product, with 65% saying they would recommend it to younger generations because it helps them to save both for a first home and for retirement. Nearly half the respondents (48%) can see younger family members continuing to use a Lifetime ISA after taking money out for a house purchase.

Having recommended a Lifetime ISA to younger generations, the Bank of Mum and Dad (and indeed the Bank of Grandma and Grandad) are set to help them to fund their account. Nearly two thirds of over-40s (64%) said they will give younger family members money to pay into a Lifetime ISA. Among these, 41% see themselves giving ad hoc lump sums and one in five expect to give payments on a regular basis.

Nearly three quarters (72%) of over-40s believe the new product will be effective in helping more young people to save for their future. In a further endorsement of the Lifetime ISA, 79% say they would have opened one if it had been available to them between the ages of 18 and 40.

February 14th, 2017 | Andrew Hagger | News

Thousands of homeowners could unknowingly be living in a high flood risk area, significantly increasing their chances of unexpected and costly damage, new analysis from home insurer Policy Expert has revealed.

Of the 5,443 people surveyed, almost half (44%) did not know whether they lived in a flood risk area. This is despite the fact that an overwhelming majority (95%) stated they wouldn’t even consider buying a home if they knew it was on a floodplain. Furthermore, one in five of those surveyed stated they would consider emigrating if they knew the weather was going to continue to get worse in the UK in the future.

Despite people’s concerns, nearly one in five (19%) admitted they wouldn’t know what steps to take to protect their home if they knew it was going to be flooded, further increasing the potential scale of damage. Half of homeowners would think to clear gutters, drains and downspouts, and move electrical equipment high above ground level if a flood was imminent. Additionally 85% of people would know to seek out and place important documents upstairs. A further 84% state they would think to source a supply of sandbags and plastic sheeting to protect their home if a flood warning was issued.

Adam Powell, Head of Operations, Policy Expert commented: “Floods can have a devastating impact and are happening more often than ever, all over the country. For that reason, it is vital homeowners are aware they could be at risk and have appropriate precautions in place.

“It’s also sensible to check you have the correct level of insurance. While most standard home insurance policies cover you for flooding, nearly all insurers expect you to know if your address or your neighbours’ has flooded in the past. A good place to find this information is on the Environment Agency website: its interactive postcode search tool will allow you to see how susceptible where you live is to flood, and how severe the risk is.

“However, what’s most important is being prepared. Being vigilant and taking precautionary steps before and after a potential flood can go a long way to mitigate the long lasting and costly damage it can cause.”

Tips on protecting your home from flood:

1. Flood warnings– The Environment Agency, your local council and even your insurer provide a wealth of information regarding flood warnings to help you prepare. You can sign up for text, twitter and email alerts.
2. Move your possessions upstairs– Some insurers will insist you move items upstairs as part of your policy’s terms. Whether that’s the case or not, it’s a good idea as a lot of flood damage occurs at ground level, such as to sofas, electrical and white goods and carpets.
3. DIY protection products– Items such as window and door flood guards, airbrick covers, sand bags and other free-standing water barriers are available on the market.
4. Clear your drains– The difference between being flooded or not can be down to your drains. Blocked drains prevent water running away, so keep them well-maintained and clear of debris.
5. Consider placing white goods on supports– This could raise them off the floor enough to save damage occurring.
6. Tile flooring– Tiles are much easier to clean and aren’t damaged as easily as rugs and carpet.
7. Important documents– It’s costly to replace passports, driver’s licences and other documents so consider keeping them in water-proof bags. When a flood warning is issued, remember to move these upstairs or on top of furniture so they’re off ground level.
8. Cars and other motor vehicles– It’s easy to forget vehicles you own in the panic of facing a possible flood. But moving cars, motorbikes, vans, trucks, ride on mowers and other vehicles to safer areas is a sensible precaution.
9. Electric, gas and water supplies– Make sure you know how to switch these off in the event of a flood occurring.
10. Maintain your home– You need to keep your property in a good state of repair. Many claims are rejected as its deemed water damage wouldn’t have occurred if the home had been looked after better.

February 14th, 2017 | Andrew Hagger | News

Making small sacrifices, such as cutting out your daily cappuccino, could transform your finances, according to figures calculated by Fidelity International.

By simply ditching your daily shop-bought coffee at £2.50 a day, five days a week, you can easily find £50 a month to invest in an ISA. And growing even that apparently small sum in the stock market can quickly generate a meaningful investment pot.

Over time, this ISA Cappuccino Plan could lead to significant returns of nearly £7,000 after 10 years, and more than £17,000 after 20 years.

If the thought of giving up your shop-bought coffee makes you twitch, or you just want to reach your investment goals sooner, there are a number of other easy lifestyle changes you could make.

For example, by bringing your lunch to work, cancelling that gym membership you never use or giving up smoking, you could reach the £10,000 mark much sooner.

Tom Stevenson, investment director for Personal Investing at Fidelity International, comments: “Many investors may struggle to stump up a lump sum to get their ISA portfolio started. But don’t let this put you off. In fact, you could quickly build up a significant ISA pot by simply saving on small daily expenses, such as the cost of your daily cappuccino. The longer you can save for, and the sooner you start, the better your results will be, given the snowball effect of compounding.

“Furthermore, a monthly savings plan, where you drip-feed your money into your portfolio, can be a more prudent approach than investing in one lump sum. By investing your money into the market regularly, you will benefit from a process known as pound-cost averaging. This means that you buy more units in your investments when prices are low and fewer when prices are high. Buying at a variety of prices, and spreading ongoing investments over time, helps to cushion your ISA portfolio from dips in the stock market.”

February 7th, 2017 | Andrew Hagger | News

Two thirds (64%) of 18-25 year olds in the UK now use a mobile wallet, according to research released today by social money transfer app Moneymailme.

The research reveals that 48% of 18-25 year olds believe that physical money will be obsolete within 20 years, while more than a third (38%) say that we will no longer need it in 15 years’ time. Less than three in ten (28%) say that they don’t think cash will ever stop being used or produced.

The research, which surveyed 1,000 18-25 year olds across the UK, known as Gen Z, revealed that young people prefer alternative methods of payments to cash, even for small purchases. Eight in ten (79%) say that they make purchases under £20 at least once a day, but when asked how they feel when faced with a ‘cash only’ sign at a bar or a shop nearly two thirds (62%) say that they felt frustrated. One in seven (14%) said that they would be frustrated enough to leave and go elsewhere.

In terms of mobile wallet preference, PayPal seems to remain one of the most frequently used online payment services among 18-25-year old’s (52%), while newer entrants to the market like Apple Pay (18%) and Google Wallet (9%) are starting to gain more market share.

While 36% say that they currently don’t use a mobile wallet only 14% say that they have no interest in having one, suggesting there is room for considerable growth in this market for services that appeal to the younger generation.

Nearly half of respondents (49%) say that they pay back their friends up to £10 per month, but almost a quarter (22%) wouldn’t consider a bank transfer for under £10, which currently leaves them reliant on cash to share money unless they have access to a mobile wallet.

A moneymailme spokesman said: “This generation of young people has grown up with mobile technology and for many of them using cash seems like a very dated concept, especially with the range of alternatives available to them. In 2015 electronic payments overtook cash for the first time in the UK and as this generation gets older this trend is only going to continue until producing physical cash is no longer desirable.”

February 7th, 2017 | Andrew Hagger | News

The over 50s believe that pensions are the best way to save for a comfortable income in retirement, and have more confidence in pensions to provide security and good returns over other products, according to research from Retirement Advantage and YouGov.

Well over half (61%) of over 50s surveyed (who have a pension) say they would recommend pensions as the best way to save for retirement to someone entering the workforce today. 30% of respondents would neither recommend or were against pensions, while 9% said they would not recommend a pension as the best way to save for a comfortable retirement.

Pensions also featured at the top of the list of types of financial products that over 50s have confidence in to keep their money safe and deliver good returns, with net confidence at 40%.

Andrew Tully, pensions technical director at Retirement Advantage, said: ‘Pensions rightly sit at the top of the preferred way to save for retirement. With tax advantages, employer contributions and the additional flexibility from pension freedoms, there really is no better way to save for the long-term.

‘Unfortunately pensions continue to be a political football, with moving goal posts, while the launch of the Lifetime ISA means many people may miss out on a hugely valuable employer pension contribution. Hopefully the future generations of savers created from auto-enrolment will continue to see the benefits of pensions as the most effective way to save.’

Those surveyed also stated that they have high confidence in other traditional savings vehicles, including buy-to-let properties (40%) and cash ISAs (38%). Although interestingly confidence in stocks and shares ISAs was significantly lower at 25%. Recent developments like peer-to-peer lending have the lowest levels of confidence (10%).

January 31st, 2017 | Andrew Hagger | News

The financial stresses and pressures of self-employment are taking their toll on family life, according to the latest report from Scottish Widows’ think tank, the Centre for the Modern Family. Findings of ‘Self-employment and the Family’ show that one in five relatives of a self-employed worker (20%) report increased stress levels in their household due to their career choice.

With the number of self-employed in the UK up by 133,000 in the last year (and now accounting for 15% of the total UK workforce)^[1], the impact it has on family life is a worrying trend, especially as the research suggests that for many, the decision to leave traditional employment is driven by a desire for a better work-life balance.

Over half (53%) of self-employed people left traditional jobs in search of greater control and flexibility in their working life: 53% wanted to be able to choose their own hours, and 17% needed to fit work around childcare responsibilities. For women especially, it appears self-employment provides an opportunity to fit working hours around childcare, with nearly half of self-employed mothers (46%) choosing self-employment for this reason, compared to just 7% of self-employed fathers.

Family life – but at a cost?

As a direct result of being their own boss, over a third of self-employed people (35%) say they can spend more time with their family, a figure which rises to half (49%) amongst mothers.

However, nearly one in five people (19%) with a self-employed relative claim their family member has more financial worries since becoming their own boss, while 20% say this person is generally more stressed as a result of their career choice and one in ten (11%) say their whole family is under more stress as a result. What’s more, nearly one in five of those in a self-employed household (18%) say their family member is always on call for work.

Financial worries: a barrier for many

Despite the perceived benefits of self-employment, a significant proportion of the UK’s workers are hesitating to take the plunge. Two fifths (42%) of the workforce claim they want to be their own boss, yet only 5% have plans to do so in the future. Instead, one in four (40%) say they prefer the financial security of being a permanent employee and 39% enjoy the benefits – such as a pension, parental leave and sick pay – too much to become self-employed.

However, with more support, budding entrepreneurs say they’d have the confidence to strike out on their own; 27% say that better financial support from the Government would encourage them to become self-employed. For 50%, more practical support, such as online forums, local entrepreneur networks and Government guidance, would help overcome the barriers.

Anita Frew, Chair of the Centre for the Modern Family, said: “To a growing number of people, self-employment offers a chance to structure a rewarding career around family life. However, our research suggests that the pressures and stresses of being their own boss may, for some, be too much for a family. With more and easier access to practical and financial support, individuals may feel better equipped to make their path in self-employment less stressful for themselves and their families, and bring them more of the benefits which attracted them to self-employment in the first place.”

January 31st, 2017 | Andrew Hagger | News

More than a third (35%) of UK broadband users who’ve experienced a period of internet access when they tried moving providers in the past say the thought of being without internet has put them off doing it again, according to new research by uSwitch. Yet those consumers are missing out on collective savings of £327 million a year. The average saving just for switching provider is £9.80 per month, but almost one in 10 (8%) customers save more than £240 a year.

Our dependency on broadband – a now essential service – is apparent when you consider a quarter of Brits (25%) now rely on their internet connections to work from home, a figure that rises to more than a third (34%) among under 35s. This might explain why little more than one in 10 (11%) has switched broadband provider within the past year and why more than a fifth (22%) have not moved in over five years. More than a third (35%) have never switched provider.

Of the 55% who have reported being without broadband between providers, the average length of downtime is 1.4 days. One in 10 (10%) report spending one to two weeks without broadband while 6% had to wait longer than three weeks. Regionally, internet users in London wait the longest for broadband switch-on – an average of 2.3 days.

Almost a third (32%) of those who experienced a gap in service say their broadband switch-on date was not delayed and that their wait was standard or faster than the time specified by the new provider.

Ewan Taylor-Gibson from uSwitch says: “You should generally allow around two weeks from the point of sale to get your new broadband installed. However, if this is delayed, or you’re forced to live without internet, now deemed an essential service, you have every right to be incensed. At the very least, it can be irritating for those who enjoy internet TV services, but it can also seriously impact those who are isolated, work from home or need access to critical services online.

“Unless you’re switching providers on the same existing line – a transfer that can happen automatically on the same day – there is often an element of physical installation involved. There are a range of factors that can hold up the installation process – such as if you need a new Openreach home phone line installed, or if you’re signing up to Virgin and your property hasn’t yet been connected to their cable network. These potential delays should be factored in when looking to switch.

January 31st, 2017 | Andrew Hagger | News

Coventry Building Society is giving customers the ability to compare its savings accounts with competitor products on its own website – the only major UK savings provider to do so.

Customers can compare similar products across the whole of the market – on areas including the interest rate, the amount they can save and how they can operate the account – using independent data from Moneyfacts. There are also links to best buy tables from three well-known comparison sites.

Plus, visitors to the site can choose to see the interest they would earn on the Society’s savings accounts in pounds and pence throughout the site, personalised to the amount they are investing. The Coventry is again the only major UK savings provider to do this. It also has a whole new look and is much easier to navigate – particularly on smartphones and tablets.

Mark Parsons, Chief Executive at Coventry Building Society, commented: “Customers have told us that they want simplicity and transparency from their bank or building society and we’re proud to deliver the tools they said they would value most highly”.

“Our new product comparison tool is unique amongst major UK savings providers. Customers can see exactly how our savings accounts measure up against the competition on the things that matter to them. If a competitor’s account offers a better deal for them, they’ll be able to see that straightaway. We’ve also provided customers with a link to best buy tables, if they would rather check with a different independent source.”

“Some customers have also told us they don’t understand AER. We’re giving them the option to see what interest they would earn with our savings accounts in real terms – pounds and pence instead of percentages.”