December 11th, 2017 | Andrew Hagger | News

11 Dec 2017  Commuters are carrying valuables worth more than £516 million every year, new research from Policy Expert has revealed. 8.6 million people travel across the TFL network, each carrying valuables worth more than £600, with mobile phones, jewellery and wearable gadgets all making the list of the most common items.

In addition to these findings, a Freedom of Information request to TFL also reveals that more than 330,000 items including phones, laptops, desktop computers and games consoles, made its way into TFL’s lost and found last year.

Of the incidents highlighted via the FOI, mobile phones were one of the most commonly lost items with 34,322 left behind. More than 1,000 laptops and 70 games consoles have also gone astray.

The data – which shows the total items lost every year since 2013 – revealed there has been a 24% increase in lost items, including a 19% increase in technology gadgets being left behind.

Adam Powell, Head of Operations at Policy Expert commented: “It’s easy to get distracted whilst travelling on public transport, particularly during the rush hour when trains, tubes and buses are jam packed. But it’s important to ensure you’re keeping a careful eye over your belongings to avoid taking a trip to the lost and found. Most importantly, make sure your home insurance policy includes away from home cover, that way, should you lose or leave a valuable item on the train, bus or tube, you know you’re covered.”

The most popular items UK adults carry on their daily commute:

1. Mobile phone – 92%
2. Wallet or purse – 76%
3. Jewellery – 34%
4. iPad/tablet- 14%
5. Wearable tech (e.g. Fitbit or Garmin) – 12%
6. Laptop – 9%
7. Kindle or e-reader – 6%

Top tips for protecting your valuables

1. The most lost and stolen items in the last year were mobile phones – while it’s tempting to check your phone when on the move, ensure you’re being sensible with where you make calls and texts. Keep it out of sight in a zipped bag or pocket.
2. Never idly put down any small valuable item, such as a phone or purse. Valuables left on tabletops in restaurants will be both easy and tempting to snatch and leave behind.
3. Keep your bag where you can see it, especially when on the tube or in a crowded area. If you’re in a restaurant place your chair leg through a bag handle to make it harder to move.
4. Be cautious if you’re walking by yourself, in the dark or with earphones in – being alone or distracted by music can make you more attractive to thieves.
5. If you’re using a cash machine, be wary of who is around you and make sure your pin is covered.
6. Thieves often work in groups, so try not be distracted by commotion or attention which could be a ploy.
7. Finally, check whether your home insurance policy includes away from home cover so if the worst does happen, you at least know you are covered financially.

December 6th, 2017 | Andrew Hagger | News

06 Dec 2017 Introduced in April 2015 the pension changes brought freedom and choice on how to take income in retirement. It means that most individuals, age 55 or over, can now withdraw as much or little income, as and when they like from their defined contribution (DC) pension scheme.

It may be tempting to take advantage of the new freedoms and cash in your pension, but have you really thought through what’s involved?

Please see below for WEALTH at work’s top tips to help inform your decision-making.

1. Don’t pay unnecessary tax
Tax planning should be at the heart of any pension transaction you undertake. Don’t forget that only the first 25% of the amount that you drawdown from your pension pot is tax free and the remaining 75% is taxed as earned income. If you cash in a pension during a tax year when you are still working, 75% of the sum withdrawn will be added to your earnings for that tax year and may push you into a higher tax bracket. It may therefore be worth considering withdrawing smaller amounts from your pot.

For example; if you are a non-taxpayer and have your full personal tax allowance available (£11,500 for 2017/18), you could withdraw £15,333 tax-free – 25% as tax free cash (£3,833.33) and the remaining 75% (£11,500.00) would fall within your personal allowance.

An option could be to take an income through ‘partial’ or ‘phased’ income drawdown. This would enable you to drawdown small amounts of your pension pot while keeping the majority of your savings invested in the pension and growing tax free. Of course, growth isn’t guaranteed and the value of your pension could fall instead.

Another important point to note is that if you withdraw any cash simply to add to your savings, the money withdrawn will form part of your estate for inheritance tax purposes. If left in the pension scheme, it would be exempt of inheritance tax.

Ultimately, it’s crucial not to forget that a pension remains one of the most tax efficient saving vehicles available.

2. Will your retirement savings withstand the test of time?
Before taking the cash, it is crucial to think about if you will have enough money to last the duration of your retirement. For example, a 65-year old man now has a 50% chance of living to 87 and a woman of the same age has the same chance of living until she’s 90, so making your retirement savings last is key. But don’t forget, it’s not a one-off decision; it’s advisable to regularly review your choices throughout your retirement as your needs evolve and income needs may change.

For example, income requirements are widely believed to follow a ‘u shape’ in retirement with the first ‘active’ phase being the most expensive. Spending seems to fall after a while in what is known as the ‘passive’ phase, as people become a little less active and perhaps cut back on areas such as travelling. But costs then may go up later in retirement in the ‘supported’ phase, if extra care and support is required.

3. Does your pension scheme allow it?
If you’re convinced that cashing in your pension pot is the right move for you, you need to ensure that your pension scheme allows you to do so.

You may, for example, be a member of a final salary, or ‘defined benefit’ (DB) scheme, which currently prohibits members from taking their savings in one go (unless on the grounds of serious ill health).

This means that you’ll need to transfer your savings into a suitable pension scheme to be able to access your cash. However, pension transfers are complex – there are many things you should consider before making any decisions, including if the transfer value being offered represents good value. Transferring from a DB pension scheme can mean that you will be giving up valuable guaranteed benefits and you might find yourself worse off.

To protect consumers it is now a legal requirement to take regulated financial advice for transfers on DB schemes valued at £30,000 or more. This advice is a highly specialised area and only certain advisers hold the relevant qualifications and permissions to help you. It should also be noted that the Financial Conduct Authority’s (FCA) current view is that a transfer will not be suitable unless it can be proved to be in your best interests.

4. Beware of scams
Pension savers getting scammed out of their retirement savings is a real issue. The problem is many of these scams look perfectly legitimate so are not easy to spot. Others offer investment returns which are too good to be true but people easily get sucked in. They often have very professional looking websites and literature.

Whatever you are planning to do with your retirement savings, check before you do anything that the company is registered with the FCA https://register.fca.org.uk/. You can also visit the FCA’s ScamSmart website which includes a warning list of companies operating without authorisation or running scams www.fca.org.uk/scamsmart.

5. Financial advice can be better value than no advice
Many people are concerned about the cost of advice without realising that when you buy retirement products such as annuities, through for example online brokers, there are charges deducted which can cost just as much, if not more, than getting advice. A financial adviser should look at your personal circumstances, objectives and attitude to risk and then, after considering all of the retirement income options available, make a specific recommendation to address your needs; then you have the benefit of consumer protection for the advice given. After all, according to research by Unbiased, UK savers who take advice save on average £98 more every month and receive an additional income of £3,654 every year of their retirement, based upon a pension pot of £100,000.

Jonathan Watts-Lay, Director, WEALTH at work, comments;
“The freedoms people now have with their pensions is a good thing, but it can be incredibly daunting especially when we see news headlines about people paying too much tax or getting scammed out of their retirement savings. But this doesn’t have to be the case. Getting the right support in terms of financial education, guidance and advice, can help individuals understand the many retirement income options available and how these can be calibrated to provide a retirement income in the most tax efficient way.”

December 6th, 2017 | Andrew Hagger | News

06 Dec 2017 Only 78% of British car buyers say they typically do any research at all before purchasing a car according to a study by car finance provider Black Horse. This is less than buyers researching a holiday (84%) and only slightly more than those who research smaller purchases such as a mobile phone (72%) or a TV (66%).

Of those who do research a car before buying, almost a quarter (23%) do so for a day or less, whilst almost half (47%) say they spend a week or less doing so. Just under one in five (19%) say they spend a month researching before buying.

Similarly when selecting which purchase they’d spend most time researching from a list (see table 1), 31% of Brits said a holiday, almost double that of those who said a car (16%). This gulf is widest in 18-24 year olds where 41% say they typically spend the most time researching a holiday and 19% said mobile phone, compared to only 9% who answered a car.

Black Horse head of motor finance Tim Smith said: “With the obvious exception of property, a car is likely to be the most expensive purchase people make. So its crucial that people carry out detailed research before buying and our data suggests many of us do not. We also see a large volume of buyers appear to carry out only limited research despite the likely cost and lifespan of the purchase.

“We would strongly encourage anyone looking to buy or lease a car to consider all options available to them, to shop around for the best deal and fully understand the total cost especially over the term of a finance or leasing agreement. Whilst consumers rightly research electronic goods and holidays before buying, the reality is these are not usually as expensive as a car.”

December 6th, 2017 | Andrew Hagger | News

05 Dec 2017 A quarter (24%) of UK SMEs believe that banks have failed to change the way they behave since the global financial crisis in 2008. The survey of UK SMEs from CivilisedBank, the new UK business bank with a Local Banker network, also reveals that over half (55%) of those surveyed believe that it is not a priority for banks to act in a ‘civilised’ manner.

Some of the reasons given for this negative sentiment includes the continued closure of branches, poor customer service and an emphasis on profits before service. Indeed, one respondent stated that bank staff are pressured to make short-term sales to boost low basic salaries, rather than focusing on long-term business development and client relationships.

Some executives at SMEs noted that with the removal of local relationship managers there is no consistent point of contact at their bank, resulting in a limited understanding of their business to help inform decisions. Others highlight that rather than treating SMEs as individual entities, decisions are made via computer algorithms with little understanding of the case-by-case requirements of each business from an informed, personal perspective.

Over four fifths (82%) of SMEs think that banks behave in a civilised way at least some of the time, while 3% believe that banks never behave in a civilised way. In fact, only 8% believe banks operate in a civilised way all the time.

Despite this, almost three quarters (73%) agree that they would consider a bank that behaves in a civilised way, over those that do not. Over two fifths (46%) of SMEs also think it is extremely important for their suppliers and partners to act in a civilised way.

Philip Acton, Chief Executive Officer, CivilisedBank said: “It’s clear that SMEs want to see change. Despite many initiatives since 2008, a quarter of executives at SMEs still think nothing has changed in banking.

“As an industry, banking needs to get back to the future and to revisit customer service and personal relationships, something that has been lost over the years. Whilst much has changed since the 2008 global financial crisis, the good work that’s been done has not resonated with the wider public. As a sector, banks need to reconnect with SME customers.”

Meanwhile, amongst SMEs themselves, almost a third (32%) are actively taking steps to make their business more civilised. Some 13% are placing a particular focus on being more ‘hands on’ with their customers so that they can develop meaningful, long-term relationships. Only 7% said that making their business more civilised was not a priority.

Over half of SMEs (59%) selected ‘fair treatment of customers’ as representing what being civilised means to their business, with being a ‘responsible employer’ (38%) and having ‘strong relationships with customers’ (37%) also ranking highly.

Nick Gould, Chairman of the SME Alliance said: “SMEs are, as we keep being told, the backbone of the UK economy and in times of wider uncertainty it is vital that they are given the support they need in order to grow. The banking sector as a whole needs to examine constantly how best to meet the needs of this massive market. Banks need to combine the best of innovative technology and a more relationship driven approach, the old and the new. What is clear from evidence we have seen is that the current status quo isn’t reliable or effective enough if we are to foster a truly vibrant and innovative SME driven economy.”

November 29th, 2017 | Andrew Hagger | News

29 Nov 2017 With Brexit anxiety, interest rates on the up and house prices expected to stall, the current property market is a minefield for anyone looking to buy in the UK. Despite this uncertain time, the desire for Brits to get on the property ladder is still strong, especially among those in their 20s.

A SpareRoom.co.uk survey of more than 5,000 British renters found that 86% of 20-somethings said they want to get on the property ladder, with 52% wanting to do so in their twenties. The vast majority of those (87%) said the main motivator is to pay into their own home, rather than lining their landlord’s pocket.

But the bank of mum and dad isn’t an option for most. 87% of 20-somethings said they intend to save a deposit from their salary, with just 1 in 3 anticipating help from parents.

With the average UK salary standing at £27,600 (£34,473 in London) and the average house deposit at £33,000 (£106,577 in London), people saving the average 5.9% of their income outside of London (around £108 a month) would need to do so for 25 years to accumulate a deposit. And those buying in London, saving an average of £131 a month, would need to save for a staggering 68 years to save up the deposit. This means buying in their twenties is an unachievable dream for most, even with the stamp duty relief announced in the recent Budget.

The findings uncover the extremity of the situation, with 93% of London flatsharers in their 20s saying they may have to leave the capital to buy a house and 87% across the UK are facing the prospect of leaving the town/city they call home in order to buy.

In contrast, people who are forty plus are far less bothered about owning. 29% said they don’t think owning is important, compared with 10% of people in their twenties and 15% of people in their thirties.

This piles on the pressure to find a high paying job to save a deposit and, even then, affordability is still a huge issue, as a quarter (25%) of twenty-somethings who bought and then sold a property said this was because they could no longer afford it.

Personal Finance expert Andrew Hagger from Moneycomms commented on the findings: “Buying a house isn’t a fool proof money maker. The UK’s property market is far less certain than just 18 months ago, and buyers are faced with rising inflation and interest rates. House prices are also stalling and in London there’s signs they’re falling. This may seem like good news to first time buyers but, if the trend continues, there’s a strong possibility people will end up trapped in negative equity.

“The financial pressure of buying a house isn’t just the deposit and the monthly mortgage repayments. If anything goes wrong, you have to pay for it and this can be a huge cost. Young people need to consider whether they can truly afford this without getting into difficulty. Buying a house in your twenties ties you to a long-term responsibility that can be tricky to get out of.

“Property can be a great investment, but you need to weigh up whether the potential profits currently outweigh the risk of ending up in negative equity. This is a decision that should not be rushed.”

Matt Hutchinson, director, SpareRoom comments: “Ownership is undeniably the wise long-term option for those who can afford it. But people in their twenties are putting too much unrealistic pressure on themselves to get on the property ladder. Renting ought to be the perfect choice in your twenties, leaving you flexible to move around, travel, change jobs or find a partner to settle down with. But we’ve become so terrified of missing out on the long term financial benefits of owning, buying feels like the only option.

“Brits have been force fed the notion by successive governments that buying is the right thing to do. But it’s not currently the realistic thing to do, leaving millions of people feeling locked out of financial security and like they’re a failure. That’s just plain wrong.”

If 82% of people think they’ll have to move to another area in order to buy then our housing market is failing us. Our homes should be secure, comfortable, affordable platforms for us to lead happy and productive lives. Instead they’ve become financial assets, investments, pensions and, for a whole generation, nothing more than a pipe dream.”

November 28th, 2017 | Andrew Hagger | News

28 Nov 2017   Homeowners who have been a victim of a break in are two and a half times as likely, as someone who hasn’t, to be targeted again, according to Co-op Insurance’s latest claims data.

Furthermore, for those homeowners who are unfortunately targeted a second time, Co-op’s claims data reveals this is approximately 16 months after the first break in took place.

Highlighting a need to make homeowners feel more safe and secure at home, research among a panel of homeowners conducted by the Co-op shows that two fifths (38%) feel nervous at the thought of someone unexpected approaching their door.

Over a tenth  said they wouldn’t answer the door if this was the case and a further 12% said they only answer their door to friends and family.

Co-op’s claims data also highlights that home break-ins are 43% more likely to occur in November and December, in comparison to the summer months.

In order to help these homeowners feel less nervous at the thought of someone approaching their door ahead of the Christmas period, Co-op is piloting providing smart, connected doorbells to customers who have been a victim of burglary, for a period of 6 months.

As a means of connecting communities, the doorbells allow homeowners or loved ones and neighbours on their behalf, to see and speak to anyone at their front door from anywhere, using their smart phone, tablet or PC, ultimately to help people feel safer.

The device, created by US start up Ring.com works by sending instant alerts to electronic devices when people press a doorbell or trigger the in-built motion sensors. Homeowners, loved ones or neighbours can speak to whoever is at the door, using the inbuilt speakers and microphone.

Caroline Hunter, Head of Home Insurance at the Co-op said: “Our claims data shows that people who are victims of home break-ins are more likely to be targeted again. We want to connect communities and provide tools for neighbours to easily keep an eye out for each other helping homeowners feel safer.

When we asked ex-convicts what would put them off attempting to break into a house, 89% agreed that ‘smart tech’ topped the list.

“For that reason, we’re now starting to provide these smart doorbells as a six month pilot to a proportion of our direct home insurance customers, who have had to claim for burglary.

“In addition to helping people feel safer, the device also allows homeowners to record activity, which, in the event of a break in, could be of use to the police and insurers.”

November 28th, 2017 | Andrew Hagger | News

28 Nov 2017  More than one in five are saving or investing less because they cannot access advice on how to handle their money, new research for the Nottingham Building Society (The Nottingham) shows.

Its study found 21% of adults believe they are not saving as much as they could and would be able to put away an extra £134 a month on average if they could get financial advice – the equivalent of more than £1,600 or three weeks’ average earnings before tax**.

It is younger savers and investors who need the support with their finances the most, The Nottingham research shows. Nearly one in three (30%) of under-35s believe they are not saving enough because of a lack of advice compared with just 12% of the over-55s questioned.

The first base rate rise in 10 years combined with rising inflation is making the need for advice more important but The Nottingham’s research shows customers are struggling to get help. Around 20% say they have struggled to access advice on savings in the past two years and 11% have struggled to get advice on investments.

Banks and building societies are increasingly being considered as a potential source for independent advice – around 73% of adults say they would consider becoming a customer of a bank or building society which provided advice services. However, branch closures are making it more difficult to access advice, The Nottingham warns.

It has transformed its branch proposition to offer a wide range of financial advice-based services including support on savings products, and independent whole of market advice for mortgages and financial planning.

David Marlow, Chief Executive of The Nottingham said, “It is very worrying that people are missing out on saving and investing simply because they struggle to get independent advice.

“The recent rate rise and increased competition among providers means there is more choice than ever but at the same time people clearly need more help to decide what is right for them and their individual circumstances.”

”Branch closures are making it difficult for savers to get the advice they need to make major financial decisions.  As a mutual building society, we have a significant role to play in helping members to plan for the future which is why we are expanding our branch network and providing our unique combination of advice and service all available under one roof.

November 23rd, 2017 | Andrew Hagger | News

23 Nov 2017  Home insurance premiums are soaring as rising inflation increases the cost of claims while fraud escalates, new analysis from insurance market experts Consumer Intelligence shows.

Average home insurance costs rose 8.5% – nearly three times the 3% rate of inflation for the economy as a whole – in the year to October to £131.

Inflation is increasing the cost of repairs as claims for water leaks damage grow with more homeowners installing bathrooms and wet rooms. The rising cost of gold and diamonds is also hiking the cost of jewellery claims, while fraudulent claims are another issue, particularly among younger demographics, analysts say.

Consumer Intelligence – whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics – says average premiums in London are the highest at £168, 41% more expensive than the £119 in the South West of England.

Prices are rising fastest in the South East of England and Wales where premiums are up to 10.6% higher than last year while Scotland is seeing the lowest price rises at 5.6%.

Older homeowners (£127) now pay slightly less for their insurance than the under 50s (£133), with average premiums increasing 8.4% and 8.6% respectively, over the past year. 

Customers can take comfort from the fact that home insurance costs are still slightly lower than they were three years ago.  And owners of newer properties built after 2000 pay average premiums of £114 due to tighter building regulations. 

John Blevins, from Consumer Intelligence, said: “The home insurance market remains very competitive but customers can expect prices to continue to rise in line with inflation.

“Claims costs are increasing but there is no one major factor driving the market. Some trends are emerging, however, including escape of water claims and the cost of jewellery claims driven by price increases for gold and diamonds.

“Fraud also impacts home insurance claims in a similar fashion to motor – although claims tend to be smaller in severity, but greater in frequency.”

November 20th, 2017 | Andrew Hagger | News

20 Nov 2017  Co-op Insurance is urging motorists to be alert on the roads this Black Friday as its claims data reveals that motor incidents increased by almost a fifth (18%) on this day last year, in comparison to 2015 data.

Whilst ‘Black Friday’, due to fall on 24^th November this year offers bargains galore to consumers, last year it led to an increase in motor accidents, collisions and theft claims according to Co-op Insurance’s claims data.

Nick Ansley, Head of Motor Insurance said: “Our claims data shows year on year that Black Friday’s sales do lead to greater traffic on UK roads and therefore more incidents. 

“Whilst drivers should take care all year round, unfortunately we do see an increase of road incidents on this day specifically and so we’re urging drivers to take care when out on the roads.”

Furthermore, Co-op’s claims data highlights that Cyber Monday due to take place on 27^th November is becoming a safer day to drive on the roads for motorists as consumers opt in to online sales.

The insurer found that the number of claims from on Cyber Monday in 2016 decreased by over a tenth (12%) when compared to 2015 claims data.

November 20th, 2017 | Andrew Hagger | News

20 Nov 2017  The average Brit has six jobs in their lifetime, according to new research by Investec Click & Invest released today.  However, those aged between 18 and 34 plan to only stay in their current job for an average of three years and four months, which equates to an average of 12.5 jobs during their working lives – more than twice the national average.

Millennials are most likely to be driven by wanting more money, a new challenge or career progression (all 35%).  This compares to older individuals, whose primary reasons for wanting to change jobs include being unhappy in their current role (33%), wanting to do something different (25%) or wanting to do something they are passionate about (24%),

Indeed, only a quarter of millennials stated that they would want to move because they were unhappy, while they are also less likely to want to move to have an easier job (4% versus 7% of over-35s) – dispelling the myth of the “lazy millennial”.

It is 18 to 34-year olds who also secure the highest proportional pay rise at 20.4% when they change jobs. While this is largely due to the lower average salaries earned by those starting their careers (£30,913), this still represents an increase of £5,235 – 64% higher than the national average pay rise.

Commenting on the findings, Jane Warren, CEO of Investec Click & Investec said:

“The days of a job for life have long been over and our findings show that younger people are keen to take control of their careers by switching jobs to meet their objectives, despite the greater insecurity this brings.  Against this backdrop, it is important that they save and invest to provide the certainty and security that may be otherwise missing.”

Investec Click & Invest (www.clickandinvest.com) is the new online investment management service for individuals with £10,000 or more to invest. Click & Invest combines the experience of a team of Investment Managers and over 180 years of wealth management experience with the convenience and ease of an online service, opening the door for individuals who wouldn’t usually be able to access traditional wealth management services.