February 13th, 2018 | Andrew Hagger | News

13 Feb 2018 Retired homeowners have gained more than £7,900 each in property wealth in the past year despite uncertainty in the housing market, analysis* from leading over-55s financial specialist Key Retirement shows.

Total property wealth owned by over-65s who have paid off their mortgages is near a record high of more than £1.101 trillion after growing £37 billion in the past year, Key’s Pensioner Property Equity Index reveals.

Owning a home outright has been worth nearly £660 a month on average for retired homeowners. Over-65s in the South East and East Anglia have been the biggest winners with gains of more than £1,000 a month while retired homeowners in the West Midlands have made £960 a month.

The long-term value of home ownership is underlined by Key’s index – since the group started analysing over-65s housing wealth in 2010 retired homeowners have seen growth of 41% or £321 billion which is worth around £68,500 on average for every over-65 homeowner.

The strength of the housing market means property wealth is making a major contribution to retirement standards of living as the equity release market expands with customers** releasing an average £77,380 of property wealth and nearly £134,000 in London and £91,000 in the South East.

Dean Mirfin, Chief Product Officer at Key Retirement said: “The long-term strength of the housing market is delivering for retired homeowners who have made around £7,900 in the past year.

“Total property wealth of more than £1 trillion means pensioners who have paid off mortgages can rely on using their homes to generate tax-free returns no matter what happens in the short and medium term.

“The average homeowner is releasing through equity release the equivalent of the gains made since 2010 and property wealth is having a dramatic effect on the standards of retirement living for many thousands across the UK.”

February 8th, 2018 | Andrew Hagger | News

08 Feb 2018  Although the Bank of England kept the base rate at 0.50% at it’s monthly meeting today, it intimated that rates may rise again soon and more quickly than previously predicted.

Some analysts are suggesting that the base rate will increase from today’s level of 0.50% to as much as 1.75% by 2020.

Personal finance expert Andrew Hagger of Moneycomms said: “There are still some excellent credit card and personal loan deals available, but with the next rate rise getting ever closer they won’t be around much longer, so grab them while you can.”

Hagger points out some of the top products currently on offer as follows:

• 0% purchases credit card for 31 months from Sainsbury’s Bank
• 4.9% APR Credit Card with rate fixed for up to 5 years from MBNA 5
• Credit card offering up to 30 months 0% on both purchases and balance transfers from Nuba
• Personal loan from M&S Bank at 2.8% APR representative for £7,500 to £15,000

He added: “You will need a good credit record to be accepted for these products as they are amongst the best in market and will be in great demand.”

“Borrowers have had it good over the last decade, but it looks as if the tide is about to turn and the cost of borrowing whether by mortgage, personal loan or credit card is likely to become more costly in the not too distant future.”

February 8th, 2018 | Andrew Hagger | News

08 Feb 2018 More than three quarters of parents with children aged 18-40 said they still felt responsible for their child’s financial security some or all of the time, according to new research from Legal & General.

The insurer surveyed over 1000 parents with children aged between 18-40, with the findings showing that the majority of parents (90%) felt responsible some or all of the time for their adult child’s overall well being.

The new figures come as part of Legal & General’s ‘Forever a Parent’ campaign, which aims to highlight the importance of parents taking steps to safeguard their children financially, including by having appropriate protection policies in place. Despite this, less than half of those who said they felt financially responsible some or all of the time had taken out a life insurance policy.

The survey also found that parents were putting their money where their mouth is, by continuing to support their adult children financially. Two-thirds had provided financial assistance within the past year, with nearly a quarter (24%) gifting more than £1000. Worryingly,33% of p arents had helped with general living costs in the last year and one in ten  had helped   with mortgage or rental payments in the last five years.

However, despite the considerable support provided on housing by the Bank of Mum and Dad, which last year Legal & General research found would lend £6.5bn, less than one in ten (9%) parents had helped their children with a house deposit since their child became an adult.

Of the 87% of respondents who had provided their child with some form of financial assistance, the top 5 reasons were:

• General Living costs (43%)
• To pay a bill (23%)
• Grocery shopping (23%)
• University education fees (20%)
• To pay for commuting or travel costs (16%)

Since their children had turned 18, parents had been asked to provide support on:

• Financial advice (46%)
• Career plans (40%)
• Cooking (37%)
• Car trouble (29%)

Finally, highlighting the valuable support parents continue to provide their adult children, a fifth (20%) of parents had been turned to by their children for financial advice within the last month.

John Hyde, Managing Director, Legal & General, Direct Insurance, comments:

“No matter their age, as parents we always feel a sense of responsibility for the wellbeing of our children. Whether it’s making sure they’re financially secure or helping them with life’s big moments, such as buying their first home, our research shows that parents continue to support their children, aged 18 or 40. Perhaps more worryingly, parents are still relied upon for more pressing financial matters, such as paying credit card bills and grocery shopping.

“However, no matter what support we provide, being a parent doesn’t stop after we’re gone and the question we all need to ask is whether that security will continue should the worst happen.

“With our Forever a Parent campaign, we want to encourage more parents to think about how they can safeguard their children, whether it’s making sure there’s an emergency fund if a tragedy strikes or by taking out a life insurance policy to help their families when they’re no longer around. After all, family is the most important factor in our lives and making sure they’re looked after and are financially secure is the top priority for any parent.”

February 6th, 2018 | Andrew Hagger | News

06 Feb 2018 As forecasters warn that Britain is set to have the coldest week of the year as temperatures continue to plummet. Leading breakdown provider Green Flag predicts more than 114,000 breakdowns will occur on Britain’s roads this week, as the difficult weather conditions take hold.

An abundance of ice and snow showers are set to hit the UK over the coming days – and with weather conditions causing havoc on British roads, 11 breakdowns a minute are predicted to take place across the country.

In response to the adverse weather conditions, Green Flag has issued a set of tips on how to drive in snowy and icy conditions, to encourage drivers to stay safe on the roads.

A spokesman for Green Flag, said: “The plunging temperatures and icy conditions may take some drivers by surprise this week, so it’s important that drivers do all they can to stay safe in the more challenging conditions.

“By thoroughly checking their cars before they leave home, and approaching the roads with caution, drivers will decrease the risk of encountering a problem on the roads this week.”

Winter Driving Tips

1. Check your speed and use gentle driver inputs – even if the roads have been gritted they’re likely to be slippery.
2. Give more warning than usual to other drivers – when turning, stopping or changing lane.
3. Keep plenty of distance between cars – you never know when you’ll hit an icy patch. If you pass the same landmarks as the car in front of you within three seconds, you’re following too closely.
4. Check whether your car has ABS anti-lock brakes. In the unlikely event that it doesn’t, pump the brake pedal slowly to prevent the wheels locking up and skidding.
5. Be extra-wary of black ice. It’s an invisible danger that can catch out even the most careful driver.
6. Approach corners at a steady speed, in as low a gear as possible. Don’t touch the clutch unless it’s absolutely necessary, steer smoothly and avoid braking on bends.
7. Ensure you’re familiar with your car’s ventilation system to prevent windows from steaming up. Air conditioning will keep windows free from mist and condensation.

February 2nd, 2018 | Andrew Hagger | News

02 Feb 2018 Analysis of over 11,000 UK personal current accounts (PCA) has revealed that the average holder was charged £152 in bank fees last year which, if incurred by every one of the 65 million active current accounts in the UK, suggests banks made £9.9 billion from charges in 2017.

The data, collated by Plum, the automated money management chatbot, coincides with launch of its Fee Fighters function, a free tool that enables users to check in exactly what fees they are being charged by their banks. This functionality is made possible due to the implementation of Open Banking, which aims to encourage fair competition and comparison. The European-wide regulation orders banks and credit card companies to share a customer’s data with other regulated companies if requested to do so by a customer, removing the banks monopoly on customer data.

The average £152 paid per year by current account holders includes overdrafts, foreign exchange, and transactions fees, as well other unspecified fees, such as monthly account charges. This £152 average rises significantly when considering personal current accounts with an overdraft function. In this case, total bank charges were closer to £221 per current account holder with those that have at least 1 overdraft transaction per year.

In terms of what charges were applied by the banks, 56% were due to overdrafts, both from planned and unplanned usage. Foreign exchange fees accounted for 11% of the total charges, while late transaction fees made up 6%. Over a quarter, however, (27%) of the total charges were classed as “other” which included monthly account fee, unspecified bank fees, or bank subscriptions. Some of these charges can be fairly high, with an average of £5-£10 charged per bounced back transaction it is not uncommon for users to accumulate these charges without realising it, getting charges up to £75 in “Unpaid Transaction Fee”.

To help consumers be alerted to and understand the culprits of the charges, Plum has developed a free Fee Fighter tool, first of its kind that alerts users to fees. With the implementation of Open Banking, in the coming months Plum hopes to go beyond raising awareness about hidden fees and provide solutions, helping users to identify smarter deals and more cost effective products with alternative providers bespoke to their financial requirements.

January 31st, 2018 | Andrew Hagger | News

31 Jan 2018 Coconut has today launched a new smart current account combining banking and accounting services, designed specifically for the UK’s ever-growing freelance and self-employed workforce.

The app-based business current account will prepare customers for HMRC’s ‘Making Tax Digital’ which starts rolling out from April 2019. Coconut features automated tax management and expense tools, giving customers visibility into how much tax they owe with a real-time estimate, while also categorising their expenses for tax and allowing them to stay on top of client payments with instant notifications.

The Coconut Start account which ultimately aims to eliminate tax returns, is free and can be opened in minutes on a mobile – instead of waiting for weeks which is the current norm. The app will offer optional extra services, such as VAT management.

Recent data from Coconut’s Self-Employment Survey highlights how money becomes complicated business when you work for yourself. Unexpected tax bills, unpaid invoices and financial admin are holding people back from finding financial security, with a quarter of respondents admitting that budgeting for taxes is one of the top five headaches when working for yourself. Keeping track of expenses (24%) and completing tax returns (22%) were also high on the list of challenges that self-employed people face, with almost a quarter storing their receipts in a box waiting to be sorted at the end of the year.

Sam O’Connor, Co-Founder and CEO of Coconut said:

“The growth of self-employment in the UK is one of the biggest structural changes in our workforce of our time, but self-employed people are still one of the most underserved groups of businesses when it comes to banking products and services that meet their specific needs.

“Staying on top of tax and expenses, getting paid on-time or managing an unpredictable flow of income is a big worry and time-suck for customers. And this is only going to become a bigger burden with Making Tax Digital requiring digital tax submissions quarterly instead of annually. We created Coconut to sort out these challenges for freelancers and we ultimately aim to eliminate the need for tax returns, removing a huge amount of stress for business owners.”

January 27th, 2018 | Andrew Hagger | News

27 Jan 2018 Co-op Insurance has today entered the Travel Insurance market, seeking to disrupt the sector by offering a new product shaped by its members.

The new travel insurance product offers cashless medical expenses, for all ages and medical conditions, meaning customers will not have to pay out themselves for any medical treatment – a first for the general insurance market.

Highlighting a need for this change, Co-op’s new study reveals two thirds (62%) of holidaymakers who have claimed on their travel insurance, said they had to cover the costs upfront themselves and then claim these costs back at a later date from their insurer.

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.

A further quarter (25%) had to take money out of their savings and a tenth (10%) ended up in debt as a result of having to pay the claim themselves and then claim this back from their insurer.

Furthermore, the new travel insurance product will offer Co-op customers access to an online medical consultation with a General Medical Council (GMC) registered doctor, 24 hours a day, seven days a week, from anywhere in the world.

Customers can use their smart phones or tablets to speak to doctors both prior to jetting off and during their holidays. Users can also receive prescriptions, referrals and fit-for-work notes, avoiding the need to navigate unfamiliar health systems and overcome language barriers.

Mark Summerfield, CEO, Co-op Insurance said: “This is an exciting time for the Co-op as we introduce Travel Insurance to our portfolio of products. Having recognised a gap in the market, we’ve worked with our members across the Co-op, to build a product which is fair, inclusive of all ages and medical conditions.

Andrew Hagger, Personal Finance Expert from Moneycomms said:“It’s great news for consumers that a respected brand such as Co-op will be competing in the travel insurance sector with such an attractive proposition”

“Furthermore, we’re the first general insurer to pay medical expenses up front, ensuring that our customers are not left out of pocket at what can already be a stressful time.”

For more information on Co-op Travel insurance visit www.co-opinsurance.co.uk

With the average travel insurance claim now standing at £2,090, Co-op’s study reveals the effect this has on UK holidaymakers’ pockets. A quarter (26%) had to turn to family members to borrow money in order to pay the claim.

January 26th, 2018 | Andrew Hagger | News

26 Jan 2018 Car insurance bills have increased by 9.6% in the past year, but the relentless rise has gone into reverse following a Government U-turn, new analysis from insurance research experts Consumer Intelligence shows.

Its data reveals the average most competitive premiums rose by three times inflation – 3% ­to – £837 but overall prices dropped in the last quarter of 2017.

The Government review of the discount or Ogden rate, which sets pay-outs for major personal injury claims, has enabled insurers to reverse rises; confirmation of the new rate of between 0% and 1% could spell further cuts.

Average premiums dropped by 1.7% in the three months ending December, with under-25s benefiting the most – their average premiums are up just 2% in the past year to £1,953.

Younger motorists are also limiting their insurance bills thanks to black box technology – so-called telematics – which rewards improved driving. Around 59% of the most competitive quotes are from telematics providers.

Over-50s drivers are experiencing the biggest increases in premiums at 11.8% but still pay average prices of just £395 a year. Motorists in London pay the highest premiums at £1,217 which is more than double the cheapest at £606 for the South West of England.

January 25th, 2018 | Andrew Hagger | News

25 Jan 2018 Just 17% of UK SMEs feel their high street bank fully understands the specific challenges of their business, according to Close Brothers Group’s quarterly business barometer of 900 UK SMEs.

Close Brothers research revealed that UK SMEs were concerned that their high street bank was not well enough equipped to offer bespoke advice and support for their business, with just 24% saying that they offered a range of products suitable for their business.

A recent report from Close Brothers, The Power of Productivity: Measuring, understanding and improving productivity for SMEs revealed that only 26% of SMEs thought that their high street bank was able to meet their funding needs. Previous research found that just 41% of UK SMEs accessed funding through their chosen source of finance last year, and 34% felt that it wasn’t enough for their investment plans.

Having access to the right finance is imperative for SMEs to grow their business, but the latest barometer results suggest that high street banks are lacking the specialist knowledge needed to support small businesses. Many SMEs are unaware of all the finance options available to them and will therefore go to the biggest banks as the first port of call when looking for finance.  With the high street bank rejection rate for first time borrowers at 50%, and a third of SMEs reportedly giving up after their first rejection for funding, this is a big cause for concern.

In addition to many SMEs giving up after rejection from high street banks, those who do go on to access finance often opt for the wrong type of products. This product unsuitability may put them at risk and hinder their growth. For example, an SME may choose an overdraft to finance new equipment or technology and run the risk of the bank being able to withdraw the facility at any time, leaving little or no time to repay the money.

Credit card use is also prevalent among SMEs, with 47% using a personal card for business purposes and, whilst the majority will pay their card off regularly, this need for short term finance could put businesses at risk should the interest accumulate.

A spokesman for Close Brothers Group plc said: “SMEs need to receive the right support, particularly when it relates to financial decisions, and this research suggests that high street banks may not always be the best option.

“Every small business is unique and their challenges and requirements vary considerably.  They rely on advice and support on how best to deal with their specific finance needs and this is where a lender with the relevant specialist knowledge and experience is invaluable. Explaining the options available, providing funds and helping overcome issues are all areas where the right finance provider can make a real difference.

Working with lenders who understand and recognise the importance of the SME market is always likely to result in a better outcome.”

January 22nd, 2018 | Andrew Hagger | News

22 Jan 2018 Short term saving is dominating Brit’s savings habits, with two in five (35%) prioritising saving for a rainy day fund over any other financial milestone, according to the latest sentiment research from Foresters Friendly Society.

The findings reveal that less than a third of consumers (29%) view saving to provide a retirement income as a priority, while around a quarter are prioritising saving for a holiday. This long term saving gap is particularly significant amongst millennials (those aged between 18-34) who stand most to gain when thinking longer-term, where saving for retirement ranked even lower on their list of priorities with just 16% building up ‘nest eggs’ for their future.

This short-termism is reflected in their savings choices, highlighting a significant lack of understanding when it comes to deciding how best to achieve these financial goals. More than a third of UK adults use a standard savings account as their preferred way to save while 27% opt for cash ISAs and 15% just use their current accounts. In the current low interest environment, none of these vehicles is likely to deliver significant returns but shares based options, best suited to early saving, offering the potential for superior returns are not being embraced in significant numbers, with take-up of the Lifetime ISA at 9% and Stocks and shares at just 10%.

This attitude calls for improved education, amongst younger savers particularly, on the importance and benefits of saving early in order to avoid them hampering their future saving progress. Fewer than one in ten, for example, are taking advantage of the benefits from the Lifetime ISA (LISA) which was developed specifically to help those under 40 years old achieve their long-term savings goals.

Paul Osborn, Chief Executive for Foresters Friendly Society commented:

“There’s a lot of talk about economic uncertainty, and we’re seeing inflation continue to outpace wage growth, so it’s little surprise that people are putting something away for a rainy day. But there’s a real worry that this is being done at the expense of their longer-term saving.

“Saving early and often is a great habit to get in to, but that’s only part of the savings puzzle. The next step is to identify the best way to achieve your goal. Interest rates continue to deliver meagre returns, so whether you’re saving for a house deposit or for retirement, it’s important that you give yourself the best chance. This means making use of government bonuses through schemes such as the Lifetime ISA, and taking the investment risks appropriate for your stage of the saving cycle. Savvy investing can make your savings goals much more achievable and can make your financial future much more secure.”