January 21st, 2019 | Andrew Hagger | News

21 Jan 2019 UK adults are putting their finances at risk by shortcutting powers of attorney and relying on good will from their relatives to manage their finances, according to Co-op, the UK’s leading probate provider.

A quarter (25%) of over 45 year olds have access to a relative’s bank account who isn’t their spouse. Of these adults, almost a tenth (7%) have set up formal joint accounts with a relative, whilst a fifth (18%) have access to a relative’s bank card or internet accounts.

Of those people who have put joint bank accounts in place, a third (35%) said they had access to a parent’s bank account and a fifth (18%) are able to access a sibling’s account. A tenth (11%) can access an aunt or uncle’s accounts and a further tenth (9%) can access the account of a grandparent.

According to the research, which was conducted among 2000 over 45 year olds, the main reasons for the access are to manage their money for them and to pay for groceries and luxuries such as holidays – things, that an appointed attorney could do legally and securely.

Whilst so many over 45 year olds have these informal arrangements in place, over a tenth (11%) admitted that they’d worry about a relative borrowing money if they were short themselves and a further 5% said they had suspicions that their relative may have previously taken money.

Despite this, the research shows that people are opting out of putting a power of attorney in place. Instead, they’re making their own unofficial arrangements to enable relatives to make decisions about their finances. Four fifths (79%) of those surveyed said they do not have a lasting power of attorney in place.

Furthermore, three quarters (74%) of people aged between 65 and 74 and two thirds (67%) of people aged 75 to 84 also do not have a lasting power of attorney in place.

Gavin Holt, Head of Probate at the Co-op said: “It’s concerning that so many people are ignoring, or perhaps are not aware of, the benefits of lasting powers of attorney and are putting these accounts of convenience in place instead.

“Whilst it may seem convenient and safe at the time, in our experience, these informal arrangements can often cause significant problems which only come to light after death. The worst of the problems, and sadly one of the most regular, is where financial abuse is alleged to have taken place.  This can add months, if not years, to the length of the probate process.”

A lasting power of attorney is a secure and formal means of allowing trusted individuals to make decisions about a person’s finances and also about their personal welfare, and they continue to have effect in the event that the person becomes unable to make the decisions themselves.

January 17th, 2019 | Andrew Hagger | News

17 Jan 2019 Christmas may be an expensive time of year but new research by Leeds Building Society found nearly a quarter of people in the UK who celebrate the festive season (24%) don’t save ahead for it at all.

Conversely, 15% of those surveyed start saving in January although 39% tend to leave it much later and start putting money away from September onwards.

As part of its ongoing efforts to understand the savings habits and attitudes of UK adults, the Society ran a national YouGov survey to find out how far people who celebrate Christmas plan ahead.

Of those who save, respondents were split between early starters and the planners who begin organising gifts, festive food and get-togethers from autumn onwards.

Some are thinking about Christmas almost as soon as the cards and wrapping paper have been recycled and the decorations packed away again:

·         2% start asking for gifts or dropping hints in January although most people wait until later in the year, with one in four (25%) placing requests come November.

·         An organised 7% start buying gifts in January but Christmas shopping peaks in November when almost a third (32%) buy their presents. Almost a quarter (24%) wait until December before hitting the shops.

·         5% are deciding in October what to eat on Christmas Day, with 1% starting to think about this as early as September.

·         4% of people put up their Christmas decorations in November.

The research found fewer than one in five (18%) had relied on credit to cover the cost of Christmas – however, the majority of those took more than a month to repay what they’d spent, risking interest and additional charges inflating the final bill.

Of the respondents who had used credit for Christmas spending, 71% % took up to six months to repay this, while 23% needed longer.

“It was good to see plenty of people start saving for Christmas in January,” said Matt Bartle, Leeds Building Society’s Director of Products.

“Similarly, it was positive that nearly three quarters (74%) of the people surveyed don’t take out credit to pay for Christmas. However, it was worrying that those who do use use credit can take months to pay it off, which will incur fees and could end up costing them a lot more.

“When there’s a big annual expenditure – whether that’s Christmas or a holiday – saving little and often helps to spread the cost to make it more manageable and it’s satisfying seeing your savings grow.”

January 8th, 2019 | Andrew Hagger | News

08 Jan 2019 The 8^th of January marks the most popular day of the year for people in the UK to begin legal proceedings to dissolve marriages. Sometimes things just aren’t working and a low point at the start of the year is enough to push a marriage over the edge. So why are people more likely to make this life-changing move than they are to change banking provider? It’s considerably easier to break up with your bank, picking up a new card or current account, and in many cases people still don’t act on their dissatisfaction.

Myths and the power of habit are stopping people from getting the best deals, with a bit of shopping around and research you can get so much more from your money. With the 7-day switch guarantee consumers can also be assured that they will be with their new provider within a week and will not be without access to their financial products for more than 48 hours.

Matt Ford, Product Director at Tandem Bank, says “The incumbent banks are still profiting from the myths that surround switching banks. It seems that no matter how many difficulties you have with your banking service, you stick with it, even more so than you would with a struggling marriage. In reality, switching provider has never been easier and there are so many products on the market that offer tangible benefits and a better banking experience.”

Thanks to Open Banking a wealth of opportunities have opened up for both the banking sector and consumers. Open Banking allows consumers to connect a range of financial products, pulling together a banking experience from all corners of the industry that is personal to them.  Apps like Tandem’s pull all of these tools into one place, curating third-party services and gathering insights on your financial life to help you spend, save and manage your credit better.

Matt Ford, adds, “The market has never been so diverse and the one-size-fits-all approach to banking is broken. Seek out the best from the market for your individual needs. ‘Changing banks’ doesn’t have to mean switching every banking product. You could just opt for a better rate on your savings or a credit card that doesn’t sting you with fees when you spend abroad. It is remarkable that you are more likely to get divorced than to change your bank – it’s time we change that.”

January 8th, 2019 | Andrew Hagger | News

08 Jan 2019 More than half of savers (53%) still intend to rely on ISAs to protect interest on their nest egg from the tax man, according to new research by Leeds Building Society.

The national survey also found most people (66%) chose an ISA because they knew their interest would be tax-free^†.

The Society has continued to see strong demand for its ISAs, particularly fixed rate products, despite a marked decline in the tax-free savings market following the introduction of the Personal Savings Allowance (PSA).

Since the PSA came into force in April 2016 the first £1,000 in savings interest earned by basic rate taxpayers is tax-free (£500 for higher rate taxpayers), a benefit which applies to the majority of UK savers.

However, one in four of those surveyed (24%) was unaware of the PSA.

“We carried out this national research to find out what savers thought about tax-free saving and better understand what type of products they were seeking,” said Matt Bartle, Leeds Building Society’s Director of Products.

“We believe ISAs are still important to tax-efficient saving in the longer term – consistent saving in tax-free products can build up a substantial nest egg over time and all the interest on that investment is protected from the taxman.

“While the PSA benefits the majority of savers, it was surprising a significant number of people were either unaware of it or unsure of how it affected them.

“Successive Governments have implemented different measures to incentivise saving – the fact that savings accounts with tax-free status have been around for nearly 30 years acknowledges the importance of this type of product and its value to consumers.”

The Society has refreshed its ISA range for the New Year and offers a choice of variable and fixed rate products, available across different channels including branch and online.

Highlights include:

·         1.80% Two Year Fixed Rate ISA, which is market-leading on the high street

·         1.38% Limited Issue Online Access ISA

The maximum investment for the current tax year (2018/2019) is £20,000, less any amount invested in a Stocks and Shares ISA in the same tax year.

January 2nd, 2019 | Andrew Hagger | News

02 Jan 2019 As the nation goes back to work, new data reveals Britons are also heading online for mortgage advice.

The research, conducted by free online mortgage broker, Habito, looked at Google trend data from the last five years across mortgage-related search terms such as ‘mortgage deals’ and ‘best buy mortgages’. 27th December onwards is when internet searches pick up, with 10-15 per cent more traffic than at the start of the month. But, the real search volume hike begins on 2nd January with up to 60 per cent more people looking online for a mortgage deal than start of December.

Long-term financial planning is the flavour of the month in January with searches in categories related to pensions or insurance up significantly by 30 per cent month on month. Web searches relating to shorter-term products such as credit cards or banking services remain consistent.

Daniel Hegarty, CEO at Habito, the free online mortgage broker said: “Christmas costs the average family more than £700, so it’s no wonder homeowners are using the first few weeks of 2019 to look online for where they can make long-term savings.

“With Brexit uncertainty still ongoing, this January looks set to be busier than ever before. The good news is that with interest rates still relatively low and competition between the banks so strong, there are cheap deals to be had – even on longer-term fixed mortgages. We’ve seen a surge in buyers choosing 5+ year fixes since the Autumn, as they try to future-proof their mortgage and lock in the same rate until 2023.”

“But, the biggest savings come from being mortgage-free quicker. If you are in a financial position to do so, you can remortgage to get on a lower rate, but tell your bank you want to keep your monthly payments the same. Effectively, this means your overpayments now count towards lowering your overall balance and you could wipe years and tens of thousands of pounds off your total repayment bill.

Research from the University of Manchester for Habito found that 55 per cent of all British homeowners could save an average of £294 every month by switching their mortgage away from their lender’s standard variable rate – or a huge £3,500 a year.

According to Habito, on a typical £200k mortgage of 25 years, paying 2.5 per cent interest, if you overpaid every month by their suggested savings (£294) you would pay off your mortgage 7 years and 9 months earlier, saving you a whopping £22,803 in interest payments over that time.

January 2nd, 2019 | Andrew Hagger | News

02 Jan 2019 There is thought to be somewhere between £15bn and £77bn in unclaimed money sitting in forgotten investments, pensions, bank accounts and a whole range of other places in the UK. So, how can you go about finding out if any of it is yours? Carl Drummond, senior wealth planner at Sanlam UK reveals 7 top tips for reclaiming forgotten money.

1. Pensions

There is more than £5bn in forgotten pension schemes in the UK, according to the Pension Tracing Service. We have, on average, 11 jobs during our working lives and because of this it’s easy to lose track of employee pensions. Personal pensions can get lost when you move house, change your name or neglect to update your personal details.

But there are ways you can track this money down. The Pension Tracing Service is free and impartial, and you can start the process online, although you will then be sent documents which you need to sign in order for it to search on your behalf. Alternatively, you could try the Pensions Advisory Service, which is another free service providing lots of useful tips, advice and search tools.

2 .Investments

If you think you might hold shares in a company, but you have no record of them and cannot find the share certificates, you can check by applying direct to any or all of the three main company registrars – Capita, Computershare and Equiniti. They will search their records for free but will charge you a fee for issuing a replacement certificate. Alternatively, the Investment Association or the Association of Investment Companies might be able to help.

3. Old bank and building society accounts

According to the Money Advice Service there is £850m sitting unclaimed in British accounts. These days we tend to be less loyal to banks and building societies than was the case for our parents’ or grandparents’ generations, and this has increased the likelihood of losing money as we switch.

Fortunately, it’s easy to check using a free online service called My Lost Account. It covers over 30 banks and all 44 UK building societies and it will help you trace any lost personal accounts. It is particularly useful in instances where a bank or building society has closed or merged. Banks and building societies say they aim to respond within three months.

4. Premium Bonds

NS&I reports that there are more than 1.5 million unclaimed prizes worth more than £60m. The My Lost Account service can tell you if you hold any Premium Bonds which you may not have been aware of. That in itself is useful information, but most people will want to know if those missing Premium Bonds have won a prize over the years. Stage two is to find out whether you hold a prize-winning number by visiting NS&I and filling in the online form. NS&I says it will respond within one month. Note that any Bonds bought more than 30 years ago are likely to be individually numbered – to get a bond holder’s number you will need to write to NS&I at Glasgow, G58 1SB.

5. Lost insurance policies

You can hold a life insurance policy for many years and because of this they are easily forgotten. Unclaimed Assets UK, which helps to trace lost money, estimates there is £2bn languishing in unclaimed life insurance. To find out if a deceased person had a life insurance policy, it can be helpful to go through old bank statements or cancelled cheques to see if any premiums were paid. You could also contact the people who dealt with their legal or financial matters and even past employers.

6. Lottery wins

In September, there were almost £12m in unclaimed National Lottery prizes, but all prizes have to be claimed within 180 days. To check whether you have won an unclaimed lottery prize, go to the National Lottery website, click on the ‘Check results’ tab and you will find a section on unclaimed prizes. This lists any large unclaimed prizes and the site allows you to input numbers for Lotto, EuroMillions, ThunderBall, Lotto HotPicks and EuroMillions HotPicks. After 180 days, any unclaimed prizes go to fund National Lottery Projects.

7. Child Trust Funds

Tax-free Child Trust Funds saw children born between 2002 and 2011 given a government bonus of £250 each, but over one million such bonuses were classified as ‘addressee gone away’, meaning they have not been claimed. According to The Share Centre, as of June this year, as much as £1bn could be lost. To find out if you, or more accurately your child, might be one of them, simply submit a request via GOV.UK – you’ll need a Government Gateway ID, which you will already have if you submit a tax return.

January 2nd, 2019 | Andrew Hagger | News

02 Jan 2019 New research from The Nottingham Building Society (The Nottingham) reveals that 39% of retired people in the UK claim that they are having the best time of their lives since they stopped working. Although YOLO (you only live once) is a phrase and attitude associated with Millennials, older generations are adopting some of the YOLO personality traits later in life instead.

One of the key reasons that so many retired people feel so positive about life after work is that 46% claim to have more disposable income than ever before thanks to being a generation of frugal young savers.

The Nottingham believes this is, in part, down to this generation saving earlier on in their lives.  One in ten claims they started saving for their retirement when they were 18 and 45% did this when they were 30 or younger.  Despite this, 45% wish they had actually started saving earlier than they did – with just over one in four (26%) saying they would have started saving 10 years earlier if they had their time again.

Tina Hayton Banks, Director of Member services at The Nottingham said: “Younger generations can learn a lot from their parents and grandparents, and this is particularly true when it comes to saving.  Our research shows that many people from older generations started saving much earlier in their lives than those in their twenties and thirties do today which has helped them enjoy their retirement to the fullest. However, we recognise this can be more challenging for younger people today who have more debts from studying, face higher house prices and have less-favourable state pension schemes.”

“To live like YOLO pensioners, today’s generation will need to start a savings habit as early as possible.  If they start saving and investing smartly over a long enough period, they can build up a tidy nest egg to fund their lifestyle when they stop working. This is why we did this research because although it seems like a long way off, younger people need to envisage the sort of lifestyle they want in later life and understand how soon they need to start making allowances to enable that.”

The life of ‘YOLO pensioners’

In taking a closer look at life in retirement, 90% of those in retirement claim to eat out at least once a month, with 7% doing this seven times or more.  46% say they have active social lives, with one in 50 saying it’s the best it has ever been. Over one in three (36%) claim to holiday at least three times a year.

Some 17% belong to private members clubs and 21% say they still have active sex lives.

In terms of their retirement pots, 39% have fully adopted the ‘YOLO’ attitude of younger generations and intend to spend all of their money whilst alive. Half (51%) of those who responded said they still intend to leave an inheritance.

Hayton-Banks continued; “As a modern mutual, we feel a responsibility to help people prepare financially for later life and it helps to understand what this looks like for so many brits. Products such as the Lifetime ISA are perfect for helping younger generations get into the savings habit earlier and start thinking and planning for the later life they want, before it’s too late to make a difference.”

The Nottingham is one of just three providers to offer the Cash LISA, and the only provider that allows customers to open the account face-to-face via one of its 67 branches.

The account was created for those aged 18-39, who are either saving for their first home or retirement. Account holders can save up to £4,000 every year, with a 25% state bonus being paid monthly, on funds deposited in the previous month, until the account holder turns 50, when they will no longer be able to make deposits, but interest will continue to accrue.