November 20th, 2023 | Andrew Hagger | News

Introducing the ten credit misconceptions, TotallyMoney CEO, Alastair Douglas comments:

“For decades, banks have kept people in the dark about the information they have access to, how they use it, and why they make the decisions they do. These decisions can have a life-long impact, from scuppering somebody’s chances of getting their first mobile phone contract, to worsening the terms offered when buying their first home.

“The genuine lack of transparency has led to credit confusion, monetary myths, and people having to second guess how the system works. They need access to their own financial data, to be told what it means, and how it works. Only then will everybody have the tools they need to unlock a life of more choices.

“To help set the record straight, we’ve debunked some of the most common myths to help you create financial momentum and make your credit score soar. You can also download the free TotallyMoney app, which can help you better manage your finances and unlock a life of more choices.”

 1. There is no credit blacklist

Two in five (40.9%*) people believe there is a credit blacklist — but the truth is there isn’t one.

Alastair Douglas comments:

“One of the most common, and costly of myths people have been led to believe is there’s a credit blacklist. However, neither you nor your address will find itself on a central database of borrowers excluded by the banks. But if you have slipped up in the past, filed for bankruptcy, or have a CCJ, you might only have access to a limited number of offers. That’s because your information is stored on your credit file, and they might see you as a risky borrower and therefore treat you with greater caution.

 2. Get on the electoral roll

Only 43.1% of adults are aware that being on the electoral roll can impact their credit score

Alastair Douglas comments:

“Being registered to vote can have a significant positive impact on your credit score, but more than half of adults aren’t aware of this. Being on the electoral roll can act as a vote of confidence — because banks can verify who you are and trust you’ll be able to repay what you borrow. Plus, if you’ve been at the same address for a while it can make you appear to be more settled and stable.”

 3. Criminal records aren’t visible

Almost half of adults (46.4%) think that a criminal record could impact their credit score. However, it’s not visible to lenders and can’t impact your score.

Alastair Douglas comments:

“A criminal record won’t directly impact your ability to access credit, but nearly half of adults think it could. And while fines can impact your finances, they won’t be visible to lenders either.”

 4. You’re free to check your report

One in five people (19.3%) wrongly believe that checking your credit report can negatively impact your credit score.

Alastair Douglas comments:

“Your credit report contains the information banks use when deciding whether or not to let you borrow money — and remember, it’s your data and you should never pay to see it or use it. It’s also important to know that checking your report won’t negatively impact your score — in fact, it’s quite the opposite, as people who check it regularly have on average a better credit score. You can also make sure that all the information is correct and up to date, putting yourself on the front foot when it comes to making an application.”

 5. What you earn doesn’t impact your credit score

43.9% of people surveyed believe their earnings impact their credit score — however, how much you earn doesn’t appear on your credit file.

Alastair Douglas comments:

“Two in five adults think that the amount of money they earn impacts their credit score. And while it may give you some more financial freedom, income doesn’t show up in your credit report. However, it will be considered when banks are deciding who to lend to, as they’ll need to be able to make sure that you’ll be able to repay the money you borrow.”

 6. Student loans aren’t seens as loans

One in four (24.3%) of people believe a student loan can impact their credit score — but they don’t.

Alastair Douglas comments:

“Student loans don’t appear on your credit report, and therefore aren’t used by Credit Reference Agencies when calculating your credit score. However, student loans might be considered by banks when running affordability checks, and could therefore impact your ability to borrow. That’s because the lender will need to make sure you’re able to keep up with repayments, and if you’re repaying other loans and credit agreements, you might find it harder to meet any new commitments.”

 7. Seek debt advice without a worry

17% of people wrongly believe that seeking advice can impact your credit score

Alastair Douglas comments:

“There are a number of free, impartial debt advice providers out there, who could help you better budget and manage your money — and the good news is that it won’t impact your credit score. However, debt management plans can show up on your credit file and might impact your ability to borrow because it’ll show that you’ve struggled to keep up with payments before.”

 8. You could be given a different offer to what you applied for

Only 46.2% of people realise they might be given a different credit limit to the one they apply for

Alastair Douglas comments:

“Regulators require lenders to only provide 51% of successful applicants the advertised product. This means you could be offered a very different card to the one you thought you were applying for, including one with lower limits, and higher APRs. However, this can be avoided by looking out for offers which are pre-approved and guaranteed. That way you can apply with confidence and bank on getting exactly what you wished for.”

 9. Avoid using credit cards to withdraw cash

Only 44.3% of people are aware that using a credit card to withdraw money from an ATM can incur added fees and higher interest rates.

Alastair Douglas comments:

“If you need quick cash and are thinking about putting your credit card in the ATM then think again. These transactions come with extra fees, often with a higher APR, and they can make it more difficult to borrow in the future. They can be particularly costly if you’re making multiple, smaller withdrawals, as you could pay £3.46 just to withdraw £10.”

 10. Prepayment meters no longer cost more

More than half (52%) of people believe prepaid energy meters are the most expensive way to pay for your energy — and although they used to be, they’re not any more.

Alastair Douglas comments:

“More than half of adults believe prepaid meters are a more expensive way of paying for energy than Direct Debit. However, on July 1st this year, the government scrapped the prepayment meter premium, making energy fairer for three million households. So while”

November 10th, 2023 | Andrew Hagger | News

HSBC UK is warning consumers they need to double-down on their efforts to stop scammers and be on their guard over the next few weeks, with scammers using the ‘Black Friday’ online shopping frenzy as an opportunity to turn Black Friday into Black Fraud-Day.

While Black Friday is due to take place on 24^th November, offers start to appear online before the day itself. With ‘Purchase Scams’ being by far the most popular type of scam, scammers have the perfect set of circumstances to ply their criminal trade, leaving unwitting consumers disappointed and significantly out of pocket.     

Over the last year, purchase scams have been on the increase. Recent scam data from HSBC UK has shown the average purchase scam carried out between July and September is £894, with the average value per case increasing to over £900 in September. The three-month period between July and September saw the most purchase scams reported so far this year.

David Callington, HSBC UK’s Head of Fraud, warned: “Bargain-hunters need to double-down on their efforts to shop safely, especially before Christmas, which is typically an expensive time of year. While the cost of living challenges are still lingering, retaining or improving our financial resilience should be extremely important, and losing money unnecessarily to a scam could have a significant impact on that.

“Month on month scammers steal millions of pounds through purchase scams, advertising items such as cars, campervans, holidays or tickets to a ‘must see’ concert or sporting event. Both our own data and that of UK Finance shows that the scourge of purchase scams is growing, with scammers content to scam more people with lower value items than specifically targeting victims for higher value frauds.

“Scammers are devious criminals who don’t care about the impact of their crime on the financial of mental wellbeing of their victims. Customers can help protect themselves and their money by taking note of some simple steps.”

HSBC UK has teamed up again with professional magician Troy von Scheibner in advance of Black Friday to highlight some of the tricks scammers will play on shoppers. For an insight into the mind of tricksters, visit our Purchase Scams page on our website’s Fraud and Security Centre. The videos are also available to watch on YouTube.

Advice on protecting yourself from purchase scams:

Purchase scams happen when you’re paying for an item or service. The item doesn’t arrive, or you don’t receive the service and your money is lost.

Typically, these scams:

·         ask you to send money via bank transfer

·         offer a too-good-to-be-true deal or discount

·         have ‘limited availability’, or are a ‘special offer’ to encourage you to act quickly

·         persuade you to send money before receiving a service

·         are advertised on social media or other online marketplaces, or in some cases through legitimate looking websites that have actually been set up by fraudsters

Remember to:

·         use safe sites when shopping online

·         check the returns and cancellations policy

·         research the retailer online to make sure they’re legitimate

·         stop and think – would you be willing to send cash in the post for an item you’ve ordered?

·         research and check the validity of the item before paying – ask to see it if possible

·         approach an independent professional to authenticate the goods or services you’re purchasing

November 9th, 2023 | Andrew Hagger | News

A new study by credit management company Lowell shows that Brits are planning on being more money-conscious rather than impulse buying on Black Friday 2023.

In fact, 45% confess they want to prioritise their financial well-being, and it’s predicted that they will spend £900 million less than last year, with 40% less average spend per person compared to 2022.²

However, with Black Friday and Cyber Monday fast approaching, the promise of reduced prices by retailers on this year’s top tech, best-selling beauty products, and early Christmas gifts, has left almost three quarters (74%) of Brits feeling pressure to spend money during the flash sales to prep for the festive period.

What pressures are people facing to spend this Black Friday?

Despite the rise of inflation influencing 43% of Brits to be more financially conscious over this festive period, others are still feeling the pressure to spend. Almost a third (29%) feel pressure to keep up with what friends and family are buying, whilst a combined 28% feel pressure from advertising on TV and social media to buy in the Black Friday and Cyber Monday sales.

Are people researching for cheaper deals this year?  

Over a quarter of bargain hunters (27%) will be doing their research by monitoring the price of an item before the sale, and only making a purchase if there is a good discount. It’s clear that Brits are being more money-savvy this Black Friday, as just 17% plan to follow influencer recommendations and only one in ten (9%) intend to impulse buy.

Are Brits improving their spending habits for the festive period?

Encouragingly, the number of Brits planning to buy more than is needed over the festive period has dropped from 34% last year, to 30% in 2023, with a third of people (33%) planning to not exchange gifts with their families and friends.

However, with ever-growing inflation and cost increases in the cost-of-living crisis, 32% feel they will still spend more than they can afford in November and December this year, compared to 28% in 2022. To combat this, 15% have admitted they will use second-hand sites such as Vinted and Facebook Marketplace to source their gifts.

With Black Friday falling on what, for many of us, is the final payday before Christmas, it’s all too easy to get pressured into spending more than you can afford in the sales. Lowell recommends considering the following five tips to spend well over Black Friday, Cyber Monday and the festive period:

1. Don’t be impulsive, make a list of the things you need and stick to it. Sticking to your list means that you’ll be saving rather than spending in the long run.

2. If you have a planned purchase in mind there are useful tools online that check how much a product has actually been sold for throughout the year to find its cheapest price.

3. Plan a festive budget to prioritise essentials throughout Christmas, so you know exactly what you have to spend, and how much you need to save to get ahead in January

4. Refer to your budget when feeling pressure from social media, TV adverts, or friends and family so you can give an instant yes or no to buying depending on your allocated funds.

5. Utilise second-hand sites such as Vinted or Facebook marketplace to find your desired purchases before spending on a Black Friday sale.

John Pears, UK CEO of Lowell UK said “It’s encouraging to see people in the UK prioritising their financial wellbeing over the upcoming consumer-driven period.

Although our report shows that many Brits still feel the pressure to spend on Black Friday and Cyber Monday, many people are choosing to be savvy with their money through means such as shopping on second-hand sites or researching for the best deals.

As at any time of the year, we’d like to remind anyone feeling financial pressure to reach out for support, and a list of organisations who can help can be seen at https://www.lowell.co.uk/help-and-support/independent-support/”

For more information about the findings and advice on how to manage finances on Black Friday, visit our blog https://www.lowell.co.uk/about-us/lowells-blog/lifestyle/the-truth-behind-black-friday-spending/

November 6th, 2023 | Andrew Hagger | News

Over 11 million Brits (22%) will play host to friends this Christmas, new research from American Express has found.

The UK’s younger generation are those most likely to host friends, with 27% of 18-34 year olds sharing the festivities with friends compared with 22% of 35-54 year olds and 19% of those over 55.

Immediate family are the group most likely to be hosted however, with 67% of Brits inviting their closest family members to share in the festivities.

The essentials of hosting this festive season

For Brits hosting or being hosted over the festive season, food and drink ranked as the most important factor in having an enjoyable time. Over half of UK adults (52%) highlighted the quality of food and drink as their top priority for festive gatherings.

Keeping friends and family entertained is also seen as important, with 28% wanting to play games or take part in a Christmas quiz, 27% wanting to get some fresh air with a walk and 25% prioritising watching Christmas specials on TV.

Most important factors of Christmas when hosting/being hosted

% of UK adults

Quality of food & drink – 52%

A wide variety of food & drinks – 40%

Christmas games or quizzes – 28%

A walk with family & friends – 27%

Watching Christmas television specials – 25%

A good music playlist – 22%

Christmas jumpers – 13%

Spending for the big day

From decorations, to table settings and festive gifts, there are a multitude of elements that Brits will be spending on to create the perfect hosting environment.

With food and drink crucial to guests’ enjoyment, 21% of Brits say they will buy new table dressings such as flowers, tablecloths and Christmas crackers for their friends and family.

18% of those hosting or entertaining over the holidays will be buying entertainment for their guests, such as board games or films. A further 10% will be embracing hosting; heading to the shops to buy new homeware for those coming to visit, including sofa beds, bedding and toiletries.

Brits are also finding ways to be savvy with their spending, with 42% using purchases they made last year at this year’s Christmas. While gift giving is synonymous with the festive period, over 6 million UK adults (11%) will regift a present that they received as a gift last Christmas.

Harry Mole, Vice Present at American Express, said: “Our research has shown the important role that friends, as well as family, play in celebrating the festive period. As Brits gear up for these celebrations, they are set to embrace their resourceful side, re-gifting and repurposing last years’ treasures. But when it comes to food and drink – a key factor that guests expect from a host – our data found there is little room for compromise.

“As American Express^® Cardmembers get ready for the holiday season and stock up on goodies, they can make their spending go further, earning valuable points, rewards and cashback that should help to bring the festive spirit this season.”

November 3rd, 2023 | Andrew Hagger | News

Go.Compare pet insurance has launched an exclusive deal for pet insurance customers to receive a brand new Ring Indoor Camera when they purchase cat or dog insurance from Animal Friends this November.

Anyone who compares pet insurance with Go.Compare and goes on to buy a policy from Animal Friends (excluding accident only and equine insurance policies) between 1^st November to 30^th November, will qualify for the deal.*

The promotion allows eligible pet owners to get their hands on an indoor camera, worth £49.99, allowing them to keep an eye on their beloved cats and dogs while they are out of the house, giving peace of mind that their pets are safe when they aren’t around.

Ceri McMillan, pet insurance expert at Go.Compare, said of the deal: “As a cat owner, I know myself how worrying it can be to have to leave your beloved pets at home and not know what they are up to. Sometimes you can be stuck in work or just running late and so your cat or dog is left at home for longer periods than you would like and that’s where the reassurance of a gadget like an indoor camera really comes into its own. Through a video feed on your smartphone, you can check up and see that they are safe and well.

“We are a nation of pet lovers, and we definitely are here at Go.Compare, so anything we can do to look after pets and help their owners is a win-win in our book. So, when you come onto Go.Compare’s pet insurance comparison site this month, fill in the online form with in your requirements and your pet’s details, compare the policies on offer and if Animal Friends gives you the cover you want at a price you can afford, then you will get the added bonus of a free pet camera.”

Ceri added: “Eligible customers can expect to receive an email 14 days after the one-month qualifying period from Animal Friends and will receive their unique code for them to redeem their new Ring Indoor Camera.

“It’s a simple as that, and then you can keep an eye on your beloved furry friends wherever you are, and whatever time of the day.”

To compare pet insurance visit: https://www.gocompare.com/pet-insurance/

November 3rd, 2023 | Andrew Hagger | News

New research by ALA Insurance has revealed that over a third of the UK don’t feel comfortable discussing their finances with friends.

The survey which was commissioned to explore the state of the UK’s financial wellbeing also shows that this figure increased in older age groups with half of those aged 65 and over claiming they wouldn’t feel comfortable discussing their finances with friends.

Regional differences highlighted how the UK’s towns and cities have varying levels of openness when it comes to talking about money. Sheffield is the UK city least likely to open up on the topic while those in Birmingham are the most comfortable.

With this in mind, ALA has teamed up with Laura Ann Moore, host of the Mind Money Soul podcast, to share steps to improve your money mindset and to help everyone feel more confident when it comes to the topic of money.

What is a money mindset?

“Your money mindset is your own unique set of beliefs and attitudes towards money”, Laura explains.

“It’s these very beliefs that quietly govern the way you manage, spend, and save your money. If you find yourself frequently bumping against financial roadblocks or struggling to maintain productive habits, the solution might not lie in numbers, but rather in improving your money mindset.

Understanding and reshaping your money mindset is an instrumental step towards bolstering your financial well-being.”

Step 1: Awareness

Laura recommends thinking of your approach to money as a financial GPS:

“Picture this: You’re on a road trip, but you’ve got no GPS. Chances are, you won’t reach your destination without getting lost. The same applies to your money journey. Before you can change anything, you’ve got to be aware of what needs fixing.

Acknowledging how you currently think and feel about money is the first step in making any impactful change to your behaviour. Remember, awareness isn’t about judgement; it’s about understanding where you stand and where you want to go.”

Step 2: Speak Your Way to Abundance

Shifting language and squashing negative self talk when it comes to your personal finances is essential, according to Laura.

“Ever caught yourself saying, “I’ll never be good with money” or “I can’t afford that”? Well, it’s time to drop that script and pick up a positive one. The words you use about money shape your thoughts and actions. And the simple act of changing the words you use can be transformative. Instead of saying “I can’t afford it” try “How can I afford it?” By making this language shift, you’re opening the door to creative solutions and inviting a more abundant mindset.”

Step 3: Reframe How You View Money

Challenging some of our most deep rooted beliefs around money can help you reframe your thoughts and grow confidence when it comes to managing your finances:

“Money is a tool in your journey, not an obstacle. When you identify your current money beliefs, you can then start to reframe and reshape them. If you have always believed that having money makes you greedy or selfish, you can ask yourself “is this really true?”.

Challenge your beliefs and look for example either in your life or in other people that show the other side to your money block. Embrace the idea that wealth is your ally in achieving your goals, not a barrier to them.”

Step 4: Embrace Your Mistakes

Laura recommends being kind to yourself and learning from your money mistakes as you go:

“Who hasn’t stumbled on their financial path? We’ve all been there, done that. The key is not to camp out in the land of regret. Reflect on your money missteps to see if you can take any learnings but do not let them define you. Every financial setback is a lesson in disguise, and each lesson brings you closer to financial mastery. Remember, the present and future are where your power lies, not in dwelling on the past.”

Step 5: Abundance Mindset:

Finally, Laura suggests shaping a new mindset when it comes to flourishing financially:

“Imagine your mind is a garden. If you feed it thoughts of scarcity, you’ll reap self-doubt and limitations. But if you plant seeds of gratitude and abundance, your garden will flourish. Start each day by counting your blessings, whether big or small. This primes your brain to seek the good, attract opportunities, and believe that there’s more than enough to go around. After all, a mind rooted in abundance sees solutions whereas scarcity sees problems.

Transforming your money mindset is like giving your financial journey a GPS that leads to abundance. By raising awareness, reshaping your language, reframing money’s role, forgiving past errors, and embracing an abundance mindset, you’re rewiring your brain for prosperity. Remember, it’s not just about the numbers; it’s about the thoughts behind them. Here’s to a brighter, bolder, and wealthier you!”

To learn more about ALA’s 2023 Money Survey visit the website.

October 26th, 2023 | Andrew Hagger | News

Over the past two years, high inflation has squeezed household finances, driving demand for credit as people look to plug the gap. This has meant the UK personal loan market has grown by 8% in the past year, and is estimated to be worth £37.7bn — and projected to reach £43.9bn by 2027§.

However, while demand has grown, so has lender caution — with people now a fifth less likely to be eligible for a loan than they were in December 2021 (just before the start of the Bank of England’s 14 consecutive rate hikes).

The table below shows the cost of five of the top loan products for £3,000 in December 2021, and at the present time. The market-leading offer has more than doubled, from 4.9% to 9.9%, meaning an increase to the total amount repayable of £231.68 (from £226.84 to £458.52). The average APR for the top five loans has increased by 3.18%, increasing the total repayable by £145.41.

 Alastair Douglas, CEO of TotallyMoney comments:

“The past two years have seriously squeezed people’s pockets, and stubborn, high inflation continues to pile on the pressure. To help tide themselves over, more people are turning to credit, but to make things even harder, the cost of borrowing has soared.

“It’s essential that if you’re looking for a loan, you take the right steps to find the best product for your needs. This means checking your credit report, working out your best options, and checking your eligibility before you apply. Banks are being extra careful with who they lend money to, and almost one in three people have been refused a personal loan.

“Some lenders will ask if you’d like to connect your open banking data when applying for a loan. This will give them a far more accurate and up to date picture of how you’re managing your money, so you could be more likely to unlock a better offer.

“If you’re struggling with your finances, then download the free TotallyMoney app. It’ll help you track paid and upcoming bills, and will tell you which ones could impact your credit score. We also work with innovative lenders who’ll let you connect your open banking data to help you find the best option for your circumstances.”

 Andrew Hagger, Personal Finance Expert, Moneycomms.co.uk comments:

“It’s not just credit card and overdraft borrowing costs putting a drain on consumers’ finances — opting for a personal loan has become a lot more expensive too.

“For people looking to borrow to change their car, carry out some home improvements or consolidate borrowing, interest rates are now more than double what they were before the base rate hikes began.

“An extra few pounds each month may not sound like a big deal, but when you look at the full term of the loan it’s a major extra cost — for example borrowing £10,000 over 5 years will set you back £863 more in interest costs.”

#ENDS

 Alastair Douglas’ seven top tips for loan success

1. Check your credit report

“9.8 million adults (18.9%) lack confidence in making financial decisions, but checking your credit report can give you the confidence to move your money forward. It’s free to do, and you’ll get to see all the information banks use when choosing who to lend money to. If you spot something that doesn’t look right, you can raise a dispute, and our data shows that those who check their report have a better score.”

2. Consider all your options

“If you want to borrow a relatively small amount, it might be cheaper to use a 0% purchase card. Another option could be a secured loan, as these can sometimes let you borrow more money, at a lower interest rate — but missing payments on these could lead to your home or car being repossessed, so there’s more at risk. Always make sure you compare the offers, and weigh up the pros and cons.”

3. Do your calculations

“When comparing different offers, do your calculations to make sure you’re getting the best product for your own personal circumstances. Higher rates don’t always mean worse offers, as you might be repaying the money over a different length of time, while some credit cards might offer a higher interest rate, but also a 0% introductory rate.”

4. Shop around

“Worryingly, one in three (33%) people who applied for a loan last year didn’t shop around, with one in ten (12%) saying, ‘I didn’t think I would get an account elsewhere’§. This means millions might have missed out on the best deals, and instead have taken something out which could cost them more in the long term. When it comes to finances, loyalty doesn’t pay. So always do your research on what else is out there, so you can find the best offer for your personal needs.”

5. Check your eligibility

“Almost one in three (31%) adults were refused a personal loan in the past two years, and while the outcome of your application won’t show up on your credit report, making multiple applications will. This can act as a red flag to lenders, so when shopping around, make sure you use an eligibility checker to find out your chances of being accepted. This will mean you can apply with confidence, and avoid credit rejection.”

6. Get the guarantees

“Different firms will have a different name for this but look out for lenders which are offering guaranteed limits and rates. That way you’ll know exactly what you’re applying for, and how much it’s going to cost you.”

7. Read the small print

“Different lenders will have different terms and conditions, and these can even vary between offers. So, make sure you do your homework and stay a step ahead of the banks. Some might charge you more for repaying your loan early and it’s likely you’ll incur fees for any missed payments.”

October 25th, 2023 | Andrew Hagger | News

Non-homeowners with a ‘single’ relationship status are looking at innovative ways to get on the property ladder, with 49% considering buying a property with family or friends to offset costs.

People who are not in a relationship are looking at viable alternatives to get on the ladder, as nearly two thirds (64%) agreed that purchasing a property by themselves did not feel like a realistic aspiration at the moment.

A survey commissioned by first direct explored how people’s relationship status is impacting their property ownership goals. The study focused on 1,500 non-homeowners across the UK who either live at home or rent, taking into account a 50/50 split of individuals and people in relationships.

Single people delaying plans to get on the ladder

Half of non-homeowners surveyed (50%) who aren’t in a relationship said that they were delaying or adjusting plans to get on the property ladder.

This was partially due to challenges raising a deposit, with more than four in ten (41%) of single non-homeowners saying that they cannot currently afford to save towards one. This is in comparison to one in three (33%) aspiring homeowners in relationships who made the same claim.

One of the biggest drivers of this trend is the cost of renting – and nearly half (46%) of single people confirmed they’d made changes to their living situation in order to reduce this cost. Some of the most common changes involved moving back in with parents (23%) or moving in with friends (13%). A smaller portion went as far as accepting a job working away where accommodation is provided (6%) or subletting a room in their rental property (5%).

This trend was exacerbated by the rising costs in the rental market, with 57% of single people surveyed agreeing that renting individually isn’t affordable for them.

Chris Pitt, CEO of first direct, commented on the findings:

“We know that there is still a big appetite amongst aspiring homeowners to get on the property ladder – but people trying to do so on a single income face more challenges than most. On top of raising a deposit and managing mortgage payments without the support of a partner, many will also be facing the added pressure of trying to get into a position to buy while also paying rent.

“Whether you’re a renter in a tough spot, or a single person looking to get on the ladder but unsure where to start, there is help available. At first direct, we can provide support with getting on the property ladder, or if you are struggling with rent we also have a range of measures that are designed to help renters, from budgeting support to free legal guidance.”

Couples have more optimistic outlook on home ownership

The picture was more optimistic for couples. A quarter (24%) of couples said that they can realistically aim to be on the property ladder in one to two years. This was narrowly ahead of the 23% who stated that three to five years was a more realistic timeline.

Interestingly, six in ten (60%) of couples surveyed who had moved in together in the last two years, or planned to move in together imminently, said that the rising cost of living had impacted their decision to do so.

A massive 71% said that they wouldn’t be in a position to buy a property alone without their partner – whilst only 10% of people in relationships said they would be able to buy a property alone.

Top tips from first direct for aspiring home owners:

1. If you don’t know where to start, speak to your bank: If you’re unsure where to start with getting a mortgage, there might be help available from your bank. First direct can provide objective support, practical guidance and tips on a range of topics relate to getting a mortgage, from improving your credit score to budgeting to save a deposit, as well as giving you all the info you need around borrowing thresholds, affordability, and expected costs.
2. If you’re a renter in a tough spot, speak up: We know that renters are particularly impacted by rising costs, and if you’re in a difficult position there is again help available. As well as being able to provide support with getting some breathing space if you’re struggling to make ends meet, your bank may also work with a network of partners they can refer you to for additional help. For example, first direct has a charity partnership with Shelter through which it funds free legal advice and support for customers who are renting.
3. Get a strong return on any savings you do have: With higher interest rates, it’s important to ensure you’re getting a competitive return on the savings you do have. Shop around for the best deal – and if you have a lump sum, consider a fixed rate account for higher returns.
4. Save little and often if you can: For those making their first steps into saving a deposit, saving little and often is a good starting point. Many banks will offer base rate exceeding rates on regular saver accounts, to reward customers for getting into a monthly saving habit. first direct’s Regular Saver offers a 7% return, for example.
5. Look at flexible mortgage options and schemes: If you have an active plan in place to get on the ladder, it’s worth researching if there are any flexible mortgage features or schemes that can help you – from high LTV mortgages to 40-year terms or Government support schemes – you might find there is extra help available to reduce the cost of the deposit needed or make your monthly payments more affordable.

October 23rd, 2023 | Andrew Hagger | News

The decision to purchase a home is a significant one – probably the largest one you’ll ever make in your life. If you don’t have the cash available to buy the property outright, like most people, you’ll need to secure a mortgage.

While a mortgage is never guaranteed, there are some measures you can take to greatly improve the chances of having one approved. From building your credit score to increasing your deposit, we take a look at the best ways to make yourself look more attractive in the eyes of lenders.

Improve your credit score

Your credit score is the single number that lenders will use to assess your credit risk. Essentially, they want to see how likely you are to repay your loan. Typically, the higher your credit score, the better your chances are of getting the best mortgage rate.

Credit scores are calculated using various data like your length of credit history, payment history, and amounts owed. This means it’s vital you check your credit report and fix any major mistakes, as well as pay your bills on time, reduce your debt, and keep credit card balances low.

Put down a larger deposit

Try to save as much money as possible before applying for a mortgage. A larger deposit not only demonstrates your ability to be financially responsible but it also reduces the value of your loan. When it comes to modern properties, lenders will generally ask for a larger deposit. Therefore, if you’re looking to invest in a new build home, you’ll need to save a bigger deposit.

The loan-to-value (LTV) ratio represents the portion of the property’s value that you use as your initial deposit. As an example, if you put £40,000 down on a £200,000 property, the LTV is 80%. A 20% deposit is usually recommended but the larger the deposit, the better the deals will be and the higher the likelihood that the mortgage will be accepted.

Ensure you register to vote

While it may sound fairly simple, because it is, registering to vote can greatly impact your chances of having a mortgage approved. When your name is added to the electrical roll, lenders can run identity checks to confirm who you are and where you live.

Regardless of whether you meet all of the lender’s other criteria, not being on the electrical register can make the process much more difficult. If you are unsure whether you are registered to vote, you should reach out to your local council.

Have all the relevant paperwork ready

Lenders will ask for a large variety of documents before even considering giving you a deal. The types of documents they usually require include three months of bank statements, your most recent P60, proof of identification and address, and three months of payslips (including any bonuses). If you are self-employed, you’ll also need three years’ worth of accounts or tax returns.

By preparing these documents in advance, you reduce the time and the number of individuals needed to review and process your application.

October 23rd, 2023 | Andrew Hagger | News

A shocking 59% of UK adults do not have paperwork in place to protect their loved ones after they are gone, a national Will-writing charity has revealed.

A poll, commissioned by Will Aid and involving around 2,200 people across the country, showed that only 29% had an up-to-date Will – with the majority admitting they haven’t got anything in place at all.

What’s more, the cost-of-living crisis appears to have had an effect of people taking action with figures increasing , with 54% of participants without a Will in 2022, and 49% in 2021.

Many participants cited cost as their reason for not instructing a solicitor to write a Will on their behalf, while others said time was a factor or they were simply reluctant to think about the end of their life and had therefore postponed writing a Will.

Peter de Vena Franks, Will Aid Campaign Director, said: “We understand that nobody likes to think about death and the thought of considering your final wishes can be daunting – but actually, this is about a final loving act for those you care about.

“After all, having a Will means there is a clear plan of action to follow, and clear guidance for your family after you are gone. A Will also minimises confusion between family members and other beneficiaries.

“The statistics on up-to-date Wills are also concerning. Situations change and its vital to keep on top of your documents to make sure they still reflect your circumstances.”

Solicitor Trusha Velji, director of Touch Solicitor Ltd has updated her own Will eight times.

The law firm in Oldham has taken part in Will Aid for the last 14 years and says it is the perfect opportunity to help people get their affairs in order.

She said: “Making a Will is such an important undertaking to protect your loved ones from unnecessary distress at an already upsetting time.

“But keeping that Will up to date is equally important especially after having more children or buying a house, getting a divorce or during a time of ill health.

“If you die without having drafted a Will then your estate might be distributed in a way that does not align with your best intentions.”

Shak Inayat is the Principal Solicitor of Penn Chambers Solicitors, a boutique specialist law firm in the City of London.

He said a Will was also vital to protect those people who live together but are not married.

“Many people assume that after living together for a period of time, they then become common law husband and wife. That ceased to be the case a very long time ago. Certainly since 1753, marriages not witnessed by a pastor or bishop were banned and thus the concept of common law husband and wife effectively ceased to exist.

“If you are cohabiting as a couple, the law does not recognise you as a common law spouses, even if you have children together and even if you have lived together for many years. Therefore, if you do not have a Will the Rules of Intestacy will apply and your partner would then be completely disregarded.

“Will Aid is a superb initiative which targets the millions of people in the UK who do not have a Will and allows them access to a professional to draw up this important document so this is a great opportunity to resolve your inheritance issues and help charities whilst saving money all at the same time.”

The annual Will Aid campaign sees solicitors across the UK volunteering their time to write Wills throughout November.

Will Aid is a partnership between the legal profession and nine of the UK’s best-loved charities. The initiative, which has been running for more than 30 years, sees participating solicitors waive their fee for writing basic Wills every November. Instead, they invite clients to make a voluntary donation to Will Aid – a suggested £100 for a single basic Will and £180 for a pair of basic ‘mirror’ Wills.

Donations to the campaign are shared by Will Aid’s nine partner charities, which operate both here in the UK and around the world.

For more information on Will Aid and how to get involved visit www.willaid.org.uk.