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.

October 13th, 2023 | Andrew Hagger | News

With the ongoing cost of living crisis, households are paying more for energy bills in winter 2023 than the previous year, despite the energy price cap expected to fall this month. The average annual energy bill is estimated at £1,923 this year- £134 higher than the average bill last year.

According to GOV.UK, around 12.4 million people in the UK are eligible for the Winter Fuel Payment this winter.

Sustainable energy experts at L&R Renewables answer frequently asked questions, and share their insight on the government payment:

“With the cold months approaching, the Government has promised annual heating help for eligible pensioners from November. Around 12.4 million people in the UK could receive a one-off payment from the Department for Work and Pensions (DWP) to help keep winter heating bills down. The payments can provide a much-needed boost for people as the time comes to crank up the heating.

Applications for the DWP cost of living support are open, but many may not be aware that they are eligible to receive the help.

People who are eligible for the Winter Fuel Payment will also receive an extra £150 or £300 this winter to help with essential costs. This means eligible households could receive between £250 and £600 to offset higher heating costs.

Last year, elderly people in the East of England received around 1.1 million payments, while more than 1.6 million were paid in the South East – the most in the UK.”

Who is eligible?

“The DWP will send letters to eligible households from this month letting them know exactly how much money to expect. The amount someone receives depends on their age, household circumstances and the benefits they receive.

Winter Fuel Payments are made automatically into the bank accounts of eligible people over State Pension age, so most people will not need to apply for it.

You will need to claim if you’ve never received the Winter Fuel Payment before, you live abroad, or you’ve deferred your State Pension since your last Winter Fuel Payment

To be eligible for the Winter Fuel Payment, you must have been born before September 25, 1957 and lived in the UK for at least one day during the week of 18 to 24 September 2023 – known as the ‘qualifying week’.

The deadline to make a claim for this winter is March 31, 2024.”

Who does not need to make a claim?

“You do not need to claim if you receive any of the following:

• State Pension
• Pension Credit
• Attendance Allowance
• Personal Independence Payment (PIP)
• Carers Allowance
• Disability Living Allowance (DLA)
• Income Support
• Income-related Employment and Support Allowance (ESA)
• Income-based Jobseeker’s Allowance (JSA)
• Awards from the War Pensions Scheme
• Industrial Injuries Disablement Benefit
• Incapacity Benefit
• Industrial Death Benefit

You will not be eligible if you have been in hospital getting free treatment for more than a year, need permission to enter the UK and can’t claim public funds, or you were in prison during the qualifying week”.

How can I make a claim?

“You can claim Winter Fuel Payment by post or over the phone – all details can be found on the GOV.UK website.”

How much will I be paid?

“If you live alone, or no one you live with is eligible for the Winter Fuel Payment, you will receive:

• £500 if you were born between September 25, 1943, and September 24, 1957
• £600 if you were born before September 25, 1943

Your payment might differ if you get one of the following benefits:

• Pension Credit
• Income-based Jobseeker’s Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Income Support

If you live with someone else who is eligible for the Winter Fuel Payment, you will get a payment of either:

• £500 if both of you were born between September 25, 1943 and September 24, 1957
• £600 if one or both of you were born before September 25, 1943

These costs include the additional payment of either £150 or £300 this winter to help with essential costs.

There have been reports of cuts to the Winter Fuel Payments scheme in order to allow Rishi Sunak to keep his pledge over the pension triple lock.  However, the Government has since confirmed that cuts to the scheme will not be taking place.”

When will I be paid?

“Most payments will be made between November and December. If you do not get a letter or receive the payment by January 26, 2024, you should contact the Winter Fuel Payment Centre.”

Tips to Help You Reduce Your Energy Bill This Winter:

• “Consider solar panels: Solar panels generate electricity from the sun, which can help to reduce your reliance on the grid and save you money on your energy bills. Despite the fewer hours of sunlight in winter, solar panels are more efficient at converting sunlight into electricity in colder temperatures.
• Turn down your heating by 1 degree Celsius: You might not even notice the difference in temperature, but it can save you around £100 per year on your energy bill.
• Use energy-efficient light bulbs. LED light bulbs use up to 90% less energy than traditional incandescent bulbs and last up to 25 times longer.
• Insulate your home properly. This can help to keep the heat in and reduce your heating costs. You can insulate your attic, walls, and floors. You can also seal any air leaks around your windows and doors.
• Take shorter showers. This can save you a significant amount of water and energy. Showers account for a large portion of household water use, so reducing your shower time to 5-10 minutes can make a big difference.
• Wash your clothes at a lower temperature. Most clothes can be washed at 30 degrees Celsius or less, which will save you energy. Washing your clothes at higher temperatures uses more energy and can also damage your clothes over time.”

October 9th, 2023 | Andrew Hagger | News

New research from Go.Compare money has revealed that a quarter of parents (26%) who host a birthday party for their child will be covering their costs on a credit card, and over a third (36%) have said they’ll be using their savings to pay for the celebrations.

The research, which surveyed over 500 parents with children aged 5-12 across the UK, found that 70% of the respondents are planning to host a birthday party for their offspring, and spend an average of £298 on the occasion.

25% of the parents who took part admitted that they spend more than they would like organising children’s birthday parties, but a further 24% claimed that they love having a party for their child and will spend as much as they need to. 37% of respondents said they try to limit the guest list to save money and 23% said they felt under pressure to put on an event.

Over one in ten (14%) parents said they will be sharing or co-hosting a party with another family to save money. But over a third, (36%) said that they would be using savings to pay for their child’s birthday party and a further 26% will be putting it on the credit card.

Matt Sanders, money expert at Go.Compare, said on the research: “As a father of two young children, I know that hosting a party is a great way to celebrate your child’s birthday, but I’m also all too familiar with the cost that comes with it.

“There’s definitely an unspoken pressure to host a party, but there are ways to keep costs down – and the research shows that some parents are already joining forces to share the burden.  But it’s worrying that a number of the parents who took part in the survey are using credit cards or savings to pay for the celebrations. While credit cards can offer a convenient way to pay for things, it’s important that you consider the pros and cons of using this method of payment and whether it’s the right option for you. Planning as far as you can in advance will also help, if you set a budget and stick to it and try to save up in advance, you may not have to borrow the money at all.”

For those who are planning on using a credit card to pay for parties, Go.Compare has compiled some tips on how to manage any credit card debt:

1. Firstly, make sure you consider the right card for your requirements. There is a wide range available in the market – for example, you might be looking to earn rewards as you spend, spread out the cost of a big purchase, transfer existing debts to a lower interest rate, or build up your credit history. So, when you’re choosing your card it’s important to consider what you need it for.
2. Make sure you shop around for the best deal, check what fees or charges might be involved and work out what repayments you would be able to afford.
3. When it comes to paying for an event on a credit card, it will also give you some protection under section 75 of the consumer credit act. This allows you to raise a claim against the credit provider in the case of a breach of contract or misrepresentation by the supplier of goods or services. For example, if your caterer or entertainment fail to show up, you may be able to reclaim any costs incurred from your credit provider if the supplier fails to refund any costs.
4. When your card statement arrives, try to make more than the minimum repayment. Interest is added to any outstanding balance so the longer you take to repay the debt, the more money you will owe.
5. If you have more than one card, think about switching your balance to a card with an extended 0% period on balance transfers. Alternatively, if you are unlikely to repay a significant part of your debt during the 0% period, switch to a card with a low interest rate for the lifetime of the balance transferred. This will immediately reduce the interest rate until the debt is paid off.
6. Protect your credit score by using a soft search before applying for a credit card.
7. Avoid fees for missed payments and cash.
8. If you are facing significant financial difficulties, talk to your credit card provider to see what help is available in terms of a payment holiday or a new repayment plan.

Matt continued: “The most important thing to remember if you are using a credit card is to make your monthly payments on time, or aim to pay the full balance each month to avoid incurring fees and high interest rates.”

Go.Compare has more information about managing a credit card in this guide: https://www.gocompare.com/credit-cards/making-cards-work-for-you/

October 3rd, 2023 | Andrew Hagger | News

With 52% of customers paying credit card interest each month, TotallyMoney highlights how much money people can save with a balance transfer, even if they have a poor credit score:

• The market-leading balance transfer product could help excellent credit score customers reduce payments by £1,285 and stop paying interest until February 2026*
• Those with a good credit score might be eligible for a 16 month card, saving £666*
• Poor credit file customers may have options available, with a 9 month card offering average savings of £346*
• In the past 12 months, interest-bearing balances have crept up by £262, from £2,486 to £2,748†, while the effective interest rate on cards has increased by 2.1 percentage points‡, meaning people are not only borrowing more, but also paying more for it
• During the same time, banks have slashed the average balance transfer offer by more than two months (69 days), and cranked fees up by 0.3 percentage points§

Below, we provide insights into the savings, share what to watch out for when applying, and Alastair Douglas provides his five top tips for credit score improvement, so customers can unlock the best offers and create financial momentum.

 Play your cards right

Data shows that 52% of customers are paying interest¶, with an average credit card debt of £2,748. For a small transaction fee (typically 3-4%), a balance transfer credit card lets people pause interest payments for a set number of months (currently up to 29). In doing so, they can repay their debts quicker, use the money to cover the increased cost of living, or put it into savings.

The table below highlights some of the best products on the market for each credit score band, and the potential savings for the average interest-bearing credit card balance.

Don’t bank on luck

Before applying, customers should always check their credit score to make sure the information is correct and up to date. Compararing offers across different sites, and checking their eligibility means they can get a full-market view, and find out their chances of being accepted.

Balance transfers will usually carry fees of around 3-4% of the amount being moved, and most lenders will only let you shift a percentage of the credit limit offered — often 90-95%. This means if you’re accepted for a limit of £1,000, you might only be able to transfer £900-£950. In addition, most providers won’t let you transfer balances between their own products — and they’ll expect you to make the transaction within the first 60-90 days of opening the account.

Finally, avoid using your balance transfer card for making purchases. Often these won’t be included in the 0% deal, and instead could come with hefty interest rates.

 Alastair Douglas, CEO of TotallyMoney comments:

“Millions of people are paying hundreds, sometimes thousands of pounds on credit card interest. For eligible customers, this could be avoided with a balance transfer card. Cutting interest means more money to put towards everyday expenses, or to pay off debts quicker.

“If current trends of worsening offers and increased debt continue, now could be the time to make the move and see if a balance transfer card is right for you. Once you’ve checked your credit report and done your research, use an eligibility checker to see how likely you are to be accepted. This can help you avoid rejection, and won’t leave a mark on your credit file.

“Always remember to transfer the balance within the required time frame, make your repayments on time, and avoid using the card for purchases — these can incur higher rates and put more stress on your finances.

“Our free app puts customers in control of their own data, and notifies them when they’re paying interest. That way people can keep one step ahead of the banks, and keep their finances moving forward.”

 Alastair Douglas shares his five top tips for credit score improvement:

“The best credit offers will usually only be available to those with the best credit scores. This doesn’t just mean cards, loans and mortgages, but also other forms of borrowing which include car finance and mobile phone contracts. A good score could even be the difference between paying for energy and gas by Direct Debit or being on a prepayment meter. So by taking a look at your credit report, you can find out what’s holding you back, and take the right steps to start moving forward.”

1. Check your report: 

“Everybody should check their credit report regularly. You’ll not only be able to make sure it’s up to date, but you can also keep an eye out for any fraudulent activity happening in your name. What’s more, it’s completely free to do.”

2. Get on the electoral register:

“It doesn’t matter if you’re planning on voting, being on the electoral register can help lenders check your address and identity, meaning you could be more likely to be accepted for offers.”

3. Satisfy any County Court Judgements (CCJs):

“If you have any outstanding CCJs you can satisfy, then you should — as it could make you look more favourable to banks.”

4. Try to never miss a payment:

“It can be really hard to keep up with the cost of living while trying to manage bills at the moment, but if you can then try to never miss a payment. If you’re struggling to keep up, then get in touch with your lender to see if they can give you some breathing space.”

5. Keep an eye on your credit utilisation:

“Using less than 25% of the credit available to you can help show lenders that you’re not too reliant on it. For example, if you have a total credit limit of £1,000 then use less than £250. In the long run this could also help you increase your balances, and access better deals.”

September 29th, 2023 | Andrew Hagger | News

Starling Bank has announced that from 1st October, it will increase its in-credit current account interest rate to 3.25%.

The new rate is payable on balances up to £5,000 for sole accounts and £10,000 for joint accounts.

John Mountain, interim CEO of Starling Bank said: “Most banks with competitive interest rates require customers to move money into a separate account or pay a subscription fee. This friction means that many people won’t get around to taking action and so miss out on the interest on their main balance. We wanted to change this and ensure that everybody benefits by paying interest on the first £5,000 in their current account. This is something that all big banks should consider doing.”

It’s big change from Starling, which until now was paying just 0.05% on balances up to £85,000 so their customers will no doubt be delighted to see this shift change.

Interest rates apply to the first £5,000 in a customer’s account, inclusive of money held in Spaces and children’s Kite cards connected to an adult account.

Customers with joint accounts will earn interest on joint balances of up to £5,000, as well as on balances of up to £5,000 in their personal current account. 

According to Starling, most of its retail customers will benefit from the interest on the entirety of their current account balance, with 94% holding £5,000 or less.

Interest is paid monthly on the first day of the following month.

The 3.25% interest rate is available to new and existing customers.