November 1st, 2022 | Andrew Hagger | News

By James Mabey, Senior Associate at Winckworth Sherwood

Amid the current cost of living crisis and economic backdrop, it is understandable that many executors will decide to administer a deceased’s estate themselves and dispense with the cost of instructing a solicitor. We have compiled a list of 5 key reasons why it pays to pay for Probate.

1. Protection from financial risk:

Executors are accountable to beneficiaries and are liable personally for anything that goes wrong, and so administering an estate oneself, rather than instructing a solicitor, means taking on additional risk. This can be exacerbated by the fact that for many executors, it will be the first time they have carried out the role.  Unfamiliarity with the Court system, dealing with HM Revenue & Customs, HM Land Registry and generally with financial organisations can all mean that important deadlines are missed and financial penalties can result.  If something goes wrong and you have instructed a solicitor, you can complain to them and have the benefit of their indemnity insurance. . Instructing a solicitor to handle the estate can therefore give you peace of mind – not just that you are in safe hands, but also that you have an added layer of protection.

1. Relying on a solicitor’s expertise and access to resources

Instructing a solicitor who carries out this work on a daily basis and is familiar with the deadlines and organisations mentioned has a lot of advantages. A solicitor will have access to precedent letters and software specifically designed for completing and filing necessary documents, not to mention technical resources if there is a point of law or procedure which needs addressing, or the expertise within their firm to draw on. Unless you have access to these resources and software yourself, it is likely to take you longer than it would take a solicitor to complete the same work.

1. It saves you time

Administering an estate is a time-consuming process, with lots of the correspondence involved still needing to be carried out by letter. It is not uncommon for the administration to take one or even two years. More complicated estates can take even longer to administer. The amount of work required often comes as a surprise to an executor and the time involved can interfere with other work you might be carrying out, or simply eat into spare time. A solicitor can therefore help to free up evenings and weekends which you would otherwise spend on administering an estate.

1. It is a burden

If the person who has died is a family member or friend, you will be grieving at the same time as dealing with their estate, which is a double burden. As the months go by, beneficiaries can get restless and want to know when a property is going to be sold or when they are likely to receive their inheritance. Solicitors are familiar with the stages of an administration and timeframes and can manage expectations accordingly in their capacity as professionals.  The recent delays in applications for Probate have put an even greater strain on executors trying to manage expectations themselves.

1. And finally…The costs are more manageable than you might think

While solicitors’ fees for administering an estate may seem large, they often amount to between 1.5% and 3.5% plus VAT of the value of the gross estate. The fees are not payable by you personally and are payable out of the estate.

October 26th, 2022 | Andrew Hagger | News

A leading legal expert reveals what happens to a person’s debt when they die, including who is responsible for paying up and what happens if the money has run out.

There are a lot of misconceptions around debt and inheritance according to Solicitor Nicola Clayton of Atkins Dellow, who says it isn’t as simple as your debt dying with you.

Here Nicola reveals what happens to your debt when you die, and who might be held responsible

What happens to your debts when you die?

When someone dies their debts won’t automatically die with them but they also won’t be ‘inherited’ or passed on to their next of kin or family members – instead the payment of the debt will be paid out by their ‘estate’.

An estate consists of everything a person owns including their home, any other properties, investments, business interests, vehicles and belongings. These will then be sold with the funds going towards settling the debt.

Who has to pay off the debts?

While your debt won’t be passed on to your next of kin, the executor or administrator of your will is responsible for settling any outstanding debts you may have using money from your estate. This usually goes as follows:

1. First your executor will collect all of the estate’s assets, then arrange for the payment of any funeral or administration costs.
2. Next, the executor will settle any outstanding debts using the estate’s assets.
3. Once all debts have been settled the executor can finally distribute the remaining assets to any beneficiaries.

TOP TIP – To make it easier for the person who will be dealing with your estate when you have died, think about keeping a record of any debts which are held in your name and be aware that if debts exceed asset values this means your intended beneficiaries might not inherit anything from your estate.

What if there is no money in the estate?

If there isn’t enough money in the estate, the executor must ensure that the debts are paid off in prescribed order until the money or asset run out:

1. Secured debts e.g. banks or mortgage lenders
2. Priority debts e.g. HMRC or taxes
3. Unsecured debts e.g., credit cards or personal loans

Once the money or assets run out the remaining debts are likely to be written off and will not be passed on to a spouse, civil partner etc. unless they have provided a guarantee on a loan, or the debt is held in joint names.

What happens to mortgage debt?

If you have a mortgage just in your name this will be treated as secured debt and will need to be repaid by your estate as a priority.  If fully paid off the property can then pass to the entitled beneficiary, if not the property will be sold and the proceeds used to repay the mortgage.

However, a mortgage on a jointly owned property will usually mean the surviving borrower will be liable for the outstanding amount and will take responsibility for the mortgage.

If you jointly own a property as ‘tenants in common’ you can leave your share in the property to whoever you like and not necessarily the co-owner. In this case, if there isn’t enough money in the estate to repay the mortgage, the beneficiary can choose to take on the responsibility of paying the mortgage to avoid the need to sell the property.

TOP TIP – Always check the wording of any wills as sometimes they may state that the person inheriting the property is responsible for paying the mortgage as well as any other debts secured on the property. This means they’ll now be liable for mortgage repayments and can’t use funds from the estate to settle the amount.

What happens to joint accounts?

Joint accounts, such as those with a bank or building society, are not frozen after death and sole ownership is immediately passed on to the remaining account holder. This means they now own any money or assets in the account but are also responsible for any shared debts, such as a mortgage or overdraft.

For joint mortgages or loans, the outstanding debt will pass onto the other named party or parties but they will not be responsible for any other debts e.g. personal debts or taxes of the deceased.

TOP TIP – Check your insurance policies to see if any cover paying off the debt if the worst should happen – if not, speak to your creditor or lender and see if they can offer a new or alter your policy to provide some peace of mind.

Can Life Insurance be put towards your debts after you die?

Absolutely! Some people even take out life insurance specifically to cover debts when they die, being enough to cover the mortgage and other debts. Arranging life insurance can be a significant part of your estate planning to ensure that your family aren’t left with the burden of paying your debts out of the estate.

It’s very easy to get confused about what happens to your debts if you die; if you need guidance don’t hesitate to get in touch with a legal expert who can offer support, answer your questions and ease any worries you may have.

ABOUT ATKINS DELLOW LLP

Atkins Dellow’s highly experienced and personable team consistently delivers excellent, practical, legal advice, looking only after your best interests. They speak in plain English and focus on what’s needed to achieve the best possible outcome for you – looking after your personal and business matters wherever you’re based across the country.

www.ATKINSDELLOW.com

October 18th, 2022 | Andrew Hagger | News

Small businesses constitute a significant part of the economy, and credit cards are critical to their success. UK Finance head of research Adrian Buckle reports that there has been a long-running trend away from cash, with more consumers veering towards cashless options such as credit cards. In 2008, approximately 60% of payments were made in cash; by 2020, that figure was only 17%.

With the increasing pivot towards cashless payment, credit card processing is starting to become a backbone for small businesses across the country. However, a lot goes into getting the right equipment, setting it up, and managing it. If your business is new to credit card processing or you’re just looking to brush up on your knowledge, here are some tips you need to know:

1. Open a merchant account

A merchant account is an agreement between you and your bank that allows you to accept payments via credit card, debit card, or other electronic payment methods. To get started with credit card processing, you’ll need to open an account with a merchant bank or processor (also known as a merchant acquirer). Most businesses pay a monthly fee based on how much money they process through their account. Some banks will offer discounts if you agree to use only their services for other needs, such as loans, checking, or savings accounts for your business.

2. Find a suitable payment processor

If you accept credit cards as part of your payment processing, you’ll need an integrated point-of-sale system to process credit card payments. Finding a suitable payment processor requires looking into one that can provide a seamless card processing experience that fits your business. The kind of card payment machine you should get will depend on the type of services you provide. A restaurant, for instance, might find it more convenient to have a portable machine that can take card payments around the restaurant. On the other hand, a small grocery store may need a countertop machine to take payments at the till.

3. Have contingencies in case of fraud

Credit card fraud and scams do not only hurt consumers, but also small businesses. For instance, if a customer has a chargeback filed because of a fraudulent transaction, it may be difficult to recoup your losses. You should ensure you have a plan in place, so you aren’t left scrambling for cash when something like this happens. This can include having different payment processors or setting up direct deposit with the bank so that payments are automatically made when they come in. Consider setting up fraud alerts with your credit card processor so that any unusual charges get flagged immediately. These measures will help protect both sides from losses due to fraud.

4. Know the transaction fees

Not all credit card processors are created equal. Before deciding on a credit card processor, it’s essential to make sure you know all the transaction fees that are involved so you can account for them in your balance books. Some costs that your processor may charge include minimum monthly payments, surcharges for international transactions or business purchases, and transaction fees. For instance, your processor may charge you 5% or more if you process £10,000, or they may charge 1.5% per transaction. It’s crucial that you understand the fees associated with accepting credit cards and confirm you’re getting a good deal when you sign up for a service.

Credit card processing has become an essential part of small businesses. Setting up your credit card payment system with the right strategy doesn’t have to be complicated. These four tips are good starting points to consider before setting up a card processing system for your business.

October 13th, 2022 | Andrew Hagger | News

As details emerged this week that the average 2-year fixed rate mortgage is now 6.43%, Leeds Building Society has looked at historical data to calculate the equivalent mortgage rates.

Interest rates of 6.43% may seem lower than the mortgage rates of 15% which borrowers were paying in 1980 for example, but there is a critical difference: surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the commensurate increase in household indebtedness, mean that the 6.43% mortgage rates of today are equivalent to a rate of 25.7% in 1980 (see Editors’ notes for calculation).

In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income (see Editors’ notes). Today, with the average 2 year fixed rate mortgage on offer to new customers currently standing at 6.43%, those figures are around £292,000 and 45.1% respectively.

Housing is now at its least affordable point since records began.  The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.  Rates of home ownership amongst 25-34 year olds have collapsed over the last 30 years.  In 1996, home ownership levels for this age bracket were 65%.  By 2016, the level for this age group had fallen to 27% – giving them the label of ‘generation rent’.

Leeds Building Society has confirmed the ways it will help aspiring and existing homeowners during the current period of market uncertainty but underlined the need for Government to act as well.

The Society has confirmed it will:

• Honour any mortgage offers (including the offered rate) to new customers for six months from the date of issue* (See editors’ notes).
• Give all existing customers who are up to date with their mortgage repayments and who are within three months of the end of their fixed rate deal a choice of other mortgages that they can transfer to.
• Not charge any arrears fees if borrowers fall behind on their mortgage repayments until at least 1 April 2023 – extending its suspension of these fees from since the start of the COVID-19 pandemic.
• Give tailored support to all members who are struggling, or may struggle, with repayments or are in arrears. Members should contact us as soon as possible so we can offer them the individual help and support they need. 

Richard Fearon, Chief Executive, Leeds Building Society, said:

“We stand firmly on the side of homeowners and first-time buyers and will do everything we can as a lender to help them. The recent, rapid interest rate rises following the mini-budget have been a hammer blow to borrowers and will continue to cause distress for them over the coming months.

October 11th, 2022 | Andrew Hagger | Uncategorized

As the savings market continues to surge, Cahoot, the UK-based online bank, has today announced increased rates on its Fixed Rate Bond range, including ‘top of market’ rates on two year and three year Fixed Rate Bonds.. 

Fixed Rate Bonds are available immediately: 

·        1 Year Fixed Rate Bond: 4.30% AER/Gross from 3.70% AER/Gross 

·        2 Year Fixed Rate Bond: 4.70% AER/Gross from 4.10% AER/Gross 

·        3 Year Fixed Rate Bond: 4.80% AER/Gross from 4.20% AER/Gross 

Cahoot savers locking away £10,000 in a 3 Year Fixed Rate Bond product will see annual returns of £480.  Savers can check what returns they can get by using the Bank of England savings calculator. 

Check all the latest best buy savings deals on Moneynet.

A Fixed Rate Bond can be opened with only a £500 deposit and with a maximum balance of up to £2 million. All accounts are protected by the Financial Services Compensation Scheme (FSCS)¹ up to £85,000, to provide customers with peace of mind.

October 5th, 2022 | Andrew Hagger | Uncategorized

Nearly one in five (17%) properties received an offer within one hour of a viewing, with one in 14 (7%) buyers making an offer on a house without even visiting it, according to data from the past five years.

This trend is far starker in 2022 as 31% of properties now receive an offer in an hour compared to 7% in 2018. Properties receiving an offer in a day is up over the same period from 26% in 2018, to 48% in 2022. One in eight (12%) properties have received an offer without a viewing this year, up from 7% in 2018.

October 3rd, 2022 | Andrew Hagger | News

Drivers could save themselves over £97 a month by simply starting to lift share with a colleague and splitting the cost of fuel, new data has found.

With household energy bills expected to be £190 more a month than last year in October, drivers are being urged to review their travel costs.

Ofgem recently reported that domestic electricity and gas prices – for a ‘typical’ household – rose from an annual average of £1,042 in October 2020 to £1,971 in April 2022. Annual prices are now capped by the government at £2,500 a year from 1st October, in an effort to limit soaring energy costs. Without taking into account October’s pay cap, energy bills have already increased 89% since 2020. At the same time, the average cost of filling up a car has increased by 35%

Despite the surge in bills, Liftshare Group’s Commuter Census found that a fifth of workers still commute to work five times a week, travelling an average of 17.5 miles each way. This is costing solo drivers around £51 a week in petrol or diesel. But, by splitting the cost of their journey with another driver, or with someone in their household, commuters could save up to £97 a month on their fuel bills. This £1,167 yearly saving is almost the same as receiving a 4% pay rise based on the UK’s average salary of £29K which equates to £1,167.

Liftshare.com helps match like-minded drivers and passengers heading for the same destination. Sharing fuel costs can help the UK’s lowest-paid workers through the tightening cost of living squeeze.

Ali Clabburn, founder of Liftshare Group, which has now saved its 670,000 members £6 Million on their fuel costs, said:

“Sharing the commute is one of the simplest and best ways to save a lot of money. First and foremost, car sharing alleviates the financial burden imposed by the rise in living costs crisis. Travel costs aren’t only comprised of fuel but also potentially toll and parking fees. These costs can add up, especially if you’re making the same journey every day.

With National Liftshare Week coming up, an initiative to help those who can’t walk or bike to work keep the costs of their travel down, people could save at least 50% on their weekly fuel costs. We are urging people to evaluate their outgoings so that they can make simple savings during one of the toughest financial crises. Now is the perfect time to explore your options and sign up to liftshare.com during Liftshare Week to start making immediate and valuable savings”.

Lift sharing even makes financial sense for those workers only in the office 1 or 2 days a week. Recent reports found that the UK’s office workers only spend an average of 1.5 days in the office each week. Yet, that still adds up to around £565 on fuel a year, compared to £284 if you car share with another motorist.

Daniel McDermott and Tom Scott, Service Technicians at Heathrow Airport have been sharing the journey to work together for a number of

years, each saving £140 a month in travel costs.

Daniel McDermott, said:

“I would always recommend car sharing. It’s a no-brainer when you can save that amount of money! And, it’s great to have someone to chat with.

Sharing a lift has made travelling to work considerably more affordable and convenient. Having someone to speak to throughout also makes the journey go quicker”.

The financial impact the pair have saved collectively is huge, adding up to about £ 3,500 every year. The implications for the environment are even bigger. Daniel and Tom save an average of 3 tonnes of CO2e every year, that’s the equivalent of a return flight from London to Perth, Australia!

For more information on how much you could save on your commute to work, visit Liftshare.com’s Saving Calculator here: https://liftshare.com/uk/savings-calculator

September 27th, 2022 | Andrew Hagger | News

A quarter (27%) of savers are currently putting money away to get ahead of rising bills, according to recent research carried out by Atom bank and Walnut Unlimited.

The looming energy cap increase in October seems to be at the forefront of our minds, with many of us worrying about making ends meet in the coming winter months. This is perhaps unsurprising given 20.3 million (39%) Brits don’t feel confident managing their money, and 11.5 million have less than £100 in savings according to the Money Advice Service.² As the current cost of living crisis bites, Atom’s report also found that a fifth of savers (20%) haven’t been able to save as much as they usually would in the last six months, while nearly the same number (16%) haven’t been able to save at all in the current climate.

A whole host of new providers in the market, like Atom, have made the process of saving simpler, faster and better value than the incumbent banks, and Aileen Robertson, Head of Savings at Atom bank, explains why people should reconsider their loyalty to their current provider.

What does saving look like in a cost of living crisis?

The interest rate set by the Bank of England has been increasing significantly over the last few months to combat rising inflation, which should mean that savings rates follow – but the bigger high street banks aren’t necessarily passing these increases onto customers.

Now is the time to make our bank accounts work harder for us, which means delving into the terms of our existing savings accounts and thinking hard about how we can get bigger returns on the (perhaps limited) funds in there.

Aileen Robertson comments:

“Too often we’re guilty of being creatures of habit and staying loyal to our existing banks, despite not getting the best value for our money. This usually stems from a lack of understanding and knowledge about what else is out there. At a time like this – when there is so much financial uncertainty, people need to take action and get the most out of their money. You may have had the same savings account with your bank for years, but a 0.2% interest rate isn’t much of a reward for your loyalty.

“It’s key to have a savings account that works in your favour at the moment. Realistically, you should aim to utilise this more than your current account, as this will likely be paying you next to nothing on your savings. I’d think about keeping the majority of your money in an easy-access savings account – which allows you access to your cash but earns you more interest on your hard-earned cash at the same time.

“I’d really encourage people to shop around for the best deals as rates increase, and be sure to check the terms of the account to find out important things like if interest gets added monthly or annually or if there is a minimum deposit amount. It’s also important to check how often you can withdraw – ideally, you should opt for an account that allows you unlimited withdrawals so you have that safety buffer if you need your money.”

September 20th, 2022 | Andrew Hagger | News

One in three mortgage customers in the UK say that rising interest rates mean they cannot afford their repayments, new research commissioned by Butterfield Mortgages has found. 

The independent survey of 2,000 UK adults found that a third (33%) of mortgage holders believe the interest rate hikes over the past year have made their mortgage repayments unaffordable. Among younger mortgage customers (18-34), the figure rises to 48%.

Since December 2021, the Bank of England has made six consecutive hikes to interest rates, with the base rate rising from 0.1% to 1.75% in the past nine months. On Thursday (22 September), Monetary Policy Committee is expected to increase rates by 0.75 percentage points to 2.5%.

Butterfield Mortgages’ research showed that rising interest rates top many mortgage customers’ financial concerns – 44% said they are more worried about rates than inflation. A similar number (42%) said they are considering switching to a different mortgage provider offering a longer fixed-term mortgage.

Over half of UK mortgage customers (53%) feel locked in with their current mortgage provider, while more than a quarter (27%) are actively shopping around for a new mortgage.

The study also uncovered a desire for greater support from lenders to help navigate the current economic landscape. Less than half (45%) of respondents believe their mortgage provider has been proactive in providing guidance or communication about the implications of rising interest rates.

Alpa Bhakta, CEO of Butterfield Mortgages, said: “Borrowers are facing sharp shifts in the economic landscape. Our research has shown the extent to which six consecutive interest rate hikes by the Bank of England have impacted mortgage repayments and people’s wider financial concerns.  

“As lenders, we must do everything we can to help mortgage customers navigate the best possible financial path through these mounting challenges. This includes taking proactive steps towards anticipating borrowers’ evolving needs and offering greater flexibility with long-term and fixed rates, which may provide a sense of security over the potentially uncertain times ahead.”

September 6th, 2022 | Andrew Hagger | News

As rising living costs leave households £249 poorer a month on average, research from Nationwide Building Society reveals one in eight people are putting off getting the help they need.

The poll comes a month after Britain’s biggest building society launched its freephone cost-of-living hotline¹ (0800 030 40 66) and as it gears up to provide financial health checks to members in October, ahead of the incoming price cap – offering appointments in branch, over the telephone or video.

According to the survey² of more than 2,000 people, more than eight in ten (83%) people are worried about the rising cost of living on their household finances, with six per cent saying they are already in serious financial difficulty. Despite many already having cut back on costs, more than seven in ten (71%) feel they have cut back as far as they can.

Despite this, around one in eight (12%) are avoiding seeking any additional support and are instead relying on their situation naturally improving, with younger people nearly five times more likely to avoid seeking help (19% for 16-24-year-olds vs 4% for those aged 55+).

While getting support early for financial difficulties can often resolve the issue sooner, when it comes to talking to banks or building societies, half (50%) of people worry about the ramifications. Worries include having their credit score impacted (30% worried), being charged higher rates for credit (27%), prevented from getting credit (26%) or having their credit limit cut (21%).

Fewer than a fifth (19%) would speak to their bank or building society if they were struggling. This compares with 24 per cent who would go to their partner or spouse and 22 per cent who would turn to their parents. However, one in six (17%) wouldn’t seek any help from anywhere.

Nationwide, which pledges to answer calls within ten minutes on its cost-of-living hotline, is handling a range of calls from members at this time. Around one in ten calls are being referred to Nationwide’s specialist money worries teams, who are able to offer support to those in financial hardship by understanding their individual circumstances and working through solutions, as well as putting people in touch with third party debt organisations and charities who can provide independent advice. With costs continuing to rise, Nationwide expects call volumes to its hotline to accelerate in the coming months.