February 28th, 2022 | Andrew Hagger | News

The increased cost of living is the main barrier for adults maintaining a savings goal, with those in the ‘squeezed middle’ age bracket hit the hardest, Paragon Bank research has found.

Paragon’s survey of 2,000 adults revealed three in five (62%) admit to struggling to maintain savings commitments, with 33% highlighting the increased cost of living was the main obstacle. Other barriers included a lack of income (28%), high outgoings (18%) and prioritising debts (15%).

Those aged between 35 and 55 were most likely to cite the cost of living as the main hindrance to saving, with 37% of respondents in this category reporting problems compared to 31% of those aged between 18 and 34 and 55+.

In addition, just under three quarters (74%) of adults report having financial anxieties about 2022, with inflation the main cause of concern. The most common financial anxiety is the cost of bills increasing (51%) followed by an increase in the cost of goods and services (44%) and general economic uncertainty (23%).

Women are more likely than men to be anxious the about the cost of bills going up (56% vs 46%) and the increased cost of goods and services (49% vs 39%).

Again, those aged 35-55 were more likely to be worried about the cost of living than other age brackets. Nearly three in five (57%) of this age bracket are worried about rising bills (18-34: 40% / 55+: 53%), whilst just under half (48%) said they were concerned about the increased cost of goods (18-34: 36% / 55+: 47%).

Paragon Bank Savings Director Derek Sprawling said:

“The rising cost of living is impacting us all and putting pressure on household budgets. Maintaining monthly savings levels or committing towards a new savings in this environment can be challenging, but it’s important that people keep focused on their finances and make the most of their money.

“Over 70p in every £1 saved into Easy Access accounts in the UK is languishing in accounts paying 0.1% or less – less than seven times the best rates available in the best-buy tables¹. Savers in low paying accounts are missing out on considerable interest so it’s important for people to look for the best deal. Taking the time to search for better paying accounts can pay off, particularly as savings accounts can grow quickly.”

February 25th, 2022 | Andrew Hagger | News

Aldermore bank has today increased the rates on a range of its fixed rate and individual savings account (ISA) products, providing savers with choice for their medium- and longer-term savings goals.

Our Fixed Rate Savings accounts provide competitive long term rates that protect your hard earned money from interest rate fluctuations so you’ll always know exactly how much interest you’ll earn:

• 2 Year Fixed Rate will increase from 1.50% to 1.70%
• 3 Year Fixed Rate will increase from 1.65% to 1.85%
• 4 Year Fixed Rate will increase from 1.67% to 1.90%
• 5 Year Fixed Rate will increase from 1.70% to 2.10%

Our Fixed Rate Cash ISAs give you guaranteed interest rates over a choice of fixed terms, and the interest you earn is tax free and doesn’t count towards your Personal Savings Allowance:

• 2 Year Fixed Rate ISA will increase from 1.25% to 1.35%
• 3 Year Fixed Rate ISA will increase from 1.40% to 1.45%

Ewan Edwards, director of savings, Aldermore comments: “With the cost of living on the rise, Aldermore is committed to supporting savers by providing competitive rates to help them achieve their savings goals. With the end of the tax year approaching, it’s an ideal time to sit down and review finances, to set out both short, medium, and long term savings targets whilst considering how best to achieve them.

“Finding the right timeframes for your savings goals is a useful habit to ensure the best returns are achieved. People will have many plans for the future, so it can be advantageous to split savings into smaller pots and put them into different products that suit the timings for reaching those goals. This will also encourage people to regularly review their savings so they can continue to update the products they’re using with each new savings goal allowing their hard-earned cash to work as hard as possible.”

February 15th, 2022 | Andrew Hagger | News

New figures reveal that the average petrol price in the UK has surpassed 148p per litre for the first time. 

According to the AA, the cost of petrol has now jumped to 148.02p per litre on Sunday – rising above the previous record high of 147.4p per litre.

Following this news, Nick Drewe, money-saving expert at WeThrift has shared six ways drivers can cut down on their fuel costs. 

1. Use cashback schemes and loyalty cards

From Texaco to Sainsburys, various petrol stations and supermarkets offer cashback schemes and loyalty cards to encourage customers to use their services.

Every time you buy fuel at a particular station, you simply have to swipe your loyalty card and points are then awarded.

BP, for example, offers a loyalty scheme where if you earn 200 points, you’ll be able to claim £1 off your fuel or shop purchases. With a Tesco Clubcard, you’ll be able to earn one point for every £2 spent every time you fill up at the supermarket’s petrol station.

As the nation continues to grapple with the accelerated cost of living, these incentives can go a long way.

2. Be conscious of how much you’re topping up

Every time you fill up your tank, make sure to only top up what your car requires at the time. A top tip to deciding the correct amount of fuel you need is to keep a consumption notebook in your glove box or a record on your phone.

For every visit to the petrol station, note down how much fuel you put in your car to get from A-B. In this ever-changing economy, be sure to record your fuel consumption in litres and not in pounds.

3. Select your sat nav app carefully

If you’re driving in an unfamiliar location, make sure you use a sat nav to avoid going in circles and wasting your running costs.

Sat navs are great devices for saving money because they will show you the quickest route to your destination. They can also work in real time and help you avoid getting stuck in traffic jobs, and some models will even select the most economical route to help you avoid fuel-stealing obstacles such as large hills and heavy stop-start traffic.

Motorists will be pleased to know that there is a new ‘eco-friendly routing’ feature on Google Maps, which instructs drivers on the most economic route to take.

4. Fill up your tank at supermarket

Supermarket fuel is often cheaper than branded fuel.

Whilst supermarket fuel usually comes from the same refineries as the big brands brands like Shell or Esso, these brands will usually add a range of special additives to their own fuels in order to improve efficiency and performance – which is why they tend to cost more.

5. Inflate your tyres to the right pressure

If you have the incorrect tyre pressure, you’ll be using more fuel to keep your car running smoothly. This is because of the added friction while driving that comes from a misshapen tyre.

To know what the recommended tyre pressure is for your vehicle, first check your vehicle handbook.

Sometimes the pressure could be printed either in the sill of the driver’s door or on the inside of the fuel tank flap.

Your vehicle manufacturer may also suggest different tyre pressures for your front and rear tyres so it is always worth doing your research.

6. Drive smoothly

One of the easiest ways to save on fuel is to drive in a smooth manner. Be sure to accelerate smoothly and avoid hard breaks to limit your fuel consumption. Shifting gears from time to time can also help you to avoid throwing away your fuel.

If you’re driving a new model, check if your vehicle has a gear-shift indicator, as this will inform you of the most economical and efficient point to change your gear. As well as this, there are apps such as Aviva Drive that lets you record your driving style and give you indications on how to improve it.

You may also be interested in this in-depth guide called “Driving Ethically: Understanding the sustainability of electric cars”

It offers some helpful information on how electric vehicles can lower emissions in the automotive industry and tips for buying and owning your electric car responsibly.

February 14th, 2022 | Andrew Hagger | News

Recent research from RCI Bank, the digital savings bank, has found that 74% of UK adults who aren’t confident about reaching their financial goals this year think the biggest barrier for them to do so will be the rising cost of living. This comes as the latest ONS figures released in December 2021 showed an annual inflation rate increase to 5.4%, with expectations of another rise when the January figures are released on Wednesday.

In addition to the rising cost of living, other reasons people aren’t confident they’ll achieve their goals this year are that they are in too much debt (22%), they are finding it difficult to manage their spending (18%), and the lack of support from the government (17%).

Despite this, the number of people making financial plans this year is almost four times higher than last year (67% vs 17%), as consumers want to put more money into savings (35%), spend less money (32%), review their finances more frequently (19%) and increase their financial knowledge (11%). On average UK adults hope to save up to £6,767 in the upcoming year, with 10% wanting to save between £2,001- £3,000.

Two fifths (40%) of those who made financial goals last year saved on average £3,372 ** more than they planned. The top ways people managed to save more last year included making a budget for the year (38%), setting up a clear savings goal (35%),and recording their outgoings to see where they could make savings (32%). Others made sure they paid off their debts before they started saving (27%), researched savings products to get the best rates possible (26%), and set up a standing order to pay into a savings account regularly (24%).

Tafari Smith, Head of Savings at RCI Bank comments: “Despite the current economic pressures, it is positive to see so many more people are making financial plans this year. It is encouraging to see more UK consumers are more in touch with their finances, however, for some it is likely drawn out of necessity. Our research shows that what helped people achieve their goals last year was having a clear budget, setting up clear goals, and keeping track of their finances.

“Just earlier this month Ofgem announced the steepest increase ever in household bills, a 54% increase in the energy price cap, leaving 22 million households out of pocket. In the current inflationary environment and as the cost of living continues to rise, saving may not be a priority or even possible for everyone right now – but engaging with your finances where possible is always a positive step to take.”

February 11th, 2022 | Andrew Hagger | News

“A recent survey was taken that asked 1,000 people if having a smart meter installed gave them stress and anxiety. Nearly 30% answered yes, but now we wonder if this will increase if people have to start paying more?

The new energy price cap is to go up c.54% which could be detrimental to the vulnerable people in our society. Many pensioners and low-income families could struggle with this and it might leave some families without gas and electricity because they simply cannot afford it.

The survey also asked if people were looking at alternative options to reduce usage and out of the 1,000 people that answered, 73% said yes. This is when we decided to speak with an energy expert to find out what other options people could have and why some might be better than others.”

Karl Tippins, Financial expert at Pension Times.

Speaking with Ann Christian, aged 69, about the energy price cap these are her comments:

“It is a bit of worry, as I don’t want to have to start thinking – can I afford to heat my home? It does get very cold some days and I don’t want to have to start rationing my heating in order to afford higher energy bills.

My home is an older building that is harder to heat so it takes a lot longer and then I’ve got my health to think about. It’s not easy being old but I’m sure me and my husband will think of something, even if it’s not ideal.”

What the Energy Experts are saying:

“It’s understandable that some people are worried about the energy price cap going up. However, no matter how tempting it is to look for a new energy company to save a few more pennies, you won’t cut your bill by switching. Instead, you should spend most of your time doing simple things to help save money on your energy bills.

The first step would be to make sure all your phone chargers are unplugged, don’t leave things on standby and use energy-efficient light bulbs. Remember, if you use more, you’ll pay more.”

Chris Harvey, Energy expert at Stelrad.

February 4th, 2022 | Andrew Hagger | News

One in five UK adults plan to buy a property in 2022, new research from Market Financial Solutions (MFS) has revealed.

The bridging lender commissioned an independent survey among more than 2,000 UK adults. It found that 18% intend to purchase property this year, including 34% of those aged 18-34.

Among renters, 14% plan to buy their first home. Among existing homeowners, 14% plan to sell up and move home in 2022, while 6% hope to purchase an additional investment property.

Of those planning to buy a property this year, 43% say they will look in a different area to where they currently live because the rise of remote working means they do not need to be in the same location. Half (50%) want a property that has more space as the pandemic means they spend more time at home.

Two thirds (66%) of prospective homebuyers are worried about inflation and rising house prices, which they say will hinder their chances to buy in 2022. Further, 38% said that the complexities and long waiting times involved in getting a mortgage are a major challenge when looking to buy a property.

MFS’ research also revealed how UK adults expect house prices to perform over the coming 12 months. The vast majority (63%) believe they will rise, with 29% predicting they will stay roughly the same and 8% thinking they will fall.

More generally, the study showed that 40% of UK adults say the pandemic has changed what matters to them in a home – this is particularly true among those aged 18-34 (53%).

Paresh Raja, CEO of MFS, said: “After a frenetic year for the property market in 2021, in which house prices rose sharply, there is a great deal of speculation as to how 2022 will unfold. Our new research shows we should not expect any sudden slowdown; the fact that 18% of UK adults – over 9 million people – intend to buy a property in the coming 12 months shows that demand remains sky high.

“Yet our research also underlines the challenges that stand in front of prospective buyers. The so-called ‘race for space’ means that competition for certain properties – such as houses with gardens and spare rooms for home offices – will be fierce. Meanwhile, rising inflation, the potential for further interest rates hikes, and delays in securing mortgages, could also act as stumbling blocks for those looking to buy property.

“Forward planning will be crucial for anyone looking to buy a new home or invest in property. Having their finances in order and, if required, a lender in place will ensure they can act with speed and confidence, which will improve their chances of being successful in a competitive market.”  

January 26th, 2022 | Andrew Hagger | News

With billions of pounds set to be spent on holidays abroad this year, TotallyMoney, the credit app that helps everyone move their finances forward, is calling for holidaymakers to protect their payments with Section 75 of the Consumer Credit Act 1974.

• Following the relaxing of covid restrictions, the number of holiday bookings has spiked by up to 200%*
• Brits are predicted to spend a massive £41bn on foreign travel in 2022**
• With travel businesses reporting turnover 78% lower than pre-pandemic levels†, some could be teetering on the edge,  potentially following the likes of Thomas Cook, Flybe, Wow Air, and Laterooms, who all collapsed in recent years‡
• Section 75 protects all credit card transactions between £100 and £30,000. This includes holiday companies and airlines going bust, or cancellations due to covid
• It only covers customers paying with a credit card — not cash, debit cards, loans or buy now pay later services

As the impact of covid continues to unfold, and with inflation hitting a 30-year high, customers can’t afford to gamble with their finances and should protect all payments where possible.

The credit card payment guard

TotallyMoney is urging Brits to cover holiday bookings, both domestic, and international, with Section 75. This covers any purchase made with a credit card costing between £100 and £30,000.

Section 75 means the credit card company and supplier are equally liable for any breach of contract. Even if you only put down a deposit on your credit card, paying the rest by other means, you can still claim back the full amount.

Your claim will only be successful if the Debtor-Creditor-Supplier (DCS) link isn’t broken. This means that the exchange of money between you, your credit card company, and the service provider must be maintained. So, you won’t be able to claim when booking through third parties such as Booking.com or Expedia, or if you pay via PayPal.

Section 75 is only valid on purchases using credit cards, and not debit cards, loans or buy now pay later services. It doesn’t cover just travel, but all other qualifying purchases. This could range from buying a faulty dishwasher or ordering a new television that doesn’t turn up.

TotallyMoney’s five Section 75 tips are below, with a link to its in-depth guide here.

Buy now, spread longer

This recommendation comes at a time when TotallyMoney customers are 31% more likely to be eligible for a credit card now§, compared to the beginning of the pandemic.

With only part of the payment required using a credit card, customers won’t necessarily need a high limit. However, they should always check their pre-approved offers, to see how likely they are to be accepted, before applying.

Additionally, some of the most competitive purchase card offers seen in years are available now, customers can buy now and spread payments, interest-free, for up to two years. That gives extra breathing space, as well as payment protection.

Alastair Douglas, CEO of TotallyMoney comments, 

“With the impact of covid still playing out, we can’t take anything for certain. That includes booking holidays with a guarantee we’ll be able to travel. However, customers making payments with credit cards can be confident, knowing that if anything does go wrong, they can make a claim for their money back under Section 75.

“Claiming requires no excess, and customers will be covered if there’s a breach of contract. This includes if the holiday firm goes out of business, the airline goes bust, or travel is cancelled as a result of covid measures.

“At TotallyMoney, we’re on a mission to help everyone move their finances forward. By protecting larger purchases with Section 75, customers can ensure they don’t get caught short when a supplier fails to keep to their side of the bargain.”

Five Section 75 Tips

Here’s our top five things to remember for Section 75. We also have a full guide here.

1. £100 to £30k

Individual items and purchases costing more than £100 and up to £30,000 are covered under Section 75. So, whether it’s a cancelled flight or an all-inclusive family holiday, as long as you paid part of it on a credit card, you could be reimbursed the full amount if the company goes bust.

2. Just credit

Unless at least partially paid on a credit card, Section 75 doesn’t apply to purchases using debit cards, cash, loans, or buy now pay later services. It’s only valid when using credit cards.

3. Rule number 3, no third parties

Buying through a third party, like travel agents, won’t offer Section 75 protection. You need to have paid the company directly (so purchases made through PayPal, for example, aren’t covered).

4. Part pay for full cover

Remember that only part of the purchase needs to be paid with a credit card. So for instance, if you pay the deposit with a credit card and the rest debit, should anything prevent you from settling the balance (like the airline collapses), Section 75 lets you claim the full amount. Not just the part paid on credit.

5. Not just travel

You’re covered for all qualifying purchases. Whether you buy a new television and it doesn’t turn up, or if you buy a faulty dishwasher. If you’ve used a credit card, you could be protected under Section 75 of the Consumer Credit Act 1974.

January 25th, 2022 | Andrew Hagger | News

1)Review your spending

“When did you last really review your spending? The start of the year is a great time to take stock of your outgoings. Prepare to be amazed! How much do you really spend on expensive coffees or snacks bought ‘in the moment’? Is your preference for branded food items pushing up the cost of your weekly shop? Do you know what your energy or fuel costs? Perhaps you have gym or other memberships that are no longer good value for money. It’s well worth putting time on one side to shop around for better deals on your phone, broadband, energy and insurance. One day spent on this each year might save you hundreds of pounds.”

2)Create a simple budget

“Budgeting is a great way to keep track of your spending and control your finances. All you need are details of your income and outgoings. It’s simple to do. Once you’ve reviewed your spending, you’re halfway there! You can find step-by-step guidance on how to create a basic budget using our MoneySkills app. The MoneySkills  app provides information on budgeting and saving through short video clips, e-zines, and an interactive budget planner. It is an interactive tool that you can use to help manage your finances on the go. Use the app to learn how to budget, start routinely saving and to set financial goals. “The app was developed out of CBiS’s research, funded by the Money Advice Service and in conjunction with the Open University. The research found that learning how to budget and working out how to save can help put people in control of their money.”

3) Set up a regular savings direct debit

“When the bills are stacking up, committing to regular saving might seem unrealistic. But it’s surprising how quickly a small amount saved each month can mount up. Creating a ‘rainy day’ fund can cut the stress of unexpected expenses and help you save for a special occasion or planned big spend. If the direct debit is timed for just after you’re paid, you’re much less likely to miss the money going into your savings.”

4) Set aspirational financial goals

“Having aspirational goals gives you a great incentive to save. Researchshows that we often spend for emotional reasons, to cheer ourselves up or to lift us through life’s challenges. Sadly, this kind of short-term spending can make it difficult to work towards our longer-term goals. Setting longer-term financial goals can be a great motivation for reducing day-to-day spending. Your goal might be the promise of a dream holiday, the desire to replace an unreliable car, to fund time off to visit friends or relatives, or even to become debt free. Some people work towards these goals by making simple changes – such as cutting back on coffee shop drinks or walking or cycling to work – to allow them to save toward these goals.”

5) Seek help quickly if you need to

“Money is one of the last taboos, with many of us resistant or embarrassed to discuss our finances, even with those we love. Often, we leave it too long when money problems hit, yet seeking help quickly can make all the difference. Our research findings show that some people resist asking for help because they don’t know who to trust and worry that a source of free help might actually be trying to sell them something. But there are many useful sources of independent and free guidance out there, including:

 MoneyHelper  https://www.moneyhelper.org.uk  offers free advice on money and budgeting.

 Stepchange  https://www.stepchange.org/  (0800 138 1111) and National Debtline  https://nationaldebtline.org/  (Freephone 0808 4000) both provide free and independent help on debt.”

January 17th, 2022 | Andrew Hagger | News

According to new research from mortgage broker Boon Brokers, 83 per cent of people say they aren’t aware activity on their bank statements could be a red flag to a mortgage lender. Even when prompted, 58 per cent had never considered that gambling transactions on their account may cause any issues.

When given a list of transactions which might give lenders a reason to take a closer look, 55 per cent didn’t feel that payday loans would be a cause for concern, and 58 per cent didn’t feel that being constantly in an overdraft would be a red flag.

Three in four (72 per cent) didn’t believe that having multiple payments coming in with no clear reference of what they were for would ring alarm bells, according to Boon Brokers which surveyed more than 2,800 people in the UK.

Gerard Boon, partner at Boon Brokers, said: “Not all lenders will scrutinize your bank statements, but if you’re seen as a higher risk, perhaps with a smaller deposit or from being self-employed, lenders are more likely to take a closer look. Anything which shows that the account holder may struggle with debt or to control their spending is likely to create questions.

“Our research revealed that the equivalent of 1.38 million current homeowners** (four per cent) would consider trying to hide transactions on their bank statement to make sure their mortgage got approved – which we definitely would not recommend! If you’re planning on applying for a mortgage or remortgage in the next six months, it’s worth being aware of what may lead to further investigations – even though in many cases it’s totally harmless and easy to explain. You don’t want any unnecessary delays to your application which could stop you getting the property you want. As our research revealed, not all the things that could cause an issue are automatically that obvious – gambling, pay day loans and being in an overdraft are the ones people are more aware of, but there are others too.”

Boon Brokers’ research revealed the transactions people were least likely to know may be a red flag to a mortgage lender and impact on lending eligibility were:

1.       Working for a family business. Just three per cent of people realised this could be an issue. Lenders can be nervous that family have employed the relation just for the purpose of them being able to take out a mortgage.

2.       Using rude/joke references for payments to family and friends. Only one in 10 (nine per cent) said they thought it could cause any hold up with a mortgage application – but using ‘funny’ references which could be misconstrued may mean a lender needs to investigate further.

3.       Having multiple payments for luxury items. Only nine per cent thought this could be of potential concern. Lenders will worry if they feel that spending is out of control and exceeds what they would expect based on the applicant’s income

4.       Having lots of PayPal transactions. Although PayPal transactions in themselves are not a problem, because it’s not always clear who is being paid, having lots of vague PayPal transactions can raise concerns. Only a tenth of people had considered that (nine per cent).

5.       Catalogue or on credit payments. Buy now, pay later options may signal to a lender that you are unable to pay for day-to-day items upfront, or are buying things beyond your means – something which only 13 per cent of people realised.

6.       Playing bingo. Playing once in a while for fun with friends will cause no concerns, but a regular habit with larger sums would be classed as gambling, which may raise a red flag. Only one in eight had registered that as a potential concern (13 per cent).

7.       Multiple store cards. Store cards in themselves are not an issue, but if you’re struggling to clear the balance every month, given their notoriously high interest rate, it could be a warning sign to the lender, which 18 per cent of people hadn’t considered.

8.       Frequent payments to unknown third parties. There are lots of above board reasons to make frequent payments to third parties – but where possible, it’s best to make the reason clear to minimise any risk of a red flag. Eighteen per cent of people hadn’t considered that as an issue.

9.       Large cash deposits/cash-in-hand work. Surprisingly, only 20 per cent of people thought this would be of any interest to a mortgage lender – who will want to see evidence of steady, reliable and legitimate income.

10.   Taking out a recent credit card. Only one in five people (22 per cent) realised that applying for new credit can knock your credit score, which is something all lenders will look at to assess your eligibility.

January 12th, 2022 | Andrew Hagger | News

Just Group’s twelfth annual State Benefits insight report finds that pensioner homeowners are missing out on thousands of pounds of extra income by failing to claim their full entitlement to means-tested State Benefits.

The annual research is based on in-depth fact-finding interviews with clients seeking advice on equity release during 2021 and, in its key findings, uncovers that among eligible pensioner homeowners:

• Nearly half (49%) were failing to claim with each household missing out on an average of £1,197 a year extra income
• Two in 10 (21%) who were claiming were receiving too little, on average missing out on £1,220 a year extra income
• The highest amount of extra income lost was £9,090 a year to a couple in Kent who were missing out on claiming Guarantee Pension Credit, Savings Pension Credit and Council Tax Reduction.
• Guarantee Pension Credit – the main benefit targeted at helping low-income pensioners – has the highest take up rate of all the four key benefits with 72% who are eligible claiming, but those failing to claim are missing out on an average £2,265 extra income per year, the most of all the benefits

“Every year we find meaningful income that would make a real difference to people’s lives is not being claimed,” said Stephen Lowe, group communications director at retirement specialist Just Group.

“It reinforces the message that benefits information is integral to retirement guidance and that those struggling for income should check if they are missing out which many fail to do.”