May 10th, 2021 | Andrew Hagger | News

Many people often wonder what life is like as a landlord and whether or not this is a good way to make money off of property either as a main source of income or as a secondary income stream. As with any type of job, there are both benefits and drawbacks to being a landlord and for many it can be a fantastic and rewarding way to earn while for others it is more hassle than it’s worth.

Incredibly, its estimated that 30% of landlords are “accidental” as they were unable to sell or are working abroad, but if you are planning on becoming a landlord then you need to know both the benefits and drawback to make an informed decision.

Pros

• You can earn a steady income when you have tenants.
• Steady income also means financial security (particularly important in the current situation).
• Can be used as a passive income stream as there is not too much work involved.
• Once you find reliable tenants it can be largely stress-free as they will look after the property.
• There are tax deductions, including repairs, professional services and building and contents insurance.
• Provides you with an alternative property if your living situation changes (as long as you do not break any contracts with tenants).
• It is similar to running your own business as you are in complete control in terms of costs, contracts, terms etc.
• You can use a letting agent to manage the investment so that it is less stress and effort for you.

Cons

• You are liable for any maintenance and repairs that the house needs.
• There is always a risk when it comes to tenants in terms of paying rent on time and looking after the property.
• You will have to pay tax on any rental income (as well as handle all of the paperwork).
• There are many costs to cover, including a buy-to-let mortgage, tenancy deposit scheme, gas safety certificate, energy efficiency certificate, landlord insurance, letting agency fees (if you use one) and furniture and decoration.
• Emergencies and legal issues can arise that you need to be able to deal with swiftly.

These are the main pros and cons to being a landlord. It can be an excellent income stream, but it can also be a stressful investment to manage and not suitable for everyone. Many of the cons can be overcome by using a letting agency to manage the investment, but then there are obviously additional costs involved, so you need to weigh up whether this decision is right for you or not.

The rental market remains incredibly strong in the UK and becoming a landlord could certainly be a good way to earn, but it is important to know what you are getting into beforehand.

May 10th, 2021 | Andrew Hagger | News

In a survey response from more than 11,400 cardholders, the key findings were as follows:

Key points:

• 43% of 18–25-year-olds and 40% of 26–35-year-olds ready to book and travel ‘As soon as restrictions ease’.
• 70% of 18-25’s and 62% of 26-35’s said they are not worried about longer waiting times at the airport.
• More than 1 in 3 younger travellers plans to treat themselves to a better holiday in 2021 because they missed out last year.
• An average of 70% across travellers from all age groups say they will feel more comfortable to travel abroad once they’ve been vaccinated.

New research from Caxton, the travel money specialists, highlights how its younger customers are determined to treat themselves to a better foreign holiday in 2021 after missing out on their sunshine getaways last year.

The survey raised the potential issue of longer queues for checks at the airport, but young travellers weren’t put off by this – 70% of 18-25’s and 62% of 26-35’s said they were not worried by this.

It seems that the lockdown misery they endured over the last 14 months means nothing will stand in their way this summer.

Not only are these young sun seekers set on travelling at all costs and ASAP, but they are going to spend big and treat themselves this time round with 38% of 18-25’s and 33% of 26-35’s planning an upgrade on their usual holiday.

Alana Parsons, Chief Operating Officer at Caxton FX commented on the findings: “Many of our customers are desperate to get away and that’s no surprise bearing in mind the misery that many have endured during lockdown”.

“Throughout this pandemic we’ve been providing our customers with up to the minute country by country travel information and we’ll continue to offer expert support and guidance throughout 2021 as details of the government traffic light travel strategy evolves.”

May 7th, 2021 | Andrew Hagger | News

Aldermore bank has today launched a range of fixed rate bonds for new customers, providing savers with competitive rates and more choice to realise their savings goals.

The following personal savings products will be available immediately:

• One Year Fixed Rate Bond at 0.60%
• Two Year Fixed Rate Bond at 0.70%
• Three Year Fixed Rate Bond at 0.80%
• Four Year Fixed rate Bond at 0.90%
• Five Year Fixed Rate Bond at 1.00%

Ewan Edwards, director of savings, Aldermore comments: 

“With the UK rapidly moving towards a post-lockdown period, now is the perfect time to plan out savings goals for the next twelve months, alongside identifying those longer term financial aims. Fixed rate accounts are the perfect vehicle for future planning as they offer more favourable rates than easy access products, so you can make your money work harder for you until it is time to be used.

“We are delighted to annouce the introduction of our fixed-rate bond propostion, helping customers reap better returns. While interest rates have been at an all time low over the past year, small and consistent returns over time can make a big difference.”

May 6th, 2021 | Andrew Hagger | News

With thousands of workers forced to work from home since March 2020, setting up a desk from the kitchen table has become an attractive option for companies looking to reduce overheads and slash rents.

According to the Office for National Statistics, almost half of British workers were working away from their office or factory last June, with many companies now planning to embrace a mix of home and office working.

This sudden change in circumstances has meant many people have taken on an unanticipated amount of running costs. Electricity, telephone charges, WiFI and even tea and coffee all add up and come at the expense of the homeworker. However, if you are working from home, you may be able to claim tax relief for some of your bills.

Here, Victoria Pearson, a Partner at Perrys Chartered Accountants, explains what you can and can’t claim if you are working from home.

My office or factory is closed and I have to work from home. What expenses can I claim?

If you have to work from home, because your office or factory is closed, then you can claim tax relief, but only for the things to do with your work. These include business telephone calls or the additional cost of gas and electricity for your work area.

However, if you use things for both business and private use, such as broadband access, then you cannot claim for these.

I have decided to work from home permanently. Can I claim tax relief?

You cannot claim any tax relief if you choose to work from home. If you decide to work from home voluntarily, there may be other expenses you are entitled to.

For example, if you set up a business from home, and you operate as a sole trader or partnership, you can include your business costs in your self-assessment tax return. These include a proportion of the cost of things such as council tax, heating, lighting, phone calls and broadband.

How do I make a claim for tax relief?

If you are eligible for claiming tax relief and you normally complete a self-assessment tax return form, you can make your claim using this method. Otherwise, you can complete a P87 form online via your Government Gateway account. If you haven’t got a Government Gateway account, you can complete a postal form.

Alternatively, from April 2020 your employer can pay you up to £6 a week (£26 a month) to cover any additional costs if you have to work from home. For previous tax years, you can be paid £4 a week (£18 a month).

Do I need to keep records if I claim tax relief when having to work from home?

The good news is you will not need to keep any records to claim the working at home tax relief so long as your claim does not exceed the £6 a week entitlement from April 2020 (or £4 a week for previous tax years). However, if you believe your costs are a lot higher than this you could claim more, but you will need to provide proof of your expenditure.

What other expenses can I claim for?

Whether you’re working from home or not, you might be able to claim tax relief for other expenses. For example, if you use your own money for things that you must buy for your job and you only use these things for your work, such as:

• Uniforms, work clothing and tools
• Vehicles you use for work
• Travel and overnight expenses
• Professional fees and subscriptions
• Buying other equipment

You cannot claim tax relief if your employer either gives you all the money back or provides an alternative, such as giving you a laptop but you want a different type or model.

For some claims you must keep records of what you’ve spent, such as receipts or invoices. You have four years from the end of the tax year in which you spent the money to make a claim.

Tax can be a complicated business so it is always worthwhile seeking the help of a professional, such as a qualified accountant, to help ensure your claim is correct.

April 26th, 2021 | Andrew Hagger | News

 It’s the moment that we have been waiting for, restrictions are starting to ease and with warmer months in sight, new research from American Express reveals that Brits are planning a summer of fun.

From the much anticipated reopening of pubs and restaurants, to staycations, beauty and fashion, many Brits across the UK are set to open their purse strings to the tune of over £23 billion over the next six months as we look ahead with optimism to the rest of 2021.

The Social Spend

With pubs, restaurants and bars now open in England, and with Wales and Scotland set to do the same in April, research revealed that seven in 10 are planning on dining and drinking out, spending an average of £163 each over the next six months.

Over a third of Brits (39%) stated eating and drinking out is what they’re most looking forward to when lockdown restrictions ease, with many people also wanting to prioritise spending on shared experiences with family (54%) and friends (43%).

In addition to eating out with their nearest and dearest, one in seven are also planning to host their friends and family more than they did before the start of the lockdown. In preparation, respondents admitted to having spent an average of £37 per person on outdoor accessories.

The Great Lockdown Escape 

Research showed that over a quarter (28%) of Brits have already booked a staycation, and a further 53% are planning on booking one, spending an average of £353 per person, equating to £8.7 billion across the UK as a whole.

Top staycation destinations this summer:

The Post-Lockdown Look Reveal

To celebrate the easing of lockdown, over a third of those surveyed (37%) admitted to wanting to look their best for any social get togethers. As plans unfold, 18-34 year olds revealed that they have already spent an average of £73 on their post lockdown wardrobe compared to the national average of £37 per person.

However, it’s not just the younger generations who are out to impress, as 40% of 55+ are looking forward to getting back to the hairdressers and beauty salons compared to only 18% of those aged 18-34.

Stephen Steinhardt, Marketing Director at American Express, said: “As more lockdown restrictions ease this week, our research reveals there is a renewed sense of optimism in the air with Brits planning to treat themselves on dining out, upgrading their post-lockdown wardrobe and holidaying in the UK. As Brits look to return to some semblance of normality this summer, using a card that offers rewards or cashback as they spend on the things they’ve missed out on during the pandemic can make their spending work harder for them and earn something back.”

April 25th, 2021 | Andrew Hagger | News

Article by John Ellmore, director of NerdWallet

It’s been more than a year since the onset of COVID-19, and Britons have not experienced any financial respite.

With many people being furloughed or made redundant, household finances have inevitably taken a hit. Indeed, a recent survey conducted by NerdWallet revealed that almost two fifths (38%) of UK adults have been forced to put their long-term savings goals on hold because of the coronavirus pandemic.

COVID-19 has created a particularly hostile environment for savers. Interest rates have been held at historic lows of 0.1% for over twelve months. Adding to the financial anxieties of many Britons, however, is the fact that inflation is steadily on the rise. Just this week (21^st April 2021), it was announced that inflation rose to 0.7% throughout March, up 1% from last year. Experts are also predicting a further leap throughout April, to 1.7%, as lockdown rules ease and adults are able to spend their money on the high street, as well as online.

The steady increase in inflation could be viewed positively. The fact that fuel and clothing costs are returning to pre-pandemic levels signifies that the UK is turning a corner in its post-COVID recovery. Likewise, low base rates have made borrowing cheaper, which have helped to facilitate greater consumer spending and wider economic growth. However, savers may experience more damaging effects.

How do inflation and interest rates impact savings?  

The combination of low interest rates and increased inflation have the potential to hit savers hard.

Firstly, low base rates mean that adults are less likely to receive generous returns on their savings. This is largely because the lower rates are, the more expensive it is for the bank to hold onto clients’ money. As such, savers might not be able to make their money work as hard as they may have liked.

Likewise, increases in inflation – even modest ones – can prove problematic for savers. This is because the purchasing power of people’s money starts to decline. Put simply, it makes the cost of living more expensive.

So, this increased cost of living, teamed with consistent rock-bottom interest rates could mean that people’s cash saving will lose value in real terms.

This may seem like an unnerving prospect. However, there are steps that savers can take, which can help to safeguard their money against such circumstances.

Exploring alternatives

Whilst in the current climate, traditional savings accounts might not seem overtly appealing, there are still some accounts which offer relatively generous returns. Indeed, some instant access savings accounts can still offer up to 0.6% interest, whilst certain fixed rate accounts offer as much as 1.25%.

Comparison websites are a great starting point for exploring these options. They search the market on behalf of the user, presenting their findings in a clear, jargon-free table. So, savers simply need to review their various options and select the account which best suits their needs.

Alternatively, savers might consider investments, or stocks and shares ISAs to combat low interest and rising inflation. This route presents the potential to make substantial gains, if the investments – which are selected by either the saver themselves, or the portfolio manager – are successful.  However, investments can be risky, involve complex charges and do not guarantee returns. As such, savers should assess their risk appetite, and seek financial advice where possible, before making any major decisions.

The prospect of rising inflation and low interest may seem like an unnerving prospect. After all, they have the potential to have a lasting impact on people’s financial futures. However, the key is to remain calm and thoroughly research various savings and investment options. Doing so will ensure that savers can make their money work as hard as possible, and begin their post-COVID financial recoveries.

John Elmore is Director for NerdWallet UK

As an independent financial comparison website, NerdWallet provides consumers and businesses with useful tools and insights so they can make smart money moves. 

Users have free access to our comparison tables and expert content, to help them stay on top of their finances and save time and money, giving them the freedom to do more. 

April 23rd, 2021 | Andrew Hagger | News

TV has been a key source of entertainment during the pandemic and it is likely to remain critical for many months to come. But it can also be a source of anxiety as TV bills continue to grow and companies continue to pile on the pressure with mid-contract price hikes. Therefore, the importance of understanding the costs associated with various pay-TV packages cannot be understated.

 Alistair Thom, CEO of Freesat – the free-to-air satellite TV provider – commented: “The past year has proved highly stressful – whether we’re contending with remote working issues, childcare commitments or, just the pure impact of Covid-19 on physical interactions that previously provided so much joy.

“Indeed, research from the Mental Health Foundation, found that nearly three quarters of people admitted to feeling overwhelmed or unable to cope with stress brought on by the pandemic. In many cases our emotional wellbeing can be directly linked to our financial health.

“Now, with the end of lockdown getting ever closer, it’s a good time to get into financial shape. The prospect of more social freedom should trigger people to revaluate whether it’s worth maintaining the high monthly fees associated with Pay-TV when they can find many of the same viewing choices elsewhere and for free.”

1. Understand your outgoings

For many, sticking to a budget will be key ahead of any long-awaited, post-lockdown purchases. There will also be those who need to keep the purse strings tightened so they can recover any financial losses from last year. Did you know, we found half of the UK don’t know exactly how much they spend on their Pay-TV subscriptions each month? Try and track what you’re spending, as the true cost of your TV payments could be hidden amongst your other expenses.  

2. Consider your contract

From today, millions of Sky customers will see their bills increase as the broadband and TV providers’ latest series of price hikes take effect. This follows Virgin Media’s price rise of up to £54 per year for its customers just a month previous. At a time when so many of us are keeping a closer eye on areas where we can reduce our costs, it’s important to be aware of this change and ensure you’re regularly checking your contract. For those looking for the best deal, it’s wise to wait until your contract is up for renewal before trying to negotiate a better rate that’s more appropriate to your usage – remember not only should you not be penalised for your customer loyalty, but you also shouldn’t have to pay for more than you use.

3. Watch what you’re watching

While we’ve all certainly been clocking up the hours spent watching TV in lockdown, the truth is nobody really watches absolutely “everything”. In fact, a lion’s share of what gets watched on television comes from free-to-air TV, so it pays to understand what you are watching. Quite often you’re really paying to watch only one or two programmes. Free-to-air can offer a huge range of channels and choices, particularly when combined with On-Demand services like Netflix and Amazon Prime Video.

4. Pick N Mix what works for you

Some people are not aware that there are pay-as-you-go alternatives to let you watch the PayTV programmes you want, so it’s worth investigating the right combination of services that works for you.

Otherwise, taking the time to run a quick online comparison to see what deals are available, and the length of contract needed for each, will help you feel more informed, and in better financial control, when it comes to your choice of at-home entertainment.

Working remotely isn’t always easy. To counter the hours spent crouched over a laptop, why not enjoy putting your feet up in front of the TV as social restrictions ease further. Take time for yourself and ensure you don’t miss a moment of all the latest shows TV has to offer – whether that’s a new hit series like Married at First Sight Australia or returning favourites such as Line of Duty.

April 22nd, 2021 | Andrew Hagger | News

According to new research from Paragon Bank, using CACI data, the average easy access balance has continued to surge during lockdown and exceeded a record £11,000.

CACI’s database, which analyses savings data from more than 30 providers, shows that easy access average balances continue to climb, growing from £10,132 last January to £11,0921. At 9.5%, this growth is a third more than the easy access balance increase between January 2019 and January 2020, which was around 6.6%.

The boost to savings during the pandemic has been well documented, with Bank of England estimating that £162 billion has been saved since the first lockdown last March.

Much of this balance growth has been made in easy-access and current accounts. Easy access balances now account for 58.7% of the savings market (excluding current accounts), up from 55.6% last January, while fixed rate non-ISA balances have reduced – they now account for 8.8% of the market, down from 10.5% year-on-year.

Cash ISA markets have delivered some growth. Cash ISAs are worth £292 billion, an increase of only 0.6% in the last year, compared to an increase of more than 4% the year before.

On the other hand, the non-interest bearing market has climbed an enormous 29% year-on-year, by far the largest segment growth across any category.

Derek Sprawling, Savings Director at Paragon Bank, said:

“We know that reduced expenditure during lockdown has created a nation of ‘accidental’ savers, with most people choosing to keep extra money in easy access or current accounts.

“There are numerous reasons why people have chosen to save in this way. While many will be making contingencies for a ‘rainy day’ by building an emergency fund, some might just be unsure what to do with their savings. Others might want to wait until the restrictions start to lift before they make definitive plans for their money, or just value the convenience of staying with their current provider rather than being proactive in targeting higher returns

“Regardless of long-term saving goals, it’s important for people to move savings out of current accounts, where they may be earning zero interest, in order to receive at least some return. ISAs should also not be overlooked as they provide tax free income now and in the future.”

April 21st, 2021 | Andrew Hagger | News

Two thirds (66%) of 2021 retirees risk not having the pension savings to sustain their planned retirement income, according to a new report launched today from Standard Life Aberdeen.

In its inaugural Class of report, surveying UK adults planning to retire this year, Standard Life Aberdeen revealed how ready the Class of 2021 is to retire, identifying what worries and excites them most, and how recent events have impacted their plans for retirement.

The research found that a 2021 retiree plans to spend, on average, £21,000 a year in retirement – almost £10,000 less than the average UK household income (£29,900).

However, looking at their pension pots, and factoring in the money they’ll receive from their State Pension, analysis shows that two thirds (66%) are at risk of running out of money.

The average value of a Class of 2021 pension pot is £366,000 – but a third admitted to having less than £100,000 saved.

John Tait, Retirement Advice Specialist at Standard Life Aberdeen, said: “Vast numbers of those retiring this year risk running out of money in their retirement. Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.

“Pension pots are without a doubt the most popular option for funding retirement, but it’s so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not.”

Standard Life Aberdeen’s research also found that more than a third of those planning to retire this year are worried about not having enough money to last throughout retirement.

Just 39% feel very confident that they’re financially ready to finish working this year, with a third of women feeling very confident versus two in five (43%) men.

Almost half are planning to reduce their usual spending to support themselves in retirement, while a quarter will work part-time to help financially. One in five (21%) are planning to sell their home or downsize to fund retirement.

John continued: “Understanding what money you have for your retirement and how to spend it wisely can be hard, but that’s where preparation and speaking to an expert can help. Circumstances or priorities may change, particularly if you’re retiring amidst a global pandemic, but it will be much easier to adapt a plan you already have, than if you were to have to start from scratch.”

Despite many admitting to worries about whether they’re financially ready to retire this year, Standard Life Aberdeen’s research found that almost two in five (37%) of the Class of 2021 have accelerated their planned retirement date in the past 12 months due to Covid-19.

Lockdown changing their retirement plans, health worries due to the pandemic and job uncertainty were the three main reasons for speeding up their retirement.

However, there are clearly some apprehensions about retiring during a pandemic amongst this year’s retirees. More than half (51%) are worried about not being able to do things they planned, while two in five are concerned they won’t be able to see friends and family.

When it comes to their finances, three in ten (29%) have concerns about their pension falling in volatile markets, and almost one in five (17%) have seen their income fall over the past year.

Ben Hampton, Head of Retirement Advice at Standard Life Aberdeen: “Deciding how and when to retire is one of the biggest life decisions and transitions we make. Longer life expectancy, volatile investment markets and ever-changing regulation can make planning and preparing for retirement feel confusing, not to mention the impact of the coronavirus pandemic on people’s immediate and longer-term financial priorities and plans.

April 12th, 2021 | Andrew Hagger | News

As savings in Britain reached a record high, new research has uncovered that the nation is determined to keep those savings on lockdown even as Covid restrictions ease leading up to 21^st June. More than three quarters of Brits (77%) say they want to continue to save the same amount even when restrictions lift and they’re able to socialise regularly again.  

The new research from Zopa highlights that 70% of Brits are planning to stick to the savings habits that they started in the last 12 months. While more than two thirds of those surveyed (71%) even said that their saving habits are so good now that saving is just an unconscious decision for them. 

As lockdown eases and restrictions lift leading up to the 21^st June, plenty of Brits are making plans but a staggering 75% of Brits said that they wanted to avoid dipping into their savings. Their determination is often motivated by a specific goal, with more than half of savers surveyed (54%) saying that they were saving for a major life event such as buying a house, a wedding, retirement or a holiday of a lifetime.   

Many Brits are making great progress towards these goals as shown by the latest update of the UK savings ratio report, showing a record high of 16.3%* in 2020, Zopa’s research highlights that this is a result of the nation taking the last year to re-evaluate their finances. 70% said that over the last 12 months they’ve made monthly deposits into their savings, while nearly one in 10 (8%) save every week and 21% save as and when they can. In fact, nearly three in five Brits (57%) said that their relationship with money and saving has improved over the last 12 months.  

Savings aren’t the only way that people are improving their financial outlook. During the pandemic, Zopa’s own data shows an 11% increase in customers making additional payments to their loans, and 500% more people have been checking Zopa’s Borrowing Power feature that allows users to find ways to improve their credit score.  

Based on these insights, Zopa’s ‘Post Lockdown Piggybank’ provides a selection of options for those looking to sustain good financial habits. Found in Zopa’s app, users can: 

·        Save money on bills through comparing energy providers and switching in minutes 

·        Improve their credit score through personalised actions, enabling them to access their best Zopa loan rates 

·        Grow their savings with competitive rates on Fixed Term Savings accounts, allowing them to lock money away for one to five year to help them achieve their goals 

·        Control their spending using the Safety Net feature on Zopa’s credit card to lock away part of their credit limit and use the spend breakdown to better understand their purchase behaviour 

Clare Gambardella, Chief Customer Officer at Zopa said: “the last year has given many of us an opportunity to put extra savings away as we have reduced spend on things like commuting, going out or traveling abroad. It’s great to see that Brits aim to continue saving, but as restrictions gradually start to lift, it may get more difficult to stick to our goals. At Zopa, we have the perfect range of tools in our app to help people continue with good financial habits whether it’s saving, building their credit score or getting in control of their spending.”  

Zopa has also worked with some of its regular money experts to compile their top tips on how to keep your savings habits on the right track: 

Laura Ann Moore 

“Be specific on what you are saving for, and maybe even name the savings pot as your goal. When an emotion is attached to a savings goal, it helps us stay motivated towards saving more and not dipping into the pot of money. For example, if over lockdown you were saving money and you’ve decided to spend it on a post-lockdown travelling trip, give yourself a constant reminder of the reason behind saving that money (i.e. the excitement of a holiday) so you are more likely to favour the delayed gratification of the saving, over the instant gratification of spending it.” 

Ashley, Money Medics 

“My biggest saving tips, would be to  

a) plan 

b) not get too ahead of yourself  

“It’s so easy to get excited by the prospects of shops and restaurants reopening, that you end up spending your social budget and money you could have saved in a very short period of time. So it’s important to list down all the places you would like to go to (shops/restaurants) and then realistically figure out what you can actually afford to do each month “after” you’ve locked your savings away. If any don’t make the cut, they can always be added onto next month’s budget or the month after. Just remember the shops and restaurants aren’t running away and will always be there.” 

Lynn James, Mrs Mummy Penny 

“My cash emergency savings (six months’ worth of essential expenses) are stashed away in a separate bank account with no app or card access. Hence no temptation to spend this when the new lockdown life returns. In readiness for post lockdown life with all those extra drinks and dinners, I have made adjustments to my budget. I have a ‘fun spends’ allocation which I have doubled for the next few months!”