November 19th, 2019 | Andrew Hagger | News

19 Nov 2019 In October 2018 there was a total of 17 credit cards offering interest-free periods lasting more than 20 months. The top 10 leading cards avoided adding interest for at least 26 months (Clydesdale Bank), while the best deal delivered 30 months (Santander).

A year later only five credit card companies offer shoppers 0% purchase terms greater than 20 months: MBNA (26 months), Santander (26 months), Barclaycard (25 months), Sainsbury’s Bank (25 months) and Tesco Bank (24 months). 

Extended interest-free periods give shoppers greater financial flexibility when using a credit card to buy big ticket items or during times of increased shopping activity. For example, around Black Friday and in the lead up to Christmas.

Last year consumers could spread the cost of major purchases — cars, house renovations, holidays, Christmas shopping — over the course of two years or longer, potentially easing any financial strain.

A year later, TotallyMoney and Moneycomms’ research shows the average 0% purchase duration time has dropped to just 9.8 months. The average in October 2018 was 13.5 months. This is a fall of 27%, suggesting credit companies are squeezing consumer finances harder as they look to recoup payments in full, in less time.

Despite cutting the number of interest-free months offered, consumers can still find favourable terms. With the average credit card rate at 19.9% APR, putting £1,000 on an interest-free card for 24 months, for example, may result in £398 saved in interest charges.

TotallyMoney is working to improve the UK’s credit score and help people move on up to a better future. With the help of a free credit report, customers can better understand their position in the credit market and understand if and where credit score improvements are needed.

Armed with this knowledge, there’s a higher chance of someone being accepted for purchase cards with longer offers, making it easier to spread the costs of any festive spending or upcoming big purchase.

Alastair Douglas, CEO of credit experts TotallyMoney, comments:

“Seeing a fall in the number of credit cards offering a 0% purchase deal and a drop in the number of interest-free months is disheartening. There’s little doubt both of these factors will impact some shoppers.

“Christmas is already a financially stressful time. People may spend more in the next few months than at any other time of the year and, as such, they may choose to lean on their credit card. It’s during these times that 0% offers come into their own and really benefit customers.”

He continues: “Used sensibly, these cards give you more breathing space as you can spread big expenses over longer periods of time, without worrying about interest. Just remember to make repayments in full and on time. This way you avoid late payment fees and get to enjoy the maximum number of months of your interest-free offer.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score. Checking a report is the first step of this process and can help people to understand their score. With this, they can get better rates and more choice — helping them work towards a better financial future.”

November 18th, 2019 | Andrew Hagger | News

18 Nov 2019 Money remains one of the UK’s least favourite topics of conversation, it’s unsurprising then that research has found that 54% of UK adults don’t have an appropriate will; either they’ve never had one or their current will is out of date.  For many people, thinking about what will happen once you’ve passed on can feel too hard, unnecessary or just not a priority amid busy lives and careers.

Shona Lowe from 1825 discusses the most common reasons people have for not making a will and why these shouldn’t be an excuse.

• I’m too young/I’ve not got anything to leave: It can seem unnecessary to think about what will happen in years to come but you’re never too young to take control of what will happen in the future. Even if you don’t own a property and have no money in the bank, whatever age you are, you do have things to leave.  It might not be money or property but what about the photos on your phone, your online bank account or your social media accounts? Our digital assets take many forms and can have real value, not only sentimental value Making a will allows you to have the final say on who inherits your possessions, no matter how small.

• I’m single and don’t know who to leave it to: Whether it’s a brother or sister, a parent, a niece or nephew, a godchild, a friend or a charity, we all have people or causes we care about. A will allows you to clearly state who you want your estate to go to and can be amended at any time, should your circumstances and wishes change.

• My partner and I have lived together for years, so everything will automatically pass to them:  There’s no such thing as a common law spouse so your partner will only get what you say in your Will you want them to get.  If you don’t have a Will or it doesn’t include them as a beneficiary, they’ll have to go to court and make a claim instead.

• I’m married so I don’t need a Will for my spouse/civil partner to get everything:That might work in some cases, but certainly shouldn’t be relied upon.  The value of your estate and whether you have children can affect that so don’t take the chance – if you want your spouse or civil partner to get everything, say so in a Will.
• I’ve got a young family and don’t have time: Life can be hectic with school trips, days out and sports clubs taking up a lot of parent’s time, however, making a will is crucial to ensure that your children are properly supported if you were to die before they reach 18 (16 in Scotland). A will allows you to appoint guardians and makes sure that  Social Services or the family courts won’t be left having to decide what’s best for your children. This could end up being someone that you wouldn’t have chosen.

• I’m separated so don’t need a will to make sure my ex doesn’t inherit: While you may have separated your physical assets and no longer live together estranged spouses can still have an entitlement to part of your estate. If you made a will previously but have not updated it to reflect your new circumstances, there’s a risk that your ex may be able to inherit what you have previously said you wanted them to have or make a claim on your estate.  And even if you’ve got divorced, if you live in Scotland, that doesn’t invalidate your Will so you have to make a new one to override it.

When you decide to make a will it’s important to get it right. While you can write a will yourself or do it online, speaking to a professional that understands the intricacies of will writing and can advise you based on your needs both now and in the future gives you the peace of mind that your wishes will be carried out accordingly when the time comes.

To find out more information about the financial planning services 1825 offers please find further information at www.1825.com

November 14th, 2019 | Andrew Hagger | News

13 Nov 2019 Individuals who look after both children and elderly parents, described as being part of the ‘sandwich generation’, are struggling the most to save money, according to Aldermore’s Annual Saving’s Tracker research.

Almost a third (32%) of individuals who have adult children living at home and who care for elderly parents, are unable to save money, the highest proportion of non-savers of any group.

On average, last year individuals within the ‘sandwich generation’ saved 7% of their annual income, a measure known as the savings ratio. In comparison, the population on average saved 9%.

Aldermore says that saving even small amounts of money can be hugely beneficial for individuals in later life, especially when they come to retire. Such is the stress of being stretched financially that one in five individuals within the sandwich generation say they are kept up at night worrying about their lack of savings.

Many within the sandwich generation for instance (35%) are worried their children are not saving enough with 78% believing it is their responsibility to teach them the importance of saving.

Not only are parents educating their children about money, they are also tangibly helping them too. 28% of parents aged 45-54, regularly give their children money to help them save, while one in four (25%) have helped or plan to help their children with a deposit on their first home.

Ewan Edwards, Head of Savings at Aldermore comments:  “Many individuals are finding their finances stretched wafer thin by supporting both their children and elderly parents.”

“Added to the difficulty for people is having their children still living in the family home after the age of 18, which can often place a further financial strain if they are not yet working.”

“We find it is concerning that such a high percentage (34%) of this group feel they are unable to save enough to ensure a stable financial future. It is crucial that when facing such demands, people prioritise their financial security and make small changes to their savings habits, in order to provide protection for their own future.”

November 14th, 2019 | Andrew Hagger | News

12 Nov 2019 Halifax customers can now benefit from a service feature to protect themselves from gambling-related harm. The gambling card freeze, which is a feature of the banks’ mobile app[s], was developed in recognition of the ways in which the bank can support customers to manage their money and gamble responsibly.

Halifax is the first UK bank to enable customers to apply the gambling freeze to any of their debit and credit cards, with an accompanying ‘defrost’ period that means if customers want to reverse their decision to freeze gambling transactions, they must wait 48 hours.  This time period allows customers to thinking time to ensure their decision isn’t made in haste or under duress.

This is part of a broad set of activities to protect customers from gambling related harm. This includes providing additional training to customer facing colleagues the branch network and telephony services, and sharing further support information for customers online. Halifax is also working with Warwick University to review and analyse the impact of gambling related harm and will be sharing findings with the Gambling Commission and other external organisations in the coming months.

Elyn Corfield, Managing Director, Consumer Finance, says: “We know that people who gamble a higher proportion of their income are more likely to face financial pressure – so we’ve introduced the freeze tool to help them manage that. Importantly, by also introducing a defrost period we’re helping to protect those who might otherwise make an impulsive return to gambling.”

Lloyds Bank, Bank of Scotland and MBNA also offer card freeze features providing customers more choice and support in this area. Over 15,000 debit and credit card customers across these four brands have already signed up to the new gambling card controls since launch at the end of October.

November 6th, 2019 | Andrew Hagger | News

06 Nov 2019 Research by mutual insurer, Royal London, found nearly three in five (57%) of UK adults do not have a Will in place.

November is Will Aid Month and Royal London tested the public’s knowledge of Wills – this revealed five misconceptions.

1. – My children will be cared for by my immediate family if I die.

Two in five (39%) people incorrectly believe that the legal responsibility for children will automatically go to the immediate family if their parent(s) were to die without a Will. Without a Will in place the legal responsibility for any dependent children under 18 would fall to the courts, until a decision is made on who will become guardians.

2. – If I separate from my spouse my assets won’t go to them.

A third (31%) of people didn’t know what would happen to their assets if they separated from their spouse. A Will is technically valid even if you separate from your spouse. Until you divorce, your spouse could still be entitled to your assets.

3. – I’m cohabiting with my partner, so they’ll inherit my assets when I die.

If you are cohabiting with a partner and not married, they would not be entitled to assets only owned by you if you were to die without a Will. If there are jointly owned assets, the other owner would normally inherit them.

Children would have a claim on the assets but if there are no children, the assets would be passed on to parents and siblings. A cohabitee has no rights under the law of intestacy (dying without a Will in place).

Royal London asked the public who would inherit the assets of someone who is cohabiting with their partner but has children from a previous marriage. Three in four (74%) either gave an incorrect answer or did not know.

4. – My Will is valid across the UK.

The research also found that around nine in ten (87%) people are not aware that a Will written in England may not be valid in Scotland. If you have written a Will in England and since moved to Scotland or vice versa, you should consider taking advice.

5. – If I’m estranged from my family, they won’t inherit my assets.

In Scotland, you cannot legally remove your spouse or children as beneficiaries even if you have a Will which doesn’t include them. Even if you are estranged from your family, they can still claim on your assets. Research reveals that two thirds (65%) of UK adults do not know this is the case in Scots law, and only one in five (21%) of those living in Scotland are aware that this rule applies in Scotland, compared to 8% of all UK adults.

Mona Patel, consumer spokesperson at Royal London, said:

“Not having a Will in place can lead to all sorts of complications, many of which the general public are not aware of. But even with a Will in place, there are misconceptions around what happens to your assets when you die. It’s important to not only write a Will, but also to make sure it reflects your wishes and to keep it up to date if your circumstances change.”

November 5th, 2019 | Andrew Hagger | News

04 Nov 2019 Homeowners could be mortgage free sooner than they initially planned thanks to flexible mortgages that allow borrowers to overpay each month. 

Data from Yorkshire Building Society shows a fifth (23%) of borrowers are in credit on their mortgage after making overpayments on their account.

For some, overpayments can be a way to pay off their mortgage sooner than they had originally planned; potentially reducing the amount of interest they pay over the term of the mortgage. 

For others, regularly repaying more than the fixed monthly amount can help to pre-empt an expensive period in the future that could allow a payment holiday – an agreed temporary break in repayments – if the mortgage account is in sufficient credit.

Charles Mungroo, Senior Mortgage Manager at Yorkshire Building Society, said: “While it’s great to see so many borrowers value the option of managing their mortgage flexibly, it’s really important people understand the facts and implications of making overpayments to decide if it’s right for their circumstances.

“For example, while it could help reduce the amount of interest you pay, you can’t retrieve an overpayment if you need the money back. Likewise, it may mean you can pay off your mortgage quicker but if done wrong, could mean you incur fees. There’s a lot for borrowers to weigh up.”

Typically, lenders allow borrowers to overpay by up to 10% of the total outstanding mortgage balance each year either through regular, smaller overpayments each month or a larger one-off deduction when circumstances allow, for example receiving an inheritance.

However, borrowers unwittingly paying any more than the allowance would likely trigger early repayment charges (ERCs) on the overpayment, the amount of which varies depending on the terms of the mortgage.

For example on a £200,000 mortgage, borrowers could overpay an extra £20,000 each year before they would incur any financial penalty, but a miscalculation could see the mortgage holder charged a percentage of any additional payment over the agreed limit. 

Charles added: “If your mortgage terms allow overpayments and you can afford to make any additional contributions, no matter how small, over time you could really start to see some benefit.

“However, taking on a mortgage is likely to be one of the biggest financial commitments you will make in your life so it’s essential you understand all the facts before making use of flexible features on your mortgage to help you manage your finances in the future.”

To help borrowers understand how overpaying on their mortgage could help them, the Yorkshire has launched a new calculator that enables them to quickly and easily see how even the smallest overpayments could reduce the amount of interest they pay and how much sooner they could be mortgage free. 

The Yorkshire is offering tips for borrowers to consider before making overpayments:

1.    Do your research: Always check your existing mortgage deal to understand the terms of your mortgage and find out any potential fees that may be applied in the event you pay off your mortgage early. Most mortgage providers will allow you to overpay by a certain percentage (usually 10% but this will vary between different lenders and depend on the type of mortgage you have) and if you go over this amount, a charge is applied.

2.    Speak to your lender: if you think overpayments could work for you, speak to your mortgage provider to find out if this is something you could make use of, and on what terms. They know your mortgage better than anyone else so will be able to discuss your options with you.

3.    Clear any debt: Typically the interest charged on unsecured debt, such as loans and credit cards is more than that charged for a mortgage – so it’s a good idea to try and pay existing debts before you begin to overpay on your mortgage.

4.    Are your savings paying?: If the interest rate you earn on your savings is higher than the interest rate charged on your mortgage you might be better leaving it where it is, than overpaying on your mortgage.

5.   Don’t run on empty: Before committing any spare cash or savings to overpayments, make sure you have enough in reserve to support you in an emergency, such as boiler repairs or car breakdown. Once it’s used as an overpayment, you can’t get the cash back.

October 30th, 2019 | Andrew Hagger | News

30 Oct 2019 More than one in five (22%) people have fallen victim to fraudsters when shopping online, according to new findings from secure payments provider Shieldpay. This equates to some 11.5 million Brits who have, at some point in their lives, been defrauded when purchasing an item online.

The cost to people’s pocket is significant: on average UK shoppers are defrauded by £683 with 1 in 10 (11%) losing more than £1,000. For those who have been a targeted more than once, the value jumps to £1,460, more than double that lost by people who have been defrauded just once.

Online fraud is often associated with older members of society, but the Fraud Tracker research shows it’s actually younger generations who are frequently targeted and defrauded by larger sums. A quarter (25%) of millennials, those aged 18-34, have been defrauded while shopping online at an average cost of £767 and nearly one in six (16%) have handed over more than £1,000 to fraudsters.

Indeed, research by Lloyds Bank published last month revealed millennials are falling victim to all types of online fraud at a greater rate than any other age group.

Shieldpay’s patent pending payments process mitigates the risk of online shopping fraud by fully verifying the identity of all parties, holding funds securely and only releasing them once both parties confirm they are happy.

Tom Clementson, from Shieldpay, said: “It takes just moments to go online, order an item and see the money taken from your bank account. As we lead increasingly digital lives, this has become as normal as buying something over the counter. However, it also takes just moments for fraudsters to target unsuspecting consumers to part them from their hard-earned money and their methods are becoming more advanced by the day. The sky-high levels of fraud the UK is currently experiencing shows no sign of slowing down soon but this can’t go on. Fraudsters have had it good for too long.

“Initiatives like confirmation of payee and strong customer authentication have been kicked into the grass to the benefit of retailers but to the detriment of consumers. People must take their online safety into their own hands and there is technology already available to help. Alongside that, simple steps like only shopping on trusted websites, checking the website is secure and never clicking on links in unexpected emails go some way to keeping money safe.” 

October 29th, 2019 | Andrew Hagger | News

29 Oct 2019 The nations’ parents may be worried about the future of the economy, but that’s not stopping them handing out increasing amounts of pocket money to their kids. National consumer confidence in the UK economy has been hit hard by Brexit uncertainty (currently at -9% quarter on quarter), but latest figures from RoosterMoney, the pocket money app, show no signs of that impacting kids’ wallets, as the average pocket money hits a new high of £4.38 a week.

The last three quarters of 2019 have seen the
average weekly pocket money received by 4-14 year olds steadily rise, whilst
the consumer confidence index has gone the other way:

Percentages are Quarter on Quarter

The top earning chores helping kids reach
these figures are:

1. Gardening – £2.97
2. Washing the car – £2.34
3. Cleaning the bathroom – £1.04

And the top things kids are saving for are:

1. Lego
2. Phones
3. Nintendo switch

Kids are also saving an impressive 27% of
their pocket money, and have been doing so consistently throughout the year.
These savings, combined with a forecasted £44 injection of cash gifts over the
Xmas period (based on last year’s figures), offer a bright horizon when it
comes to money habits for the nation’s kids heading into 2020.

Will Carmichael, CEO of RoosterMoney says:

“Our quarterly Pocket Money Index provides a fascinating insight into the workings of the family economy, and highlights the opportunity to develop positive behaviours at a young age. It’s extremely encouraging that wider issues such as Brexit aren’t negatively impacting family pocket money routines. The research shows it’s these early routines that help kids develop strong money habits that stay with them into adult life, ensuring they’re prepared for their future”.

October 23rd, 2019 | Andrew Hagger | News

23 Oct 2019 The Association of British Insurers (ABI) is urging the Government in its forthcoming Budget due on 6 November to cut the rate of Insurance Premium Tax (IPT) to ease the squeeze on families and businesses who do the right thing by taking out insurance.

The standard rate of IPT has doubled since 2015, most recently going up from 10% to 12% in June 2017. It applies to the vast majority of policies sold, including property, motor, health (including cash plans), pet and business insurance.

In 2017, research by the Social Market Foundation estimated that, if the standard rate of IPT had remained at 5%, its rate prior to 2011, then the savings per UK household could be significant. For the fiscal year, 2017/18, they estimated that households were directly paying about £50 per year more as a result of higher IPT^.  If the business costs associated with higher IPT are ultimately borne by households (either through higher prices or lower incomes/dividends), then the additional cost per household could be as high as £105.

Total IPT revenue for government in the last five years has risen by 109%. In 2018/9 alone, IPT raised £6.19 billion^., more than the taxes on wine, spirits or betting and gambling.

Huw Evans, Director General of the ABI, said: 

 “IPT has doubled to 12% since 2015, and responsible people deserve a break. This tax hits people on lowest incomes the hardest, as it applies to products most people need, or are required to have, such as home and motor insurance. Our rate of IPT is the 7^th highest in Europe and hits our international competitiveness at a time when the UK needs to be making itself more globally attractive.”

October 22nd, 2019 | Andrew Hagger | News

22 Oct 2019 Three quarters (75%) of UK tenants are happy to rent, and a third of those (33%) are happy to rent forever, according to new research from buy-to-let focused marketplace lender, Landbay. The study questions 2,000 private renters in the UK, offering insight to landlords on the wants and needs of their tenants.

Men are more likely to be happy renting forever, (36% vs 31% for women), while for those in the 55+ bracket, nearly two thirds (64%) are also happy to remain tenants, versus less than a third of 35-54-year olds, who are more likely to want to own a home. Londoners also hanker more than most to own their own home with just 17% happy to stay renting, compared to 46% of Welsh tenants.

Of those who aim to buy a property, the average length of time tenants are prepared to wait is 4.1 years, with men content to wait 4.6 years and women 3.8 years.

Three quarters (75%) of tenants are happy renting, with 12% saying ‘they couldn’t be happier’ and 30% ‘very happy’. Just 15% are not happy, with the remaining 43% ‘reasonably happy’.

As for the motivations behind renting, the top three reasons are:

1. I don’t want to/can’t make the financial commitment of buying a home – 46%
2. I have fewer responsibilities than an owner (i.e. my landlord is responsible for most issues) – 40%
3. I like the flexibility of renting – 33%

John Goodall, CEO, Landbay comments: “Renting affords significantly greater flexibility than home ownership and, at a time when house price growth is uncertain, remains the best option for a significant number of people. It’s clear from this data that those who choose to rent are happy doing so, and indeed would like to continue doing so forever.”

“The financial hurdle of home ownership is for many too great a stretch and frankly they don’t want to make the commitment. The reality is owning a home isn’t the right choice for many, which is why the private rental sector needs to be supported properly if we are to house this growing portion of private sector tenants.”