January 25th, 2019 | Andrew Hagger | News

24 Jan 2019 At least a quarter (24%) of Brits will have an account with a digital-only bank within the next five years, according to new research from personal finance comparison website finder.com.

A further 21 percent said they would consider a digital-only bank once they have more information, meaning that almost half of Brits (46%) could end up getting an account within five years.

One year on since Open Banking launched in the UK, almost one in ten (9%) adults say they have already opened an account with a digital challenger bank, equalling 4.5 million Brits.

Over the next five years, 16 percent of the population intend to open an account with a digital-only bank, meaning that almost 13 million people (24%) will have at least one fully digital account by the end of 2023.

The top reason for those who have, or intend to go digital with their banking is that they feel doing everything online is more convenient (33%). A third (31%) of people believe they will get better rates than with traditional banks, while 28 percent want to transfer money more easily.

Despite the quick uptake of digital banking in a short amount of time, finder.com‘s research shows that as well as some educational challenges and issues around awareness, digital banking simply may not be for everyone. The majority of adults in the UK (53%) have no plans to open an account within the next five years, while one in five Brits (20%) don’t know what a digital-only bank is.

Perhaps surprisingly, the main reason for those who don’t intend to open an account with a digital bank is that they feel their current bank has treated them well (61%). Half of us (49%) also like to have the option of speaking to someone in person, while more than one in five (22%) think it would be too much hassle to switch accounts and direct debits.

The region with the lowest uptake so far is the East Midlands, where only five percent of people have a digital-only bank account. In contrast to this, Londoners are almost three times as likely to have one (14%), and they are also the most likely to get an account within the next five years with a quarter (26%) planning to do so.  East Anglians are the least likely to move away from traditional banks (12%) over the next five years.

Despite the uptake of digital banking being very similar across genders so far, a fifth (21%) of men intend to get a digital-only bank account in the next five years, which is significantly more than women (12%).

Younger generations are the most likely to have already gone digital, with one in eight (12%) Millennials having done so, compared to six percent of baby boomers and just two percent of the silent generation (born before 1945).

To see the full research of digital-only banking adoption and intentions, including age, regional and gender breakdowns, visit: https://www.finder.com/uk/digital-bank-adoption

Speaking about the findings, Jon Ostler, CEO at finder.com said: “When you consider how long the banking industry went without any real technological advances or change to the status quo, the speed that digital challenger banks have established themselves has been very impressive. When done right, digital banking can offer customers the speed, convenience and transparency that is becoming increasingly important for consumers in most sectors.

“However, our research also showed that a lot of Brits still aren’t interested in taking all of their finances online. Open banking, for example, is only a year old and some people may not be comfortable with having their data shared between companies yet – the problems that large banks have had with ‘digitalising’ their services also doesn’t help the image of online banking.

“It will be fascinating to see how the sector evolves over the next few years, and if it can cope with the increasing consumer demand that we expect to see.”

January 24th, 2019 | Andrew Hagger | News

23 Jan 2019 UK adults are starting 2019 with outstanding borrowing from 2017, with 3.1 million  people still paying for Christmas 2017.

The new study from Sainsbury’s Bank Credit Cards found more than a quarter (27%) of people have debt remaining from two years ago. This New Year, UK adults still owe money from 2017 shopping (8%), holidays (8%), cars (7%) and Christmas (6%), showing it’s not just the latest festive season which is having an impact on UK household budgets.

On average people hold their debt to one credit or store card. However a significant 28% of spenders have debts on two or more cards. For 2019, two in five (40%) people like the idea of consolidating all their debts together, but only 6% plan to take advantage of this. 

Consolidating borrowing

Consolidating borrowing for example onto one credit card, (particularly a 0% balance transfer card) can be a good way to manage re-payments as it lets people keep track of all their borrowing in one place. It should enable them to stop shelling out on interest payments and allow them to focus on reducing the debt. They should also set up a monthly direct debit for more than the minimum payment to ensure they’re paying off the debt, and they can also top up as and when they can afford to.  It’s important people pick a card with a 0% balance transfer period that’s realistic in terms of how long they think it will take to pay back the borrowing.

Difficulty sticking to budgets is a contributing factor to people’s increasing levels of debt. Whilst many people have great intentions to budget – more than half (54%) of people set a financial plan in 2018 – only 28% managed to stick to it. In fact nearly a quarter (24%) of people admitted going over budget last year and only 1% of the population was under their 2018 financial plan. 

The card spending from 2018 that’s contributing to 2019 card balances are everyday shopping (49%), Christmas (41%) and holidays (30%).  Despite this, only 25% of people intend to set themselves a spending budget for 2019.

Borrowers believe it will take 12 months on average to clear their balance.  One in 10 (12%) of those with outstanding debts think it will take longer than a year to get back into the black, indicating that Christmas 2019 may be an outlay well into 2020.

Jerome Fernandez, Head of Credit Cards at Sainsbury’s Bank, said: “We are committed to providing customers with products which can help them manage their borrowing. Customers can take advantage of 0% on balance transfers for up to 30 months, enabling borrowers to consolidate outstanding debts and focus on clearing their balances.”  

Sainsbury’s Bank offers five top tips on dealing with debt

1.       Make a list of all debts. Understanding the true picture of how much you owe in total is the best start to feeling in control of your outstanding payments.

2.       Check interest rates. Make sure you know how much interest you are paying on each of your debts and consider moving it to a 0% balance transfer credit card so you can focus on paying down the debt.

3.       Consider consolidating debts. If you have debt from more than one lender, consider consolidating these debts into one product. This will be easier to keep track of and should mean you pay less interest on the overall debt.

4.       Check your outgoings. Are there regular items you are paying for that can be reduced while you are focused on paying off your debt? For example a gym membership could be replaced by joining a free fitness boot camp in your local park. The money you save can go towards driving down your debt.

5.       Speak to professionals about debt. Debt can be an emotional issue and there is help available through charities such as StepChange that can help you take the first steps to managing debt.

January 21st, 2019 | Andrew Hagger | News

21 Jan 2019 UK adults are putting their finances at risk by shortcutting powers of attorney and relying on good will from their relatives to manage their finances, according to Co-op, the UK’s leading probate provider.

A quarter (25%) of over 45 year olds have access to a relative’s bank account who isn’t their spouse. Of these adults, almost a tenth (7%) have set up formal joint accounts with a relative, whilst a fifth (18%) have access to a relative’s bank card or internet accounts.

Of those people who have put joint bank accounts in place, a third (35%) said they had access to a parent’s bank account and a fifth (18%) are able to access a sibling’s account. A tenth (11%) can access an aunt or uncle’s accounts and a further tenth (9%) can access the account of a grandparent.

According to the research, which was conducted among 2000 over 45 year olds, the main reasons for the access are to manage their money for them and to pay for groceries and luxuries such as holidays – things, that an appointed attorney could do legally and securely.

Whilst so many over 45 year olds have these informal arrangements in place, over a tenth (11%) admitted that they’d worry about a relative borrowing money if they were short themselves and a further 5% said they had suspicions that their relative may have previously taken money.

Despite this, the research shows that people are opting out of putting a power of attorney in place. Instead, they’re making their own unofficial arrangements to enable relatives to make decisions about their finances. Four fifths (79%) of those surveyed said they do not have a lasting power of attorney in place.

Furthermore, three quarters (74%) of people aged between 65 and 74 and two thirds (67%) of people aged 75 to 84 also do not have a lasting power of attorney in place.

Gavin Holt, Head of Probate at the Co-op said: “It’s concerning that so many people are ignoring, or perhaps are not aware of, the benefits of lasting powers of attorney and are putting these accounts of convenience in place instead.

“Whilst it may seem convenient and safe at the time, in our experience, these informal arrangements can often cause significant problems which only come to light after death. The worst of the problems, and sadly one of the most regular, is where financial abuse is alleged to have taken place.  This can add months, if not years, to the length of the probate process.”

A lasting power of attorney is a secure and formal means of allowing trusted individuals to make decisions about a person’s finances and also about their personal welfare, and they continue to have effect in the event that the person becomes unable to make the decisions themselves.

January 17th, 2019 | Andrew Hagger | News

17 Jan 2019 Christmas may be an expensive time of year but new research by Leeds Building Society found nearly a quarter of people in the UK who celebrate the festive season (24%) don’t save ahead for it at all.

Conversely, 15% of those surveyed start saving in January although 39% tend to leave it much later and start putting money away from September onwards.

As part of its ongoing efforts to understand the savings habits and attitudes of UK adults, the Society ran a national YouGov survey to find out how far people who celebrate Christmas plan ahead.

Of those who save, respondents were split between early starters and the planners who begin organising gifts, festive food and get-togethers from autumn onwards.

Some are thinking about Christmas almost as soon as the cards and wrapping paper have been recycled and the decorations packed away again:

·         2% start asking for gifts or dropping hints in January although most people wait until later in the year, with one in four (25%) placing requests come November.

·         An organised 7% start buying gifts in January but Christmas shopping peaks in November when almost a third (32%) buy their presents. Almost a quarter (24%) wait until December before hitting the shops.

·         5% are deciding in October what to eat on Christmas Day, with 1% starting to think about this as early as September.

·         4% of people put up their Christmas decorations in November.

The research found fewer than one in five (18%) had relied on credit to cover the cost of Christmas – however, the majority of those took more than a month to repay what they’d spent, risking interest and additional charges inflating the final bill.

Of the respondents who had used credit for Christmas spending, 71% % took up to six months to repay this, while 23% needed longer.

“It was good to see plenty of people start saving for Christmas in January,” said Matt Bartle, Leeds Building Society’s Director of Products.

“Similarly, it was positive that nearly three quarters (74%) of the people surveyed don’t take out credit to pay for Christmas. However, it was worrying that those who do use use credit can take months to pay it off, which will incur fees and could end up costing them a lot more.

“When there’s a big annual expenditure – whether that’s Christmas or a holiday – saving little and often helps to spread the cost to make it more manageable and it’s satisfying seeing your savings grow.”

October 19th, 2018 | Andrew Hagger | News

19 Oct 2018 New research from Charter Savings Bank reveals that 40% (over 5.8 million) of grandparents give their families cash handouts every year worth an average of £1,475 each, as well as the equivalent of one month’s free childcare.

Children and stepchildren are the main beneficiaries, receiving £743 a year, while grandchildren collect around £450.

Of those grandparents who gift money, the majority (61%) do so because they want to pass their wealth to their family during their lifetime, while a third extend a helping hand to help family members who are struggling to make ends meet.

Grandparents’ cash is most likely to go towards the younger generation’s living costs (30%), holidays (21%) and home improvements (19%). One in six (15%) say they are helping towards a home deposit, while 12% are clearing university debt.

It’s not just the younger generation receiving a helping hand; the research shows that 5% of grandparents are also providing financial support to their parents too.

On a regional basis, the most generous grandparents are based in Yorkshire and Humberside who donate a whopping £2,298 every year. In a close second are grandparents living in London (£2,043) followed by the East Midlands (£1,929) and the South East (£1,723).

Grandparents contribute one month’s worth of childcare

As well as cash, two-thirds (65%) of grandparents have given up their time to look after grandchildren and great-grandchildren, spending an average of four hours per week. When rolled out over the course of a year, and assuming a 7.5 hour working day, grandparents are providing 28 working days of free childcare annually. Assuming the national minimum wage of £7.83 per hour², grandparents are providing £1,629 of free childcare – collectively worth £4.3 billion.

While most grandparents can afford to be generous, over a third (37%) admit to having to make lifestyle changes including fewer holidays (58%) and postponed or cancelled home improvement plans (37%).

Paul Whitlock, Director of Savings, Charter Savings Bank, said: “Rising living costs and squeezed family incomes mean that grandparents are having to ride to the younger generation’s financial rescue. In many cases grandparents find it hard to say no and while they like being hands-on, the risk is that they compromise their own standard of living.

“Savings accounts play a key role in grandparents’ ability to finance the younger generation, so it’s important to check they’re getting a competitive rate.  Many grandparents have built up sizeable nest eggs thanks to years of saving regularly. Passing this habit down through the family will help to ensure that future generations can also benefit from a financial leg-up.”

 Regional breakdown of financial contributions

Source: Charter Savings Bank, 2018

October 17th, 2018 | Andrew Hagger | News

17 Oct 2018 Today’s publication of the inflation rate for September means that the government now has all the information that it needs to set pension and benefit rates for April 2019.  Under the terms of the pensions ‘triple lock’ policy, the pension has to be increased by the highest of:

–          The growth in earnings, which was 2.7% in August 2018 (based on seasonally adjusted average earnings including bonuses);

–          The growth in prices, measured by the CPI, which is 2.4%;

–          A minimum of 2.5%;

With today’s fall in price inflation, the pension will rise in line with the growth in average earnings (2.7%).   The key figures (rounded to nearest 5p) are:

Pensioners on the old state pension system will see an increase in other elements of their pension, such as the state earnings related pension scheme (SERPS) in line with the increase in the CPI.

The main rate of the Guarantee Credit for the poorest pensioners is linked by law to the growth in average earnings so will also rise by 2.7%.

Commenting, Steve Webb, Director of Policy at Royal London said:

“Whilst the rates of working age benefits have been squeezed for many years, pensioners look set to enjoy another above-inflation increase.   Those receiving the full rate of the new state pension should get an extra £4.45 per week or just over £230 per year”.

ENDS

October 17th, 2018 | Andrew Hagger | News

16 Oct 2018 While losing money is common, with those prone to misplacing things often finding spare change in pockets (66%), bags (37%) and drawers/cupboards (34%), new research from NS&I reveals that 14% of Britons (7 million people) think they may have lost track of a financial product, highlighting the staggering amount of money left dormant with UK financial services providers. And it’s not just savings accounts, with a fifth (20%) admitting there is a possibility that they have lost track of a pension.

Paper or provider: what’s the problem?

Nearly two-thirds of Britons (63%) admit to losing or misplacing things from time to time, but many admit that this could stretch beyond occasionally misplacing items such as keys. A quarter of Britons (25%) who admit to misplacing things tend to lose important paperwork, which could lead to losing track of bank or savings accounts, direct debits or signed agreements.

Now that many financial products are available to manage online, the requirement to remember security details or passwords is higher than ever before. Just over half of Britons think that misplacing passwords or codes for accounts is a cause for losing track of financial products, yet 78% believe that digital technology has improved the ability to stay in touch with financial products. This figure reaches 89% of 16-24 year olds, and steadily decreases with age, however over two thirds of those aged over 65 still agree that digital technology has improved their ability to keep track of finances.

While most Britons hold savings and investments with 1-3 financial providers 17% use between four and six providers. Nearly half of the population believe that people can lose track of financial products because they use too many financial providers.

As a way to combat the complication of paperwork that may come with using multiple providers, 45% of people believe that offering a single banking platform to view all accounts would help prevent people from losing track of their financial products.

Tracing could be easier than you think

While looking for lost change is easy, only half  (50%) of those who believe they have lost a financial product have ever attempted to track it down, and just over a third (34%) of these are unaware of the ways in which to do so.

NS&I offers a free tracing service for their products, and additionally works alongside UK Finance and the Building Societies Association to provide MyLostAccount.org.uk – a free service dedicated to reuniting customers with lost funds held in banks, building societies and NS&I. While the process may take up to three months to perform a successful trace, the reward could be worth the wait. To date, NS&I’s tracing service and My Lost Account combined have reunited over £770 million with customers.

Just over one in ten (13%) of Britons have heard of My Lost Account, while only 3% of Britons have ever used the service.

Ian Ackerley, Chief Executive at NS&I, said:

“Misplacing things from time to time, including money, is common, yet searching for something you may not know exists could appear like a waste of time.

“Our research shows that 14% of us think they have lost a financial product at least once and yet only 3% have ever undertaken a trace using My Lost Account to try to find them. It can be daunting to know where to start, but if you suspect you have funds with a financial institution, you should start by contacting them directly or by using services like My Lost Account.  Both NS&I’s tracing service and My Lost Account do the hard work for you, leaving you with time to spend on things that matter to you.”

October 16th, 2018 | Andrew Hagger | News

16 Oct 2018 Holidaymakers are losing up to 13% exchanging unused foreign currency after trips abroad due to the rates on offer from foreign exchange providers, financial data analytics experts Consumer Intelligence warn.

One of the biggest gaps between buying and selling rates is offered by the Post Office – customers buying £100.99 of US dollars at the Post Office receive $130 but would only receive £87.25 for selling the $130.

There are better rates on offer than the 13% loss on buying and then selling but Consumer Intelligence advises holidaymakers to consider buyback guarantees.

There is potentially huge demand – its research shows one in three holidaymakers intend to exchange left over foreign currency after overseas trips and 38% take more than £500 of cash abroad.

Providers offering buyback guarantees on unused currency include Asda, Travelex and Moneycorp who charge £3.99 for the service while Caxton charges £4.99 for the buyback on its prepaid cards. 

Eurochange uses a sliding scale offering to buy back 20% of the original amount for £2 after 20 days; 30% for £3 after 30 days; or 30% for £5 after 50 days. The Post Office does not offer a buy back guarantee. 

Andy Buller, from Consumer Intelligence said: “Buyback guarantees can be good value for customers planning to sell back currency particularly when compared with the buy and sell rates offered by travel money providers.

“Holidaymakers are often coming back with large amounts of unused cash and there is a real opportunity for currency providers to win more business by offering good rates on buyback schemes.

“There is certainly a lot of leftover foreign currency around in the UK and it’s all money that could be better used for something else.”

October 11th, 2018 | Andrew Hagger | News

11 Oct 2018 Android owners are more likely to clumsily crack, crush and smash their devices than iPhone users are, according to new data which has been revealed by gadget insurance provider Protect Your Bubble.

More than three quarters of Android and non-IOS users who submitted a claim to the insurance provider cited ‘accidental damage’ as the reason behind their device’s plight.

By comparison, just 62% of iPhone owners who claimed on their insurance cited the same reason.

But while the analysis of mobile phone claims made to Protect Your Bubble in 2017 suggests iPhone owners are, on the whole, more careful, the insurer’s data reveals Apple fans were more likely to water-damage their phones.

Just 4.4% of Android owners claimed for water damage, while 11.1% of iPhone owners did so during the same period.

Intriguingly, female iPhone owners were the most likely group to drown their devices, with 12.6% citing ‘liquid damage’ as the reason for their claim. Meanwhile, just 8.9% of male iPhone owners claimed for water damage, while 5.2% of female Android owners did so as well as just 3.6% of male Android users.

Protect Your Bubble also found Millennials were clumsier than pensioners, with 80% of 21 to 35-year-olds claiming for ‘accidental damage’ and ‘loss’ combined. By contrast, only 73% of over-65s submitted claims to Protect Your Bubble for the same reasons.

However, the older generation was still more likely to drop their devices in water, with 10.7% of pensioners claiming for water damage, compared to just 7.8% of Millennials.

James Brown, director of gadget insurance provider Protect Your Bubble, comments: “Our research shows that we are unquestionably a nation of butter-fingered Brits. There are few feelings worse than scooping up a once pristine smartphone from the ground and flipping it over to reveal a smashed screen or worse. Sadly, our data proves ‘accidental damage’ is the overwhelming cause of gadget mortality, with 65.2% of our customers submitting claims for this reason in 2017.

“But what raises eyebrows further is that iPhone owners are clearly substantially worse at keeping their devices above water level. One of the many causes of liquid damage is dropping a phone in the loo. Not only is someone confronted with the unpleasant task of fishing around in toilet for their device, but their phone is often rendered useless after.

October 11th, 2018 | Andrew Hagger | News

11 Oct 2018 Tandem Bank, the UK’s leading digital bank, announce the launch of a second credit product, the Journey Card, available through application via the Tandem website.

Tandem Bank obtained its banking licence in January 2018 and launched shortly after with their Cashback Credit Card and three market-leading Fixed Saver accounts, along with an advanced app that aggregates bank accounts to give users full visibility and insight into their finances. Tandem is now adding its second competitive credit card offering to its product suite, this time to a market that Tandem believe is underserved.

The Journey Card is a way for those who haven’t had credit before to build up a strong credit profile. When paid on time, and without going over their credit limit, customers can use the Journey Card to achieve better financial health. Increasingly people are realising the importance of credit scores for building a better future, be that helping them to get car loans, mortgages and better credit rates in the long-term.

One of the worst things about travelling abroad is constantly having to worry about being stung with fees when you get home, but from today, customers signing up to the Journey Card can make purchases overseas without incurring fees and will receive real time in-app updates as they spend, leaving out the nasty surprises. Following the success of the Cashback Card, it’s clear that Tandem’s customer base loves to travel and the Journey Card offers the same great overseas features plus the advantage of a smooth application even if you are new to credit.

The Journey Card offers:

• ZERO transaction fees on any purchases
• ZERO transaction fees on cash withdrawals
• 56 days interest free on any money spent
• 24.9% APR representative, variable
• Receive all updates and communication via the App (forget documents being lost or exposed account information)
• Powerful in-App budgeting tools