December 13th, 2016 | Andrew Hagger | News

Just one in four mortgage-paying homeowners understand how cuts to the Bank of England’s (BoE) base rate could affect their mortgage payments, according to new research from Trussle, the UK’s first online mortgage broker.

In August 2016, the BoE made the first adjustment to the rate in over seven years, cutting it from 0.5% to 0.25%, and mortgage rates soon fell as a result. Tracker rates dropped by 0.25% in line with the BoE’s action, while fixed rates also hit record lows, with two-year fixed rates available for as little as 1.39%.

However lender SVRs, the ‘default’ rates that borrowers often find themselves on as soon as an initial rate has ended, did not drop nearly as far. The average SVR before August’s base rate change was 4.8%, but by November had fallen only 0.17% to 4.63%.

Borrowers could save £3,500 a year by remortgaging

As a result of the widening gap between the best and worst rates on the market, people stuck on expensive Standard Variable Rates (SVRs) could now save a further £380 per year by switching to a market leading fixed rate. What had been an average annual saving of £3,120 has grown to £3,500, as a result of August’s base rate cut.

Just over one in 20 have considered switching mortgage

In the study, borrowers were also asked if they were happy with their mortgage. Only a third (36%) of borrowers said they were content with what they were paying in the current environment of rock-bottom mortgage rates. This could be explained by the one in three borrowers currently on an SVR. Despite the high proportion of people unhappy with their mortgage, just over one in 20 borrowers have considered switching to a better rate since the Bank of England cut the base rate to 0.25% in August. When asked what had ever stopped them from switching, 20% said the process would be too much hassle, while 14% said that it all seemed too complicated.

December 13th, 2016 | Andrew Hagger | News

M&S Bank is encouraging motorists to check their car insurance before heading out shopping this festive period, ensuring the Christmas gifts they’ve purchased aren’t at risk from opportunistic thieves.

Research from M&S Bank has shown that the average Christmas shopper is expecting to spend just over £600 this year (£364 on presents and £241 on food and drink), which could be put at risk if left in an underinsured car.

Paul Stokes, Head of Products at M&S Bank explained: “The Christmas shopping period is now well under way and the festive excitement is building for many.

“However, the contents of the vehicle can prove a target for opportunistic thieves, particularly at this time of year. That’s why it’s crucial that shoppers make sure they’ve got adequate car insurance in place to cover their Christmas shopping, should the worst happen.”

On average, festive shoppers will make at least three trips to the shops to stock up for Christmas this year. The main shopping trip for presents alone is expected to increase the vehicle’s contents by £216, with the main outing for food and drink likely to boost its value by an average of £189.

However, nearly two in five (38 per cent) will put their Christmas shopping at risk over the next few weeks by leaving it in the car. This includes taking presents back to the car in between shops to reduce the amount they have to carry (26 per cent), taking presents back to the car before heading out to dinner, to the cinema or to Christmas markets (7 per cent), or keeping presents hidden in the car when they get home (5 per cent).

Top tips for keeping your shopping safe this Christmas:

• Keep shopping bags covered and locked in the car boot – they could be tempting for opportunistic thieves if left visible
• Don’t leave expensive electrical items in view – make sure smartphones, tablets or satnavs are safely locked away or removed from the vehicle
• Don’t make it easy for thieves – be sure to fully close all windows and roof panels and always lock the vehicle, even if you’re just getting a ticket for the car park
• Don’t leave receipts in shopping bags – that way, you’ve got them to hand should the worst happen
• Check your car insurance policy – make sure you know what your policy covers

December 7th, 2016 | Andrew Hagger | News

Almost half of premium digital pay TV customers in the UK are watching less than a fifth of the channels included in their TV packages, according to new research by uSwitch.com.

And yet, the average yearly spend for premium pay TV is £508, or £42.30 per month, with almost a third (32%) spending more than £50 a month. A quarter of Sky customers and 28% of Virgin Media customers pay more than £60 a month per household for their packages.

TV customers signed up to Sky, Virgin and BT say that, on average, they only watch a third of the channels included in their packages. Almost four in 10 watch less than 10% of the channels on offer, while 71% are watching less than half of the channels they pay for, suggesting many people may be signed up to the wrong service for their telly watching habits.

TV series and box sets have proved most popular on pay TV, with 54% of customers naming these as their favourite genre to watch, closely followed by films (51%). Less than a third of viewers say that they watch sports most, falling to 26% among 18-34 year olds and rising to 36% amongst viewers aged 55 and over.

Ewan Taylor-Gibson, TV and broadband expert at uSwitch.com, says: “It’s irksome to have to flick through dozens of channels you never watch. If you’ve found yourself sitting on the sofa questioning whether you’ve made the wrong decision to sign up to a bells and whistles pay TV package, you know it’s time to look at other options.

“Providers have recognised our appetite for greater flexibility when it comes to both content and payments and are responding accordingly. Sky Q, Virgin’s V6 and Netflix allow you to  download some content and watch it on the move, while Sky is now advancing on streaming services with its Now TV Combo available on monthly rolling contracts.

December 6th, 2016 | Andrew Hagger | News

According to the latest YouGov research commissioned by credit information provider, Equifax, over a third of Brits (35%) are very or fairly concerned about being able to meet their financial commitments in 2017.  The new research also reveals that 30% think their financial situation will worsen next year; only 15% believe it will be better.

It is the lower paid workers that feel the least confident about getting a pay rise next year.  53% of those earning £5,000-£9,999 per annum and £10,000-£14,999 per annum do not expect to get a pay rise.  Those earning £40,000- £59,999 per annum appear to be the most confident, with 54% expecting to get a pay increase in 2017.

With four out of ten Brits believing they will not receive a pay rise in 2017, it is probably not surprising that there is a lack of confidence in the economy as a whole. When asked what concerned them most about their financial situation for 2017, the state of the UK economy came top of the list at 26%, followed by the impact of interest rates falling on savings at 17% and having enough saved for retirement at 12%.

Lisa Hardstaff, Equifax credit information expert, said:   “There’s no question that 2016 has been a significant year for the UK.  So it is perhaps not surprising that people are concerned about the strength of the UK economy as we head into 2017.  Although it is somewhat unfortunate to see that nearly a third feel their financial situation will be worse next year, it is positive to see that 46% believe it will stay the same. This means they are somewhat confident that they are not going to be in a worse position. 42% are going to review their current financial commitments in a bid to get better deals and save themselves some money.”

December 5th, 2016 | Andrew Hagger | News

One in five Brits are scared of being scammed at Christmas, new research by Nationwide Building Society has found, with many people failing to take simple precautionary steps.

The study of 2,000 UK adults found that nearly half (48%) admit to not checking their current account or credit card statements regularly to compare the details against what they know they have bought – therefore running the risk of not spotting a fraudulent or unknown transaction on their account.

While 55% say they avoid the high street and do the majority of their Christmas shopping online, almost two in five don’t know how to spot if a website is secure or not – identified through a padlock symbol (see top tips below).

For those that do hit the high street to shop at Christmas, one in ten admitted to not shielding their PIN number at all at the cash machine when withdrawing money or paying for a purchase by card, while a further three in ten admitted to only shielding it sometimes.  This creates a risk, especially as close to a fifth have experienced shoulder surfing – someone trying to see their PIN from behind.

And when an offer seems too good to be true, it more than likely is.  More than one in five  have been left disappointed after purchasing fake gifts, or have not received anything at all, after making an online purchase in the hope of grabbing a Christmas bargain.

In the spirit of sharing at Christmas, 15% of Brits share details on social media of what they are up to when either on holiday or making overnight visits to friends and family over the festive period – but experts warn this is potentially giving criminals the opportunity to strike.

Stuart Skinner, Nationwide’s Head of Fraud, said: “Our research reveals people are at risk of being scammed at Christmas if they don’t take some simple preventative steps. With fraud, often the most frustrating thing is that a lack of awareness or lapse in concentration can lead to someone being successfully targeted. We hope that by being aware of a few top tips that shoppers will be in a safer place this Christmas.

“Nationwide, like other financial institutions, has a range of measures in place that are highly successful in protecting our members from becoming fraud victims. However, scammers are always looking for ways to deprive people of their hard-earned cash.

“For example, criminals target ATMs at this time of year because of the increase in use, tied with the fact that in the holidays, people tend to be less likely to check their balances.  This is why we recommend customers check their accounts regularly and shield their PINs in order to limit their chances of being defrauded.”

November 29th, 2016 | Andrew Hagger | News

One in four Brits, equivalent to 13 million people, say they have been the victim of a scam, according to new research from Santander UK, while almost three quarters (73%) said they were concerned about falling victim to a scam.

With the latest figures showing losses of almost £11 billion to the UK economy as a result of fraud, the survey also revealed the nation’s relaxed attitudes towards personal security with one in eight (12 per cent) admitting they would reply to an email from somebody they didn’t know, and four per cent confirming they were comfortable giving personal, security or banking details to a stranger. Santander took to the streets to test this further, with alarming results. With the help of Paul Wilson, host of the BBC TV show The Real Hustle, the bank’s video shows that in fact 85% of the people asked readily gave over their bank details.

The survey findings also reveal that over 4.6 million adults (nine per cent) believe their bank would ask for their full PIN, password or other private security details. One in 14 (seven per cent) also believe their bank would ask them to transfer money out of their account for security reasons, or ask for remote access to their computer (six per cent).

Santander’s Top 10 Tips to Protect Yourself from Scams

1.   Never give out personal, account or security details (including One Time Password codes). Santander, the police or any other organisation will never ask you for these in full.

2.   Never allow someone remote access to your computer following a cold call. Never log onto online banking if someone is remotely accessed to your computer.

3.   Don’t rely on caller ID – numbers can be spoofed by fraudsters to make it look like they’re calling from a trusted number.

4.   Always validate requests for new payments or changes to payment details face to face or by calling on an independently verified number.

5.   Santander, the police or any other company, will never call to ask you to transfer your money out of your account for security reasons.

6.   Never log on or enter/reveal a security code (One Time Password) in order to process a refund to your account.

7.   When buying/selling online always keep within the website guidance and advice – never communicate offline with a buyer/seller.

8.   Be wary of all cold calls purporting to be from banks, police, or other trusted organisations – if you have any concerns, call back on an independently verified number.

9.   Never log onto online banking after clicking on a link in an email or text message.

10. Install anti-virus software that includes an anti-phishing programme. Install Trusteer Rapport, it’s free and provides an extra safeguard when you are banking online.

November 25th, 2016 | Andrew Hagger | News

Research released this week by environmental charity Hubbub highlights how Black Friday is adding to the financial stress people are feeling in the UK.

The findings show how Black Friday has snowballed since its introduction to the UK by Amazon in 2010, with spending in 2015 exceeding £1 billion.  This looks set to increase further in 2016 as the occasion morphs into a five day online shopping frenzy from Thursday through to Cyber Monday.

For many, the annual sale event represents an opportunity to make some terrific savings in the run up to Christmas on presents that they would otherwise have bought at full price.

The issue is particularly acute for younger generations, with four in ten people under 35 saying the hype around Black Friday makes them feel pressured to join in, compared with only one in ten of the over 55s.  Half of this younger group felt that Black Friday encouraged them to buy things they don’t need and 45% reported they had spent money they couldn’t afford because there was a sale on.

Despite this month’s worrying statistics on the growing level of household debt in the UK¹, seven out of ten under-35s said they had bought items on sale and never used them and six in ten have shopped in a sale and regretted it afterwards.

Hubbub is responding to these concerning findings by launching their #BrightFriday campaign, which presents alternative ways for people to spend their Black Friday to avoid the pressure to buy things they might not want or need.

As 96% of people said they’d rather spend a free day doing something other than shopping, #BrightFriday invites people to pledge what they will do instead of taking part in Black Friday.  With clothes and shoes topping the list of items that people regret buying, the campaign also encourages people to think about rekindling their love for clothes they already have through creating new outfits without buying new, by restyling or refashioning wardrobe gems and borrowing or swapping with friends.

Trewin Restorick, Founder and CEO of Hubbub said “It’s a real concern to see the pressure that people feel to join in with Black Friday when so many are already in debt.  We’re keen to reassure people it’s OK to opt out and do something more enjoyable instead – spend time with friends or try something new.  The best moments in life can be made, not bought.”

ENDS

November 22nd, 2016 | Andrew Hagger | News

New research released today by Zurich shows that nearly half of UK adults say that a lack of savings is stopping them from achieving life goals now.

Based on a survey of over 2,000 UK consumers, the study is a benchmark of how financially confident people are they will be able to fulfill their aspirations for life now and in the future.

The study, which aims to highlight the savings gap in the UK, found that millennials in particular believe a lack of savings stops them from realising their current goals.

Three in five of 18-24-year-olds and half of 25-34-year-olds said lack of savings prevents them from realising goals such as starting a family or travelling the world. This compares to just 33% of those aged 55 or over.

Furthermore, almost three quarters (72%) of those under 65 said they have goals they want to achieve when aged 65 or over, such as travelling more often or for longer periods, taking up new hobbies or being in a position to financially support their own children, grandchildren or stepchildren.

Despite recognition of the importance of saving in achieving aspirations, people under the age of 65 are not actively saving for at 65 and over. A quarter of those who are yet to retire do not have either a private or workplace pension while nearly one fifth (17%) have no savings.

While over half of those pre-retirement hold private or workplace pensions, of those only one in six said they felt confident they knew how much they should be saving into their pension every month to comfortably afford the standard of living they expect from their retirement. Furthermore, 26% stated they had no workplace or private pension provision in place at all.

Anne Torry, of Zurich UK Life, commented: “It is positive that people are so optimistic about their long term future and have clear goals they want to achieve after the age of 65, from travelling the world to starting a new hobby or financially supporting loved ones. Yet, when it comes to realising goals, whether in the long or immediate term, money is a clear brake on ambition with a lack of savings fundamental to realising aspirations. Despite realising this, our research shows just half of non-retired people have pension provision. This simply will not be enough to support the aspirations that people have.

In a low interest rate environment, a professional adviser can also help to create a plan and make the most of savings. The earlier action is taken, the more likely it is that your savings will be sufficient to realise your aspirations today and in the future.”

November 21st, 2016 | Andrew Hagger | News

Personal Finance Expert, Andrew Hagger, has just released new credit card research showing how the 0% purchase sector of the credit card market has evolved over the last two years.

Andrew Hagger of Moneycomms comments:

With the credit card balance transfer market the balance transfer fee is frequently the element of a card that helps pinpoint the best deal.

However with the 0% purchase cards there is no corresponding one off fee so consumers need to consider other card attributes when selecting their plastic of choice.

This includes looking at the reward scheme/cashback, maximum interest free days and the ‘revert to’ or ‘go to’ interest rate that kicks in once the 0% promo offer expires.

The battle for best buy status remains fierce because most aggregators compile their tables based upon the longest term.

This has been the key driver that has pushed interest free deals to record levels – up by 50 per cent, from 20 to 30 months in just two years.

The supermarket banking brands Tesco Bank and Sainsbury’s Bank have long been key players in this market with a compelling combination package of long interest free term and rewards, as an example the latter is currently offering a 5000 Nectar point intro deal worth £25 for new customers.

The average promotional term for a 0% purchase credit card is now 11.9 months (was 9.3 months in Nov 14) and there are now 18 cards offering 20 months or more compared with just a solitary deal in November 2014.

If it’s a card that’s going to be a long term shopping companion consumers should also factor in whether they’ll get any kick back for their loyalty and what the interest rate will be when the promotional deal ends.

Many rewards providers have cut the reward earn rates or ditched their schemes altogether due to cost pressures from the EU interchange fee changes.

In this latest 0% credit card purchase market analysis carried out by Moneycomms only John Lewis (Partnership Card), Nationwide Building Society and Sainsbury’s Bank have maintained their reward rates of 2 years ago .

I’m sure this market will continue to develop and a 36 month 0% purchase card may well be a possibility before too long, however as with the balance transfer market I urge consumers not to base their choice purely on the longest deal as it’s not necessarily the most suitable or financially beneficial.

November 21st, 2016 | Andrew Hagger | News

Thousands of Brits are oblivious to when they’re being credit checked, according to a study from Amigo.

From overdraft extensions to mobile phone contracts, thousands of Brits across the UK are completely unaware that they are being silently judged by a number on a screen.

Monthly insurance premium instalments, monthly gas direct debits and monthly electricity direct debits are among the top things consumers are not aware they’ll be credit checked for – with more than half of the population admitting that they weren’t aware big brother was checking out their trustworthiness.

More seriously, one in five people (22 per cent) aren’t aware that they’re credit checked when applying for a mortgage, meaning they may not only be declined but they could actually damage their credit score even more, making finding a mortgage acceptance even harder. Other financial transactions people didn’t know were credit checked included applying for a personal loan (24 per cent) and applying for a credit card (19per cent).

Top Ten financial transaction that people DIDN’T KNOW they were being credit checked for

1.    Monthly insurance instalments – 63%

2.    Gas direct debit payment – 56%

3.    Electricity direct debit payment – 56%

4.    Flat rental – 50%

5.    Mobile phone monthly contract – 37%

6.    Overdraft extension – 49%

7.    Store cards – 42%

8.    Retail finance – 37%

9.    Car finance – 27%

10.  Personal loan – 24%

A damaged credit score severely impacts an individual’s ability to borrow from a lender, especially a mortgage. If your credit score is poor, it indicates that you are less trustworthy when it comes to paying back a loan.

Every individual in the UK has a credit score, yet only 12% of people recall knowing their exact rating. This means many could be in for a nasty shock when they apply for a loan, credit card or mortgage.

What’s worse, if you apply for a credit card, loan or mortgage and are declined, that process can actually damage your credit score even further.

There are three principal reference agencies which allow people to check their score before applying for credit including; Equifax, Experian andCallcredit.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: Thousands of people are completely oblivious to the fact big institutions are checking their trustworthiness. The days when you would only be checked for a mortgage or a loan are long gone. What’s really worrying is that people could be inadvertently destroying their own credit score, and as a result may be closing the door on life dreams like home ownership.