November 21st, 2016 | Andrew Hagger | News

Adam Powell, Head of Operations of home insurance provider Policy Expert commented:

“With predictions for heavy snow just around the corner, it’s important to ensure that your home is prepared for everything that the winter months might throw at it. Cold and stormy weather can ravage buildings so it’s important to take the time to quickly make sure you have the correct level of home insurance cover before the weather worsens. Check the small print – some policies may not cover sheds and outbuildings, and others won’t cover damaged boilers if they haven’t been seen by a registered plumber.”

Top tips for protecting your home from winter weather:

• Check your boiler and heating system – If you haven’t done so already this year, get your boiler checked and/or serviced by a Gas Safe registered plumber.
• Roof tiles– Check for any cracked, missing or loose tiles and replace them. If a roof is in disrepair the weight of snow or high winds can prove to be hazardous.
• Keep the central heating on – Set the central heating to a minimum of 14 degrees Celsius throughout the winter. It helps prevent pipes freezing and frost damage.
• Repair damaged chimneys– Look for cracks around chimney pots and at the roof join, also for loose render and render that’s come away from the stack. High winds and heavy rain can damage chimneys even further, make sure they’re properly stable before extreme weather happens.
• Windows– Take a look at your window frames and fill any cracks and put on a coat of paint if needed. Extreme temperatures and wet weather can cause untreated wood to expand and rot, treating the window sills helps prevent water and frost damage.
• Insulation – Lag any pipes and water tanks in exposed areas such as lofts, garages and utility rooms to prevent pipes freezing and bursting.
• Guttering and drains – Clear your guttering and drains of any debris such as leaves, mud and stones; they can block easily and freeze up.
• Walls – Check the pointing in brickwork both on the main house, all outbuildings and garden walls, look for any loose stone or areas that are in need of repair.

November 21st, 2016 | Andrew Hagger | News

Research from Aviva has revealed the extent to which pension policies are being forgotten. A survey of almost ten thousand people who hold a pension has revealed that just under one in eight (13%) admitted they have at least one pension that they had forgotten about. This is equal to more than 2.5 million pension policies currently sitting in the back of people’s minds.

Among those with a forgotten pension, the majority believe they have misplaced one pot (77%), although 17% think they have forgotten about two and 6% have forgotten three or more.

According to Government figures, there is an estimated £400m in unclaimed pension savings. At the same time, almost three in five (59%) UK adults are worried about not having enough money to last them in retirement.

Although tracking down a lost pension can provide a valuable boost to retirement income, those who delay could receive a smaller amount than expected. Forgotten pensions may have been subject to charges and not invested in the best way suited to the policyholder, making it worth less than it would have been if it was actively managed.

Andy Curran, from Aviva, said:

“It’s unsurprising that so many people have pensions they have forgotten about. The ‘job for life’ is now a distant memory with people much more likely to change employer on a regular basis. With auto-enrolment doing such a great job of getting more people saving for retirement, we are likely to see the number of pension pots that people hold increase further as each time a person gets a new job they get a new workplace pension. This is why Aviva is now working to help create a pensions dashboard – a platform where people will be able to see all their pensions in one place.

“People need to be aware of the potential risks of having a number of different pension pots with small amounts of money in each. It’s likely that there will still be charges taken out of those pots for their management and administration and that can have implications if you are no longer contributing into them.

November 15th, 2016 | Andrew Hagger | News

A new online budgeting app, Squirrel, is helping thousands of Brits take control of their personal finances. Through an ultra-intuitive web app, soon to be available on iOS and Android, users can budget effortlessly, spend responsibly and save money with minimum fuss.

Squirrel users start by directing their monthly salary into a Barclays-powered Squirrel account that’s created in their name, and then set up their recurring commitments, e.g. rent or mortgage payments, utility bills, council tax and Sky TV.

Their monthly commitments are then deducted from their salary and are paid out on a ‘just in time’ basis, meaning no bills are ever missed because the necessary funds arrive just before they go out. At the same time, they allocate funds for any savings goals, whether saving for a new car, Christmas or a dream holiday.

After all costs and any savings have been allocated, Squirrel creates a spending amount for the month out of what’s left. ‘Squirrels’ then decide if they’d like their ‘spending money’ to be divided into weekly or monthly instalments. If weekly, their spending money is paid into their current accounts every Monday, preventing them blowing it all too early in the month.

Against a backdrop of rising inflation and low wage growth, it’s becoming even more important for Britons to manage and control their finances. But importantly Squirrel helps people save, too: currently, two in five working Brits have less than £100 in savings*, whereas the average Squirrel user currently has £650 ‘squirrelled away.’

Squirrel costs £3.99 per month, for which users get:

• Their own secure FCA-regulated, Barclays-powered bank account
• Unlimited personalised savings pots for different goals
• 24/7 support from real people
• Integration with all high-street banks
• Full use of the unique budgeting and savings tool

November 15th, 2016 | Andrew Hagger | News

Consumers could be paying thousands of pounds more in interest payments on personal loans and credit card balances because they are failing to check and take steps to improve their credit scores, according to research carried out by credit improvement service Credit Improver. Lenders use credit scores to determine who qualifies for a loan or credit card, and at what interest rate and credit limit.

Credit Improver looked at the typical interest rate a borrower could secure – depending on their credit score – on a £5,000 personal loan paid back over 36 months. It also looked at the typical rate a borrower might secure on a credit card, and how much interest they would pay if that card had a £3,000 balance, and they committed to paying 4% of the outstanding balance every month.

Taking a £5,000 personal loan paid back over 36 months, and comparing a borrower with an ‘Excellent’ credit score, between 961 – 999*, and someone with a ‘Very Poor’ credit score, between 0 – 560*. The former could secure a typical rate of 3.8% APR, with monthly interest payments of £8.14 and total interest paid over the duration of the loan of £293.08. However, someone with a ‘Very Poor’ score, may typically secure an APR of 79.4%, with monthly interest payments an eye-watering £162.96 a month, and total interest paid of £5,866.60 over three years. That’s a staggering £5,573.52 more interest.

Even a borrower with a ‘Fair’ credit score, between 721 – 880, could still pay more than £1,000 extra in total interest over the duration of the loan, as the typical rate on a personal loan would be 16.9%. Also, by improving your credit score from ‘Very Poor’ to a ‘Poor’ rating, you could secure a better loan rate of 29% rather than almost 80%, and reduce the total interest paid by more than £3,500.

November 15th, 2016 | Andrew Hagger | News

Andrew Hagger of Moneycomms.co.uk today warned borrowers that overdraft costs could wipe out the discounts that shoppers receive during Black Friday promotions.

He Said: “The hype around ‘Black Friday’ and buying furniture and carpets in time for Christmas seems to increase every year, but before you get carried away with your debit card and max out your overdraft it’s worth weighing up the potential costs against cheaper alternative options.

Whether you’re going to blow a few hundred pounds or a four figure sum by repeatedly clicking the ‘add to basket’ button over the next few weeks, take a minute to understand what it’s going to cost in terms of interest and fees.

Some overdraft tariffs can be very reasonable – with First Direct charging just £1.96 if you’re in the red by £400 for a full 30 days – on the other hand a £2,000 overdrawn balance with a Halifax Current Account for 60 days will set you back an eye watering £180 – so what are the alternatives?

The credit card ‘Money Transfer’ or MT is often overlooked, but as you’ll see from the tables below can deliver huge cost savings when compared with an overdraft.

You have the same flexibility as an overdraft as the funds are transferred from your card into your bank account so you can shop for Xmas however you wish – that includes withdrawing cash at the ATM without having to pay the usual hefty credit card transaction fees.

The two most cost effective Money Transfer deals at the moment come from Virgin Money and MBNA offering 0% on the amount you borrow for 32 and 24 months respectively.

I’m not saying you should look to spread the cost of Christmas over such a prolonged period, however the only fee you’ll pay on these deals is a one off Money Transfer Fee which is 1.69% of the sum borrowed with Virgin Money and 1.99% with MBNA – both outperforming the high street bank overdrafts as you’ll see in the tables below.

Compared with a £1500 overdraft for 2 months an MT could easily save you more than £70 and for £3000 over 3 months the difference could be in excess of £210.

If it’s a credit card with a 0% deal you’d prefer, maybe for section 75 protection, look for maximum reward on minimum spend such as the new intu credit card which gives you a £20 gift voucher for just £250 spend – the equivalent of an 8% return.”

ENDS

November 8th, 2016 | Andrew Hagger | News

Every year millions of consumers make New Year’s resolutions and for a good number of those people it means consolidating their credit card and overdraft debts on to a zero per cent balance transfer deal.

Personal Finance expert, Andrew Hagger said: ” if you’ve got a solid balance that you’ve been carrying over from month to month, it makes financial sense to sort it out now rather than wait for 2017 to arrive and trigger you into action.”

“By getting ahead of the game and switching now you’ll save yourself two full months’ worth of interest and for someone with a £7,500 card balance at a market average of 18.9% APR that’s a saving of £236.25.”

So while we’re all looking of ways to keep the cost of Christmas down, there’s an obvious saving opportunity staring many people in the face every time they open their monthly credit card statement.

According to the latest statistics from The British bankers Association there is £26.8 billion pounds worth of credit card balances upon which interest is being charged – at 18.9% APR average this works out at £13.8 million in interest every day so there’s plenty of people who could save a good bit of money by switching  – as long as they have a decent credit record.

Individual cost savings depend on the current balance and interest rate being charged, however the following table gives you an idea of the amount of money you could save by acting early.

Credit card lenders are falling over themselves for your custom at the moment, so why not get your New Year’s resolution in ahead of the game and give your finances an early boost as a result.

November 8th, 2016 | Andrew Hagger | News

According to new YouGov research commissioned by Equifax, the credit information expert, 29% of Brits who celebrate Christmas say they feel pressured to spend more than they can afford for the festive season. On average, people expect to spend £441.24 on Christmas this year, with around 1 in 5 (21%) thinking they will spend more than they did last year.  The research also revealed that 7% of those who used a credit card to pay for Christmas 2015 still haven’t paid off the debt.

It appears, from the Equifax commissioned research, that women feel the pressure of festive spending more than men.  Nearly a third (32%) think they will feel pressured into spending more than they can afford compared to 26% of men. And when it comes to blowing the budget, 42% of women expect to spend £500 or more, but only 32% of men say the same.

Scottish consumers appear to be the biggest spenders, on average at £479.14; those living in the South seem to be more prudent averaging £403.16.

And those living in the East of England and Wales feel the most pressure to spend more than they can afford, with 33% of people in these regions admitting to this, compared to just 22% in the South.

In Scotland, 29% think they will spend more this year than they did last year, a significant increase on the overall average of 21%.

“It’s clear that many of us feel the pressure to spend for Christmas – which can leave us with hefty bills to pay come the New Year”, commented Lisa Hardstaff, Equifax credit information expert.  “But with over a quarter of people using credit cards towards paying for Christmas last year, we’re reminding consumers to plan ahead to ensure they can pay it off as quickly as possible. This particularly applies to the 11% who expect to spend more than £1,000 or more this year. It is vital that if they plan to use credit that they make repayments on time and if possible not just pay the minimum each month, otherwise they could end up like the 7% who are still paying off their Christmas spending from last year.”

Christmas on credit

Over a quarter (26%) used a credit card towards paying for Christmas last year, with a third of those aged 45 to 54 taking this option, compared to just 10% of 18 to 24 year-olds.

For those who chose to use credit, over half (54%) paid off the bill within 1 month.  However, 15% took 2 months or more.  Worryingly 5% took more than 6 months to pay off the Christmas spending on their credit card and 7% admitted to still not having paid off the bill fully by October of this year.

November 8th, 2016 | Andrew Hagger | News

Tempting finance deals such as Personal Contract Purchase offers (PCP) are luring car buyers to upgrade their cars more frequently, potentially creating an embarrassing cash shortfall, What Car? can reveal.

In a recent survey of motorists, 37% of respondents said they now changed their car more frequently than they did a decade ago, while more than one in five (22%) said that a generous finance offer would be the primary motivator in the decision to change.

However, with earnings on savings at an all-time low, and four in 10 adults having less than £500 in savings in the bank, motorists could be overstretching themselves when the initial, low PCP payment term ends.

What Car?’s survey indicates that these pitfalls are unlikely to be at the forefront of the car buyer’s mind when they make the purchase – a third of motorists agreed that modern car finance solutions such as PCP make upgrading easier.

The haste of buyers to switch to the latest model using car finance rather than cash coincides with a £48bn*** increase in national unsecured debt in just three years.

What Car? Editor Steve Huntingford commented: “The range of finance options available to car buyers is now more generous than ever and can often be an effective way to spread the cost of paying for a safer, better-equipped car.

“However, these finance options shouldn’t be seen as ‘free money’ and buyers need to ensure they have a financial cushion to cover the costs at the end of their initial payment term in order to stay on the road.

“The final payment to secure a vehicle on a PCP term is typically several thousand pounds, and the deposit on the next car can also require a substantial cash injection.

“Damage and excess mileage charges on a PCP-financed vehicle could also be an unpleasant surprise if not accounted for, so it is important to read the small print before making the commitment.”

November 1st, 2016 | Andrew Hagger | News

The UK’s youngest and oldest adults are least likely to switch financial providers, including credit cards, loans and mortgages. New research from Experian shows that two thirds (63%) of British adults  ‘rarely’ or ‘never’ change credit card provider, in spite of it being easier than ever to switch financial products.  The research also sheds new light on how people prefer to bank and their attitude to loans and mortgages.

James Jones from Experian said, “Millions of people are throwing away money and paying way over the odds on their borrowing. Most are already managing their accounts online and might not understand that it can take literally minutes to get a much better deal in just a matter of a few clicks. People with a strong credit history can qualify for highly competitive rates on credit cards, loans and mortgages. Now that the Experian Credit Score is available free, for everyone, forever, there really is no excuse not to shop around.”

Credit Cards

While 82% of people say they manage their credit cards online, 63% of Britons rarely or never change credit card provider. It appears that the groups who generally have the lowest levels of income in the country tend to be the least likely to switch to get better deals that could save them significant sums. A massive 75% of 18 to 24-year-olds and 77% of over-65s say they rarely or never change credit card provider.

“It’s young adults  who could benefit most by building good habits early and reviewing their financial accounts regularly, and switching when better deals become available. This could save them huge amounts in the long run. Using services like our new free CreditMatcher tool is a really easy way to see which credit card is suited to their needs and individual financial circumstances. Right now, 75% of young people are missing out on the best deals when it comes to credit cards.”

James’ Tips: Think about your priorities and why you want a new card when shopping around.

• Rewards cards can be a good option for people who travel regularly or spend a significant amount on their weekly shop
• 0% balance transfer cards allow you to transfer existing debt to a card where you pay no interest for a set period of time
• Many providers offer 0% introductory offers on purchases, which can be helpful if you’re planning to spread the cost of a big purchase over a number of months
• If you occasionally carry over your balance to the next month, then a competitive standard APR might be worth investigating

October 28th, 2016 | Andrew Hagger | News

To coincide with Good Money Week 2016 starting on Sunday 30th October, a new report from Castlefield Advisory Partners claims that Tracker funds are financing activities that are damaging people and the planet, pumping hundreds of millions of pounds into tobacco and fossil fuel companies.

John Ditchfield, Partner at Castlefield, said: “Trackers might appear to be a cheap investment solution, but we are concerned that people may not be fully aware that they are financing damaging social and environmental activities and putting investors’ money at risk.”

“Automated robo-investors are pumping hundreds of millions in pension savings and other investments into businesses which individuals would not choose to support and may actively want to avoid, for example tobacco and heavily polluting fossil fuel companies.

“More than 70 countries have ratified the Paris Climate Agreement and it is about to come into force, but a large chunk of tracker capital is invested in coal, oil and gas, exposing investors to serious risk.”

A new Good Money Week survey from Triodos Bank, released alongside the Castlefield report highlights how worried consumers are about these findings.

• 60% believe people should avoid investments that negatively affect people, society and the environment;
• 47% would move their money if they found their investments conflicted with their values.
• Nearly half (47%) have no idea which companies and industries their money is supporting.
• Investors want transparency – 48%, think that it should be standard for banks and other financial advisors to make customers fully aware where their money is invested.

For more information on ethical money issues, please take a look at Good Money Week and  Castlefield Advisory Partners.

ENDS