April 12th, 2016 | Andrew Hagger | News

More than six out of 10 over-55s worry about the cost of continuing to live in their home city in retirement but want to avoid the hassle of moving, new research* from over-55s finance specialist Key Retirement shows.

Its unique study of the cost of living in the UK’s top 20 cities found 62% of over-55s are worried about making ends meet in retirement where they live –  but two out of three (66%) do not want to move out.

Key’s analysis shows the most expensive city for pensioners to live in is Brighton where the average annual cost is more than £13,266 a year, followed by London on £12,941 and Bristol on £12,058. By contrast pensioners in Cardiff enjoy the lowest annual cost of living at £9,723 – around 36% cheaper than Brighton – with Birmingham and Coventry joint second cheapest at £9,897.

Despite the possibility of major savings from relocating the study shows over-55s are reluctant to move – 63% say they like where they live while 35% say they don’t want the upheaval of moving and 29% are concerned about losing touch with family and friends. Younger people are more likely to relocate, the study shows. Around 57% of 18 to 34-year-olds say they would relocate when they retire.

Key believes property wealth can be a major factor in helping people stay in their homes – on average homeowners can release enough money from their homes to fund four years of living costs. In London the average homeowner can fund seven years of living costs.

Dean Mirfin, technical director at Key Retirement said: “Moving out of the city to save money can make financial sense but it is not an easy decision to make in retirement with the costs of moving as well as the risks of losing touch with family and friends to consider.

“But apart from all that, quite simply most people like where they live and want to stay there if they can afford it despite the rising costs.

“Property wealth can make a major contribution to increasing retirement income and enabling pensioners to strike the balance between living where they want and being financially comfortable.”

April 12th, 2016 | Andrew Hagger | News

Brits will need to tighten their belts ready for this wedding season, with new research from Policy Expert suggesting guests will be shelling out over £600 for each wedding they attend.

The average UK wedding guest will be totting up a total spend of £644 on gifts, food, new clothes, accommodation and stag and hen dos. More than a third (35%) of us even splash out on engagement presents, kicking off the spending spree long before the big day.

When it comes to choosing gifts for the bride and groom, the research found well over a third (37%) tread carefully and stick to the preapproved list, with other typical choices including cash and gift vouchers. Just 3.5% of those surveyed showed a little more imagination, stating they gave handmade gifts.

Unsurprisingly, mothers or fathers of the couple splurge the most at their children’s weddings – spending over £700 on presents alone. Second to this, grandparents spend around £245, followed by £144 for siblings, £78 from aunts and uncles and £57 for close friends.

If you’re looking to be showered with the most expensive gifts, don’t forget to invite your Scottish friends and family to watch you say ‘I do’, with the research finding that that on average Scottish guests spent the most (£58) on gifts, compared to a tight-fisted £39 in the South East.

Adam Powell, Head of Operations at Policy Expert commented: “If you or a family member is set to walk down the aisle this wedding season, it’s important to remember to check that the gifts received from generous guests as well as wedding rings and other valuables are covered in your home insurance policy. Policy Expert offers an additional 10% contents cover the month either side of your or your children’s wedding as standard, meaning you can cross the threshold on your return from honeymoon without any nasty surprises.”

April 12th, 2016 | Andrew Hagger | News

With the children back at school this week after Easter, people will soon be looking ahead to their 2016 summer holidays.

Lots of planning goes into getting the cheapest flight and best value hotel for the money, but when it comes to holiday plastic, many people stick with their everyday credit card and are paying over the odds.

Andrew Hagger of Moneycomms said it’s worth applying for a credit card that doesn’t charge overseas usage fees or cash withdrawal fees – you could easily save around £6 on every £100 currency equivalent ATM withdrawal and around 3% on every purchase made with your card.

Too many people rely on the cards they use in the UK but don’t realise how much they could save by picking the right card to pack with their passport.

For example, the new MBNA Everyday plus credit card doesn’t charge any foreign currency charge or cash withdrawal fee, so makes a perfect cost effective holiday companion.

Other credit cards worth a look are Metro Bank and Nationwide Select (although a current account is required) or alternatively Saga (over 50’s), Halifax Clarity or Post Office.

The table attached shows just how much the cost can stack up on a two week summer holiday – surely an £80 plus saving makes it worth taking the time to apply for a more suitable card to take away when you travel.

Even if you’re only going abroad for a few days the potential savings mean more money in your holiday kitty rather than adding to the profits of the banks.

April 7th, 2016 | Andrew Hagger | News

New research from Churchill Car Insurance exposes the ‘Jekyll and Hyde’ personality of UK motorists.  More than 57 per cent of drivers admit they behave differently when behind the wheel, acting more aggressively than they would normally.

Churchill compared displays of aggression on the road with those in person and found that while 31 per cent have sworn at strangers in the car, only 12 per cent have done so face-to-face. While 26 per cent of motorists have shouted at others while driving, less than half of that amount have done so in person. 

 One of the biggest catalysts for so called “Jekyll and Hyde” style driving is the mistaken belief that this behaviour is acceptable when in the car. Indeed when questioned, 27 per cent felt this was acceptable and psychologist insights support this. 

Drivers feel disassociated from their environment, their car a safe place allowing them to express anger and frustration at another driver and even at life in general without the risk of direct conflict. There is no one to criticise or in close contact, so people feel detached from situations and more able to express their feelings. 

Psychologist Donna Dawson said: “One of the reasons drivers exert such different behaviours when on the road is the belief that their behaviour is justified by the circumstances – we tell ourselves ‘the other driver caused me to react this way due to their bad driving. In other words, I am a perfectly reasonable person, reacting normally to another person’s bad behaviour.’”

Churchill’s research shows how dangerous the roads can be, with 29 million motorists (58 per cent) admitting to behaving aggressively while driving. Aggressive driving ranges from beeping horns (33 per cent) and swearing at other drivers (31 per cent) to deliberately tailgating (11 per cent) and chasing someone’s car in anger (four per cent).

April 7th, 2016 | Andrew Hagger | News

Research carried out by Skipton Building Society has revealed that many savers are missing out due to not understanding the rules and financial jargon that are associated with the new PSA and existing types of savings accounts.

Of the 2,000 people surveyed, almost half (47%) said they are confused by the rules associated with ISA accounts, over two fifths (44%) said they didn’t know what the maximum amount is they could put into an ISA and over a third (36%) didn’t know what the new Personal Savings Allowance (PSA) was.

The research revealed a clear lack of understanding on the savings landscape, one in five people admitted they didn’t save at all (19%), with one in ten of this group stating it is because they don’t understand enough about the different types of savings products (10%).

The research also shows that it’s not just savings rules that are confusing the nation, a fifth (22%) stated they didn’t know how ISA differed from standard savings accounts, and surprisingly one in ten (10%) said they didn’t even know what the acronyms ISA or PSA stood for.

April 6th, 2016 | Andrew Hagger | News

Research released today by HSBC indicates the UK public may be missing out on financial reward by not seeking professional advice.

Of the investments made to-date in 2016, two thirds were arranged without any financial consultation (68%). Over half of respondents planning to make an investment during the remainder of the year are unlikely to seek any advice (51%) and almost a quarter (23%) of those asked felt it was too expensive.

With a fifth (18%) of customers we spoke to during our research telling us that they are looking to make an investment during 2016, HSBC has launched Stand-alone Investment Advice following a successful trial period. The service is designed to provide financial advice for customers looking to invest single lump sums of cash from £15k.

One in five adults in the UK (22%) has £15K or more to invest. Despite this, there is currently a gap in the UK advice market where customers who have smaller amounts of money to invest can’t access the appropriate advice. This could mean customers leave their long-term savings in cash, sitting in bank accounts as seen by almost half of the respondents (47%).

With the introduction of Stand-alone Investment Advice at a 30% discount to full financial advice, HSBC says it is providing a more affordable service to customers as and when they need it, helping them to make the most of their money.

April 1st, 2016 | Andrew Hagger | News

The Personal Savings Allowance (PSA) comes into force from the start of the 2016/17 tax year and will reduce the amount of tax paid on savings interest for most people.

It is a radical new government scheme designed to encourage people to save more, it is conscious that it needs to incentivise savers at a time when interest rates are historically very low.

Up until the introduction of the PSA all bank and building society interest was paid net – i.e. after 20% has been deducted at source by your account provider (apart from ISAs).

The tax treatment of savings interest changes from 6^th April 2016 when everybody will receive their interest payments gross – i.e. without any tax deductions.

The PSA applies to interest earned on all non-ISA cash savings ,current accounts and Peer to Peer lending and will allow savers to receive a generous portion of their interest totally free of tax.

As a result of this move it’s expected that around 95 per cent of savers will receive their interest tax free – a change that gives the vast majority of savers an instant boost of 20% on their savings income.

The amount of tax free interest you will be entitled to under PSA will be based on your annual taxable income as follows:

• If you earn less than £43,000, i.e. a basic rate taxpayer, there will be no tax payable on the first £1,000 of savings interest earned each year.
• The tax free allowance if you are the higher rate tax bracket (earning between £43,001 and £150,000) has been set at reduced limit of £500.
• People in the 45% tax band, i.e. those with an income above £150,001 are currently not entitled to the PSA.

It’s a positive move that will see lower earners benefit from the largest allowance giving a welcome but long overdue instant boost to UK savers.

April 1st, 2016 | Andrew Hagger | News

Saving for retirement to ensure a decent standard of living in later life should be one of the most important financial decisions we adopt from a relatively early age, but people are being put off because pensions have become too confusing.

While rock bottom interest rates hasn’t helped our attitude towards savings, the constant meddling with pension rules and regulations means people simply don’t understand what they should be saving or what they are entitled to when they finally give up work.

Recent research from The Open University Business School (OUBS) highlights the level of confusion particularly around the new state pension.

According to OUBS findings 60% of employees aren’t aware that people who have been contracted out may not get the full amount of the new state pension and even more worrying is that almost a quarter of working people don’t know whether they’ve ever been contracted out.

The persistent meddling with rules and regulations has created too much uncertainty amongst would be savers and is a major reason why people are not putting sufficient monies aside for their retirement.

How can people be expected to plan for the future if the goal posts are constantly being moved? – until it’s clearer who gets what and how much people should be saving then the situation will not improve.

March 31st, 2016 | Andrew Hagger | News

Thousands of low-income households across England and Wales are being urged by the Consumer Council for Water (CCWater) not to miss out on a raft of schemes which could stop water bills from draining their finances.

Eighteen out of 21 water companies will have social tariffs in place from April 1, with the potential over time to significantly reduce water bills for almost half a million customers who are struggling to pay.

South Staffs Water, Cambridge Water and Dee Valley Water will become the latest companies to launch their own schemes next month, when the average water and sewerage bill across England and Wales is set to rise by £2 to £389. Portsmouth Water will also have a new tariff in place to help those on low incomes from July.

CCWater has welcomed the roll out of social tariffs, having worked with companies on their development, but warned that many households are missing out on the help available to them due to a lack of awareness or reluctance to ask for help.

Andy White, Senior Policy Manager at CCWater, said: “We know from our research that one in eight households feel their water bill is not affordable. Help is waiting for thousands of customers, but many simply don’t expect to be able to get assistance from their water company.

“Our message is very simple – don’t suffer in silence, ask your water company if you qualify for help. Social tariffs can reduce bills by more than 50 per cent in some cases, and are usually just one of the ways companies can help those facing financial difficulties.”

Wessex Water and Bristol Water already operate social tariffs but are both adding new schemes from April 1, targeted at helping those who receive Pension Credit.

The other water companies with social tariffs are Affinity Water, Anglian Water, Dŵr Cymru Welsh Water, Essex and Suffolk Water, Northumbrian Water, Severn Trent Water, South East Water, South West Water, Southern Water, Sutton and East Surrey Water, Thames Water and Yorkshire Water.

CCWater has produced a quick and easy-to-use online guide for households to check whether they might qualify for a social tariff which is available at www.ccwater.org.uk

The water watchdog has also teamed up with poverty relief charity Turn2Us to launch a Benefits Calculator and Grants Search tool on its website to help consumers work out if they could be entitled to additional financial support.

March 24th, 2016 | Andrew Hagger | News

Figures from Bacs reveal that more than a quarter of a million people moved banks in the last 3 months of 2015.

This means that 2.5 million customers have now used the official Current Account Switching Service to transfer to a new provider.

Santander, Halifax and Nationwide Building Society are still winning the biggest share of current account movers whilst Barclays and NatWest are losing the most customers to rival providers.

One of the biggest problems is that even with the new faster switching rules and switch guarantee in place, people don’t know which account to choose and are scared that they may end up with a product that isn’t any better than the one they already have.

Although each bank and building society has its own tariff and rate details clearly displayed on its website and marketing literature, working out which account is best can prove a big headache.

The dilemma for consumers is that no two accounts are the same, and difficulty in trying to compare the different rates and charging structures is probably one of the major reasons that customers have remained loyal and put up with a below average service.

There is not one bank account that’s the perfect fit for everybody, it’s more about weighing up the individual elements of an account that are most important to you.

For some people a low cost overdraft will be the priority, while for others interest payable on credit balances or a debit card offering low cost transactions abroad will be key.

I’ve carried out some research to try and establish which accounts are strongest in each of the different areas.

If it’s a cheap overdraft that’s most important, then it’s worth considering First Direct (first £250 interest free) or M&S Bank (first £100 free).

For those seeking interest on credit balances or reward for their custom, for balances of £2000 or less consider Halifax Reward or TSB Classic Plus and for £3,000 take a look at Tesco Bank.

Lloyds Bank and Santander 123 are tops for those with balances of £3,000 plus, with the latter being the market leader for balances over £5,000 – paying a very competitive 3% gross up to balances of £20,000.

Whilst some people may be put off the Santander 123 account because of the monthly £5 fee, remember it also pays cashback on your utilities direct debits, which in many cases will more than offset the cost.

If you’re seeking a cheap debit card for use overseas then Norwich & Peterborough Building Society offers this facility for free worldwide whilst Nationwide Building Society and Metro Bank are much cheaper than the main banks in this area.

Picking the wrong bank when it comes to debit card costs overseas can cost you a lot more than you’d imagine.

For many people there’s more money to be saved in this area than any other element of a bank account. Your two week summer holiday could easily see you shelling out an extra £50 or more in charges – for many customers that can save you far more than the amount interest you’ll earn on your bank account in a whole year.

Yet for others it’s not the nuts and bolts of the account that concerns them, all they want is the ability to be able to talk to a human being at a UK call centre 24×7 and to receive a good level of customer service, day in, day out. Consistently top performers for service continue to be First Direct and The Co-operative bank.

If you think it’s time you gave your bank the elbow, pick an account that reflects the way you run your finances rather than being swayed by a cash sweetener.