February 24th, 2016 | Andrew Hagger | News

Two months into the New Year and it feels like deja vu with the credit card companies’ hell bent on pushing interest free cards.

One of the downsides of this strategy is that that some of the more versatile credit cards offering a range of flexible features are often overlooked.

If you’re considering a new credit card, all the adverts continue to try to lure you towards the longest interest free plastic on the market.

For some people these won’t be a good fit and they may be better off with a low rate credit card, with no introductory gimmicks – plastic they can they can stick with for years to come.

While promotional switching offers can cut your interest costs if used wisely, there are too many people simply ‘treading water’ and continually shifting their debt just to keep repayments manageable.

It’s now possible to get up to 40 months on free credit on balance transfers, but watch out for the balance transfer fee – hitting almost 3% in some cases.

Another issue often overlooked in the rush to sign up for an interest free deal is the ‘go to’ rates when the introductory deal finishes. In some cases these are touching 20% APR.

If you’re financially disciplined enough to take advantage of the 0% period and repay your balance at minimal cost that’s fine, but if you’re looking for a card to remain in your wallet for the longer term, there are some alternatives with a wider range of attributes and benefits and a more favourable long term interest rate.

No gimmick low rate cards such as Lloyds Bank Platinum at 6.4% APR, AA Low Rate card at 6.9% APR or Tesco Club card charging 7.8% APR all make a good longer term companion for your wallet.

Other examples of excellent all round cards include the MBNA Everyday Plus at 7.4% APR with no charges for using abroad or ATM charges and the Nationwide Building Society Select at 15.9% APR with 0.5% cashback and commission free purchases overseas (for Nationwide current account customers).

The Halifax Clarity credit card, a long standing holidaymakers favourite is worth a look too, although less of a standout deal since it increased its rate to 18.9% APR in line with the vast majority of cards.

When you weigh up the sum of the component parts of these cards, they deserve to be highlighted in the shop window rather than hidden away under the counter.

February 16th, 2016 | Andrew Hagger | News

Home insurance premiums have climbed sharply in the past three months as tax rises take effect, new analysis from insurance market research experts Consumer Intelligence shows.

Average premiums have risen 3.1% to £119 in the past three months following the introduction of Insurance Premium Tax increases in November.

Consumer Intelligence’s analysis – which is used by the Government’s Office of National Statistics to calculate official inflation statistics – found the tax rise is being passed directly to homeowners reversing years of falling premiums.

Recent storm and flood damage could exceed £1.5 billion, according to analysis, and will increase the pressure on premiums.

Consumer Intelligence’s research monitors the five most competitive home policies across price comparison websites and direct insurers and underlines the need for homeowners to review their premium at their next renewal.

Homeowners aged 50-plus are paying slightly less on average than younger customers – average premiums for over-50s are £110 compared with £127 for the under-50s.

But price rises are relatively similar in the past three months – for the over-50s premiums are up 2.9% compared with 3.3% for the under-50s.

Home insurance customers can take some comfort from recent price falls – average premiums are still slightly below the rate of a year ago but only by 0.8%. However they are 9.5% lower than in 2014.

February 16th, 2016 | Andrew Hagger | News

New research reveals that 1.2 million Millennials (18-34) have ignored a payment such as the last month of a phone contract or a household bill. Nearly a third (31%) of this age group has been rejected for a financial product such as a mortgage or store card because they have defaulted on a repayment.

This is despite the average outstanding amount being less than £8. Defaulting on any payment – big or small – can cause difficulties in the future because of the negative impact it has on someone’s credit score.

Phone contracts are the most readily ignored bills. 16% of young people admit to ignoring the last payment of a contract, this figure is three times higher than the proportion of older people who admitted they had done this.

A lack of knowledge could be the route of the issue: 62% of the UK population don’t feel informed about the repercussions of missing a payment and this number rises to 70% amongst the Millennial generation. The most common reason people gave for missing a payment was that they already thought the final payment had been paid (27%) but almost a quarter thought it didn’t matter.

CEO and founder Justin Basini comments, “Missing a minor payment may seem harmless at the time, but it can come back to haunt you.

The consequences of defaulting on a payment – even it’s just a small amount – can be huge. A lender will take into account the information in your credit report before giving you a mortgage or a credit card. This isn’t just about how much you owe or earn, but more importantly how you have managed your credit in the past.

Unless it’s a bank or credit card firm, organisations aren’t legally required to let you know you’re about to default on a payment. The onus is therefore on us to keep track of what we owe to whom. If you’re not sure whether there could be an unpaid bill lingering, arm yourself against the disproportionate punishment of being rejected for credit by checking your credit report online for free.”

February 15th, 2016 | Andrew Hagger | News

New research from Amigo Loans reveals over one million sole traders have been given the cold shoulder by mainstream lenders, with nearly a third of one man bands admitting they’ve been turned down for a loan.

Of those who have been refused, a quarter think they would have a better chance seeking funding by asking a stranger on the street, with a quarter preferring to look down the back of the sofa!

The survey of 500 sole traders found that when refused credit, entrepreneurs are turning to their nearest and dearest for financial support. Two fifths (40%) turn to family and almost a third (30%) look to their friends to give them a helping hand.

Despite support from loved ones, a worrying two fifths (42%) of business entrepreneurs are also dipping into their overdraft to fund their aspirations. This comes despite the fact authorised overdraft fees have hit record highs this summer as the banks introduce new usage fees. These fees have forced the cost of using an overdraft up to six times that in 2009 with the typical cost of an authorised overdraft now £140 a year. If the overdraft isn’t authorised this can be substantially higher with charges of up to £35 for each payment made.

However, what is perhaps more alarming is that over 1 in 20 business start-ups which have been turned down by mainstream lenders didn’t look anywhere else to support with funding. This means nearly 73,000 potential businesses may have simply faded away because they haven’t been able to access the funding they needed.

Glen Crawford, CEO of Amigo Loans, commented: “It’s a disgrace that the people who keep our society operating, the mobile hairdressers, the wedding photographers, cleaners, cafe owners, mechanics, driving instructors and a whole host of other ambitious sole traders are being alienated by banks –the bankers have forgotten why they exist.”

“Whilst some responses may be tongue in cheek, our findings outline the clear lack of confidence people have in high street lenders. At Amigo we have the flexibility to lend to microbusinesses because of the way we lend. If a borrower’s family and friends trust them and they can afford the repayments, we’ll support any business. We have already helped over 6000 businesses across the UK”

February 11th, 2016 | Andrew Hagger | News

Almost 23 million households (84 per cent) across the UK have taken steps to make their bills more affordable, according to new research from Santander.

Highlighting a nation of ‘sofa-eskimos’, more than two thirds of Brits say they layer up at home with gloves, hats, scarfs and extra jumpers in an attempt to keep warm and reduce their fuel bills.

Drinking more hot drinks (33 per cent), getting into bed instead of sitting on the sofa (22 per cent), blocking off areas of the home (20 per cent), and using the oven to warm up (17 per cent) are also common ways people avoid that extra notch on the thermostat. Freezing temperatures have even driven three million Brits (six per cent) to spend more time than usual at work, simply because it’s warmer.

A Spokesman for Santander, said: “As bills get more expensive in the winter months, our research shows households are being very resourceful and finding clever ways to reduce their overall expenditure.

“There are a multitude of methods to help manage and reduce bills. Households should check they have the best deal by comparing energy providers, look to take advantage of cashback and loyalty offers, and it’s often cheaper to pay by direct debit.

Lifestyle sacrifices

Looking ahead, two thirds (62 per cent) of households expect to make significant lifestyle cut-backs within the next year in order to pay their energy bills. These range from taking on a second job or extra hours (22 per cent) and sacrificing holidays (17 per cent) to cancelling TV subscriptions (15 per cent) and even downsizing their home (six per cent).  According to the bank’s research, the number of households resorting to these measures is on the rise, as just 42 per cent made these same sacrifices in the last 12 months.

February 11th, 2016 | Andrew Hagger | News

With the Easter break just around the corner it’s that time of year when many of us aim to get those eagerly anticipated home improvement jobs and DIY projects underway.

Few of us are fortunate enough to have sufficient cash in the bank to pay for that kitchen makeover, revamp of the bathroom, or landscaping the garden, so picking the right finance is important if you’re looking to keep the costs in check.

It’s important to do your homework before signing on the dotted line for a loan or credit card as making the wrong choice can end up costing you a lot more than it ought to.

There are plenty of options when it comes to borrowing the money you need, but don’t fall into the trap of assuming that taking a loan from your own high street bank is best the way to go.

If you’re looking to borrow £7,500 or more then yes the banks are keen for your business and are offering some very tempting deals at the moment , including M&S Bank at 3.3% APR, one of the cheapest interest rates ever seen for unsecured borrowing.

However if you only need two or three thousand pounds towards the cost of your home improvements, this is where the banks are much more expensive.

If you wanted to borrow £3,000, the average personal loan rate is a whopping 16% APR with some high banks charging as much as 29.9% APR, so you can see that it makes sense to shop around to avoid being ripped off.

If you’re comfortable that you can afford to repay what you borrow within the next two years, it’s worth considering a credit card offering zero per cent interest on your purchases.

The best buy interest free credit cards from Post Office Money and Sainsbury’s Bank are worth a look, giving you 27 months and 25 months respectively to repay your borrowing without charging you a single penny in interest, as long as you make the repayments on time.

If you’re not sure you can manage to repay within that sort of timescale but still want a very affordable option, another smart choice is the Everyday Plus credit card from MBNA.

This credit card charges a very competitive rate of interest of just 7.4% APR but unlike the vast majority of credit cards, this particular card enables you to transfer money into your bank account without a transfer fee, and so gives you much more flexibility.

Just as you spend hours thumbing through brochures and checking out websites to ensure you get that perfect new look for your home, It’s just as important to compare what’s on offer when it comes to sorting out the money stuff.

So while you’re on the lookout for those new kitchen appliances or getting a quote to give the bathroom a makeover, don’t forget to check out the specialist personal finance websites too.

Sites such as www.moneynet.co.uk will point you in the right direction for the latest low cost credit card and personal loan options.

Taking an expensive loan from your bank may well be something you later regret, so, don’t leave your choice of finance to chance.

February 11th, 2016 | Andrew Hagger | News

Brits are set to spend £431 million this Valentine’s Day as 41% of UK adults plan on celebrating with their loved ones according to new research from American Express.

Contrary to popular belief, spending on the special day extends beyond the honeymoon period. Couples who have been together for four years will splash out the most, spending more than double (£46) the national average (£20).

Furthermore, the research reveals that romance does stand the test of time, albeit at a lower price tag, with those who have been in a relationship for over 51 years spending an average £11 on their nearest and dearest.

When it comes to expressing ourselves, we are still a nation of traditionalists, with the majority (61%) of people opting to send a card rather than turning to social media (8%) to share messages of affection with their loved ones. Unsurprisingly, the most popular gifts continue to be flowers (34%), chocolates (34%) and champagne (17%).

February 3rd, 2016 | Andrew Hagger | News

A third (30%) of UK adults have admitted to using something personal, such as their date of birth, maiden name or home address to create their password, much of which is easily accessible online. Almost half (44%) said they rarely or never change their online password – further increasing the risk.

The findings also show that, when it comes to protecting their information on mobile devices, many Britons are leaving the door wide open to fraudsters. Four in 10 (37%) don’t password-protect their mobile devices and less than one in ten (9%) are concerned that their online security could be compromised by cybercriminals through mobile apps, many of which hold vast amounts of personal data.

The Experian research shows a trend that as awareness of data breaches increases, so do people’s expectations of organisations to safeguard their personal information. This may be part of the reason many are falling behind in protecting their own information from fraudsters. 77% now believe it is the responsibility of organisations to ensure they are well protected online, almost twice as many as in 2012 (40%).

Amir Goshtai, Managing Director at Experian says: “Whilst most of us take the necessary steps to protect our homes from burglars, not everyone is taking the same care to protect their possessions online. We wouldn’t use one key for all the doors and windows in our home – and most of us wouldn’t leave a key in the front door so anyone could get in. So we encourage people to think of their ‘21^st century keys’ in the same way – things like the passwords we use to secure the doors to our personal information online.”

Experian has partnered with the City of London Police to encourage people to review their ‘21^st Century Locks’ to protect information from the growing threat of online identity theft.

February 3rd, 2016 | Andrew Hagger | News

The big supermarket brands have been successfully selling financial products for just shy of 20 years in the UK and the keen rates and discounted deals continue to make them a popular choice.

With all the accounts and cards being sold online or by phone the overheads are less of a burden and that translates to keenly personal finance deals regularly appearing in the best buy tables.

With no bank branches to maintain or the cost of extra ‘in store’ staff eating into profits, this ‘lean and mean’ business model gives the supermarkets a distinct advantage.

As well as competitive pricing, there’s the convenience factor including free parking right outside the front doors, 24 hours a day in some cases – something that most high street banks can only dream of.

The advertising is polished and literature cleverly positioned to ensures millions of weekly shoppers can’t help but notice the display of money and insurance advertising staring them in the face as they put their weekly groceries on the conveyor belt.

Whether you’re looking for credit cards, personal loans, mortgages, savings, insurance or travel money the shelves are stacked with award winning top value deals.

Credit cards offering reward points is a very strong product area built on the huge success of the Clubcard loyalty scheme at Tesco and Nectar brand at Sainsbury’s.

Similarly the cash back credit card from ASDA which gives you 1% back on all grocery and fuel spend is another popular loyalty based product and one that ASDA say isn’t going to be axed or cut any time soon.

Unsecured borrowing is a particularly strong area with Sainsbury’s Bank featuring prominently in the best buys with the third longest interest free term for card purchases at 25 months with Tesco Bank not far behind at 21 months.

Similarly Tesco Bank and Sainsbury’s Bank are also in the top ten for zero per cent balance transfer deals at 38 months and 37 months respectively – in touching distance of the 39 and 40 month market leading deals from MBNA Platinum and Halifax respectively.

Supermarket banks are just as competitive in the personal loans space and have dominated the best buy tables over the last three years

For loans of £7,500 and £10,000 Tesco Bank charges just 3.4% APR representative and is a top five player along with the likes of M&S Bank and Yorkshire Bank.

Tesco is also establishing itself as a credible threat in the mortgage market particularly for longer term fixed rate deals.

The supermarket banks have always excelled at offering simple no nonsense products and savings accounts is another area in which they fare well

Whilst the top slots in the savings best buys tend to be occupied by the less well known banks and niche financial players, both Tesco and Sainsbury’s are never too far off the pace with their pricing and frequently offer a better return than the main UK banking brands.

Tesco Bank also has its own current account which offers an excellent all-round proposition with Clubcard points on debit card spending, a competitive overdraft rate and credit interest of 3% on balances up to £3,000.

Switching numbers have been better than many of the big banks and that’s not really a surprise with many consumers seeing current accounts as an alternative home for some of their savings nest egg.

There’s frequently talk of challenger banks threatening the monopoly of the big high street banks, however it’s the supermarkets that have the dream combination of a huge weekly footfall and simple competitive product ranges to really make a difference.

February 1st, 2016 | Andrew Hagger | News

The peer-to-peer lending industry lent more than £2.2 billion in 2015 according to new figures released today from the Peer-to-Peer Finance Association (P2PFA).

The sector has now lent £4.4 billion in total, doubling in size since the end of 2014. In the final quarter of 2015, P2PFA members provided just under £650 million in new lending.

The figures also show a growth in users of peer-to-peer lending. In the past 12 months, the number of lenders increased by more than a fifth (22 per cent) to just over 128,000, while borrowers have almost doubled (96 per cent) to 273,000.

Christine Farnish, Chair of the P2PFA, said:

“Year-on-year, peer-to-peer lending continues to grow and have a strong impact across all markets. The growth demonstrates that more lenders and borrowers believe our industry to be a real alternative to traditional lenders. This is only enhanced by our members’ approach to transparency and strict business conduct rules.

“2016 is another important year for the industry as we look forward to the April launch of the Innovative Finance ISA.”