June 16th, 2016 | Andrew Hagger | News

As summer holiday season approaches, experts from Gocompare.com travel insurance are warning holidaymakers not to leave arranging their travel insurance to the last minute or risk losing their holiday costs if they have to cancel their trip.

According to research based on their own customer data, more than half (56%) of the holiday makers who purchased their travel insurance through Gocompare.com last year arranged their cover within a week of their holiday start date. This includes 9% who arranged their cover on the actual day of departure.

84% of travel insurance policies purchased last year through Gocompare.com were bought within a month of the holiday start date.

98% of single trip policies provide some level of cancellation cover which starts as soon as you purchase the policy, not on your date of travel. This cancellation cover provides valuable protection against events affecting you long before you even leave your home.

According to figures from the ABI, around 34% of travel insurance claims made by UK holidaymakers are for costs related to cancellations with an average claim value of around £700. This is second only to the average medical costs claim of £900.

However, insurers will only consider claims if they are prompted by events travellers could not have known about before buying their insurance. Therefore, the sooner they buy the policy, the more likely it is they’ll be covered if something happens between booking their holiday and going on their trip.

Cancellation cover would enable the holidaymaker to reclaim the costs of their holiday, up to the cover limit and minus any excess, should certain circumstances arise before going away. These may include a serious illness or injury affecting someone in the travelling party or a close relative, such as a parent, child or sibling, who isn’t travelling but with whom they would like to remain at home.

Having a serious fire or flood at home may be another reason why you might want to cancel or postpone your holiday, but may be covered for under your travel insurance policy. Also, you can’t usually refuse jury service because of a holiday booking, but if you didn’t know about it before you arranged your insurance you may be able to reclaim some or all of the costs of cancelling or postponing your trip.

June 13th, 2016 | Andrew Hagger | News

research by Tesco Travel Insurance has found that British travellers are set to pay out £112m to airlines in excess baggage charges this summer. The research found that over packing is rife, with just over 3 million passengers expected to go over their baggage allowance and many checking in more than one bag for their summer break abroad.

Most airlines offer some checked baggage included in the ticket price, or it is available to buy at the time of booking. However, this is usually limited to one bag per person with a maximum weight of 23kg. If travellers go over their allowance without realizing, they can be charged anything from £10 per kg up to £15 per kg of excess weight when they check in.

The good news is that the research also found that travellers are often packing items they never use, meaning these charges could be avoided.  The most unused items on holidays are excessive clothes and shoes, but also include make up, hair driers and tongs, and sun cream.

Of those who have been stung by excess baggage charged, the vast majority (79%) only found out about the charges when checking in at the airport, and 6 out of 10 travellers who were caught out by them were not expecting it.

To help travellers manage the cost of their summer break, Tesco Travel Insurance is currently offering new customers with a Clubcard 25% off all travel insurance policies purchased online between 8am on 13th June and 8am on 20th June** entering the  code FLASHSALE. Policies purchased during this period can start any time in the next 12 months.

David McCreadie, Managing Director of Tesco Bank, said “Customers could save a good deal of money by planning ahead and thinking carefully about what they take away with them on holiday. Tesco Bank has a great offer on travel insurance this week to help customers make their holiday money go that little bit further.”

June 7th, 2016 | Andrew Hagger | News

Failing to read the small print on travel insurance policies could leave holidaymakers out of pocket and at risk. A study of over 700 travel insurance products by Comparethemarket found that restrictions and exclusions on many policies can leave customers unprotected if something goes wrong.

Nearly half (45%) of products only offer cover for cancellation of any prepaid travel or accommodation expenses of less than £3,000 – the cost of cancelling a family holiday outside Europe could be considerably more.

Almost half (49%) of products only cover valuables worth £250 or less, and just over one in 10 products offer cover for valuables of £500 or greater. Holidaymakers carry laptops, iPads, expensive cameras and mobile phones, but due to their policy restrictions many will be unwittingly travelling with uninsured valuables.

Over one in ten policies provide no cover for missed flights and almost a third (32%) of products will not pay out for missed connections within the UK. Even if your policy does cover missed flights, customers often have to undergo a lengthy process to make a claim including getting confirmation from the appropriate travel authorities.

Terms and conditions of travel insurance policies are on average 26,392 words, the longest of any insurance product, which highlights the difficulty that customers face in understanding the details of their policy. On average, travel insurance terms and conditions would take 88 minutes to read – which may be off putting for consumers and encourage them to skip reading the small print and noticing important exclusions.

June 7th, 2016 | Andrew Hagger | News

New research released by Zopa shows Brits are renovating their properties to create their dream home for the long-term, with over two thirds (67 per cent) of people undertaking renovations saying they plan to stay in their property for five years or more.

Far from viewing their homes as just a financial investment, Brits are opting to create their dream home by investing in improvements to live in for longer, making the UK a nation of improvers not movers. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that only a quarter (27 per cent) either have had or plan to get their home revalued after renovations, and less than one in ten (9 per cent) said they would need to move to be in their ideal home.

So far in 2016, Zopa customers have borrowed over £50 million to improve their homes, a 54% increase on home improvement loans compared to the same period last year. The figures show that more and more people are choosing to use a Zopa loan to improve their most important asset: their home.

With personal loan rates at record low rates, an unsecured loan, currently offers one of the best value options for those looking to undertake a home improvement. Home improvers can spread their loan costs evenly over a number of years, and for the vast majority it can be much quicker than re-mortgaging which typically can take up to two months and can be a far cheaper option than using a credit card with typical purchase interest rates well above 20% APR when compared to a typical personal loan from Zopa that averages 8% APR and with an online process that takes under 2 days, Zopa’s current loan rates start from 3.3% APR.

In line with latest ONS data suggesting more people are choosing to entertain at home, space to host family and friends is high up on the list for people’s ideal home. A third (34 per cent) used their home improvement loan to revamp their kitchens and, of those who said their homes are not yet perfect, a fifth (19 per cent) cited a bigger kitchen as top of their wish list. This reflects recent data from HMRC that suggests home transactions for April 2016 are down 14% compared to same month last years, highlighting that people are opting not to move and sell up.

Far from heading to the estate agents after renovations, two out of five people say they are now in their perfect home. Of those who still don’t think their property is perfect, only one in five (22 per cent) said they would need to move. The most commonly cited areas for improvement were better décor (31 per cent), bigger kitchens (19 per cent) and more bedrooms (19 per cent).

June 7th, 2016 | Andrew Hagger | News

Nearly four million energy consumers were overcharged a total of £270 million or £72 each due to billing mistakes by suppliers in the last year, according to new research from uSwitch.

Over a third (36%) of those whose supplier had made a mistake said the wrong tariff or product details had been applied. Other blunders include providers applying incorrect fees (31%), using the wrong meter reading (27%) and setting inaccurate Direct Debit amounts (24%).

Breakdown of bill error types

Source: uSwitch.com survey, May 2016

Not only are billing blunders hitting consumers’ pockets, but also their time. Nearly a fifth (19%) waited between one and two months before the issue was resolved, with more than one in ten (12%) waiting over two months. Worse still, nearly one in ten (9%) consumers who were overcharged as a result of a mistake are yet to receive any money back from their supplier^[3].

A spokesman for uSwitch said: “Consumers have a right to expect correct bills. It’s unacceptable in this day and age that customers are picking up the cost of suppliers’ mistakes. Households are already trying to cope with the high cost of energy and can’t afford the additional cost of simple blunders.

“Accurate bills are essential if consumers stand any hope of taking control of their energy use and spend. Recent upgrades by some suppliers to billing systems have resulted in teething problems, but today’s figures show there’s still more for the industry to do.

“We urge customers to always check their bills carefully, and speak immediately to their supplier if they think they have been short-changed. Consumers should also always provide up to date meter readings to avoid estimated bills, and check that the figure they provided has been used.”

June 2nd, 2016 | Andrew Hagger | News

Almost two thirds (62%) of the over 50s say they would be unlikely to take advantage of the suggestion from a recent government proposal to allow people to use their pension savings to pay for advice, according to new research from Retirement Advantage¹.

The research also finds that people who are not planning to use a financial adviser are put off by the cost of advice (38%) and the extent to which they can trust advisers (38%).

This new insight comes as the industry is beginning to question whether the £500 proposed allowance is actually going to be sufficient to pay for a comprehensive look at people’s pensions.

Andrew Tully, pensions technical director at Retirement Advantage, said: ‘While it sounds like a good idea to let people use their pension savings to pay for advice, it appears not only are people unlikely to take up the offer, but £500 won’t actually go that far.

‘Cost is clearly still a big issue when you ask people what the barriers are to seeking advice, alongside trust. On a positive note it is good to see government supporting advice and recognising the real value in people getting help and advice at retirement. The trick will now be to create a market which can service a wider range of consumers cost-effectively and also evidence the value of the advice being provided.’

The research also shows that the most common sources for financial advice among the over 50s are the internet (43%), financial advisers (43%) and the Government’s Pension Wise service (38%).

Andrew Tully added: ‘The internet is clearly a force to be reckoned with as consumers self-direct or simply use it to check facts and figures. What we’ve found from speaking to consumers is that many are using a combination of web research and professional advice. Far from posing a challenge, we could be on the brink of creating a real opportunity for advisers who are digital-savvy.’ 

1.    Research was conducted by YouGov Plc. Quantitative fieldwork conducted between 24 and 30 March 2016, surveying 1000 UK adults aged 50+ who have a DC pension and who are not in retirement.

June 2nd, 2016 | Andrew Hagger | News

Brits’ budgets continue to feel the squeeze, with regular household bills having increased by 20 per cent since 2007, according to the Bacs Bill Tracker.

The Tracker, created by Bacs Payment Schemes Limited (Bacs), the people behind Direct Debit in the UK, shows that by the end of Q1 2016 the average amount paid out by households in the UK to cover essential bills had grown to £674. This is up from £562 in March 2007 and represents an increase of 20 per cent, or £112 per month, equating to a hefty annual rise of £1,340.

Unfortunately for bill payers, average wage levels have failed to keep pace with these increases. In fact, over the period between 2007 and 2015, data from the Office for National Statistics (ONS)* shows that average wages grew by 12.4 per cent in comparison.

The Bacs Bill Tracker data is drawn from 100 million actual anonymised monthly transactions processed by Bacs as householders use Direct Debits to pay for their essential household bills, including energy, water, mortgages and rent, council tax, broadband and phone, TV licensing, and household insurances. It does not include elective personal bills such as gym memberships or mobile phone payments.

Mike Hutchinson, from Bacs, said: “These latest figures reflect the financial burden being faced as the cost of household bills increases steadily, while wages fail to keep pace.

“With 73 per cent of regular household bills paid by Direct Debit, this data gives a clear indication of the upward financial pressures across a basket of core bills. Splitting costs across the year could relieve some of the strain on hard-pressed family budgets and, with the discounts offered from many billers and service providers for paying by Direct Debit, there’s an opportunity to save some vital pounds.”

June 2nd, 2016 | Andrew Hagger | News

Half of the UK’s drivers believe that motor insurance is too confusing, with the overwhelming majority (86%)* believing that it needs to be easier to understand.

Research from the Co-op Insurance has found that over half (51%) don’t understand how their premium is calculated, two fifths are unclear why their premium price may fluctuate year to year and over a third (36%) don’t understand their policy price, in relation to their vehicle.

Research has also revealed that many people aren’t aware of some of the fundamental things that their premium is for. For example, 42% of drivers don’t realise it is in case another driver claims for personal injury, as a result of an accident that is their fault.

For two fifths of drivers, motor insurance is a grudge purchase, with over a tenth (15%) of drivers saying that they would not buy motor insurance if it wasn’t a legal requirement.
In response to this, the Co-op Insurance is today (2 June) launching the first, in a series of three, animated videos which has been designed to explain how insurance pricing works, to improve transparency for its customers.

The Co-op insurance is committed to improving transparency for its customers and members and this is the second part of a series of activity it has undertaken to do this, and make insurance easier to understand. Earlier this year it launched an online tool which was sent to over 10,000 home insurance customers, which was positively received, and fully explained how home insurance premiums are calculated.

The video aims to answer why premium prices cost what they do, in relation to the value of a vehicle. It explains what percentage of a motor insurance premium goes towards costs if a driver injured others, with a quarter going towards this. It also explains how about a fifth of the policy premium price goes towards repairing damage to other people’s property. A fifth also goes towards a policyholders own car for things such as, theft of the vehicle or repairs to fix damage to a policyholder’s own car in case of damage. It also outlines business costs and Insurance Premium Tax.

May 26th, 2016 | Andrew Hagger | News

 iCarhireinsurance.com, the leading provider of standalone excess insurance, this week launched its ‘Car Hire Hit List’, featuring ten top tips to save drivers up to £760* on a week’s hire.

The hit list is based on the hire of a compact family car for a week.  

1. Book early – iCarhireinsurance.com research found that in 2015 holidaymakers saved on average £100 if they booked their summer hire car in February instead of waiting until June. Last minute deals do exist but to guarantee a good price, and the car you want, book as soon as you can – Saving approx £100. 
2. Use price comparison sites – The price charged by car hire companies varies significantly so always shop around to make sure you get the best deal. E.g., Hiring a car for a week in 2015 (6-13 Aug) in Crete cost £291 with Europcar and £468 with Sixt. However hiring in Barcelona for the same week Sixt charged £245, and Hertz charged £369. Use a price comparison site to shop around as the price between companies can vary by hundreds of pounds – Saving approx £150 
3. Get the right sized hire car for you – Being unable to fit in that pushchair or extra bag could cost you over £100 to upgrade to a bigger car.  E.g., booking a compact car to pick up from Alicante Airport for a week in Aug (6 – 13 Aug) costs £233 if booked in advance, but if you need a Ford C-Max, which can carry three large suitcases and two small cases, on arrival, you would pay £456 at the location, compared with £314 if you’d booked it online in the first place – Saving approx £140. 
4. Shop around for car hire excess insurance – If a hire car is stolen or damaged even if it isn’t the hirer’s fault means they are liable for the excess which can be as much as £2,000.  Hire car companies charge on average £16 a day for excess insurance/waiver to protect drivers from this, but this can be as much as £28 a day!  Buy a standalone policy from £2.99 a day or £37.99 for an annual policy from iCahireinsurance.com – Saving approx £90 on a week’s holiday. If you travel more than once a year, an annual policy could save even more.
5. Take a spare credit card – If you don’t buy the car hire company’s excess / waiver policy they will often insist that the excess is held on a credit card until the car is returned undamaged. Take a spare credit card with you, as having £2,000 held on your one credit card could seriously limit your holiday spending. – Saving £110. 
6. Protect your tyres and windscreen – Often rental desks’ excess policies exclude damage to windows, tyres and undercarriage, and sell a separate Tyres and Windscreen excess policy for around £32 a week.  All iCarhireinsurance.com policies include, as standard, cover for vulnerable parts of the vehicle including windscreens, tyres, roof and undercarriage – Saving approx. £30. 
7. Sharing the driving increases the costs – Adding a named driver to your rental agreement could cost almost £10 per day and if the driver is under 25 this could be as much as £30 per day. If one of you is going to do 90% of the driving is it really worth the extra cost? Different companies charge different amounts, so if this is important to you, factor it in when making the booking. – Saving approx £70. 
8. Do you need a SatNav? – It can cost over £80[vii] to hire one for a week, and often this cost is not disclosed to you when you book. If you have a detachable SatNav at home, it is normally cheaper to upgrade to European mapping and take it with you, or consider getting a SatNav app for your smart phone – Savings approx £80 if you take one with you (or £30 if you buy one for £69.99). 
9. Hiring a car seat for your child can cost up to £70 for the week – Many airlines will take car seats in their hold for free, so consider taking yours with you. For older children why not purchase an inflatable booster child seat? Saving approx £70.   
10. Check the exchange rate – Some companies let you pay for your extras when you book your hire car, but others cannot be paid for until you arrive at your destination.  Changes in the value of the pound against the Euro can make a big difference in price so keep this in mind when making your booking. With theaverage cost of extras totalling £276 a 10% change in the value of the pound against the Euro can add or remove £30 from your bill. Saving approx. £30

Ernesto Suarez, Founder and CEO, iCarhireinsurance.com said, “When hiring a car the headline price is often not the price you actually end up paying, and often the prices for extras are not available until drivers reach the rental desk. We created this ‘Hire Car Hit List’ to help drivers get the best deal and avoid the pitfalls.” 

May 26th, 2016 | Andrew Hagger | News

Thousands of people in the UK are in the dark about when they’ll be credit checked for life events and financial products, according to a study from Amigo.

The research revealed being credit checked for a job (80 per cent), monthly insurance instalments (63 per cent) and renting a flat are among the top things consumers are not aware they’ll be credit checked for.

More seriously, 18 per cent didn’t know they would be credit checked when applying for a credit card, meaning they’re potentially hindering their chances of getting one. This was closely followed by submitting a mortgage application and a securing a personal loan. 

The life events and financial products Brits were unaware they’d be credit checked for

 Job – 80%

Monthly insurance instalments – 63%

Electricity and Gas direct debit payment – 56%

Flat rental – 50%

Mobile phone monthly contract – 37%

Overdraft extension – 49%

Store cards – 42%

Retail finance – 37%

Car finance – 27%

Personal loan – 24%

Mortgage application – 22%

Credit card – 19%

With only 12% of people actually knowing their exact rating, thousands could be in for a nasty shock when applying for a job, loan, mortgage or even renting a flat.

What’s worse, if you are credit checked and are declined, that process can actually damage your credit score even further.

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

There are a number of credit reference agencies available which allow people to check their score before applying for credit including Equifax, Experian and Callcredit.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: “There is a huge lack of understanding about when you’ll be credit checked and for which products. The days when you would be checked for just mortgage are long gone, even some employers are conducting full credit checks nowadays.

“It’s never been so crucial that people who think they do have a chequered financial history, take positive actions to improve their credit file so they avoid disappointment down the line.”