March 13th, 2015 | Andrew Hagger | News

Scottish Friendly has called for the issue of formal ‘think again’ warnings to be issued to customers wishing to cash in all or part of their pension when the new pension freedoms take effect next month.

The savings and ISA provider says that guidance alone from bodies such as Pension Wise and Citizens Advice is not enough to prevent people putting their hard-earned pension savings at risk.

A spokesman for Scottish Friendly, said: “Like many in the industry, we have concerns that people will make investment decisions that could fall flat and ultimately leave pensioners without any source of income. Those retirees planning to invest into property are of particular concern as the volatile nature of the market could leave thousands of people penniless if the housing bubble was to burst.

“The prospect of considerable numbers of people using their pension to buy property for buy-to-let purposes is a very real and present danger to them and the wider long term economy. The industry needs to be doing a lot more to alert people to the risks they could be taking before they take the decision to withdraw all their money to fund this type of investment.”

It added “For those with modest pensions, putting all their money into property represents a real risk compared to those with larger pots who could use property as part of a diversified portfolio. Putting all their money into property means they would in effect be running a business, they’d have no access to their capital and there is no certainty that their property will generate the income they originally envisaged. Unlike regulated investments where customers are protected by Treating Customers Fairly rules, investing in buy-to-let property moves outside this protection.

“It is good that pensioners have access to guidance from such bodies as Citizens Advice and Pension Wise, but this relies on the individual reaching out to examine their options. A more formalised approach also needs to be adopted that ensures that all retirees are alert to the potential downside of drawing down all or part of their pension savings and in particular the risks of using buy-to-let for retirement income.”

March 6th, 2015 | Andrew Hagger | News

Up to one million people nearing retirement age still owe money on their mortgage, according to a new report.

The latest research from LV= looking at the finances of retirees reveals that less than one in four over-50s were planning to seek professional financial advice before they retire.

These numbers are worrying ahead of the government’s pension changes next month which will give people the chance to use their retirement savings as they wish.

LV= said that a third of people do not understand the new rules or how the changes will affect them.

Some may simply not be able to invest another property as a way of providing a monthly income with a million mortgages yet to be fully repaid by retirees.

It is estimated that more than four million current retirees have outstanding debts, with more than half of these owing money on credit cards.

A spokesman for LV= Retirement Solutions, said: “In just a few weeks those approaching retirement will have even more choice as to how they take their pension income. This is a great opportunity for pension savers and the men and women who take advantage of these new rules could significantly boost their income.

“We would always encourage people to seek financial advice to ensure they make the most of the savings they have spent a lifetime building. We believe that it is crucial that the industry works together to demonstrate the value of guidance and advice to savers.”

March 6th, 2015 | Andrew Hagger | News

Mobile phone giants O2 and EE are hitting customers in the pocket with a 1.1% price increase.

The hike in prices comes just over a year since the regulator OFCOM ordered mobile phone providers to allow customers to exit their mobile phone contract without paying any penalty if the cost of monthly their monthly tariff was increased.

The downside is that this ruling only applied to customers who signed contracts on or before 23 January 2014 when the new rules came in to force.

Customers who signed up after this date have it written into their contract that the provider is allowed to increase their monthly price mid-contract.

O2 said customers on a Sim Only tariff, or one of its non-refresh Pay Monthly tariffs, paying £28 a month would see their bill rise to £28.30 from their April bill onwards.

It is also upping some bundle call charges from 1 April including the cost of making voice calls in the UK which will rise from 40p to 45p a minute from 1 April.

EE Pay Monthly customers who have been on their existing tariff since before 11 February 2015 will see their bill rise by 1.1% from 26 March.

Pay monthly customers who joined or upgraded on or after 11 February 2015 won’t see any uplift in the cost of their tariffs until March 2016.

EE calculates that the tariff increase move will add around 31p per month to the average bill.

March 5th, 2015 | Andrew Hagger | News

Three-quarters of UK adults – approximately 38 million people – worry that they aren’t saving enough money – yet many admit to wasting significant sums each month according to research by Standard Life.

The average UK adult ‘wastes’ £52 per week, money which they feel could have been ‘saved or better spent’ – totalling £2,704 per year. Additionally, they could reduce their spending on average by £92 a month without it having an impact on their lifestyle.

The research indicated that many people favour short term gratification over larger long term gains.

More than 36% of UK adults said they would rather have £100 now than £1,000 in five years’ time. The main reason for favouring the short term was impatience – 45% said five years was just too long to wait.

Furthermore, over half find it hard to resist spending all of the money they earn each month – rising to 69% for those aged under 35. ‘Impulse purchases’ drive this, with 14% making an impulse purchase of over £50 in the past month which they regretted.

And it doesn’t take long for regret to take hold – for 54% it kicks in within a day of spending it.

Over half of adults feel they don’t have enough money left over at the end of each month to make saving seem worthwhile – but this ‘worthwhile’ amount was revealed to be surprisingly high.

On average, UK adults believe that £145 is the minimum amount worth saving each month. Men have a higher threshold in terms of what is considered worthwhile (£174 vs £118 for women).

A Standard Life spokesman said: “It is clear from the research that a large proportion of adults don’t have enough savings to give them peace of mind.“

“An ISA is a fantastic way to start saving regular small amounts of money – you could start by putting aside just £50 per month. Saving through an ISA offers fantastic benefits; unlike other accounts, any interest on your cash balance or gains from investments are tax free, which can help savings grow faster over time.”

February 26th, 2015 | Andrew Hagger | News

Almost two-thirds of remortgage customers in January switched deals to take advantage of the new lower mortgage rates that are currently on offer, according to research from LMS.

The company surveyed customers opting to remortgage at the start of the year and found that almost one in five (19%) homeowners increased the size of their loan by more than £10,000 to free up capital to pay off other debts or spend elsewhere.

Releasing equity in their home meant that 19% were able to fund home improvements, while over one in ten said they would use the extra capital to consolidate their debts.  This is 2% more than the number who did this in December, highlighting that families are still feeling the pinch post-Christmas. A small number of homeowners also said they planned to use the money to help their children onto the property ladder.

Four in ten customers were motivated to remortgage by the potential cash savings on offer and the opportunity to reduce their monthly mortgage repayment..

More than eighty per cent of borrowers switched lenders, while just 2% were incentivised by their existing lender to stay with them, a sign that lenders could be doing more to keep current customers.

Almost half of customers consulted with an independent mortgage adviser or broker – a marked improvement since December when only 37% did this – to highlight the value that advisers and brokers have in sourcing the best rates available to customers.

February 26th, 2015 | Andrew Hagger | News

This week a new index was launched that tracks historic returns of major peer-to-peer providers Zopa, RateSetter and Funding Circle.

The latest data reveals that peer-to-peer investors have enjoyed an average rate of 5.09% over the last 12 months and an impressive consistent level of return ranging between 4.5% and 6.2% over the previous nine years.

Compare these numbers with the rock bottom rates on offer from bank and building society deposit accounts and despite concerns at a lack of a 100% watertight FSCS type guarantee, month by month more savers are dipping their toes into the P2P waters.

A quick look at the range of rates advertised on RateSetter on Monday showed 4.2% for 1 year, 5.8% for 3 years and 6.6% for 5 years – a far cry from the best buy fixed rate savings bond equivalents of just 1.75% for 1 year, 2.5% for 3 years and 3.03% for 5 years.

In each of these three deposit terms the very best traditional savings bonds are delivering less than half the return on offer from the fastest growing UK P2P provider.

The new index was welcomed by the key players in the alternative investment field at the unveiling on Monday, with Giles Andrews of Zopa saying that he expected the index to become a useful and impartial tool in measuring returns in the future and that it would help increase transparency in the industry.

Similarly Rhydian Lewis of RateSetter referred to the Index as ‘another building block in the emergence of peer-to-peer as a proper asset class’.

“Transparency is absolutely crucial. It’s our skin in the game, and will ensure we maintain the trust of our customers for the long term” were the words of Samir Desai from Funding Circle.

With the difference between alternative and traditional returns showing no signs of narrowing and the P2P industry now lifting the bonnet for all to take a look inside, the case for alternative lending has just got that little bit stronger.

January 14th, 2015 | Andrew Hagger | News

New research from Gocompare.com has found that nearly half of UK consumers didn’t switch any of the 10 most popular financial products in 2014, including car insurance, home insurance, energy provider, bank account and broadband.

Astonishingly it found that 1 in 5 admitted to NEVER having switched their mortgage lender, bank, car insurer, home insurer, broadband provider, mobile phone or landline providers, energy provider, savings account or credit card .

59% of the 2011 UK adults who took part in the research felt that the worst effects of the Government’s ‘austerity’ measures were still to come and 55% were expecting 2015 to be a tough year financially. However, Gocompare.com found that millions of consumers could be saving £4.7 billion between them on just three common household expenses.

The most switched financial product is car insurance with 35% of drivers changing their insurer in the last 12 months. However, 34% have not switched in the last three years and half of those (17%) have never switched.

Home insurance is another product which is easy to switch and 29% of consumers did just that in 2014.  32% of householders have not switched their home insurer in the last 3 years including 21% who have never switched. Those customers could be missing out on a collective saving of £611 million.

Lee Griffin, Gocompare.com’s insurance spokesman, said: “Loyal customers are throwing away billions of pounds of savings by sticking with the same financial services and household utility providers year after year. Consumers who don’t regularly ditch and switch uncompetitive products and services such as their car and home insurance, energy tariff, mobile phone and broadband deals are paying out hundreds of pounds a year more than they need to in household bills.

“There are considerable savings to be made, but the only way to be sure of getting the very best deal is to check it for yourself by comparing what’s on offer from the competition. If your insurer, bank or energy provider thinks you’ll be happy to stay and keep paying over the odds, they’ll be equally happy to let you.

January 14th, 2015 | Andrew Hagger | News

Lloyds Bank has today a new travel notification service for online and mobile banking customers, which enables customers to let the bank know when they are going abroad.

Once customers are logged in to their online or mobile banking, they can now go into their profile and update the dates that they are going to be overseas, with the notification immediately effective.

The new travel service means that customers have greater choice to advise the Bank of their travel plans.

The travel notification can be set up  from the Internet Banking homepage, where customers can also add their travel destination and the dates of their travel.

The bank hopes that this initiative will give customers greater confidence and peace of mind when spending abroad, whether that’s paying for a hotel, meal or hire car.

Adrian Bryant, Director of Digital at Lloyds Bank commented: “We know that our customers find travel notification a useful service and previously they would have had to visit a branch or activate this through telephone banking. Enabling customers to provide us with this information in real time means that they can do it where and when it’s convenient for them, even if that is 2am in a departure lounge.

With digitally active Lloyds Bank customers now able to take advantage of the new service, it is expected that travel notifications will increase by around 50% over the next 12 months.”

May 6th, 2014 | Andrew Hagger | News

Around twenty per cent of travelers over the age of 50 go on holiday without insurance, according to a new report.

A poll of more than 10,000 people by Saga Travel Insurance found that 17 per cent go abroad without cover, while a further quarter delay buying their cover, with many purchasing insurance in the month before they travel.

Saga warned that buying cover at such a late stage could leave people exposed particularly as cancellation claims account for a large proportion of the total travel insurance claims for this age group.

Regionally, those in the Midlands and Welsh Borders are most likely to travel without any cover at all.

The report also claims that Londoners are the most likely to wait until the last minute before arranging insurance, with 13 per cent saying they wait until a week or two before departure.

A spokesman for, Saga, commented: “Typically the over 50s book their holidays a long time in advance and it makes sense to take out cover at the same time to ensure you can claim back your deposit if for some reason you are no longer able to travel.”