February 7th, 2023 | Andrew Hagger | News

Facing redundancy can be an intimidating time, therefore it is important to be aware of your rights and have a clear overview of your finances.

WEALTH at work have provided an overview of some of the key areas that employees will need to understand if they are made redundant.

1. Redundancy Entitlement: If your employer makes your job redundant and you are forced to leave the company, you may be entitled to redundancy pay. Redundancy packages are not set in stone, they vary according to the company but are also based on age, length of employment, and job role. For those who have been in the same job for at least two years, your employer is usually legally required to pay you. The legal minimum is called ‘Statutory redundancy pay’ however it is vital that you check your employment contract as you may be entitled to more. There are also plenty of online resources such as GOV.UK or Money Helper, which can help you understand your rights.

2. Taxation on redundancy payment – It is important to understand how much you will actually receive once tax has been paid. Usually, the first £30k is tax free, with anything over this being added to your income and charged at the marginal rate. Please note, employee National Insurance is not deducted from a redundancy payment.

For example, someone who has an annual salary of £36k, has earned £15k so far this tax year and is offered £50k redundancy would owe £4,000 in tax on their redundancy pay.

This is because the first £30k of their redundancy pay is tax free but the remaining £20k is taxable. As they have earned £15k so far this year, even with the £20k added to this, they are still within the basic rate tax band, so tax of £4,000 is due on the redundancy pay (20% of £20k). Please note, individuals could end up in a higher rate tax bracket, depending on their income and redundancy pay.

3. Review financial position and budget – Work out what assets you have, pensions, savings, ISAs, property and investments, and what liabilities you have e.g. mortgage, debt, childcare, insurance and utility bills.  Then look at any other household income and expenses. If the amount of money you need each month is more than the amount you have coming in, you can then work out what action you need to take to cover your costs. Money Helper has a great budget planner: Budget Planner | Free online budget planning tool | MoneyHelper

4. Debt repayment – If you can afford to, it might be worth using some of your redundancy payment to pay off expensive debts. There are many different types of debt with varying rates of interest.  Credit cards and overdrafts can have rates of 18 – 40%, with some payday loans having rates of 1,500% and more!

For example, a debt of £3,000 with a rate of 18% APR, could take 10 years and 10 months to pay off if paying £50 a month, with total interest of £3,495 paid. If that monthly payment was increased to £100 a month, the debt would be paid off in 3 years and 4 months, and interest paid would be only £908. If this was increased to £300 a month, the debt would be paid in 10 months, with total interest of £252 paid.

5. Mortgage overpayment – Mortgage interest rates tend to be significantly lower than other debts, and can include payment holidays for those who are made redundant. However, if they don’t have other debts, employees may want to consider overpaying on their mortgage. For example, with a £200,000 mortgage which has a 3% rate of interest over 25 years, an individual could pay £84,527 in interest over the 25 years. If this is overpaid by £200 a month, the interest reduces to £62,905 over 19 years. If this is overpaid by £400 a month, the interest reduces to £50,209, over 15 years and 6 months, and if this is overpaid by £600 a month, the interest reduces to £41,825 over 13 years. 

6. Can you afford to retire? – If you are nearing retirement age, you may consider the idea of retiring early.  Depending on your circumstances, this may be more achievable than you think. An individual could use their redundancy payment or pension tax free cash to pay off any outstanding loans and mortgages, and as a result, they may be able to maintain their standard of living. For example, someone earning £30,000 per year, once they have paid income tax (£3,006), National Insurance (£1,804), pension contributions via salary sacrifice (£2,400), mortgage (£6,000) and loans (£2,400), may end up with a disposable annual income of around £14,390. Realising that you may only need a retirement income of less than half of your salary to maintain your standard of living can be an eye opener, and make retirement a more realistic option.

7. What happens to your company pension? – It is fine to keep your pension with your previous employer and it will remain invested and safe until you retire. Some people prefer to move their pension to their new workplace pension scheme, or a private pension. There are benefits to this in that all pensions are kept together in one place, however, there can be a cost to transferring a pension; investment charges are not all the same and may not be lower, and the range of investment options vary between schemes. Make sure you check these things before moving your pension. 

8. Pay more into your pension – If you can afford to do so, it may be worth considering paying some of your redundancy payment into your pension to boost your retirement savings.  There are limits on the tax relief you can receive from pension contributions each year, so it will be important to check these carefully first.  For those approaching retirement, this may be a particularly attractive way of providing a final boost to the value of their pension pot.  

9. Beware of scams – Unfortunately, there are some really unscrupulous people in the world, who won’t think twice about scamming someone out of their redundancy pay. If you are looking for somewhere to keep your redundancy pay beyond just your current account, make sure you do your research. Before handing over any money, always check the firm is regulated by the Financial Conduct Authority (FCA).

Jonathan Watts-Lay, Director, WEALTH at work, comments;

“For organisations that are making redundancies, it’s really important that the workforce receive the appropriate support so they understand how it will impact their finances. It can be a really difficult time and it is crucial that they get help around areas such as how to budget, manage debt and cut down on spending and bills. Employees will also need to understand how much they will actually receive from their redundancy pay after tax, how to make it last if they don’t get a new job quickly, or how it could help them afford retirement when perhaps they thought it wasn’t a possibility.”

January 31st, 2023 | Andrew Hagger | News

Following the contact-free payment increase during the coronavirus pandemic, bank notes and coins are continuing to be phased out. But what does this mean in the context of the cost of living crisis?

James Andrews, personal finance expert at money.co.uk said

“Our research has revealed that 65% of people say they spend more when using their card or contactless payment device rather than cash, which doesn’t bode well for those struggling to budget during the cost of living crisis.

Many of those questioned also expressed that using cash instead of a card when doing simple things such as doing their food shop or eating out in restaurants would help them spend less. Proving that access to cash is vital for those hit hardest during the crisis.

It’s concerning that our research also found that despite a real cost of living need for access to cash, more than one in ten of our ATMS in the UK have disappeared in the last 10 years.

Going digital is fine in theory but when sections of society are struggling to make ends meet and find cash easier to budget with then there must be something done to slow the scale at which cash points are disappearing.”

FAQ’S

What are the advantages of ATMs?

24-hour service: The ATM provides service round the clock, meaning people can visit an ATM any time day or night.

Convenience: The ATM gives convenience to bank customers since they are often located in places such as airports and train stations, meaning customers don’t always have to be near a bank to obtain their cash.

Reduced workload: ATMs reduce the pressure and workload of bank tellers, which in turn reduces queues at bank premises.

What are the disadvantages of ATMs?

Security:  Unlike bank tellers, ATMs do not require the person performing the transaction to present a picture identification, they simply need the card and a pin number. This means if a bank card is stolen and the pin number somehow obtained, the criminal can get access to funds. Check out our guide on how to keep your bank details safe here.

Basic transactions: ATMs cannot perform complex transactions e.g moving money between accounts or sending money abroad, making them obsolete to some people.

Privacy: Unlike banks where premises are monitored by security guards, ATMs leave the user open to privacy leaks e.g someone behind them attempting to steal their pin number, or even cameras being placed above the ATM for the same purpose. For this reason, always shield the pin pad on an ATM with your hand while entering your pin number. Find out the four ATM scams you need to look out for here.

Fees: When using an ATM that isn’t part of your bank’s network of machines, the machine sometimes notifies you about a fee charged by the bank or company that operates the ATM. You can avoid this by only using ATMs that are part of your bank’s network, but this takes away the convenience factor.  ATMs also often charge fees when you are using a credit card rather than a debit card – find out more here.

Difficulty of use: For those who are unfamiliar with technology, using an ATM might cause some issues. An ATM is incapable of providing personalised instruction to the user in a way that a human teller can.

Eating a card: On occasion, an ATM may malfunction and swallow the user’s card. This will result in them having to contact their bank to retrieve it, and they may be left without a card for a period of time.

What is the future of the Atm?

Personal finance expert Salman Haqqi has shared his thoughts on the longevity (or lack of!) of the ATM, saying:

“The global pandemic saw many countries encouraging the use of contactless payments rather than cash, which saw ATM depletion in some countries across Europe. The UK has seen a 14% depletion in the past 10 years, which essentially means more than 1 in 10 have disappeared.

However, The new Financial Services and Markets Bill, announced in the Queen’s Speech at the state opening of parliament, is designed to shore up the country’s cash infrastructure for the long term.

This means ATMs will be protected and not allowed to become redundant in the UK, however, they may not remain as we know them.

Like most technology such as smartphones or computers, experts have predicted ATMs will evolve to include built-in finger-print or facial recognition, and they may give us access to financial advice. Furthermore, they could take on more of a traditional bank teller’s job, potentially allowing us to open new accounts, transfer money between existing accounts or make secure payments.”

January 23rd, 2023 | Andrew Hagger | News

• Saying they’ve found a problem with your computer and need access

• Asking for banking or card information, your PIN code or a password

• Mentioning anything related to PayPal or money transfers

• Stating your broadband had been hacked

• Mentioning your IP address and saying it’s been compromised

• Demanding or asking for anything

• Having an urgent or demanding tone

• Saying phrases such as ‘we are calling from your service provider’

• Ask them who your broadband provider is – If they don’t know, or the answer is something vague like Openreach, then the call is likely not genuine. Legitimate BT customer support staff would not refer to your provider as ‘BT Openreach’

• Ask them what model your router is – If it is a generic answer such as ‘BT Hub’ then be wary. If there was a problem, as they claim, they would already know straight away.

• Google the phone number that you received the call from. If it is a number associated with your provider, it will be made obvious. If it’s showing results used for a scam, be wary.

• They should never insist you run checks on your computer or ask for remote access to your computer.

• Always ask why – if they call you, the caller shouldn’t be asking any personal questions, especially not bank details or passwords. Never give out any of this information.

January 16th, 2023 | Andrew Hagger | News

With wet weather causing flooding and damage across the UK, and more rain predicted this week, Go.Compare home insurance is urging Brits to prepare and protect their homes and cars. There are a combined 258 flood warnings and alerts in England* and 76 in Wales**, causing widespread disruption in parts of the UK.

Ceri McMillan, Go.Compare’s home insurance expert, said: “With over 300 flood alerts and warnings currently in place across the UK, it’s important to consider the safety of our homes and cars – and there are several ways you can prepare and protect yourself.

“Firstly, keep a list of important numbers you may need to call if you are affected by flooding, including emergency services, your local council, your GP, and your car and home insurance providers.

“Additionally, check your home insurance documents carefully to make sure your policy covers flood, wind and weather-related damage. You can’t assume that you will automatically be covered for a weather-related claim as individual insurers and their policies will vary as to whether storm damage is covered. For example, extreme weather is not deemed a general peril for contents insurance.

“Before setting out on any car journeys, check for known flooding or obstacles on your routes, and only go ahead with your trip if it is safe to do so. If you encounter any flooding on the roads while driving, do not drive into it as you could get stuck.

“Putting together an emergency flood kit is also a good idea – include a first aid kit, essential medicines, a battery powered torch and radio, plus copies of your insurance documents, along with warm clothing, blankets, bottled water and snacks. Keep this kit in your car, and somewhere easily accessible at home, too.

“You may need to shut off your electricity, water or gas supply in the event of a flood – so make sure you know where your breakers and meters are located.

“If you think your local area is at risk of flooding, make sure to think carefully about where your car is parked – avoid valleys and ditches if possible as these will be the first to flood. At home, think about where your valuables are stored, moving them to a safe place if necessary.

“To reduce the risk of your home flooding, make sure all drains are maintained well – remove any leaves or debris and keep them clear. Clean gutters too, particularly in autumn and winter, when fallen leaves are more likely to cause blockages.

“If you do suffer flooding damage at home, make sure you record the time and date it occurred. Having these details to hand, along with photos or a video of the damage, will help you if you need to make a claim. We always recommend you pass on all the relevant information to your insurer as soon as possible after the damage occurs,” Ceri added.

Go.Compare has put together a practical checklist for prepping ahead of wet and extreme weather:

• Check your insurance – does your policy cover weather damage?
• Make sure you replace any cracked windows, fix any leaks and repair/replace any damaged sections of guttering
• Keep a list of emergency contact numbers, including your GP, insurance providers and local councils
• Keep a supply of sandbags in case they are needed
• Ensure pets are microchipped, and consider where you can safely send them if you need to evacuate your home
• If you know bad weather is on the way, walk around the inside and outside of your property and check to see if there’s anything that could be damaged or washed away.

Read Go.Compare’s guide to flooding and home insurance: https://www.gocompare.com/home-insurance/flooding-and-home-insurance/

January 3rd, 2023 | Andrew Hagger | News

1. Work out ‘your’ financial plan for retirement

Your expenses are likely to change in retirement, so work out what you think you will need to meet your day-to-day living expenses (such as household bills) and discretionary expenditure (such as holidays and hobbies).  Your current outgoings are a good place to start when working this out, but make sure you take rising prices on food and energy etc. into account.

It’s then a good idea to work out the value of all your savings and investments including pensions. You should bear in mind the impact of inflation on these. For example, those with a defined benefit scheme are likely to have some inflation protection, although often this is limited to between 2.5% and 5%.  Also, as announced in the Autumn Statement, the pensions ‘triple lock’ has been re-instated, meaning that the State Pension will now rise in April 2023 by 10.1%.

2. Can you afford to retire?

Do you have enough put aside to be able to afford to retire or do you need to work a little longer, or perhaps work part-time? Many people may be questioning this right now, especially if their pension has fallen in value due to market volatility. According to the Pensions and Lifetime Savings Association (PLSA), a single person will need about £11,000 a year to achieve the minimum standard of living (this would cover all a retiree’s needs plus enough for some leisure activities such as a week’s holiday in the UK and eating out occasionally); £21,000 a year for a moderate standard of living (a two-week holiday in Europe and more frequent eating out); and £34,000 a year for a comfortable standard of living (this would cover all a retiree’s needs plus two foreign holidays a year and some luxuries such as regular beauty treatments). For couples, it’s £17,000, £31,000 and £50,000, respectively.

When doing your sums, don’t forget to consider how long you think you will live as research has found that most people live longer than they expect. The Office for National Statistics (ONS)[1] estimates that average life expectancy in the UK for people aged 65 will be 85 years for men and 87 years for women.

Also, keep in mind that when you retire, you are likely to be paying less income tax, no National Insurance (NI), mortgages and loans may be paid off, you will have no more pension contributions, and any children are likely to be financially independent.  With these reductions in costs, the income you need in retirement is likely to be significantly less than you require during your working life.

3. Pensions are not the only source of income in retirement

The higher cost of living, as well as stock market volatility, means now may not be the best time to start taking money out of your pension. There are many assets such as cash ISAs and general cash savings, which can be used as sources of income instead of your pension.

4. Consider delaying retirement or working part time

If you are worried about the value of your pension falling due to market volatility, you need to give your pension time to recover, so it may be worth delaying retirement if this is an option for you. You might want to consider making further pension contributions to boost your pot and take advantage of tax relief while you can. In fact, hundreds of thousands of retired people are actually considering returning to work as rising cost of living has derailed their retirement plans. However, if someone has already made withdrawals from their pension other than the tax-free lump sum, something called the ‘Money Purchase Annual Allowance’ kicks in, which limits the amount that can be paid into a pension to £4,000 a year.

5. Don’t pay unnecessary tax

Usually, only the first 25% of a defined contribution (DC) pension is tax free (the calculation for a defined benefit scheme will be different); the remaining 75% is taxed as earned income. Unfortunately, in recent years many people have found themselves paying more tax than they need to. For example, some people have taken their pension as a cash lump sum, not realising that it made them a higher rate tax payer! You may be better off taking a smaller amount each year from your pension, keeping within your tax bracket, and then to top it up with withdrawals from your ISA, as this is paid tax free.

6. Shop around

Make sure that you shop around before you purchase any retirement products. Which?[2] found that the difference in growth between the cheapest and most expensive drawdown plans for a £260,000 pot (the average pot value) was nearly £18,000 over a 20-year period. It is important to not only check charging structures, but make sure it suits your needs, and that you can withdraw cash as and when you want it, and for as long as you need it.

7.  Regulated financial advice can support you through retirement

Increasing numbers are accessing their pension through income drawdown. There are many benefits to this, but it can be a daunting prospect to manage your own finances in retirement, especially during turbulent times. Also the Pensions Policy Institute (PPI) research[3] has found that cognitive decline during retirement may make it more difficult for some people to make appropriate decisions about how to access their savings in their older years.

Regulated financial advice can be a solution to this and may actually cost the same, if not less than buying retirement products, such as annuities, through online brokers. It can also be seen as an investment as an Adviser will look at all of your assets, work out the most tax efficient way for you to fund your retirement and then put a bespoke plan in place for you, which will support you throughout retirement.

8. Protect yourself from scams

The strain on household finances caused by the cost of living crisis could mean that some individuals are more vulnerable than ever this year. In fact, almost a quarter (22%) of UK adults have reported being approached by scammers offering free pension advice or a free pension review, investment opportunities, or a tax refund between March and May this year.

New regulations came into force in November 2021 which means suspicious transfers can be stopped from ending up in the hands of a fraudster, as pension trustees and scheme managers now have new powers to intervene, but you still need to be on your guard. Whatever you’re planning to do with your retirement savings, it’s vital to check whether the company that you’re planning to use is registered with the Financial Conduct Authority (FCA) https://register.fca.org.uk/. You can also visit the FCA’s ScamSmart website which includes a warning list of companies operating without authorisation or running scams www.fca.org.uk/scamsmart.

Jonathan Watts-Lay, Director at WEALTH at work, comments; “If you are due to retire soon, the rising cost of living is understandably concerning.

When deciding on the right course of action for you, make sure you work out how much you are actually going to need, how much you have saved for your retirement and if it’s going to be enough. If not, it’s important to have a clear idea of how much more you need to save, and whether delaying retirement is an option.”

He adds; “Some workplaces may provide financial education or guidance through financial coaches to help with this. If you’re over 50, you can also speak to Pension Wise for a free appointment to talk about your pension options.

Also, probably one of the most important decisions you could make is to engage with a regulated financial adviser who can take your personal situation and objectives into account and come up with a sensible plan. You may find that regulated financial advisers can be accessed via your employer or pension scheme so this is a good place to start.”

December 28th, 2022 | Andrew Hagger | News

With the UK in the grip of a fraud epidemic, fraudsters will use any tactics they can to lure unsuspecting victims into their trap.

Whether it is get-rich-quick schemes or a bargain from an unknown seller, the rising cost of living is forcing many consumers to seek alternative ways of saving or making money – something that has been seized on by scammers who will often trick victims into making quick bank transfers rather than using other, more secure payment methods.

With no let up in scammers’ pursuit of consumers’ personal information and ultimately money, the consumer champion is warning against unwittingly handing over money to fraudsters – and has identified five bank transfer scams to look out for next year.

Money mule requests

Money mule requests are when people knowingly or unwittingly let a criminal use their bank account to move stolen money. These will often appear on social media posts or via targeted emails. Banking industry body UK Finance reported a significant increase in online user generated posts encouraging people to sign up to become money mules in its latest fraud report.

Tactics employed by money mules include sending funds ‘in error’ which people are asked to return to a different bank account, asking people to apply for credit or bank cards on behalf of someone else, or convincing people to move money sent to their account (taking a cut) as a ‘favour’.

Offences for this kind of scam can carry a maximum sentence of 14 years imprisonment. If someone approaches you about moving money via your account, or you suspect someone is recruiting mules, report this to local police on 101 (or 999 in an emergency) or Crimestoppers on 0800 555 111. Find advice at moneymules.co.uk.

Card theft and ‘shoulder surfing’

While a significant proportion of fraud is carried out online, consumers must also still be vigilant to ‘offline’ crimes, including card theft and retail fraud.

UK Finance figures show that losses to face-to-face card fraud in shops – including contactless fraud – reached £33.6 million in the first half of this year, up 72 per cent on the previous year. Fraudsters will use entrapment devices such as PIN pad cameras at ATMs or ‘shoulder surf’, where they will spy on victims while they enter their PIN number.

Over the same period, credit and debit card ID theft cases more than doubled and losses increased by 86 per cent, totalling £21.4 million. Scammers who steal cards will use the details to forge documents and will either apply for a card in the victim’s name or take over their existing account.

Which? is warning consumers to remain vigilant by keeping a close eye on financial accounts and personal credit reports, notifying your bank of anything unusual immediately. Most banks will offer free balance and payment text or email alerts. Where possible, use ATMs located inside bank branches as these are less likely to have been tampered with.

Fake apps that target bank accounts

In order to keep personal information online secure, many people are advised to use two-factor authentication, which provides an extra level of security when entering sensitive details such as passwords.

Fraudsters are aware of this extra layer of protection, and at the beginning of this year researchers at mobile security firm Pradeo discovered a fake app called ‘2FA Authenticator’ on Google Play, which was downloaded more than 10,000 times before it was removed. ‘2FA Authenticator’ disabled system security checks on victims’ devices and secretly installed malware that stole victims’ banking login data.

Official stores such as Apple’s App Store and Google Play Store remain the safest places to download apps, but caution is still required. Read reviews of the app itself and the developer who made it, as these might give a clue as to its legitimacy. Check ‘app permissions’ to look at the functions of an open before you download it, and never click an unsolicited link from an advert, email or text.

Calls or texts from your bank

A common technique deployed by fraudsters is to imitate – or ‘spoof’ – legitimate companies, especially banks. A recent Which? investigation found that phone numbers at six major banks could be spoofed, potentially leaving customers at risk of being defrauded.

Alternatively, scammers will make automated ‘robocalls’ with pre-recorded messages inviting people to press numbers on the keypad to speak to them about an issue, such as a suspicious payment.

Criminal gangs will often have personal details about victims already, making the scam more believable. Fake texts are also a way of enticing people to click on links that can at first appear legitimate. Ultimately, fraudsters want personal information or for victims to send money to a ‘safe account’ controlled by them.

To guard against these types of scams, never trust the Caller ID that comes up on a call. Banks will never ask for personal information to be handed over on the phone. If there are concerns about the authenticity of a message, contact your bank or card issuer on a trusted method such as their mobile app or official phone number, which can be found on official statements or printed on the back of a credit or debit card.

Online purchase scams

Criminal gangs will frequently pay for fake or misleading adverts on search engines and social media in a bid to lure unsuspecting victims in, often by offering low prices for high value items, such as mobile phones or laptops.

Purchase scams, which according to UK Finance figures were the most common form of Authorised Push Payment fraud in the first half of 2022, can be difficult to spot as some fraudsters can recreate the websites of well-known retailers with high levels of accuracy. However, there are often tell-tale signs of bogus websites. For example, the ‘About us’ section may have poor English or grammatical errors and the ‘Contact’ page may be missing or incomplete.

While it can be tempting to grab a bargain, particularly at a time when the rising cost of living is squeezing household budgets, it is best to stick to trusted retailers. Paying via bank transfer offers less protection than paying by card.

Jenny Ross, Which? Money Editor, said:

“Scammers are relentless when it comes to wanting our personal information and ultimately our money. And while their tactics will no doubt continue to evolve, we think these scams are the main ones to watch out for.

“Banks will never ask you for personal information, nor will they try to hurry you into making a decision. If this happens to you – whether by text, email or over the phone, step back and think about what they’re asking. If it looks too good to be true, it usually is.”

December 16th, 2022 | Andrew Hagger | News

‘Tis the season and with Christmas shopping at the forefront of our minds, Black Friday sales behind us and the traditional January bargain-hunt on the horizon; many are looking to find a good deal in-store or online whilst spreading some cheer. But what should you be looking out for when making crimbo purchases or do if things go wrong…?

Festive Shopping Tips

Whatever goods and services shoppers are looking to bag this (most wonderful time of the) year, the following should be at the forefront of their minds.

Will it be delivered on time?

Under the Consumer Rights Act 2015, goods should be delivered within 30 days of the order being placed, unless agreed otherwise. This can sometimes be in the terms and conditions or specified on the order documentation. Often with large items of furniture otherwise known as ‘big ticket’ items, there can be a longer lead-time because the item is being made to fulfil an order, or parts may be shipped from abroad. Particularly at the moment, it’s very important for consumers to check these lead-times and ask the retailer for details of anything that might cause a delay.

When buying in a shop, customers should clarify that items being purchased are covered by any festive delivery guarantees and keep a record of the answer.

Further, under consumer law, customers can specify that delivery by a certain date is essential. If the retailer fails to meet that date, the consumer can treat that as a cancellation of the contract. If an essential date is specified (or apparent from the circumstances), it’s important to make sure that the date is recorded.

Is it really a bargain?

There are strict rules that retailers need to stick to when advertising reductions in a sale. This is to ensure that you can be confident that the reduction is a genuine one. You would not be entitled to the difference if items are further reduced after you have made your purchase, so make sure you are happy with the current price that you are committing to pay and don’t feel pressurised by slogan such as “only 2 left” or “3 other customers are looking at this item”.

What are my rights when goods are reduced in a sale?

Where goods are bought in a sale at a reduced price, consumers still have access to their consumer rights. If you bought the goods in a shop and they are faulty, they can be returned for a full refund (within the first 30 days). After that, if goods cannot, after one attempt, be successfully repaired or replaced, a price reduction or final right to reject would be the legal remedy. This means that you might get a sum of money to keep them as they are, or you could return them and get your money back (this might be a full or a part refund depending how long you have had them for before you noticed the issue).

The amount of the refund would be calculated by reference to the price paid, not the original non-reduced price of the goods.

It’s also worth noting that if you were told the reason for the price reduction, (such as damage), you cannot return them based solely on that issue.

What about damaged goods?

Consumer remedies do cover goods which are damaged. In a shop you might be able to negotiate a price reduction for these, but ultimately it is up to a consumer whether to buy them or not.

Where goods identified as damaged on delivery, consumers have remedies. However, where these have been opened by the original recipient, re-wrapped and potentially moved to a different location, it will be hard to prove that the goods were damaged upon delivery or when purchased so when giving gifts this Christmas, it is important that you check them over before you wrap them, so that you can deal with any issues direct with the retailer to avoid disappointment on the big day.

Can I return personalised goods?

Where goods are personalised, for example made using photographs which are supplied to the retailer or by adding your name or some specific text, these are non-returnable (unless they are faulty, not as described or not fit for purpose). This is regardless of whether the products were bought in store or ordered online. This is because they are made specifically for you and cannot reasonably be re-sold.

What if I can’t find the receipt and need to return something?

You will need proof of purchase in order to return goods; without this your refund could be refused or might be based on the current selling price, which could be substantially less in the January sales. You may be offered store credit, which might be a reasonable alternative if the goods are simply unwanted.

Judith Turner, Deputy Chief Ombudsman, Dispute Resolution Ombudsman said, “We’re in the midst of the busy holiday period, however consumers can rest assured that if they check before shopping that a retailer is a member of an alternative dispute resolution body such as a government approved Ombudsman, they will have an added layer of protection when making purchases.

“If things should go wrong, and they can’t get any joy out of the retailer, businesses that subscribe to the Ombudsman follow a code of practice which means that they are committed to being responsible retailers and looking after your consumer rights, ultimately leading to more confident shopping when making those festive purchases.”

For more information, visit www.disputeresolutionombudsman.org.

December 13th, 2022 | Andrew Hagger | News

Over a third (35%) of UK drivers do not consider depreciation when they are buying a car, according to an Opinium survey of 2,000 drivers, commissioned by InsuretheGap.com, an independent provider of GAP (Guaranteed Asset Protection).

Depreciation is the difference between what you pay for a car and the amount you can get back when you sell or trade it in.  A new car generally loses approximately 20% of its value when it is driven off the forecourt, and then between 15 – 20% each year, but, different makes, models and even colours will all hold (and lose) their value differently.

Ben Wooltorton from InsuretheGap.com said: “Depreciation hasn’t been such a factor in drivers’ lives in the last couple of years, as supply problems with parts and delays in new car production has meant drivers have held onto their cars for longer and cars have retained more of their value. However, as we head into next year depreciation will once again become more significant for drivers, particularly those who like to change their car regularly.

“Depreciation also affects the amount of money that car owners can claim from their insurance company if a car is written off or stolen. If a car is involved in accident and is written off an insurer will only pay out what it’s currently worth, rather than the amount paid for it,” said Ben Wooltorton. “This could leave drivers owing money on outstanding finance agreements for a car that no longer exists.”

GAP (Guaranteed Asset Protection) insurance can help bridge the gap between what you paid for a car and the amount you receive from your insurer if you make a claim, in the event your vehicle is written off or stolen. A GAP insurance policy from a specialist insurance provider, like InsuretheGap.com, starts from just £66.74 and is significantly cheaper than those offered by car dealerships. Cover is available for vehicles worth up to £50,000.

Top Ten Tips on Car Depreciation

In addition to a car’s age, where the years of one, three and eight often signify sharp price drops, other factors that determine a car’s depreciation rate include:

Mileage – the average mileage is around 10,000 per year.  The more miles, the less your car is worth, however while for internal combustion vehicles

this is an indication of the wear and tear that its internal parts have been under, for a battery-driven car it will be an indication of how often the battery was charged.

Owners – the more owners a car has, the less it will be worth.

Service history, general condition and keep receipts for big ticket jobs – a full-service history from a manufacturer, approved garage or dealership helps to maintain a car’s value. The upkeep and maintenance of a car will also help retain its value, as dents and scratches can seriously affect its resale price. Always keep the documentation for the big-ticket jobs, like replacing a cambelt, to prove these have been done in alignment with manufacturer’s recommendations.

Colour – generally speaking, the popular selling colours of grey, black, silver, blue and white tend to be the best colours for holding their value. Slightly bolder (red) or off-the-wall colours might not have the same demand, so not have such a high re-sell value.

Desirability – if the vehicle is in high demand or is rare, the more residual value it will hold.  If you are lucky enough to purchase a car that is on trend it will suffer much less depreciation, provided it is still on trend when you come to sell it. Similarly, if there is very little demand for your car then you can expect its value to drop dramatically.

Economy – cars with good fuel economy are more desirable, and therefore tend to hold their value better. With electric cars, they will slowly lose their charging capacity over time.

Vehicle tax – buyers looking to run their vehicle on a budget may be put off by high vehicle tax.

Reliability – mechanically reliable cars and those with reasonably priced spare parts are more in demand because they cost less for upkeep in the long term.

Warranty Length – vehicles with a long manufacturer’s warranty attract a higher resale value.

Size – bigger cars tend to depreciate more quickly due to higher running costs.

December 9th, 2022 | Andrew Hagger | News

Can you get a mortgage with poor or limited credit history?

Bad credit is a spectrum when it comes to mortgages, and there is some variation in the requirements among the major high-street lenders. For example, some lenders are prepared to consider less serious credit issues, such as default and CCJs when they are two to three years old and/or have been satisfied.

1. Mortgages for bad credit

• Some mortgage lenders specialise in providing loans for those with bad credit. They are also known as subprime lenders but they are not necessarily as accessible as traditional banks.

• A mortgage broker may know more about which lenders are likely to accept people with bad credit, so it’s often worth speaking to an adviser before applying for a mortgage.

• Taking out a mortgage with poor credit has disadvantages because you’ll normally pay a higher interest rate and/or might be offered a smaller loan amount. Before making a choice, it’s a good idea to compare the deals being offered to you now with those that might become available if you wait until your credit score has improved.

2. Guarantor mortgages

• Guarantor mortgages are another alternative for those who are fortunate enough to have a close friend or family who is willing to guarantee the mortgage for you.

• The person serving as your guarantor must be aware of all the risks and obligations they are accepting if you are unable to make repayments. Their home and yours may be repossessed if you are unable to make your payments.

• If you’ve been turned down for a mortgage because of poor credit, you didn’t meet the criteria for affordability due to a low salary, or you can’t afford to save the required amount for a deposit, a guarantor mortgage might provide you a way of getting on the property ladder.

Tips to improving your credit score before your apply

If you’re unable to find a suitable bad credit mortgage loan or guarantor mortgage, you should aim to improve your credit score. Find tips from our experts on how to improve your credit score below.

1. Verify that you are listed as a voter at your current address.

2. If you have any outstanding debts that you can afford to pay off, do so; otherwise, try to lower your overall borrowing so that it doesn’t exceed 50% of your total borrowing capacity. For instance, if your credit card has a £5,000 limit and a £1000 overdraft, you would want your balances to be under £2,500 and £500, respectively.

3. Any accounts that you are no longer using, including credit cards, store cards, and others, should be closed. This includes any accounts you have with people you are no longer associated with financially, such as those you may have shared a bank account with, like those with an ex-partner.

4. Authenticate the accuracy of all the data that has been recorded about you. Incorrect addresses and other information can be problematic, but there may also be errors in the information that the agencies have recorded as a negative mark. You can occasionally ask to have a note added to your file to explain a late payment if you can demonstrate that it was not your fault, for instance, because of postal strikes or a creditor-side accounting issue.

5. You can also apply for specific credit cards made to raise your credit score; these are especially useful if your score is low as a result of little credit usage in the past. However, to demonstrate that you can manage debt sensibly, you must borrow wisely and make all the repayments on time.

For further information, see our full guide here.

November 30th, 2022 | Andrew Hagger | News

Ben Dhesi, the creator of the energy-saving mobile app HUGO, built his career providing energy-saving software to businesses, racking up accolades such as two ‘Energy Buyer of the Year’ awards and the Energy Awards ‘Energy Technology Innovation of the Year’ – now he is using his expertise to help UK households with their winter energy bills.

From talking to your supplier to looking at hardship funds, Ben shares practical advice on what you should do if you find yourself struggling to pay your gas and electricity bills.

What should I do if I can’t pay my energy bills?

#1 – Don’t stop paying

While it’s true that a mass boycott of paying your energy bills would give the energy companies something to think about, it’s more likely to have had widespread negative ramifications.

A mass boycott could lead to a collapse in the market and the bankruptcy of energy suppliers leading to issues with energy supplies, even higher energy rates and more, so keep up with your payments as best you can – something is better than nothing.

TOP TIP – Your energy supplier is legally obliged by the energy regulator Ofgem to help you if you’re struggling, so try to work with your suppliers to find a better payment option such as setting up a direct debit or a payment break.

#2 – Work out your essential costs

The next thing to do is work out your essential gas and electricity costs. You can do this using looking at your energy usage on your smart meter or our HUGO app which breaks down your energy consumption by the hour.

Look at what it costs to run the essentials such as your fridge, heating etc. and see if there are any areas you can reduce your consumption, such as washing clothes in the evening when the energy rates are lower or limiting your use of energy-hungry devices like dishwashers.

TOP TIP – Take some time to see if there are small changes you can make to your consumption, as sometimes it’s the little things that add up! Items left on standby can cost you an extra £55 per year, and lights that are left on £20!

#3 – Talk to your supplier about your options

As I’ve already mentioned, your energy suppliers are legally obliged to help you if you’re struggling with your bills so don’t hesitate to get in touch with them ASAP. There are a range of options they could offer which are decided on a case-by-case basis depending on your circumstances. These include:

• A review of your payment plan
• A debt repayment plan
• Payment breaks or reductions
• Longer deadlines for bills
• Access to hardship funds
• Installing a prepayment meter

TOP TIP – Always be honest about your circumstances and ability to pay, there are different support options available depending on your situation such as if you are elderly, vulnerable or pregnant.

#4 – Check for any grants, schemes or benefits you may be entitled to

Even before the cost of living crisis, there have been grants, schemes and benefits available to help you with paying your energy bills, but more options have recently become available so it’s worth checking what you may be able to get.

Look into your energy supplier’s hardship funds – big energy firms will set up these charitable trusts to help those in debt to pay their bills. There will be eligibility requirements and each application is done on a case-by-case basis, but it’s worth seeing if your supplier has funds you can apply for.

The government also has many different schemes and grants you may be eligible for, so it’s worth taking the time to check your eligibility. These include:

• Fuel vouchers
• Cold Weather Payment
• Energy Bills Support Scheme
• Warm Home Discount Scheme

Some of these schemes will be paid to you automatically, and those such as the elderly, disabled, or on those means-tested benefits will have access to various extra one-off payments between £150 – £650. If you’re not sure what you’re entitled to I recommend speaking to your local council or Citizen’s Advice.

TOP TIP – If you can’t get a hardship fund from your own energy supplier, look into the British Gas Energy Trust. These grants are available to everyone, not just British Gas customers.