July 18th, 2019 | Andrew Hagger | News

18 July 2019 Immigration is a hot topic in the UK right now, however it’s easy to forget how many British expats reside in the EU.

According to data from the United Nations, there were just over 4.5 million Brits living abroad in 2017, with 1.3 million residing in EU member states. Whilst this number is thought to have fallen slightly since the Brexit negotiations began, it remains a significant number.

One of the key challenges for expats is managing their money when relocating, and understanding what they can do to ensure their finances are adequate, safe and accessible.

Here are three tips to help anyone thinking of relocating to Europe:

• Set Clear Financial Goals

If you relocate abroad, the chances are that you’ll seek out guidance from the likes of Withers Worldwide an immigration and relocation specialist.

By the same token, it makes sense to take some professional financial advice when looking to manage your funds as an expat, this will help you to set your goals and ensure you have sufficient funds for your new life overseas.

You should also get an understanding of international currency fluctuations, which can impact on your financial goals when switching funds between different currencies.

If you do your homework you won’t be in for any nasty surprises and associated stress and more likely to enjoy your new life abroad.

• Understand the Tax Implications

One of the most common misconceptions surrounding expats is that they immediately exempt from their home nation’s tax system, but it’s not as cut and dried as that.

For example, an expat who is longer classed as a UK resident may still be responsible for the tax levies on profits generated by a business or property located in the UK, whilst the same principle applies to accrued pension income.

This creates a complex tax situation, and one that may require you to pay levies both at home and abroad, therefore take some advice from an expat tax specialist before you u sticks and leave the UK.

• Checking the Local Cost of Living is Vital

If you’ve relocated for the purpose of work, the chances are that your earnings may be similar to what they were in the UK.

The same cannot necessarily said about the cost of living, however, which can vary dramatically from one country to another and have a significant bearing on your disposable income levels as an expat.

So, before you relocate, you should carry out some research on your chosen destination, and look to factor in any cost increases or potential savings on your monthly budget,

This type of proactive approach can be really rewarding and reduce worry and stress, especially if you’re looking to manage your money carefully and save for the future.

July 17th, 2019 | Andrew Hagger | News

17 July 2019 Renting out property can be lucrative source of income. It yields many opportunities to landlords, but like with all potentially profitable ventures, it also comes with its fair share of downsides too; namely paying tax on rental income.

Paying tax is a positive thing when you look at the bigger picture. It helps the economy tick along and funds a wide range of public services. For landlords though, fees can be a heavy burden…but they are not always entirely necessary with the right (and legal) professional assistance.

Here’s a rundown on how private landlords can pay fewer taxes on their rental income.

What is a rental income?

A rental income is the sum of money a tenant pays to the landlord in exchange for living in their property. It also includes things like utility costs, parking fees, and use of furniture that’s owned by the landlord. It can also fluctuate based, where the property is located or its overall value, and if the landlord is employed or not.

Allowable Expenses

Although some landlords are starting to feel the system is stacked against them and overly favours tenants, rental income tax is one area where things are surprisingly fair. First, you need to really understand how the system works. If you make all your money from renting out properties, you need to register as a fully-fledged business with HMRC to be taxed as an independent firm. If you’re employed alongside renting out a property or two, you’ll only need to pay tax on the profit you make from renting your property to a tenant; which is often simpler and cheaper!

Private landlords can claim allowable expenses in certain scenarios, providing they were exclusive to renting out your property. This can all be deducted from your overall rental income, which means you’ll be liable for less tax. These tax-free expenses can include landlord insurance, mortgage interest, repairs and maintenance, service charges, household costs and more.

It’s worth keeping a close eye and making comprehensive records of these costs as they are vital to keep your tax bill to a minimum.

Be sure to carry out your own research on which allowable expenses might be allowable in your particular situation. Private phone calls and personal expenses can’t be included, so try to focus on the things that’re exclusive to your role as a landlord.

Conclusion

It’s possible to pay fewer taxes on rental income with the right level of awareness. You need to have a thorough understanding of what you’re taxed on and why, and then from there you can start to make distinctions between personal allowances in being a landlord. Take it seriously and research your tax obligations independently, and you should be able to make savings and put more cash in your pocket.

July 15th, 2019 | Andrew Hagger | News

15 July 2019 Almost 3.8 million people aged 22-29 are saving below the recommended level for a comfortable retirement, according to the latest Scottish Widows Retirement Report.

Despite auto enrolment, one in six people in this age group still aren’t saving at all for their retirement. Yet, 38% of under-30s say they would save more into their pension if they could access savings as a one-off to help fund a deposit on a first home. That would be the equivalent of 3.5 million young people increasing their long-term savings levels and helping to ensure a more comfortable retirement.

Property seen as priority over pensions

The average size of a deposit in 2018 was £32,000. A decade ago the average deposit was a third smaller at £21,366. This means getting onto the property ladder has become increasingly difficult, with the average age of a first-time buyer now 31 – the highest it has ever been.

As this trend continues, it could mean more people renting in retirement. They would need to save a significant amount more during their working life to cover this additional cost, whereas homeowners may have paid off their mortgage by the time they retire.

Tying together property and pension savings

To avoid a crisis of renters struggling in retirement, Scottish Widows is calling for flexibility within the pension system to allow young savers to withdraw up to half of their early retirement pot and put it towards a deposit on their first home. While some critics may argue this further depletes the long-term savings of young people, it is advocating for further changes that will increase savings levels overall to account for this.

It calls for the age at which people become auto-enrolled to be reduced to 18 alongside an increase in minimum contribution levels to 15% by 2030, with employers and employees continuing to share the cost. Scottish Widows is also calling for an annual government top-up of £500 – similar to the model used in Help To Buy and Lifetime ISAs. It points out that first home deposits tend to be smaller than the average (£32,000) and split between a couple. In this scenario, people would have much higher levels of savings, which would ensure accessing them for a property deposit is financially sound.

Pete Glancy, Head of Policy at Scottish Widows, said:

“Property ownership is a national obsession, but it is also a long-term investment that could support people into old age, either by avoiding expensive renting costs or providing a source of equity. We should recognise the fact that many young people will prioritise getting onto the property ladder ahead of saving into a pension, despite the powerful positive impact of compound interest by saving at an early age.

“This policy is focused on helping young people to move from renting, not to increase demand for housing. Of course, we still require appropriate government policies to ensure an adequate supply of housing and improve affordability.”

July 9th, 2019 | Andrew Hagger | News

09 July 2019 Customers can register today for a new savings account, Kepe, which promises to end the ‘loyalty penalty’ by automatically moving cash savings to get better interest rates.

Kepe plans to do for people’s cash savings and cash ISAs what auto-switching has begun to do for household energy bills. It removes the need to manually search for, and switch to, new accounts once initial preferential rates have expired.

Customers will be able to sign up to one account, just once, and from then on their money will be automatically moved to different savings accounts best suited to meet their specifc savings needs and offering the best rates available to each saver.

An initial panel of partner banks will be offering highly competitive rates across a range of easy access, notice, fixed term and cash ISA products. 

A ‘super complaint’ lodged by Citizens Adviceto the Competition and Markets Authority last month (June 2019) estimated savings customers had lost out on more than £800 million since September 2018. It claims this happens because higher rates are only offered to attract new customers.  

Kepe intends to tackle this by automatically moving money to get people better offers.

“There are several issues with the savings market at the moment, not least the loyalty penalty which is unfavourable to people who don’t actively manage their cash savings,” explains Karteek Patel, CEO of Crowdstacker, the financial platform behind Kepe.

“Also the FCA’s 2018 report ‘Price Discrimination in the Cash Savings Market’identifies people’s apparent unwillingness to switch accounts as one of the main reasons why they are losing money on their cash savings and cash ISAs,” Karteek continues.

“And it goes so far as to suggest providers are capitalizing on this by offering the lowest rates to the longest standing customers.”  

Kepe’s own research found that despite less than one in five (19%)  savers saying they are confident they are getting the best interest rate on their savings, a large majority of two-thirds (66%) say they are unlikely to bother switching.

The FCA report estimates that £117 billion of the money held in easy access cash savings accounts, and £21 billion held in cash ISAs, has been in accounts opened for more than five years.  Yet Kepe’s own research also reveals the number one criteria considered by savers when looking at account options is the interest rate offered.

“So that doesn’t make a lot of sense, people want better rates but they aren’t doing anything about it.  A lot of money is obviously just sat there not working as hard as it could,” Karteek continues.

“This customer inertia is owing to misplaced brand loyalty, and probably confusion caused by multiple product offerings and unclear communications.

“Kepe tackles all of these issues by automating the process of switching accounts so that money is never left in an account paying a lower rate of return than is otherwise available to each particular saver. 

Kepe customers will be able to select the terms they are happy to accept such as whether the cash is held in instant access accounts or not.  Similarly they will be able to set savings goals according to what they are savings towards.  

Each time a customer’s money can be switched to a better deal it will automatically be done removing the need for researching or form filling.  Customers will be notified when this happens and up to the minute information on the status of their cash can be viewed via their dashboard.  

In line with the priorities identified by Kepe’s market research the core offering will be protection provided by the Financial Services Compensation Scheme (97%), better interest rates (96%) and up to date information about account status (90%).

Anyone interested in opening a Kepe account can pre-register now at https://www.crowdstacker.com/kepe/register  to enjoy a range of early-bird benefits.  The full service will launch later in 2019.

July 4th, 2019 | Andrew Hagger | News

04 July 2019 New research from TotallyMoney and Moneycomms reveals 1 in 12 Brits wouldn’t notice a rogue £20 entry on their bank statement, potentially costing a total of £108m.

• 1 in 12 (5.4 million) people wouldn’t spot a rogue £20 entry on their main current account
• Assuming each person has one bank account, losses could be up to £108m
• 1 in 7 people only check their bank account once per month — or less
• 50% of people haven’t got their free credit report, an easy way to detect possible fraudulent activity
• To help customers stay alert to fraud, TotallyMoney has created a simple five-step plan.

Online statements and mobile banking apps make it easy to check your account. But, people don’t always pick up on some signs of possible fraud.

Recent survey results show that 1 in 12 people wouldn’t spot a rouge £20 entry on their statement.

There are 65 million active personal current accounts in the UK. So, assuming one person owns only one account, a staggering £108m, across 5.4 million bank accounts, could potentially be lost.

Banks and lenders are under increasingly more pressure to up their security. In the meantime, there are some things you yourself can do to detect fraud — and limit potential loss.

Alastair Douglas, CEO of credit experts TotallyMoney, said: “For some people, a £20 transaction they don’t recognise isn’t the end of the world. But, it could be tell-tale of a bigger issue.

“In the past, we had to rely on monthly paper bank statements. Now, thanks to mobile apps, our bank accounts are at our fingertips, making it easier than ever to check our outgoings.

“Spotting and reporting anything you don’t recognise — no matter how small — could stop an incident of fraud in its tracks.

“Another way to keep an eye out for fraud is by getting your TotallyMoney free credit report. You can see any financial activity made in your name, as well as see your balances and payments — so you can spot and report anything you don’t recognise.

“To make it easier to spot any of the potential signs of fraud, we’ve pulled together some of the best ways to get in the know.”

The TotallyMoney five-step plan

1. Use Online Banking Download your bank’s mobile app, or use online banking, to check your statement every couple of days. You can often even set up alerts to get notified every time a transaction is made.
2. Hold on to Receipts
   Keep tabs of your contactless card transactions, by keeping the paper receipts until the money is taken out of your account.
3. Check your Direct Debits
   Be aware of future direct debits and regular payments due before payday, so you know how much ‘spare spending money’ you’ve got available — a good way to avoid hefty overdraft charges, too.
4. Review your Statements
   Don’t ignore your monthly credit card and bank statements. Check that everything is as you’d expect.
5. Check your Free Credit Report Ensure you recognise everything on your credit report — especially credit searches.

July 3rd, 2019 | Andrew Hagger | News

03 July 2019UK drivers can save themselves £20 by making one simple change and avoiding motorway refuelling stations. 

New research has exposed a disparity between the price of petrol stations on the roads and on the motorway, revealing how motorists can save themselves a money by making a simple detour and using alternative fuel stations.

The study by fuel price information service and app, PetrolPrices.com has revealed that UK service stations are charging up to 37p per litre of fuel more than their nearest station, taking advantage of the captive market.

The research by found that Leicester Forest East services is charging 37p per litre more than nearby station Sainsbury’s Fosse Park which is 2.1 miles away.  Bridgewater services on the M5 in Somerset is charging up to 29p per litre more than Sainsbury’s Bridgewater, which is just 2.5 miles away.  This equates to £16.38 and £12.18 more per tank respectively, when filling up the 42L tank of a Ford Fiesta, which is the best-selling car in the UK. Bridgewater, Cherwell Valley, Exeter and Lancaster services featured in both lists of stations that charged much more than their nearest cheapest station for both diesel and unleaded.

The study found that a five-hour journey from Maidstone to Cornwall would cost £150 if the driver filled a 50-litre tank at Clacket Lane services on the M25 and then Exeter service station on the M5. However, drivers could save £20 by pulling off the motorway and refilling at the Shell pumps in Godstone, Surrey, and the Tesco Extra in Exeter Vale. 

Says Kitty Bates, consumer spokesperson at the company said “Our research shows that many motorway service stations are pricing their fuel well over the odds with some stations charging up to 37p per litre more than their nearest forecourt operator.

“Motorway Service Areas have long been overpriced because operators know that motorists have to fill up there, and they have a captive audience, so they charge a similar rate year round, regardless of the fluctuations in the wholesale industry. Their argument is the costs are higher, which is something the government has been saying that it wants to investigate for quite a few years now. However, until this takes place, we would encourage drivers to find the best fuel deal local to them, or along their intended route, before they set off using an such as PetrolPrices.com which will help them to avoid being ripped off on the motorway. For too long millions of UK motorists have been stung by extortionate motorway service area fuel prices.”

July 2nd, 2019 | Andrew Hagger | News

02 July 2019 Our expectations of ‘everyday’ living are growing rapidly. As mainstream technology advances at an exponential rate, more and more items are moving from luxury to necessity in our lives. The good news is once unthinkable technologies are now readily accessible, indeed affordable for most people in the western world.

Not everything is getting cheaper, though. In fact,
some of the most fundamental parts of life are costing us more than ever. Here,
we discuss some of the key everyday items in life that have moved in both
directions.

More affordable: televisions

The humble television has been on quite the journey
since first going on sale in 1928. Naturally it began as a very exclusive item,
ask previous generations of their memories of watching the Queen’s coronation,
or even the moon landing, and you’ll hear stories of watching it at someone
else’s house because the TV was still a household rarity.

Back in the early 80s, a 26” Sony colour TV cost between £570-£800
which, inflation adjusted, equates
to roughly £1975-£2775 in today’s money. Today, you can find 50”
Sony Smart TVs for under £400.

Less affordable: further education

Student loans are the bane of many millennials’ lives.
For many, their loan will be never be paid off, simply down to their earning
potential never matching up to their level of debt.

Up until the late 90s, higher education was virtually
free in the UK, thanks to state paid tuition fees and maintenance grants. In
1998, annual tuition fees of £1,000 were introduced. In 2006 that rose to
£3,000, before shifting to £9,000 a year in 2012.

More Affordable: air travel

Even though airfares still represent a significant
cost to travellers, things are much better than they used to be. Of course,
when plane travel first became a truly commercial matter in the 1950s, costs were
sky high. Domestic
US flights could cost comfortably over $1,000, with trips abroad consistently
in the multiple thousands.

Typically, flights that cost thousands then only cost
hundreds or even tens nowadays. There is somewhat of a trade-off though — early
commercial flights were spacious, with plenty of free booze and food. That
certainly isn’t the case now.

Less affordable: housing

Thanks to the UK government’s Help
to Buy scheme, hundreds of thousands of people have
managed to get on the property ladder. However, costs have continued to rise in
both the buying and rental markets.

According
to Nationwide, the average cost of a house in the UK
sits at £212,694, as of Q1 2019. The property market fluctuates, but prices
have been consistently on the rise since the start of 2013. Back then the
average was £163,056. At the turn of the millennium, it was £77,698. Even in
inflation-adjusted terms, the cost of house prices has risen by just under
£100,000 in the last 20 years.

With the typical one-bed
home in the UK costing £600 a month, renters aren’t faring
much better. The
BBC dubbed two thirds of the country ‘unaffordable’ for young renters,
with a salary of £51,200 required to afford a mere one-bed in London.

Overall, there’s an interesting contrast of
expenditure facing today’s society. As technology advances and production costs
drop, we’re enjoying more affordable access to better gadgets and general
electronics than ever, as well as cheaper travel around the world. However,
where some of life’s more fundamental costs are concerned, there’s a different
story altogether.

The stark rise in key spend areas like housing and
education is a wider indictment of the rising cost of living against stagnating
wages. For those looking to make
the right financial choices, it appears many of life’s most
important expenditures will pose the biggest challenges.

July 2nd, 2019 | Andrew Hagger | News

02 July 2019 More than half the population are prepared to insure their mobile phone, gadgets, and other possessions before themselves, according to new research by Co-op Insurance.

The insightful data shows that less than half (48%) of UK residents have purchased life insurance but have taken out cover for objects they own.

Of those who don’t have life insurance, almost a fifth (18%) say that they have never even thought about taking out life insurance, despite the majority having insurance for things such as mobile phones and other gadgets.

Insurance policies held by people who don’t have life insurance:

The survey also highlighted the need for insurers to be more flexible in the design of their products. Four fifths (80%) of people say that insurers should do more to help people who fall into financial difficulty, with three fifths of these (58%) thinking that insurers should offer extended payment holidays of more than one month.

Co-op Insurance recently re-entered the life market alongside its partner Royal London with a life policy, which offers extended payment holidays. This distinctive feature was designed in conjunction with Co-op Members, who were keen to ensure that policies did not lapse un-necessarily during the term.

The product offers a level term, decreasing term or monthly income benefit and:

·         Includes the option to take two six month payment holidays throughout the lifetime of the policy after a 12 month qualifying period, allowing their policy to remain in force

·         Customers can also opt to reduce their cover level rather than pay back any shortfall at the end of the payment holiday window

Charles Offord, Director of Co-op Insurance, said: “It’s hard to imagine that many people will insure their possessions ahead of their own lives, but that is the reality.

“Our research has shown that the inflexibility of life products is a clear barrier to people insuring their lives and protecting the futures of their dependants. Our extended payment holidays provide the peace of mind our customers and members are looking for to ensure their policies remain in force throughout the term.”  

June 28th, 2019 | Andrew Hagger | News

28 Jun 2019 One third of Brits (31%) have borrowed money from family and friends; yet more than half (53%) do not expect to pay the money back according to new research by Lloyds Bank. 

Part of Lloyds Bank’s ‘How Britain Lives’ study, the UK-wide analysis from YouGov of 2,018 adults also found that one in five (22%) are borrowing money from friends and family just to get by, using the cash to cover day-to-day living costs. 

Brits are most likely to borrow money from the Bank of Mum and Dad (25%); borrowing an average of £4,008. Meanwhile, one in 20 (5%) have borrowed from siblings and 4% from friends, with just 3% seeking financial support from grandparents. 

Almost half (46%) of those that borrow money say they feel guilty for doing so, as they hoped to provide for themselves, and nearly one in ten (8%) admitted that the borrowing of money has caused tension in their family. 

However, six in ten (61%) Brits say they are happy to lend money to family and friends, with just one in ten (8%) feeling annoyed about lending to loved ones. Those in the South West (67%), and the South East (66%) appear to be the most generous regions and are happiest to offer a loan in times of need. 

London is shown to be less likely to hand out the cash than the rest of the UK, with only half (50%) of Londoners happy to lend money to a family member. Londoners are also twice as likely to be annoyed about being asked for a loan (20%), compared to 8% across the UK. The East Midlands are far more relaxed about lending money, with no respondents saying it left them feeling annoyed.    

This comes against the backdrop of the Lloyds Bank M-word campaign to tackle the stigma of talking about money, which found that that people don’t talk about money with their loved ones. More than two fifths (44%) of people have avoided discussions about money and a quarter (25%) have lied to family and friends about their personal finances. 

Martin King, Head of Customer Support at Lloyds Bank said: “We feel much more comfortable lending than borrowing in Britain; with half of us feeling guilty when we do have to ask for a bit of extra help. It’s important to keep talking with our family and friends about money concerns, as it can help to have some support and hear another perspective. 

“We’ve recently created the Lloyds Bank M-word online hub to provide a series of tips to help people feel more confident in opening up about money worries.” 

STARTING CONVERSATIONS ABOUT MONEY WITH FRIENDS OR FAMILY  

Conversations about money can be difficult, especially when you are facing financial problems. Most of us don’t feel very comfortable talking about our finances with our loved ones, let alone asking them for help.  

The Lloyds Bank M-word online hub has a whole range of information to support opening up about money. Take a look at the steps below on how to start a conversation.  

Go over your finances and understand what you need help with – It is easy to sometimes feel so overwhelmed by your finances that you end up ignoring the situation altogether, so why not ask a family member to look through your finances with you?  

Gathering all the information you need will help you understand exactly what the situation is. Once you’ve established all the facts, working out a plan will be much easier. For example, if you are struggling to get a deposit together for a home, it will be easier to start the conversation if you know how much you’ll need to borrow.  

Be prepared to talk, but also be prepared to listen – Understand and acknowledge the other person’s point of view. It’s only by listening that you’ll be clear on what’s important to the other person and be able to make a plan together.  

If you are asking for financial support, it is understandable that the other person might have some questions and concerns. Clear and open communication will help ensure there are no disagreements further down the line. 

Feelings around money can be strong, but they don’t have to lead to arguments – It’s not unusual for families to argue about money. There can be a lot of intense feelings, but the important thing is to have a calm conversation about the issues. Start by telling them how you feel, rather than what you want.  

Turning to a friend or family member for help could also impact wider relationships, for example if other friends or family members see it as favoritism. If you’re borrowing from a parent, it might be a good idea to call a family meeting to discuss the terms openly.  

Make a plan together – Reach an agreement about what to do next and keep talking about it. Occasionally the relief of having talked about money is so overwhelming that people don’t mention it again and don’t really convert words into action.  

A written plan or agreement is always a good idea. Break down exactly what the plan is, including details like when you will start to pay them back and how you plan to make the payment. 

June 25th, 2019 | Andrew Hagger | News

24 Jun 2019 New research from later life lending specialist, Hodge highlights the crucial role that the nation’s grandparents play in enabling parents to work.

For many, retirement is an opportunity to enjoy the luxury of free time, however new research from Hodge revealed that grandparents are giving up an average of 11.5 hours a week looking after their grandchildren saving parents £9,568 a year on childcare costs.

Grandparents who provide childcare are enabling parents to focus on their careers and career progression to better provide for their families.

In fact, more than half (53%) of grandparents believe that providing free childcare has allowed parents to return to full-time work, and one in three (32%) think that their children wouldn’t be able to afford formal childcare.

With the majority (87%) not receiving any financial compensation for their time, over 50’s could help fund their retirement by accessing the value tied up in their home with Hodge’s flexible later life lending options.

Grandparents and family members who provide care for children under the age of 12 should also check if they’re eligible for Specified Adult Childcare National Insurance credits.

Matt Burton, director of mortgages at Hodge said; “When we think about generous grandparents we usually think about extravagant Birthday and Christmas gifts, not their time.

“But, by selflessly giving up their hard-earned free time grandparents are helping new parents to return to work and saving them thousands of pounds a year in the process.

“While it’s natural to want to help children and grandchildren, it’s also important that retirees remember to make time for themselves to enjoy their retirement. Hodge offers a range of products that allow people to access the value locked up in their homes allowing them to live the retirement lifestyle they choose and help make their retirement work for them.”