January 15th, 2018 | Andrew Hagger | News

15 Jan 2018  Up to 1.3 million recipients of pension advice could miss out on £236m of potential tax savings, if advisers and employers do not act on new legislation in time for April.

Employees can now sacrifice up to £500 taxable salary p.a., in return for a tax-free payment from their employer, reimbursing them for any fees paid for pension advice. Salary sacrifice schemes – such as Childcare Vouchers or Cycle to Work schemes – allow employees to swap taxable salary for a non-taxable benefit in kind. In the case of pension advice, this can save people up to £310 p.a. in tax and national insurance.

However, the new legislation has gone largely unnoticed since receiving Royal Assent in November. No Employee Benefits Platform has built a scheme to help employers in the same way as they have with Childcare Vouchers and Cycle to Work, due to the complexities involved. Consequently, very few employers have plans to offer this benefit.

If this does not change in time for the end of this tax year, 1.3m clients could miss out on an average saving of £187 for the 2017-18 tax year.

Pension Advice Vouchers – launched by VouchedFor in December – is the only pension advice salary sacrifice scheme to have launched in the wake of this new legislation. Adam Price, MD, comments “Access to good financial advice is so important right now, and this government initiative reduces the cost by up to 62%. But very few employers yet offer this benefit. It’s especially urgent for the 1.3m employees who already pay for advice each year – they only have until April if they want to capture their first year’s savings.”

Adam continues with this advice:

• “Employees – should urge their employer to join the Pension Advice Voucher scheme. Most easily, they can submit a request through the website. We will then work with both their employer and adviser to put everything in place.”
• “Employers – can register with Pension Advice Vouchers and start promoting the scheme with just a few clicks.”
• “Advisers – can register with VouchedFor free-of-charge, then login to invite their clients to claim vouchers from their employer. They can also encourage their corporate clients to join the scheme”

Commenting on VouchedFor’s innovation, Adam adds “We found we had all the necessary ingredients to bring this scheme to market quickly, just in time for the first April deadline. Our VouchedFor verification system makes it possible for us to contact any UK IFA on an employee’s behalf and verify the validity of their request for fee reimbursement. And of course, VouchedFor makes it easy for any employee who needs a good IFA to find one. Finally, with Hatch – our new hybrid robo-coach financial planning service – we have a low cost solution for those employees who fall below advisers’ minimum criteria.”

January 12th, 2018 | Andrew Hagger | News

12 Jan 2018 With almost 900,000 National Savings ‘Pensioner Bonds’ due to mature over the next four months, savers may be looking for inspiration as to where to put their money in today’s market.

At the time the 3 year Pensioner Bonds from NS&I were launched offering a fixed 4% return,  the offer rate was way above market rates at the time and is even more so today.

Andrew Hagger of the website Moneycomms said:”To be brutally honest, there’s no chance of earning anywhere near that figure today without taking an element of risk.”

“The stock market has performed well in recent years but potential volatility means it’s not going to be suitable for many pensioners particularly if this money represents the bulk of their savings nest egg.”

“For some it may be worth looking a little more closely at some of the more established peer to peer options – for example RateSetter is paying 3.1% on 30 day money today – although nobody has lost any money since it started over 7 years ago it’s important that you understand that your capital is at risk and is not covered by the Financial Services Compensation Scheme (FSCS) guarantee.”

As for standard fixed rate options please see the best buys below – some of these names may not be familiar with some savers but they are all banks covered by UK FSCS so your money is as safe as it is with a high street bank or NS&I.

The decision is whether you put all your cash away for three years or perhaps split it so half in for three years and half for a shorter term – with interest rates possibly rising again later in 2018 or early 2019 we may see fixed rates creep up so maybe better to avoid locking all your cash away for 3 years as you may miss out on slightly higher returns.

Best Buys – fixed rate bonds as at 12 January 2018

January 12th, 2018 | Andrew Hagger | News

January 8th, 2018 | Andrew Hagger | News

08 Jan 2018 The increasing cost of living and the impact of Brexit top the Nation’s main financial concerns for 2018, according to new research from GoCompare.

The research found that 40% of people think that 2018 will be a financially challenging year, with 12% admitting to being ‘seriously worried about their finances’ in the year ahead.

Just under half (49%) of people said they need to try and reduce their outgoings in 2018, with  one in ten expecting to carry credit card debt for most of 2018 and 7% relying on credit cards simply to make ends meet.

The rising cost of living was of greatest concern to those aged 65 and over with 73% citing it as their biggest financial worry in 2018, compared with 58% of all UK adults.  Meanwhile, young adults (aged 18 to 24) were significantly more concerned (35%) than the UK adult population as a whole about the ability to find sufficient work.

Commenting on the research, a spokesman for GoCompare, said; “The level to which people are worried about their financial situation and job security in coming year is a real concern. We know that money worries can impact on our relationships, our work and our mental health, causing us to make poorer financial decisions which in turn could make our situation worse. With the rising cost of living and most of us unlikely to see a pay rise any time soon, it’s no surprise many are expecting to have to make sacrifices.

“But while there will be some who simply cannot find areas to make any savings, the vast majority of us could and it doesn’t have to lead to great hardship either. Why pay more than you need to for your utilities or insurance?

“Just twenty minutes on a comparison site  could set you on a path to ensure you are thousands of pounds richer by the end of the year. Providers are constantly review their pricing, so even if you think you’re currently getting a good deal on your financial products it’s worth shopping around on a regular basis to find out. It might be the best New Year’s resolution you have made!

January 3rd, 2018 | Andrew Hagger | News

03 Jan 2018 New Research reveals that the costs for energy, motor and home insurance have risen by 13% over the past year from £2,216 to £2,502, leaving consumers £286 out of pocket.

Energy bills have seen the most dramatic price hike, as customers have paid on average over £200 more than the previous year. The average bill is now £1,625 – an increase of almost a fifth (17%) on the 2016 figure of £1,383.

Changes to the personal injury discount rate (also known as the Ogden Rate), and Insurance Premium Tax (IPT), which impacted the cost of car insurance in 2016 and 2017, continues to impact finances. The rising cost of cover shows no sign of slowing, as findings show that car insurance premiums rose by a further £43 in 2017. This follows 2016’s sharp increase of almost £100. Home insurance was the least affected by price hikes, rising by barely noticeable 85 pence in 2017.

Some regions have been hit worse than others. Wales has experienced the highest price increases in the UK over the course of 2017. Household bills soared by £500, with energy bills increasing by a huge £458. Scotland too has also seen large bill increases, with costs rising by 15%, rising to £2,317.87.

Simon McCulloch, of Comparethemarket, commented: “It’s been a torrid three years for household finances. The combination of soaring bills and squeezed wages is causing a lot of pain for millions. The ongoing trend of ‘billflation’ is most apparent within the car and energy markets; in the latter case consumers can expect to pay around £200 more than they did in 2016. UK motorists are paying a heavy price for the changes to IPT in 2016 and 2017 and the Ogden Rate, brought about in March this year, which have significantly increased the costs of insuring a vehicle.

“Despite recent announcements from big-six energy firms who plan to scrap Standard Variable Tariffs (SVTs), millions are still languishing on expensive default tariffs, which may account for the fact that energy costs are at a record high.

However, it is not all doom and gloom. Significant savings that can be made by switching suppliers. Consumers can expect to save, on average, over £500 on all their household bills simply by shopping around for the best deal.  As steep, annual price hikes have rather depressingly become the norm, it is vital that people engage with finances and find the best deals in the market. Only then can they offset the impact of soaring bills.”

January 3rd, 2018 | Andrew Hagger | News

03 Jan 2018 Around three in five millennials currently saving for a house deposit are more confident in their ability to achieve their goal following the Chancellor’s stamp duty changes, according to the latest sentiment research from Foresters Friendly Society. Around 17% of this age group are much more confident following the announcement.

The Lifetime ISA (LISA) was developed in order to specifically help those under 40 years old in their long-term saving. And while there is now a strong awareness of the Lifetime ISA amongst this age group, with three quarters having heard of it, too few have chosen to take advantage of the benefits. Take-up sits at just 11% of those eligible and this figure remains the same even amongst the third of respondents who view a house deposit as one of their current savings priorities.

The figures clearly show the lack of understanding amongst younger savers about the best way to save at their stage of life, with many preferring options that offer limited risk but also weaker returns.  Low down on the list of preferable saving vehicles are those options that are best suited to early saving such as the Lifetime ISA (9%) and Stocks and shares (5%). Those that are saving for a house deposit are instead opting for savings accounts (43%), cash ISAs (27%), and current accounts (24%) as their preferred way to save.

Paul Osborn, Chief Executive for Foresters Friendly Society commented:

“As young people continue to strive to get on the housing ladder, it’s hugely important that they use the most suitable products to help them achieve their savings goals. While economic uncertainty tends to push people towards options deemed as lower risk, doing so can mean forfeiting much needed returns and makes the effort of saving for a house deposit feel even more of a struggle.

“While it’s encouraging that three quarters of those under 40 are aware of the Lifetime ISA, it is evident that more work needs to be done to help them understand the role that it can play in their long-term savings plan. The 25% government bonus offers significant savings support at a time when inflation continues to outstrip wage growth and is putting pressure on people’s savings.”

January 1st, 2018 | Andrew Hagger | News

01 Jan 2018  One in ten UK adults said they were considering buying or giving a home to a dog or cat before the end of the year, according to new research from Sainsbury’s Bank Pet Insurance, with an even split between those intending to get a cat or  a dog.

Throughout the festive season 5% of UK adults said they were considering buying a puppy or a kitten while 3% planned to give a home to a rescue dog or cat.

Sainsbury’s Bank says those who have a new puppy or kitten should get their pet insured from a young age as they can be particularly vulnerable to parasites and prone to accidents as they explore their new home.

Analysis of Sainsbury’s Bank’s claims data shows that from 2013 to 2017 there were 24% more claims for pets aged under two than those aged between two and three.

Further analysis of the claims data shows that the ailments that younger pets (aged 0-1) suffer more frequently than older pets (aged 2-3) are: leg/hip/shoulder disorders (56% more common), skin disorders (41% more common) and accidents and injuries (38% more common).

The ten most popular cat and dog breeds insured by Sainsbury’s Bank Pet Insurance up to the age of four are: crossbreed, moggy, Labrador Retriever, Cocker Spaniel, Cavalier King Charles Spaniel, West Highland White Terrier, Staffordshire Bull Terrier, Golden Retriever, English Springer Spaniel and German Shepherd.

Sainsbury’s Bank Pet Insurance is currently offering 12 months for 9 , available to new Pet Insurance customers who buy online. New customers with a Nectar card can receive up to a 12.5% discount as well as double Nectar points on Sainsbury’s shopping and fuel. 

Sainsbury’s Bank Pet Insurance lets customers build a policy to suit their pet’s needs. There are three policy levels to choose from as well as additional cover options available. For further information people can call 0330 100 7925 or go online at www.sainsburysbank.co.uk

December 28th, 2017 | Andrew Hagger | News

28 Dec 2017  Many UK families will enter the New Year with a resolution to sort out their finances and research from OneFamily has revealed that forgotten pension pots may be a good place to start.

Millions of savers admit to losing track of their pensions savings, with just 47% saying they know who their provider is. Savers are also in the dark about how much they have put away with one in three workers (32%) saying they have no idea what they have saved and a further third (37%) saying they only have a vague idea.

To help people get on top of their retirement savings this January, OneFamily has the following advice:

• Contact old employers. If you think you may have had a pension through an old job contact the HR team at the company who should be able to point you in the right direction
• Combine your pots: Sometimes multiple pots can seem like too much to manage – over one in 10 people (13%) has three or more to keep track of – you can combine all your savings into one account to make it easier to keep track of, however you need to check any fees you may need to pay if you are moving money
• Track down lost pots: Get in touch with old providers so you can map out what money you may have sitting with them. The Government provides a handy Pensions Tracing Service to help you find lost pots
• Start young: There are lots of options to help top up your retirement savings. While many people might take advantage of a Lifetime ISA for the money towards a deposit on their first property, they are also a great product for under 40s to start putting extra money away for retirement
• Check just how much you are saving for retirement: While auto-enrolment has seen more people than ever saving into a pension, at present the minimum saving is 2% (of which at least 1% must be paid by your employer). While there are plans to increase this over time to a total of 8%, you may not be putting an adequate amount away to reach your goals for retirement, so check now to avoid problems down the line. Your provider should also send you an annual statement which you can review.
• Talk to a financial adviser. Taking financial advice when you are thinking about how much you need to save for retirement, or when you are getting close to could help you make the most of your pensions savings and inform you about other products that might help both before and during retirement
• Make the most of what you have once you reach retirement: For those nearing retirement, they might feel their existing savings will not enable them to achieve the level of income they need. However, there are other ways to boost the cash you’ll need for retirement. Many people are using equity in their home and releasing it using products like OneFamily’s Lifetime Mortgages to help them achieve their goals.

Simon Markey, OneFamily CEO, commented: “The start of New Year is a great opportunity for savers to get their existing investments in order, plus think about the future and what they might need. Tracking down and keeping on top of existing savings is the first step, but also thinking about what you might need in your later years, and how you plan to fund them, is equally important.

“For those nearing retirement who may find they don’t have as much put away as they hoped, there are a number of alternative ways to fund it. Lifetime mortgages are becoming an increasingly popular option as people take advantage of the value hidden in their homes, and over the last year, the number of people using these has increased by nearly 60% as homeowners take advantage of the house price increases we have seen over the last few years.”

For useful information on managing your finances visit the OneFamily Hub and the Pensions Tracing Service can be found by clicking here. 

December 27th, 2017 | Andrew Hagger | News

27 Dec 2017  Financial New Year’s Resolutions from Samantha Seaton, CEO of Moneyhub Enterprise

1. Change unhealthy spending habits

Notice when you’re engaging in bad money habits, whether it’s unnecessary daily spending, prioritising short term goals or not taking financial advice when it’s needed. Once you have identified if you’re engaging in these kinds of behaviours then you can begin to put plans in place to enable you to take control of your financial wellbeing. Traditional guidance would have been to put aside an hour a week to undertake financial admin but modern money management tools like Moneyhub will make this easier and help you understand how to make your money work harder for you.

2. Make realistic budgets and set spending limits

Make sure you have an accurate list of all of your outgoings including your rent or mortgage, utility bills, council tax, fuel and food. The more realistic you are about your spending the easier it will be to get results from your plan, so factoring in things like eating out and socialising is essential. Modern money management tools make this easy by tracking and categorising your spending for you and tracking your goals for you. Remember, assign as much as you can to debt repayment as the sooner you can pay off your credit, the less you’ll pay in interest, saving you money in the long run.

3. Use platforms to keep track of finances in one place

Use money management tools to see all of your spending and saving in one place. This makes it easier to understand your money as the spending analytics can show you exactly where your money goes each month and nudges can remind you if you’re about to exceed a spending goal, if a bill is due for payment, and even identify opportunities to save.

4. Make a repayment / savings plan

Once bills are covered each month then your focus should turn to debt repayment and savings. Repaying debts should take priority over saving as the interest due on loans is likelier to be higher than any interest earned in cash ISAs, leaving you out of pocket in the long run. Don’t forget, if you can afford to pay off a larger percentage of your loan then make sure you won’t be charged for paying them back early.

5. Ask for help if you need it

At this time of year, it may seem like every other TV and radio advert is for a debt management company. While this may feel like a tempting option if you need support, remember that their help comes at a cost. There are numerous charities and government organisations that are set up to help people struggling with debt, for free. Companies like National Debtline, the Money Advice Service, Stepchange and Citizens Advice offer free debt advice, and some can even contact the credit providers on your behalf to set up a payment plan that works for both of you. Once you have a plan modern money management tools, like Moneyhub analyse your data for you and give you nudges to help you stay on track and identify opportunities to save more money.

December 27th, 2017 | Andrew Hagger | News

26 Dec 2017 During the festive season, pension and retirement planning is rarely top of people’s “to do” list. But once the excitement of Christmas has passed, organising your future finances can be a great way to kick start the New Year, making sure you save enough for the retirement you’re hoping for.

Peter Bradshaw, National Accounts Director, Pension Monster offers five top tips to help people put their finances in order ready for the New Year:

• Swot up on your financial future: It’s crucial to understand how to provide for your future. There are many tools and services available that will enable you to forecast your budget and create a savings plan. One great example is Pension Monster which explains different options and offers free online guidance in just a few clicks.  It helps you to plan realistic savings goals and see how much you need to budget in order to meet them.www.pensionmonster.com
• Start saving now (if you haven’t already!): It may sound obvious but the sooner you start your contributions the longer they have to grow ahead of retirement, plus building up a ‘nest egg’ removes temptation to use it for something else and encourages a regular saving habit.  So, don’t delay, start saving today!

• Changing jobs? Don’t forget to keep track of your existing pension entitlements. : For many, the start of the New Year means the chance to rethink career choices. Don’t forget to stay in touch with your former pension schemes to receive annual statements, that way you’ll know just how much you’ve got tucked away, before you consider your next savings.

• Talk to the professionals: It will help clarify exactly what your options are and help you get the best returns to achieve your retirement objectives.

• Stay on top of your finances: Once you have set a financial plan, make sure to review it regularly and budget accordingly. Yearly statements and forecasts are available for all pension plans, making it easy to monitor your savings and view how well your long-term savings are performing for you.