December 14th, 2017 | Andrew Hagger | News

14 Dec 2017  A new set of insurance products are being launched that have been designed to cater specifically for the burgeoning sharing economy of AirBnB hosts and parking space rentals by a new entrant to the market.

The new company, Inlet, claims to have spotted a significant gap in the market that is being under-serviced and overcharged by current insurance policies. Louise Birritteri, CEO, explains, “The sharing economy has really taken off in the last couple of years but what people don’t realise is that, in most cases, their standard home or landlord insurance policy won’t cover them for losses or their liability for these types of short term letting activities – whether that’s letting a room in their house or renting out a parking space.”

“Some insurance providers do offer a level of cover for these sorts of arrangements in their annual policies but it often falls short of what the customer actually needs. It means that they don’t have the right cover and also end up having no choice but to pay over the odds for year-round insurance when, in most instances, they only need cover for a limited number of days a year.”

Inlet is launching with ten products covering four main product areas and plans to grow that to around 35 during 2018. The products areas that are available now:

·         Host insurance – cover for homeowners, tenants and landlords for the letting of rooms, annexes and whole houses

·         House swap – cover for homeowners and tenants who are house swapping

·         Landlord protection – cover for landlords to protect themselves should tenants sub-let their  property, with or without their knowledge

·         Parking host – cover for people letting their garage, driveway or allocated parking

These add-on products retail at around £1/day for Parking host and from £1.50/day for Host insurance. For clients to be eligible for cover, they must have an annual home insurance policy in place.

Birritteri continues, “With Inlet’s insurance products, people can buy cover they need ‘on-demand’, from a broker or direct, at a fixed daily price, for pretty much any period they like. Using the Inlet website, it takes no more than 2-3 minutes to arrange and costs from as little as £1 a day. We’ve also recognized that paying by the day can get expensive quite quickly, so we also offer packages for 35 and 90 days’ cover, as well as full year cover. Our aim is to make sure people only pay for what they need, at the most appropriate price, so they don’t end up wasting some of the valuable income they earn from asset renting on insurance they don’t need.” 

Inlet has designed its products to run alongside standard home and landlord policies on offer from any insurance provider. It means that the generation of AirBnB-ers can now get best of both worlds – the best deals for both their standard and shared economy cover avoiding the need to be tied into expensive home or landlord policies that offer both.

December 13th, 2017 | Andrew Hagger | News

13 Dec 2017  Thousands of UK adults have no idea that they are credit checked for financial products, from utility bills, mortgage applications and credit cards, according to a new study from Amigo Loans.

The research found that more than 51% of UK adults have never checked their credit score, meaning that thousands could be in for a nasty shock if they are declined when applying for financial products. Utility bills including electricity (63%) and gas (62%) and mobile phone contracts (37%) were amongst the everyday financial products that individuals didn’t realise could impact on their credit.

Almost a quarter of consumers also didn’t know they would be credit checked when applying for a credit card meaning they are potentially hindering their chances of getting one. When you are credit checked and declined it can actually damage your credit score further. This means unknowingly, many Brits could be making future applications ever harder. The numbers are even higher amongst 18-24 year olds with 42% failing to realise that an application for a credit card can impact their credit score if they are refused.

With property rentals on the rise, it’s concerning that 60% of adults didn’t know that in order to rent the property their credit could be checked first. And nearly a quarter of UK adults also hadn’t realised their credit would be checked when applying for a mortgage.

Lenders and banks use your credit score to judge how trustworthy you are and the level of risk involved in lending to you. Damaging it could severely impact an individual’s ability to be able to borrow from a lender, especially a mortgage or a loan.

Kelly Davies, Chief Communications Officer at Amigo Loans, which commissioned the study said: “Credit checking, credit scoring and pretty much the whole ‘credit history’ system is more mysterious than the Bermuda triangle for most of us Brits. It’s so clandestine and it needs to change because not knowing can really mess up a person’s chances of borrowing. The whole system needs reviewing; I’m not a fan of credit scoring because it can alienate people unfairly.”

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

Top things people DIDN’T know you were credit checked for:

1. Electricity direct debit payment – 63%
2. Gas direct debit payment – 62%
3. Property rental – 60%
4. Retail finance – 51%
5. Overdraft extension – 50%
6. Store cards – 47%
7. Car finance – 38%
8. Mobile phone monthly contract – 37%
9. Personal loan – 26%
10. Mortgage application –24%
11. Credit card –23%

Top tips for improving your credit score:

1. Double check you’re on the electoral register. Lenders use the electoral register to confirm an individual’s address and location and fight against identity fraud.
2. Try not to have a high balance on your credit card. Lenders may view this as excessive debt and think you have an inability to repay.
3. Make sure to pay your bills on time, or ahead of time, a good credit score will be built up over time.
4. Do not make multiple applications for credit as this can impact your record negatively.
5. If you notice anything unexpected on your credit report you could be a victim of identity fraud, i.e. someone could have applied for credit in your name, contact the credit reference agency who will try to resolve the issue, alongside the lender.
6. Only apply for credit which is necessary – applying for more than four a year can lower your score.
7. Cancel old credit card agreements and out of date credit cards, such as store cards you no longer use, as this will still show on your file. Lenders will be cautious about the possible size of your debt.
8. If you are divorced or separated, cut all financial ties and make sure your former partner’s details are eliminated from any joint accounts. The credit history of anyone you are financially associated with, such as a joint bank account with a spouse, can affect your credit rating.

December 12th, 2017 | Andrew Hagger | News

12 Dec 2017  With shoppers set to spend nearly £700 in total on Christmas this year – £100 more than last year – M&S Bank is encouraging motorists to check their car insurance before heading out Christmas shopping, ensuring the gifts they’ve purchased aren’t at risk from opportunistic thieves this festive season.

Research from M&S Bank has shown that the average Christmas shopper is expecting to spend £411 on presents and £289 on food and drink, a total of £700.

Festive shoppers will make between three and four trips to the shops to stock up for Christmas, with the main shopping trip expected to increase the vehicle’s contents by over £550 on average, which includes around £300 on presents and £257 on food and drink, which could be put at risk if left in an underinsured car.

Nearly half (46 per cent) will put their Christmas shopping at risk over the next few weeks by leaving it in the car – an increase of 10 per cent on last Christmas*. This includes taking presents back to the car in between shops to reduce the amount they have to carry (29 per cent), taking presents back to the car before heading out to dinner, the cinema or to Christmas markets (10 per cent), or keeping presents hidden in the car when they get home (seven per cent).

A spokesman for M&S Bank explained: “With just a couple of weeks until the big day, Christmas shopping is now well underway for many people.

“However, it’s often overlooked that the contents of your vehicle can prove a real target for opportunistic thieves, particularly at Christmas time. That’s why we’re urging shoppers to make sure they’ve got adequate car insurance to cover their Christmas shopping, should the worst happen.”

M&S Bank top tips for keeping your shopping safe this Christmas:

• Keep shopping bags covered and locked in the car boot – they could be tempting for opportunistic thieves if left visible
• Never leave expensive electrical items in view – make sure smartphones, tablets or games consoles are safely locked away or removed from the vehicle
• Don’t make it easy for thieves – be sure to fully close all windows and roof panels and always lock the vehicle, even if you’re just getting a ticket for the car park
• Don’t leave receipts in shopping bags – so you’ve got them to hand should the worst happen
• Check your car insurance policy – make sure you know what your policy does and doesn’t cover

December 11th, 2017 | Andrew Hagger | News

11 Dec 2017  All of Yorkshire Building Society’s variable rate savings accounts receive a 0.25% interest boost from Thursday (14 December) and there’s no time like the present to start the savings habit.

Variable rate accounts are now a much more attractive option for those looking to build a nest egg

Recent research from Equifax revealed that 43% of British adults don’t have any personal savings set aside for unexpected financial events, however the Yorkshire suggests this is easy to remedy.

For instance, by putting just £50 a month, the equivalent of buying a coffee shop latte every day for a month, into Yorkshire’s monthly regular saver account, which rises to 2%² on Thursday, a customer would save £605 a year or £1,223 over two years which is the full term of the account.

The Yorkshire Building Society was the first of only one of a small number of providers to pass on the whole of the recent Bank Rate rise to savers.

Louise Halliwell, Savings Manager at Yorkshire Building Society, said: “Variable rate accounts are a great choice for someone starting their savings journey because these accounts offer flexibility to access money easily without penalty.

“They are also great for watching your money grow – little and often is the best way to save.

“Getting started can be a bit daunting, that’s why we offer a saving health check in our branches and agencies to give savers guidance on the best account for them.

“It has been a tough few years for savers so we’re delighted to be able to pass on the full Bank Rate increase. We hope by providing this interest rate boost it will encourage more people to start the savings habit.”

December 11th, 2017 | Andrew Hagger | News

11 Dec 2017 With the Christmas period fast approaching, people across the country are already preparing to make changes to improve their finances in 2018.

In a recent survey to help promote a better understanding of Basic Bank Accounts, Virgin Money found that one in six people expect the cost of Christmas to mean they are likely to use their overdraft over the festive period, which would equate to over 8 million people across the UK. Of those likely to use their overdraft this Christmas, 42% say they will struggle to afford the interest charges that they will incur as a result of being overdrawn.

Although the festive period is not yet in full swing, people are already thinking about how they can improve their finances in the New Year. Over half (53%) want to be more in control of their money than they are at the moment and to achieve this, 41% of people intending to make a New Year’s resolution will look to manage their money and finances better in 2018.

While the research shows that overdraft charges will be unaffordable for some, many are unaware of the benefits a Basic Bank Account can offer. Nearly one in two are unaware of bank accounts that can prevent people going overdrawn and therefore avoid overdraft charges.

Basic Bank Accounts have many of the key features of a current account, but protect customers from the costs of going overdrawn, and charge no unpaid item fees. However, a third of people believe Basic Bank Accounts are only available for the financially excluded who are unable to get another type of bank account.

A spokesman for Virgin Money said: “Although most people look forward to the Christmas party season, the financial hangover can be painful for many. Rather than waiting until January, I’d encourage people to take control of their finances now, by making sure they have the right account to achieve their money goals in the New Year.”

“Many people believe that a Basic Bank Account is only for people on lower incomes or the financially excluded. That could mean some are missing the opportunity to take control of their finances and avoid unexpected overdraft charges. Opening a Basic Bank Account could be the first step towards financial health for a much broader range of people than you might expect.”

December 11th, 2017 | Andrew Hagger | News

11 Dec 2017  Commuters are carrying valuables worth more than £516 million every year, new research from Policy Expert has revealed. 8.6 million people travel across the TFL network, each carrying valuables worth more than £600, with mobile phones, jewellery and wearable gadgets all making the list of the most common items.

In addition to these findings, a Freedom of Information request to TFL also reveals that more than 330,000 items including phones, laptops, desktop computers and games consoles, made its way into TFL’s lost and found last year.

Of the incidents highlighted via the FOI, mobile phones were one of the most commonly lost items with 34,322 left behind. More than 1,000 laptops and 70 games consoles have also gone astray.

The data – which shows the total items lost every year since 2013 – revealed there has been a 24% increase in lost items, including a 19% increase in technology gadgets being left behind.

Adam Powell, Head of Operations at Policy Expert commented: “It’s easy to get distracted whilst travelling on public transport, particularly during the rush hour when trains, tubes and buses are jam packed. But it’s important to ensure you’re keeping a careful eye over your belongings to avoid taking a trip to the lost and found. Most importantly, make sure your home insurance policy includes away from home cover, that way, should you lose or leave a valuable item on the train, bus or tube, you know you’re covered.”

The most popular items UK adults carry on their daily commute:

1. Mobile phone – 92%
2. Wallet or purse – 76%
3. Jewellery – 34%
4. iPad/tablet- 14%
5. Wearable tech (e.g. Fitbit or Garmin) – 12%
6. Laptop – 9%
7. Kindle or e-reader – 6%

Top tips for protecting your valuables

1. The most lost and stolen items in the last year were mobile phones – while it’s tempting to check your phone when on the move, ensure you’re being sensible with where you make calls and texts. Keep it out of sight in a zipped bag or pocket.
2. Never idly put down any small valuable item, such as a phone or purse. Valuables left on tabletops in restaurants will be both easy and tempting to snatch and leave behind.
3. Keep your bag where you can see it, especially when on the tube or in a crowded area. If you’re in a restaurant place your chair leg through a bag handle to make it harder to move.
4. Be cautious if you’re walking by yourself, in the dark or with earphones in – being alone or distracted by music can make you more attractive to thieves.
5. If you’re using a cash machine, be wary of who is around you and make sure your pin is covered.
6. Thieves often work in groups, so try not be distracted by commotion or attention which could be a ploy.
7. Finally, check whether your home insurance policy includes away from home cover so if the worst does happen, you at least know you are covered financially.

December 6th, 2017 | Andrew Hagger | News

06 Dec 2017 Introduced in April 2015 the pension changes brought freedom and choice on how to take income in retirement. It means that most individuals, age 55 or over, can now withdraw as much or little income, as and when they like from their defined contribution (DC) pension scheme.

It may be tempting to take advantage of the new freedoms and cash in your pension, but have you really thought through what’s involved?

Please see below for WEALTH at work’s top tips to help inform your decision-making.

1. Don’t pay unnecessary tax
Tax planning should be at the heart of any pension transaction you undertake. Don’t forget that only the first 25% of the amount that you drawdown from your pension pot is tax free and the remaining 75% is taxed as earned income. If you cash in a pension during a tax year when you are still working, 75% of the sum withdrawn will be added to your earnings for that tax year and may push you into a higher tax bracket. It may therefore be worth considering withdrawing smaller amounts from your pot.

For example; if you are a non-taxpayer and have your full personal tax allowance available (£11,500 for 2017/18), you could withdraw £15,333 tax-free – 25% as tax free cash (£3,833.33) and the remaining 75% (£11,500.00) would fall within your personal allowance.

An option could be to take an income through ‘partial’ or ‘phased’ income drawdown. This would enable you to drawdown small amounts of your pension pot while keeping the majority of your savings invested in the pension and growing tax free. Of course, growth isn’t guaranteed and the value of your pension could fall instead.

Another important point to note is that if you withdraw any cash simply to add to your savings, the money withdrawn will form part of your estate for inheritance tax purposes. If left in the pension scheme, it would be exempt of inheritance tax.

Ultimately, it’s crucial not to forget that a pension remains one of the most tax efficient saving vehicles available.

2. Will your retirement savings withstand the test of time?
Before taking the cash, it is crucial to think about if you will have enough money to last the duration of your retirement. For example, a 65-year old man now has a 50% chance of living to 87 and a woman of the same age has the same chance of living until she’s 90, so making your retirement savings last is key. But don’t forget, it’s not a one-off decision; it’s advisable to regularly review your choices throughout your retirement as your needs evolve and income needs may change.

For example, income requirements are widely believed to follow a ‘u shape’ in retirement with the first ‘active’ phase being the most expensive. Spending seems to fall after a while in what is known as the ‘passive’ phase, as people become a little less active and perhaps cut back on areas such as travelling. But costs then may go up later in retirement in the ‘supported’ phase, if extra care and support is required.

3. Does your pension scheme allow it?
If you’re convinced that cashing in your pension pot is the right move for you, you need to ensure that your pension scheme allows you to do so.

You may, for example, be a member of a final salary, or ‘defined benefit’ (DB) scheme, which currently prohibits members from taking their savings in one go (unless on the grounds of serious ill health).

This means that you’ll need to transfer your savings into a suitable pension scheme to be able to access your cash. However, pension transfers are complex – there are many things you should consider before making any decisions, including if the transfer value being offered represents good value. Transferring from a DB pension scheme can mean that you will be giving up valuable guaranteed benefits and you might find yourself worse off.

To protect consumers it is now a legal requirement to take regulated financial advice for transfers on DB schemes valued at £30,000 or more. This advice is a highly specialised area and only certain advisers hold the relevant qualifications and permissions to help you. It should also be noted that the Financial Conduct Authority’s (FCA) current view is that a transfer will not be suitable unless it can be proved to be in your best interests.

4. Beware of scams
Pension savers getting scammed out of their retirement savings is a real issue. The problem is many of these scams look perfectly legitimate so are not easy to spot. Others offer investment returns which are too good to be true but people easily get sucked in. They often have very professional looking websites and literature.

Whatever you are planning to do with your retirement savings, check before you do anything that the company is registered with the 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.

5. Financial advice can be better value than no advice
Many people are concerned about the cost of advice without realising that when you buy retirement products such as annuities, through for example online brokers, there are charges deducted which can cost just as much, if not more, than getting advice. A financial adviser should look at your personal circumstances, objectives and attitude to risk and then, after considering all of the retirement income options available, make a specific recommendation to address your needs; then you have the benefit of consumer protection for the advice given. After all, according to research by Unbiased, UK savers who take advice save on average £98 more every month and receive an additional income of £3,654 every year of their retirement, based upon a pension pot of £100,000.

Jonathan Watts-Lay, Director, WEALTH at work, comments;
“The freedoms people now have with their pensions is a good thing, but it can be incredibly daunting especially when we see news headlines about people paying too much tax or getting scammed out of their retirement savings. But this doesn’t have to be the case. Getting the right support in terms of financial education, guidance and advice, can help individuals understand the many retirement income options available and how these can be calibrated to provide a retirement income in the most tax efficient way.”

December 6th, 2017 | Andrew Hagger | News

06 Dec 2017 Only 78% of British car buyers say they typically do any research at all before purchasing a car according to a study by car finance provider Black Horse. This is less than buyers researching a holiday (84%) and only slightly more than those who research smaller purchases such as a mobile phone (72%) or a TV (66%).

Of those who do research a car before buying, almost a quarter (23%) do so for a day or less, whilst almost half (47%) say they spend a week or less doing so. Just under one in five (19%) say they spend a month researching before buying.

Similarly when selecting which purchase they’d spend most time researching from a list (see table 1), 31% of Brits said a holiday, almost double that of those who said a car (16%). This gulf is widest in 18-24 year olds where 41% say they typically spend the most time researching a holiday and 19% said mobile phone, compared to only 9% who answered a car.

Black Horse head of motor finance Tim Smith said: “With the obvious exception of property, a car is likely to be the most expensive purchase people make. So its crucial that people carry out detailed research before buying and our data suggests many of us do not. We also see a large volume of buyers appear to carry out only limited research despite the likely cost and lifespan of the purchase.

“We would strongly encourage anyone looking to buy or lease a car to consider all options available to them, to shop around for the best deal and fully understand the total cost especially over the term of a finance or leasing agreement. Whilst consumers rightly research electronic goods and holidays before buying, the reality is these are not usually as expensive as a car.”

December 6th, 2017 | Andrew Hagger | News

05 Dec 2017 A quarter (24%) of UK SMEs believe that banks have failed to change the way they behave since the global financial crisis in 2008. The survey of UK SMEs from CivilisedBank, the new UK business bank with a Local Banker network, also reveals that over half (55%) of those surveyed believe that it is not a priority for banks to act in a ‘civilised’ manner.

Some of the reasons given for this negative sentiment includes the continued closure of branches, poor customer service and an emphasis on profits before service. Indeed, one respondent stated that bank staff are pressured to make short-term sales to boost low basic salaries, rather than focusing on long-term business development and client relationships.

Some executives at SMEs noted that with the removal of local relationship managers there is no consistent point of contact at their bank, resulting in a limited understanding of their business to help inform decisions. Others highlight that rather than treating SMEs as individual entities, decisions are made via computer algorithms with little understanding of the case-by-case requirements of each business from an informed, personal perspective.

Over four fifths (82%) of SMEs think that banks behave in a civilised way at least some of the time, while 3% believe that banks never behave in a civilised way. In fact, only 8% believe banks operate in a civilised way all the time.

Despite this, almost three quarters (73%) agree that they would consider a bank that behaves in a civilised way, over those that do not. Over two fifths (46%) of SMEs also think it is extremely important for their suppliers and partners to act in a civilised way.

Philip Acton, Chief Executive Officer, CivilisedBank said: “It’s clear that SMEs want to see change. Despite many initiatives since 2008, a quarter of executives at SMEs still think nothing has changed in banking.

“As an industry, banking needs to get back to the future and to revisit customer service and personal relationships, something that has been lost over the years. Whilst much has changed since the 2008 global financial crisis, the good work that’s been done has not resonated with the wider public. As a sector, banks need to reconnect with SME customers.”

Meanwhile, amongst SMEs themselves, almost a third (32%) are actively taking steps to make their business more civilised. Some 13% are placing a particular focus on being more ‘hands on’ with their customers so that they can develop meaningful, long-term relationships. Only 7% said that making their business more civilised was not a priority.

Over half of SMEs (59%) selected ‘fair treatment of customers’ as representing what being civilised means to their business, with being a ‘responsible employer’ (38%) and having ‘strong relationships with customers’ (37%) also ranking highly.

Nick Gould, Chairman of the SME Alliance said: “SMEs are, as we keep being told, the backbone of the UK economy and in times of wider uncertainty it is vital that they are given the support they need in order to grow. The banking sector as a whole needs to examine constantly how best to meet the needs of this massive market. Banks need to combine the best of innovative technology and a more relationship driven approach, the old and the new. What is clear from evidence we have seen is that the current status quo isn’t reliable or effective enough if we are to foster a truly vibrant and innovative SME driven economy.”

November 29th, 2017 | Andrew Hagger | News

29 Nov 2017 With Brexit anxiety, interest rates on the up and house prices expected to stall, the current property market is a minefield for anyone looking to buy in the UK. Despite this uncertain time, the desire for Brits to get on the property ladder is still strong, especially among those in their 20s.

A SpareRoom.co.uk survey of more than 5,000 British renters found that 86% of 20-somethings said they want to get on the property ladder, with 52% wanting to do so in their twenties. The vast majority of those (87%) said the main motivator is to pay into their own home, rather than lining their landlord’s pocket.

But the bank of mum and dad isn’t an option for most. 87% of 20-somethings said they intend to save a deposit from their salary, with just 1 in 3 anticipating help from parents.

With the average UK salary standing at £27,600 (£34,473 in London) and the average house deposit at £33,000 (£106,577 in London), people saving the average 5.9% of their income outside of London (around £108 a month) would need to do so for 25 years to accumulate a deposit. And those buying in London, saving an average of £131 a month, would need to save for a staggering 68 years to save up the deposit. This means buying in their twenties is an unachievable dream for most, even with the stamp duty relief announced in the recent Budget.

The findings uncover the extremity of the situation, with 93% of London flatsharers in their 20s saying they may have to leave the capital to buy a house and 87% across the UK are facing the prospect of leaving the town/city they call home in order to buy.

In contrast, people who are forty plus are far less bothered about owning. 29% said they don’t think owning is important, compared with 10% of people in their twenties and 15% of people in their thirties.

This piles on the pressure to find a high paying job to save a deposit and, even then, affordability is still a huge issue, as a quarter (25%) of twenty-somethings who bought and then sold a property said this was because they could no longer afford it.

Personal Finance expert Andrew Hagger from Moneycomms commented on the findings: “Buying a house isn’t a fool proof money maker. The UK’s property market is far less certain than just 18 months ago, and buyers are faced with rising inflation and interest rates. House prices are also stalling and in London there’s signs they’re falling. This may seem like good news to first time buyers but, if the trend continues, there’s a strong possibility people will end up trapped in negative equity.

“The financial pressure of buying a house isn’t just the deposit and the monthly mortgage repayments. If anything goes wrong, you have to pay for it and this can be a huge cost. Young people need to consider whether they can truly afford this without getting into difficulty. Buying a house in your twenties ties you to a long-term responsibility that can be tricky to get out of.

“Property can be a great investment, but you need to weigh up whether the potential profits currently outweigh the risk of ending up in negative equity. This is a decision that should not be rushed.”

Matt Hutchinson, director, SpareRoom comments: “Ownership is undeniably the wise long-term option for those who can afford it. But people in their twenties are putting too much unrealistic pressure on themselves to get on the property ladder. Renting ought to be the perfect choice in your twenties, leaving you flexible to move around, travel, change jobs or find a partner to settle down with. But we’ve become so terrified of missing out on the long term financial benefits of owning, buying feels like the only option.

“Brits have been force fed the notion by successive governments that buying is the right thing to do. But it’s not currently the realistic thing to do, leaving millions of people feeling locked out of financial security and like they’re a failure. That’s just plain wrong.”

If 82% of people think they’ll have to move to another area in order to buy then our housing market is failing us. Our homes should be secure, comfortable, affordable platforms for us to lead happy and productive lives. Instead they’ve become financial assets, investments, pensions and, for a whole generation, nothing more than a pipe dream.”