Getting Loans and Credit & Managing Money - Feed How to successfully manage your personal finances Thu, 21 Jun 2018 14:54:30 +0000 hourly 1 39026437 Switch away from the “Big 6” energy companies to save money Wed, 20 Jun 2018 11:18:24 +0000 Alex Hartley Energy price rises are not exactly news. However, for many consumers, the rate at which the big energy companies continue to put up their prices means increasing, uncomfortable, pressure on personal finances. In May SSE became the last of the ‘Big Six’ energy companies to announce ongoing price rises. So, is it time to move away from the big companies and switch to a smaller energy provider instead to start saving cash?
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Recent price rises by the “Big 6” energy suppliers

All the major energy suppliers in the UK have now announced an increase in the prices that they charge for gas and electricity. That includes British Gas, EDF Energy, E.ON, Npower, Scottish Power, and SSE. The increases are different, depending on the energy company that you’re currently with. For example, SSE customers will see a 5.7% increase in the cost of gas and a 7.7% rise in electricity prices as of 11th July. For  2.36 million customers that’s going to result in an average increase of £76 a year. Around 4.1 million British Gas customers will see an increase of 5.5%, which will add an average of £60 to annual bills. Around a million people who buy their energy from Scottish Power will be paying £63 more on average (an increase of 5.5%). The same number of customers at NPower will be paying 5.3% more, which translates into a £64 increase, which will be payable from mid June. And finally, E.On has changed its billing processes with the result that the average standard variable rate will increase.

What can you do to save money on your energy bills?

Many of these price rises have been criticised by the government as “unjustified” but, given the fact that these are not nationally owned power companies but private entities, there is little that can be done to stop power companies increasing bills. So, the only solution for individual customers may be to shop around and find a cheaper energy supplier – which is increasingly where smaller energy companies are more appealing.

What does the process of switching suppliers involve?

It’s pretty simple, especially if you use one of the big and well established switching websites.

  • Create a comparison of the prices available to you – you’ll need to enter information, such as your post code and how you use energy, to get this.
  • You’ll be shown the options for comparison and the price of each one so you can see the available services and costs.
  • Make the switch – if you use one of the big comparison sites the switch can often be made on the site. Your new supplier will contact the old supplier for a meter reading and the switch automatically takes place.

Make sure you use a website that is Ofgem accredited and look for one that states you will have a 14 day cooling off period to change your mind if you decide the new supplier is not for you. Remember that price comparison websites take commissions from energy companies in return for a successful switch so there should be no cost to you.

What to bear in mind when you’re switching energy suppliers

  • Start by looking at your existing bills. This will be a useful way of working out how you already use your energy and could also help you to save cash. For example, if you’re using most of your energy during the day then you could opt for an off peak tariff that should be cheaper. Read your meter so that you know exactly how much energy you’re consuming per month and year and then look at the deal you were previously on to see if something similar would work with a new energy supplier.
  • Fixed and variable tariffs. When you’re choosing a new energy supplier your tariff options will be fixed or variable. A fixed tariff will remain the same for the length of your contract whereas a variable tariff may go up or down. So, if prices go down then you benefit more from a variable tariff but a fixed option may make it easier to budget.
  • What about a dual fuel deal? It’s always worth looking at whether it is cheaper to buy both gas and electricity from the same supplier – you may get a discount for doing this.
  • Look at the opportunities to save. For example, the supplier may offer a discount if you pay by direct debit and you could get a further discount if you opt to manage bills online, as opposed to receiving paper bills.

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How to cut the cost of your bank overdraft Mon, 18 Jun 2018 11:13:11 +0000 Alex Hartley How much does your bank overdraft cost you every year? Collectively, in the UK we paid out a total of £1.2bn on overdraft charges in 2017. Somehow, overdraft charges seem to have been overlooked by industry reform designed to make borrowing cheaper for consumers and charges can still be high. While some banks have anticipated incoming overdraft price caps by reducing their fees, many still remain fairly exorbitant.overdraft costs and fees

How much do overdrafts cost?

Government figures show that around a quarter of the UK has been overdrawn at some point in the past year. Charges vary from bank to bank but if you’re persistently entering into an unauthorised overdraft, for example, you could find yourself with incredibly burdensome costs. The Labour party has conceived plans to cap overdraft charges at £24 per month for every £100 borrowed. However, until that happens, banks are still free to apply fees and charges as they wish. So, how can you reduce your overall overdraft costs before the price caps are implemented?

8 ways to cut the cost of your bank overdraft

  1. Don’t go overdrawn. It sounds obvious but if you think about the times when you have dropped over your limit and incurred charges as a result it was probably when you weren’t concentrating particularly hard on your finances. If you are racking up high charges and you want to bring this to a halt then start by shifting your perspective so that your starting point is to begin managing your money so that you don’t go overdrawn in the first place.
  2. Start budgeting properly. Whether you use an app or pen and paper, if you are able to get on top of your incoming cash and outgoing expenses then you are much less likely to find yourself in a position of accidental (and expensive) overdraft.
  3. Switch your bank. The charges that are applied to overdrafts vary a lot from one bank to the next. You can significantly reduce what you’re paying for your overdraft by getting it from another provider. For example, if you borrowed £500 via an unauthorised overdraft for a week you’d be charged £7.75 (£6 monthly fee and £1.75 interest) by Natwest and £5.25 (75p a day up to £1,000) at Barclay’s. If you were a First Direct customer you’d pay just 71p in interest, as there are no fees or charges applied at that bank.
  4. You can still move banks even if you’re already overdrawn. Many banks look at someone who is already using their overdraft and see them as a much more lucrative option than someone who is not. So, you don’t have to wait until you’ve cleared the overdraft to move to a different bank. Shop around for the best rate and then make an application that involves paying off the existing overdraft with the new one.
  5. Speak to your current bank. Use the fact that you’re looking at other options as leverage to get a better detail on your overdraft use. If you keep going into an unauthorised overdraft, for example, you might be able to agree an authorised overdraft with the bank that attracts lower charges and makes it cheaper for you to use. If you’re already in overdraft then apply for an extension – yes, you will attract more interest and a fee but this is likely to be cheaper than continuously going over your overdraft limit and paying the penalty charges as a result.
  6. Get text alerts from your bank. Most banks now offer a text alert service that will tell you when you’re getting close to your account limit – or about to go over it. This might seem very simple but is also very effective. Financial Conduct Authority research found that using text alerts and a banking app tended to reduce monthly overdraft charges by an average of 24%.
  7. Pay off your overdraft with cheaper debt. 0% credit cards and personal loans with lower rates can be a much better option than remaining in an overdraft where the charges are much higher.
  8. Stop using cheques. If you’re trying to manage your money better then cheques can be a real hazard. The time that a cheque takes to come out of your account will depend on when the recipient of the account banks the cheque and how long your bank takes to process it. So, the moment that a cheque is going to hit your account will be completely unpredictable and cheques could very easily be the items that push you over your limit.


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How much does a wedding cost and how can you pay for it? Fri, 15 Jun 2018 11:09:22 +0000 Alex Hartley In 2017, the average cost of a wedding was £27,161 – an increase of almost 10% on the cost of a wedding the year before! Given that the average salary in the UK is £27,271, paying for a wedding is a significant challenge for many people. So, what are the costs involved in your wedding budget and how are you going to pay for them?the cost of weddings

Your wedding budget – the main costs

It’s crucial to start with a budget when you’re planning a wedding because it’s very easy for wedding expenses to escalate. Cake makers, venues and photographers instantly increase their prices when the word “wedding” is involved. But that doesn’t mean that you can’t still have the perfect big day, as long as you’re prepared to pay for it.

A wedding venue

The average wedding venue will set you back around £2,790. This may not seem that expensive until you realise that this is only the location where the ceremony takes place and not where your guests will drink, dine and party.

A reception location

Receptions can be held almost anywhere, from a classic country house or golf course through to your parent’s top field. The average amount that couples pay for their reception location is £3,919, which will usually include standard event furniture but not decorations. It’s also worth noting that you’ll be paying separately for the catering and this figure will only cover the cost of the venue hire.

Food and drink

The cost of food and drink will can also vary enormously and if you’re able to arrange some of the catering via friends or family then discounts can help you to save significantly here. Average catering costs come in at around £3,959 but you may need to revise this figure depending on factors such as the kind of catering you want to have, as well as the number of guests and the number of times you’re planning to feed them.

A photographer/videographer

You could, in theory, get your guests to snap away on smart phones and then send you all the images collected to save costs on your wedding photography. However, most people want to have at least a couple of shots that are professionally taken to keep and frame. A wedding photographer will set you back an average of £1,046, depending on how long you need them for and how much shooting they need to do.


Your wedding location and reception venue will most likely both need some decoration, whether that’s flowers, balloons or gorgeous place settings. Costs will vary but an average expense for wedding flowers, for example, is £638.


The average cost of a honeymoon is £4,413 – under any other circumstances that would be a pretty pricey holiday for two. Of course you can keep your costs down by opting for a less exotic location but it’s still a key expense to consider.

Other Bits & Bobs

These are some of the major costs involved in any wedding but you’ll also need to bear in mind the smaller expenses, as these can really add up:

  • Entertainment: £773
  • Cake: £300
  • Groom’s outfit: £439
  • Bride’s outfit: £1,677
  • Wedding rings: £809
  • Stationery: £271

How can you cover the cost of your wedding?

Couples all over the world have come up with a wealth of creative solutions for finding new ways to pay for a wedding, including:

  • Find a sponsor – agree a reduction in wedding prices in return for advertising on the day
  • Pay as you go – most wedding services companies will take a large, up front deposit and then enable you to pay as you go for the rest
  • Use your gift list – many gift lists today offer the opportunity for guests to contribute financially instead of buying a gift, whether that’s to the cost of the honeymoon or the dress. So, you’ll have a pot of cash after the event to clear anything you owe
  • Use equity release – for weddings later in life, equity release from an owned property can be a great resource

Any for the rest of us…

Borrowing has become a regular part of wedding financing today and can help ensure that you have everything in place for the perfect occasion. Wedding finance options include:

  • Personal loans – longer-term unsecured lending that can be repaid over a period of years
  • Secured loans – if you’re looking for wedding financing and own your home then a homeowner loan allows you to borrow against your property (with possibly a more flexible approach to your credit rating)
  • Credit cards – find a low cost or 0% credit card so that you don’t pay interest on covering some of the cost of your wedding

note: data source –

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How to live your life off the grid – running away from your bad credit rating! Wed, 13 Jun 2018 10:42:24 +0000 Alex Hartley Living off the grid sounds like something Jason Bourne would do. However, escaping a world driven by consumerism and cash – especially if you don’t have an ideal credit rating – is certainly worth considering. So, how do you do it?living life off the grid

Why would you choose to go “off grid”?

Assuming that you’re not being chased by a government agency, the main motivation for living off grid is often to escape the influence of over-consumerism. Many people with poor credit ratings also find themselves trapped in a world where products and services are expensive and it’s difficult to improve a credit rating to get access to better deals. Going off grid means you can escape the shadow cast by your credit rating and make life choices that aren’t dominated by consumerism.

7 stage plan to live your life off grid

  • Minimise what you own and what you need. It’s very easy to become a hoarder in the shopping-driven world that we live in today. You might feel like you really “need” to have a power shower and 15 pairs of red shoes but the reality is that you don’t. If you want to go off grid and make it work then it’s best to adopt a traveller-style attitude so that you only have with you what you really need. Minimise your possessions and identify what it is that is essential to your survival and what is really just luxury or extra.
  • Own your own home. It’s quite difficult to live life off grid if you have a landlord or a mortgage, as every time you move or remortgage you’ll be subject to credit and personal checks. If you own your own property then you have no ties to outside financial institutions or other companies or people. This doesn’t have to be a bricks and mortar property – it could be a canal boat, a yurt, even a tent on land you own.
  • Investigate alternative power sources. Some people who go off grid are happy to forgo basics such as water and electricity. If that’s not you then you’re going to need to find other sources of heat and light than just getting them from big power companies. Alternative energy provides some great options here, from solar panels on the roof through to wind turbines in the garden. You could also resort to more traditional sources of heat and light, from wood burning stoves to oil lamps and candles – or just get used to getting up and going to sleep as the sun rises and sets.
  • Look at the future cost of everything you buy. When we’re evaluating the cost of an item we often only look at how much we’re going to pay to acquire it. This kind of short-term thinking means you’ll most likely be back on the grid in no time at all. So, when you’re investing the money that you have in something, try to get an idea of the future cost too. What will it cost to run, how much would you pay to replace it and what will the maintenance expenses be?
  • Take a step back from tech. Technology requires a lot of energy to power it and, if you’re going off grid, that could be difficult to obtain. So, it’s often useful to take a step back from tech or go back to simpler times – replace your radio app on your smart phone, for example, with a wind up radio that doesn’t require electricity to power it.
  • Make frugal living your goal. If you’re living off grid then life isn’t going to be one expensive whirl of luxuries. Although, of course, that depends on what your definition of a luxury is – if it’s freedom from commuting, spending time in nature and not having to worry about energy price rises then off grid could feel like a very luxurious lifestyle. Either way, get used to looking for the cheapest options and finding ways to make savings. That could be something as simple as growing your own food, making your own furniture or getting a sewing machine and learning how to create or customise your own clothes.
  • Don’t leave debts behind you when you go. Going off grid with a poor credit rating is one thing but taking the step when you have a poor credit rating and a lot of debt is quite another. If you clear your debts and stop spending as a result of going off grid then the end result could be that your credit rating actually beings to improve. However, if you leave debts behind you – on which you don’t plan to make any further payments – this will send your credit rating through the floor and could result in court action.

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Why you should consider consolidating your unsecured debt Mon, 11 Jun 2018 11:15:39 +0000 Alex Hartley When you’re juggling multiple debts it can be difficult to ensure that you meet the payment deadlines and don’t get into trouble with managing your other finances. Many people, for whatever reason, find themselves with more than one debt to manage and sometimes that can be challenging. If you’re looking for a way to simplify your finances, as well as reduce the amount of interest that you pay, then consolidating your unsecured debt could be the answer.consolidate unsecured debt

Debt consolidation loans – what are they?

The idea behind a debt consolidation loan is to take all your unsecured debts and consolidate them into one single debt. In practice, this means taking out a new loan that will cover the cost of all the other debts, using that to pay off those existing debts and then settling down to repay that new loan over time. In terms of simplifying your debts and giving you opportunities to make them more manageable, debt consolidation loans can be advantageous.

The benefits of consolidating your unsecured debt

  • Combine everything you owe into one single debt that you can monitor and manage much more easily. No more missed monthly payments or inconsistent interest rates – everything will be under one single agreement.
  • Cut the interest rates that you’re paying. If you have a range of different debts to combine then these may have a differing interest rates too, some higher than others. One of the major advantages of consolidating debt is that you may be able to cut costs with a debt consolidation loan that has a lower overall interest rate. The less you pay for your debt, the easier it will be to clear it more quickly.
  • Reduce your monthly payments. If you’re struggling to meet current debt repayments, a consolidation loan could provide the opportunity to restructure in a way that suits you better when it comes to repayment. Choose a slightly longer term for your consolidation loan and you’ll have lower monthly payments to deal with. This may mean that you’re repaying debt over a longer period of time – and so you may also pay more interest overall. However, it will put less pressure on monthly finances and may make it easier to ensure you stay on top of them.

Consolidating your unsecured debt – what to be aware of

Debt consolidation loans can help you to better manage existing debts, from personal loans and credit cards to overdrafts and store cards. However, it’s worth looking carefully at the terms you’re being offering to make sure they are really going to be beneficial. In particular look out for:

  • An interest rate that is higher than the one you’re already paying
  • Monthly repayments that are higher than required by your current debts (unless you’re looking to pay the debt off more quickly)
  • The opportunity to spend the consolidation loan without repaying the debt. If you don’t use the debt consolidation loan to repay those other debts then you will end up with double the debt as a result
  • Fees and charges that are applied by any of the lenders you’ll be repaying – what additional costs will there be to make early repayment?

How to arrange debt consolidation loans

  • Work out exactly how much you need. Don’t borrow more than you need but make sure you’ll have enough to clear all the older debts and close down the accounts so you’re not tempted to spend them again.
  • Decide what kind of terms you’re looking for. Are you seeking a lower interest rate than on current debts and do you want to pay less each month, for example.
  • Shop around for an attractive lender. Debt consolidation loans are widely available and, depending on your credit score and existing debts, you should have some appealing choices. Online loans brokers, high street banks and digital lenders are all good options.
  • Choose one or two lenders to apply to. It’s a good idea to avoid making too many applications in a short space of time, as this will affect your credit score. Choose one lender instead and wait to hear about the outcome of the application before you move on to another.
  • When you receive your loan repay all the other debts immediately. Don’t spend a penny of the new loan on anything other than repaying old debts.
  • Carry out some account maintenance. You’ll need to cancel old direct debits and set up new payments so that you can meet the terms of the new debt consolidation loan.

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How to find a new job if you lose one when in your 50s Fri, 08 Jun 2018 11:31:11 +0000 Alex Hartley It’s all too common that people in their 50s find themselves out of work as younger and cheaper people “steal their jobs”. However, youth is wasted on the young, as they say – and employers are increasingly recognising that older employees have a lot to offer the workplace. As a result, job hunting in your 50s isn’t the intimidating task that it once was. If you’re looking for a career change, or you’ve been forced into making a move, there is every chance that you’ll be able to find a satisfying and lucrative role that suits your needs. It just may take a while so you also need to manage your finances accordingly.job hunting in your 50s

Job hunting in your 50s is more common than it used to be

People are living longer, the retirement age is rising and many more people find it necessary to work into later life. Plus, thanks to the advantages of modern technology, the range of different roles available is much broader and much more interesting. If you’re job hunting in your 50s then you have a lot more of a market to choose from and you’ll find that you’re not alone – according to the London School of Business and Finance, 43% of employees between the ages of 45 and 54 are looking for new opportunities.

Getting started with job hunting in your 50s

What do you want from your next role? It’s important to start from a position of assuming that you’ll be able to get some, or all, of the things that you want from a new job. You don’t have to take the first one that comes your way. Are you looking for flexible working, the opportunity to learn practical skills or to work abroad, for example?

What can you bring to a new job? We all have different skills and strengths and focusing on yours can help you identify which job you’d be well suited to, as well as helping you to convince an employer that you’re the right person for the job. Perhaps you’re a great negotiator, you have a lot of management experience or niche knowledge in a particular sector of the market.

Are you online? You may or may not be a bit tech-shy in your 50s but, if you’re job hunting, then you need to recognise the advantages of the online world when it comes to finding a new job. Being on LinkedIn, for example, will be essential – it will act as an online CV that will give potential employers an idea of what your skill set is.

Is your CV out of date? If your CV is out of date, or just in a bit of a mess, then now is the ideal time to rewrite and rework it into a really useful document. Start with your most recent experience first and tailor every the CV you send to the role in terms of relevance. Keep your CV concisely written and short in length – even if there is a lot of experience to include – and make sure you check twice for spelling or grammar errors.

How to find a great role in your 50s

  • Networks are everything. If you’re looking for an exciting new opportunity then remember the power of your established networks when it comes to finding it. Make contact with old colleagues and bosses, clients or customers if it looks like they could give you a helping hand when it comes to tracking down the right role and making introductions.
  • Social networks can be useful too. Haven’t yet ventured on to Twitter or Instagram? Now could be the perfect time to do it. You can make useful contacts via social networks and attract attention for the content that you post, whether that’s cleverly shot images or smartly written tweets or blogs.
  • Age is just a number. Often, the success of job hunting in your 50s is defined by the confidence you have in your ability to achieve results. Don’t worry about being older than other potential candidates and instead focus on the benefits this has, from more on the job experience, to better people management skills.
  • Be flexible. It may be the case that you don’t find the perfect role for you and you might have to accept a compromise for now. Flexibility will get a foot in the door and show your ability to compromise in a positive light.
  • Broaden your approach. Today, there are many more options when it comes to jobs and you can work in many different ways. It may be worth looking at totally new career options or roles that you may not have considered before. You could also investigate the possibilities of being self-employed and working in the gig economy.

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Money management if you’ve lost your job Thu, 07 Jun 2018 11:24:37 +0000 Alex Hartley There are currently around 1.42 million unemployed people in the UK – according to the Office for National Statistics – and 96,000 people lost their jobs between October to December 2017. While the redundancy figure is 11,000 lower than the number for the year before, for many people there still exists a significant threat of ending up out of work. So, what do you do if you’re suddenly without the monthly income that has kept you afloat?money management plan

How to to manage your money now you’re unemployed

You could have become unemployed either because your job became redundant or because your employer felt your performance in the jobs was not good enough. The difference here is that if your job was made redundant you will probably have been paid a redundancy sum. This can give you some financial protection – at least for a while.

Becoming unemployed could happen to an employee at any time – many simply don’t see it coming. Coping financially with a period of unemployment before you secure another job, can involve some careful planning and money management. Many, many people in the UK do not have any savings to protect them when they become unemployed. If you are currently in work then you really need to build up an emergency fund now!

Here’s are our suggestions as to how to deal with money while out of work:

  • Revise your budget. A post-redundancy budget is going to be significantly different to the budget you may have enjoyed while in work. Now is the time to reevaluate your spending and identify where you can make savings. Start by working out what your income is going to be per month until you find another job – this is mostly likely to be a combination of redundancy pay, benefits and savings. Then go through all your spending and cut back wherever you can.
  • Claim benefits if you’re entitled to them. Depending on your circumstances, you may be entitled to a range of benefits, including jobseeker’s allowance. It’s worth visiting your local job centre to find out what financial support you might be able to get while you’re in-between jobs.
  • Manage your redundancy pay. It’s important to establish that you’ve paid the right amount of tax on redundancy payments (anything under £30,000 should be tax free). A redundancy pay out can seem like a huge sum of money when first received but will quickly dwindle. Make sure you put the money aside if you can, preferably somewhere that it can earn some interest, and don’t be tempted to go on a spending spree with it.
  • Are you eligible for a tax rebate? Every opportunity is worth investigating when your income comes to a sudden halt like this. If you were made redundant half way through a tax year, for example, then you could be entitled to some tax back. HMRC will be able to tell you whether that’s the case.
  • Don’t avoid your debts. If you’ve been made redundant then you might be feeling incredibly stressed about the future and unsure how you’re going to cover payments in the long term. The ‘head in the sand’ approach does not work in this situation – you need to face up to your debts and make sure they are properly managed. Prioritise those debts that are the most important – for example, the mortgage that will keep a roof over your head – and then allocate funds to pay the others where you can. If you’re struggling, speak to a lender or creditor before you get into a position where you’re in default.
  • Avoid borrowing any more. If you don’t have a job then your borrowing options will be more limited but you can still borrow via homeowner loans etc. However, it’s important to consider whether this is really necessary, as it will create another obligation that could be stressful to fulfil. If possible, avoid taking on anymore borrowing until you at least have a job offer on the horizon.
  • Proactively look for work. Being made redundant can be depressing – it’s the same for everyone. However, now is not the time to sit back and wallow in it. The jobs market is not as dire as it used to be in the UK (in fact the unemployment rate is at a 42 year low!) and proactively looking for work will help to keep spirits up, as well as increasing your chances of success. And to be able to claim Universal credit you will need to show you are looking for work.
  • When you start work again… make it a priority to repay any additional debts you’ve taken out while you were redundant and focus on clearing credit cards with high interest rates first. Give your new employer your P45 so that you can go straight onto the right tax code and try to put aside a proportion of your remaining redundancy money to provide a safety net for the future.

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FCA clamps down on high street “Rent to Own” shops Mon, 04 Jun 2018 16:07:23 +0000 Alex Hartley High interest borrowing has been the subject of a Financial Conduct Authority (FCA) investigation that has taken nearly two years to complete. One of the major targets of this has been the rent to own sector, which includes stores such as BrightHouse that offer payment plans on items, such as ovens or furniture, available on very high cost credit terms [in 2016 we showed how you could end up paying 2-3x the cash price!] . 

The FCA has now concluded its investigation and the result is a potential crackdown on rent to buy – but not much impact on other forms of high cost credit, such as overdraft fees or doorstep to own washing machine

What is “rent to own” or “rent to buy”?

Rent to buy acted as a trigger for the FCA investigation, which was designed to look further into the high cost credit market. More than three million people in the UK use high cost credit and around 400,000 people currently have an outstanding debt to a business like BrightHouse. This type of credit makes it possible for anyone who is unable to pay the up front cost of an item, such as a washing machine, to make the purchase using credit instead. Rather than paying for the entire item up front, regular payments are made until the debt is cleared, at which point the item is owned. In principle, this sounds like a good idea for cash poor individuals who need a little more time to cover the cost of essentials. However, the FCA investigation has found that customers ended up paying a lot more for an item than would have been the case with a single up front purchase thanks to the high cost of the credit. For example, BrightHouse customers were paying £1,500 for ovens that sell in other high street shops for under £300.

How is the FCA taking action?

A new cap is likely to be introduced that is designed to prevent the cost credit in the rent to own sector from spiralling so disproportionately. The FCA is about to undergo a period of consultation with the industry before potentially introducing the price cap into the market in April 2019.

What about other forms of high cost credit?

Campaigners against high cost credit (including actor Michael Sheen) were looking for more from the FCA review. In particular, many were hoping that the FCA would impose a cap on bank overdraft charges too. According to Gareth Shaw of Which? the charges that banks apply to those going over their overdraft limits can be seven times more expensive than the cost of a payday loan! In 2015 the FCA intervened in the payday loans market to cap the cost of credit. The intervention has been deemed a great success and so many debt charities and campaigners were hoping that step would provide a blueprint for every type of high cost credit, including overdraft fees.

Why has the FCA not tackled high overdraft fees?

Andrew Bailey, the Chief Executive of the FCA has not ruled out a cap on high overdraft fees, saying,

“Our immediate proposed changes will make overdraft costs more transparent and prevent people unintentionally dipping in to an overdraft in the first place…However, we believe more fundamental change is needed in the way banks charge customers for overdrafts.”


So, it’s entirely possible that – at some point in the near future – the FCA will introduce a cap on overdraft charges. However, the FCA hesitation is anchored in a fear of getting a price cap wrong when it comes to overdrafts, particularly as the British banking industry is a formidable opponent with no qualms about challenging change in the courts. In particular, the FCA is wary of a 2009 case that ended up in a supreme court challenge that went in favour of the banks on the issue of price caps.

So, what is the FCA doing with overdrafts right now?

Instead of introducing a price cap, the FCA has made a number of recommendations to the industry that are designed to save consumers money. These include requiring banks to send mobile alerts with respect to imminent overdraft charges, no longer including an overdraft in the definition of “available funds” and making credit and borrowing costs clearer.

Is the FCA doing enough?

The cap on high interest credit, such as rent to own, is a great first step and is likely to benefit around 400,000 people who currently owe money to companies like BrightHouse. However, the £2.3bn in overdraft fees that are generated by customers who go over their limits and into the red remains untouched by the FCA recommendations. Banks will still be able to collect these, no matter how disproportionate they are. For campaigners, the hope is that the FCA won’t take too long to work out how to engineer a price cap for these fees too.

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How to avoid being duped into laundering criminals’ cash Fri, 01 Jun 2018 10:59:27 +0000 Alex Hartley Money laundering is something that we tend to associate with large companies and big banks. However, new figures from the UK’s fraud prevention service, Cifas, have indicated that money laundering is becoming a much more personal problem. According to Cifas, we are entering an era of vulnerable individuals being used as “money mules” to launder the cash of criminal enterprises through their own bank accounts.

money laundering

What is a “money mule”?

The definition of a money mule is effectively someone who is being used by criminals to move money from one account to another. The money goes in to the individual’s account as “dirty” money, often the proceeds of people trafficking or drugs, for example. Then, when it is transferred on from the individual’s account, it has been cleaned or laundered. Using money mules enables criminals to avoid the authorities and to keep the proceeds of illegal enterprises under the radar.

How does someone become a “money mule”?

Criminal gangs are increasingly targeting those with money issues, such as students or young people, and offering them the opportunity to be a money mule, often under the guise of a job offer. Social media provides a platform for fraudsters looking to reach out to people who might potentially be open to allowing their bank accounts to be used in this way. According to Sandra Peaston, Assistant Director at Cifas, Whatsapp is the communication tool of choice for fraudsters seeking victims who are often lured in by fake money making schemes or even fake job offers.

How does money laundering work?

It involves an individual making their bank details available so that money can be transferred into and out of the account. Usually, when the money is transferred out of the account, the victim is entitled to retain a small percentage. Around 32,000 bank accounts were highlighted in 2017 as potentially belonging to money mules so it’s an issue that involves fairly large sums of cash.

It’s free money isn’t it?

According to the experts, the money that these accounts are being used to launder has usually come from drug smuggling, people trafficking and terrorism. So, while there may be some small benefit for money mules, the end result is that they are supporting some of the worst elements in society. It’s also worth bearing in mind that handing over bank details to anyone, let alone a fraudster, leaves an individual open to serious financial harm. Once a criminal has bank details that belong to a money mule they could be used for anything, from scamming that individual to creating a false identity in their name.

What about the law?

Money laundering is illegal in the UK. A conviction for money laundering could lead to 14 years in prison. So, there could potentially be some very real consequences for money mules who are involved. Individuals who have their bank accounts shut down for something like money laundering could find it difficult to get back up and running in financial terms. After a money laundering issue it can be difficult to get student loans, mobile phone contracts and other financial products.

How do you avoid becoming a money mule?

According to Cifas, between January and September 2017, there were 8,652 cases involving 18-24-year-olds being used as money mules. It’s a growing problem targeting younger individuals – so, how do you avoid getting inadvertently being made a money mule?

  • Be cautious about handing over your bank details to anyone. If it’s not someone you know and trust then it’s rarely a good idea to give them this very personal and valuable information.
  • If something seems too good to be true then it probably is. There is no such thing as free money. Even if you’re tempted by the cash and not that bothered by where the money has come from, the risks to you in giving a criminal your bank details – or getting caught – are significant.
  • Be wary of any unsolicited offers of financial help. Why have they targeted you and how realistic is what they’re offering?
  • If you’re offered a job out of the blue then spend some time researching the company to establish that it’s a genuine business and not a money laundering front.
  • Be especially careful with any job offers that relate to a “job” that is purely online.

If you get a job offer that is written in poor English or full of grammar or spelling mistakes then this could be a warning sign. Make sure you look further into the company and what it actually does before you agree to anything. If you need money then it makes more sense to look at other ways of earning it or borrowing it – don’t take unnecessary risks.

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The current state of the UK’s cashback credit cards market Wed, 30 May 2018 10:29:09 +0000 Alex Hartley Cashback credit cards are designed to help you generate cash every time you shop. With cashback received for every pound that you spend, you are essentially getting paid for going shopping. There are some great benefits to having cashback credit cards, as long as you know how to use them. So, what are the pros and cons of cashback credit cards and where can you currently find the best deals?cashback credit cards

The pros and cons of cashback credit cards

Like any financial product, there are pros and cons when it comes to signing up for cashback credit cards – these are useful to know before committing to one card over another:

The pros of cashback credit cards

  • Earning cash every time you spend. If you’re using the card in the normal way – i.e. not adjusting your spending habits or spending more – then getting cashback for what you’d be doing anyway is a big bonus.
  • The better the credit you have, the higher the percentage of cashback. If you have a great credit score then you’ll usually benefit from a much better deal on cashback credit cards. Cashback is usually paid as a percentage total of your overall spend and that percentage will be higher if you have a great credit score.
  • The savings can really add up. Although the percentages of cashback may seem fairly small initially, those savings can be quite substantial over the course of a year.
  • If you pay off the balance every month then you get all of the benefits of cashback credit cards with none of the pitfalls. As long as you don’t go forward with an outstanding balance then you are generating a positive return every time you spend.
  • If your interests align with the savings the card offers then you can save a fortune. For example, some cards give cashback against specific categories, such as fuel and supermarket spending – if these suit you then you can save a lot.

The cons of cashback credit cards

  • Some of the cards that offer the most lucrative rewards programmes tend to come with a fee. Make sure you’re not paying out more in an annual fee than you’re likely to earn in cashback.
  • If you don’t have a great credit score then you won’t get the best rates. Like every other type of credit card, cashback credit cards provide the best deals to those who have the most attractive credit history. So, if your credit score is low then you may not find that the cashback deals are worth it.
  • Interest rates can be higher for cashback credit cards. Pay close attention to the interest rate that you’re offered with a cashback credit card deal. This will, to a certain extent, be dependent on your credit score but is also dictated by the type of card. If you’re looking for really low interest rates on a credit card then a cashback card may not be the right choice.
  • Cashback cards can create some bad spending habits. For example, you may be tempted to spend more on the card to generate the cashback and then be unable to clear the balance. Remember that if you do that you will usually pay more in interest on the outstanding balance than you will earn in cashback so it could be costly to change your spending routines.

Cashback credit card deals available right now

  • Amex Platinum Cashback Everyday. The card is fee free and has a 5% introductory rate. Spend £2,000 within three months to get an intro offer of £100 cashback and you’ll then go onto a tiered cashback system – £0 to £5,000 = 0.5% cashback and anything above that generates 1% cashback.
  • Tandem. The Tandem credit card is also fee free with 0.5% cashback on all purchases over £1 worldwide and you can track your spending via the Tandem app. APR is 18.9% for both purchases and cash withdrawals. No fees for overseas purchases.
  • The Asda Money card. For Asda shoppers this is a great deal, as you’ll get 1% cashback on every Asda shop in the form of Asda vouchers. Other purchases generate 0.2% cashback. There’s no annual fee and the APR is 19.9%. John Lewis and Amazon also offer cards with similar deals that generate cashback when used to shop with that particular brand.
  • Aqua Reward. If you don’t have a perfect credit score you could still enjoy cashback credit card benefits with Aqua Reward. The card provides 0.5% cashback on all purchases up to a credit limit of £1,200. The interest rate is higher – APR 34.9%.

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How to get the best exchange rates when travelling abroad Mon, 28 May 2018 11:51:49 +0000 Alex Hartley Since the EU referendum, exchange rates have been something of a sore point for anyone looking to travel outside of the UK. Brits have become used to enjoying some fairly favourable exchange rates against currencies like the Euro and the Dollar. However, all of that changed when Britain decided to leave the EU and the value of the pound fell substantially. Today, we are still in a position where the pound is worth a lot less than it used to be in exchange terms – which is why it’s so important to make sure that you get the best possible exchange rates when travelling exchange rates

Using credit cards overseas

Credit cards can be the cheapest way to spend when you’re overseas. Many believe that they consistently offer the best rates and the most low cost option for withdrawing cash abroad. However, this depends on ensuring that you have the right credit card. The ideal credit card for overseas spending is one with no non-sterling transaction fees on foreign spend and no charges or interest on ATM withdrawals. Whenever you’re overseas and spending with a credit card, look out for Dynamic Currency Conversion. This is where you’re given the option of paying in sterling abroad. It may seem like a good deal but the reality is that you’ll be charged about 5% more than the correct rate if you opt for it.

Exchange rates when you’re taking cash

There are a few locations where you’ll get a better deal on your cash currency if you buy this on arrival but, on the whole, it’s usually a much better idea to get your currency before you leave the UK. There are a number of different ways to get hold of cash for a trip abroad at a sound rate of exchange. For example, you could buy online with one of the big airport currency specialists, such as ICE, Moneycorp and Travelex. If you buy your money in advance and then collect it at the airport you’ll get a far better rate than if you purchase on your way through to departures. High street options can also be a great idea if you shop around. The Post Office is consistently rated as one of the cheapest ways to buy overseas currency and tends to have fairly strong rates, and you can also look at local travel agents to see what they offer. If you’re going to make comparisons then work from the same baseline question each time i.e. “how much sterling will EUR100 cost me?”

The option of travellers cheques

Although travellers cheques used to be the number one way to take money abroad, they are not that widely used now. In terms of convenience, the risk of loss and the average exchange rates they tend to be less appealing.

The benefits of prepaid cards

A prepaid card enables you to take your cash with you in a more secure way – loaded onto a prepaid card that can be blocked if lost or stolen. The rate of exchange you’ll get with prepaid cards varies but you can generally avoid paying any fees to withdraw cash using most of these cards. A lot of credit cards charge 2-3% fees on overseas transactions (although some don’t) and you can avoid these with a prepaid card too. It’s worth remembering that prepaid cards can’t be used as a surety when you arrive at a hotel or to rent a car, for example. You’ll need a regular credit card for that. There’s an element of reliability with prepaid cards that many find appealing – you’ll get the currency rate on the day that you convert your cash to the card. This can make it much easier to set, and stick to, a budget and also means that if things do change and the pound takes another dive then you won’t be affected while overseas.

The option of using a debit card abroad

Although it’s probably the card you’re most used to spending with, your debit card is generally viewed as a last resort because most banks tend to charge high fees to use debit cards overseas. This is not the case across the board so it’s worth checking whether your bank will charge you for using your debit card when you’re outside the UK. In particular, look at the potential costs for withdrawing cash from a local ATM. Some banks will charge an ATM fee every time you use a debit card overseas and another fee on top of that every time you spend.

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How to protect yourself from rogue traders when doing home improvements Fri, 25 May 2018 11:18:33 +0000 Alex Hartley It’s the scenario that anyone making home improvements dreads: assuming that you’re working with a reputable plumber or builder and then finding out that they are actually a rogue trader. Normally, this only becomes evident when it’s almost too late to do something about it. So, how do you protect yourself from being misled by someone without the of best intentions?avoid rogue tradesmen

Be aware of the common scenarios

Rogue traders are everywhere in the home improvements industry. Construction work and refurbishment, for example, are big investments for most people but also something many of us don’t have a lot of experience in. There are large sums of money involved and often a lack of knowledge of what is a “usual” process means that rogue traders can get away with misleading people. A common scenario involves a deposit payment up front for something like a conservatory or an extension. The deposit is usually several thousand pounds but could be up to five figures. Often, that’s the last that the homeowner will see of their money as the trader simply disappears.

Doesn’t the law protect homeowners?

In theory yes. However, it can be quite a process. Currently, the law allows a rogue trader who has ripped someone off to simply declare their company insolvent and then start up a new company the next day and carry on. Anyone who has contracted with the old company will have only limited opportunity to get their money back, as directors can often walk away from an insolvent business without any liability for debts. Eventually, if there are enough complaints about a business, then Companies House may strike that person off as a director, which means they can’t create any more businesses.

How significant is the problem?

It’s a fairly substantial issue, especially as it often involves life changing sums of money. Citizens Advice receives 3,000 calls a month about building work that is substandard. Over the course of a year it received 7,000 complaints about work where money had changed hands but projects had not been finished. With 43,877 complaints annually, substandard builders represents the second biggest issue that Citizens Advice receives complaints about.

How can you avoid a rogue trader?

  • Use a credit card to make payments. If you opt for a credit card, as opposed to a bank transfer, then the payment is protected under the Consumer Credit Act. Bank transfers are not protected by this legislation.
  • Take out insurance to safeguard any deposit monies that you pay. There are plenty of schemes that offer a Home Improvements Guarantee to provide protection in the event that a rogue trader makes off with your money. Look for a scheme regulated by the Financial Conduct Authority (FCA) and offering a guarantee of at least 10 years.
  • Find a builder with an accreditation. The Federation of Master Builders, for example, has a strict set of membership criteria for those who receive its accreditation. It also has a Code of Practice and requires members to pass an independent inspection. If something does go wrong with an accredited builder then you have access to a government approved disputes service to try and find a solution to the problem. Other trading bodies include the National Federation of Builders and the Guild of Builders and Contractors.
  • Do your research. When people have a bad experience with a builder or tradesman today they are often quick to go online and tell others about it. So, by searching the name of the business, its directors and the individuals involved you might be able to find information that indicates you could have a problem before any money changes hands.
  • Use a reviews website. There are a number of different websites springing up today that rate services, such as builders and tradespeople. Rated People, for example, is endorsed by Location, Location Location’s Phil Spencer and enables those who have used a local builder or tradesman to leave a rating to give others some idea of what is was like to work with them.
  • Ask around. Often, the best recommendation for contractors will come from family or friends who have already used an individual or a company. If you’re planning an extension or a conservatory, for example, and you know someone else who has already had this done then get in touch and ask some questions about who they used, and why. You’ll get an honest review of the work completed and the way the job was handled, as well as how much everything cost.

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Cybersecurity for the home – what is best practice for staying safe? Wed, 23 May 2018 12:14:35 +0000 Alex Hartley Our digital home lives are becoming increasingly more complicated. There are now 8.4 billion devices in the UK that connect to a home network and which together make up the Internet of Things (IoT). These devices could be something as obvious as a mobile phone or a laptop or a voice activated speaker. They could also be games consoles or smart fridges and smart energy meters. There is even technology now that has been used to create a smart hair brush that sends data about the way you’re brushing your hair to your phone so that you can learn how to do it better. According to the experts it’s the IoT – and our lack of understanding of it – that is causing problems when it comes to security.home cybersecurity

Where do the issues arise?

Firstly, many people will purchase a “smart” device, such as a smart meter or a smart plant watering system, and not realise the extent to which this makes them vulnerable. Cyber criminals can use gadgets such as this to hack into a home network. From there it’s possible to go on to harvest other data, such as bank details and passport numbers, that can be used in identity theft. The second issue is a lack of understanding of the technology itself and the fact that it may well have a “use by” date.

What do the government security experts say?

The experts at the National Cyber Security centre have highlighted how important it is becoming for people to understand the risks from the IoT. They have introduced a Code of Practice that is designed to give people information on, in particular, how long it’s safe to keep using a device or gadget before it becomes a security risk (i.e. past its “use by” date). The obvious comparison is a mobile phone, which is frequently updated with new fixes and patches when vulnerabilities are discovered and then discarded for a new model when the technology becomes redundant. The idea of a use by date effectively suggests the same approach for other devices, from smart meters to smart fridges. Once they get beyond the point of no longer being supported by the manufacturer they are vulnerable to being hacked and consumers should move on.

Is the risk real?

Yes. According to the National Cyber Security centre it’s possible that cyber criminals have already been able to use hacked smart TVs with cameras to spy on people’s homes. The risk is very real and the cyber criminals are coming.

Best practice for digital home security

  • Make sure you know which devices in your home are connected. What does the IoT look like in your property?
  • Keep an inventory of purchase and “expiry” dates. Take the time to understand the shelf life of all the devices in your home and to make a note of when it might be time to consider an upgrade or simply replacing the device with something not connected.
  • Prioritise your router. Many people buy a home router, install it and then forget about it. An out of date router – or one where there is no security – is one of the easiest ways for cyber criminals to access your data. So, make sure you have noted the date for upgrading or renewing your router and that you know how to handle its security features.
  • Change the name of your Wi-Fi network. The default name settings give away a lot of information about you and the type of network you have.
  • Turn off your Wi-Fi network when it’s home alone. If you do this then you’re minimising the opportunity for hackers to get into it without anyone spotting what’s happening.
  • Consider where you place your wireless router. If it’s right in the centre of the property then it will not only ensure you get better signal in all the rooms but will also prevent anyone standing just outside from being able to get the signal.
  • Use Wi-Fi encryption. Encryption effectively scrambles the data that is being sent over the Wi-Fi connection so that it’s impossible to decipher to anyone who shouldn’t be looking at it. All Wi-Fi kit will support some sort of encryption, whether it’s WPA or WPA2.

Don’t disable your router’s security. Most routers today have a firewall built in and it’s important to make sure you don’t disable this if you want to have basic protection for your home network. You could also consider installing an additional level of security in the form of security software on each device connected to the router.

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Financial tips for Millennials who want to get on the housing ladder Mon, 21 May 2018 10:10:15 +0000 Alex Hartley Millennials (those born 1981-2000) face some fairly tough financial challenges today. House prices that are beyond unaffordable – especially in London – combined with poor interest rates on savings and wage growth that rarely rises with inflation can create some serious barriers to positive financial health. Although this is the age group that has been tagged “Generation Rent,” there are still many Millennials who have ambitions to get a foot onto the bottom rung of the housing ladder, regardless. In the current financial climate, accruing wealth and property from a starting point of zero is tough but with the right financial advice Millennials could change the future that has been forecasted for them.advice for millennials

Be prepared to buy with someone else

According to the Institute of Fiscal Studies, house prices in the UK have shot up by 152% over the past two decades. Wage growth has not. Most mortgage lenders will limit the amount available to borrow to four times that of annual salary. According to the Annual Survey of Hours and Earnings, the average UK salary is around £27,000. The average price of a property in the UK? £225,047, according to the Land Registry. So, take the average salary to a mortgage lender and you won’t even get to half the amount you’ll need to borrow to buy the average property. However, if you buy with another person you’ll have much more chance of success. Whether that’s a sibling, a partner or a friend this way you’ll both get a foot onto the property ladder in an affordable way – and sooner too.

Use Help to Buy

It used to be the case that lenders offered solutions to those who had not quite been able to get a deposit together and weren’t going to be gifted one by parents. These were often in the form of a 125% mortgage (i.e. including the deposit) or an interest only mortgage. Today, few – if any – mortgage lenders offer these products and for good reason, as they can place a heavy financial burden on those who are trying to pay them off. However, that does leave rather a gap for anyone without five figures in savings but who is still keen to buy. Help to Buy is the government scheme that has stepped in to fill this gap. You only need a 5% deposit to make an application for a mortgage with Help to Buy – a government equity loan for 20% of the property purchase price will cover the rest. Help to Buy is available for new build properties only, with a purchase price of less than £600,000.

Open a Lifetime ISA

For those under the age of 40 (i.e. all Millennials), a Lifetime ISA offers a tax free savings vehicle that also has the benefit of a government top up. This type of ISA is especially useful for freelancers or anyone who doesn’t benefit from being part of an occupational pension scheme. You can pay up to £4,000 into a Lifetime ISA each year and the government will top up whatever you pay by 25%. The Lifetime ISA is designed to be used either as the deposit for a first home or to pay for retirement – if you opt to use it for anything else then you’ll lose 25% of whatever is in it as a penalty.

Learn how to budget

Key financial advice for any demographic and any generation is learning how to budget. Without this key skill it’s almost impossible for anyone to achieve financial success. Budgeting is simply the balancing of incoming and outgoings to ensure that one doesn’t overwhelm the other. However, there are many different ways to achieve this. One of the most successful is the 50-30-20 rule:

  • 50% of your income is allocated to necessities (e.g. bills and rent)
  • 30% of cash is put towards financial goals (e.g. saving for a deposit)
  • 20% of what you earn goes to the things you want (e.g. festival tickets, new shoes)

Map out a pension and savings now

Getting into the habit of putting money aside for the future is better done sooner rather than later. Old age may seem decades away but that time can quickly pass and there are some pretty expensive events that could take place in between. Sign up to an occupational pension scheme as early as possible – minimal contributions now will build up over time – and get used to putting aside the 20% of what you earn so that you can reach your financial goals. If you’re not great at financial planning and saving then get a little help from technology. The Cleo app, for example, is an AI assistant designed to help you get better with your cash.

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Tax Scandals Decoded – Protect Yourself from Fines and Worse! Fri, 18 May 2018 15:15:20 +0000 Amanda Gillam Everyone has heard about tax avoidance and tax evasion but very few of us understand the differences and the potentially extreme consequences of getting involved in one of these schemes.

At Solution Loans, we’ve put this article together to let you know what tax avoidance is, what tax evasion is, what to do if you think you may be involved in a scheme and the potential legal consequences. We’ve included a list of hallmarks of schemes to look for as well as details of three of the most common tax avoidance schemes.

The UK Government has put a lot of resources into clamping down on both tax evasion and tax avoidance. HMRC, which oversees the collection of taxes, has referred increasing numbers of cases of both evasion and avoidance to the Crown Prosecution Service, making 1,135 referrals in 2015/16.

What’s the difference between tax avoidance and tax evasion?

One of the key areas of confusion is the difference between tax avoidance and tax evasion.

Simply put tax evasion is completely illegal and is the name given to the practice of not paying taxes by not reporting income or by reporting expenses not legally allowed. This kind of activity is basically a form of fraud that could land you in prison and with very hefty fines. Between 2017 and 2018, the average prison sentence for tax evasion increased from just over three years to four years as the government continued their clampdown.

Tax avoidance is bending the rules, exploiting loopholes and using complex company structures to minimise tax liabilities. A hallmark of many of these schemes is that they involve money leaving businesses and going through a series of transactions either through other businesses or intermediaries that are unnecessary and then coming back again.

So, is tax avoidance legal?

The short answer is, it depends. These schemes often work within the letter of the law but not its spirit. The Government, specifically HMRC, are working hard to ensure these schemes don’t work and either involve a lot of work that comes to nothing or is actively penalised when HMRC take those involved to court and recover the money for the treasury.

Why would I get taken to court for involvement in a tax avoidance scheme?

HMRC set up something called the Disclosure of Tax Avoidance Schemes (DOTAS). This makes anyone involved in or promoting a Tax Avoidance Scheme disclose it to HMRC. Each known tax avoidance scheme has a number that must appear at the top of your tax return. HMRC take a dim view of anyone failing to disclose a scheme. If you’re just the business using such a scheme, penalties start from £5,000. If you’ve devised the scheme and fail to report it the penalties can be up to £1 million.

What can I do if I’m involved in tax evasion?

If you’re involved in tax evasion then you should stop immediately and consult a lawyer and reputable accountant about what to do next.

How do I know I’m involved in a tax avoidance scheme?

HMRC publishes a list of known schemes here. As mentioned above, if a scheme is complex and involves multiple businesses for no reason other than to avoid tax then this is likely a Tax avoidance scheme. Other things to look for are:

  1. It sounds too good to be true (i.e. for no real effort or reason you avoid paying tax)
  2. There is no real economic activity or risk involved (such as an investment)
  3. The scheme consists of money going around in a circle through other businesses or intermediaries
  4. A third party or the scheme’s promoter provides funds to make the scheme work
  5. Known tax havens are involved
  6. Offshore companies are involved (or offshore trusts)
  7. There are confidentiality requirements

What are some specific examples of tax avoidance schemes?

Tax avoidance schemes come in a huge variety of different shapes and sizes. Here are three examples:

Job board tax avoidance scheme

This is one of the more common tax avoidance schemes. It is used by contractors to avoid paying tax and national insurance contributions.

Job Board Tax Avoidance Scheme

Land Tax & Stamp Duty tax avoidance scheme

This scheme was used to avoid Land Tax and Stamp Duty by abusing rules on gifting and unlimited companies.

Land Tax & Stamp Duty Tax Avoidance Scheme

The Gift Aid tax avoidance scheme

This scheme was a high-profile one-off involving a charitable trust set up to help avoid tax via gift aid. The charity involved was shut down by the Charity Commission. The scheme famously involved cycling pro Bradley Wiggins.

Gift Aid Tax Avoidance Scheme

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Unsecured lending is down but so too are secured loan default rates Thu, 17 May 2018 14:59:36 +0000 Alex Hartley The UK economy is going through a challenging period. With destabilising factors, such as Brexit and a rise in interest rates for the first time in a decade, the lending market in particular is an interesting place to be right now. The ongoing change and the fluid nature of influences such as the EU referendum and global political events have created a number of trends in both unsecured and secured loan lending.

secured and unsecured loans

The amount of unsecured consumer lending has dropped

According to figures from the Bank of England, the amount of unsecured lending to consumers fell in the first three months of 2018. The drop was significant too, with a fall of almost 40% recorded in the Bank of England statistics. This reduction has been attributed to a significant slow down in the volume of approvals of unsecured credit (e.g, personal loans) by lenders. Successful credit card applications, for example, were down by 26.2%. Other forms of unsecured lending dropped by 13.2%. The reasons behind the trend are thought to be a lack of appetite for risk on behalf of unsecured lenders. In reality this translates to lenders who are less willing to approve applications where there is any doubt at all over whether a borrower might potentially be able to repay.

Unsecured lenders are becoming more cautious

Whether as a result of a slower economy or a weaker consumer environment, lenders are not as willing as they once were to agree to credit for consumers where there might be some risk. It’s also thought that unsecured lenders – in particular, credit card lenders – are more cautious in the wake of the Financial Conduct Authority’s voiced concerns about credit card debt.

Unsecured consumer lending is the lowest since the recession

In terms of whether this trend is likely to continue it’s worth noting that the availability of unsecured loans to consumers has dropped by the highest rate since the Bank of England’s records began in 2007. Unsecured lending rates have fallen more quickly than at any point since the recession, and this is part of a trend that was also evidenced, and accelerating, back in 2017.

Rates of secured lending are much more stable

According to the Bank of England quarterly credit conditions survey the drop in unsecured lending rates is not being reflected in the secured loans lending sector. In the first quarter of 2018, those lenders that participated in the Bank of England’s survey reported unchanged secured loan availability. Secured credit is lending, such as mortgages, where an asset – such as a property – is provided as security for a loan. Lenders have less risk to bear where there is an asset, which could explain why the secured lending sector has not seen the same change as in unsecured lending.

Default rates for secured lending are lower too

This is a trend that is expected to continue with a reduced number of defaults on lending right across the secured loans sector.

Can you still borrow under these conditions?

Yes. Whether you’re looking for secured or unsecured borrowing, there are still applications being approved by UK lenders. If you’re planning on making an application for either of these types of finance then there are a number of ways in which you can prepare to give yourself the best possible chance of success.

  • Check your credit report. Amend any mistakes, ensure you’re on the electoral roll and make sure your personal information (such as addresses) is up to date. If your credit report is connected to that of another person you once shared a credit account with, but now no longer see, then ask for a notice of disassociation so that their credit behaviour won’t affect your credit score.
  • Pay off other debts first. One of the key factors that lenders will bear in mind is whether a potential borrower already has an unmanageable level of debt. Reducing, or paying off, any existing debt will help to improve your credit score and make you a more attractive lending prospect.
  • Make sure any borrowing you’re applying for is affordable. Affordability is a key criteria in the lending sector today, whether secured or unsecured. When you make an application for a loan or mortgage, calculate how you’re going to handle the repayments and whether you’ll still be able to ensure that your other expenses are covered.
  • Apply for the right loan and to the right lender. Different lenders have different requirements when it comes to approving an application or not. Choosing the right loan product with the lender best suited to you as a borrower can make all the difference.

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How to claim Marriage Tax Allowance to get another £230 per year Tue, 15 May 2018 15:20:16 +0000 Alex Hartley The Marriage Tax Allowance was introduced in April 2015 and is designed to benefit couples who are either married or in a civil partnership. It’s essentially free money and is available even where one partner has passed away – and yet around 1.5 million people in the UK have yet to claim it. Whether it’s a simple reluctance to make a claim for the allowance or a lack of awareness that it’s actually available, if you are married or in a civil partnership and you’re not claiming then you could be losing out on £230 a year. marriage tax allowance

What is the Marriage Tax Allowance?

It essentially allows couples to share a small percentage of their individual personal allowance between them. The tax free allowance is the amount that everyone in the UK is entitled to earn free of tax every year. For the 2017/2018 tax year it is £11,850. Those couples who are entitled to the Marriage Tax Allowance can transfer 10% of the allowance from one partner to the other (£1,190).

Who is entitled to the Marriage Tax Allowance?

It’s available to anyone who was born on or after 6 April 1935 and who is married or in a civil partnership. The allowance is not available to couples who are simple cohabiting. There are two key conditions to note for the Marriage Tax Allowance:

  1. One of the partners in the relationship must be a non-taxpayer. So, their income for the year must be less than the personal allowance.
  2. The other partner in the relationship must be a basic rate taxpayer. The allowance is not available to anyone who is a higher or additional rate taxpayer.

It doesn’t matter if you’re living abroad as long as both partners get a personal allowance. Having a personal pension also won’t affect entitlement to the allowance.

What if one of the partners has died?

As of 29 November 2017, it’s still possible to make a claim for the Marriage Tax Allowance even if one partner in the relationship has died. As long as the above conditions are met it’s highly likely that the claim will be successful.

How do the numbers work?

In total, anyone applying for the Marriage Tax Allowance now could be entitled to up to £900. This is broken down into the allowances over the past four years, as it’s possible to backdate a claim for the Marriage Tax Allowance over this time. In 2015, the allowance was worth £212, in 2016 £220 and in 2017 £230. When added to the £238 for the 2018 tax year the total is £900. Much larger than the average cash loan. And you don’t have to repay it!

How can you apply for Marriage Tax Allowance?

The applications process is fairly simple and you can do this via HMRC. The person who is the non-taxpayer will need to provide a form of ID from the list and both partners will need to be able to access National Insurance numbers. It’s important to note that it’s the non-taxpayer who must make the application, as they are effectively asking HMRC to transfer 10% of their personal allowance to their partner. If the application is made by the taxpayer then this will be the wrong way around and may need to be done again.

The Marriage Tax Allowance – other points to note

  • The allowance will only apply for the years that you’re eligible. So, for example, if one partner’s income goes above the basic rate tax threshold in a tax year then the couple will not be eligible for the allowance in that year.
  • Non-taxpayers come in all shapes and sizes. For example, you could be at home looking after children, working part time, retired, caring for relatives or not currently in work because of your health. As long as your income stays below the correct level of personal allowance you’ll be able to claim.
  • The correct level of personal allowance for non-taxpayers will be 10% below the limit – so, you must have at least a £1,190 difference between your total earnings for the year and the top limit of the personal allowance. If you go over the personal allowance by a little you can still claim but not for the full amount.
  • A successful claim results in HMRC sending out a cheque for the amount. This is processed automatically after the application is made.

Currently, 2.7 million people in the UK benefit from the Marriage Tax Allowance but there are still 1.5 million who are eligible but who haven’t claimed. It’s worth checking to make sure that you’re not missing out on quite a substantial pay out.

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All you need to know about accessing one of the UK’s food banks Fri, 11 May 2018 11:31:55 +0000 Alex Hartley Many columnists and commentators believe that food banks shouldn’t even exist. But, as Guardian columnist Owen Jones wrote recently, “benefit cuts and an unjust social order have left hundreds of thousands hungry in one of the richest countries in the world.” In the UK, the use of food banks has jumped by 52% – we are using them four times as much as we used to. Regardless of where your politics lie in terms of what has caused this situation, it’s clear that more Britons have become more reliant on food handouts. In fact, in 2017, around 1.3 million food parcels were handed out by the Trussell Trust alone. But what are food banks, who benefits from them and how do they actually work?UK food banks

What is a food bank?

Food banks are usually staffed by volunteers and are set up to provide those in need with food essentials. The food that is distributed via food banks comes mostly from donations, often from members of the public. These are collected at donation points around the country, at churches, supermarkets and schools for example. The donations are sorted by volunteers at the food bank and then parcelled up and distributed to those who need them the most.

How do you get access to a food bank?

You need to have a food bank voucher. These are issued by people such as social workers and health visitors as well as staff at schools. They are given to those who are identified as being in a state of crisis and unable to buy these provisions on their own. The food bank voucher entitles anyone with one to three days worth of supplies. Where a voucher hasn’t been automatically given, it’s also possible for those who feel they need access to a specific food bank to start the process.

  • Contact your local food bank. Every food bank will be able to provide a list of referral agencies through which you can obtain a voucher.
  • Contact one of the referral agencies. You will have the opportunity to show why you need help from the food bank and then you will be issued with a food bank voucher.
  • Take the voucher to the local food bank. You will get three days worth of nutritious food, as well as the opportunity to sit down with volunteers and potentially get some advice about your situation.

What does a food bank parcel contain?

This varies but the Trussell Trust, for example, will provide three days’ worth of nutritionally balanced, non-perishable tinned and dried foods. This could include a very wide range of different produce, including cereal, rice, biscuits, UHT milk and fruit juice. Many food banks also provide other items with food parcels, such as essential toiletries and hygiene products. Those who are eligible to receive a food bank parcel will sit down with a volunteer and go through the options in terms of dietary requirements to ensure that none of the food that is handed out goes to waste.

Are food banks purely about the food?

No, many food banks have evolved to provide a helpful infrastructure to those who use them. That could simply be company or someone to listen, as well as directing people in need to the various charities and organisations that might be able to help them.

Who uses food banks the most?

This tends to change annually. However, some statistics from the Trussell Trust from 2016/2017 provide some insight into those who were the most frequent visitors to the food bank during that year. During those 12 months, 39% of visitors to the food banks were single men, 13% were single mums with children, 12% were single women and 9% were couples with dependent children. In that year 87% of those who used the Trussell Trust’s food banks were born in the UK and only 3.7% were asylum seekers.

Why do people need food banks?

Although living on a chronically low income can be a factor in driving people towards using a food bank this is not the only influence. Researchers have found that it’s often some kind of “shock” that ends up pushing an individual or family into a place where a food bank is the only choice. This could be a rent increase, for example, or the removal of a benefit payment. We are using food banks today much more than we ever have before, even in the wake of the lean years of the 2008 financial crisis. In 2010-11, the Trussell Trust gave out 61,500 food parcels but in 2017 this had risen to 1.3 million.

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Could my partner’s credit rating affect my ability to get credit? Wed, 09 May 2018 17:01:04 +0000 Alex Hartley According to the credit ratings agency Experian, one in six people have had their loan prospects harmed as a result of someone else’s credit report. The research revealed that a partner – or ex partner – who has a bad credit history could have a serious impact when it comes to applying for credit. From former spouses through to university housemates, there are many people who come into – and out of – your life who have the potential to make getting credit more difficult.your partner affect your credit rating

Who could adversely affect your ability to get credit?

Anyone with whom you have shared a credit account in the past. For many people that’s an ex partner or spouse but it could also be a housemate or a sibling.

How does someone else’s credit score affect your own?

If you have formerly shared the responsibility for some credit with someone then you will continue to share a link when it comes to credit information too. Joint financial activity will mean that your credit file becomes associated with that of another person. As a result, when you make an application for a loan/credit, the lender will have the option to look at your credit history and also at the credit report of the person you have become associated with.

Does your credit file contain their credit information?

No. When a lender makes a search of the credit file they will see only the information that relates to that particular person. However, there will also be a note that indicates there is another credit file connected to this one. So, a lender can also go and retrieve the financial information of the associated file. If it’s information that flags up a potential risk to the lender (for example, missed debt repayments) then there could be some hesitation when it comes to lending to the original applicant.

What can you do to protect yourself?

Experian research also found that one in three people now rate being good with money above good looks when it comes to finding a potential partner. This focus on financial dexterity is a sensible place to start when it comes to avoiding a situation where your credit history is being adversely affected by a partner or an ex partner. But there’s also a lot more that you can do, including:

  • Have a frank conversation about cash. The earlier you do this, the better for the relationship and for your own financial future. Establishing financial compatibility can not only help to avoid a negative credit situation in future but could be the key to working towards a relationship that helps you reach your own money goals.
  • Make sure you know exactly how and when your credit report could become linked to that of another person. Everything, from applying for a mortgage with a partner through to setting up a joint account with a sibling you’re sharing a home with could create financial association. If you’re not sure whether that’s going to be the case then ask before you sign anything.
  • Swap your credit scores. It may seem like pretty personal information but honesty is the basis to any good relationship and secrets tend to cause issues, especially when it comes to money. So, swap your credit scores early on so you can see whether this person is a good match for you financially or whether there is something in their credit history that means there could be a potential problem in future.
  • Act quickly when a relationship breaks down. Although it can be an emotional time it’s important to protect yourself financially. For example, you will need to start monitoring transactions closely in any shared accounts to ensure that payments aren’t being made or cash withdrawn without your knowledge. It is also a good idea to settle any outstanding joint debts that you have as quickly as you can, where possible so that there are no remaining ties.
  • Break your financial connections ASAP. You can apply to each credit agency for an official notice of disassociation that will cut the financial tie between you and whoever else you may have once shared a credit account with. This will ensure that, in the eyes of any lender you make an application to, your credit report is not linked to anyone else’s.

Having a different credit rating to your partner doesn’t have to mean the end of the world for your relationship. It’s important to be honest and open about where you are financially to lay the foundations for making things work. And, if things come to an end, to ensure that you can both go your separate ways unencumbered.

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The top 10 pieces of money advice every young person should know Mon, 07 May 2018 09:59:09 +0000 Alex Hartley Financial management tends not to be a life goal for anyone under the age of 25. However, it’s often before this point in life that you can have considerable influence over what your financial circumstances aged 30+ are most likely to be. With that in mind, these are the top 10 pieces of money management advice that every young person should hear as early in life as 10 money management tips

The Top 10 Tips


  1. Saving is boring – but essential. Saving is the key to the door of financial success and the earlier you get used to putting 10% (or so) of your income into savings each month, the more you can build up. Savings will enable all the fun things in life, such as holidays and shopping, as well as the serious stuff like a mortgage and starting your own business.
  2. Learn how to budget now. Budgeting is just the balancing of incomings and outgoings and ensuring you’re not spending more than you have. It will become a crucial skill as soon as you leave home. If you haven’t acquired it by the time you graduate then you could easily get into trouble with debt and meeting further life goals could be difficult.
  3. It’s never too early to save for retirement. The amount of cash required for a comfortable retirement these days is up in the six to seven figures. So, it’s a huge mistake to leave saving for retirement up until the years when you can actually see it on the horizon. Start saving early and save small so that you gradually build up a retirement fund that gives you security and freedom.
  4. Set some financial goals. More realistic than “I’d like to retire at 30” but more ambitious than “I just don’t want to get into debt,” good financial goals can help to motivate and inspire you onto better things. Financial goals could be anything, from being able to take two years off work to travel, to embarking on a freelance career, getting married, having children or buying your own home. Clear financial goals will help you to create a money roadmap.
  5. Pay off your credit cards at the end of each month. Or, if you can’t do this, at least limit the number of cards that you have and try to keep the balances as low as possible. Credit cards can be a really useful option for paying for large purchases and many offer attractive benefits, such as accumulating air miles. However, they need to be carefully managed so that you don’t end up paying too much interest.
  6. Be aware of your credit report. As early as possible, take a look at your credit report and begin analysing what factors affect the view a future lender might potentially take. For example, you might need to pay off debt to improve a credit score and if you’re not on the electoral roll then your score will drop right down.
  7. Learn how to live within your means. Budgeting is the first step towards living within your means but there is more to it than that. As early as you can, start acquiring the skills that enable you to live lean when times are tight, from shopping second hand to learning how to managing food shopping and preparation so that you’re nutritiously fed without spending a fortune.
  8. Have a rainy day fund. This is money that you set aside to cover life’s little emergencies, from a broken boiler through to paying the excess on your car insurance. Life is a lot easier if you have a financial safety net so it’s worth working to create this as early as possible in life.
  9. Work out what you’re good at. If you do what you love then you’ll never work a day in your life – or at least that will be how it feels if you genuinely enjoy what you do. Plenty of people take jobs for the salary that comes with them and are perfectly happy. However, ultimately, you might find that you’re more financially successful if you’re doing something you’re genuinely good at and really enjoy.
  10. Investing doesn’t have to be risky. You can put your money into all sorts of places to help it grow, from tax free ISAs through to investing in stocks and shares. Investing in stocks and shares tends to generate the highest returns but also comes with the most risk – you could lose it all. However, if you start with small investments and learn as you go, there is a lot of potential to make more money.


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Act now! The era of the very low mortgage rate is coming to an end Fri, 04 May 2018 10:24:32 +0000 Alex Hartley Mortgage opportunities have changed significantly since the start of the financial crisis in 2008. It’s now much more difficult to pass affordability criteria and mortgage lenders are much less likely to offer the most attractive deals to all but the most appealing buyers. So, for the majority of those trying to get onto – or move up – the property ladder, mortgage deals are not what they once were. This is particularly evident when it comes to the most popular mortgage deals.low cost mortgages

An increase in the cost of the best deals

As lenders look ahead to a potential interest rate increase, many have already increased the cost of a mortgage. As a result, the most popular mortgage deals are now the most expensive they have been for two years. The Bank of England last increased the base rate in November 2017. While it was a small increase of just 0.25% it was the first time that the rate had been put up for a decade. And the Bank of England warned that the rate increases were not likely to stop there with two further rate rises over the next three years according to the Bank of England governor Mark Carney. It’s because of this 2017 increase – and the potential for a further rate rise – that the cost of a mortgage continues upwards. In fact, between March 2018 and April 2018, the average mortgage rate has gone up by 0.25 percentage points.

What is the average increase in the cost of a mortgage now?

For a typical mortgage of £175,000 it now costs £44 more a month than it did to borrow last autumn around the time when the Bank of England raised the base rate. In May, many financial commentators are expecting that the next of the two rate rises will be announced by the Bank of England, taking the base rate from 0.5% to 0.75%. And it’s because of this that mortgage costs have started to spike upwards once again. However, research from uSwitch found that lenders have actually been increasing the cost of their mortgages for some time and not just in the run up to anticipation of the latest Bank of England announcement. Barclays, for example, has changed the rate on around 60 products already.

How can you protect against the increasing cost of a mortgage?

The short answer is that you can’t. At least not forever. In the short term, locking in a fixed rate mortgage for a period of years will provide some certainty to homeowners who don’t want to find that their rates suddenly shoot up. This is what happened around the time of the first Bank of England rate rise back in November 2017 when there was a significant flurry of people who opted for fixed rate mortgages to try and ensure that they secured a lower rate for a specific period of time.

What are the benefits of a fixed rate mortgage?

Currently, many people are being urged to opt for a fixed rate mortgage as a result of the speculation that interest rates are heading upwards. The major benefit of a fixed rate mortgage is that, whatever happens to the interest rate, the mortgage payments will remain the same for a homeowner with a fixed rate mortgage. This makes the payments due much more predictable and makes it easier to manage the debt. Fixed rate mortgages for five years used to be an incredibly popular option – however, it’s the two year fixed rate that is starting to gain increasing popularity. Two year fixed rates tend to offer a better deal than a longer period and are also more flexible. In particular, for new homeowners, after two years, having paid down a proportion of the capital in the property better deals are likely to be available.

Mortgages for first time buyers

If you don’t yet have a foot on the property ladder then the prospect of mortgages getting more expensive can be intimidating but there is always something you can do to ensure that they remain accessible to you.

  • Look into Help to Buy. The government provides a 20% equity loan that will enable you borrow just 75% from a mortgage lender with a 5% deposit so you’re a more attractive lending prospect.
  • Accumulate a sizeable deposit. The more deposit you have, the smaller the mortgage you will need and so the more attractive the rate available to you is likely to be.
  • Keep an eye on your credit report. Positive factors in your credit report will contribute to your chances of getting a mortgage, and at a more attractive rate.

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7 Things about Debt you ought to know! Wed, 02 May 2018 15:07:06 +0000 Alex Hartley Debt is part of life in the UK. From managing student loans through to getting a mortgage, almost all of us will take on a debt at some point in our lives. However, despite the fact that debt is so commonly used in the UK we are never taught how to deal with it. There are no lessons in handling debt at school and many parents don’t pass on this kind of information to their children. As a result, there are many things that you simply may not know about debt, even if you should. burden of debt

  1. The debt burden in the UK is huge

As of autumn 2017, the average UK debt stood at £8,000 per person. This figure was worked out on the basis of unsecured debt, such as credit cards and personal loans and does not include mortgages. Research from established that 62% of Britons were worried about the level of personal debt that they had accrued and 6 million Britons didn’t believe that they would ever get to a position in life where they were debt free. So, the use of debt is widespread in the UK and not everyone is comfortable with it.

  1. Student debt is slightly different

Student loan terms are probably the most attractive you will ever be offered for debt. Low-ish interest rates and long repayment terms are made available to students and this isn’t often the case out in the wider world. For example, you don’t need to start repaying student debt until you’re earning at least £25,000 and after 30 years any remaining debt is written off. Whether it makes sense to pay your student loan off early is debatable and depends on your personal situation.

  1. Those with mental health issues are much more likely to struggle with debt

The Money and Mental Health Policy institute, set up by Money Saving Expert Martin Lewis, found that people who have mental health issues are three times more likely to be in trouble with debt and struggling financially. This could be anything, from depression through to anxiety. Worryingly, debt and mental health issues tend to feed each other and can create a vicious circle from which it’s difficult to escape.

  1. There’s no such thing as free money

Credit cards and overdrafts can seem like free money, especially if they’re offered at a time when their rates are low and there are no fees attached e.g. when you’re a student. However, these attractive student rates are often quickly converted as soon as graduation takes place and the costs kick in. If you haven’t cleared balances before that point then the costs can soon mount up.

  1. Creditors prefer communication when people are struggling

When you get into debt then you owe money to a creditor, such as a credit card provider or personal loans lender. If it looks like you’re not going to be able to meet the regular payments agreed then most lenders are much more appreciative of borrowers who give them a heads up first. So, if you’re about to miss this month’s credit card payment it’s always worth contacting the lender first. Most lenders will want to work out a way to help you out of trouble so that what you owe them eventually gets paid off. UK Finance, the organisation that represents banks and lenders, suggests for example a 30 day breathing space to borrowers who are in trouble.

  1. More and more people are getting into trouble with debt

Charities like StepChange are getting increasing numbers of requests for help from those who are not coping with their debts, especially from younger people. In 2017, the 340,000 people who contacted the charity looking for advice had a grand total of around £4.5 billion in unsecured debt between them. As interest rates go up, wage rises remain sluggish and the cost of living rises, experts have predicted that getting in to trouble with debt is highly likely to become more and more common.

  1. Debt problems can have a broad influence

For example, although debt is often offered cheaply to students, if it is not paid back before graduation this can often have an impact on your credit score. Credit cards and personal loans where there have been defaults or missing payments could make it difficult to get new credit – such as a mortgage – in the future. Debt problems that spiral tend to bring default fees and more interest payments, which can make budgeting even more challenging. And problems with debt could affect your mental health to the point at which it’s difficult to concentrate or work. So, debt problems aren’t just about not being able to make a repayment, they can affect your life in a much broader way.

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All you need to know about the Lifetime ISA (LISA) Mon, 30 Apr 2018 10:20:09 +0000 Alex Hartley The Lifetime ISA was launched in 2017 and offers savers the opportunity to put away up to £4,000 a year between the ages of 18 and 50. It’s a rather different type of savings vehicle, as the money saved must be for one of two purposes: either for retirement or the purchase of a first home. Although the Lifetime ISA has stayed under the radar as a savings option it still has a lot to offer in terms of benefits.Lifetime ISA

What is the Lifetime ISA?

It’s a savings vehicle that was designed to provide an opportunity for anyone to save in a tax efficient way. The big draw of the Lifetime ISA is the fact that the government will top up whatever is saved in it by 25% – up to a maximum of £1,000 a year.

How to save with a Lifetime ISA

You can put up to £4,000 a year into a Lifetime ISA, either paying this is as a lump sum, or as and when you can. The 25% bonus added by the government is paid into the ISA once a year. So, if you save £4,000 a year then you will have £5,000 a year after the government’s 25% has been added. Once the 25% bonus is in your Lifetime ISA account then you will be able to earn interest on what you’ve saved and also on the bonus – at the rate that the account offers. Your LISA can contain both cash and stocks/shares and the proportion you choose of each will depend on your attitude to risk.

Lifetime ISA restrictions

There are two key restrictions to note when it comes to the Lifetime ISA. The first is the age limit. You must be at least 18 to open a Lifetime ISA and you must be under the age of 40. So, this is not a savings product that is open to everyone. The reason for the upper age limit is that you can only put cash into your Lifetime ISA up until the age of 50.

The second important restriction to note with a lifetime ISA is how the money you save can be used. You must use the savings in the ISA to buy your first home or to help pay for retirement. If you plan to use the money for other purposes then there is a 25% charge applied to the savings when you withdraw them from the ISA. Effectively, this means that you will lose the 25% bonus that the government has added to your saved cash. However, the way that the numbers work out mean that you will also lose some of your own savings if you use what you have in a Lifetime ISA for other purposes. For example, if you have saved £4,000 in one year and receive the £1,000 bonus from the government, 25% of £5,000 is £1,250. So, if you were to then withdraw the cash for other purposes you would lose the £1,000 from the government plus £250 of what you had saved. You can only avoid this charge if you withdraw the money from your Lifetime ISA:

  • Once you are over the age of 60
  • In order to buy your first home
  • If you are terminally ill and have less than 12 months to live

When are Lifetime ISAs a good idea?

  • For young property savers. If you’re young and keen to start saving for your first home then a Lifetime ISA could be an important first step towards a deposit. Any property must cost £450,000 or less and you can’t buy within 12 months of opening a Lifetime ISA if you want to use the money you’ve saved in it.
  • For couples looking to buy. If you both have a Lifetime ISA you can both use the 25% bonus to help you save enough to buy your first home.
  • For freelancers. If you work for yourself and don’t have a company pension scheme to rely on, the Lifetime ISA is an efficient way to put cash aside – with that 25% bonus on top.
  • For anyone without retirement savings. Although you can only put money into a Lifetime ISA until the age of 50, if you don’t yet have retirement savings, this is an easy way to top up by 25% a year. However, it’s not recommended to rely solely on a Lifetime ISA, as a personal pension will probably create a larger return and more sizeable pension pot.
  • For those looking for low risk savings. Lifetime ISAs don’t offer large returns but neither are they high risk – this is a slow, steady and reliable way to build up cash.

Who offers a Lifetime ISA?

Currently, there are not that many Lifetime ISAs available and the only provider offering a cash Lifetime ISA is The Skipton Building Society. The interest rate offered is fairly low but it’s the 25% government bonus that will be the real appeal for most people.

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Update on the FCA’s review of motor car finance deals Fri, 27 Apr 2018 10:39:08 +0000 Alex Hartley The review of car finance being carried out by the Financial Conduct Authority (FCA) began in July 2017. The motivation behind it was to ensure that the market for motor finance – which has experienced an enormous boom – was/is a safe one for consumers. The use of car finance agreements has almost doubled in the past decade. In 2008, the number in use was 1.2 million and by 2017 this had risen to 2.3 million, making car finance a very sizeable part of the finance market. Given this vast escalation in use, as well as some consumer horror stories that emerged at the time, the FCA began looking into whether the industry presented a risk of harm to consumers.motor car finance review

The FCA’s findings

The latest review from the FCA on the car finance industry was presented in March of this year. Despite the fact that many were expecting the FCA to find a broken market in danger of capsizing, so far that doesn’t seem to have been the case.

Where has the growth in the take up of car finance come from?

The FCA found that the strongest rates of growth were among consumers who had better credit ratings, as opposed to those who were struggling to get other types of finance. So, it’s generally people with higher credit scores who are driving the increase in the volume of car finance. The review so far has also found that the market is a relatively stable one and that the level of arrears and defaults has remained fairly low. However, there is also evidence that defaults and arrears for consumers with the lowest credit scores are somewhat higher.

What about the risks we’ve seen from the severe drop in the prices of used cars?

Surprisingly, the FCA review found that lenders were managing this fairly well. When presented with the issue of lower prices of used cars and the impact this could potentially have on the fact that car finance firms are dealing with large numbers of used cars being returned to them at the end of a car finance plan, the FCA research found these firms were coping well. Prudent measures were in place to manage how much the car would be worth in the future and most firms had robust asset valuations and risk management processes.

Are issues with car finance related to problems with any other type of finance?

Not according to the FCA review. In fact, there is no significant relationship between those who get into financial trouble with a car finance agreement and falling foul of other types of consumer credit products. So, there is no domino effect disaster waiting to happen.

Do car finance providers deal transparently with consumers?

According to the FCA review, on the whole, the answer is a resounding “yes.” The contracts that are used for car finance were found by the FCA to be transparent and simple to understand. Similarly, the language used on websites – and in communications with consumers was the same, as well as being consistent and straightforward right across the information provided.

So, what did the FCA decide overall?

It seems that the FCA believes that the car finance market is generally working well in the interests of consumers. It was found to be well structured and to involve balanced risks that those within the market are aware of. However, the FCA review is not yet complete and there are some issues that the regulator felt were worthy of closer examination. These include whether there is a potential conflict of interest in some car finance commission agreements where incentives are given to brokers if they arrange the finance at a higher rate for the consumer.

What’s likely to happen next?

The FCA has outlined a number of specific steps it plans to take, including:

  • Staging a mystery shopping exercise. The point of this will be to clarify whether enough information is given to consumers and to ensure that it is clear about the options and risks involved.
  • Affordability checks. This will be mostly aimed at those with lower credit scores and what kind of information a lender might be able to use to check whether someone in that category can genuinely afford the repayments.
  • Commissions and incentives. The FCA will be looking further into the incentives that some brokers receive for arranging higher rates, as well as what the difference is between highest and lowest rates and whether this is potentially harmful to consumers.

The review by the FCA is scheduled to be completed in September 2018.

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Looming changes to privacy legislation – how so-called GDPR will affect you Wed, 25 Apr 2018 10:53:56 +0000 Alex Hartley On 25th May this year the General Data Protection Regulation (GDPR) will come into force in the UK. This marks a seismic shift in the landscape of individual data protection and has been designed to give consumers more control over their information. It will mean that individuals have a lot more rights when it comes to how their information is collected and used – and it also requires any business that is using individual data to ensure that its processes are compliant. But what does this actually mean for customers who disclose personal data – and for the businesses that want to work with it?

GDPR General Data Protection Regulation

What does GDPR mean for business?

Rather worryingly, the Federation of Small businesses conducted a survey of its members and identified that only around 8% of them feel ready for changes. In addition, only a third had begun to put measures into place to ensure GDPR compliance. Many said that they simply didn’t understand what was required of them and that the scope of the GDPR is so broad that it could cost up to £10,000 to make the required changes. However, the new rules introduced by the GDPR don’t just set a new standard of data protection they also usher in a new era of enforcement too. Any business, no matter how small, that isn’t GDPR compliant could face fines of up to €20 million or 4% of turnover. So, what are the key areas of the GDPR that businesses need to note?

  • The need for better consent. The GDPR requires that businesses have user consent in order to store details and data about them. This consent must be clear, well informed and unambiguous, as well as given by affirmative action. That means that it’s no longer acceptable to scrape data from websites or to pre-tick consent boxes.
  • Consumers can revoke consent at any time. Where a user revokes the consent they have given to a business to use and store their data this needs to be actioned in a timely way, which could present a significant issue for businesses that just don’t have the systems in place to do this.
  • Buying marketing lists is no longer an option. Compliance with the GDPR presents big challenges for businesses looking to market to a new audience because cold calls and buying marketing lists will mostly be unacceptable. Instead, it will be necessary to establish that the consumer really wants to hear from the business and what it is that they want to hear about.
  • Data security now needs to be inbuilt. There are many new provisions that apply to the security of data that is in the hands of a business. Perhaps one of the most potentially problematic is the requirement to notify if there has been a security breach. Now, businesses have just 72 hours to do this. The very public nature of notification could create some real issues for small businesses reliant on customer trust to grow.

What does GDPR mean for consumers?

Particularly in the light of the recent Facebook and Cambridge Analytica scandal, there is a lot of focus right now on what happens to consumer data after we hand it over. But what is the GDPR really likely to change for consumers?

  1. The right to be forgotten. Consumers who don’t want a particular business to continue to have information about them can ask for all of it to be deleted.
  2. More privacy transparency. For example, businesses can no longer use complex and hidden privacy notices to bamboozle customers about what really happens to their data, as the GDPR requires that it’s all set out clearly and simply in black and white.
  3. The right to access data. Consumers can request that a company reveal all the information that they hold on that individual. This used to be something that businesses charged for but with the GDPR it’s an action that will have to be completed for free.
  4. The right to object. Consumers will have more right to object to their data being used for direct marketing – and this is something that the businesses using the data have to highlight to their customers.
  5. The necessity of opting-in to communications. Because there are new and much stricter requirements for businesses to obtain proactive consent from consumers to communications, this should reduce the amount of unwanted communication received. Once the GDPR is in place businesses won’t be able to add customers to a mailing list just because they make a purchase, for example, unless there has been explicit and specific consent.

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7 low cost collectibles that could make a future fortune! Mon, 23 Apr 2018 10:40:26 +0000 Alex Hartley It is the dream for any hoarder – all of those erasers or comics that you’ve been collecting for years are actually worth a fortune. For most of us our low value collectibles turn out to be just that: not worth very much. However, there are some items that, even if you haven’t started collecting them already, could be a wise investment now – because they’ll make you a fortune in the future.collectibles

Low cost collectibles that could be high value items

Collectibles can be very subjective – it all depends on whether you can find the right buyer who wants to pay the right price for what you’ve collected. However, there are some categories of collectibles that have a better chance than most of making you a fortune in the long run.

  1. Pop memorabilia. Music memorabilia has always had a great deal of value and now is the time to begin drawing together, and adding to, anything you have from the 1980s onwards – the era when pop music began to explode. It’s amazing what people will pay for unique items of pop memorabilia so don’t be put off if at first you think what you have is of no value. For example, a single set list from a Nirvana gig sold for $8,750 at auction because it had been scribbled on by Kurt Cobain.
  2. First edition books. This doesn’t have to be vintage books (although they do tend to be very valuable) but could be modern classics too – first editions of the Harry Potter books, for example, can go for five figures. The general rule though is that the longer you hold on to them the more likely they are to increase in value.
  3. Childhood toys. There is a big market for childhood toys now, mainly driven by the nostalgia factor and people looking back at what they used to play with. If you’ve been collecting Micro Machines since the 1980s, for example, you could find yourself with high value spoils on your hands. To the right collector, the right Micro Machines model could go for anywhere up to £200.
  4. Star Wars stuff. The older collectibles and figurines tend to fetch the highest prices right now but Star Wars collectibles from recent films, especially the limited edition pieces, are unlikely to lose their value. The rarer the figurines, the more they tend to fetch. So, if you have Star Wars figures and you’re not sure whether they’re worth anything it’s important to check first so that you don’t end up accepting less for them.
  5. Comic books. Comics are some of the most collectible items around and those that can often generate the most impressive financial return. If you’re looking to invest in comics that really might make you a fortune then it’s those that date back beyond 30-40 years that have the really high price tags.
  6. Old coins. Maybe you inherited a stack of old coins from a relative or perhaps you’ve been a serious collector for some time. Coins can be worth a lot more than their face value if they are unusual or out of commission. The rarest coins fetch the most cash but you might also see the value of your collection swell with rare, commemorative or limited editions.
  7. It’s often difficult to put a value on a collection of stamps – even some of the oldest ones may not be worth that much other than to a nostalgic collector. However, it is always a good idea to get a valuer to look at the stamps you have in case the collection contains some rare ones. A Penny Black, for example (the world’s first adhesive stamp) could fetch many thousands of pounds if it still has the original gum and the right margins.

Some sage advice on collecting collectibles

  • Choose something that you love, not just items that you think are likely to make you money. That way if it turns out that you have nothing but boxes full of old comics, as opposed to a priceless find, then you’ll still get some pleasure from them.
  • If you’re doing this purely to make money then choose wisely. You need to make sure that whatever you’re going to spend money collecting will guarantee you a return. Do your research online, check out auction sales and look at what other collectors have received for similar items.
  • Start with what you already have. If you have a box of old Bratz dolls or a bunch of first edition board games then build on what you’ve already got rather than starting completely fresh.

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The psychology of money in our pursuit of happiness Fri, 20 Apr 2018 11:45:16 +0000 Alex Hartley Does money make us happy? The obvious answer to this is “no.” There are plenty of examples of people who have had lots of it and yet been miserable. However, the flip side of the argument is that a lack of it – or difficulties with it – can make life very difficult. So, where does money fit in terms of our overall state of happiness in life and how can you achieve financial well-being?financial well-being

The psychology of money

Looking deeply into the psychology of money tends to reveal that we’re all very different when it comes to how we cope with our cash. However, there are some general themes and personality types that can provide some helpful insight into the ways that we think about money. For example, many of us find delaying gratification very difficult but it can mean better results in the long run. A famous 1960s test – the Stanford marshmallow experiment – gave children the choice of eating a marshmallow straight away or waiting and getting two as a reward for delaying gratification. The children who were able to wait had better life outcomes in follow up studies. However, it’s difficult to wait, especially as we live in an era when everything is instantly available. Spending hits all the pleasure zones in the brain – saving does not – and, as many of us have trouble visualising our future selves, saving feels like giving money to a stranger!

The financial personality types

Sometimes, getting to grips with the psychology of money can be assisted by working out whether you fall into a specific financial personality type. For example:

  • The Hoarder – a cash saver who is to fearful of letting go of money saved to invest. Would benefit from releasing some cash to invest it and generate more.
  • The Social Value Spender – spending money generates warm and fuzzy feelings for this person, as well as gratitude from others. It’s important to stop impulse spending and keep an eye on debts if this is you.
  • The Cash Splasher – using money to make people think more highly of them, Cash Splashers will benefit from finding other ways to achieve contentment and cement relationships.
  • The Ostrich – avoiding bills, refusing to talk about debts and just wishing it would all go away. This personality type benefits from facing up to things and getting organised but taking small steps to get there.

The objectives of financial well-being

Whatever financial personality type you might fall into there are many different ways to define financial well-being. Some, for example, would focus on low debt and high net worth as being the ideal combination of factors to achieve it. The US Consumer Financial Protection Bureau defines it as “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future and is able to make choices that allow enjoyment of life.” It might mean something subtly different to everyone but, overall, it’s generally being able to use the money you have to enjoy your life and not having to worry too much about a lack of it. Whatever it means to you, most people’s financial well-being objectives will include:

  • Being able to absorb a life event that causes a financial shock
  • Being in control of budgets and finances, daily, weekly and monthly
  • Having a degree of financial freedom so you can make choices
  • Being able to set financial goals and move towards them

Taking steps towards financial well-being

  • Start saving. In 2017, Brits struggled to save even 4.6% of their income and yet this is one of the fastest routes to a sense of financial wellbeing and well worth doing.
  • Change your mindset. Start viewing saving as a gift to your future self and/or future family, as opposed to giving money to a stranger.
  • Review what goes out of your account already. One in eight people are currently paying for subscriptions they don’t use, for example.
  • Use savings tools. There are lots of different tools out there to help you track your saving and spending, and visualise your progress.
  • Get organised with your important payments. Make sure these leave your account as soon as you’ve been paid. That way you’ll know how much of your cash is left to spend.
  • Be firm about saving. Set up a standing order that leaves your account for a separate savings account at the same time as all other important payments.
  • Shop around for the best deals. Find the lowest costs and highest savings rates to make the most of the cash that you have.

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How to stay safe and spend wisely if considering cosmetic surgery Wed, 18 Apr 2018 11:12:26 +0000 Alex Hartley According to data from the British Association of Aesthetic Plastic Surgeons (BAAPS), the number of cosmetic surgery procedures fell 40% in 2016. The reason? Many more “relatable” celebrities who are seemingly at home with their flaws. However, for many people cosmetic surgery remains a very attractive option, whether you’re considering a full procedure or a tweak like botox. If you’re keen to have cosmetic surgery, it’s important to make sure that you have all the facts – to ensure you don’t pay more than you need to, and to stay safe. cosmetic surgery

Cosmetic surgery – the options

If you’re looking at cosmetic surgery then there are two broad categories: surgical and non-surgical procedures. Non-surgical procedures are generally less invasive and are unlikely to require anaesthetic or a hospital stay. Surgical procedures are much more of a commitment. These are some common examples of the two:

Surgical procedures: breast enlargement/reduction, breast augmentation, tummy tuck, ear correction surgery, liposuction, hair transplant, eyelid surgery, facelift, labiaplasty, a nose job or surgical fat transfer.

Non-surgical procedures: botox, dermal fillers, microdermabraison, chemical peels, laser hair removal, skin lightening, tattoo removal or permanent make up.

The cost of cosmetic surgery

Some cosmetic surgery is available on the NHS, which means that there will be no cost to you. However, this is becoming increasingly unusual and generally requires a broader motivation than simply wanting to have fewer wrinkles or a smaller nose. Costs for cosmetic surgery can vary significantly, depending on where you are in the UK and the type of clinic that you choose. Research carried out by Private Health UK identified these average costs for some common surgical cosmetic surgery procedures in the UK:

  • Facelift – £6,156
  • Breast enlargement – £4,610
  • Eyelid reduction – £3,113
  • Liposuction – £3,507
  • A tummy tuck – £5,685
  • Nose reshaping – £4,235

All of these procedures are costly and we are aware of a constant flow of people wanting to borrow to pay for cosmetic surgery.

Non-surgical procedures tend to be much cheaper and are much more accessible. Often, this is because they are administered by beauty therapists and not by doctors, nurses or trained clinicians. If you’re looking at non-surgical cosmetic surgery then these are some of the most common procedures, as well as the potential costs involved, according to the NHS:

  • Dermal fillers – £150 to £300 per session
  • Botox – £150-£350 per session, depending on the amount of product used
  • Chemical peels – £60 – £500, depending on the depth of the peel
  • Microdermabrasion – £60 – £80 per session
  • Laser hair removal – £40 – £400
  • Tattoo removal – £150 – £800, depending on the size of the tattoo

Where to get cosmetic surgery, the UK or abroad?

For anyone looking at either surgical or non-surgical procedures the choice of where to get the cosmetic surgery is often based on cost. Many people become cosmetic surgery tourists, travelling to other locations in order to access cheaper plastic surgery. And this is often worth it, as it’s possible to save around 60% on the cost of cosmetic surgery by choosing to go to somewhere outside the UK. The idea also appeals to many people because of the privacy element involved – the surgery can be scheduled into a holiday and no one needs to know. If you’re considering cosmetic surgery abroad then the NHS has these tips:

  • Find out how doctors and clinics are regulated in the country you’re thinking of, as well as how standards are enforced.
  • If you can’t establish that a surgeon is fully trained then it may be better to go elsewhere.
  • Make sure the surgeon speaks English so everything can be explained to you.
  • Look for feedback on the clinic and the service – social media can be a useful tool here.
  • What happens if things go wrong? Find out what insurance the clinic has and what local hospitals are like if there is a problem.
  • Look into aftercare – how will this be administered?

Cosmetic surgery – how to stay safe

There are always risks to any kind of surgery or operation and accepting these is part of the process of determining whether you’re ready for cosmetic surgery. There are also some key steps to take if you want to stay safe.

  • Check the surgeon’s registration status – you can do this online with the General Medical Council.
  • Consult the Joint Council for Cosmetic Practitioners register – this is a new register aimed at those carrying out non-surgical procedures, such as botox and fillers. Currently, no qualifications are required to administer non-surgical procedures but anyone on this register must have had approved training.
  • If you’re having a surgical procedure then make sure the person who advises you about it is the person who will actually do the surgery.
  • Find out whether the clinic has insurance coverage in the event that anything should go wrong.
  • Check that the clinic is registered with the Care Quality Commission (the independent regulator of health services in England).
  • Visit the clinic and ask questions – for example, what kind of aftercare is there, what are the total costs involved and what happens if something goes wrong?
  • Search for feedback and reviews – many people who have had a bad experience with a surgeon or beauty therapist go online to share it. Search social media, Google and chat rooms and forums to see what you can find.

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What happens if you get into loan repayment arrears? Mon, 16 Apr 2018 10:20:15 +0000 Alex Hartley A 2017 survey carried out by the Bank of England found the highest numbers of customers defaulting on loan repayments since the beginning of the financial crisis. This is a worrying statistic for both credit providers and consumers. It also means that, for many borrowers, being aware of how a potential arrears situation could arise – what the implications are and how to deal with it – could be essential knowledge.repayment arrears

How do loan arrears arise?

If you miss a repayment on a personal loan then you will find yourself in arrears. There could be any number of reasons for this, for example you may lose your job or experience a change in lifestyle that means you have less disposable income. You could even just have a single month of poor budgeting. However it happens the results will be the same – you will be considered behind with your personal loan payments.

What’s the difference between arrears and default?

These are two separate stages in the process of failing to make payments on a personal loan. The arrears letter is usually the first stage in the process. This will act as a way of notifying you that you have missed a repayment, or repayments, on your personal loan. The letter will usually set out the date of the missed payment, as well as the amount and what you need to do to rectify the situation. A default means that the lender has reached the stage of assuming that the lending agreement you both signed up to is now breached. Defaulting on a payment is more serious than simply being arrears, which can be rectified simply by paying off what you owe, which may be just one or two payments. When a default occurs the credit provider can take more significant action, including requiring the entire loan to be repaid or taking legal steps. The presence of arrears of defaults on your credit file will lead to you having a so-called “bad credit history” with all that that implies in terms of obtaining further loans & credit.

How to deal with loan repayment arrears

If you get an arrears letter in the post from a lender you’ve borrowed from then the most important thing is to take action as soon as you can. Although loan arrears will likely show up on your credit report, if you can remedy the situation quickly then you’ll be able to prevent serious damage. Contact the lender and let them know why you have missed the payments that were due. In most cases, lenders are keen to ensure that borrowers keep making repayments. So, if there is another way to enable you to do this, such as lengthening the term of the loan, they may be willing to help you out.

What happens in a default situation

Default situations tend not to occur straight away. If you’ve missed three to six payments then you could end up on the receiving end of a default letter but not usually before this point. Defaults can only be issued for debts that are covered by the Consumer Credit Act (this will include most personal loans) and it’s important to note that you’re required to be notified of the default in writing. You can still stop a default situation from escalating, even after you have received a default notice. The first thing to do is contact the lender and explain your situation – you may want to try making suggestions about how it could best be resolved to see if the lender agrees to help you. However, once you get into a default situation it’s not possible to escape the fact that this will leave a mark on your credit report. In fact, a default stays in your credit history for six years after it happens. During that time your credit score will be lower and you may find it tougher to take out any new credit.

What to do if you think you’re heading into arrears or default

  • Assess the situation. Work out exactly how much you owe and why this has happened. Look for opportunities to make up the arrears or default – prioritise this over other spending if you have to.
  • Speak to the lender involved. Most lenders appreciate being contacted before they have to go to the trouble of sending out an arrears or default letter and may be more willing to help you restructure your lending so that it becomes more affordable.
  • Look for specialist debt advice. If you’re really struggling with your debts and can’t see a way to pay what you owe it’s always worth speaking to the experts. A debt specialist will be able to assess your situation with an experienced eye and make suggestions for solutions, as well as providing reassurance that there is always something you can do.

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How to find your next job in a rapidly interconnecting world Fri, 13 Apr 2018 10:47:47 +0000 Alex Hartley As of December 2017, UK employment figures had dropped by 56,000. This caused many economists to start warning that the UK jobs market had peaked. However, with unemployment remaining at record low levels and the jobs market itself diversifying thanks to the influence of tech and globalisation there is still a lot to be positive about. So, if you’re currently looking for a new role then it’s still possible to find your dream job. You may just have to make some adjustments in the way that you go looking for it.finding your next job

Networking has changed

Networking is a tried and tested way to help find new job opportunities. From being the first to know about a role not yet advertised, to being headhunted by someone you’ve met during a networking event, there are lots of ways in which it is possible to positively influence a job search by time invested in networking. However, networking today needs to be a balance of online and offline activity. Social networking via platforms such as LinkedIn and Twitter can be just as valuable in terms of extending your connections and creating opportunities as going to events.

How to use the internet to find your next job

As well as engaging with social networking, there are many other online tools that will make it easier to get ahead.

  • Create your own website or portfolio. Depending on what you do, having your own web pages to display your work could help to bring you to the attention of your next employer or client.
  • Synchronise your online profiles. From Facebook, to LinkedIn make sure anywhere that you’re represented online highlights your career goals and demonstrates what you’ve achieved.
  • Clean up personal profiles. New employers will look at your personal social media profiles as part of the standard process of reviewing you as a candidate. So, untag yourself in the drunken photos, delete the late night statuses and choose a professional profile photo.
  • Post your CV online even if you’re not actively looking. This will mean that you can be found by someone who could identify you as an ideal fit for an available role. It’s always easier to get headhunted than not.
  • Sign up for updates and newsletters from businesses you want to work for. That way you’ll be the first to know about any opportunities they have and you’ll be well equipped to talk about the business itself if you get to the stage of an interview.
  • Decide what it is you actually want from a job. You’ll be a much more impressive candidate if you’ve clearly thought this through and are committed to the outcome.
  • Don’t sit on your hands if you’re between jobs. There’s a lot you can do to contribute to your job search, from honing your CV through to doing voluntary work that will help to illustrate a specific skill set that could be useful for your next applications.

Key changes in job searching in the last couple of decades

  • Social media matters. Most employers now check a candidate’s social media profiles even if they don’t rely on them to make decisions.
  • It’s not just for employers though… Social media is a great way to find out about job opportunities, to learn about a company culture and what the values and vision are for the business, as well as the latest news.
  • Telephone and Skype interviews have become standard. Often the first step in a recruitment process after the application has been made is a brief “initial interview” by phone or Skype.
  • CV standards have risen. We all have laptops now, as well as spell check and access to tech tools. So, employers expect CVs to be well laid out, engaging and error free.
  • Online recruiters have a huge reach. Online recruiters and job search sites are often a first port of call for employers looking to engage the widest pool of candidates. This makes them a rich source of potential for anyone looking for a new job.
  • Candidates have more power. Employers expect candidates to ask for what they want and also to challenge employers on what the business could do for the candidate and not just the other way around.
  • But some things haven’t changed at all. For example, asking good questions at interview, personal hygiene, being on time and ensuring that your interview answers tally up with the content of the CV all remain important.

Senior roles can be trickier. For those in senior or management positions it’s often a lot more about who you know and who could put you forward. That’s why networking is such a crucial tool for anyone at any level.

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How lenders judge loan repayment affordability and why this is important to you Wed, 11 Apr 2018 10:04:40 +0000 Alex Hartley There are many factors involved in being approved for credit. However, perhaps one of the most important today is affordability. Changes in the personal finance market over the past decade have put affordability at the top of the list of criteria that lenders must establish before they decide to approve a loan application. But what kind of tests do lenders use to measure affordability and what does it mean for you if you don’t pass them?judge loan affordability

How credit providers judge affordability

The basis of affordability is whether you can borrow the personal loan – or use the credit card that you’re applying for – and be able to make the required repayments. And once you have made the repayments, will you still have enough disposable income to make other essential payments, such as mortgage or rent, the cost of food and transport.

So credit providers will need to know your monthly income (net of taxes) versus your monthly outgoings. They will probably try to distinguish between your discretionary costs (i.e. those things you can choose not to spend money on e.g. your socialising) versus non-discretionary (i.e. those costs you can’t avoid, such as food, energy, rent/mortgage payments & travel, etc).

  • How much you earn – the more you earn, the more income you have to cover repayments.
  • Your outgoings – the higher your monthly outgoings, the more unaffordable new credit is likely to be.

But don’t get affordability mixed up with creditworthiness. Your creditworthiness needs to be strong too. If you can afford the loan repayments but your repayment behaviour has been poor (as recorded in your credit file at the credit reference agencies) they may still refuse to lend to you. You need to be able to demonstrate that you can afford the loan repayments and that you actually do make the repayments on time and in full.

So credit providers will also use your credit report to help them make a judgement about whether to lend to you. They don’t use the credit scores generated by credit reference agencies but, instead, will use the information in your credit report to generate their own. The following factors will have an influence over how credit providers assess your credit worthiness:

  • The amount of debt you already have – if you are already making payments on multiple debts then lenders might not feel it would be affordable for you to add to that.
  • The ratio of earnings to debt – high earnings and low debt is the optimum to demonstrate you can afford credit. However, middle income earnings and low debt may work too, as well as other combinations. If you have low earnings and high existing levels of debt then you may struggle to get further credit.
  • Public records – your credit report will demonstrate to a lender whether you’ve struggled with borrowing in the past, for example if you’ve had a court judgement against you. Although this doesn’t go to the heart of affordability it will demonstrate how easy you find it to manage debt.
  • Your financial associations – your credit report will also show a lender who you are connected to financially. If a current or ex partner has a very negative credit report, for example, it could mean a lender assumes you might end up being responsible for their financial situation and unable to afford your own obligations.

Why does affordability matter?

There is now an increased focus on responsible lending, particularly in the short-term credit sector. The UK Financial Conduct Authority has issued official guidance that makes it clear that a credit provider should not be advancing credit to a customer before assessing their creditworthiness (including affordability). This is a requirement in addition to the assessment the credit provider will do to determine the risk to itself in providing the credit to the customer. As a result, every lender will now carry out an affordability assessment so, for those looking to borrow, it is an important factor to consider.

What can you do if you’re not approved?

If you find yourself in a position where a credit provider has refused your application on the basis of affordability then there are a number of steps you can take.

  • Check your credit file. Look for mistakes that could have given the impression you couldn’t afford to make the repayments – or a connection to someone else who doesn’t have a good credit score.
  • Pay off existing debt or consolidate debt. It may be that your application was refused because you already have too much debt – if that’s the case then reducing that debt is a good place to start. Or restructure your debt to make monthly repayments smaller.
  • Start budgeting. If you’re not in control of your finances then you could fail an affordability test on the basis of an imbalance of income and outgoings. Learning to budget can help you to bring these figures back into line.
  • Look for other types of credit. Affordability criteria vary from lender to lender. You may also find that a different type of credit is a better option. For example, a homeowner loan – which uses your property as security – could result in an approval where an unsecured loan application did not.

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Brits attitudes towards spending now on big ticket items Mon, 09 Apr 2018 10:59:32 +0000 Alex Hartley According to the Chancellor Phillip Hammond, the UK economy has reached the point of still being within the tunnel – but able to see light at the end of it. However, for UK consumers these remain testing times and many are still struggling to catch even the slightest glimpse of the promised end-of-tunnel brightness. Consumer confidence is one of the easiest ways to measure how the UK economy is being experienced by those who live within it every day – and those metrics currently tell rather a different story.

Consumer confidence metrics

The GfK consumer confidence index looks at the individual experience of UK consumers. It uses anecdotal evidence to analyse how people feel about the state of their own finances, the wider economy, as well as whether they feel that this is a good time to start spending or saving. The most recent results from GfK indicate that UK consumers are perhaps more cautious than the Chancellor would like to believe. We are certainly more careful with cash than we used to be – still making purchases but thinking twice about them before we do, especially when it comes to larger and more expensive items. The GfK survey creates a picture of the consumer side of the UK economic landscape right now that looks a little like this:

  • A significant drop in the number of items being sold
  • A tendency towards holding back on spending, buying something better quality and buying less
  • An unwillingness to take on the kind of credit that might usually be required to enable a bigger purchase
  • Avoiding spending unless something actually needs to be replaced or where an emergency purchase is necessary
  • Taking a long-term, as opposed to a short-term, view of spending and keeping an eye on the future so as to tailor spending as things change

Consumer confidence tends to shift month on month. In January of this year it was reported that consumer confidence had risen somewhat. However, in February it had taken another dip, as people began to worry more, both about their own personal finances and the state of the wider economy. So, nothing is set in stone.

So what are we spending our cash on?

Each year the Office for National Statistics (ONS) updates its “basket of goods,” which is designed to reflect the evolution of UK consumer shopping habits. It’s also used to measure inflation. Crucially, this basket of goods can provide some guidance on what UK consumers are actually spending their money on. The ONS’s current basket contains a total of 714 items. It highlights food preferences, such as an increase in the popularity of quiche and a drop in the popularity of pork pies. It can also be used to identify wider trends – for example, the inclusion of non-dairy milk, cycling helmets and active wear leggings indicates a burgeoning trend towards healthier lifestyle choices. Items that drop out of the basket are also a useful measure of consumer choices. This year, peaches, nectarines, leg waxes and edam cheese all fell out of the basket.

The credit provider perspective

The ONS’ basket of goods indicates that consumers are generally more drawn towards affordable purchases and lower cost treats that don’t require credit to buy them. However, we are still in the middle of a surge in consumer credit cards that includes 1.3 billion credit card payments worth £46.8 billion made in one month alone at the end of 2017. With annual payments on credit cards increasing by around 13% is it likely that this cautiousness with credit will continue?

Most credit card providers remain optimistic about the interest that consumers have in using credit to pay for items, whether they are large or small. Figures from last summer indicated that spending on credit, debit and charge cards was growing at the fastest rate since 2008. And most lenders tend to expect a slow down during the months of the year after Christmas as consumers adjust to credit that may have been used up to pay for annual festivities. Plus, as the consumer confidence index shows, all of this can change extremely quickly and from month to month. All the signs are that any reservations consumers have now about taking on credit to buy large items could be temporary. And, if the Chancellor’s prediction about light at the end of the tunnel should turn out to be true then we could see a revival on the high street sooner rather than later.

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How to close the gender pay gap if you discover discrimination Fri, 06 Apr 2018 11:13:54 +0000 Alex Hartley The gender pay gap is currently a very hot topic. With businesses with more than 250 employees now forced to reveal how much less women are paid than men we are beginning to see just how little the female side of the workforce is valued by a number of very big brands. Ryanair, for example, recently revealed a gender pay gap of 72% – the worst in airline history – and even in the public sector this figure comes in at 14%. The deadline for private firms to report on the gender pay gap was 4th April – if you’ve discovered that the business you work for has a significant gender pay gap, what can you do about this kind of potential discrimination?close the gender pay gap

Understand the data

Looking at the gender pay gap data that is being released can be somewhat confusing. However, this isn’t about equal pay for equal work – even if there is a large gender pay gap that doesn’t mean that there is discriminatory practice. Equally, if there isn’t much of a gender pay gap to speak of at your firm it doesn’t mean that pay discrimination isn’t an issue. Look instead at data such as how many women are in the lower paid roles, what the bonus gap is and whether there is a decent proportion of women in the higher earning brackets. All of this will give you a good idea of how committed your company is to giving women equal opportunities.

If you can, think about joining a union

According to the statistics, the gender pay gap in unionised workplaces is smaller. Even if your employer doesn’t recognise a union it’s still worth joining, as they can provide plenty of support. Where a union isn’t an option it’s a good idea to get together with others who have the same concerns, to sit down and identify what the issues are and how you would like them to be dealt with.

Speak out

Now is the time to take action if you find that you’re stuck in a gender pay gap. The data that is being revealed is very public and there is widespread shock about how much of a gender pay gap there really is. This is putting pressure on businesses to do something about it, which means that now is the ideal time to put your case to the senior people who have the power to make a difference. You might want to ask about flexible working and when the business last did a job evaluation scheme (if at all). Enquire about bonus structures, whether there has been an equal pay audit and whether bonuses are structured so that men and women have equal access to them.

An equal pay audit

Equal pay audits identify whether men and women are being paid differently for the same job. They will also highlight whether those who join the business come in on a different rate of pay as a result of gender. If the results show that the business is actually breaking the law with its gender pay policies then an employment tribunal can compel the business to make changes.

Don’t accept the same tired old excuses

Many businesses reporting gender pay gaps simply say “we just have more men at senior levels.” Statements like this have been used as an excuse for not making change for decades. Now is the time to challenge companies to provide an explanation for why this might be the case. Is it institutionalised discrimination? Is it because the more senior roles are structured so as to be impossible for those with caring responsibilities (most of whom are women)? Is it because there is a culture that men and women belong in certain positions? None of this needs to be an excuse anymore and now is exactly the right time for change.

Ask for what you want

A promotion. Men are overwhelmingly paid better than women, both in terms of basic salary and also bonuses. They tend to take the head office positions and senior management roles – and that may also be the case in the company you work for. If you know that you’re ready to move up then ask for a promotion and encourage other women to do so to. There should be a willingness to address the gender pay gap and seniority inequality with all the statistics that have been released, particularly if your employer has fallen short of fairness.

A pay rise. Avoid demanding a pay rise simply because your employer has a significant gender pay gap. It’s far better to try and gather information that relates to your specific role within the business. See if you can get information on what others in a similar position are paid, ask for collaboration from your colleagues and then steel yourself and request the pay rise, no matter how awkward it may feel.

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What type of cars should we buy, now and over the next decade? Wed, 04 Apr 2018 11:16:42 +0000 Alex Hartley The automobile industry has undergone a dramatic shift in the past couple of years. Public concern over air pollution has forced a complete rethink of the traditional gasoline powered engine. As a result, we now have many more options when it comes to what type of car to buy – and which part of the industry to support. But what are the best options when it comes to the type of car we should buy now, and over the next decade?the cars of the future

Why not stick with what you know?

Petrol – and, in particular diesel – cars have brought some serious environmental and health issues to the UK. The air in our towns is now significantly polluted with nitrogen dioxide, which is incredibly toxic. It may seem like an issue only for those with environmental concerns but air pollution has serious consequences and is responsible for 23,500 premature deaths in the UK every year. Although the EU responded to this worldwide crisis by setting strict rules on nitrogen dioxide in 2000 this did very little to reduce the crisis thanks to the actions of the auto industry. Diesel vehicles produced by carmakers were designed to show acceptable levels of emissions in the test centres to comply with the EU rules but then emitted much higher pollutants outside once in normal use. So, change is well overdue.

What type of car to get now?

The cost of financing an electric vehicle has fallen in the past year or so, which has made it a more feasible option for drivers who want eco-power. It’s an option that makes particular sense for drivers in London who can avoid the £11.50 a day congestion charge with an electric vehicle. However, outside of the capital – and other urban hubs – it’s still a challenge for a number of reasons:

  • Range anxiety – electric car batteries go further than they have ever done but still not far enough for some. The Renault Zoe, for example, now has a top range of 180 miles on just one charge.
  • Charging points – the UK’s charging infrastructure has grown to some 5,000 public locations. However, more street and lamp post chargers are likely to be required to ensure full ease of use.
  • Cost – buying an electric vehicle outright still generates a considerable cost but leasing options are starting to make ownership more viable. The concern for many is the speed at which EV values drop – a single development in battery technology, for example, could mean that the value of old cars drops through the floor.

What type of car to get now: a hybrid. For many people who are keen to reduce their environmental impact a hybrid car is a good first step.

What type of car to get in five years?

There are already 130,000 electric vehicles on the UK’s roads and a choice of 60 different models for consumers. However, issues remain and the relatively small size of the market has kept costs high. This is all set to change with carmakers hatching ambitious plans to flood the market with battery and electric vehicles that will be competitively priced.

  • According to researcher LMC Automotive, electric car sales will account for around 10% of global auto sales by 2025.
  • Battery costs are declining rapidly, causing all carmakers, not just environmentally driven brands like Tesla, to start producing their own models.
  • General Motors Co. has planned to release 20 models by 2023 and Toyota Motor Corp 10.
  • Over the next five years, 127 battery-electric models will be released onto the market.
  • Since 2013, electric vehicle charging infrastructure across Europe has grown by 30 – 60% every year. By 2019, all new houses in the EU countries must have an EV charging port, according to new regulations – that will be 10% of all buildings and parking space by 2023.

What type of car to get in five years: many consumers will still hesitate over an electric vehicle in five years time but costs will likely be lower, choice increased and infrastructure growing to support it.

What type of car to get in 10 years?

It’s in 10 years time that many predict the electric vehicle market will reach its tipping point. That’s the moment at which the mass market of car buyers turns its collective gaze towards electric as a realistic option.

  • According to Bloomberg New Energy Finance, EVs will reach price parity with gasoline-powered cars by 2029 or earlier, which will be the moment at which many consumers seriously consider an electric vehicle as a competitive choice.
  • Carmakers don’t want to be left behind – in a decade, the gasoline powered car could be as out of date as a horse and cart.
  • Charging is set to become faster. BMW, Daimler, Ford and Volkswagen are already collaborating on an ultra fast charging network that will be rolled out across Europe over the next 5-10 years.
  • The charging infrastructure should be sizeable by 2028 – electric charging points are set to outstrip the number of petrol stations in the next few years and soon every supermarket, railway station and hotel will have them.
  • The figures will soon make sense. There are already multiple incentives for businesses to support electric vehicle charging infrastructure (e.g. a £600 subsidy where companies install double charging points) and reducing the cost of public charging is a key target for government over the next decade.

What type of car to get in 10 years: an electric car. By 2028 you won’t have to choose an electric vehicle on principle, as the numbers will make sense too. By 2040 he UK intends to ban the sale of all petrol and diesel vehicles, but other countries intend to move more quickly (e.g. Norway by 2025 and Netherlands by 2030).

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How exercising can make you money – the apps that turn pounds into pounds! Mon, 02 Apr 2018 10:48:25 +0000 Alex Hartley Exercise is (usually) a good idea. It can help to increase fitness levels, keep weight under control and also improve your mood. But can you make money just from getting on your bike or hitting the running track? A couple of years ago the answer would have been a definitive “No.” However, today we are in a world of mobile apps that have broadened out the way that we live our lives, including how we motivate ourselves to exercise. And, as a result, it is actually possible to make money from exercising if you have one of these apps.make money from exercising


The Fitcoin app works with any fitness tracker that will integrate with Apple Health app on your iPhone. It enables you to generate rewards from the activity that you do during the day. So, the more calories you burn and the more exercise you do, the more likely you are to have something to show for it at the end of the day. Although Fitcoin doesn’t pay out cash to those who earn their share of Fitcoins, you can convert these into vouchers that can be used to make purchases with retailers such as Amazon.


If you’re a keen walker then you could make money every time you step out with Sweatcoin. The app will reward users with one Sweatcoin for roughly every 1,000 outdoor steps that are taken. Sweatcoins can then be redeemed in the app’s own store against fitness kit and gadgets, services and experiences. The app has had great reviews from users who have found it useful, both in terms of motivation to get fitter and satisfaction of rewards. The best way to work with Sweatcoin is to generate the rewards from the steps that you would already be taking in a day.


You can use the Bounts app with your fitness tracker or device or just use the pedometer in your mobile phone. The app is designed to encourage fitness by rewarding certain activities with points. Those points can then be used to join various challenges that come in a variety of different shapes and forms, including Kudos, Chance of a Reward & Guaranteed Reward Challenges, and win prizes. You can also simply use the points that you accumulate to redeem offers and discounts that big name retailers have agreed with Bounts.


The Bitwalking app is one of the few that enables users to generate “real” money, as opposed to rewards that can be redeemed for vouchers. It is described by the app makers as “a technology that recognises our human value. A new global currency generated by each of us, for all of us.” That currency is ‘Walking Dollars’ (W$) and the theory goes that you’re using your steps to mine this cryptocurrency. Opportunities to enjoy the W$ that you earn include spending them in the app’s store, trading W$ with others and eventually you’ll also be able to withdraw the W$ that you earn as cash.

Charity Miles

If you’re keen to raise cash for a good cause and you want to use activity to do it then Charity Miles is an app worth investigating. It enables anyone to walk, run or cycle to accumulate Charity Miles that can then be donated to more than 30 very well known charities. The app uses the GPS on your smartphone to track the activity that you do and then donates on the basis of how far you get. It may sound a bit fanciful but the app has some pretty big name sponsors, including Johnson & Johnson and Humana. So, if your motivation to exercise is of the more philanthropic kind you might feel you can go further with Charity Miles.

Healthy Wage

This app is all about rewarding weight loss and giving you the opportunity to earn money by betting against yourself in the process. Healthy Wage is a free app but does require a verified weigh in before you can start to use it properly. It works on the basis of giving users the opportunity to set time sensitive goals and then to make bets based on whether you think that goal will be achieved. So you bet money to win for weight lost within a specific time period. If you’re successful in your bets then the rewards can be cash, which is paid out through PayPal, or you can choose to opt for Amazon credit instead. The app is incredibly motivational as you’re using your own money to place the bets and enjoying rewards that are both physical and financial.

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Household debt costs to surge over next five years Fri, 30 Mar 2018 09:50:28 +0000 Alex Hartley The next five years could be a tough time for those with debts, whether credit cards or mortgages. According to projections obtained by a freedom of information request to the Office for Budget Responsibility, the cost of household debt is going to soar. In fact, by 2023, debt servicing costs are likely to increase by 29%. The rise of a third in the cost of having a mortgage or servicing loans could be challenging for many UK households already stretched to breaking point. But where is the cost most likely to bite and what can you do to prepare for it?

Debt problems

Where are we right now?

Most of the UK population is currently unprepared for the reality of what a significant increase in debt cost is going to look like. Over the past five years we have seen debt costs fall 9% and decline as a percentage of household income. However, this has been largely thanks to the way interest rates have remained low. In November 2017, the Bank of England raised interest rates for the first time in a decade and has already indicated that further rate rises could be implemented as early as May 2018. According to the Governor of the Bank of England, the combination of a growing economy, including GDP growth, as well as increasing average wages means it’s time for interest rates to start going up.

How much is the increase actually likely to cost?

According to the figures, the average UK household could find itself with an extra £468 a year to pay in debt interest costs. So the average interest cost of household debt will rise from £1,983 in 2018 to £2,451 by 2023. This could be seriously problematic for many UK households that are already struggling. The figures are based predominantly on the cost of mortgages so it’s not known how high costs could go for those who also have other types of debt with variable interest rates, such as many personal loans and credit cards.

Who is likely to be the most affected?

Opinions differ on who will potentially suffer the most from the increase in debt costs. According to Andrew Hood, a research economist at the Institute for Fiscal Studies, it is most likely to be felt by richer homeowners who have more valuable properties and larger mortgages. However, independent think tank The Resolution Foundation has identified millions of low-income families reliant on cheap credit as the potential worst hit.

What can you do to protect your own finances?

  • Make affordability your top priority. Whether you’re shopping for a mortgage or a new personal loan, affordability should be the driving factor in the choices that you make. If you can afford to make the repayments and still live comfortably then you can avoid a situation where a small rise in interest rates starts to make life very uncomfortable. You could investigate the use of a debt consolidation loan to help make your non-mortgage debt more affordable on a monthly basis (but read the small print).
  • Reassess the way you use debt. We are a nation of homeowners and buying a property remains the goal for many people – we will get into great debt to do it. However, a surge in interest rates could make mortgages seriously unaffordable. For many people it might be worth looking at renting long-term as a better option than taking on a mortgage that’s only going to increase in cost over the next five to 10 years.
  • Make a solid repayment plan. If you’ve been lacking the motivation to get moving when it comes to debt repayment now is a great time to make a begin. Any debts that you have are likely to start costing more in the next five years – so, the more of these you can clear now the easier your finances will feel.
  • Start budgeting. If you aren’t committed to budgeting then it’s time to get involved. The increase in debt costs is going to require better financial management from anyone who doesn’t want to find themselves with serious problems when it comes to covering the cost of living and keeping up with debt obligations. Whether you sit down once a week with a pen and notepad or use a budgeting app, now is the time to take control of your finances.

So shop around for the best deals on debt. Deals on credit cards, mortgages and personal loans can vary widely depending on where you’re looking. If you want to ensure that you’re getting the very best deals on interest rates and other costs then it’s a good idea to shop around. Online lenders often offer the best deals but some high street banks can be competitive too. As the costs of debt begin to rise don’t be afraid to ask for the deal you want before signing on the dotted line. Use our QuickStart tool to help you narrow down your loan choices, and our free enquiry service to make your credit application.

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How to save for a deposit for your first home Wed, 28 Mar 2018 10:13:12 +0000 Alex Hartley For many of those not currently on the property ladder, the topic of deposits creates an instant sinking feeling. The average deposit in the UK is currently £32,899. If you’re looking to buy in London then that triples to £106,577. Government Help to Buy has enabled first time buyers to get on the housing ladder with just a 5% deposit. Although this has brought home ownership within reach for many it doesn’t reduce the associated cost. To get a good deal on a mortgage, most experts agree that you need to have a deposit of at least 10% of the purchase price, ideally 20%. So, how do you do it?Deposit for your first home

The argument for cutting back

The average salary in the UK is £27,000 and the current average rent is £921 a month (£1,246 in London). As Money Saving Expert Martin Lewis says,

“There are those young people who are managing their money so badly that they can’t afford property, then those who would never be able to buy without help from the bank of Mum and Dad.”

So, for many people when it comes to saving for a deposit the figures just aren’t going to add up. However, for others it may be a simple case of managing your money better. And, if you’ve already started to save, you have a little help from someone else or you’re earning above the average salary then it could make sense to look at cutting back on outgoings as a way to help you get that deposit together. These are just some of the places where savings could potentially be made:

  • Daily coffee – switch from your local artisan coffee shop to a cheaper brand or take your own coffee from home and save upwards of £600 a year.
  • Clothes – cut back on what you spend on new clothes while you’re saving for a deposit or look for bargains in charity shops. Depending on your spend you could find an additional thousand or two over the course of 12 months.
  • Taking your own lunch – buying lunch every day is an expense that could set you back £100 a month. Take leftovers from home and you’ll be £1,200 better off at the end of the year.
  • Drink less – the benefits of cutting back on alcohol affect your well-being as well as your bank account. If you’re spending around £120 a month on drinking then your annual savings total will be £1,440.
  • Those little luxuries – we all have luxuries that we somehow manage to justify spending money on, no matter how it impacts our budgets. Whether that’s a pricey haircut or fuel for a car that isn’t really a necessity, you know where your weaknesses lie. Saving for a deposit is a great time to reassess whether you really need the haircut or the use of the car. Could you temporarily do without in order to get that first step up on the property ladder?

Remove the impact of paying rent

When you’re trying to save for a deposit it’s often rent that ends up creating the most significant obstacle. So, increasing numbers of people are looking for other options, whether that’s moving back to a relative’s spare room or moving with someone else to split the rental cost. For an average renter the annual cost is more than £11,000 – for those in London it’s close to £15,000. So, just a year or two in temporary arrangements with less (or no) rent to pay could make a real difference.

Consider buying with someone else

Given the discrepancy between average salaries and the average property price, most people in the UK will find it hard to buy alone. This obviously benefits people in relationships but doesn’t necessarily exclude everyone else. You don’t have to buy with someone you’re in a relationship with – in fact, sometimes it can be less complicated if you don’t. Friends, siblings and current housemates could all be a good option with respect to sharing the cost of a property purchase. Just make sure you have the right legal documentation in place to enable a split if you later want to go your separate ways.

And if you just can’t get there on your own…

It’s is often worth asking friends or relatives whether they are able to help you out. Contributions towards a deposit could give your savings the boost they need, whether they come from a relative’s own savings pot or something like equity release, which enables a homeowner to release (as cash) some of the equity in the property that has been paid off.

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All you need to know about the NS&I (National Savings & Investments) Mon, 26 Mar 2018 12:00:29 +0000 Alex Hartley The NS&I (National Savings and Investments) is often recommended as one of the safest options for savings and investment products. But does it offer the best deals? If you’re looking to do more with your money then it pays to get to know the NS&I, where it might be the best way to save and when other options could help you earn more.NS&I logo

What is the NS&I?

The NS&I has been around for well over a century and now has more than 25 million customers. It’s essentially a state owned UK savings bank that offers a range of savings and investments products, such as Premium Bonds and Children’s Bonds. The NS&I is a government department and an Executive Agency of the Chancellor of the Exchequer and is about as safe as they come with respect to ensuring your money is secure. The NS&I offers 100% security on all deposits, which is one of the factors that sets it apart as a savings and investment option.

What does 100% security mean?

In an age of issues with online fraud and hacking, the guarantee provided by the NS&I is very attractive. It means that if anything happens to the cash in NS&I accounts the organisation guarantees to reimburse the saver for any loss. So, where any payment has gone out of the account that has not been authorised by the account owner – unless it can be proved otherwise – reimbursement for the payment is guaranteed. The NS&I is also 100% safe as a savings institution – it is backed by HM Treasury so depositing your cash here means that it’s as risk free as it’s likely to get.

What kind of products does NS&I offer?

The NS&I is a good option for a range of different bonds, ISAs and investment accounts, all of which are managed online, including:

  • Premium Bonds – there is no interest or capital gain with Premium Bonds but you can be entered into draws for cash rewards (which are tax free).
  • Investment Guaranteed Growth Bonds – a product that requires tying up cash for at least three years. You’ll need a minimum £100 investment and get a rate of 2.2% interest before tax.
  • Guaranteed Income Bonds – for those with at least £500 to invest, Guaranteed Income Bonds can be committed to for one year or three. One year attracts 1.45% gross interest and three years 1.9%.
  • Guaranteed Growth Bonds – these are fixed rate bonds ideal for those seeking peace of mind from investments. They attract a rate of 1.5% gross for a one year commitment and 1.95% for three years.
  • ISAs – the NS&I Junior Isa has an attractive rate of 2.25% up to £4,126 for the 2017/18 tax year for those aged 16 or 17. Older investors can put cash into the regular NS&I ISA which attracts interest of 1%. Both are tax free.
  • Savings account – the NS&I Direct Saver account attracts interest of 0.95% (gross) and offers easy access at any time without notice or penalty.

Is the NS&I the best way to save and invest?

It depends on what you’re looking to achieve with your money. The NS&I is ideal for those who are seeking:

  • Safe savings – with 100% security there is no risk to your savings and investments, either in terms of loss from fraud or the financial institution going under.
  • Longer term savings – the best rates on NS&I products are available to those who can commit cash for at least three years.
  • Slower income growth – NS&I savings will certainly give you income growth but over a longer period of time.
  • Tax free savings – the NS&I offers a tax free ISA.

You may want to look elsewhere for savings and investment options if you:

  • Want a higher interest rate
  • Are looking for a more sizeable return
  • Are keen to achieve a faster return
  • Need a higher interest savings product that will give you instant access to your cash
  • Have money to spare that you can take more of a risk with

Other products from other banks and financial institutions might be better suited to the above criteria. For example, NS&I doesn’t offer a stocks and shares ISA, which is a higher risk product but also one that offers a greater return – the average stocks & shares ISA fund grew by 15.8% during the 2016/17 tax year. The key attraction with NS&I products is that you know your cash is safe, whatever happens. If that’s your priority as a saver or investor then the NS&I is well worth investigating.

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Unexpectedly brilliant and cheap weekend destinations in the UK Fri, 23 Mar 2018 11:27:38 +0000 Alex Hartley The Pound is struggling against the Euro and the Dollar, inflation is rising and it costs more than ever before to pay for overseas travel. However, most of us still want to get away from it all and enjoy the odd weekend break. So what’s the solution? There’s nothing new about the idea of taking a ‘staycation’ in the UK rather than going overseas. However, you might be surprised to find just how many locations offer an awesome weekend away without a crippling price tag.


East Yorkshire town Hull (full name ‘Kingston upon Hull’) is located on the coast, a port city that sits where the River Hull meets the Humber Estuary. For a city break without the European cost it is the perfect choice, whether you’re looking for history or culture. Visit Wilberforce House, birthplace of William Wilberforce and a museum that documents the abolition of the slave trade, or take a cycle tour through Hull’s perfectly flat streets. Hull was named as the 2017 City of Culture, a title that lasts four years and means there’s a full schedule of exhibitions, art shows, performances and even a drive in cinema for visitors to enjoy. A night in a 3-star hotel will set you back £66.

Newcastle upon Tyne

Another northern citybreak option, Newcastle was named as one of the Rough Guides’ top place to visit for 2018. Famous as a party town, Newcastle also has vibrant food, drink and arts scenes that have begun to put it on the map as something of a hipster hangout. Craft beers, cool independent coffee shops, sourdough pizza and creative restaurants serving irreverent dishes such as deconstructed English breakfasts give Newcastle an edge. The cultural events scene is strong too – visit in May, for example, to experience The Late Nights, a late-night cultural crawl of the city’s art hubs. The average cost of a 3-star Newcastle hotel is £63 a night. Newcastle upon Tyne


The town of Southport may not instantly make you think of classic English style but it’s an unexpectedly interesting location for a weekend away. This Victorian town in Merseyside is smack bang in the middle of beautiful natural coast that is perfect for wildlife walks and the town has it’s own stretch of beach. Championship golf courses, botanical gardens and activities such as Southport Splash World provide plenty of entertainment. But it’s the quirky attractions many people love the most about Southport, such as the British Lawnmower Museum where you’ll discover a history of antique lawnmowers and garden machinery. The average 3-star hotel in Southport costs around £65 a night.

King’s Lynn

For countryside that gets the royal stamp of approval, book a weekend away to King’s Lynn. As well as a fascinating maritime history, King’s Lynn is a short bus journey from the Sandringham Estate, the Queen’s favourite retreat, described as “Dear old Sandringham, the place I love better than anywhere in the world” by King George V. West Norfolk is also renowned for its coastline with a large proportion of the 43 mile stretch designated an Area of Outstanding Natural Beauty. Horse riding, golf, fishing and birdwatching are just a few of the relaxing ways to pass the time. A night at a 3-star hotel in historic King’s Lynn will cost you around £80.

The Lake District

Yes, everyone knows the Lake District is an area of great natural beauty but it’s also a staycation option with landscapes that will feed your soul. Head for the quieter spots – such as Ennerdale – and there are some great deals to be had. This is an area that has inspired some of the greatest British creatives, from William Wordsworth and Beatrix Potter to John Ruskin. It is England’s largest National Park and also a World Heritage Site. Boating, cycling, walking and cave diving are all on the agenda for those seeking an action packed weekend away that won’t break the bank.  An overnight in Ennerdale will set you back around £45. The English Lake District


One of the UK’s classic Victorian seaside resorts, Eastbourne is much overlooked as a weekend destination. From the vintage architecture to the theatres, galleries and pier, the spirit of the seaside over the centuries is well preserved here. Beachy Head, as well as Birling Gap and the Seven Sisters are key local attractions – and it’s the access to the South Downs (the UK’s newest National Park) that really make Eastbourne something special. These chalk hills stretch for 260 miles, from Eastbourne to the Itchen Valley in the west, and offer up some beautiful coastal walks, wildlife, camping, stately homes and historic sites. A night at a 3-star hotel in Eastbourne averages £54.

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How to protect yourself from pensions scams Wed, 21 Mar 2018 12:18:03 +0000 Alex Hartley Change has come quick and fast to the pensions world in recent times. We now have a much broader range of options when it comes to how to save for retirement and greater freedom in terms of choosing investments for pensions. While this means that we have more control over our money it also increases vulnerability and the scope for scammers to succeed. So, how do you protect yourself from scams while navigating this new pensions landscape?how to avoid pension scams

Don’t take cold calls

The Pensions Regulator specifically highlights unsolicited phone calls, emails or texts as a prime source for pension scams. So, if you get a call or email out of the blue then be very wary. Most reputable organisations simply wouldn’t do this kind of cold marketing when it comes to their products so it’s far more likely to be a scammer.

Be cautious of unregulated investments

Pensions themselves are regulated but there are all sorts of investments for retirement that are not. For example, you might be offered the opportunity to invest in something glamorous, such as a vineyard in France or a hotel in the Caribbean. This could be pitched as an exciting investment with “guaranteed returns.” The trouble is that if you put your cash into one of these unregulated investments and something does go wrong then you don’t have any access to the Financial Ombudsman Service or Financial Services Compensation Scheme. You’ll also have no real way of knowing how competent the business is that’s handling your money.

Don’t be lazy

If a friend tells you about this fantastic investment opportunity for your pensions cash then look into it thoroughly. So many people have lost money through schemes that are recommended by a friend and that recommendation is trusted 100%. Make sure that you take on the responsibility of fully understanding what you’re getting into – read all the small print. If you unwittingly get scammed because you didn’t bother to fully understand what was being sold to you then the only person who will lose out is you.

Think carefully about an annuity

Since recent changes have enabled those over 55 to release cash from pensions and not purchase an annuity, many people now have a lot more freedom when it comes to what to do with pensions cash. However, it’s a good idea to think carefully about whether that annuity might actually be a good idea. An annuity is designed so that a lump sum is purchased up front to provide a regular retirement income for the rest of your life. If you don’t take the opportunity to buy an annuity then have you really thought about how you’re going to pay for the rest of your retirement?

If you’re nervous then choose big brand names

Margaret Snowdon, the Chair of the Pensions Liberation Industry Group, has said she is “reasonably confident that £1 billion has gone to scams.” When it comes to pensions fraud, figures are thought to be grossly under-reported. There are two reasons for this: firstly, scammers often pay out under investments for the first year or so as this provides a false sense of security and allows them to complete the scam and disappear. Secondly, many who have been caught by a pensions scammer are so ashamed that they don’t tend to report it. So, there is a lot to be wary of when it comes to pensions investments – if in doubt, opt for the big brand names where you know products will be regulated and providers will be accountable.

Nothing is guaranteed

Many pensions investments offer “guaranteed” returns. However, the reality is that nothing is guaranteed. Investments are by their nature a high risk endeavour so anyone who attempts to sell a product on the basis of a “guaranteed” returns is highly likely to be either fraudulent or inept.

Avoid anything that is time sensitive

It is a trick that scammers often use to tell potential victims that there is an element of time sensitivity to an investment or deal. This “one day only” type approach enables scammers because it means paperwork is often not read and the consequences of an investment being made are not really thought through. Take your time when it comes to deciding what investments to make and then give yourself enough opportunity to read all the paperwork and think through whether this really is the right investment for you.

Follow a couple of basic rules

Ultimately there are two key rules that will help you to keep your pension pot safe if you follow them:

  1. Only deal with businesses registered with the Financial Conduct Authority (FCA)
  2. Don’t put your pensions cash in the hands of an overseas business that the FCA can’t reach


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The Rich, the Super-Rich and the Rest of Us Mon, 19 Mar 2018 14:35:10 +0000 Amanda Gillam We all know that money can’t buy you love or happiness and yet there are those who somehow manage to acquire lots of cash even if it wasn’t the first thing on their mind. We thought we’d take a look at the wealth of the elite across a number of popular careers and industries. Just how wealthy are some of those successful people and if you compare their wealth to your own income how do things look? We’ve come up with some interesting ways to compare that highlight more starkly the wealth of the tiny minority versus the wealth of the majority.

Try This Wealth Comparison Tool

To make your jaw drop, simply input your income and then select the name of the person you’d like to compare yourself to.

Then the tool will show you all sorts of interesting statistics – for instance how long would it take your chosen “celebrity” to earn your annual income? What would be the cash equivalent for the celebrity of you dropping a pint of milk? How long would it take them to earn enough to buy average UK home?

It’s easy to convince yourself that being super-rich automatically leads to happiness, but the stories of unhappiness are legion. So, don’t let the numbers make you feel left out. After all having strong friendships is perhaps the best way to achieve happiness, and such friendships can’t be bought!

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Summer 2018 Holidays – Where to go and how to pay for it Fri, 16 Mar 2018 11:24:13 +0000 Alex Hartley Storm Eleanor, Storm Georgina, high winds and forecasts of snow – the weather of 2018 so far has been cold, wet and dark. If you’ve been dreaming of escaping the damp grey of the UK then now could be the time to start planning a summer escape. We passed the longest day on 21st December, which means that the countdown to summer has already begun. It may not feel much like it right now but actually we’re just a few (ok, five) months away from summer 2018 and all the travel possibilities that brings.

Summer holidays travel

Why now is the perfect time to plan your summer holidays

  • There are some fantastic deals around on prices
  • Buy now and you have plenty of time to pay off your holiday on credit
  • Many travel operators are currently offering extras such as “children go free”
  • Book up the best festivals, hotels and locations while they’re still available
  • January to March are traditionally the months when the most summer holidays are sold – and when the most effort goes in to discounting and promoting them
  • You can secure a fantastic summer holiday right now with a low deposit
  • Book now and you’ll have great choice of travel times and more convenient flights
  • If you’re only able to travel during the school summer holidays when prices are high and everyone wants the same trips you could save a fortune by booking early

What are the options for paying on credit?

At this time of year, personal savings can be low after all the spending of Christmas. That’s why the option of paying for a summer holiday on credit is such a popular choice. With three months to go until June, now is the time to start planning a fantastic summer trip that you can pay for in the run up to the summer months. If you want to pay for your summer holiday on credit then what are your options?

Travel agents and operators

Big names like Tui and Thomas Cook offer ‘low deposit holidays’ in addition to the multiple promotions and sales that they use to push their trips at this time of year. So, you can secure a summer trip with a deposit from as little as £50 per person in some cases. You’ll then have the option of clearing the remaining balance on a monthly basis or in one or two block payments.

A personal loan

Personal loans are a great way to pay for a summer holiday now if you’ve got cash coming in and you know that you can clear the balance in the future without putting too much pressure on your finances. Despite a slight rise in interest rates, loans rates remain some of the lowest they have been so if you’re looking to pay less to cover the costs of your trip you could find a great deal with a personal loan.

Rewards credit card

There’s a double bonus to using a rewards credit card to buy your summer holiday – the holiday itself plus all those additional rewards points. From high street vouchers, to points that you can use for future flights, choose rewards that will add something to your lifestyle.

Interest free credit card

If buying your summer holiday now and paying the lowest interest for it is the priority, an interest free credit card is a great way to do it. The key is to find a card that is interest free on purchases and which gives you enough time to clear the balance before the higher rate of interest kicks in.

Great value summer 2018 holiday locations

Given the drop in the value of the pound thanks to Brexit it’s harder than it used to be to find great value when it comes to holidays – but not impossible.

  • Argentina – this beautiful South American country is still good value for Brits. You’ll get £662.24 more for £1,000 in 2018 than you would have in 2012/3.
  • Mexico – the Pound has improved by 24% against the Peso in the past five years, which means Mexico, with its stunning beaches, Aztec culture and wonderful food is still great value.
  • Norway – you’ll get around £190 more for £1,000 this year than you would have done five years ago so Norway’s fjords and beautiful natural landscapes still represent an attractive option.
  • South Africa – for fans of wildlife and wine, South Africa still remains a good deal with a 23% improvement in the Pound to Rand rate in five years.
  • Australia – a trip of a lifetime is possible for any budget thanks to exchange rates. For every £1,000 you exchange in 2018 you’ll get £111 more than you would have done in 2012/3 so start planning your Outback experience or Sydney foodie tour now.

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Why should you save using an ISA? Wed, 14 Mar 2018 11:55:56 +0000 Alex Hartley An ISA (Individual Savings Account) is designed to be a simple and tax efficient way to save money. But with very low available rates, combined with the changes to the personal savings allowance, many have questioned whether any kind of ISA is still a good deal. So, what are your options if you’re looking to save in the most efficient way possible –  and does an ISA still feature in them?saving with an ISA

Why ISAs are a good idea

ISAs have evolved over the past couple of years and now offer a very wide range of choice for tax free savings. Today, you have the option of tax free savings or a tax free investment account that you can open via a broad selection of different building societies, banks, asset managers or insurers. The ISA seems like a great idea – a way to accumulate cash without attracting tax up to an annual limit (in the 2017-18 tax year, you can put £20,000 into a cash ISA). However, these savings vehicles do have issues. The main problem is that ISA rates are currently very low (1.1% per annum), which means that there isn’t going to be much of a return on the cash that is invested into the ISA.

The personal savings allowance

Another key reason for the current lack of interest in ISAs is a change in the law that introduced a new personal savings allowance on 6 April 2016. As a result of this allowance, a basic rate taxpayer can now earn interest of up to £1,000 on savings not in an ISA and this interest is tax free. For higher rate taxpayers this drops to £500. Many believed that the introduction of the personal savings allowance meant the end of the line for the ISA, given that the tax free savings offered by both are currently almost identical. However, there are a few differences to bear in mind:

  • ISAs can be passed on tax free on death, which doesn’t apply to other savings products
  • If you move into the higher rate tax band then your allowance for the personal savings allowance drops by half
  • ISA products continue to diversify and offer a wide range of ways to invest as well as save

ISAs today – what are your options?

There are a growing number of ISAs to choose from and some of the less traditional are offering considerably more impressive rates of interest than the standard 1% on a cash ISA.

The Innovative Finance ISA. If you’re looking to get the highest return from an ISA then the Innovative Finance ISA has the most impressive rates. This is a new type of ISA that is based on the idea of peer-to-peer lending. So, you – together with other investors – are effectively lending your money to individuals or businesses and the returns that you make on these are tax-free. Currently, there are Innovative Finance ISAs that are offering targeted returns of around 7%, some of which can be opened with just £1. It’s important to bear in mind that this is a different type of product to other ISAs because of the investment angle involved. The returns are not guaranteed and you could lose your money if there is a complication, for example the business that your money has been loaned to goes bust. These ISAs are also generally not protected by the Financial Services Compensation Scheme.

The Stocks and Shares ISA. When you put your money into this type of ISA it is invested into stocks and shares, such as government bonds or individual company shares. Any income and gains that you make as a result of the investment are tax free (these would normally be taxable). So, the Stocks and Shares ISA offers a way to increase your savings, up to the limit, without paying tax. And you’re not limited to interest rates – returns depend instead on the performance of the stocks and shares you put your money into. Bear in mind that there are a number of charges that apply to this type of ISA and your investments can go down, as well as up.

The Lifetime ISA. This type of ISA has a specific purpose: saving for a home or saving for retirement. As long as it is used for this purpose then savers get a bonus additional 25% on top of whatever goes into the account. The Lifetime ISA has an annual limit of £4,000 a year and you need to be under the age of 40 to open a Lifetime ISA. If you don’t use the cash you’ve saved for the specific purpose then you will lose that extra 25%.

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Eating out vs. home cooking – The Great Food Debate continues Mon, 12 Mar 2018 11:22:49 +0000 Alex Hartley Food and eating habits can be a confusing business. One minute we’re told that this or that ingredient is a superfood, the next day another report emerges indicating it’s bad for your health. It’s very easy to end up not really knowing what – or how – to eat given the range of confusing information out there. However, while diets and food types tend to be a very subjective matter, when it comes to the choice between home cooked food or takeaways/eating out in restaurants it’s a little easier to quantify the arguments.eating out vs home cooking

The takeaway

Historically, the takeaway has had a really bad reputation. Nevertheless, according to government statistics, a fifth of UK adults have a takeaway once a week. Typically, takeaway food is fast food – high in salt, fat and sugar and low in nutrients and fibre. The average doner kebab, for example, has 2,000 calories (80% of the daily allowance for the average adult) and a wineglass sized portion of fat (according to research by Hampshire County Council). Just one slice of takeaway pizza can be around 300 calories and almost 10g of fat. These are not the kinds of statistics that will win a healthy eating argument. The government has also found a correlation between obesity and takeaways – obese children are more likely to be from deprived areas and government research shows a close association between the density of fast food outlets and the level of deprivation in an area.

Takeaways vs. restaurants

On the whole, takeaways don’t offer a wide variety of healthy food. Even with the arrival of services such as Deliveroo – which open up takeaway options other than pizza or kebabs – the bulk of takeaways will likely remain the high fat options. But is eating out at a restaurant any better than getting a takeaway? In 2014, an American study concluded that this is not the case, generating headlines such as, “Eating In Restaurants No Better Than Fast Food For Health.” The study found that people eating in a full service restaurant were consuming just as many calories as those who ate fast food. Although it’s worth bearing in mind that the study did not identify portion sizes it’s still a surprising result.

The home cooking debate

The same study that identified that restaurants could be just as calorific as a takeaway used home cooking as a point of comparison to both. It found that, on average people consume 205 more calories per meal when eating out at a restaurant, as opposed to cooking a meal at home. People eating a takeaway or at a fast food restaurant consumed an additional 194 calories per meal than those who were eating at home.

Why do we eat more when we’re out?

There are a number of possible explanations for this, including:

  • Portion sizes may be larger
  • The food on a restaurant menu may be higher in calories
  • We often view eating out as a “treat” and indulge more
  • We pay less attention to what we’re eating if we’re out dining with others
  • We just don’t know what’s in the food on a restaurant or takeaway menu, compared to something we have cooked ourselves

What about the financial cost?

There is a lot of conflicting information out there about whether healthy food or junk food costs less. However, in terms of where you’re eating that food – at home or from a takeaway or restaurant – home cooking wins on the financial front every time. In fact, average prices for food cooked at home dropped by 0.5% in the last financial year while restaurant cooked food prices rose by 2.7%. So, it’s actually getting cheaper to eat at home than it has ever been. Given that in the UK we currently spend around half of our annual food budgets on eating out and takeaways (according to the Office for National Statistics) just imagine how much more you could get for that cash by cooking at home more often.

So, when it comes to the great food debate, in cash terms home cooking wins every time – it will always be cheaper to eat at home than to buy a takeaway or eat at a restaurant. With respect to the health statistics it’s not quite as simple. Yes, you are more likely to consume more calories simply because of the nature of the food on a takeaway or restaurant menu. However, with the wider range of raw food, vegetarian and vegan restaurants popping up, as well as concerted efforts by mainstream restaurants to offer healthier options, you don’t have to. As always, it comes down to being informed about what’s in your food and then making the right choice.

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When and how to use the Small Claims Court Fri, 09 Mar 2018 12:01:31 +0000 Alex Hartley The ‘small claims court’ is not a court at all but a system of handling claims that are worth £10,000 or less. So, if you’ve had a workman make a mess of your bathroom, or goods that you purchased were faulty, then you’re most likely to find yourself on this track. If you’re making a claim that is worth £10,000 or more then you will need to go through the regular court process, which can be more expensive, more time consuming and may require legal counsel.small claims court

Why do people use a small claims court?

You can make a claim in the small claims court for most types of breach of contract claims. The most common types of small claims are:

  • A claim for compensation for faulty service – for example, the builder, plumber or gardener who does a bad job and causes damage or the dry cleaner who ruins your clothes.
  • A claim for compensation for faulty goods – for example, the dishwasher that never worked or the electronics you bought that have a serious manufacturer fault.
  • A claim that involves a dispute between a landlord or tenant – for example claiming compensation from a landlord for repairs that were never carried out or claiming unpaid rent from a tenant.
  • A claim for money owed under a work contract – for example, unpaid wages or a payment where proper notice wasn’t given.

Why would you use a small claims court?

If you feel that you’ve had a genuinely bad experience and been wronged as a result of an individual or company not doing what they said they would then the small claims court is a good option. It’s worth remembering that whatever you’re claiming will be scrutinised so if there’s anything you’re not sure about – or where you might be embellishing the truth – it’s a good idea to think twice before starting your claim.

How do you use a small claims court?

You can make a claim against an individual or a company in the small claims court. The cheapest way to make a small claim is to do this online – if you opt for the online route then you’ll have the following fees to pay:

£25 – £410 Initial claim fee – to begin your claim

£40 Court allocation fee – this fee gets your case into the courts

£25 – £325 Hearing fee – you’ll pay this if you actually have your day in court

There are time limits on when you can make a claim – for example, a breach of contract claim must be made within six years of the breach. You also have a responsibility to try and resolve the matter without going to court. So, before you start looking at the small claims process it’s important to contact whoever you’re planning to make a claim against and give them time to resolve the situation.

If you don’t have the cash available to make the claim then take care. Only borrow money to do it if you feel you have a genuinely strong case.

What’s the process involved?

  1. Fill in and send a claim form. This is where you set out what the claim is about. You’ll need to send two copies of the claim form, which will be stamped and the court will serve it on the defendant (this will certainly get their “attention”!).
  2. If the defendant agrees that they owe you money then they won’t defend the claim and you should be paid immediately.
  3. If the defendant doesn’t agree then they will have 14 days to prepare a defence.
  4. You’ll receive an allocation to the small claims track and a hearing date. You will be asked to submit documents you’ll be using at the hearing to both the court and the defendant 14 days before the hearing.
  5. During the hearing, both sides will have the chance to make their case and at the end of it the judge will make a judgement in favour of one or the other.
  6. If there was an irregularity in the proceedings or you feel the court made a mistake in law then you will be able to appeal.

What other options are there?

Mediation – if you don’t want to pay the court fees but you’re keen to recover money you think you’re owed, an independent mediator could help both sides to reach a fair conclusion.

An Ombudsman – an Ombudsman is an organisation that has been set up to protect consumers. If you have a consumer complaint then you can contact an Ombudsman and they also have the power to order compensation and compel various actions. Just as with a court claim you’ll need to try and resolve this yourself first.

A watchdog – there are a number of industry watchdogs in the UK. Although they don’t have any powers to order compensation they have some sway in terms of influencing change if there are large numbers of complaints in a particular industry or profession.

A professional body – many industries have their own professional bodies and consumers can make complaints about businesses or individuals that are members of that body. For example, if you want to make a complaint against a letting agent you can contact Association of Residential Letting Agents and if the agent is a member they will investigate and can take action.

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How to access your credit report Wed, 07 Mar 2018 12:37:48 +0000 Alex Hartley Your credit report has a lot of impact on your financial future. It’s what lenders will use to help decide whether to approve an application for credit, such as a loan or a mortgage. It can also determine whether you’re able to access the cheapest interest rates and how much you pay to borrow. It’s an important document that many people still don’t take the time to keep track of.accessing your credit report

Why should you read your credit report?

To make sure your details are correct. If your credit report has mistakes in it then this could affect your credit score. It could also give lenders a false picture of whether you are a potential borrowing risk. For example, your credit report may not show an address for you for a period of time which a lender may find suspicious.

To identify any mistakes. For example, your report might show a missed credit card payment from years ago that you cleared straight away. You can ask that this is removed, which will improve your overall credit history.

To look for inconsistencies. If you’re repeatedly being turned down for credit, looking at your credit report could help you work out why. For example, is your report still linked to an ex-partner who has a bad financial history?

To understand what you can do with your finances. While credit scores differ from agency to agency – and lenders don’t actually use them to assess your credit worthiness – they can be a good indication of your financial potential. By looking at your credit score you’ll be able to gauge what mortgage rates might be available or whether you’ll be able to get a low interest credit card, for example.

To avoid fraud. Regularly monitoring your credit report will ensure that you spot any signs of fraud quickly, for example multiple credit cards being opened in your name.

How to access your credit report

There are three main credit agencies in the UK: Experian, Equifax and CallCredit. You have a legal right to receive a statutory credit report that will provide you with key information, including whether you’re on the electoral roll, the credit accounts that you have, any missed payments and searches against your credit report. It costs £2 to access a statutory report and all of the main agencies are legally obliged to provide you with one.

How to access your credit report for free


You can access your entire credit report for free with Equifax for the first 30 days. After that it’s £14.95 per month with the option to cancel at any time.  You’ll need addresses for the past six years and details of mobile phone contracts, credit cards etc to confirm your identity, just as you would for any of the other credit agencies.

Pros: Equifax is the UK’s second biggest credit agency so you’ll see what many of the lenders you apply to will see.

Cons: the monthly fee is quite substantial, particularly if you’re planning to access your credit report every month on an ongoing basis.


You can also access your credit report for free with Experian, although the agency places the same 30-day limit on free access as Equifax. After the 30-day free trial it costs £14.99 a month to have ongoing access to your credit report.

Pros: Experian is the largest credit agency and also puts together a selection of credit offers based on your credit info.

Cons: you can only access the 30-day free trial once and the monthly fee is high.


Noddle is part of CallCredit, the UK’s third credit reference agency. It is the only one of the big three agencies to offer access to your credit report for free. In fact, Noddle’s marketing is all based around the fact that access to your credit report and credit score is “free for life.”

Pros: it’s free – forever and gets some pretty good reviews on Trust Pilot.

Cons: CallCredit is the smallest of the agencies but that doesn’t necessarily mean that you won’t get a comprehensive picture of your credit history


Another service that provides free access to your credit score and credit report for life. ClearScore is based on your Equifax credit report although the two companies are not connected. It’s very straightforward to navigate and updates once a month with new credit information. The app is particularly easy to use.

Pros: it’s free and easy to access

Cons: there’s a lot of advertising for financial products although you’re not obliged to apply for any of them

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If you feel financially excluded what can you do about it? Mon, 05 Mar 2018 16:29:28 +0000 Alex Hartley Financial exclusion has become a big problem in the UK. Around this time last year the Select Committee on Financial Exclusion called on the UK’s banks, as well as the Financial Conduct Authority, to make tackling financial exclusion a priority. Currently, there are around 1.7 million people in the UK who don’t have a bank account. And roughly 40% of those of working age in the UK have tiny savings pots of less than £100. So, if you feel financially excluded then you are part of a large number of people who fall into the same category. But if you are financial excluded then what can you do about it?

being financially excluded

What is financial exclusion?

Essentially, it means being outside of mainstream financial services. Someone who is financially excluded will have difficulty accessing – or be completely unable to access – those financial services, whether that’s credit cards or a bank account. However, those are not the only elements involved. If you’re financially included then you not only have the ability to access a range of financial products and services that are appropriate to your life and income but you also have the financial literacy and savvy to know how to manage them. The financially excluded may struggling with basic financial concepts and may not have the financial capacity to get to grips with the range of financial products that are available today.

What is the impact of being financially excluded?

The number of people who find themselves financially excluded can cause problems, not just for individuals but also for the country and its infrastructure.

  • Employment issues. Many employers today will only pay wages into a bank account so those who don’t have one may struggle to get paid (or even to get work).
  • Retirement poverty. Those without savings will struggle to get by in old age.
  • Higher utility rates. Utility providers tend to drop their prices for those paying by direct debit, which is only an option for someone with a bank account.
  • High fees. If you don’t have a bank account you may have to use high street cheque cashing stores, which charge high fees for transactions, on top of 7-9% of the value of the cheque.
  • High interest credit. The financially included have access to attractive loans at affordable rates. Those who are financially excluded may have no option but to borrow high interest credit, which is more costly to repay.
  • Insurance protection. Insurance is another financial product that those who are financially excluded don’t have, leaving them completely unprotected in the event of fire, theft or flooding.
  • Social exclusion. There is plenty of evidence that financial exclusion reinforces social exclusion – but also that financial inclusion can reverse social exclusion if it is correctly tackled.

What can you do about financial exclusion?

The Post Office Card Account (POCA) – if you don’t have a bank account then the POCA enables you to receive pensions, benefits and tax credit and withdraw cash without expensive fees.

Basic bank accounts – as part of an initiative towards universal banking in the UK, 17 mainstream financial services providers now offer basic bank accounts. These don’t provide overdrafts or credit but basic account services without credit checks.

Financial skills for life – this is a partnership between Citizens Advice and Prudential plc, designed to improve financial literacy and understanding for anyone who feels financially excluded. It includes resources such as financial training and digital money coaches.

The Social Fund – the Social Fund provided a range of grants and interest free loans to people on low incomes. Unfortunately, it was abolished by the Coalition Government’s Welfare Reform Act in 2013. It has been replaced by funding made available to local authorities who can still provide assistance in their local areas to those in need.

Pensions auto-enrolment – around 80% of people believe that the state pension will be sufficient to cover the cost of retirement. However, this is barely the case now and certainly won’t be in the decades to come. Pensions auto-enrolment means anyone over the age of 22 earning £10,000 or more a year is automatically enrolled into a workplace pension to which an employer also contributes. If you don’t have any savings for retirement then don’t opt out of auto-enrolment.

Getting out of debt – over indebtedness is one of the main reasons that people remain financially excluded. However, there are a number of free services and organisations designed to help people get out of debt, including the National Debtline, Citizens Advice, and charities such as Step Change.

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60 years of the ONS Family Spending Survey – How Times Have Changed Sat, 03 Mar 2018 11:08:55 +0000 Alex Hartley 2018 sees the Office for National Statistics (ONS) turn 60. This non-ministerial department of government is the executive office of the UK Statistics Authority. Over the years it has provided a barometer of change when it comes to the spending habits of Brits. This year, the ONS is marking its birthday by going right back to its origins and looking at just how much times have changed since it first started monitoring how we spend our cash.Family Spending Survey


To celebrate 60 years of its Family Spending Survey, the ONS has made some comparisons between the way British families were spending when it first began and the way we’re spending now. In that time some 375,000 households have voluntarily provided information on their spending habits to the ONS, creating a picture of the way that families in this country spend their cash. Back in 1957 the world was a pretty different place to 2017/8. No one had mobile phones or the internet, we were pretty behind the curve on gender rights such as equal pay and you could still buy a house for around £10,000. Britain was also experiencing a period of full employment and rationing from World War Two had only come to an end three years before. So, the world was a very different place but how have things changed?

1957 – 2017

Overall spending. In today’s money, the average household in 1957 had a third less to spend per week than is the case now. Today the average home spends around £554 per week whereas back in 1957 this was the equivalent of just £381 in today’s money.

Homes and housing. Since 1957 we’ve gone through a property boom and house prices are the highest they have ever been – particularly when compared to average salaries. The homes we enjoy today are very different to those of 60 years ago when outside toilets were still common and many British houses didn’t have any central heating. While you could still buy a home in 1957 for £10,000 or less, today the average house price in the UK is £226,071. So, it’s not surprising that the ONS found an increase in the amount that families dedicate to housing costs from their weekly budgets – the proportion of total expenditure on housing has doubled in the past 60 years, from 9% to 18%.

Food and clothing. Back in 1957 Brits were still very much in a non-rationing mindset, as this had only ended three years previously. Fruit, sugar and meat were all fairly new to the British diet at this point and a much larger proportion of weekly spending went on enjoying them. In fact, the amount that British households spend on food has halved between 1957 and 2017. In those 60 years we’ve seen the proportion of total spending on food drop from 33% to 16%. The same is true of clothing, which used to account for 10% of weekly spend and in 2017 had dropped to 5%. You have to wonder whether if we’re spending so much less on food and clothes than we did 60 years ago, has the quality of what we’re getting dropped significantly too?

Health and wellness. If the consumption of alcohol and cigarettes are an indicator of how seriously Brits take their health then we’re doing better today than we were 60 years ago. Spending on tobacco, for example, accounted for 6% of household budgets in 1957 and in 2017 this was just 1%. Of course, all the research on the health risks of cigarettes has come in much more recent times so it’s probably not surprising that we were spending more on cigarettes then than we now spend on clothes. Surprisingly, alcohol consumption has stayed pretty much the same and we spend the same proportion of our weekly budgets on it now as we used to in 1957.

Many of the costs that eat further into our budgets today are easy to explain – for example we spend vastly more on transport today than we did in 1957. But, as more of us have cars, and as we tend to travel much more for work and leisure that’s perhaps not that surprising. We also spend a lot more on leisure and services as there simply weren’t that many options in terms of paid for leisure and entertainment 60 years ago.

From fashion, through to travel costs and food, spending habits have evolved significantly in the years since the ONS first began. And, given the revolutionary change we’ve seen during that time socially and politically, it makes you wonder what’s likely to happen in the next 60. Hopefully the ONS will be around to find out.

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Equity Release reaches record levels in 2017 Wed, 28 Feb 2018 11:39:53 +0000 Alex Hartley Equity release is a frequently discussed topic these days. According to statistics from the Equity Release Council, older homeowners released £3.06 billion of equity from their homes in 2017. In the last quarter of 2017 the equity release industry broke new records with annual lending growth in the sector reaching the highest levels since 2002. So, equity release is clearly a popular option for older UK homeowners – but is the trend likely to continue?equity release schemes

What is equity release?

It is a way for UK homeowners to access some of the value that has been built up in their property by paying off the mortgage. The equity in the property – i.e. the paid off value – can be unlocked to release cash that can be used for other purposes. The lifetime mortgage is the most popular option for equity release – 75% of the new equity release arrangements agreed at the end of last year were of this type. Lifetime mortgages release a cash sum from the property but don’t require monthly repayments as a regular mortgage does. Instead, the interest that would normally be paid under such an agreement is rolled up and added to the overall amount owed. This is repaid when the property is sold, usually on death or when the last surviving home owner is taken into care.

Why are we seeing such an increase in equity release?

A broad range of reasons have been put forward as to why we’re suddenly seeing such an increase in the popularity of equity release products, including:

  • Interest rates are the lowest they have ever been, which makes this kind of borrowing cheaper than it used to be
  • The older demographic is growing by the day, creating an increasing number of people who are eligible for equity release every year
  • Equity release has become more common – it used to be that equity release had a “bad” name but there are now more safeguards in place and equity release has a far better reputation.
  • The market offers a wider range of choice – the competition to attract customers to equity release has forced equity release providers to offer better deals on interest rates, for example.

What do people spend equity release on?

Those who opt for equity release are borrowing, on average, £80,000. This is being spent on a very wide variety of different things including:

  • Home and garden improvements
  • Payments to children and other relatives
  • Holidays, travel and enjoying retirement
  • Making a pension go further

An increasing number of people are also using equity release to pay off or consolidate existing debts, for example credit card debts or personal loans. Some are repeatedly releasing equity from their homes in order to repay new debts over and over again.

Are there other alternatives?

Although equity release has clearly been fully embraced by the current generation of older homeowners it is not for everyone. It’s easy to forget that releasing equity from a property means that a large proportion of the sale value of that property will then go the equity release lender when it is eventually sold. This could have a big impact on inheritance value for generations coming up behind, many of whom are already struggling with stagnant wages and higher housing costs and may have been relying on such a windfall. In addition, the full effect of the interest is often not taken into account. Equity release offers average rates of interest of 4-5% – which seems low when compared to average credit card interest rates of 17%. However the interest can quickly mount up, particularly if the homeowner lives a decade or more after the equity release has been agreed. So, what are the other alternatives?

  • A remortgage. Right now it’s possible to get a better rate of interest for many mortgages than with equity release as interest rates are so low. As a result, a remortgage might be a better option.
  • Using a secured loan (also known as a homeowner loan) – current rates start at just over 3.5% p.a. and can be a relatively straightforward way to borrow against the value of your home.
  • Trading down. Selling a home with a lot of equity in it and buying somewhere smaller, mortgage free, can release that equity without creating a future obligation.
  • Not spending. It’s worth considering whether the spending is actually required or whether it might be better to simply go without if it’s seriously depleting the one valuable asset most people have.

For those considering equity release it’s important to take legal advice on the decision and also to speak to debt charities such as Step Change as they have a lot of insight to offer. And – crucially – relatives need to be told about changes such as this as it will considerably impact on their own expectations for the future.

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Are you taking on debt you can’t really afford? Mon, 26 Feb 2018 10:55:27 +0000 Alex Hartley “Alarming” increases in consumer debt have been much in the media in recent times. New figures show that unsecured debt could exceed £15,000 per household in 2019, rising to £19,000 per household by 2022. This is not debt made up of mortgages but purely unsecured debt, such as personal loans and credit cards. The statistics have triggered fears that whole swathes of the UK population will end up with debt that they can’t afford to repay – the effect of which could be disastrous for the economy as a whole. However, while there’s no doubt that household debt levels are certainly rising, the demographic affected by this is not as many have predicted.unaffordable debt?

Who is taking on this new debt?

New research from the Bank of England and the Financial Conduct Authority has found that new borrowing is not necessarily being driven by desperation. The research has identified that these borrowers have good credit ratings and no mortgages. So, they are not made up of “the struggling poor.” This comes as something of a surprise to many commentators who had been labouring under the assumption that debt increases such as this are largely due to borrowing by those who are unable to manage on existing income.

Why are the “well off” borrowing more?

This is something that the Bank of England research doesn’t reveal. And it’s this information that could be the key to understanding whether the rise in borrowing is really something to be concerned about. As a nation, we now owe as much as we did before the 2008 financial crash – but how much of a risk does this represent?

“Free” money. Those who are better off could well be borrowing to take advantage of low interest rates, which effectively offer “free” money for a period of time. So, for example, some might be taking advantage of 0% credit card spending rates to invest the cash elsewhere and then repay the card at the end of the 0% period having made a profit. Others use credit cards to earn points or take out low interest loans to cover unexpected costs because they’re cheaper than insurance.

No hope of a mortgage. The data provided doesn’t tell us enough about who these new debtors are to draw any real conclusions. However, there has been speculation that it’s younger generations who have good credit ratings – but no hope of taking out a mortgage – who have been driving the increase in consumer debt.

Cheaper deals. One thing that the research did reveal was that these consumers are remaining in debt for longer. This would indicate that debt such as low cost car finance and low interest rates on loans and credit cards is providing an incentive to borrow. As long as there are cheaper deals on borrowing the trend could continue to grow.

What are the risks?

Although this new research has been viewed positively by many, economists at the Bank of England have still warned about any rise in the levels of consumer debt for the following reasons:

Stagnant wage increases. It’s been a year since inflation began to outstrip pay rises and wage growth remains stagnant. If interest rates continue to rise this could mean debt becomes unaffordable even for the well off.

A good credit rating doesn’t mean excessive wealth. You don’t need to be rich to have a good credit rating. The new research doesn’t actually show whether new borrowers are relatively wealthy or just have a good borrowing history.

Things can change. Anyone borrowing still needs to ensure their debt is affordable. Life changes quickly, from illness to a new baby, and high debt levels could quickly become unsustainable even for those who aren’t “poor.”

Good value credit is key

There’s no doubt that these statistics are being driven in part by the fact that credit is better value than it used to be. So, where do consumers find the best value credit?

  • Online lenders tend to be able to offer better rates of interest and no fees or charges, whether for personal loans or credit cards.
  • New lenders. We are seeing a whole swathe of new lenders poised to enter the market with borrowing that is less costly and provides more in return.
  • Innovations in finance are being designed to tailor credit options to individual circumstances to ensure that consumers always get the best value credit. Enter artificial intelligence such as the chat bot Cleo, which is designed to help driver smarter, bespoke personal finance decisions.
  • Peer-to-peer lending. There are increasing options for peer-to-peer lending – this type of lending can be to businesses or individuals and often provides a cheaper credit option than borrowing from high street banks.

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Car Finance – the worry of extra charges Fri, 23 Feb 2018 11:28:43 +0000 Alex Hartley Car finance is an enormously popular way to own a car in the UK. Personal Contract Plans (PCPs) are now used for four in five new cars that are purchased and there are millions of these loans now in force in this country. However, some consumers have found that when the time comes to hand back the vehicle, if this is done via a voluntary surrender then there may well be some unanticipated additional finance on new cars

The mechanics of the PCP

The PCP is essentially a hire purchase agreement that enables someone without the cash to buy a car up front to borrow the money and repay in instalments. PCPs are structured around an initial deposit and a series of monthly payments that are made over three to four years. These monthly payments are calculated to cover the fall in value of the car as it ages. When the PCP contract comes to an end the car can either be purchased or it can be handed back without any additional cash to pay. If the car is to be handed back then it must be in decent condition and not have gone over the mileage limit.

What about voluntary surrender?

As it turns out, there is a third option for consumers with PCPs and it’s this that has somewhat muddied the waters. It is the “voluntary surrender” option that is causing the problem. This arises from the 1974 Consumer Credit Act, which enables a consumer who has made a purchase using a hire purchase agreement to hand back the item in question, as long as half of the contract has been paid up. This is a legal right that applies to anything obtained on hire purchase, including cars.

Where do the extra charges appear?

The Consumer Credit Act 1974 also says that a lender can apply additional charges if the consumer has failed to take reasonable care of the goods that are being voluntarily surrendered. In the case of a car it would probably be understandable if the lender applied an additional charge for a dented bonnet or stained interiors, as these would considerably impact on any resale value. But what about additional mileage? Currently, lenders are arguing that it is perfectly fair and reasonable – and legal – for additional charges, often in the hundreds of pounds, to be added on a voluntary termination where mileage on the car has gone over estimated totals. The justification for the charges is that mileage exceeding the set limit falls within the definition of failing to take reasonable care within the Consumer Credit Act.

What about the PCP contract?

What has prevented many consumers from making complaints about this in the past is the fact that virtually every PCP contract explicitly states that charges will be applied in this way. However, the point to note here is that a large number of experts have said that these clauses don’t stand because they are contrary to the Consumer Credit Act. Just because something is written into a contract doesn’t make it fair, reasonable or legal. And if a contractual term goes against the legislation then it could be found null and void.

What’s the practical situation?

It’s a difficult one to navigate. Currently, there are a number of consumers entangled with PCP lenders who have applied these charges and are looking to enforce them. Some have even applied them as missed payments that show up on credit ratings. However, legal experts still claim that these lenders have not got a leg to stand on, that actually they are ‘bluffing’ and should a case of this kind come before a judge – which it will do soon – the charges will be found to be unenforceable against consumers.

The reality is that PCP contracts are hugely popular, with consumers and also with lenders and manufacturers. However the voluntary surrender option is only popular with consumers because it often means the other parties lose money. Up until now lenders have used their own terms and conditions to enforce additional charges, for example for extra mileage. They have also relied on a lack of consumer knowledge about how legislation and contracts interact and the fact that few consumers have access to affordable legal advice. Now, we are beginning to see a stream of challenges and some could succeed. With respect to extra mileage it might be easy to see how 100,000 extra miles might indicate a lack of reasonable care. However, the charges are being applied to vehicles with much less – 7,000 in one case. Currently, there’s no clarity on these numbers, or anything else, but if there could well be in the coming months if one of these claims succeeds.

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George Banco is acquired by Non-Standard Finance PLC Wed, 21 Feb 2018 12:07:13 +0000 Alex Hartley The market for guarantor loans has grown significantly in the UK over the past couple of years. Particularly for younger people with impaired or inadequate credit ratings, a guarantor loan often represents the only opportunity to be able to borrow. George Banco has risen to prominence as a guarantor loan lender over the past few years and towards the end of 2017 was acquired by a fellow sub-prime lender, Non-Standard Finance PLC.

Who is George Banco?

The lender was established in 2014 and offers guarantor loans. This is a type of lending that requires a third party to stand as surety for a loan. It enables someone without a great credit rating to be able to borrow, thanks to the guarantor system. Guarantors are required to be over 18 and are usually homeowners with a good credit rating. In the years since it was established, George Banco has expanded considerably and has become the second most prominent provider in the guarantor loans market. When the company was acquired it had a loan book value of around £40 million and in the year up to 31 May 2017 it generated revenue of £9.3m.

George Banco is one of a large number of guarantor loan lenders that Solution Loans works with – it’s quick and simple to apply to all our lenders in one go, and at no cost!

Who acquired George Banco?

When the acquisition of George Banco was announced, the market value of Non-Standard Finance PLC increased as a result so this is clearly a positive move for the lender. Non-Standard Finance PLC was established in 2015 and has become the UK’s third-largest provider of home credit (i.e. loans where the repayments are collected at home), as well as other unsecured types of loans. George Banco will sit alongside another acquisition that the business has made – TrustTwo, which was acquired in 2015. TrustTwo targets younger borrowers who either have no credit history, or a difficult credit history, and aren’t particularly eligible as borrowers as a result.

What does the acquisition mean for the market?

The thriving guarantor loans market looks set to continue to grow with the consolidation of these businesses. Guarantor loans have become incredibly popular in the UK for a number of reasons:

  • They are unsecured so can be borrowed even where there is no asset (such as a home or a car) to secure the loan against
  • New lenders have made guarantor loans more attractive. Lenders recognising the need for this type of lending now offer low (or no) fees, as well as instant cash availability.
  • Guarantor loans offer slower repayment. While payday loans, for example, have short repayment terms that may suit some borrowers, spreading payments out over a longer period of time with a guarantor loan makes borrowing more affordable for many.
  • Parents and relatives can provide low risk assistance. Guarantor loans are popular with the younger generations currently struggling to obtain finance. Guarantor loans offer a way for parents and relatives to support a loan application at no financial cost (as long as the borrower keeps up the repayments).
  • A debt lifeline. For some people this is the only option when it comes to obtaining finance. Guarantor loans provide lenders with the reassurance they need to extend credit to certain borrowers. Without this some borrowers might not have access to finance at all.
  • There is no limit on what the finance can be used for. From helping to get a business off the ground to paying for emergency repairs, there is no requirement for guarantor loans to be used for a specific purpose.

What does the George Banco acquisition mean for borrowers?

It’s a sign that the market is continuing to develop and that more sophisticated products and options will likely be created. Non-Standard Finance PLC has said that it intends to expand its product ranges to meet demand from customers and to offer different types of borrowing that cater to non-standard borrowers.

“George Banco represents a transformative acquisition for the group, putting NSF into the clear number two position in the fast-growth guaranteed loans segment. Complementing our existing TrustTwo brand, George Banco provides us with real scale and an opportunity to grow even faster”

said John van Kuffeler, chief executive of Non-Standard Finance.

What obligations do guarantor loans place on the guarantor?

Guarantor loans offer a great opportunity for a borrower and are also attractive to lenders – but what about the guarantor? It’s always important for a guarantor to understand what might happen if the borrower doesn’t keep up essential repayments. Any repayments not made become the responsibility of the guarantor, as well as any applicable fees, charges or interest. Guarantors are often friends or family members – it’s important for the guarantor to trust that the borrower is going to make the repayments on time.

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Spring Short Story Competition Open for Entries Mon, 19 Feb 2018 16:38:45 +0000 Amanda Gillam We’re pleased to announce that our third short story competition is open for entries. Entries to our previous competition grew significantly compared to our inaugural one. And we’re expecting a lot of interest in the new one not least because of its theme and a certain event that it coincides with!

The theme of this competition is “The Wedding Gift”. It can be interpreted any way you wish, but we do recommend you take heed of our judges’ advice following our previous competition:

As a writer, it’s worth remembering that your first idea for a story may often be someone else’s too, so it might be a good idea to dig again more deeply for a different or more unusual idea?

wedding rings atop a roseHere are the competition’s rules and terms & conditions. They should all be self-explanatory.

Not only is the competition FREE to enter (unlike many others) but you could also WIN a first prize of £250 or a runners up prize of £50!

Please be aware that your entry must be received by midnight on Thursday 31st May 2018.

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How’s 2018 looking for house price movements in your area? Wed, 31 Jan 2018 11:49:05 +0000 Alex Hartley For anyone trying to buy – or sell – a property right now, the UK housing market is a confusing place to be. Tax cuts for first time buyers would seem to be an encouraging sign but then mortgage approvals have hit a significant low. On the one hand house prices are still some of the highest in Europe – but for those looking to sell movement has been incredibly sluggish. So, where are we right now in terms of the housing market and what change is there on the horizon?house price growth

It’s not a great time to get a mortgage

According to industry trade body UK Finance, mortgage approvals fell to a 13 month low at the end of 2017. 40,488 mortgages were approved in November, for example, compared to 41,576 in September. Some experts have predicted that this marks the beginning of a downward trend in mortgage approvals, something that has been made worse by the rise in interest rates last year. There could be many other reasons for the fall too, from the higher interest rates on mortgages in 2018 to more stringent lending criteria.

However, that’s not the case if you’re remortgaging

In fact, the number of remortgages at the end of last year was 37% higher than the year before. This was largely attributed to more competitive remortgage rates as a result of the interest rate rise. As ever if you are looking to remortgage to release equity to do major home improvements or to fund some other sizeable project then it is also worth looking at secured loans as an alternative.

The housing market in general is sluggish

Words such as “flat” and “quiet” are being used to describe the UK housing market, which was previously viewed as fairly dynamic. Data from the RICS UK Residential Market Survey in November indicated that new buyer enquiries were still low but not as low as in previous months. However, other than in Wales and Northern Ireland, sales agreed numbers were either completely flat or in the negatives. A lack of new instructions to sell is highlighted as one of the major reasons that the market is so slow. The supply of homes for sale has been in decline now for some 22 months and isn’t likely to change significantly in the near future. Brexit is often named as another of the major reasons for the poor performance of the UK housing market at present. With uncertainty over the UK’s exit from the EU set to continue for another year this influencing factor isn’t going to be relieved any time soon.

House prices are static

On a national level, house prices have remained static in the last couple of months. However, regionally it’s something of a different story. London, in particular, has seen significant downward movement in house prices. Analysis by Zoopla identified that around 35% of the homes that are being marketed for sale via its site have been marked down and London is where the biggest discounts are to be found. For example, the average price reduction for homeowners selling in Richmond in London is £84,244. Across the entire country, Zoopla identified the average house price reduction at around £25,562. Again, Brexit is considered an influencing factor here – the number of properties being marked down before the EU Referendum in 2016 was slightly less at 29%.

The forecast for 2018

EY Item Club predicts house price growth of just 2-3% in 2018. There are many reasons for this, including the fact that inflation is currently running at a rate far higher than income growth. So, life has become unaffordable for many people and a large and risky purchase, such as a property, just isn’t an option. The impact of low consumer confidence is being exacerbated by the increased difficulty when it comes to getting a mortgage. For many people, given the number of potential obstacles to buying, it seems like a process fraught with issues and costs. So, are there any positives for the UK housing market this year?

  • First time buyers can purchase without paying stamp duty. Properties up to £300,000 are stamp duty free
  • This is a good time to remortgage – remortgage rates are some of the most attractive they have been for some time
  • Buyers with sizeable deposits generally won’t struggle with mortgages and could enjoy significant bargains as a result of house price drops
  • Some experts have predicted that demand for one and two bedroom flats will increase as house owners look to downsize
  • Slow house price growth should make it easier for first time buyers with mortgage options to get a foot onto the property ladder

Regionally, there have been some house price gains (for example in Wales, Northern Ireland and the North West region) and an increase in both new sales agreed and new instructions.

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Credit file vs credit score – what’s the difference? Mon, 29 Jan 2018 12:42:24 +0000 Alex Hartley “Credit file” (or “credit report”) and “credit score” are terms that are often used fairly interchangeably, as if they represent the same thing. However, while both involve the same data these are two quite different elements in the picture of your financial health and history that available data can create. So, what’s the difference?

your credit file

What is a credit file

This is essentially a potted history of your financial behaviour with respect to the credit that you’ve had. This information comes from public sources (e.g. the electoral roll) and also from private sources (e.g. data that is shared between lenders). It is collated by credit reference agencies who then put it together into a report that is made available to lenders, mobile phone operators – anyone that you apply for credit with.

What’s in a credit file?

There are three main elements to your credit file: who you are, how you’ve borrowed and what you’ve borrowed.

  1. Who you are. This is personal information about you that confirms your identity. So, for example, this could include name and address, as well as where you are registered to vote.
  2. What you’ve borrowed. This can cover a very wide range of credit, including credit cards and personal loans. Contracts for a mobile phone or internet provision are also included here. Potential lenders will be able to see what your current balances are, the total debt and a list of the credit accounts that you currently have.
  3. How you’ve borrowed. Your payment history is broken down into some detail in your credit file, showing when payments have been made on time and when they haven’t. This will be a crucial part of the decision making process for a new lender, as if you have a history of missing payments on credit cards they might be reluctant to offer you the credit you’re asking for.

Your credit score

There’s a perception that the UK has a universal system of credit scoring but in fact that’s not the case. There are three main credit reference agencies in the UK and each one has its own system of scoring. So, you will have one score with Equifax, for example, and quite a different score with Experian. Each agency has a different top limit – Experian’s is 999, Equifax’s is 700, and Callcredit’s is 710 – but all use the same data to calculate the scores that they produce. It’s your credit file that determines whether you have a bad credit rating or not and a credit score is simply a representation of this.

How is a credit score calculated?

The information in your credit file is used by each of the individual agencies to calculate the credit score that you get.  The higher the score you have, the more likely you are to get credit with a new lender. However, it’s worth bearing in mind that there are no guarantees, especially because lenders use their own scoring systems to rate each potential borrower.


Why do credit providers access a credit file? They are looking to see whether it’s a good idea to give you the credit you’re asking for i.e. how you’ve behaved as a borrowed in the past. A credit file can also be accessed as a way to check identity.

Do credit reference agencies determine your credit score? Yes and no. Credit reference agencies will give you a credit score based on the information in your credit file and their own systems of scoring. However, each one of these is different. More importantly, lenders don’t use the scores that agencies generate when it comes to making lending decisions. They will rate a potential borrower using the information in the credit file but against their own internal scoring systems. So, an ‘Excellent’ score with Equifax may not guarantee you the credit you want with a credit provider using a different scoring system.

Can you change your credit score? Yes. There are a number of ways to improve a credit score (see the video above), such as paying off debt, correcting any mistakes on the file and disconnecting your credit file from an ex-partner who has a bad credit history.

Can you change the information in your credit file? If it’s incorrect then yes. Other than that, no. We are all creating new credit history all the time with the decisions we make with every loan or credit card we have. But it’s not possible to go back and erase bad past decisions.

How much influence does your credit file have? A lot. You can still get bad credit loans and credit cards if you don’t have a great financial history but it tends to be harder and more expensive. The more positive the financial history in your credit file (and consequently the higher your credit score) the easier it will be to get credit.

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How do Credit Reference Agencies work? Fri, 26 Jan 2018 11:21:15 +0000 Alex Hartley Credit reference agencies, such as Experian, have come to play a significant role in most people’s lives. We tend to interact with them at the point of applying for credit, whether that’s a mortgage or personal loans. However, while most of us have had some interaction with credit reference agencies at some point there is still quite a lot of misunderstanding about how they actually reference agencies

Why do credit reference agencies exist?

According to the World Bank “credit reporting…allows lenders to evaluate the borrowing capacity of clients. And lets good borrowers benefit from more and cheaper lending.” Today, credit reference agencies have two main purposes: to help lenders make decisions that are fair, consistent and well informed and also to help prevent financial fraud. There are three agencies in the UK: Callcredit, Equifax and Experian.

Who uses credit reference agencies?

Banks, other lenders, building societies, mobile phone companies and retailers are some of the main organisations that use credit reference agencies. The information that is provided to these enterprises enables them to make a fairly swift decision about whether or not to offer credit to a consumer. The available data provides insight into whether the person making the application can afford the credit that they want and, crucially, whether they are likely to be able to repay it.

How are credit reference agencies regulated?

They must be authorised by the Financial Conduct Authority and credit reference information must be stored and processed in accordance with data protection legislation. Complaints about agencies are made to the Information Commissioner’s Office or the Financial Ombudsman.

Where does the data come from?

There are two main sources of data for credit reference agencies: public information and information that has come from a credit account.

Public information – this includes the Electoral Roll, as well as information on court judgments and bankruptcies from government services such as the Insolvency Service.

Credit account information – this is information from other lenders about their customers. This is effectively a combined copy of all the information that individual lenders have about someone, held in one accessible place. Only lenders who are members of a scheme called CAIS (Credit Account Information Sharing) have access to this information.

Does there have to be consent?

When it comes to credit account information, yes. When an application for credit is made to a lender there will usually be a requirement for the borrower to give that lender permission to share information with other lenders. If you read the small print of your last loan or credit agreement you will find that permission written into the terms.

With respect to the public information that credit reference agencies hold there is no requirement for consent as this is already public knowledge.

What do credit reference agencies do with the data they have?

Nothing. The data is simply gathered together in one place and then held there for lenders to access when an application is made for credit. The agencies themselves don’t actually process the data or package it up. It’s actually the provider of credit who uses the data to help them decide whether credit should be extended to the applicant.

Who can see the searches against my file?

Lenders are legally required to keep a record of all the searches that are carried out. Every time a search is made against an individual it leaves a ‘footprint’ that other lenders can see (although lenders can’t see who has made the search and will only see credit searches and not non-credit searches such as an identity check). This information forms part of the decision making process for lenders. For example, if an individual has a lot of footprints against their name in a short space of time this could be an indication of someone applying for credit that they can’t afford. In some circumstances a so-called “soft search” can be done that does not leave a footprint.

What don’t credit reference agencies do?

Credit reference agencies are quite limited in terms of what they can and can’t do with the data they receive. There are some common misconceptions about this – in particular what these agencies don’t do with our data:

  • Make lending decisions – credit reference agencies provide data with which lenders can make decisions about whether to lend. However, the agencies themselves don’t make these decisions.
  • Advise lenders – there isn’t any element of advice when it comes to the relationship between lenders and credit reference agencies. The information collated is presented without any obvious bias.
  • Create blacklists – agencies don’t compile ‘blacklists’ of people who aren’t suitable for credit.
  • Receive data on whether or not credit applications are successful. Although eventually, new loan or credit card data will be recorded with a credit reference agency, there is no process of informing agencies as to whether a lending application has been successful.
  • Determine your credit score for lenders. Each agency will give you a credit score based on the information they have about you. However, these are all different and are not used by credit providers to make lending decisions.

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What are your responsibilities as a guarantor for a loan? Wed, 24 Jan 2018 11:17:35 +0000 Alex Hartley For someone without a great credit score, finding a friend or relative willing to be a guarantor can be a simple solution to getting rejected for credit. If you’re willing to stand as a guarantor for someone you know then you’re doing them a great favour. However, it’s also important to understand what you’re signing on for and what might happen if they’re not able to pay back the loan.Being a guarantor for friend or family member

What is a guarantor?

If you decide to be a guarantor then you’re guaranteeing the obligations of the person who is taking out the loan. In practice, that means that if the borrower can’t make any repayments on the loan you’ve agreed that the lender can demand them from you instead. Guarantors are asked to sign a guarantee agreement – this is a legally binding document and once you sign it you become responsible for the loan repayments if the person you are acting as guarantor for cannot pay.

Why do lenders ask for guarantors?

It all comes down to how creditworthy the borrower is. If there is any reason to doubt that they might be able to repay the loan – for example, they have a poor credit score – the lender will look for back up in case there is a default. The guarantor is the back up that enables the lender to advance the loan without taking all the risk on to their own shoulders – hence the term “guarantor loan“.

What happens if the borrower doesn’t repay?

The lender can come directly to you, the guarantor. If the lender decides that it will be simpler and less costly to pursue you for what is owed, as opposed to the borrower, then you will be the first port of call after a payment default. You will then be obliged to make the payment that the lender is requesting, in line with the guarantee agreement signed.

What are the risks in being a guarantor?

  • You will be required to make payments due under someone else’s debt – the total amount could be more than the original loan with default fees and interest
  • You don’t have any right to the amount borrowed by the person you are guaranteeing but the guarantee agreement makes you responsible for repaying it
  • If you aren’t able to make the necessary payments the lender can pursue you for it, via the courts if necessary
  • If you get into trouble financially as a result of repaying someone else’s debt as a guarantor then this could affect your credit score
  • If you have been asked to provide security for the loan then you risk losing this if you can’t make the repayments (e.g. your car)
  • If you end up out of pocket it could affect a close relationship

What does the lender need to do?

Lenders must be responsible and take steps to ensure that you would be able to make the payments you’re agreeing to as guarantor should that situation arise. Most lenders will recommend that you take independent legal advice so that you know what’s involved. If you don’t, lenders must communicate to you key information, such as what your liability will be, the fact that it can be limited, whether you’ll be told if the borrower gets into difficulties and what clauses in the credit agreement affect you (e.g. interest).

How can you protect yourself?

As a guarantor there are a number of ways to protect yourself, from the debt and also from making a poor decision.

Before you sign anything:

  • Avoid “All Obligations” guarantees – if your guarantee uses this language then you are guaranteeing not just this loan but any others that the borrower has too
  • Get the guarantee in writing – it should state the amount of guarantee, how long it lasts for and when your obligations might kick in
  • Choose security carefully – the lender will likely ask for security for the guarantee. This should not be something that is worth more than the debt or anything you can’t afford to lose
  • Think about the borrower – is this someone who is responsible enough to manage their own debt? Do they really need this money?
  • Create a written agreement with the borrower that covers who is responsible for which part of the loan. You can also include clauses that allow you to see what is in the borrower’s accounts and to insist the borrower keeps you informed of their financial decisions
  • Think about whether your finances are in a good place – can you actually afford to repay this loan if asked to?

Once the guarantee is signed:

  • If you’re not happy then cancel the guarantee. This can be done at any time. You will still be responsible for the original loan until it is repaid but not for any further debt of the borrower’s
  • If you were forced to sign the guarantee under undue influence or you feel the credit agreement is oppressive then you may be able to challenge the lender’s right to come after you

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What types of credit may still be available if you have a bad credit history? Mon, 22 Jan 2018 11:54:54 +0000 Alex Hartley If you’re looking to borrow, bad credit can be a problem. However, even if you don’t have a perfect credit score, you still have options. Roughly 30% of people fall into the territory of having a “bad” credit score i.e. one that sits at the bottom of the levels defined by credit references agencies. However, it’s widely recognised that even someone who falls into this category may still have borrowing needs. And, as sensible borrowing can actually help to mend a broken score, credit is something that could benefit anyone, even those on the lower end of the spectrum.bad credit loans

What counts as a bad credit rating?

It depends very much on the agency doing the rating – and not all of them are that straightforward about the numbers that would give you a bad credit score. However, if your credit score sits at the lower end of the scale then you’re firmly within this category. There could be any number of reasons for ending up with poor credit. It might be something as obvious as defaulting on a previous credit agreement, missing repayments, making repayments late or being taken to court for non-payment of debts. Credit ratings can also be affected by a range of other factors. For example, you might have missing information on your credit file. Or your file may be connected to an ex-partner or housemate who has a bad credit score. There are different degrees of bad creditworthiness and each will have a different impact on the kind of credit that might be available to someone who has a bad credit rating.

Credit for people with a bad credit rating

Guarantor loans. This type of credit is specifically designed for a borrower with bad credit. The support of a guarantor – a third party willing to step in and cover the repayments if the borrower is not able to – is reassurance to a lender who may otherwise not lend. Guarantors need to have good credit, be over 18 and preferably be a homeowner (although a tenant may be fine too, especially for smaller amounts). Terms can be up to five years and guarantor loans are available for fairly substantial sums – up to £15,000. Smaller guarantor loans are available too, from £100 – £750.

Secured loans. If you don’t have great credit then it’s much easier to borrow if you own your own home. Secured loans are available to homeowners with bad credit who are looking to use the growing value of their property to support a credit application. Loans of up to 95% of the value of the property may be available, depending on circumstances. This type of loan is secured on the value of the property, which means that if it’s not repaid the property may be used to repay the lender.

Logbook loans. Another type of secured lending that is open to someone with a bad credit rating is a logbook loan. Rather than a property, with this type of loan the credit is secured by the value of the borrower’s car. Terms are usually three years and the typical borrowing amount is £1,000. As the loan is secured on the car, if it is not repaid then the car may be sold to raise the capital to repay.

Payday loans. When it comes to short term credit solutions, payday loans are ideal. And they are also well suited to someone with bad credit for two reasons. Firstly, the short term nature of the loan means that loan amounts are often lower, less risky for lenders and so the credit rating is not as crucial. Secondly, payday loans require you to have an income – as long as your income will clearly cover the repayments, lenders are more likely to lend regardless of credit rating.

Other options for borrowers with bad credit:

  • Doorstep loans – borrowing up to £2,500 is made possible even without a bank account. Lenders are open to borrowers with bad credit.
  • Bad credit credit cards – small borrowing limits mean low risk to lenders. A good opportunity to rebuild poor credit by making repayments regularly and on time.
  • Instalment loans – borrowing up to £2,000 may be available to those with bad credit, repayable in regular monthly instalments over 3 to 24 months. Interest rates can be high.
  • Car finance – if you’re a borrower looking for credit to finance the purchase of a car, a bad credit rating won’t usually exclude you from being accepted for car finance.
  • Personal loans – it may be more difficult to obtain a standard personal loan with a bad credit rating but many lenders offer bad credit personal loans, especially to homeowner borrowers.

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An unpleasant surprise is awaiting people on PCP car finance deals! Fri, 19 Jan 2018 11:47:45 +0000 Alex Hartley Personal Contract Plan (PCP) car finance deals are one of the most popular ways to buy a new car. In fact, 86% of new car buyers are currently using PCPs in order to finance the purchase of a new vehicle. However, recent changes in the values of new cars and used cars have made PCPs more expensive and meant that those who have already a PCP contract may not find it that simple to get a great deal next time around.PCP car deals

What is a PCP car deal?

It’s a very simple way to buy a car if you don’t have enough cash in the bank to make an outright cash purchase. Instead, you’ll pay a deposit for the car – often matched by a contribution from the dealer – and then take out a loan for three or four years that covers the rest of the sale price of the car. Regular monthly repayments are made over the period of the loan and these cover the gap between the new price of the car and the expected value of the car when the PCP comes to an end. When the PCP finishes then there are three options: hand the car back, pay an amount agreed in advance to own the car, or negotiate a new PCP deal. Most car buyers tend to do the last of these and that’s where the issues with car values are starting to kick in.

Why are people looking for PCPs suffering?

It’s now more expensive than it used to be to buy a new car. As a result, anyone looking for a PCP will pay more for the same car than would have been the case 12 months ago. There are a number of reasons for this, including the impact of Brexit, which had a significant effect on the value of the pound, and the increased cost of raising environmental and safety standards which manufacturers are passing on to consumers. At the same time as new car values have gone up, used car values have been dropping. The one benefit to this should, in theory, be that those on PCP contracts who choose to buy their existing car at the end of the contract will pay less. However, in reality most PCP contracts will account for this with an increase in the prior monthly repayments to compensate for the lower used car value. So, none of the savings get passed on to consumers.

What about existing PCP contracts?

If you already have a PCP in place then nothing is going to change until you come to the end of the contract. Previously, when new car values were lower and used car values higher, this would be the point at which the PCP borrower would have built up some equity in the car. That equity could be used to bring down the price of the new PCP contract or at the very least to reduce the size of the deposit. However, that’s no longer likely to be the case because prices are higher. The disparity in different car values also means that negotiating a new PCP is going to be much less favourable than previously. Now, it may simply not be possible to replace  a car with the same model when the PCP comes to an end because that same model may now be much more expensive.

What has caused the problems?

The issues with PCPs all turn on the differences in price between new and used cars because the monthly payments under a PCP are fixed on the difference between new and used car values. In many ways the success of PCPs has also played a role in undermining them. Because so many people now use PCPs there are many more used cars on the market and this has had an impact in terms of driving down the value of used cars – there’s just so many of them around. Consumers love PCPs and so do dealers, who make commission both on the car purchase itself and also on selling the finance. But the result of such widespread use is that PCPs are getting more and more expensive.

Can you still get a good deal on a PCP?

Yes, particularly as new car sales dropped off substantially at the end of 2017 meaning that many dealers now have a lot of surplus stock. The key with a PCP is to make sure you understand the terms, you know how the payments work and that – crucially – the deal is affordable for you. It’s worth bearing in mind that there are a lot of other costs generated by a new car that you’ll also have to cover so it’s not just the monthly payments that need to be affordable, you need a buffer too. However, if you shop around and find something affordable, a PCP could still be the best way to buy a new car.

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Who can be my guarantor for a loan? Wed, 17 Jan 2018 11:29:16 +0000 Alex Hartley There are many ways to borrow these days and if you don’t have the perfect credit score then that doesn’t necessarily need to be an obstacle. Guarantor loans are one example of a bad credit loan i.e. borrowing even if your credit score is poor. If you apply for a guarantor loan then you are effectively giving the lender the reassurance of having someone else who will “guarantee” that the loan is repaid according to the terms of the credit agreement. But what is a guarantor and who can be one?what it means to be a guarantor for a loan

What is a guarantor?

A guarantor is a third party who agrees to meet the obligations you’re agreeing to if you’re not able to do so. The system of using a guarantor when it comes to financial obligations is an old one and actually pre-dates the credit scoring lenders use today to make decisions. It means that if you look like you might be a credit risk – for example, you have a low credit score – there is another option. Instead of being rejected completely for credit, you could be successful with the help of a guarantor.

Who can be a guarantor?

In theory, anyone over the age of 18 can stand as a guarantor for another person. However, the reality is that lenders are often looking for someone quite specific before they will accept a guarantor for a credit application. These are a few of the factors that lenders tend to look for in a potential guarantor:

A good credit history. Guarantors will often have their own credit rating checked by the lender, in addition to the checks carried out on the borrower.

Financially stable. The most appealing guarantors are those who can show that their finances are healthy so that they are in a position to cover the credit repayments should the need arise.

A homeowner. For many lenders a guarantor who is a homeowner is the ideal because this means there is a tangible asset to provide security if something goes wrong with the credit repayments – but many lenders will now accept non-homeowners.

A link with the borrower. A guarantor doesn’t have to be someone related by blood or marriage. However, lenders will be more convinced that the guarantor is committed to the responsibility if there is a clear link/relationship with the borrower.

A UK resident. If a lender has to take legal action against a guarantor then they will need to be UK resident for this to be successful.

Income and/or assets. If the guarantor is not a homeowner then there will need to be evidence of enough income and/or assets to cover the repayments that need to be made. This could be savings, an annual salary, investments and potentially a pension.

What does a guarantor do?

Initially, nothing. Checks are carried out against the guarantor and they will be legally required to sign a guarantor agreement. If you fail to make a repayment on a loan or other type of credit then the guarantor will be asked to make it for you. The responsibility for repaying the entire loan doesn’t then shift to the guarantor – repayments remain yours to make unless you’re unable to. If the guarantor refuses to make the payments then the lender can take legal action against the guarantor.

How do you choose a guarantor?

Becoming a guarantor is a big responsibility so it’s important to choose someone who is able to understand the impact of signing on the dotted line. Although the guarantor won’t have any right to the credit you’re borrowing they are making themselves responsible for its repayment and that can turn into a significant liability if you’re not able to meet the obligation.

  1. Make a shortlist of potential people. Often, this starts with close family members and people you trust. Parents, brothers, sisters, grandparents or close colleagues could all be a good option.
  2. Think about the financial stability of each of the people on the list. Could they afford to make the repayments for you if you weren’t able to? How would this affect their lives if that turned out to be the case?
  3. Who on the list owns their own home? This will make a guarantor much more attractive to a lender, particularly if the purchase is not recent. Tenants or people who live with their parents won’t be that appealing as a guarantor for a lender.
  4. Speak to whoever you have identified as your first choice and find out key information, such as whether they are willing to stand as your guarantor and what kind of credit score they have.
  5. Make sure both of you are happy with the situation – and both understand what’s involved.


Video: All About Guarantor Loans

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What causes someone to have a bad credit rating, and what can they do to fix it? Mon, 15 Jan 2018 11:05:11 +0000 Alex Hartley If you’ve applied for credit and been unexpectedly rejected then this may have something to do with your credit rating. A credit rating is basically an overview of the way that you have managed your money and credit in the past. It is data that is made available to lenders by credit reference agencies that will reveal information such as how much you’re borrowing, how well you’ve made repayments and how often you’re applying for credit. Lenders use their own “rules” to turn this credit rating data into a credit score, and then use the score as a means to decide whether to lend or not.Causes of a bad credit rating

A poor credit rating may not seem like the end of the world but it can have an impact in many ways. For example:

  • Rejection of credit card loans and applications
  • Only being offered high interest credit
  • Higher insurance premiums
  • Being unable to take out a mobile phone contract
  • Difficulty getting a car loan
  • Being denied business start-up finance

What causes a bad credit rating?

There is no single credit rating that every lender can see to make a judgment when it comes to your finances. However, there are a number of factors that will drag your credit score down whichever credit rating agency you refer to. These include:

Not sticking to the terms of another credit agreement. For example, you may have signed up for a personal loan but then not made repayments each month, as agreed. Even just making loan repayments late can have a negative impact on your credit rating.

Making only minimum repayments. If you’re doing nothing but paying off as little as possible on credit cards, for example, this could also negatively influence your credit rating. Many lenders see this as evidence of being unable to manage money and pay off debts. 

You’ve never had any credit. It might seem that being completely free of debt in the past would make you an ideal candidate for a lender now. However, that’s not the case. If you haven’t borrowed before then there is no evidence of good money management on your file and this can make it just as difficult to borrow now – and at a good interest rate – than having a history of bad credit decisions.

Being declared bankrupt. If you’ve struggled with credit in the past and ended up either with an Individual Voluntary Arrangement or having a County Court Judgement against you this will have a very negative impact on your credit rating.

Making too many credit applications. Although the various credit agencies rate this differently, roughly 10% of your credit rating is affected by the number of credit enquiries being made. So, if you’ve recently made multiple credit applications – especially if all have been denied – then this will negatively impact on your score.

Inaccurate, false or fraudulent information. The information in your credit file needs to be accurate in order to reflect your genuine creditworthiness. Your credit rating may be low if, for example, you are not registered on the electoral roll. You’ll see a significant drop in your credit rating if you’ve been the victim of fraud and someone else is spending credit in your name. Even incorrect address information could have an impact.

What can you do to fix a bad credit rating?

  • Make your payments on time to show a pattern of good borrower behaviour
  • Reduce some of the balances you currently have outstanding, even if only by a little
  • Check your credit report and make sure all the information is accurate. Look out for any activity you don’t recognise that could be evidence of fraud
  • If you’re struggling with the debts you already have don’t apply for more credit. Seek help in managing and paying off those debts
  • Wait at least six months before making any more applications for credit that will result in enquiries on your credit file. Wherever possible ensure any credit provider uses a “soft search” to assess an application – then there will be no footprint on your credit file.
  • If you don’t have any credit history then apply for a credit card or personal loan, even if the interest rates are not favourable. Pay this off in line with the credit agreement to start to establish positive borrower history
  • Apply only for the credit you’re likely to get – look at these bad credit loans options.
  • If you’ve shared finances with someone in the past but now gone your separate ways, make sure your credit file isn’t still linked to theirs. If they have a bad credit score it will affect yours too
  • Check your credit history is accurate – for example, if you have a bankruptcy order annulled make sure that a copy of the order of discharge or annulment is distributed to credit agencies
  • Try to stay put – lenders like long-term addresses, landline phone numbers and a solid employment history as all these provide evidence of stability.

Video: All About Bad Credit & How to Fix It

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“Open Banking” is coming your way but what does it mean? Fri, 12 Jan 2018 12:11:03 +0000 Alex Hartley Open Banking has been causing ripples, both across the fintech sector and in the news. Back in 2016, the Competition and Markets Authority (CMA) issued a ruling that requires the nine largest banks in the country to allow licensed startups direct access to their data. And with that the first step towards Open Banking was taken. The decision was a response to the dominance of established banking institutions in the UK – Barclays, HSBC, Lloyds, Santander and Royal Bank of Scotland currently hold 80% of the market. The CMA believes that opening up this data to other companies, especially those looking to innovate in personal finance, will result in better deals for consumers.Open banking is arriving in the UK

Why is Open Banking happening?

Investigation by the CMA found that there was too little competition in the UK banking market. Those same big five banks dominate, each offering fairly similar products at much the same rates with little variation through which consumers could find better deals. We have stagnated as banking customers too – only 3% of us move accounts every year. But why would we go to the trouble of moving banks when the products across the board are almost identical. Open Banking is designed to change that, to provide better choice for consumers and, as a result, to help bring down costs and drive more innovation.

How does Open Banking work?

It focuses on the idea that financial data – how much we spend on coffee, when we go over an overdraft limit etc – belongs to the customer and not to the bank. As a result, the customer can give permission for this data to be shared with others. So, customers of many of the big banks have already received letters informing them that this data can be shared with licensed startups if permission is given. If that permission is given then this opens the door to customers who want to work with fintech businesses that are disrupting banking with new ideas.

What will Open Banking look like?

Open banking comes into force on January 13th 2018. It will give new innovators the opportunity to take the financial data that we generate and do something creative with it – after all, Uber was just Google Maps and location data before someone turned it into something useful. “Useful” innovations for this data could include being able to see an overall perspective on all financial information over all accounts held. Breakdowns of spending currently offered by fintech businesses such as Monzo will become commonplace. Data could enable automatic switching to the best financial deals, as well as direct payments between retailer and customer, cutting out middlemen like card providers who charge fees. It could also enable more responsible banking, such as generating alerts where there is unusual activity on the account of someone with mental health issues.

Open Banking could potentially change the way that we bank completely. For example, currently fees for exceeding an overdraft are a big problem for many people, especially as they often kick in when cash is tight. Those designing the new Open Banking system envisage a time when these fees are no longer an issue. Instead of going over your overdraft limit, automatic systems would monitor your transactions and step in before you go over the limit. Either money would be automatically moved from another account or the exact amount of credit arranged automatically with another lender at the best possible rate of interest. The result? No going over the overdraft limit and no fees to pay.

Are there any risks?

Yes. The big risk that everyone is very focused on is the risk of opening up data to third parties in this way. Although the data is only meant to be made available to licensed third parties who will be accountable for its use this is a new opportunity for fraudsters. All it would take is a convincing fake request for permission to access data and the entire financial history of an individual could end up in the hands of someone who wants to exploit it for gain.

The other risk is to the banking sector itself. Take the fees for exceeding overdraft limits for example. The ability of Open Banking to do away with these fees for consumers has been highlighted as one of the major benefits of the system. However, income from overdraft fees currently provides a third of revenues for the more established banks. So, what happens if you take that financial income stream away?

Many fear Open Banking and many are excited by its transformative prospects. Either way, a new wave of banking is coming much sooner than many expected so being ready for it is key.

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Blue Monday, the most miserable day of the year! Wed, 10 Jan 2018 11:10:06 +0000 Alex Hartley Blue Monday falls on the third Monday of January, just inside the start of the New Year but far enough from Christmas for the glitter to have faded. This is (apparently) the most miserable day of the entire year when we all realise we are failing at our resolutions and summer is nowhere to be seen. But what is it about this particular Monday that makes it such a depressing day?Blue Monday in January

The Blue Monday formula

Blue Monday was actually conceived by a PR company so the scientific basis for its existence is sketchy. However, there is some sense behind the idea that the first day back to work after the weekend in one of the greyest, coldest months of the year could make all of us want to take a duvet day. The various factors involved in calculating the “Blue Monday formula” are:

  • The weather – often grey, windy, stormy, cold and generally not much fun to leave the house in
  • Debt – according to comparison service uSwitch 9 out of 10 people end up with a debt hangover after Christmas. It’s often in mid-January that this really kicks in and you start to realise that taking out an extra credit card for all the food and gifts and parties now gone probably wasn’t worth it. And your credit card bill will be payable towards the end of the month!
  • Time elapsed since Christmas – the glitter is faded, you’ve had your time off and there are no more excuses to eat chocolate for breakfast
  • Time elapsed since making – and failing on – New Year’s resolutions. Most people break their resolutions by mid-January leading to feelings of failure and resentment
  • Lacking motivation – January is the month when motivation levels are the lowest
  • A desire to make change – January is also the month in which many of us start to identify the parts of our lives we don’t like and want to make change. However, we may be stuck with low motivation or high Christmas debt and so unable to do anything about it

When you look at it like that it’s not difficult to see why the theory behind Blue Monday tends to hold water. But what can you do about it?Feeling depressed on Blue Monday

Antidotes to Blue Monday

Make a plan. Whether it’s a plan for debt repayment, getting fit or finding a new job you’ll feel much less hopeless if you’ve decided on a way forward.

Do some exercise. Exercise releases endorphins and will instantly make you feel better even on the gloomiest day of the year.

See some friends. A problem shared is a problem halved. There’s nothing like spending time with those you love to provide an antidote to Blue Monday feelings

Throw away your New Year’s resolutions now. Instead, replace them with a daily intention to do something constructive

Be kind to yourself. It’s much more courageous, strong and constructive to give yourself a break rather than feeling bad about broken resolutions or punishing yourself over Christmas debt.

Dance to the upbeat “Blue Monday” by New Order!

Things to look forward to in 2018

If the above antidotes don’t work then remind yourself that there’s plenty to look forward to in 2018, including:

  • The Winter Olympics – taking place in Pyeongchang in February, this is your chance to distract yourself from winter gloom and get deep into the world of skating, skiing and bobsleigh.
  • Exceptional visual entertainment – from the return of Black Mirror and Westworld, to movies like Black Panther, Mary Poppins and more instalments in the Avengers and Jurassic World series and The Handmaid’s Tale season 2, there’s a lot to celebrate on screens big and small in 2018.
  • Frozen, the musical – now you can sing along to “Let it go” in a room full of hundreds of people doing the same. Very therapeutic.
  • A royal wedding – Meghan and Harry are tying the knot in May at Windsor Castle – not long to go now.
  • The World Cup – football fans rejoice because 2018 is the FIFA World Cup in Russia.
  • A royal baby – the Duke and Duchess of Cambridge are due to welcome the regal newborn in April so spring will be a season of lots of new starts.
  • Positive anniversaries – 2018 marks 100 years since the end of World War One, for example, as well as a century since women won the right to vote.
  • Beyonce at Coachella – even if you don’t go, even if you’re not a fan the performance is likely to be an uplifting, lively one.
  • The return of longer days – yes, it happens every year but it’s definitely something to look forward to. We’ve already passed the shortest day so summer is definitely coming.
  • Intergalactic insights – 2018 is due to be the year that commercial space travel finally becomes a reality. Plus, a robotic Mars lander will finally be launched into space after a two year delay.

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What to do if you don’t feel you’re getting value for money at university Mon, 08 Jan 2018 11:47:49 +0000 Alex Hartley With the tuition fees cap about to be raised and many students already paying £9,000 a year to go to university, the stakes in higher education are much higher than they used to be. As a result of the enormous financial investment that is now involved in getting a degree, there is an increased focus on the quality of the teaching and whether courses are delivering in terms of results and value for money. Many universities are now bracing themselves for complaints, not just about the courses but the facilities – such as accommodation – too. But what can students really do if they don’t feel that their chosen degree has delivered value for money?value for money from universities

Degrees vs. goods and services

It’s worth remembering that what students pay for isn’t the degree itself. There’s no guarantee that anyone will walk out of university with the degree that they’re hoping for and no amount of cash spent will (or should) change that. What’s being paid for are the services and facilities that enable students to do their very best when it comes to getting the degree. And if these are substandard, or not as advertised, then surely there should be some way to get compensation.

The university complaints process

If there’s a problem with the teaching, accommodation or services then the first port of call will always be the university’s own complaints process. Most universities post their complaints policy online for easy access and it should be fairly simple to follow the steps to begin a complaint.

  • What is the complaint about? It’s important to be able to clearly identify what the problem is e.g. cancellation of classes or even an entire course, discrimination or harassment, poor learning resources, bad accommodation.
  • What is the desired outcome? Another key part of the process is identifying the desired outcome – is it financial compensation, a revised grade or replacing a member of staff?
  • Where is the evidence? Just as with any redress procedure such as this there needs to be evidence to support the complaint if it’s got any chance of success.
  • Completion of Procedures Letter. Once a complaint has been made the university is required to investigate it – once that’s happened a Completion of Procedures Letter is sent out that sets out what the conclusions are.

The Competition and Markets Authority is getting increasingly involved in the way that universities are complying with consumer law. Their guidance for higher education institutions provides a useful benchmark against which to judge whether a complaint has a good chance of succeeding or not.

Office of the Independent Adjudicator for Higher Education

The Office of the Independent Adjudicator for Higher Education (OIA) is an independent review body for student complaints and a second port of call if an internal complaints procedure has been unsatisfactory. The OIA upholds around a quarter of the complaints that it receives and has the power to order compensation to be paid. Interestingly, research carried out by the OIA found that most students who complain aren’t looking for a cash payment but for some kind of fair restitution. Large pay outs are not a common occurrence – the highest made was for £45,000, which involved a dispute over a PhD which had been a lengthy and damaging process for the student.

Court action

If internal procedures have been exhausted then it is possible for students to sue their universities for compensation. However, this is a complex and expensive process and requires a pretty high standard of fault and also evidence. However, students do go ahead and sue universities – and over something as simple as feeling that they have been given the wrong grade. For example, student Andrew Croskery sued Queen’s University, Belfast when he didn’t get the grade he was hoping for citing poor supervision as the reason. Mature student Mike Austin is probably the most successful student to sue in the courts, receiving £30,000 from the University of Wolverhampton in an out of court settlement for a range of problems such as lecture overcrowding and non-delivery on promises made.

So, for students who feel that they have not received value for money when it comes to a degree it is possible to take action. The first step should always be to make contact with the university to see if the situation can be rectified, followed by the filing of an official complaint. After that, it’s possible to get the OIA involved and finally to move to the courts. However, the further away this gets from being an internal matter the more costly it can be – and for those already struggling with student debt that could be a seriously off-putting factor.

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Gloomy forecasts for the UK from the Institute of Fiscal Studies Fri, 05 Jan 2018 11:24:11 +0000 Alex Hartley The most recent forecast from the Institute for Fiscal Studies (IFS) has predicted a couple of tough decades for the British public. While the last century or so has seen consistently increasing living standards, according to the IFS, this is now likely to be a thing of the past and not an ongoing trend that anyone should rely on. Instead, we can look forward to stagnant wage growth, low productivity and yet more austerity. So, it all sounds rather gloomy if the IFS is to be believed – but are they right and what are the implications?Gloomy forecast for the UK economy

IFS conclusions

After the Chancellor Philip Hammond’s 2017 autumn budget the IFS drew a number of conclusions that were based on its own analysis of the budget and a report from the independent Office for Budget Responsibility.

Earnings will be lower than expected

There has been a lot of talk about the poor – or non-existent – growth in wages. After the autumn statement, the IFS concluded that wage growth for 2021 was now forecast to be £1,400 a year lower than was predicted in 2016. In fact, when adjusted for inflation, average earnings will be lower than before the financial crisis in 2008. So, there is no recovery in wage growth to look forward to and that can have a very broad impact for everyone.

The implications: wages aren’t going to go up. That means we’re not going to have any more cash to spend and life isn’t going to become more affordable. When you combine a lack of wage growth with rising house prices and an increase in living costs, a drop in living standards is inevitable.

Productivity has gone through the floor

Productivity is generally used to measure the output of a workforce and, on a broader level, the strength of an economy and the health of its public finances. The measure of productivity is GDP and, according to the IFS analysis, GDP in the UK will be 3.5% smaller in March 2021 than was forecast back in 2016. So, the economy has failed to pick itself up and we have not achieved the kinds of productivity gains that would make the country economically prosperous once again. These gains are normally the result of an increase in skill in the workforce or of advances in technology.

The implications: The economy will be £65 billion smaller in 2021 than anyone thought it was going to be. Weak productivity means weak economic growth, which also means that more of the public finances get sucked into bailing the country out. Without an increase in productivity, wages stay stagnant, living standards fall and many people become increasingly reliant on public services.

Public services are seriously stretched

The NHS, for example, is currently facing the biggest funding squeeze since the 1980s. In the UK an ageing – and expanding – population is putting huge pressure on this vital public service. However, government spending has fallen – after the financial crisis this was at 4% after inflation, now it’s just 1%. Plus, there are nearly £12 billion in welfare cuts that have still to be processed through the system, hitting many of the worst off in the UK the hardest. And, despite the fact that demands on our public services are likely to get more intense as people struggle with dropping living standards and poor wage growth, spending on day to day public services is going to be 3.6% lower in the next 5 – 7 years.

Implications: the safety net of the NHS and public services that we’ve come to enjoy in the UK is being gradually eroded. Many have highlighted that there is potentially more cash in the Treasury for this but that it is being spent on other things that are more important to the currently Conservative government’s key supporters. They conclude that, without a change in government, spending on public services just won’t pick up.

What can you do to protect yourself?

  • Make careful buying choices. It’s going to become more important to get the best value on food and consumer goods so if you’re not already shopping around and buying in the sales now is a good time to start.
  • Take advantage of the few opportunities. For example, a holiday on Stamp Duty was announced in the autumn statement – if you are a first time buyer you could save around £5,000 as a result.
  • Learn how to budget. Money management is going to become increasingly important. There are a range of different tools to help you with this now, from budgeting apps to digital financial assistants.
  • Have a safety net in place. With no growth in wages it’s going to become increasingly important to have another option to cope with a financial crisis of your own. Savings and access to personal loans or bad credit loans could get you out of a sticky situation.
  • Future-proof your job. Despite the gloomy outlook there are some careers that are booming – for example, IT security is a part of the economy where there is a constant skills shortage and salaries are climbing. Be prepared to retrain and develop new skills.

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The future of banking, money management and personal finance Thu, 04 Jan 2018 11:21:28 +0000 Alex Hartley Technology is truly changing the world – at an increasingly blistering pace. And perhaps nowhere is this more apparent right now than in the world of money and banking. FinTech (finance + tech) is the latest buzzword and represents a huge swathe of innovation when it comes to the way that we bank and manage our money. While online banking is well established as the alternative to going in to your local branch to handle transactions or make balance enquiries this is really just the tip of the iceberg. In terms of the future of money and banking there are some pretty exciting developments on the horizon.The future of UK banking

Artificial Intelligence

Artificial Intelligence (AI) has been identified as a new frontier when it comes to helping us better understand and manage our money. Cleo, for example, is a virtual personal assistant that interacts with users of the app as if it were a real person. Ask it questions, request help and the responses are chatty and emoji-filled (the app is aimed at 20-30 year olds).

What this AI is actually doing is analysing transaction data sourced from the user’s online banking records over the past 12 months. It can use this to provide insight – such as how much is spent in a particular store over time – and to offer up budget and saving suggestions. Communication happens via Facebook and Messenger. According to the Cleo CEO, the future of banking is within software companies and traditional banks are on the way out. The team at Cleo isn’t actually a bank (it doesn’t have a banking licence) but wants to be the platform for financial management.

Given the accessible language, the mobile focus and a structure that is tailored towards the specific issues that many young people face (saving, budgeting, getting the best credit deals), it’s no wonder that it’s already starting to fly high. And it’s also no wonder that it has plenty of competitors – Xobi and Hublio to name a few.

Digital wallets

According to the World Bank there are two billion people in the world who don’t have a bank account. Mobile payments and digital wallets are seen as a much more workable solution, particularly in countries such as India where there is a sea change away from a paper money based economy. New technology such as Ezetap has enabled software that allows for mobile phone payments that don’t require bank accounts. This overcomes numerous issues, from how to manage accounts if you’re too remote to get to a branch, to doing away with the need for cards.

Digital currencies could be a logical next step down the route of digital wallets. It’s already possible to pay for some goods and/or services with a currency such as bitcoin but this has yet to be widely accepted. And with digital currencies comes blockchain – a chain of transactions or agreements that is self-verifying and so doesn’t require a middleman like a credit card provider.

Super cash machines

While digital currencies and online transactions are certainly becoming much more the norm, cash machines are going nowhere just yet. Particularly when it comes to older generations cash is still king – in 2015 17+ billion payments were made in cash in the UK. Plus, the number of cash machines surpassed 70,000 for the first time and 48 million people used them.

However, perhaps in order to keep up with the functionality of the online world, cash machines are also evolving to offer much more than just a simple way to withdraw notes. So, there are plans for the humble ATM to change to become a “bank in a box” – soon you’ll be able to do virtually everything you could once do in a branch without even walking through the door. Video links and mobile interactivity are just two of the features that will enable banks embracing technology to create super ATMs from existing cash machines.

A new approach to credit risk

Although still very much in its infancy there is a move towards reassessing the way that lenders look at the risk a borrower presents. Currently, applying for personal loans or credit cards involves incorporating the credit score of one of a limited number of agencies who use a fairly restricted pool of information. A new approach could involve a much wider spread of data involved in the risk assessment process, including social metrics and default rates. German startup Kreditech is already working under this new approach, analysing borrowers for loans using an algorithm that factors in 20,000 data points in order to provide the lender with a risk assessment.

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Why Bright House have been forced to repay £15m to its customers Fri, 29 Dec 2017 11:00:37 +0000 Alex Hartley Times are tight for many in the UK. Inflation is on the rise and there has been little or no real wage growth to speak of. The result is that, for families and individuals all over the country, there has been a real squeeze in household budgets that has left little room for bigger purchases. Step forward the rent-to-own sector, which was designed to give those on restricted incomes the opportunity to get credit on an item where a regular lender might to own washing machine

What is rent-to-own?

It is a sector that revolves around household goods, such as TVs, washing machines, furniture and computers. The idea is that if you’re not able to purchase one of these outright then you can do this via rent-to-own instead. Many of those who use the rent-to-own sector are struggling with a bad credit score and so wouldn’t be eligible for credit from a mainstream lender. Rent-to-own is meant to be an alternative way for people to pay rent on an item, such as a washing machine – and own it once that rent is paid off.

What’s the problem?

The Financial Conduct Authority (FCA), the UK’s financial regulator, has recently stepped in with respect to Bright House, one of the biggest names in the rent-to-own sector. Bright House has 283 stores around the UK and more than 230,000 customers. However, the FCA has found that Bright House has not been acting as a responsible lender, principally due to the high cost of the credit that it has been providing to its customers. There are unfortunately many examples of how Bright House has been using its position, appealing to those without many other options, to charge excessive amounts. For example, the FCA found that Bright House had charged more than £1,000 over a period of three years for its cheapest washing machine. Research by the media has found that a similar model washing machine, with breakdown cover, would cost just £250 – £350 if purchased outright. Another customer purchased a laptop from Bright House that would have cost £600 if bought out right. When the laptop was finally paid for with Bright House the total payments came to £2,287 over 26 months – almost four times the laptop’s actual value.

What does it mean to be a responsible lender?

Most of us accept that when we take out credit, whether that’s to pay for household items or as a straightforward loan, there will be interest to pay for being able to borrow. However, the excessive credit costs that Bright House has attached to its borrowing mean that it’s a world away from being a responsible lender offering credit at reasonable and affordable rates. The FCA has now ordered Bright House to make compensation payments to 250,000 customers totalling £14.8 million. This payment is broken down in a number of ways including:

  • 81,000 customers who were incorrectly assessed by Bright House in terms of their ability to repay the loan – and consequently forced to hand back the items – will be repaid (with interest).
  • 181,000 customers who cancelled their agreement with Bright House before receiving the goods will have their initial payment refunded plus interest of 8%. This applies to customers who signed up after 1 April 2010.

What are the alternatives?

Bright House’s success is driven by a lack of credit options for those who may not have access to mainstream credit. So, where do you turn for purchases if you’re in a similar position?

  1. Other rent-to-own providers. The rent-to-own market is a growing one so there are certainly other options. However, it’s always important to make sure that you don’t end up in the same position as Bright House customers. What are the credit costs and how much will you pay overall?
  2. Not-for profit credit providers. There are not many of these but organisations such as Fair For You provide funds for household goods that are much more in line with what the FCA considers to be fair lending practices.
  3. Bad credit lenders. It’s often worth looking into whether other lenders might be able to offer less expensive terms. For example, a payday loan could be a better alternative because you’ll be able to buy the item outright and then pay off the loan at the end of the month. If you’re looking for longer-term finance then guarantor loans could give you the same up front payment advantage. Although some interest rates can be higher than mainstream lenders, it’s easy to find a lender that doesn’t charge fees and the credit charges are likely to be far lower than those offered by a business like Bright House.


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Is consumer spending and debt getting out of control? Wed, 27 Dec 2017 12:29:41 +0000 Alex Hartley Debt is something that many of us have learned to live with. And, on the whole, it provides a useful way to make important life changes, from paying for study to buying a home. But, in autumn of this year, figures were released that revealed that British consumers now have unsecured debts that total more than £200 billion (i.e. exc. mortgages and other secured loans). That’s an increase in personal debt that brings it to levels not seen since the financial crisis.Consumer spending and consumer debt

Debt levels are rising

In 2014, consumer credit grew at an annual rate of 4%.  However, in 2016 this figure hit 12% as it was revealed that British consumers now had credit commitments to the tune of £204 billion. As 2017 draws to a close the figure remains lower than last but this has predominantly been put down to a drop in car loan figures, as opposed to a drop in the appetite for consumer debt overall. This increasing desire for consumer borrowing has worried many experts, particularly in the light of the recent interest rate rise.

How will interest rates affect consumer borrowing?

Most loan and credit card interest rates are tied to the Bank of England Base Rate (BEBR). On 2nd November this year the BEBR was increased to 0.50%, which marked the first time that the rate has risen since 2007. The Bank of England has forecast another two rate rises in the next two years with the base rate being capped at 1% by 2020. So, for borrowers this means that it’s going to cost more to borrow. For those who already have large debts the implication is that those debts will cost more, which will make it more difficult to clear them and get debt free.

How has this happened?

British consumers have been encouraged to spend, as opposed to save, ever since the financial crisis of 2008, partly to stimulate the economy and partly due to interest rates so low that saving has seemed almost pointless. Most experts have been unable to determine whether this current surge in consumer spending has come as a result of consumer confidence and willingness to spend. Some believe that this could be the case. However, others highlight that there are many consumers who could be turning to debt out of desperation, as opposed to confident spending. Economic conditions, such as an increase in inflation and almost completely stagnant wage growth, have left many families without any other option than to borrow to get the day-to-day cash they need.

When are we likely to feel the impact?

Currently, the rise in interest rates has been fairly minimal and, although there is concern about the impact of this in the long term, for now the government is content to simply monitor its impact. However, even before the impact of the rate rise is felt, there could be trouble on the horizon. Figures released this autumn reveal that personal insolvencies in the UK rose to a five year high in the third quarter of this year. The figures indicate that in the 12 months leading up to September 2017, one in 477 adults became personally insolvent in the UK. This represents an increase in figures to the highest rate since December 2014.

In the third quarter of the year 15,523 IVAs (a voluntary way of repaying some or all of a debt owed) were recorded in England and Wales, an increase on the 13,290 in the same time frame last year. The same period saw a 2.1% increase in debt relief orders for those on a low income.

And it’s not just individuals who are beginning to struggle with ratios of debt and income that just don’t add up. Since the EU referendum the number of companies registered insolvent has risen by 15%. The significance here is that many of these companies are small businesses run by individuals and problems at the SME end of the scale could result in more personal debt problems.

What changes can we expect?

  • The largest number of lenders since 2008 now plan to put additional restrictions on the borrowing of unsecured credit according to the Bank of England’s Credit Conditions Survey. This means that it could be tougher for individuals to obtain credit that isn’t secured by an asset such as a property.
  • Individuals are being encouraged to think carefully before taking out additional credit cards or loans, particularly in the run up to Christmas which is notoriously expensive.

Saving is still growing at the lowest rate since the financial crisis in 2008, despite the small rise in interest rates. A renewed focus on encouraging consumers to spend money is likely, particularly when it comes to saving for old age.

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How our feelings affect the way we spend Mon, 25 Dec 2017 12:16:20 +0000 Alex Hartley Are you an emotional spender? Most of us would like to answer “no” outright to that question. However, the more honest response is likely to be at least a tentative “yes.” According to a recent study there are many different types of emotions that can trigger a desire to spend money. However, the top four are boredom, sadness, stress or when you’re celebrating. So, it’s not just negative moods that can get us into trouble with our cash but upbeat moments too. How our emotions affect our spending

Which emotions leave us the most vulnerable?

According to a study conducted by MoneySuperMarket partnered with consumer behaviour experts MindLab, stress is the most expensive of our emotions. It’s the feeling that leaves us the most open to impulse buying. If you’re feeling stressed when you go shopping then the study found that you’re likely to spend 15% more than a happy shopper. We all have our own individual reasons for making impulse purchases when emotions are running high – these could include buying items that you wouldn’t normally buy because they feel like a treat or are comforting. So, unsurprisingly, food and drink are very popular stress impulse buying purchases, as are sweets, chocolate, shoes and clothes.

Other studies have identified reasons why specific emotions – other than stress – could trigger emotional spending, including:

  • Anger – angry people tend to take more risks and to be willing to do reckless things like purchasing an item they can’t afford.
  • Sadness – when we feel sad we might be more willing to give up a part of our future (i.e. money saved for something else or debt that will need to be paid off) to feel better now.
  • Guilt – feeling guilty can lead to purchases for others to feel better about ourselves.

Credit cards

On the whole we are all likely to spend more – and more often – if using credit cards as opposed to cash. A study that monitored supermarket spending over the course of a year found that those spending cash tended to spend less. There is something about paying with credit cards that makes the transaction feel less real. It’s much easier for us to respond to an emotionally driven desire to buy if we’re doing that with a credit card to hand. Cash, on the other hand, might make us think twice.

Online and ads

There’s no doubt that the online world has made it easier to impulse buy in some ways – online shops are always open and the advertising is inescapable. However, evidence suggests that we are starting to not respond to online advertising – a number of studies have found that people actually look away from ads designed to lure them into impulse purchases. And when it comes to an impulse purchase, being in a shop will always been more tempting in terms of being able to enjoy or consume a purchase as soon as you’ve paid for it. At least until instant delivery arrives in the UK…

Young people

Under 35s are the most likely to be emotional spenders and there are multiple explanations for this. Some attribute it to a lack of experience with money while others see the cause linked to the fact that young people today are more dissatisfied with their appearance than ever before. That’s one negative emotion for which the beauty and fashion industries provide a wealth of impulse buying opportunities.

Can impulse spending ever help negative emotions?

The pleasure receptors in the brain do light up in the moments before we make a purchase. So, some experts have suggested that there is definitely a feel good factor that is associated with buying. The secret is to activate that good feeling with a purchase that you can actually afford, as opposed to one that leaves you feeling guilty or wishing you hadn’t done it. However, overall there is very little evidence that buying goods ever helps us to feel better, according to the experts. If you want to buy something then purchasing an experience – as opposed to a ‘thing’ – could actually make a difference to how you feel. That’s especially the case if the experience is one that you’ll do with other people.

For most of us, the secret to controlling emotional spending is recognising the triggers that could lead us to it and that impulse buying is an issue that might need tackling. It doesn’t have to be a problem that gets completely out of control – the key, according to the experts, is to try to stay within the limits of what you can afford.

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How to max out your savings in the New Year Sales Fri, 22 Dec 2017 10:14:32 +0000 Alex Hartley There seem to be more retail sales than you can shake a stick at these days. However, while Black Friday or the summer sales can deliver some great discounts, it’s the New Year sales that often offer the most potential for savings. Many stores refresh their stock for the new year so it’s out with the old (at heavily discounted prices) and in with the new. Whether you’re looking for Christmas themed items to put away for next year, sports gear, technology, fashion or toys, the New Year sales are worth doing properly. So, how do you maximise the savings potential at this time of year?New Year Sales

Top Tips to get the most in the New Year Sales

In-store Sales

Get up early. If you’re going to do your New Year sales shopping in-store then there’s just no substitute for being the first through the door. Discounts don’t change over the course of the day but the best items will inevitably be snatched first off the shelves so if you want to get them for yourself you need to be up with the birds.

Plan your route. There are many websites that will give you a preview of sales discounts on the high street so you can work out in advance where the best savings are likely to be. Plan the most efficient route for your shopping trip to make sure you pick up all the bargains you’re looking for.

Pay with a credit card that has points. If you’re planning a sales splurge on the high street for the New Year then paying with a credit card that offers points has a double benefit. You’ll not only have the items you’ve bought in the sale but you’ll also get the points you accumulate for spending on the card. Depending on the rewards your card offers this could net you free flights, cash discounts or vouchers for 2018. Just remember to pay off the balance.

Online Sales

Be focused. Online sales can be high pressured and bewildering and you might not be able to resist huge discounts even if you have absolutely no need of the item they apply to. So, be focused – work out what you want to buy in advance, as well as how much you’re willing to spend. Don’t go over budget or spend on items you don’t really need that will end up diminishing the savings you make overall.

Sign up for memberships and newsletters. Many online stores announce their sales early to members. Whistles and Net-a-Porter, for example, tend to offer a ‘private sale’ that is available to those who have signed up for newsletters or have accounts around 24 hours before the actual sale starts. So, if you want to make sure you get the biggest savings on the best products make sure you’re the first to know.

Leave items in your basket. Have you noticed that if you’re half way through shopping and you forget to finish the transaction that you’ll often get an email with a discount incentive to do it? Many retailers will automatically send you a discount code if you seem to be abandoning your check out so you can save even more if you time it right. Normally, you don’t have to do much to trigger this, just navigate to another web page or leave the item dormant for a while.

Shop around. When you’re sales shopping online you have the unique advantage of being able to check prices on different online stores in an instant. If the item you’re looking for is available in more than one location then check to make sure that you can’t get it cheaper elsewhere. Use a price comparison site, search for the item and see what comes up or simply jump from one website to another to compare. Don’t forget to keep a record of locations and prices so you know where to go back to for the best deal.

Don’t pay for shipping. The cost of delivery can eat into sales savings significantly so make sure you’re not having to pay extra to get your purchases. If possible, combine as many as possible at one store so that you’re more likely to hit the threshold at which free delivery is available. If you’re a regular shopper at certain stores you might also want to consider an annual free delivery fee, which means that with a small up front fee all the shipping is free for 12 months.

Paying for Your Purchases

Take care not to get carried away when you start your sales spending. If you’re shopping in-store then paying by cash will make sure you can’t go over the top. If you are buying a relatively expensive item (e.g. sofa) you could look for an interest-free loan from the retailer and this would help you spread the cost and make budgeting easier. A credit card can also make sense because of a) the short interest-free period and perhaps more importantly b) the extra protection you receive for purchases over £100. Credit cards make extra sense when making online purchases – even more sense than paypal and debt cards – although take care about paying extra fees for using your card.

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Christmas through the decades – A Retrospective Wed, 20 Dec 2017 12:47:15 +0000 Alex Hartley Christmas might be an annual event but it’s become a very different experience with each decade that goes past. If you grew up in the 1960s then your festive traditions and feasts would have been very different to those for children today. So, what is it that has made a Christmas in each of these decades so very distinctive?

Christmas in the 1960s

The 1960s was the first decade when turkey really became a tradition on the British Christmas table – preceded by a classic prawn cocktail starter of course. On the drinks menu it was Babycham as the celebratory tipple of choice although you might also have had a glass or two of a Mateus Rose.

Under the tree. Space was the big theme for toys in the 1960s, from board games to Thunderbirds toys. You might also have had something James Bond themed, a brand new shift dress or a Beatles style tailored suit. The Beatles were everywhere in this decade – in fact, they dominated the Christmas Number 1 singles chart spot for almost half the decade with songs like “I Want to Hold Your Hand.”

On the TV. Three channels showed a range of shows with two of the most popular being Max Bygraves meets The Black and White Minstrels on BBC1, and The Bruce Forsyth Show on ITV.1960s christmas decorations

Christmas in the 1970s

The 1970s was one decade when “tasteful” and “understated” were two words that most people threw out of the window – especially at Christmas. Cue the mass use of tinsel and an array of wonderfully trashy festive decorations. Turkey was well established as the traditional feast – perhaps preceded by a starter of coloured gelatin Christmas trees or a (bright blue) blue cheese mousse. This was the decade of Cinzano and drinks topped with glacé cherries but it was The Snowball that was the totally festive tipple of choice – Advocaat mixed with lemonade.

Under the tree. If you were lucky then in the 1970s you might have unwrapped a Sooty glove puppet, Scrabble or an Etch-a-Sketch. Twister and Operation were the board games gifted around this time and for the really lucky there may have been a Sindy or a space hopper.

On the TV. You might have started Christmas Day in the 1970s with Basil’s Christmas Morning with Basil Brush or Ken Dodd and the Diddymen.  The Morecambe and Wise Christmas Show would have been an unmissable event for many and these were the days when everyone still tuned in for The Queen’s Speech (the actual Queen, not the Colin Firth film).

Christmas in the 1980s

Many people think Christmas in the 1980s was the best decade – certainly some of the classic Christmas songs (“Do They Know It’s Christmas”) and viewing (E.T., Gremlins, Die Hard) came from this decade. It’s unlikely you would have attended a Christmas party in the 1980s without eating cheese and pineapple on a stick but turkey was the tradition on Christmas Day. Ready-made food started to appear more widely during this decade, from Christmas puddings to pigs in blankets. Boxing Day wouldn’t have been complete without a classic sherry trifle. If you were lucky then champagne would have been your drink of choice for Christmas parties and events – thanks to yuppie culture it suddenly became much more widely consumed.

Under the tree. If you got a Millennium Falcon for Christmas in the ‘80s then you were probably going to be the most popular kid in school come New Year. Teddy Ruckspin, a My Little Pony Castle or a Rainbow Brite doll would also have been a Christmas win.

On the TV. In the 1980s there were many more options than decades gone by in terms of Christmas Day viewing, from The Man with the Golden Gun to Top of The Pops. The Morecambe and Wise Christmas Show was still a firm fixture or you could have chosen Paul Daniel’s Magical Christmas or The Two Ronnies.Christmas decorations yestayear

Christmas in the 1990s

Christmas in the 1990s probably bears more of a resemblance to what we recognise nowadays with mass produced turkeys on every table and maybe some Frubes or a Club biscuit to keep you going after breakfast. The tradition of the office Christmas party took hold in this decade with many companies having to write off any productivity the day after as a result. Christmas fizz was now obligatory – whether cava, prosecco or champagne – but for younger generations it was all about the K cider, Malibu and alcopops like Hooch.

Under the tree. The Gameboy was the must-have gift for 1990s kids – either that or a Tamagotchi or a pair of roller blades.

On the TV. For those with young children, Wizbit’s Christmas morning show might have been followed by the Songs of Praise Christmas Special. In the afternoon, perhaps a repeat or two, such as Raiders of the Lost Ark, followed by Wogan in Hollywood and Noel’s Christmas Presents with ‘90s TV favourite Noel Edmonds.

Christmas 2000s – today

During a noughties Christmas it was all about parents trying to get the kids off MSN messenger (as opposed to Snapchat today..). School Christmas discos entered the era of being a fashion-off – babydoll dresses and Buffalo shoes for noughties kids, skinny jeans, ironic tees and fedoras for young people today. Music has remained familiar too – think Beyonce, Lady Gaga and Arcade Fire or the X-Factor winners, such as Leona Lewis and Sam Bailey who have dominated the Christmas Number 1 spot from 2005 to recent years. Christmas dinner could well have been all about the nut roast in the 2000s – a decade when vegetarianism grew at a far faster pace – perhaps accompanied by glasses filled with Smirnoff Ice, WKD or Archers and lemonade. Today, clean eating trends could see more vegan Christmases than ever before. Thankfully, the thirst for alcopops has diminished and you’re more likely to be handed a glass of English sparkling wine or perhaps a nice organic red.

Under the tree. For children of the noughties Bob The Builder, Bratz Dolls or a Nintendo Wii would have been the lusted-after gifts of choice. Things haven’t changed that much today although Santa will get more requests for smart phones this year than ever before.

On the TV. A Christmas Day in the noughties might have featured The Fresh Prince of Bel Air, singer Charlotte Church or films like Independence Day. Victoria Wood with All the Trimmings provided the laughs and, like today, the listings would be awash with repeats, such as Back to The Future. This year it will be the year of the Christmas Special, from Bake Off, to Strictly Come Dancing. The big Christmas films are all glamour, from The Great Gatsby to Cinderella – with a Home Alone repeat or two for those who pine for Christmases of decades gone by.

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A plan to switch from being a two to a one person income household Mon, 18 Dec 2017 12:20:21 +0000 Alex Hartley Strange things can happen to couples over time and these aren’t always very predictable. You may start off down the road together in separate, stable jobs, working nine to five and enjoying a comfortable double income. But this could change at any time. Perhaps you get pregnant and one partner decides that actually all they’ve ever wanted is to be a stay at home mum/dad. Or you might suddenly uncover a burning desire to study again or to write a book or attempt to launch a start-up. It may seem like an enormous challenge to go from being a two income household to surviving on one – but it is possible if you “mind the income gap”.mind the income gap

Making the switch to being a one income household

Halving your monthly income might seem like a recipe for anxiety attacks. However, it’s also a good opportunity to reassess your spending and your financial situation – you could even end up in a better position as a result. So, how do you successfully switch from two incomes to one?

Pay off all your debts as soon as you can. If possible, get rid of debts before your income reduces because you might find it difficult to do so afterwards. Servicing debts is fine when you have enough money coming in every month but it can become very difficult if you’re struggling. Plus, when it comes to something like an overdraft or credit card, it’s far better to have that credit available to you should you need it than to already be right up to the limits. And don’t be tempted to take out new loans to cover unnecessary items – it will only put extra financial pressure on you.

Eliminate all unnecessary expenditure. This means stripping back your spending so that your money really is going on only the essentials. The daily take out coffee is the often-used example of an unnecessary expense where cutting it out could save you a lot of cash. However, this isn’t the only one – everything from riding a bike instead of taking the bus, to stopping your Netflix account or downgrading to own brands at the supermarket could make a difference to what’s left in the pot.

Start seriously prioritising your spending. When your income drops by half you need to make sure that your basic costs are covered first. This is especially so in the first few months when you’re still adjusting to the transition. First, allocate your cash to your essentials, such as food, energy and a roof over your head. After that you might need to look into transport, childcare and tax payments. Any other spending that comes next is unlikely to be as essential, from new clothes, to socialising and saving – these are the items that you can funnel your money towards if you have any left at the end of the month.

Sell everything that you don’t need. Many of us have a lot of objects that have some inherent value just sitting around the house. Selling these could create a buffer zone for you financially that could make this transition to a one income household much more comfortable. Do you have a huge collection of old smart phones just sitting around after you’ve upgraded to a new model each year? You could get £100 or more for these if you sell them to a company like Mazuma Mobile that recycles and refurbishes digital products. Have a yard sale, put old furniture on eBay, sell all your old work outfits if you’re not planning to go to an office anymore. The more you have in the bank to support the drop in income, the easier managing it is likely to be.

Be a budgeting whizz. If you’ve never really mastered the art of budgeting, now is the time to start nailing it. Set your budget for the day/week/month and stick to it, no arguments. Regularly review the budget to see if it’s working and to assess what you have left and make adjustments.

Learn to find the best deals. If your budget just isn’t stretching on this new, reduced income then one way to help create more wiggle room is to cut down what you spend on the things that you need to buy. So, become the person who knows where to find the best deal on dog food or where to buy bulk toilet rolls at the cheapest price. Use apps such as MySupermarket to see where your weekly shop would be the cheapest and make use of vouchers and cash back cards to keep costs down and generate cash back to replenish your accounts every time you spend.

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Key financial issues to consider if getting divorced or permanently separating Sat, 16 Dec 2017 12:41:31 +0000 Alex Hartley Separation, divorce and break ups are a very difficult time. Emotions tend to be running high and there may be children involved, which can complicate everything. However, when it comes to this stage in the ending of a relationship it’s important to ensure that you are protecting yourself. These are some of the important financial things to consider if you’re about to go your separate ways.Separation & Divorce financial issues

Splitting the assets (& liabilities)

A key part of leaving a current partnership, whether it’s a marriage, a civil partnership or you were cohabiting, is splitting up the assets and liabilities. These could be anything that you’ve purchased together or anything that you’re jointly responsible for or own including:

  • Joint debts, such as a mortgage or credit card
  • Possessions that you own jointly, such as furniture or a car (including the car finance!)
  • Bills that you’re jointly responsible for
  • Any investments that you have made that you share (e.g. a Buy to Let property)
  • Cash in the bank and/or savings

These are just a few examples of the kinds of assets and liabilities that need to be taken into account when you’re separating from a partner. It can be a lengthy process but the first step is to make a list of everything you own together and then everything that you pay for together. After that you will need to work out a fair split of who gets what and who pays for what.

Providing for children

If you share responsibility for children together then providing for their future will be a key financial consideration. Child maintenance will be payable – the first step is to try to agree between you how much this should be and when payments should be made. If that’s not possible then Child Maintenance Service may step in, to work out how much is due and/or facilitate the payments. Children make splitting finances very complicated. Even working out how custody of the children will be split has financial implications, with one partner potentially less able to work or taking on an increased burden in terms of bills or food and transport costs. There are many different factors to consider when it comes to children and the agreement may need to cover eventualities that haven’t yet occurred, such as the cost of university tuition fees or a first car. It’s often at this point that separating couples choose to seek the advice of a solicitor.

The shared home

How you deal with a property that you’ve shared will depend on whether it is rented or owned, who owns it and whether there are children who might need to continue to live in it. If the property is rented then one partner can move out and reimburse the other for a share of the rent until the end of the contract. If the shared home is jointly owned then there are a number of different options: one partner buys the other out, value is transferred from one partner to another, ownership remains the same until the youngest child turns 18 or the property is sold and the profit split. If there is a dispute over a jointly owned home and there are children involved then there are a number of different claims that can be made to the courts by one parent, including the right to stay in the home.


If you’ve been cohabiting then your pension is usually protected from your other half. However, if you have a civil partnership or a marriage then pensions are often the second biggest asset after the family home to come into contention during a financial split. Personal pension schemes, occupational pension schemes and Additional State Pension (but not the basic State Pension) can all be divided as a shared asset on dissolution or divorce. There are many ways in which pensions can be split, from a percentage share through to being entitled to a proportion of the pension payment when it starts being paid out. It’s worth noting that it is the entire pension that is taken into account, not just that accumulated during the years of the relationship.

Protecting your assets

Sometimes partners don’t behave particularly fairly during a separation or split. So, it may be necessary to go to the courts to protect your assets. If you think that there is a risk your partner may sell, transfer or get rid of certain assets (for example, by moving them abroad) then it’s important to take legal advice as a court may be able to prevent this from happening.

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Are there better odds than simply playing the National Lottery? Wed, 13 Dec 2017 14:01:47 +0000 Alex Hartley Lotteries are a type of gambling that has been enjoyed for centuries. Their history can be traced all the way back to the Chinese Han Dynasty between 205 and 187 BC and it was the Romans that first brought this sport to European shores. In the UK we were quick to embrace the idea of the lottery. Although the National Lottery is the most famous UK lottery, we Brits have actually been gambling like this since the mid 1500s when Elizabeth I organised the first official lottery.UK Lotteries

What are your UK lottery options?

There are literally hundreds of lotteries in the UK – The Gambling Commission has records of at least 520 licensed UK lotteries. Larger games tend to have bigger prizes but may also attract a much wider range of participants and charge more for tickets. Playing a smaller lottery normally increases the chances of a successful win. However, with fewer players the prizes are smaller too. Some lotteries select the winner via post code, others via ticket. Then there are the causes – you might want to play a lottery that also donates to something worthwhile. There are many different options. So, which UK lottery should you choose? These are some of the best known.

The National Lottery

This was the first nationally organised lottery – launched in 1994 – and a number of different games now come under its brand, including Lotto, Lotto Hot Picks and Thunderball. Jackpots are always six figures – not surprising given that it’s estimated around 70% of the UK population plays the National Lottery at a cost of £2 per ticket. Six million people win a prize of some sort on the National Lottery every week and almost 5,000 millionaires have been made since the game began. However, the odds of winning are quite low – you have a 1 in 14 million chance of winning the Lotto jackpot, for example.


There are 13 different prize tiers to the Euromillions, which is part of the National Lottery group. Your odds of winning any prize come in at around 1 in 13. However, if it’s the jackpot you’re after then these odds drop to 1 in 139.8 million! Tickets cost £2.50 each and include entry into the Millionaire Maker draw. As Euromillions is played right across Europe the jackpots can be huge – so far a jackpot of £167 million has been the biggest on offer.

The People’s Post Code Lottery

Entry for this lottery is your post code, as well as a unique three digit number. There’s no automatic entry and you have to buy a ticket – when you win, you win with all the players in your post code area. Tickets are £10 per month, which covers 10 draws over four weeks. A monthly jackpot of £2,000,000 is divided up in the winning areas with a maximum per person of £400,000. The odds of winning the People’s Post Code Lottery are closely protected by the brand, which says this is commercially sensitive information. However, experts put this at about one in 162,000.

The Health Lottery

Launched in 2011, the Health Lottery isn’t a national lottery but a partnership between 51 different lotteries that represent a local authority in the UK. Tickets cost just £1 or 50p and a proportion of each ticket sale is donated to local good causes. There was some scandal about this at one point, as just 20p from every £1 made it to these good causes (the National Lottery gives 28p) but the amount has now apparently gone up. You’re seven times more likely to win on the Health Lottery than the National Lottery. However, the prizes are also significantly smaller with winnings capped at £100,000 per draw.

European lotteries

The UK lottery actually has some of the best jackpot odds in Europe but is it worth playing other European lotteries too? Most European lotteries don’t require players to be residents in their country to play and it’s fairly simple to choose the numbers online. Jackpots can be high. Some of the jackpots recorded for European lotteries include SuperEnaLotto (Italy) £125.7 million, EuroJackpot £63.5million, Spanish Lotto £25.9 million and Swedish Lotto £18 million. If you want to venture into the European lotteries then the best odds are the French Lotto (a one in six any prize chance of winning) and Spanish Lotto (a one in ten chance).

A new approach to lotteries

Lottery games and prizes continue to evolve, partly driven by the need to attract more players and partly to offer better prizes. Camelot, the operator of the National Lottery, for example recently decided to introduce a very different prize: £10,000 a month for life. Around ten of the UK’s lump sum winners have blown all their winnings since the game began. This new prize is geared towards avoiding that and also appealing to demographics looking for different things from a lottery prize, perhaps to top up a pension.

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Where to shop for your Christmas & Boxing Day food and drink essentials Mon, 11 Dec 2017 11:34:04 +0000 Alex Hartley According to Good Housekeeping magazine, in 2017, the annual Christmas dinner will cost around 18% more than it did last year. The survey looked at a Christmas dinner for eight people with all the trimmings and found that factors such as inflation and Brexit had pushed the overall cost up from £19.82 to £23.53. Christmas is a very expensive time of year for everyone but no one wants to go without those celebratory essentials. If you want to make sure you have everything you need to celebrate this year – at the best price – where can you find it?

The Christmas dinner

In terms of getting the entire package of Christmas food, the Good Housekeeping survey revealed the best places to shop. This included a whole turkey, potatoes, brussel sprouts, parsnips, carrots, stuffing, cranberry sauce, Christmas pudding, mince pies and brandy butter. The cheapest supermarket for purchasing the entire Christmas dinner is Lidl with a basket that comes in at £25.53 for all the Christmas Day essentials. Second is Aldi at £25.68 and after that Iceland (£28.12), Tesco (£28.48), Asda (£31.17) and the Coop (£33.48). The priciest place to buy your Christmas feast is Waitrose with the same items costing £41.47 (60% more than Lidl).

Higher welfare meat is becoming a priority for many – i.e. turkeys that have been raised seeing some daylight or completely in the wild. These will never be the cheapest turkeys to buy but offer a more ethical option and, many believe, a tastier meat. Only the free range and organic turkey has actually lived the natural turkey life (a free range turkey could still have been almost completely confined). This year it’s not just the expensive retailers offering consumers the option to make a better choice – Morrison’s, Asda and Lidl have free range turkeys from £8 and you can pick up a free range, organic turkey at Ocado or Tesco from £30 – £50.Christmas turkey

The Christmas cake

If you’re not making your own cake this year then there are lots of different options on the high street. For a fully iced, full size Christmas cake Aldi is a popular choice – its £9.99 boozy Christmas cake comes complete with icing snowflakes and glittery baubles. Iceland has a simple, stylish gold and white iced Christmas cake from just £7.50 and Lidl’s luxury two tier cake is £9.99. If you want to impress your guests, the M&S six month matured Christmas cake (£20.00) is a bit of a showstopper.

The Christmas fizz

A bit of celebratory fizz is something of an essential to mark Christmas Day. If you’re pushing the boat out this year but don’t want to pay through the nose for your booze then Lidl has launched its Christmas magnums. These 1.5 litre bottles of real champagne come in at £29.99 – which is half what you’d pay for a regular champagne magnum. If you’re more of a prosecco fan then Lidl also has a 1.5 litre magnum of prosecco for just £12.99.Christmas prosecco & champagne

Alcohol can be the most expensive part of the Christmas shop but this year the supermarkets are going all out on deals to try to attract customers to their stores. There are some great bargains to be had, including:

Waitrose – free champagne with orders over £100

Asda – 6 wines for £25

Tesco – 2 bottles of Tesco Finest for £12

Sainsbury’s – £2.50 off

M&S – 25% off when you buy two bottles

Morrison’s – cases of wine for £25

Iceland – 2 for £3

The Boxing Day ham

The traditional Boxing Day ham is an essential for many – if you’re willing to glaze and roast it yourself then you’ll always find it cheaper. Tesco has great deals on its Woodside farm smoked gammon joints, from around £4 and if you’re happy to roast your own then Asda’s joints start at just £3 – even Lidl can’t beat that price.

The Christmas chocolate

Having a tray, tin or box of chocolate treats to dig into while you’re watching the Christmas film has become something of a tradition. Right now, a 750g tin of classic Quality Street is cheapest at Tesco, Asda and Morrison’s (£4). You’ll pay £5 for the same tin at Waitrose unless you buy two for £8. If your treat of choice is a Terry’s Chocolate orange then you can get this for just £1 at Asda or Morrison’s, which is half the price that you’ll pay elsewhere.

The Christmas spirit

Not the booze but the feeling of time off work with family and friends and lots of delicious food and drink to enjoy – that’s priceless.

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This year’s Christmas spending is set to hit over £800 per family! Fri, 08 Dec 2017 10:26:48 +0000 Alex Hartley The cost of living may be rising, Brexit may be looming but when it comes to Christmas it seems most of us are determined to spend more. While two years ago in 2015, spending by British households on Christmas dropped down to £796, this year it’s set to reach £820. From gifts and food, through to festive travel and alcohol, there is plenty to help you part with your cash during the festive season. But why do Brits spend so much?Christmas shopping & spending

The tradition of festive spending

In the UK we have established something of a tradition when it comes to the annual festive Christmas splurge. 1 in 4 Brits end up spending too much at Christmas and this is a prime time for getting into debt. As a country we spend roughly 54% more than our European neighbours on Christmas festivities and this can result in some pretty depressing credit card statements come January. According to RetailMeNot, UK households expect to spend a whopping £473.83 on Christmas presents alone this year – that’s almost double what our counterparts in France will spend. Much of this amount is generated by expensive kid’s toys and games, as well as stocking fillers. We’re even planning to spend £25 on gifts for our kid’s teachers according to a survey last month.

The cost of Christmas is definitely going up

Part of the reason for an increase in spending could well be attributable to rising consumer costs. If there is one item that sums up a Christmas purchase it might be the Terry’s Chocolate Orange. For most of us, this is an annual edible, whether you get it in your stocking on Christmas day or as a Secret Santa gift. Well, research from The Grocer has found that the humble Chocolate Orange has now doubled in price. Last year at this time it was being sold by Sainsbury’s for just £1. In 2017, the cost is £1.95. Not only that but the Terry’s Chocolate Orange is now also 10% smaller than it was two years ago so you’re paying more and getting less.

Why do we spend so much on Christmas?

Undoubtedly, increased costs are having an impact on what British households assume they will have to spend for a good Christmas 2017. However, are there other reasons why we tend to splurge at this time of year?

Competitive spending – no doubt there is an element of keeping up with the Joneses when it comes to a British Christmas. From kids wanting the best toys to show off to their friends, to neighbours competing for the best lights displays or Christmas parties there are plenty of opportunities to accidentally blow your budget when you’re trying to be the best.

Emotional spending – Christmas is a pretty emotional time of year and this can all get a bit overwhelming when it comes to bypassing normal thrifty logic. You might be seeing people you haven’t laid eyes on in months, or wanting to give a sick relative the best Christmas ever. It’s very easy for emotions to drive spending on items, which, at the time, seem important to have.

Guilt spending – if you’ve had a difficult year and want to make it up to the people you love, or maybe you don’t have much time at home this Christmas, the temptation is often to spend big. From divorced parents to absent children many people are easily affected by guilt, which can result in spending that is somewhat out of control.

How to curb the Christmas splurge this year

If you’re one of the many people affected by changing economic circumstances or dealing with existing debts this really isn’t the time of year to go all out. Even if you’re not, there are some smart ways to avoid blowing the budget this Christmas.

  • Home made gifts – this doesn’t have to be bad knitting. Everything from bath salts to candles can be created at home for half the cost of shop bought.
  • Discounted products – Black Friday and Cyber Monday are over but many stores will start their Christmas sales in the run up to December 25th, which offer plenty of opportunity for discounts.
  • Stick to your budget – create your budget now, before the madness begins, and stick to it.
  • Shop around – you can often find what you’re looking for cheaper elsewhere (especially online) so shopping around really is worth it.
  • Have one gift each – no one needs 10 presents to open on Christmas Day so set a rule that everyone gets just one really good gift each.
  • Do things that don’t cost money – go for a walk, play board games, watch your favourite festive films, just be together.

Get into the spirit – Christmas is about people not stuff so make this the year you focus on what the Christmas spirit is really all about.

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What does the recent Budget mean for UK households? Wed, 06 Dec 2017 11:32:34 +0000 Alex Hartley Two weeks aso saw the Chancellor Philip Hammond’s first budget since the general election in June. This budget was intended to get Britain “fit for the future” and was notably geared towards trying to attract the attention of younger voters. But what did it deliver for UK households in this essential period in the last quarter of the year? How will the Budget affect you?

UK budget 2017Autumn Budget 2017 – the headlines

  • Stamp duty – the Chancellor abolished Stamp Duty for first time buyers up to a limit of £300,000. Properties over this cap – and up to £500,000 – will be Stamp Duty free for the first £300,000.
  • Brexit – the government plans to set aside £3 billion for preparations for exiting the EU.
  • Universal Credit – £1.5 billion will be applied to remove the seven day waiting period.
  • Economic growth – the forecast was revised down from 2% to 1.5%.
  • NHS – the government will put just £2.8 billion into NHS England.
  • The Living Wage – an increase to £7.83 an hour.
  • Duties on wine, spirit and beer have been frozen.
  • Income tax thresholds have been increased.

How will the Autumn Budget 2017 affect UK households?


The temporary Stamp Duty holiday in this budget is particularly aimed at young first time buyers trying to get onto the housing ladder. Stamp Duty has been identified as a major obstacle to increased home ownership in the UK. The average £300,000 property would attract 3% Stamp Duty on the first £250,000 and then 5% above that so the move is significant. Substantial investment is also being made in home building, including £28m on three new housing pilot schemes in the West Midlands, Manchester and Liverpool. For renters there will be £125 million of funding, which should support around 140,000 people on low incomes over the next couple of years.


Income tax thresholds moved upward with this budget, leaving more room until higher tax bands kick in. From April next year the basic rate threshold will be £11,850 and the 40% threshold £46,350. The lowest paid workers will also see a small rise in income as the Living Wage goes up by 33p an hour. In this budget the duty on alcohol has been mostly frozen, with the exception of cider and perry with alcohol content between 6.9%-7.5%, for which a new tax band has been created. Those households planning on travelling abroad next year will see a freeze in air passenger duty – unless going on a premium ticket or private jet, in which case duty is increased.


Brexit uncertainty still remains and the Chancellor had a difficult task this budget to try and reassure the British people that it would be properly dealt with. Formerly just £700 million was set aside to manage the transition out of the EU. In this budget, £3 billion has been earmarked. Of course, while this is a more realistic sum, critics of Brexit have highlighted how much good this cash could have done if applied to other areas, such as the NHS.


As George Osborne did in nearly every budget, Philip Hammond also cancelled the fuel duty rise once again. The duty rise was scheduled to come into play in April next year so the move should save the average driver around £160 a year. There were some fairly cautious measures to encourage consumers away from diesel vehicles and towards more energy efficient, greener cars. For example, £400 million is set aside to establish an infrastructure for charging electric cars and people charging electric cars at work won’t face any taxes. At the same time, diesel cars face a one percentage point increase in company car tax and diesel cars that don’t measure up to standards will also see a rise in tax costs – up one tax band. As part of the campaign to attract younger voters there was also a new rail card for those aged 18 – 30 (the previous upper limit for the rail card was 25). Those with the rail card can get a third off rail fares.

Education and health

Slipping standards in schools has been a major theme for many in previous years. In this budget the focus was on maths – with £40 million earmarked for maths teachers – and technology, with the number of computer science teachers is to be trebled. The Budget also had some incentives factored in to help encourage schools to direct pupils towards certain subjects, including a £600 premium for schools for each student taking A-level maths. The NHS is another controversial topic in almost every Budget. While £2.8 billion might seem like a substantial sum it is just half what was required according to Simon Stevens, the chief executive of NHS England.

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Winner of first Solution Loans Photography Competition announced Tue, 05 Dec 2017 14:05:41 +0000 Amanda Gillam We are very happy to announce that after receiving literally hundreds of entries from all over the world we have a winner of the first Solution Loans photographic competition!

Over a period of 3 months to the end of October we received photo entries via our website and via our social media channels (Facebook, Instagram and Twitter). We used a “popular” voting process to reach a short list of 25 and then our judges reviewed these to decide on a final winner and two runners up.

The theme of the competition was “On a Journey”. Entrants interpreted this theme in dozens of ways and put their own cultural spin on it too given that we had entries from all over Europe and Asia in particular.

Our First Winner

We are proud to announce Jay Birmingham is the winner with a dramatic shot of the Winnats Pass in England’s Peak District.

First winner of the Solution Loans photo competition
Winnats Pass, England

Our Judges said:

We found this image more dramatic the more we looked at it. The early morning fog in the valley is in itself rather eerie. Watching the cars on their journeys descending into the valley only for their red tail lights to be swallowed up by the mist is also disconcerting. The photographer can see what the cars cannot – until the last minute. But they are so far away that even if they wanted to warn them there is nothing they can do.

We admired the overall composition with the red tail lights drawing the eye towards the fog in the valley. The slowly rising sun’s red glow helps to enhance the overall feel of the shot. Great work!


Our Runners Up


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We’d Love to hear your comments about Jay’s photo and those of the runners up. Use the comments section below, or use the Facebook comments section on our main competition results page.

Future Competitions

Given the success of this competition we’ve decided we’ll be running two competitions each year running over an extended period in each case. We want to maximise the reach of our competitions so we’ll be continuing to accept entries via social media routes (esp. Instagram and Twitter) as well as traditional means. This also serves to democratise the competition as entering via your mobile phone becomes extremely easy.

We’ll be announcing our next competition soon so we suggest you bookmark our photo competition page, and check back occasionally to see when it goes live. Good luck!

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Could your favourite soap & sitcom characters really afford to live where they do? Mon, 04 Dec 2017 12:00:11 +0000 Amanda Gillam For many of the UK’s most popular soaps and sitcoms the gentrification of their districts has passed them by. And when watching episodes of the old favourites it’s easy to wonder whether they would now be situated in their original locations given the rapid rise in property prices since those shows ended.

So we thought we’d play a game to see what the reality is.

EastEnders characters short of £700/month!

There’s something implausible in the dark heart of the average EastEnders episode. It’s not the East End hardmen who never swear, the terminally ugly who manage to have affair after affair or even that bench they all go to sit on to have a cry.

It’s that none of them could even afford to live there in the first place!The Queen Vic, EastEnders

An average London market trader earns £1,746 per month, £684 short of the average rent of £2,431 in trendy East London.

The residents of Coronation Street fair little better. Earning an average of £1,326 every month and paying an average rent of £1,043 they’d be left with a mere £283 per month. After food and other essentials they’d barely be able to afford to dampen their sorrows in the Rovers Return, let alone drown them.Rovers Return, Coronation Street

EastEnders Coronation St.
Area East London Salford
Avg. Monthly Salary £ £1746 £1328
Avg. Monthly Rent £ £2431 £1043
Surplus/(Shortfall) (£686) £285

Where could our favourite TV characters afford to live in 2018?

While soap characters might struggle to make ends meet, what about some of our other favourite TV creations?

Del Boy (Only Fools & Horses)

Derek “Del Boy” Trotter famously lived in rough and ready Peckham until finally making his fortune and moving to the country.Del Boy in Peckham

Would a modern-day Derek Trotter be able to afford to live in Peckham? Sadly it seems not.

Character Derek “Del Boy” Trotter#
Type of Property 3 bedroom flat
Geographic Area Peckham
Job Market Trader
Average Rent in area £1747
Average Income £1747
Surplus/(Shortfall) £0
Affordable Rent* £1153
Where he’d be living now 2 bed flat in Crystal Palace

With rent nearly matching his income and without the help of a bad credit loan Del would be forced to live elsewhere, or at least give up Uncle Albert and Rodney and move into a one bedroom flat by himself. If he insists on three bedrooms it would be Crystal Palace rather than hipster Peckham:

Delboy & Rodney - Only Fools & Horses

Given that nowadays he’d be more likely selling his wares on eBay and competing with goods from China, it’s debatable whether he’d even manage that.

Absolutely Fabulous

Ab Fab’s Edina Monsoon lives in a large house in Holland Park, unlike the others on this list who rent Edina has bought her house and owns it outright. Unfortunately though, even in the 90s when the show began this would have set her back £1.5 million which would have been unaffordable even given her well paid job as head of a PR company.

Given her likely wage of around £100k, she’d get about £450k for a mortgage, just enough for a three bedroom flat in Lewisham.

Character Edina Monsoon
Type of Property Very Large House
Geographic Area Holland Park
Job Owner PR Firm
Property Cost £1.5 million
Average Income £100,000
Available Property Price £450,000
Where she’d be living now 3 bed terrace in Lewisham

Still, Lewisham is so now darling!

Patsy will be visiting Lewisham more

Sherlock Holmes

Sherlock Homes wouldn’t fare much better. While he famously resides at 221b Baker Street the reality is that he couldn’t afford it. On a average private detectives salary of £1,865 per month he’d be £1,580 short of the average rent of £3,445 for a three bedroom apartment in Baker Street.

Character Sherlock Holmes
Type of Property 3 bedroom apartment
Geographic Area Baker Street
Job Private Detective
Average Rent in area £3445
Average Income £1865
Surplus/(Shortfall) (£1580)
Affordable Rent* £1231
Where he’d be living now 1 bed apartment in Tooting

To live affordably he’d have to downsize to a one bed in Tooting. Still there’s probably enough crime in Tooting to keep him busy.

Sherlock Holmes - new property in Tooting

Vince & Howard (The Mighty Boosh)

While the location of the Zooniverse is never revealed, Vince and Howard’s flat is, and the pair reside in trendy Dalston. Sadly, as professional musicians they’d be earning around £1,096, doing a couple of gigs per week (we reckon their pay from Naboo is negligible given they never sell anything and cause him no end of problems).

Characters Vince Noir & Howard Moon
Type of Property 2 bedroom flat
Geographic Area Dalston
Job Musicians
Average Rent in area £1950
Average Income £1096
Surplus/(Shortfall) (£854)
Affordable Rent* £723
Where they’d be living now Studio apartment in Camden

While Dalston may be unattainable, a one bed in Camden is just about manageable. But it could be a mighty squeeze for the Mighty Boosh.

Mighty Boosh move to Camden

Alan Partridge

Alan was always a tragic figure, but from being within striking distance of a five-bedroom, mock Tudor house in series 1 by the end he was living in a caravan next to a building site.

But could Alan even have afforded the Travel Tavern? Sadly, it seems not, unless Lynn stumped up for a guarantor loan:

Character Alan Partridge
Type of Property Standard room at The Holiday Inn
Geographic Area Norfolk (just off A47)
Job Local Radio DJ
Average Rent in area £2213
Average Income £1888
Surplus/(Shortfall) (£325)
Affordable Rent* £774
Where he’d be living now YHA (hostel)

We’d love to see the episode where Alan moves into a youth hostel (with or without Chris Eubank). Given his aversion to the Mini Metro though we suspect he’d put up a fight.

Youth Hostel for Alan Partridge

Joey Tribbiani (Friends)

It’s not just UK characters that face the demands of high property process. New York is famous for many things, but cheap rents aren’t one of them.Monica's apartment in Friends

All the characters in Friends (at least at the start if the show) have jobs that make it unlikely they’d be able to afford the (huge) apartments they live in.

Monica inherited hers and apparently has rent controls in place (we’re still not quite convinced she’d be able to afford it). Chandler always did well for himself and had a bit leftover to bankroll Joey from his jobs as an IT procurement manager and later an ad man. But given that even small New York apartments require serious money, even Chandler stretches credibility.

Joey is, by the end, the only one who might plausibly be able to afford his apartment. Joey goes from being poor and leeching off Chandler to being a soap star (with a few hiccups) who, if he wanted too, could probably pay for the all of the friends combined.

Character Joey Tribbiani
Type of Property 2 bed apartment
Geographic Area Greenwich Village
Job Actor
Average Rent in area $1706
Average Income $10,870
Surplus/(Shortfall) $9164

Of course, how long they’d stay friends once they were financially beholden to him is debatable.

Down to Business

While TV characters may be struggling to pay the rent, how are the ones trying to run a business fairing?

We looked at the per year lease costs of business premises for two TV businesses to see if their business models stack up.


Bernard Black

Through a combination of very irregular opening hours, extremely poor customer relations and refusing to order new stock, its hard to imagine Black Books made much money to start with. Once you factor in the annual costs of leasing even a small shop in posh Bloomsbury, its even less plausible that Bernard would make ends meet:

Character Bernard Black
Business Premisis Book Shop
Geographic Area Bloomsbury
Lease they’d pay now £175,000 p.a.

Bear in mind this is just leasing the shop and doesn’t include stock, business rates, running costs or insurance, it seems unlikely Bernard would be making ends meet. This doesn’t even factor in paying Manny or the cost of Bernard’s colossal booze habit.

Given these factors, it looks like Black Books would struggle if it were a real business.


Brian Potter

Brian had a lot of overheads running The Phoenix Club, mainly in the form of pay for his long-suffering staff. Lucky for him though, property prices are a bit more reasonable in Bolton than London so he doesn’t have to sell too many bottles of beer to turn a profit.

Character Brian Potter
Business Premisis Club
Geographic Area Bolton
Lease they’d pay now £125,000


New Phoenix Night club

Again, this is just the lease and doesn’t include business rates, running costs, staff costs or insurance or stock. Given that Brian does manage to get a few customers through the door, he may have a shot at successfully running the business, especially with his trade mark corner cutting.

What if they Bought?

As a final thought, if Del Boy had bought his council house in 1981 (the year the show started and one year after right to buy was introduced) he would have spent around £30,000. He could sell the same now for around £400k, that’s a 1,233% investment growth. Better than the money you’d make from crash turbans, inflatable dolls or chandelier cleaning.

The moral of the story is TV show economics don’t have much in common with real ones. Still, a TV show about Del Boy making well considered property investments over a 30 year period probably wouldn’t have been much fun to watch.


  • * reflects typical 66% of income being spent by London & New York residents on rent; 41% in UK outside of London.
  • # assumes Del Boy is sole breadwinner in the household. Rodney is entirely dependent on him.


  • Property prices & rental value:,,,,,
  • Income data:,,,,
  • Other data:,,,,,

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Brexit Update: At what stage are negotiations? Fri, 01 Dec 2017 11:22:24 +0000 Alex Hartley Brexit remains one of the most difficult topics of conversation in the UK right now. Negotiations concerning the way that the UK will retain its ties with the EU have been very publicly criticised for their slowness and the confusion about what rights will remain and what rights will go. So, what do we know about Brexit so far and what is there left to negotiate?

Brexit – what we know

The one feature of Brexit that is relatively certain is that Britain will depart the EU at 11 p.m. GMT on March 29, 2019. And that’s it – currently that is the only degree of certainty that anyone has about what life will look like in this post-referendum age!Brexit news update

Brexit – the main issues and what we think we know

Outside of the exact date and time that Britain will depart the EU there is still a lot to negotiate. However, although there has been no confirmation about what rights British citizens will have after March 29 2019, some progress is being made.

The “divorce bill.” This is one of the trickiest subjects because, although it doesn’t relate to UK citizens’ rights in Europe, it will have an impact on the national budget and, consequently, the wealth of the UK as a whole. Prime Minister Theresa May has said that the UK will honour the financial commitments that it made while a member of the EU but has gone no further. No agreement has yet been reached on exactly how much Britain should be paying to leave the EU – estimated sums come in anywhere from £20 billion to £100 billion!

British citizens abroad. There are roughly 1.2 million Britons who have made their home somewhere in the EU outside of the UK and one of the key questions for the negotiations has been what rights they will have post-Brexit. Although nothing has been confirmed the two sides are said to be within “touching distance” of a deal. Given that this is one of the first issues to potentially be resolved many experts are speculating that this is a sign that the rights of Brits abroad won’t be affected.

EU citizens in the UK. Britain is home to around 3 million EU nationals and their rights after Brexit are another point of contention. Although, initially, there were fears that large numbers would be asked to leave, the UK government has very recently sought to comfort EU citizens based in the EU who are fearful about their ongoing status. It has said it is looking to create a straightforward and low cost way for EU nationals to apply for settled status in the UK, including how to appeal if an application is unsuccessful.

Northern Ireland. Effectively, the border between Ireland and Northern Ireland will also become a border between the UK and the EU and this is becoming an increasingly contentious issue. Practically zero progress has so far been made in negotiating how this should be handled.

What will life be like post-Brexit?

Right now, all anyone can do is speculate on what life will be like in post-Brexit Britain in key areas such as these:

The right to work in the EU – restricting the right of EU nationals to work in the UK was a central plank in the Leave campaign’s rhetoric but what will also disappear as a result of the vote is the right of Britons to work freely in the EU. The issue of free movement of people within the EU is tightly tied to trade. It’s likely that the UK will be forced to continue to allow EU immigration to keep trade links open. The up side of that is that it may not be as difficult as anticipated for Brits to live and work in the EU after all.

The influence of EU bureaucracy – again, getting rid of the influence of EU bureaucracy on British daily life was seen as a major selling point for Leave campaigners. Of course, that bureaucracy has brought us the right to compensation for delayed flights, the power to crack down on big corporate tax avoiders, an end to mobile roaming charges, reduced VAT on energy bills, climate change targets, better banking regulation and limits on working hours. Some feel we’ll actually be left with less protection, rather than less red tape, as a result but as yet no one really knows which of these will stay and which will go.

Retiring to Europe – although nothing has yet been confirmed, many fear that retiring to Europe after the UK leaves the EU will no longer be possible. In fact, financial firm Blevins Franks – which offers advice to retirees locating to Europe – said it has seen an uptick of 20 – 25% in people looking to do this before 2019.

Previous Reports on Brexit Developments

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Your consumer rights if your airline lets you down Wed, 29 Nov 2017 10:40:33 +0000 Alex Hartley Booking flights seems to get easier and cheaper as the years go by. However, recently, it’s also become a bit of a risky business with the likes of Monarch ceasing to trade and Ryanair cancelling multiple flights. So, what happens if you find yourself caught up in airline drama, whether that’s a delayed flight or something more serious?compensation for cancelled flight

Compensation for a delayed flight

The right to compensation comes via an EU regulation (Regulation 261/2004) so you’re only entitled to it if you’re departing from an EU airport on any airline, or arriving at an EU airport on an EU carrier (including Iceland, Norway and Switzerland). You’re entitled to compensation if your flight was delayed by more than three hours. If your flight gets cancelled and you take an alternative flight then the right to compensation arises if the second flight was two hours later than either your original arrival time or the original flight. There are specific amounts of compensation available under the regulation:

Delays of 3+ hours for a short flight – €250 (£230)

Delays of 3+ hours for a long flight (1,500 – 3,500km) €400 (£365)

Delays of 3-4 hours for a flight of 3,500km+ – €300 (£275)

Delays of 4+ hours for a flight of 3,500km+ – €600 (£550)

How can you get compensation?

Ultimately, it’s up to the airline – at least at first – and airlines have many ways of avoiding paying out under the regulations. There is an exception, for example, for “extraordinary circumstance,” which will mean that the airline doesn’t have to pay a penny. This will cover extreme situations like war or civil unrest but could also ensure you don’t get compensation as a result of bad weather, strikes or something as basic as an airport’s failure to de-ice the aircraft on time. Technical faults tend to be the airline’s responsibility and so you’re much more likely to get compensation if that’s the basis for your claim. You can claim compensation for any flights over the past six years.

Can you challenge “extraordinary circumstance”

Yes, you can always challenge decisions made about your rights as a consumer. Obviously, airlines are not keen to pay compensation where they don’t have to so it’s often worth challenging a decision that you think has been wrongly made in case it’s a stalling tactic. Whether you’re successful will depend on the airline and how much time and energy you have to pursue them. Ultimately, if the airline still refuses you compensation you believe you were entitled to then you would need to go to court.

Compensation for connecting flights?

If you miss an ongoing flight as a result of delays to an initial leg of your journey then you should be able to claim compensation if everything is under the same booking reference. You’ll also need to have made the connection at an EU airport.

Flights cancelled by the airline

It’s usually possible to get a refund and potentially compensation when your flights are cancelled by an airline. If you had flights booked with Ryanair, for example, and they were cancelled by the airline then you should have the right to a refund. Ryanair has confirmed that all those who were affected by its recent problems have the right either to change their flight for another or to get a full refund. And it’s not an empty promise for some point in the future, as the airline also said that where a refund was requested this would be processed “within 7 days.” Compensation for these cancelled flights would be on the basis of the EU regulation mentioned above. However, there is a caveat – if the flights were cancelled and the airline notified passengers two weeks before departure then there is no right to compensation.ryan air cancellations

How to protect yourself from losing money with airlines

  1. Buy your flights on a credit card – under the Consumer Credit Act your credit card provider shares responsibility with the seller if there’s a problem with something you’ve purchased. The minimum amount covered is £100. If the airline goes bust or a travel company goes under and you lose your flights or holiday then you can make a claim for them from the credit card company.
  2. Take out insurance – most insurers don’t offer much compensation for delayed flights but it’s possible to take out a policy to cover you for the failure of an airline.
  3. Look for the Atol protection scheme mark – if you buy a package holiday or a seat-only ticket on a charter flight then the Atol protection scheme is one way to arrange a refund. Under the scheme you can also get repatriated if you’re stranded abroad as a result of issues with the airline or travel operator.


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Winners of Summer 2017 Writing Competition Announced Tue, 28 Nov 2017 15:10:18 +0000 Amanda Gillam Our first short story writing competition was such a great success that we decided to run another this summer. This has exceeded our expectations. We doubled the number of entries received while the quality of the entries stayed very high.short story writing competition winner

The competition closed at the end of September and after a much deliberation we can now announce the winners of our Summer 2017 competition. The winner and the three runners up all won cash prizes and have their short stories published on our website (read their stories and tell us what you think of them in the comments below).

The winning story “The Eternal Coin” was a striking piece moving the reader through 2000 years of British history in just 2000 words! It won the writer David Stokes £200. As our judges noted:

We really liked David’s response to our theme. We’ve probably all looked at items in museums at some point and wondered how they arrived there. In his story, David takes us on an epic journey describing  this. The writing is packed with beautiful, evocative description and credible historical references. It’s a rollercoaster of a read, spanning many centuries and it left us feeling rather humbled by our own, comparatively short, human existence.


We’d like to thank everyone who took time to prepare their entries and we hope that you’ll enter future competitions.

Our next short story writing competition

We expect to launch our winter competition at the start of January 2018 and it will run until the end of March. Watch this page to find out the theme of the upcoming competition.

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New “Money Matters” Podcast launched! Mon, 27 Nov 2017 11:25:39 +0000 Amanda Gillam We’re big advocates or people improving their knowledge of financial matters. And the typical level of knowledge is very poor. We’ve blogged about this issue before – see the related stories below – but the reality is that most people are ill-prepared for most of life’s major financial habits

Credit has become so readily available in the last few decades that we hardly give it a second thought. But given that the average indebtedness is around £10,000 per head, that millions of Brits have little if any savings, and millions more have a bad credit rating or serious debt problems there is clearly a need for some light to be shed on the realities of credit.

In an attempt to contribute to improving people’s knowledge we’ve launched a new podcast that we’re calling “Money Matters” – and yes this does have at least two meanings. You can find our new personal finance podcast here, or access immediately from the podcast player below. You can also find it on iTunes (search “Solution Loans” or visit here) where you can download to keep on your phone for when you need it!

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UK banks are planning a consumer credit squeeze Fri, 24 Nov 2017 11:51:00 +0000 Alex Hartley The Bank of England has revealed that banks in the UK are planning a credit squeeze on UK consumers. The squeeze is likely to be the biggest since the recession happened in 2008. It comes on the back of the recent rise in interest rates, which is making those with mortgages, credit cards, personal loans and other unsecured credit very nervous indeed. So, what is actually happening in the UK credit market and should we be worried?banks squeezing consumer credit

According to The Money Charity the average debt per household in the UK (including mortgages) is currently £57,490. 35% of UK households have no savings whatsoever and a large proportion of people are walking a fine line between getting by and struggling. Credit has become a key part of life for many, which is why the idea that it could become less available and more expensive is making a lot of people very nervous.

How did we get to this point?

In 2009, the Bank of England cut interest rates to 0.5%, the first time in the Bank’s existence that the rate had dropped below 2%. The intention behind the rate cut was to try to avoid the recession that the country had entered from becoming another Great Depression. The low rates were designed to discourage saving and enable people to borrow – at the time poor wage growth and high inflation, combined with austerity meant borrowing was a very attractive option. Incentives were provided for lenders to offer loans and mortgages. So, we borrowed instead of saving. And for a while house prices rose and there was enough disposable income around to make it feel like there was some kind of recovery in progress. However, despite positive house prices and lower unemployment, the reality has always been that debt levels have been rising to an increasingly difficult level. At the same time, fewer people have money set aside for a rainy day. And then came Brexit – the drop in the value of the pound, higher prices and a lot of financial uncertainty has left economic prospects bleak.

Why are banks planning the credit squeeze?

Essentially, over the past eight years debt levels have been rising for the reasons already described. Now, there are warnings that the UK’s debt mountain has risen to “dangerous levels.” For lenders that’s a difficult position – a combination of a sharp rise in interest rates alongside an increase in unemployment would leave lenders with abandoned debts that could not be serviced. In September, the Bank of England warned that circumstances such as this could leave banks with £30 billion in losses on credit cards, personal loans and car finance. Now that the Bank of England has already taken the first step and increased interest rates – albeit only by 0.25% – lenders are even more nervous.

What does a credit squeeze mean for UK consumers?

Many UK banks will be looking to clamp down on the supply of unsecured credit. That means credit criteria will become much tighter and UK consumers could find it far more difficult to borrow. In the third quarter of 2017, lenders were already making it more difficult for borrowers to take out new credit cards, overdrafts and personal loans. This resulted in a higher number of rejected and refused applications for a larger number of people. Credit is also likely to become more expensive as a result of the credit squeeze and could be more costly to borrow, depending on where the loan is coming from.

Is the situation likely to change?

Not in the near future. Lenders in the UK remain nervous and this isn’t helped by the fact that lenders taking part in the Bank of England survey also reported higher levels of credit card defaults in the last quarter of the year. Not only that but there was also a “significant” rise in defaults on other unsecured lending types, such as personal loans.

What are the options for UK consumers?

If borrowing is going to become increasingly difficult for anyone but the most attractive candidates then it’s going to be key for consumers to try to be as appealing as possible as a borrower. Improving credit scores, reducing existing debt and cutting down on unnecessary spending will all have a part to play in that. It may also be necessary to broaden the search for better credit. If high street banks are going to become less willing to lend then a range of other options might need to be explored. Lending such as secured loans – loans secured on the home – or guarantor loans, where another person stands as a guarantor for the loan repayments, are likely to be much more popular, both with lenders looking for more security and for those looking to borrow.

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How will the proposed energy price cap work? Wed, 22 Nov 2017 11:31:55 +0000 Alex Hartley Energy prices are a touchy subject for many of us. British Gas, for example, announced in August that it was increasing its prices by 12.5% from this autumn. For typical households on a dual fuel tariff that’s an increase of around £75 a year. It seems that there is a never-ending stream of bad news about energy prices with the big six following in each other’s footsteps and repeatedly giving consumers bigger bills to swallow. So, when it was announced that the government was considering an energy price cap, there were sighs of relief right across the country. But what does the new energy price cap actually mean for British consumers and are you likely to benefit?energy price cap

What is the energy price cap?

It will mean that around 18 million people in the UK will see their bills reduced by roughly £120 a year. Those who are affected are consumers who have not ever switched i.e. the most loyal customers. It’s these people who have been with a supplier so long that they have ended up on the expensive default tariffs (standard variable tariffs) where energy suppliers make most of their money. Thanks to the new energy price cap large numbers of people on these deals can look forward to seeing their energy prices drop.

When is the energy price cap likely to take effect?

The full details of the price cap are still somewhat up in the air so it’s unlikely that consumers are going to feel its effects immediately. In fact, the cap will not make any impact at all this winter. Unfortunately, for those who are affected by those significantly higher costs, the price cap is likely to take at least a year to have any impact.

What does the draft legislation say?

The draft bill concerning the price cap was published in October and states that the price cap will take effect until 2020 and will be designed to try and reduce the bills of average consumers. Those average consumers will be anyone who is on the standard variable tariff. If necessary it could continue until 2023.

Why are people worried about the price cap?

There has been some speculation that the introduction of the price cap will mean the end of cheaper deals for those who are savvy enough to switch. So, the implication is that the big six energy companies rely on those who forget to switch and pay more for their energy to fund the deals to attract new customers. On the basis of that thinking, if the price cap has the impact of reducing the profits energy companies make from those customers then other customers could lose out as a result.

What about the incentive to switch?

A potential consequence of a leveling out of energy prices could be a drop in competition in the energy market. There could no longer be an incentive for consumers to switch to other suppliers and the expansion of market players that we have seen in recent times could stall. There could also be a reduction in the number of different energy options on offer. Given that a larger number of smaller energy providers have entered the market on the basis of being able to offer better deals, the worry is that this diversification simply won’t continue.

What do the energy companies have to say about it?

Few are pleased with the prospect of the price cap but not many have made any public comment about it. That is apart from SSE, formerly known as Scottish and Southern Energy. SSE is Britain’s second largest energy supplier and it was revealed this month that it is considering leaving the UK market now that the price cap is back on the table. SSE supplies gas and electricity to around eight million UK homes so it’s a fairly significant move for the company to make. According to an investment banker who spoke with executives at the business and was quoted in the Telegraph, “at this stage the business is more trouble than it’s worth.”

So, what happens now?

The government has made it clear that capping energy prices is going to happen and has given energy companies an incentive to do something about the “broken” UK energy market. Whether this will cause bills to rise in the longer term as energy companies look to make up for that loss in profits depends on the response to the draft legislation.

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Why a bad credit rating could damage your personal relationships Mon, 20 Nov 2017 10:56:24 +0000 Alex Hartley According to a 2016 NerdWallet survey, almost 50% of people said that they wouldn’t date someone with bad credit. And the better educated the demographic, the more that figure increased. We live in an age of app dating when decisions about potential appeal are apparently based very much on looks. Eligibility comes into play in terms of personality and hobbies but there isn’t that big a focus on financial compatibility. Whether it’s a reluctance to mention money at an early stage because it feels like it’s “bad taste” – or something else – the way that we date today ignores this huge elephant in the room. But, as the NerdWallet survey shows, it’s crucially important to many people.personal relationships and personal finances

Does money matter?

NerdWallet’s survey was carried out last Valentines Day and provided some crucial insights into where money and credit intersect with love and romance. 60% of women, for example, said that a partner’s financial situation was important to them, as compared to 45% of men. Given that there’s a pretty significant wage gap between the sexes – and women are more likely to stay at home with children – that’s perhaps not that surprising. What is surprising is that, across both the sexes, a bad credit rating is a big turn off. Even at an early stage in a relationship. 48% of people said that they wouldn’t date someone with bad credit. So, if your credit score is currently pretty puny then it could be far more damaging than bad hair or uninspiring chat.

Millennials are even more focused on finances

For younger generations, the financial viability of a partner has an even bigger impact on whether they are an appealing prospect romantically. For example, overall, 35% of men said that a partner’s financial situation was more important than physical attractiveness. However, among Millennial men this figure significantly increased and 54% said that it was more important to them to date someone who was financially secure than physically stunning!

How your finances could damage your dating life

It’s unlikely that you’re going to be questioned about your credit score on a first date – or even before the date has been arranged. However, even if you’re using app dating you might find that any information you supply in your profile that could give a clue to your financial situation could be having an impact. So, for example, someone with a job like a lawyer or a real estate agent could well be more attractive to a potential date than a student. On the date too there is plenty of potential for finances to have a negative impact on the experience for the other person. For example, 46% of people wouldn’t go for a second date with someone whose credit card had been declined on a first date.

Money impacts all our relationships

If you’re having money issues then you’ll often find that this has an impact across all of your relationships, including the romantic ones. According to figures from the Pew Research Center 38% of married adults often or sometimes fought over money problems. Plus, there is evidence that couples who fight over money problems at an early stage in the relationship end up with a higher chance of getting divorced further down the line.

So, how can you tell if someone is financially compatible?

No one is going to start entering their credit score or annual salary on apps like Tinder or Bumble. And would they be truthful about it even if they did? So, there are some subtler ways to find out whether someone is your financial match:

  • Do they have student debt?
  • Are they still paying off student debt?
  • What is their general attitude to debt – averse or fine with it?
  • Do they talk about having a budget for the date or needing to stay within their weekly budget?
  • Is there talk about saving for something like a holiday?
  • Do they order the most expensive dish on the menu?
  • Do they talk about spending a lot on their outfit?
  • Do they own a property?

Of course, at some point, when a relationship gets serious, a frank and open discussion about finances, credit scores, income and debt levels is crucial. Up until that point it’s difficult to insist on openness. But there are other ways to introduce the topic subtly – for example, you could also use our Money Matters Playlist as the soundtrack to your next date. Tracks such as “Money, Money, Money” by ABBA or “The Fear” by Lily Allen could be the opener for an honest – but light-hearted – conversation about finances and financial attitudes to see where the compatibility lies.

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Signs that the UK economy is beginning to falter Fri, 17 Nov 2017 11:15:12 +0000 Alex Hartley The economy is both a total mystery and a source of great concern for many of us. And in the last couple of the months of this year there have been some worrying signs that things might not be all that positive in terms of UK economic prospects. With growth rates hovering around 0.3% and 0.4% for the last three quarters – pretty sluggish, for those who aren’t that familiar with what growth rates should be – speculation is rife that the economy is definitely not doing as well as it could be. So what signs are there that the economy is struggling and what could be behind it?sluggish UK economy

The Signs of Economic Trouble Ahead

Brexit – in early November, Mark Carney Governor of the Bank of England told the media that the UK economy would be booming right now if it wasn’t for the fact that Brexit had happened. The blame is being squarely placed on the slow negotiations, which have created enormous uncertainty among those with the cash to start stimulating the UK economy again.

The increase in inflation – in autumn this year inflation in the UK hit its highest level for around five years. This means that the cost of living has shot up for many Britons, from food prices through to holiday costs and electronics. When inflation increases things cost more and there is less cash available to spend, which means that consumers don’t add as much to the economy as previously. The Office for National Statistics has said that higher electricity and food prices have contributed significantly to the increase in inflation.

Slowdown in house price growth – at the end of the summer, the Halifax – Britain’s biggest mortgage lender – said that annual house price growth in the UK had slowed to the lowest rate in four years. In fact, in June a drop of 0.9% was recorded. Although this will be good news for many, especially those looking to get on the housing ladder for the first time, it does mean that there is much less cash moving around in the UK economy, leading to more whispers about fatal stagnation.

The increase in interest rates – in November 2017 the Bank of England raised the base rate for the first time in almost a decade. This is a clear sign that there are fears for the UK economy and that it needs a little help. The main motivation for increasing interest rates was given as the rise in inflation. The 0.25% rate rise is intended to try to reduce inflation (currently at 3%) back down to the 2% target level.

Lack of enthusiasm in big ticket items – when people stop making more expensive purchases it’s often a clear sign that there isn’t much spare cash around. It also indicates that lenders are less willing to offer credit or that consumers don’t have enough confidence to take risks on bigger purchases in the current economic environment. Big ticket items like cars and furniture are often the first to be abandoned by consumers. A prime example of this happening comes from furniture retailer DFS, which recently announced a 22% drop in annual profits as consumers start to cut back. And after five years of continuous growth the UK car market is in decline – and down 9% in September versus the previous year.

The big income squeeze – UK wages have not kept up with inflation. Even for the non-mathematically minded that’s an equation that’s just asking for trouble. If the cost of goods goes up by more than wages do then at some point households are going to start to struggle. This has left many UK households at what economists have described as “breaking point.” When this lack of wage growth is combined with the unusually high levels of inflation serious worries for the UK economy begin to surface. Life could simply become unaffordable for many people in the near future and the knock on effect that will have on the economy could be significant.

Brexit (again) – recent Organisation for Economic Cooperation and Development (OECD) reports were damning of the impact of Brexit on the UK economy. If we end up with a “no deal” scenario, the OECD estimated that Brexit could slice a significant £40 billion off the UK’s GDP growth by the end of 2019. The slump in the pound, super high inflation, very poor wage growth and a slow in GDP growth are all independent factors affecting the UK economy but most financial experts agree that they have all been significantly exacerbated by the decision to leave the EU.

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All you need to know about Universal Credit and how it works Wed, 15 Nov 2017 12:20:20 +0000 Alex Hartley Universal Credit is a new kind of benefit being introduced by the UK government. It aims are to simplify the current benefits and tax-credit arrangements. But it is clear that Universal Credit is not exactly universally loved. Prime Minister Theresa May has been warned that Universal Credit “could be her Poll Tax” – i.e. as controversial and damaging as that levy was for Margaret Thatcher. So, what does it involve and why is it causing so many problems?universal credit replaces numerous government benefits schemes

What is Universal Credit?

Universal Credit is a new means-tested benefit that applies to those who are of working age and on a low income. It is designed to replace a number of existing benefits, including:

  • Child Tax Credit
  • Working Tax Credit
  • Housing Benefit
  • Income Support
  • Income-related Employment and Support Allowance
  • Income-based Jobseeker’s Allowance.

The intention behind Universal Credit is to create a single umbrella for all these existing benefits, to simplify the current system and to encourage people back in to work. The new benefit applies across England, Scotland and Wales and is currently being phased in. It has a number of key features, including being delivered as a single monthly payment that is determined based on what the government believes someone is lacking financially.

Are there any benefits that Universal Credit won’t replace?

Yes, a number of benefits will remain alongside Universal Credit. These include:

  • Attendance Allowance
  • Basic State Pension
  • Carer’s Allowance
  • Child Benefit
  • Disability Living Allowance
  • Industrial Injuries Benefits
  • Local Council Tax support schemes
  • Local Welfare Provision
  • New State Pension
  • Pension Credit
  • Personal Independence Payment

How is Universal Credit entitlement worked out?

It’s a means-tested benefit so entitlement is based on an individual’s financial situation. It is essentially a balancing act between the financial resources an individual has and what the government says a person needs in order to live.

What’s the problem with its implementation?

There has been significant delay in introducing the system of Universal Credit, which has caused cross party condemnation in Parliament given the huge impact the change is having on the lives of many. Plus, as Universal Credit has begun its roll out it has emerged that many disabled people and their families will be a lot worse off under the new system. Annual losses to benefits could be anywhere from £1,000 – £2,000 or more, triggering extreme circumstances for many, such as not being able to buy food.

Why are disabled people so badly affected?

The main issue is the removal of disability premiums, such as the Severe Disability Premium (SDP). These premiums have been a lifeline for many people and their removal financially could result in a huge loss.

What is the Government doing?

The government has said that personal independence payments, (Pip) and social care from local councils will make up for what was previously provided by resources such as the SDP. However, investigation by the press has found that actually there is no obligation on local authorities to provide support to those who have lost the SDP. Large numbers of people who have already been transferred on to Universal Credit ahead of time – as a result of moving home, for example – also now find themselves without the Transitional Protection that was initially promised.

Transitional Protection

The government intends to provide protection for those who are transitioning to Universal Credit via “Transitional Protection.” This will top up the Universal Credit amount so that, in theory, no one should be worse off as a result of making the move to the new benefit. This will only apply to people who have not made a new benefit claim but are being transitioned over to Universal Credit from a former benefit. However, it is not scheduled to be available until July 2019 even though many claimants are already being moved across to Universal Credit and losing out as a result.

What about the “health and work conversation”

The “health and work conversation” is a new requirement that comes in alongside Universal Credit and requires a mandatory meeting between a disabled claimant and the local job centre. The claimant will be required to provide information on what kind of work they could undertake. If these meetings aren’t attended then benefits are sanctioned as a result. The main issue that many charities highlight with this kind of arrangement is that someone who is claiming disability benefits is doing so for a reason i.e. they may not be able to get to a meeting such as this. That could result in nightmarish circumstances for many – get to the meeting, no matter what the mental, physical or financial cost, or lose your income.

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What the recent FCA Financial Lives survey tells us about the UK population Mon, 13 Nov 2017 12:26:32 +0000 Alex Hartley The FCA Financial Lives survey is one of the largest surveys looking at consumers and finance. It investigates UK consumers and their experiences of financial products and services, based on interviews with 13,000 people. The survey is designed to provide data and context for the work that the FCA does in consumer protection. However, it also offers some key insights into how UK consumers are handling their finances.survey of UK consumers' financial lives

Consumers’ financial vulnerability is high

According to the survey, 25.6 million people in the UK are potentially vulnerable to financial harm. So, for example they may not have access to the internet or to safety nets such as an overdraft. The most at risk age group is the over 85s – 77% of whom show vulnerability to financial harm. Those who are vulnerable to potential harm are twice as likely to have used high cost short term credit and many would struggle if their monthly obligations increased just a little. For example, 45% said they would find it difficult to pay rent if payments went up by less than £100 a month. 4.1 million people in the UK are already “in difficulty” i.e. they have already started missing payments on bills or credit commitments.

Confidence about money matters is low

It may not be that surprising to discover that 46% of UK adults say they have low knowledge about financial matters. 18 – 24 year olds tend to be the least confident when it comes to money matters. However, the problem seems to be quite widespread – for example 17 million people in the UK who have motor insurance don’t know what “no claims protection” means. The survey showed that there is a tendency to stick with already known brands and that this increases with consumer age. So, for example, on average 62% of people will stick with a brand they already know but in the over 75s this rises to 82%.

Many of us aren’t satisfied with our financial circumstances

However, this changes as we get older. Dissatisfaction is particularly notable in the 18 – 24 age group where 60% are not satisfied with their financial circumstances. That’s compared to just 21% of over 75s who aren’t satisfied with their current financial situation.

Debt levels are rising

The Financial Lives survey backs up data provided by many other sources that levels of debt in the UK are rising. For example, 75% of UK adults have had one or more consumer credit product in the last 12 months and 46% of UK adults are currently paying for credit. 12.9 million adults are overdrawn while 3.1 million adults have gone into an unauthorised overdraft over the past 12 months. Roughly 100,000 people have resorted to an illegal moneylender in order to make ends meet in the past 12 months. Although the survey didn’t mention zero hours contracts and the gig economy, this is one of the potential factors in increased debt reliance highlighted by debt charity Step Change. When there are enough monthly hours to cover outgoing payments then everything is fine. As soon as that changes – which it can at any time – many people have no other choice but to look for debt support.

There are serious issues for young people

According to the FCA survey, around 13% of those aged 25 – 34 are currently in financial difficulty, having missed bill payments or credit payments in the last three to six months. This is something that is echoed by the FCA Chief Andrew Bailey who has said that there is a pronounced build up of indebtedness among young people. He made the point that this is not reckless borrowing but money that is being used to cover essential living costs. The debt charity Step Change has also noticed an upward spike in the numbers of calls being received from young people.  In the first six months of the year, six out of 10 callers were under the age of 40 and four out of 10 were single and had no children. Katie Morley, Consumer Affairs Editor at the Telegraph, points to a “cocktail of different problems,” saying that young people are often just a single step away from financial disaster thanks to factors such as easy credit, poor quality housing and benefit cuts.

The FCA Financial Lives survey is an interesting snapshot of the way that we are living, financially, as a country. From the large numbers of financially vulnerable, through to the serious problems that younger people face, there is a lot of food for thought in the data generated.

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How telematic black box insurance for young drivers works Fri, 10 Nov 2017 12:57:03 +0000 Alex Hartley Younger drivers have always faced challenges when it comes to getting insurance. Statistically the most likely to have an accident, younger drivers are usually considered one of the highest risk groups by insurance companies. As a result, those who are new to the roads are often faced with enormously high premiums. So, when black box insurance – also known as telematics – was introduced to help younger drivers reduce costs it seemed like the perfect solution.Youg driver black box car insurance

What is black box insurance?

750,000+ vehicles in the UK now have black box devices. When you sign up for this type of insurance, a small ‘black box’ is fitted to your car, which records various features of your driving. It will look at factors such as speed, distance travelled and when you’re on the road. It is also able to measure factors such as breaking time and cornering. To this, an insurer’s individual algorithm is applied, which weighs up all the data delivered by the black box and scores based on quality of driving. Depending on those scores, the driver may or may not get money back at a later date to reduce the monthly premium. This type of insurance is offered by a wide variety of different insurers, from Direct Line, through to the Co-op, Admiral & Hastings Direct and less well-known names such as Think Insurance. Black box insurance doesn’t necessarily cut insurance costs from day one but it does offer the opportunity to get some cash back for driving well. So, what’s the issue?

Problems experienced by drivers

There are numerous stories from young drivers who have struggled to work out how to drive better. Many have noticed that their driving scores are enormously erratic from one month to the next, sometimes creating positive savings and sometimes none at all. According to industry experts there are two major problems with black box insurance: the lack of transparency over algorithms and the quality of the black boxes themselves.

The telematic black box

There is no industry standard for the black box and they are not all made the same. All rely on GPS data but different boxes respond in different ways to different events occurring. So, for example, if a car goes into an underground car park, an “honest” black box will report back that it has lost the vehicle. A “dishonest” black box won’t do that but instead will provide a false position or say that the vehicle is currently wherever it was last recorded by the GPS. There’s no way for consumers to know whether the black box they have is “honest” or not.

The algorithm that scores your driving

The algorithms that score the data that comes in from black boxes are a closely guarded secret by insurance companies. Each company has developed its own algorithm and there is no transparency about what that algorithm is really looking for. So, for example, one may be measuring you against the legal speed limit while another may be using its own “safe” speed limit as a benchmark. Insurers can also change their algorithms at any time – and often do – without telling consumers which can increase the erratic nature of scoring. There is no one industry standard algorithm, which is problematic. In tests of two different insurers’ black box insurance apps – in the same car at the same time – the two came up with totally different results. One focused on a higher speed while the other wasn’t concerned at all with the speed but marked down for cornering.

What does the industry say?

Road safety charity IAM Roadsmart says that “safety is safety” and there should be a single industry standard on what constitutes safe driving. That would remove the confusion and lack of transparency that can arise from insurers looking for different things in order for drivers to score highly. However, insurers make a different point. Carrot insurance, for example, told Radio 4 that there was obviously a need to be more transparent and clear with customers. However, the insurer also said that algorithms are confidential and market sensitive, which doesn’t indicate any desire for transparency any time soon.

What can you do if you have black box insurance – or want to get it?

Anyone with erratic scores should challenge those with the insurer as these can often be corrected if they aren’t accurate. If you’re considering black box insurance then try out the different options before you buy and find the one you’re most comfortable with. It’s also always worth shopping around for young drivers’ insurance – black box insurance may not always be the cheapest choice.

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How being nudged will help you manage your money better Wed, 08 Nov 2017 12:14:52 +0000 Alex Hartley American economist Richard Thaler was awarded the Nobel Prize in economics this year. His work in behavioural economics – in particular, developing “Nudge Theory” – has put him firmly on the map as a problem solver. It has also opened up the idea that behavioural economics might have more of a role to play in helping all of us to do better when it comes to managing our money.get nudged to manage money better

What is Nudge Theory?

It’s basically the idea that we can be given a “nudge” in the right direction when it comes to our finances. Instead of penalising people who aren’t doing well financially, subtle policy shifts help to create change at the other end of the scale. A good recent example is pensions auto-enrolment, which was introduced in the UK in response to the fact that retirement savings rates among UK citizens were far too low. Under auto-enrolment workers are now automatically placed into a pension scheme and must actively opt out if they don’t want to remain in it. The statistics indicate that it has worked too – private pension scheme membership jumped from 2.7 million to 7.7 million in 2016.

Why does Nudge Theory work?

It makes it easier for people to make a specific decision – perhaps, the “right” decision. So, for example, in the case of auto-enrolment, introducing this new automatic step made it far easier for people to enrol in a pension scheme. It gave people a way to overcome an obstacle – the fear that it is too complicated to get set up with a private pension scheme – by making this happen automatically. Nudge Theory has also been used in other contexts too, such as organ donation. Automatic opt-ins for organ donation work on the assumption that most people do actually want to donate their organs when they die but just don’t actually get around to registering. The opt-in means that this is done automatically so people are nudged in the right direction with the minimum of effort.

What are the criticisms of Nudge Theory?

Mainly that it is intrusive and paternalistic. There have also been some who have said that this kind of overbearing influence could have some impact on civil rights. However, both the US and UK governments now have their own teams working on ways in which this kind of behavioural economics could be factored in to policy making to generate better results.

How can Nudge Theory help with savings?

Saving is something that many of us often put off until “the future.” Although 42% of UK adults said that they would save more after a pay rise, the reality is that few of us get around to doing it. Products and schemes developed along the lines of Nudge Theory can help us to start taking steps in the right direction. They can enable us to take advantage of that small window of opportunity in which there is enough money around to make change – such as just after we have been given a pay rise.  For example, the same Nobel winning economist Richard Thaler has developed Save More Tomorrow (SMarT). SMarT is a scheme that encourages people to commit a fixed percentage of any future pay rise to savings – before that pay rise has actually happened. Over the course of four pay rises, the first implementation of SMarT found that the average saving rates of those who took part increased from 3.5% to 13.6% over a period of 40 months.

Incorporating emotion into financial behaviours

All too often, traditional financial thinking just doesn’t taking emotions into account when it comes to looking at financial behaviours. However, the reality is that they have a big role to play in the way we handle our money and how successful we are at something like saving. Richard Thaler’s theory fully incorporates emotions. His economic analysis goes much further by also looking at factors such as limited rationality, perceptions about fairness and lack of self-control. In doing so, he has been able to change the way that we approach making improvements to our financial lives.

Is Nudge Theory the way forward?

Right now, behavioural economics like this look to be one of the simplest and most effective ways to help change bad financial habits that many of us have got ourselves into. It has already had an impact on the broader political stage and the chances are that we could start seeing a lot more products that incorporate this kind of thinking and make it easier for consumers to make the right decisions.

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New ways to sell your house – you don’t have to use an estate agent! Mon, 06 Nov 2017 11:40:45 +0000 Alex Hartley Estate agents don’t exactly have the best of reputations. But beyond the flashy cars, the pushy attitudes and the jargon there’s probably one thing that many people find more upsetting about working with an agent than anything else: the cost. Fees and commissions can leave a serious dent in your budget. Most agents charge a percentage of the total sale price, which can be between 0.75% and 3.0%+VAT. On a £300,000 property that could be as much as £9,000 + VAT. However, times are changing and the traditional estate agent now has a lot more competition. So, if you want to sell your house but reduce the fees that you pay what are your options?Ways to sell your house

Use a traditional estate agent as your point of comparison

It’s sometimes worth looking into the process and costs of working with a traditional agent, if only as a starting point for comparison. Many are now reviewing fee structures to become more competitive and trying to offer additional benefits to make them a more attractive option. Weigh up what you’d get from working with a traditional agent in terms of the cost vs. the support and the reach in terms of buyers. It may appeal or it may be that you – like many other sellers – are looking for something else.

Hybrid estate agents

A hybrid estate agent won’t have a physical office but in every other way will function like a traditional agent. Getting rid of this huge overhead means that you should see a significant reduction in the fees – although these are likely to still be percentage based. The new breed of hybrid estate agents tend to be local to specific areas and often have a mobile workforce who hold meetings in shared workspaces and travel to meet clients. So, all that’s different is that you won’t have a high street office to go into and hopefully you’ll pay less. The key to finding a good online estate agent is to look at the range of properties they have and also at the website. The site will be the main online selling tool so if it’s poorly designed or not well populated your chances of the right sale could be reduced.

Is it a good idea? If you want to use a traditional agency but you don’t want to pay the full price then the hybrid agent is a good idea. It won’t save you as much as a fully online agency but you’ll get more support and service.

Online agencies

A number of online agencies have appeared in recent years in response to consumers who don’t want to fork out huge fees. Purple Bricks is probably one of the best known and has made a name for itself in offering a service that is cheaper, more predictable and simple to use. If you sell your home with Purple Bricks it’s a flat fee of anywhere from £849 – £1,999 depending on where you live. A local agent will come and evaluate the property for free and then guide you through the sale process. Everything is organised and managed via an app, which allows for viewing bookings, feedback from potential buyers and instant updates on sales. Although Purple Bricks certainly saves on costs it does leave much of the organisation to the seller – and it’s worth remembering that the fee is payable whether or not the house is sold.

Is it a good idea? Purple Bricks has a lot of positive reviews from sellers who have saved thousands on commission. However, it has been pulled up on the accuracy of the amount of savings it is quoting so make sure you check exactly what the cost will be to you before going ahead. There are plenty of other agencies to choose from. One of the major advantages of working with an online agent is they can get your property listed on sites such as Zoopla and Prime Location, which you can’t do as an individual.

List it for sale yourself

If you’re going to go ahead with a private sale then you’ll need to use a website like or This puts the entire process of selling firmly into the hands of a seller and there is no commission to pay to anyone. Fees for listing properties start at around £195 but there are various packages available, some more deluxe than others. Selling a home without any agent support is certainly not impossible and thousands of people do it every year. If you’re going down this route then remember:

  • You’ll still need a valuation – check the house prices in your area as a starting point
  • Make sure you have an Energy Performance Certificate for the property
  • Be prepared to block time out for viewings
  • Write a detailed and appealing description
  • Take some fantastic photos – clear and flattering
  • Get the property ready for sale – de-clutter & do simple home improvements (e.g. repaint any overly bold colours and tidy up the garden)
  • Instruct a solicitor or a conveyancer to handle the legal side of things and the exchange of cash

Is it a good idea? If you’ve got the time to prepare your home, achieve a proper valuation, research what might make it sell and get a good looking listing together then yes.

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Could a bad credit rating affect your employment? Fri, 03 Nov 2017 11:50:40 +0000 Alex Hartley It’s no mystery that a bad credit rating can make life difficult when you’re applying for a mortgage or a loan. However, if your credit score is less than perfect could there be other implications too? Although employers have to be careful when searching employee personal information and making decisions on the basis of that, credit data is very easy to obtain. So, if you have financial difficulties in your credit history it’s natural to be concerned about whether this might impact on a current or future role.bad credit ratings and employement

When does your credit rating crop up?

Firstly, it’s important to state that in almost every case an employer would need to have the permission of an employee – or candidate – to check their credit rating. Given the effort and admin involved, most employers won’t go to the trouble of carrying out random credit checks on employees to ensure that they’re still doing well so it doesn’t happen often. However, there are certain stages in your career when you could find yourself signing a consent form for a credit check.

With a job application. Many employers now request the approval of an applicant to carry out a credit check when they receive an application for a position. Not every employer will do this and each has their own set of criteria against which to judge whether the candidate is suitable.

Promotions. Some businesses will also review the credit status of an employee just prior to a promotion or offering a new role.

Lateral hires. If you’re being recruited into a business via a lateral hiring process then this is usually at a more senior level and so you can expect more in-depth checks. Whether this involves looking at your credit status will depend on the role in question and the company.

Identity checks. Some employers may use the information in a credit score to check or establish identity.

Why do businesses check employee credit ratings?

There’s a lot at stake for an employer taking on a new member or staff – or promoting them. For many businesses it has simply become a habit to gather as much information as possible on the potential new hire. This provides a more accurate picture of who is being taken on and how they operate as an individual. Other businesses need to carry out a credit check due to the nature of the work involved. So, for example, applications for an accountancy position or a job working with cash in a bank are more likely to require a credit check. If you’re applying for a financial adviser type role then the way you handle your own money might have an impact on whether you’re suitable for the job.

What are the employment consequences of a bad credit rating?

If you have given a potential employer permission to look at your credit rating and it doesn’t match their criteria then you may not make it through to the next stage. This is never a forgone conclusion and will always depend on the job, the employer and the rest of your application. When it comes to losing your job as a result of a poor credit rating, it is less black and white. Employers have to be careful when firing employees and so usually only do so if there is a good reason. If, for example, a good credit rating could be considered essential for the job then a poor rating might be a sound reason to fire someone. Most employers won’t simply hand out a P45 to an existing employee who hasn’t done anything else to warrant being dismissed. Plus, they won’t look at the entire credit report just the information they need to make their decision. So, if you don’t have a great credit rating and your employer has requested permission to check, it’s worth opening a channel of communication about it before any decisions are made.

What can you do about a poor credit rating?

There are lots of ways to improve your credit rating so that you don’t have to be so concerned about employer checks in future:

  • Clear some debt – even reducing your debts by a small amount will improve your credit score.
  • Make sure there are no mistakes on your report – mistakes can damage a credit score and you can ask to have these removed or fixed by adding a notice of correction.
  • Don’t make multiple credit applications – if you’re not accepted for the first one then wait a while or your score could go down.
  • Make sure you’re on the electoral roll – if you’re not this will damage your credit score.

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Compare all the UK’s Secured Loans & Lenders Instantly! Thu, 02 Nov 2017 11:11:54 +0000 Amanda Gillam Secured loans are growing rapidly in the UK on the back of house price growth and the desire of people to consolidate existing debts and/or make home improvements. Although nowhere near as popular as remortgages for capital-raising purposes secured loans, otherwise known as homeowner loans, do have a number of advantages over their related cousin. If you have a mortgage and are thinking of accessing the equity in your home for one reason or another then you ought to look at the option of a secured loan as an alternative to a remortgage.

We have more information about the advantages of a secured loan

Compare Secured Loans in One Simple Table

There are a growing number of secured loan lenders, and hundreds of secured loan products available. Solution Loans has always had access to these products via a specialist broker, but now were able to show you the best deals offered by lenders. We’ve just launched our Secured Loan Comparison Table – something that you might consider to be a “Best Buy” table.

Secured loans lender table

By simply changing the loan value and loan term the table will re-organise itself to show you the lowest rate loans available – then it’s a simple matter of clicking through to request your quote – a completely free service with no obligation.

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Why car sharing may be better than car ownership Wed, 01 Nov 2017 12:00:47 +0000 Alex Hartley Sales of new cars fell by 9.3% in September this year. Car insurance, petrol, maintenance and the congestion charge all add up for car buying consumers. So much so that the trend is increasingly towards not owning a car at all. The demands of family life, school runs, weekly shops or emergencies such as a doctor’s visit might seem to necessitate your own set of wheels. However, for many – especially Millennials – that’s simply no longer the case. And build in the fact that on average a car is parked for 95% of the time! And when not parked your commute is likely to be at an average 20 mph such is the effect of traffic sharing not ownership

What are the alternatives to car ownership?

The only alternative to car ownership used to be a standard rental. This came with its own set of costs and conditions and was a pretty inflexible method for those who didn’t need a car for a particularly extensive length of time. Today, there are many more options, from those that let you “rent” a seat in someone else’s car rather than doing an entire journey in your own rental, to those that enable car sharing between neighbours. All these shorter-term options are, of course, far cheaper. And as the average cost of running a car for a driver between the ages of 17 and 21 is now £2,800+ per year, there is a huge incentive for drivers to look into the different alternatives.

Rent a seat in another driver’s car: Bla Bla Car

Bla Bla Car – if you’re looking to travel to a particular place at a particular time you can put in a request via Bla Bla Car and choose from all the drivers going in your direction. There is a set fee to pay and everyone using Bla Bla Car has a profile that can be viewed, as well as ratings from other users.

Hire a car from a neighbour: Easy Car Club

Rather than renting a car from a big, faceless rentals firm, Easy Car Club allows you to borrow one from a neighbour instead. There are 90,000+ customers already using Easy Car Club and it covers a wider range of locations.

How do the alternatives help you to save cash?

Cars are expensive. As soon as they are driven home from the dealer they start to lose value (i.e. depreciate) – and this is something that many consumers are now starting to wise up to. Not only that but cars require regular maintenance, as well as insurance and road tax – and that’s before you factor in the costs of any repairs. Newer car companies offer some very significant differences:

  1. No insurance to pay for – most of the new types of car companies have their own insurance in place. If you don’t want to have to cover the excess then you can pay a small fee to remove this.
  2. No annual service costs/MOT – servicing and maintenance costs don’t fall to consumers but are covered by the legal owner of the car.
  3. No breakdown expenses – usually, if you’ve damaged the car then you have to pay the excess on the insurance but breakdown is not the hirer’s responsibility.
  4. Tax – road tax isn’t the responsibility of the hirer either.

And then there are the environmental benefits. Car sharing directly reduces the number of drivers on the road, which has a significant impact when it comes to cutting emissions from gas guzzling vehicles. It could also have the knock on effect of reducing the need for car manufacturing and the transport of new vehicles to their point of sale. New cars usually acquire a carbon footprint even before they have first been driven.

How much could car sharing actually save?

The annual cost of using a car sharing service like Zip Car over 10,000 miles of motoring is around £1,457. This is compared to the annual cost of a brand new car with a 1.5 litre engine, which comes in at £6,659. Even a second hand car doesn’t do as well – annual costs for a three year old car are £2,605 and likely to go up as the car needs more and more work.

A significant proportion of these costs come from the depreciation in value of the car over the course of a year (£4,600 for a brand new car, £667 for a second hand car) but the savings are obviously there. Zipcar says its members save at least £300 a month by using its service rather than owning their own car. Plus, the company recently released research showing that Londoners were paying around £20 an hour to own their own cars. So, perhaps it’s not surprising that so many people are now moving away from an ownership model to a cheaper and more flexible car sharing scheme.

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Extra protection for those using Logbook Loans Mon, 30 Oct 2017 11:06:18 +0000 Alex Hartley Logbook loans are loans secured against cars. They are supposed to offer individuals a simple way to borrow by using an asset (the car) as security. Logbook loans are a popular way to borrow money the number of loans being taken out has increased from just 3,000 in 2001 to 30,000 in 2016. Problems have arisen when a car is sold to an innocent buyer with the logbook loan still attached to it. Currently, this makes the buyer responsible for servicing the loan – although incoming changes to the law could potentially correct this.keys to a logbook loan

What’s the issue with Logbook Loans?

There’s nothing fundamentally wrong with logbook loans – they are a simple and fast way to borrow money. The problem arises when a car that has a logbook loan attached to it is sold on to a buyer. If you’re looking for a used car and you unknowingly buy one with a logbook loan attached to it then you could find yourself in a difficult situation, including:

  • Someone else’s debt to pay
  • The pressure of being pursued by a lender
  • Issues of ownership – if there is a logbook loan in place then the seller doesn’t even own the car they are selling on, the lender does, and so ownership cannot pass to you
  • Repossession – your new car could be taken back by the lender even though you’ve paid for it fair and square

What protection does the law currently provide?

Unfortunately, the answer is: not much. Anyone who currently buys a second hand car with a logbook loan attached to it becomes responsible for that debt. There is no legal obligation on the seller of the car to make the person buying it aware that there is a debt attached to it. And there are no penalties for anyone who sells on a car with a logbook loan attached without being up front about the debt it comes with. So, if you buy a used car right now and then a month later find you’re being pursued by a lender for a debt you had no idea existed there is nothing to stop the lender demanding you pay them – or taking the car!

The proposed changes to the law around Logbook Loans

The Law Commission has been reviewing the situation when it comes to logbook loans and has drafted a new bill that would make some significant changes to the situation for both borrowers and buyers.

  1. It is proposed that there should be a legal obligation on the seller of a second hand car to make a buyer aware that there is a logbook loan attached to the car.
  2. A penalty is proposed where this new requirement is ignored – sellers who don’t pass on this essential information can be prosecuted for fraud.
  3. Anyone who buys a used car in good faith and then finds that there is a logbook loan to deal with won’t be obliged to take on the debt. In fact, the new law is proposing that the buyer is left free of the debt and also gets to keep the car with no repercussions from the lender.


Are there going to be any changes to Logbook Loans themselves?

It may be that the reason these loans are being passed off by the original borrowers is due to the restrictive terms that some lenders impose. Unlike other types of borrowing there is no protection for someone borrowing a logbook loan. If payments aren’t met there’s no requirement on the lender to extend more time or tolerance – they can simply repossess the car. The proposed draft changes to the law are intended to alter the way that logbook loans are administered. So, for example if more than a third of the loan has been paid off, the new law will mean that a lender has to get a court order before they can repossess the car. There will also be a requirement to give people more time to pay. Plus, if a borrower is seriously struggling, they will have the option of handing the car over to the lender to wipe out the debt.

The new bill that has been proposed will make a real difference to the logbook loans industry – and also to consumers who are buying a used car. Although, as yet, there’s no specific implementation date, it is hoped that it at some point in the next couple of years this outdated situation will finally be resolved.

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Check out our revamped YouTube Channel & Facebook page Mon, 30 Oct 2017 11:41:38 +0000 Amanda Gillam It’s been a while coming but we’ve now totally revamped both our YouTube channel and our Facebook page. We’ve also updated all our video content and this is available on our Facebook page as well as our YouTube channel.

What’s On Our YouTube Channel?

Our YouTube channel supports our aim to help inform and educate people so they feel better able to  select the most appropriate form of credit. With this in mid you will find the following content on our channel:Solution Loans YouTube Channel

  • 60 Second Explainer videos – short, sharp animations with commentary that cover a form of credit and explain its main aspects (then further detail is available on our website)
  • In-depth guides – over 4 to 6 minutes we go into more depth about specific forms of loans and credit (the transcripts to these videos are available on our website too)
  • Blog post videos – we’re turning our most useful and most popular blog posts into videos as another, perhaps more engaging way, to consume them. These videos cover a wide variety of topics and the quantity of these will gradually rise over time (we blog around 10 – 12 times per month).

When you subscribe to our channel you’ll be notified when we upload new content so that you can keep up to date with personal finance developments.

What’s On Our Facebook Page?

Our Facebook page includes all the video content above plus loads more, as follows:

  • All the videos
  • Our daily/weekly blog posts
  • Active competitions – currently we run photo contests and short story writing competitions. These competitions are open to all. You don’t have to have used our broker service, and you could win prizes worth in the region of £250!
  • You can message us, and we aim to get back to you within a few hours
  • Links to the most important product pages on our main website.

Like Us on Facebook and you’ll be updated as soon as we add new content and launch competitions (which happens fairly frequently!).

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How to save money as a local community Fri, 27 Oct 2017 10:52:53 +0000 Alex Hartley There is a lot to be said for the old idea that we’re stronger together. Particularly now when times are tough for many, the idea that clubbing together to save money as a community could help with costs and budgets is very appealing indeed. People power could not only give you the means to cut the costs of your essentials but also help bypass the more expensive commercial options that don’t necessarily deliver better results. So, where could you save money as a community?save money as a local community

Energy and fuel savings clubs

With the cost of energy always increasing and some providers putting prices up by 10% this year it sometimes feels like it’s difficult to see a way out of those huge quarterly bills. However, joining an energy and fuel savings club could give you other options than just to accept the prices you’re quoted or go elsewhere. Using the process of ‘collective switching’ it’s possible to negotiate a better tariff on behalf of a group of consumers than you’d ever be able to get on an individual basis. So, club together with others on your street – or joining a local energy club – and see what you could save as a community. You may find your local council may run such a club e.g. Solihull

Motoring savings

Cars – buying them and running them – are another big expense for most people. There are many ways to leverage the power of the community to cut the cost of what you spend on getting from A to B on four wheels. Car pooling and ride sharing are the simplest ways to start. Apps such as Waize use modern tech to solve the issue of cost to consumers, as well as the impact on the environment – its tag line is “Too many cars. So many empty seats. Let’s fix that.” You can ‘rent out’ space in your own car or borrow a seat in someone else’s via apps like this. If you’d like to cut the cost of owning a vehicle altogether then just rent one instead. While traditional rental companies might have high prices and punitive damage policies there’s a whole new wave of apps, such as Turo, which allow you to just rent from another car owner in your community instead.

A cup of sugar

Although no one really goes to a neighbour to borrow a cup of sugar anymore, the principle that a local community could pool resources to help each other save cash is a sound one. Everything from garden furniture, to fondue sets and children’s’ clothes or toys can be recycled and reused within the community to save everyone money. There are many websites and apps springing up now to take advantage of this newly emerging community mindset. Streetbank is “one of the 50 websites you can’t live without” according to the Times newspaper. It gives neighbourhoods the opportunity to pool all sorts of resources, from sharing items like power drills, to giving unwanted furniture away. Plus, you can share skills such as plumbing to help neighbours keep their costs down – and they might well return the favour when you need a helping hand.

Opening up your wardrobe

How much of your wardrobe do you really wear? Whether you’ve got a closet packed full of designer buys or you’re a more modest purchaser, you could make some cash from opening up your wardrobe to others. Online communities like Rentez-vous allow anyone to rent out their wardrobe. They work on the old school basis of sharing clothes with friends (and siblings) – except this time there’s a financial incentive and a wider pool of people involved. The renter gets to make a little cash from an item otherwise sitting unused in the wardrobe and the rentee gets to wear that perfect outfit on that perfect occasion without paying full price. A 2016 Marks & Spencer survey found that Brits only wear 44% of what’s in our wardrobes – which leaves more than half of our clothes rarely getting an airing and ripe for renting.

The local car boot sale

Before they became hunting grounds for TV shows, car boot sales provided a cheap way for local communities to recycle and reuse. Shpock is an app that has taken this idea and updated it for the modern world and has become incredibly popular. It provides an online car boot sale where anyone can list anything for sale or give away to a local community. You’ll find everything on there, from ironing boards to trainers, and at prices significantly lower than buying new. Plus, as the person you’re buying from (or selling to) is just around the corner, there’s no need to think about shipping costs.

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How to find a really good second hand used car Wed, 25 Oct 2017 10:52:10 +0000 Alex Hartley The second hand car market in the UK is expanding. In the first quarter of 2017, sales of used cars reached an all time high. In fact, we’re buying so many used cars now that earlier this year the sales of new cars fell for the first time in eight years! There are a number of different reasons why used cars have become so incredibly popular. Perhaps the most significant is the Personal Contract Purchase (PCP). The PCP is the type of financing that many people use to buy a new car. It enables a buyer to make payments over a period of time and then at the end of say 3-4 years decide whether or not to make a large final payment to keep the car – or to hand it back and enter into another PCP for a different car. As more and more people choose to hand back these slightly used cars the vehicles make their way into the used car market, increasing both the volume and the options available.Buying a used second hand car

Why opt for a used car?

‘Second hand car’ might once have conjured up an image of an old banger with the door handles held on by masking tape. However, today it could mean a vehicle that’s almost new – some aren’t even a year off the shop floor. Often, used cars have been very carefully looked after and are actually in better condition than a nearly new vehicle. So, there’s a lot more choice than there used to be. Plus, there’s the cost element. When you choose a PCP for a new car you’re effectively paying for the depreciation of the car, as opposed to the car itself. For many people that just doesn’t make sense and it’s better to buy a used car where, for the same price, actual ownership is involved.

Where might you find a good used car?

Given the increase in the size of the used car market there are now many more places to shop for a second handle vehicle than ever before. These include:

  • A local used car dealership
  • Online second hand car dealers
  • A private seller
  • Auctions

The key difference between the options for buying a used car is the level of protection you get as a buyer. If you opt for a private seller, for example, you are very much subject to the principle of “buyer beware.” So, that means it’s up to you to find out everything you can about the car and its history. Dealers often have an “approved used” section, which means that the car has been checked over before it’s been put up for sale. It’s also easier to hold a dealer accountable if the car is not as described. It might cost more to buy from a dealer but, if you don’t have a lot of time or you’re looking for assurances about the state of the car, it can be a better choice.

How to find a really good used car

Search widely. Don’t restrict yourself to just one of the above but check auctions, dealerships and private sellers too. If you find a better price somewhere for a similar vehicle you might be able to use it as a bargaining chip to bring the price down with your preferred seller.

Always check the vehicle history. An HPI check will tell you a lot about the vehicle’s history, including whether it has any financing attached and whether it has ever been stolen or written off.

Don’t be put off by a higher mileage. Any car dealer will tell you that it’s the wear and tear on a car that you should be looking at, not the mileage. A very well maintained car with a higher mileage is a far better bet than a car with low mileage that has really been through the wars.

Add up ALL the costs before you decide. This means not just the cost of the car itself but everything else too, including fuel, financing, tax, car insurance, MOT, servicing, parking permits, charges and tolls. These could be vastly different from vehicle to vehicle.

If you’re going down the dealer route timing can be key. Many dealership salesmen and women will have quarterly targets to meet so you might get a better price if you’re in the dealership at the end of March, June, September or December.

Beware the emotional purchase. Buying a car you’ll look good in, choosing a model you think you deserve, or being tempted by the limited edition are all totally human behaviours but could mean you don’t get the best deal because you’re not acting rationally.

Avoid the tax trap. Car tax isn’t transferable between owners so if you’re being offered this to sweeten a deal then it’s not genuine. You’ll need to get the car taxed in your name as soon as you get the keys.

If there’s an issue, raise it. Even once you’ve taken the car home if you have a serious problem with it then go back to whoever sold it to you. This is easier to do with a dealership or at an auction – if you bought from a commercial business then you can make a complaint to Trading Standards.

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Why has Provident Personal Credit “Imploded”? Mon, 23 Oct 2017 10:21:43 +0000 Alex Hartley Home credit provider Provident Personal Credit has been going through some serious problems recently, peaking in August when its share price dropped a huge 66% in one day! The significant crash in the share price of the business wiped around £1.7 billion off its stock market value. In June, the business had already made statements to the effect that it was struggling but the size of the crash in value was still fairly unexpected. So, what happened to Provident and is the operation salvageable?provident personal credit website

Who is Provident Personal Credit?

It’s a doorstep lender. Home credit or doorstep loans are popular with consumers who aren’t keen to arrange finance entirely online or go into a bank to do it. Instead, doorstep lenders have teams of staff who visit borrowers at home, to deal with queries and to collect regular repayments on loans. It is one of many lenders who offers financing to customers who perhaps don’t have the perfect credit score and who might not be approved for a loan elsewhere.

What went wrong?

Although there has been no definitive answer to this question yet, the problem at the heart of the share price drop is thought to be the change in the way that Provident collects its loans. Previously, the business worked on the basis of self-employed agents collecting the debts on behalf of the business. However, it recently looked to make a switch from using self-employed teams to creating a new employed workforce. Some say that not enough of the company’s workers wanted to convert to being employed. Others point to the introduction of new technology that was designed to make life easier but actually created chaos. Software recently introduced to the business has apparently been responsible for multiple errors in scheduling, sending employees to the wrong houses or on repeat visits. Whatever the causes, Provident’s collection rates dropped from 90% in 2016 to just 57% in 2017, causing the huge drop in value for the business.

A feeding frenzy

Although Provident was attempting to upgrade its business when the problems began, it has not yet managed to halt the feeding frenzy of other lenders (such as Morses Club) snapping up its staff. Collection agents are crucial to the business – it has even reputedly offered commission rates of 20% to stop staff from leaving. However, many other home credit lenders have already enticed existing Provident Financial agents across with pay increases and bonuses. This could spell disaster for Provident Financial as a good, experienced agent could take anywhere between 50 and 100 customers with them to a competitor.

How is the business getting back on its feet?

Provident problems lie in its lack of staff – with fewer people to collect loan repayments or sell new loans the business has seriously stalled. Add to that the gleeful competitors jumping in and taking those staff who stayed behind after the initial drop in the value of the business and many thought things did not look particularly bright for the lender. However, in October the business has started to rally. Since the share price drop in August, the value of Provident Financial has now nearly doubled and the business has said it has re-employed 300 former collection agents. So, it appears to be on the right track thanks to its recovery plan. But what about borrowers who have loans with Provident?

Sub-prime borrowers

Provident offers small value loans to people who don’t have perfect credit history (“sub-prime borrowers”). It’s these consumers who have been hit particularly hard by the problems that the lender has experienced. The biggest issue has been for those who have got behind on payments. For some, it has been weeks since a collection agent from Provident has arrived on the doorstep to collect loan repayments. Where budgets are already stretched the cash has simply been spent on other things and there is no back up to pay the debts now owed.

So, while the business continues to make its own recovery in terms of sorting out tech issues and re-recruiting staff, it could be sitting on a medium term time bomb. The lender is still far from being back to maximum staffing levels, which could leave its loans continuously uncollected for some time to come. If consumers aren’t then able to catch up on the missed payments, both the lender and many of its borrowers could find themselves in significant financial difficulties with not many bail out options. As one of the lender’s customers recently told the national press, “I am on the breadline now, so I cannot afford more payments. The money we used for loan repayments went on other things.”

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The death of retirement – what retirement might look like in the future Fri, 20 Oct 2017 10:13:26 +0000 Alex Hartley Back when the state pension was first introduce in 1908, the average life expectancy for men was 54 and for women 61. Given that the state pension was only available at the time to people over the age of 70 that meant that many didn’t live long enough to receive it. However, now times have changed significantly – we are living longer. A lot longer. Girls born in 2016 have a life expectancy of 93 and boys 90. The potential requirement to fund pensioners for 30+ years has meant the state pension is on the downward slope. So, relying on the state pension to provide 100% support during the golden years is just not an option now.the future of retirement

Why don’t we have enough to cover retirement?

There are a number of reasons why so many people don’t have enough cash set aside for retirement.

  • The increasing costs of owning or renting property are eating into our budgets and leaving little left for retirement savings
  • Real pay levels have been stagnant for some time so many incomes are just not keeping up with costs to allow enough cash to spare
  • Employers pay less into pensions than they used to so pension pots are smaller
  • Left over debt from university can eat into income well into earning life

So what might retirement look like in the future?

Here are some possible scenarios for how our retirement could look like into the future:

No actual retirement. Many experts predict that ‘retirement’ might eventually fade out, as many simply won’t be able to afford to stop working. Instead, we’ll be working well into our 70s and 80s.

Phased retirement. A retirement date could well disappear as a concept and instead we’ll look to have a phased retirement where workload and income are gradually tapered off.

Part time working. As successive generations start to reach the age of retirement and realise that they simply don’t have enough in the pot to cover it, part time working among the 65+ age group could become a much more common occurrence.

The rise of the private pension scheme. Funding retirement used to be worked out through a combination of the state pension scheme plus perhaps a workplace pension. However, the state pension will barely cover basic needs for future retiring generations, defined benefit pensions have now almost completely disappeared and employers are contributing less and less to defined contribution pensions. As a result, the private pension is playing an increasingly significant role.

More innovative pension products. Traditional pension options are likely to expand so that there will be a range of different savings choices for younger generations who are starting to think about the future. The Lifetime ISA is a good example of the way that financial products are evolving in response to changing mortality trends.

Planning for retirement now

It is never too late to start planning for retirement. However, the later you do this, the harder it will be to accumulate the kind of cash you’re likely to need to sustain you through a much longer lifespan, with less state support. In terms of quantifying that ultimate end goal, financial experts say that in the end we will need a pension fund that is ten times the size of our final salary to enjoy those golden years. So, how do you start planning for retirement now?

  1. Aim to contribute 12.5% of your pay each year into pension fund for 40 years. If you’re starting contributions later then you’ll need to increase this percentage, depending on when you want to retire.
  2. Increase the range of saving options you have. Workplace pensions, private pensions, ISAs and investments all provide options for retirement income.
  3. Pay off your debts. When you’re calculating what you’re likely to need to pay for in retirement this will be simpler if you’re not still paying off old debts.
  4. Change your perspective on your career. In 40 years time we may need to work into our 80s if we eventually want to enjoy the same standard or retirement as our parents. So, when you’re choosing a career bear in mind the need for adaptability to the physical and intellectual aspects of old age.
  5. Stay at home parents need to think ahead. 21% of women – compared to just 9% of men – don’t have their own personal pension provision. This is largely the result of the fact that childcare responsibilities still tend to fall predominantly on women. Any parent now staying at home – male or female – needs to think ahead to make up for the loss of pensionable income e.g. asking the working partner to pay into a pension so that both are covered during the years when childcare prevents one party from working.

Many older people are home owners living in an enormously valuable asset. This asset could potentially provide a means to find your retirement and/or pay for residential care should you need it. Accessing this value can be done without necessarily selling your home – you could consider a secured loan or equity release.

What happens if we carry on the way we are?

Right now, roughly one in seven people is retiring without any private pension. In 2017 that might be just about survivable but in 20 years time, when the state pension is almost worthless, that won’t be the case. The result could be retirement poverty on a huge scale. For everyone, funding retirement is an increasingly pressing concern and it’s only by retirement planning earlier in life that we can ensure we don’t end up with too little to live.

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How to buy a used car using car finance Wed, 18 Oct 2017 10:37:18 +0000 Alex Hartley The UK market for used cars is thriving. According to the Society of Motor Manufacturers and Traders, 2016 was a bumper year for the used car industry and set a record for sales. 8.2 million used cars were sold last year, which represents a 7.3% increase on the year before. So, the market is booming – and for many people the simplest and fastest way to secure the right second hand car is with car finance. But what are the options if you’re looking for used car finance and are there any risks in doing so?car finance for used cars

Used car finance – the market

If you’re looking for a cost effective car purchase then the chances are you have considered a second hand vehicle. The market for used cars is very different today to 20 years ago. Back then, if you were looking for a used car, then you were most likely going to be buying from an individual or a dealership handling genuinely second hand cars that had seen relatively intense road usage. Today, it’s a different story. When it comes to buying brand new cars, 8 out of 10 are now purchased via a Personal Contract Purchase (PCP). These PCPs are structured so that around half of the value of the car is paid off over a period of 3-4 years with the other half due as a bulk payment at the end of the contract. However, large numbers of people now don’t make that bulk payment but instead hand the car back to the dealer and move on to another PCP. Why is this relevant to the used car market? Well, because it is now hugely inflated by those ex-PCP vehicles. So, if you’re looking for a used car you’re going to have a much wider range of choice and from vehicles that have only been in use for 3-4 years.

The options for used car finance

Typically, if you’re looking to arrange used car finance you will have two options:

  • A finance plan offered by the car dealer
  • A finance plan offered by a specialist lender or broker (e.g. Zuto)

The finance on offer might be a PCP – i.e. where you make payments over a period of 3-4 years and then either pay off the rest of the contract or walk away. Or you could have the option of Hire Purchase (HP), where the decision about ownership is made at the start of the contract and you gradually pay off the value of the car until it’s yours.

Car dealer vs. specialist lender or broker

There are a number of different factors to bear in mind when you’re choosing who to arrange the finance with:

  • The plan itself – are you being offered HP when you want PCP or the other way around? Opt for the finance provider who gives you the arrangement you want.
  • Repayment period – some lenders and brokers offer longer repayment times than car dealers.
  • Interest and charges – how much interest are you going to pay and are there any hidden charges? Make sure you know exactly how much the deal will cost before you sign anything.
  • Options for bad credit – if you don’t have a perfect credit score then you might have a better chance of getting used car finance with a specialist lender or broker.
  • Borrowing amount – which option gives you the flexibility to borrow the amount you need to fund the car purchase that you want?
  • Which option gives you the best range of extras e.g. full vehicle checks, a reputable name in finance, free service?

What are the risks?

The car finance market in general is under a spotlight due to the lack of published figures about the way that it operates. We currently owe £30 billion for cars as a country and there are no statistics to show whether the PCPs that are so popular are getting people into trouble with debt. The main risk for anyone using a PCP is the payment requirements. Although you can walk away from a PCP deal you can’t do this until a substantial proportion of the vehicle is paid off – usually half, including interest and fees. If you want to walk away before that point then you could find yourself with a large bill owing to the car finance company or dealer. So, how can you protect yourself when arranging used car finance?

  • Is it affordable? Make sure you’ll be able to keep up with all the repayments
  • Opt for a reputable broker, dealer or lender. Several car finance companies have recently gone bust so it’s important to choose a reputable business
  • Ensure the valuation is accurate. PCPs use a predicted valuation based on what the car will be worth in 3-4 years time so make sure that valuation is accurate
  • Choose the PCP term carefully – a longer term means lower monthly payments but a shorter term means less interest to pay

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What needs to happen to improve people’s personal finance skills Mon, 16 Oct 2017 10:30:14 +0000 Alex Hartley When it comes to personal finances, many of us assume that we’re just naturally quite good at it. Until, that is, you get to a point in life when something happens to demonstrate that you’re not. For example, when the budgeting goes awry or you realise that you’ve totally forgotten to add Stamp Duty on to the price of a property purchase. If you’ve ever found yourself in a situation where you feel like a bit of a financial dunce then you’re certainly not alone. A survey by pollsters Ipsos Mori shows that many Brits are way off the mark when it comes to having a realistic perspective on personal finances, from the cost of raising kids to how much you’re likely to need for retirement.

And the survey says…

The survey by Ipsos Mori, conducted in 2015, highlights some fairly serious knowledge gaps within the UK population. For example, those surveyed thought that the total cost of raising a child was around £50,000. Most recent studies peg this closer to £229,000 per child – nearly five times the guess! Public opinions on student debt were also similarly off the mark. The survey indicated that most people thought students left university with roughly £21,000 of debt. The reality? More like £40,000. And then there’s the pensions issue  – in order to retire with an annual pension income of £25,000 a year the average Brit thought you’d need around £124,000 in your pension pot. In reality, to achieve this kind of income you’d need a pot of £315,000 or more!

Why does it matter?

The Ipsos Mori survey also identified that Brits are all spot on when it comes to identifying the price of a pint of milk – so all is not lost. However, the gaps we do have in personal finance knowledge relate to some fairly significant life events and that’s worrying. Even more worrying is the level of debt that exists (UK adults have an average debt of £30,661) and the damage that is being done to credit ratings by spiralling debt problems. When all these are combined it indicates that it might well be time to take a different look at how the standards of personal finance education could be improved.personal finance education

What needs to change?

Personal finance education isn’t something that many of us make a priority, not for ourselves or for the next generation. However, it’s crucially important that Brits start getting to grips with the reality of debt, pensions and life’s major costs to avoid future issues. So, how can we help ourselves?

  • Learn and then pass on key skills – budgeting is probably one of the most important skills for anyone to learn when it comes to financial education.
  • Cultivate a better awareness of the reality of personal finances – how would a rise in interest rates affect your loan, what’s the cost of living today, how will leaving the EU impact on your available money?
  • Start to take responsibility for your financial profile – if you don’t have a great credit score what are you going to do about it? If you hate being in debt then what positive steps will you take towards change?
  • Get better organised when it comes to all things money related – pay your bills on time, create a schedule of all your annual payments and debts, complete with interest rates, and make sure important financial documents are within easy reach.
  • Set financial goals right up to the end of your life – often, goal setting is what enables us to think outside of the right now and work out what we actually need for a financially responsible future. Set your objectives, whether you’re 15 or 50, from owning a home through to the kind of retirement you want to have.

Resources to help with personal finance education

  1. Apps and technology – there are many apps and websites out there that will help you to learn better habits when it comes to financial housekeeping, from budgeting apps, to smart savings apps.
  2. Debt counsellors and charities – if you’re struggling with debts then asking for help is an important first step. However, debt counsellors can also provide a lot more information about debt, how to manage it and what it’s best used for.
  3. Classes and courses – many local councils run personal finance courses, as does the Open University.
  4. Videos and articles – if you can’t get to a personal finance course then you can do one online or watch videos or listen to podcasts on the topic. There are many, many ways to improve the level of personal finance education that you have.


Organisations that can help

Personal Finance Education Group (pfeg) – pfeg is all about equipping our children and young people with the skills, knowledge and confidence in money matters to thrive in today’s society. Their website contains a wealth of resources, from articles and information, to videos on how to teach financial education.

The Money Advice Service – get free financial help and information across a wide range of finance-based topics. The MAS is designed to help you increase your financial know-how and aptitude, as well as that of those you love.

Citizen’s Advice – CA provides free and impartial personal finances advice and is also campaigning on an ongoing basis on issues such as finance industry regulation and ensuring individuals understand their own finances.

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How to pay for Home Improvements of different sizes Fri, 13 Oct 2017 10:35:17 +0000 Alex Hartley Home improvement is a goal for many of us. Whether it’s essential repairs, or something altogether more creative, there always seems to be something worth changing or fixing up. Home improvements cost money – however, the value that they can add to a property often more than justifies the initial expense. If you’re planning to improve the property you live in, and you don’t have great wealth with which to do it, how are you going to pay for it?finance for home improvements

Funding home improvements

Repainting a room (£0 – £500)

Depending on the size of the room this is a job that could very easily be taken on by a homeowner – i.e. with no cost incurred at all. However, if you’re very busy or not that keen to pick up a paintbrush then it can be done for a couple of hundred pounds.

How do you pay for it? In terms of financing this minor home improvement – savings, a credit card or a payday loan are all small, simple sources of cash.

Fitting double glazing (£2,000 – £5,500)

Double-glazing is the kind of home improvement that makes all the difference in the winter months when cold draughts are common in the UK. Getting a home fitted with double-glazing will make it more energy efficient, as well as more comfortable to occupy. Costs start at around £2,000 for four windows, up to £5,000+ for buildings with 10 or more windows. However, double-glazing can also save in the region of £175 per year in energy bills, which is a factor to bear in mind.

How do you pay for it? The easiest option is instalment loans, which allow you to choose a relatively low figure and to repay this over a longer period of time.

Creating an extra bathroom (£2,500 – £6,000)

An extra bathroom doesn’t just reduce queuing times in the mornings – according to Movewithus it can also increase property value by around 6%. The cost will depend on the location of the bathroom, as well as the design that you opt for and the fittings and furnishings you want to go in it.

How do you pay for it? Home improvement loans provide a simple and flexible way to finance this kind of internal upgrade to your property. The range of financing on offer means that they’re an option whether you’re looking for a low key up lift or a full renovation.

Fitting a new kitchen (£6,000+)

Most new kitchens don’t come in under £6,000 price-wise – and it’s very easy to spend a lot more than this if you’re looking for high-end features and finishes. However, a new kitchen is a major selling point, particularly if you’re keen to put your property on the market in the near future. A brand new kitchen can add roughly 6% to the value of your home and will also be a pleasure to use on a daily basis.

How do you pay for it? Unsecured personal loans are a simple option for covering the cost of fitting a new kitchen. With loans of anywhere between £1,000 and £25,000 – and some attractively low interest rates right now – finding the financing is fairly simple.

A loft conversion (£15,000 – £40,000+)

A loft conversion is a real investment in your property, as it effectively gives it another floor of living or working space. That also makes it, perhaps unsurprisingly, one of the most expensive options for home improvement. Having said that, it will add a huge 10% to the value of most homes, which is an impressive increase in value even if you’re not yet ready to sell.

How do you pay for it? Homeowner loans are a great option if you’re looking to make an investment like this. This type of financing is secured against the property itself so is ideal for home improvements that are designed to seriously boost value.

An extension (£7,000 – £50,000+)

Space is at a premium in the UK property market and so if you have the option to increase the square footage available to you it’s often a good idea to take it. Extensions can start at around £7,000 for a one-storey construction, increasing to £50,000 and beyond if you’re looking to extend across multiple floors.

How do you pay for it? The average secured loan is around £28,000 so if you’re planning an extension that requires a budget at around this price that’s often a good choice. If your designs are going to need more serious money then you might want to consider a remortgage or a combination of financing.

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How to protect yourself from being ripped off by car hire companies Wed, 11 Oct 2017 10:45:12 +0000 Alex Hartley The car hire industry in Europe and the UK is going through a pretty tough time right now. Consumer confidence is at an all time low, with a 30% rise in complaints about car hire practices in the past 12 months. Plus, one of Europe’s major rental companies is now the subject of an investigation into systemic over charging of customers. Of course, not all rental operations are the same – but if you’re looking to hire a car then you need to make sure you protect yourself from being ripped hire car rental

What’s going on in the industry?

Problems in the car hire industry have got to a critical point. The Spanish Tourist Board has even said that the issues with hire cars and hidden fees, for example, are damaging the reputation of the country. Consumers have less confidence in car hire companies than ever before and it’s not helped by the fact that some of the biggest names are currently in the dock for bad practices. Europcar, for example, is under investigation by Trading Standards for systemically overbilling customers for repairs on hire cars. There is evidence that the cost of damage to windscreen, tyres etc is being enormously inflated, by up to 300%. Europcar has carried out its own investigation and admitted that there might be a problem. The company has said that this potentially fraudulent element could cost it £30 million – although many industry experts are saying this is likely to be much higher.

What are the top complaints that consumers make?

There are three main areas where consumers struggle with the way that car hire companies treat them:

  1. Damage issues. For example, you get home from your holiday and a month or so later suddenly you’re charged for ‘damage’ to the car. This damage may not have been mentioned at the time and you’ve probably had no correspondence about it before the payment was taken.
  2. Insurance and insurance type products. The number of insurance policies that are targeted at drivers, even for one rental trip, have multiplied and consumers feel increasingly concerned about what they actually need and how they’re covered.
  3. Fuel policies. Different rental companies have different fuel policies – some request a car is returned with a full tank, others not. Some consumers have complained that they have returned a vehicle with a full tank and then been charged to refill the tank anyway.


What does the industry say?

The main justification for the issues that have arisen in the industry is the ever-decreasing cost of car rental. The British Vehicle Rental and Leasing Association has pointed out that consumers expect to pay less now for car hire than ever before. Car hire companies still need to make a margin so this either means lower rental fees but a higher insurance excess – or vice versa. However, this doesn’t explain how fraudulent practices, such as those at Europcar, are justified. Although a number of the biggest rental companies agreed to enter into a code of practice with the Competition and Markets Authority, since then the market has significantly expanded. There are now many more new names in car hire – and they have not signed up.

What do you need to look out for?

Europcar is one of the rental industry’s most trusted brands so it’s a shock for consumers to realise that even such a big name could be involved in practices that are costing consumers. So, how do you spot an issue?

  1. Is the car damaged when you rent it? There is evidence that many car hire companies are charging consumers for the repairs to a damaged car and then not actually carrying out the repair. As a result, when you rent the car it could come with a list of pre-existing damage caused by someone else.
  2. Are payments appearing on your bank statements months after the rental? Look out for those additional, extra costs that are often taken without any notice.
  3. Are you doubling up on insurance? Don’t be tempted to take the belt and braces approach, even if the sales pitch is intense – you may already be covered.


How to protect yourself when you return a car

The return of the rental car is the key stage in ensuring that you don’t get ripped off. Ensure you:

  • Do a full inspection of the car before you return it. Ideally, do this with a member of the car hire company’s staff.
  • Make sure that the car rental staff sign off on your returned vehicle and get a copy of this for your records.
  • Take photos/video of every inch of the car, including the petrol tank.
  • Choose a rental car company that has signed up to the Competition and Markets Authority voluntary code of conduct. Although it’s difficult to identify specific companies that are “better” than others, the code of conduct at least demonstrates the right intent.

Read the reviews online from other consumers – if other people have been ripped off, most will be quick to post or talk about it.

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All about the Citizen’s Advice Service and how it can help you Mon, 09 Oct 2017 11:32:57 +0000 Alex Hartley Citizen’s Advice helped 2.7 million people last year. Formerly called the Citizen’s Advice Bureau, it is a service that offers free, confidential advice to anyone who needs it. Everything from a potential infringement of consumer rights, to money problems or issues with housing come under the Citizen’s Advice remit. If you feel like your consumer rights have been infringed, you’re involved in a dispute, or you need specialist advice and don’t have the resources to pay for it, Citizens’ Advice is a good place to start.citizen's advice service logo

Citizen’s Advice – a bit of history

Established in the 1930s, Citizen’s Advice was created to help the British people with their problems. The first 200 Citizen’s Advice Bureaux opened just after the start of World War II in 1939. These first organisations were generally run by upstanding members of the local community and they were instantly popular. By 1942 the UK had more than a thousand Citizen’s Advice Bureaux and the increase in numbers continued until the 1960s when the funding was cut. Today, Citizen’s Advice consists of a network of around 300 independent organisations and charities. It’s a much better organised entity than in years gone by and, thanks to the use of email and webchat, is now able to help far more people than ever before.

Citizen’s Advice today

The network of independent local charities that make up Citizen’s Advice cover 2,700 community locations across England and Wales. 7,000 paid staff provide the structure for countrywide advice across a range of issues – and they are supported by some 23,000 trained volunteers. Each local Citizen’s Advice is a member of the national body and together the 300 or so across the country make up the national Citizen’s Advice service. Much of the funding for the Citizen’s Advice comes from government sources.

Aims and purpose

The main aim of Citizen’s Advice is to help consumers out with problems that they might be having with issues that affect their lives. In providing that support Citizen’s Advice has four guiding principles:

  • Providing a free service
  • Ensuring advice is confidential
  • Offering impartial advice
  • Remaining an independent body

These principles are applied to a very wide range of topics, including benefits questions, immigration and asylum issues, landlord and tenant disputes, consumer problems and employment related complaints. Today, much of the advice provided is still face-to-face (48%) but now 45% of complaints are dealt with over the phone and the rest via email and webchat.

How is advice provided by the Citizen’s Advice?

Funding cuts in particular have had a big impact on the reach of the Citizen’s Advice (60% of its funding comes from the government). However, the organisation has adapted and evolved. Now, advice is provided via the Citizen’s Advice network and a range of partnerships, for example those that offer specialist guidance on issues such as pensions or dealing with cancer. The key factor is that there is always an option to get advice that is local to the person who needs it.

How to get help from Citizen’s Advice

In person – Citizen’s Advice has more than 3,500 locations across the UK where you can get advice in person. These are situated in high streets and GP surgeries, courts, community centres and prisons. You can find information on your local Citizen’s Advice via the website.

On the phone – there is a national phone number for England (03444 111 444) and also for Wales (03444 77 20 20) and you can also find local numbers by searching the website.

Webchat – the Citizen’s Advice webchat service means that anyone can chat with an advisor, as long as you have a computer or phone.

Online resources – if you’re looking to browse information, as opposed to asking a direct question, the organisation’s website is filled with helpful guides and data. You can search directly for information that might be relevant to you.

What do others say about it?

Citizen’s Advice has a positive reputation when it comes to helping people deal with issues they couldn’t handle alone. The fact that advice is provided for free, as well as the impartial element of the service, are particularly important to consumers. There is sometimes dissatisfaction with response times but on the whole it’s a very well viewed consumer organisation, both in terms of the individual advice and the policy changes it has helped to campaign for. Crucially, around two thirds of those who contact Citizen’s Advice have their queries resolved.

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The UK cities where thousands have problem debts Fri, 06 Oct 2017 10:38:18 +0000 Alex Hartley There are some locations in the UK where debt problems are much more intense than others. New research from the Money Advice Service has identified a number of UK locations where debt problems are particularly severe and where those who live there are statistically more likely to be in trouble with debt.

The number of people with debt problems is growing

Over the past six months the number of people in the UK with debt problems has increased to 8.3 million. Although that figure is still lower than the number of those struggling with debt in 2003, it’s 100k higher than six months ago. These new figures also mean that more than 10% of the UK population is currently overwhelmed by financial problems. However, the issues that we have with debt don’t tend to be spread evenly across the country. As you might expect, those living in wealthier areas such as Surrey and Buckinghamshire don’t tend to have the same issues with income and debt. The Money Advice Service research shows that it’s those who live in inner cities who are more likely to be drowning in debt.

debt-laden-citiesWhich are the worst areas hit?

Two London boroughs – Newham and Tower Hamlets – top the list of the worst hit areas when it comes to local residents being unable to service their loans. In these two locations 22.7% of the population is struggling to make repayments and meet bills – around twice the national average. Despite this (or perhaps because of it), Tower Hamlets is one of the locations in London that has seen some of the most significant property rises over past decade. Since 2009, according to figures from online estate agents, property prices in Tower Hamlets have risen by more than 77% to in excess of £264,000.  The average house price in the UK in March of this year was £216,000.

London doesn’t fare well

Overall, London is home to a large number of areas identified by the Money Advice Service as those where the local population in struggling to pay its debts. In addition to Newham and Tower Hamlets, Barking and Dagenham and Hackney also make it on to the list of locations where more than 20% of people are in trouble. 21.8% of the population in Barking and Dagenham is having trouble meeting repayments, while in Hackney it’s 20.9%.

But it’s not just London where people are struggling

Debt repayment isn’t just an issue for those living in London. In Manchester, more than 90,000 local adults are struggling to make repayments on debts according to the Money Advice Service. In Hull, it’s a problem that is affecting 21.5% of the population and in Sandwell, West Midlands the number of people with money problems tops 22.1%. Areas in the Midlands that make the list include Leicester and Nottingham – with 21% and 21.9% of the local population respectively in trouble with their debt commitments.

What are the factors involved?

There are some key correlations between the areas that the Money Advice Service identified where people are living with serious debt problems. Perhaps the most significant is that many of these are inner city areas. As noted, some of these locations are areas where property prices have risen significantly, effectively pricing lower income families out of the market or putting serious strain on incomes.

Another factor: the gig economy

According to Andrew Bailey, the chief executive of the Financial Conduct Authority, the issue is also being made worse for people who don’t have a predictable and reliable income. Those who work in the gig economy – such as Uber drivers – as well as anyone on a working zero hours contract may find themselves at the end of the month without enough cash to cover repayments in addition to living expenses.

One of the key elements of the gig economy is its flexibility for both workers and employers. Work is not guaranteed but is available on demand as required. Although this allows workers the flexibility to avoid committing to regular hours it means they also don’t have the security of a predictable monthly wage and have no right to ask for a minimum monthly commitment from employers. Estimates vary but more than five million people are now thought to earn an income via the gig economy. For those workers incomes could slow – or stop – at any moment leaving no income with which to cover debts.

Although there are some areas of the country worse affected than others when it comes to making debt repayments, the number of locations where more than 20% of the local population is struggling to repay debt could soon go up, as opposed to down. With poor wage growth and high inflation affecting incomes, as well as utilities increases and Brexit redundancies there could soon be even less in the bank at the end of each month to make those debt repayments work.

Video Guide to Managing Debt

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Central Heating is going on – our tips for home energy efficiency Wed, 04 Oct 2017 10:28:51 +0000 Alex Hartley Maybe you’re a summer person; maybe you really dislike the cold and grey of a British winter. Whatever your favourite season happens to be, for all of us at this time of year there’s more than a little anxiety thanks to the rising cost of energy. As the days get shorter and the temperatures drop it’s time to turn the central heating on – and that means bigger bills. When you combine the need to use more energy with the recent (and predicted) price rises, that can throw any budget into disarray. However, it doesn’t have to be as bad this year, as there are lots of ways to make sure that your home is more energy efficient – so that it costs you less to run.central heating radiator thermostat

Washing your clothes

It’s no myth that washing clothes at a lower temperature will save you cash – and it’s better for the environment too. Dropping the temperature of your wash from 40 degrees to 30 degrees can save you around a third on the cost of the wash.

Investing in insulation

Poorly insulated homes leak heat and if your home is leaking heat then you’re going to need twice as much energy to keep it warm – sending your bills sky high. Install insulation and you can considerably cut your spend. According to British Gas, sorting out your loft insulation could save you up to £140 a year in energy bills while wall insulation can save up to £160.

Kit your home out with energy efficient products

Appliances such as the fridge and the freezer can use up a vast amount of energy. When you’re shopping for new appliances for your home don’t just choose on the basis of aesthetics or even functionality – look at the energy efficiency too. Most appliances should now come with energy efficiency information clearly marked. The size of an appliance tends to have a big impact on how much energy it uses too – the smaller the appliance, the better.

Get used to flicking the ‘off’ switch

When you’re not using gadgets or appliances, make sure that they are switched off. Get everyone in the house used to turning off the light when you leave the room or using lights on a lower setting. Some appliances are consuming energy simply by being plugged in – you don’t even have to be using them. So, be more aware of the devices and items that you leave plugged in and switched on, from phones and laptops, to entertainment systems.

Be more heating efficient

No one wants to wake up in a cold room on a winter morning – or come home to a cold house. But you can save cash by avoiding leaving the heating on for long periods of time when there’s no one in the house to enjoy it. Use the timer settings on your heating instead. Set the heating so that it comes on around 15-30 minutes before you need your home to be warm and time it to go off around the same amount of time before you go to bed.

Deal with the draughts

We lose roughly 35% of the heat from our homes via gaps and holes and undealt-with draughts around the house. So, you can significantly improve the energy efficiency of your home if you take the time to work out where draughts in your home might be coming from – and put a stop to them. Thick curtains, for example, can retain heat where there are gaps between windows. Or you can install secondary glazing, either the glass option or the far cheaper plastic sheeting, which costs around £8 per window.

Consider generating your own energy

The cost of electricity goes up by roughly 10% each year – it’s a utility that we’re using more and more of and which becomes ever more expensive. So, it makes sense to look into the options for generating your own electricity. From solar panels on the roof, to wind turbines, there are a lot of options now for homeowners (or even tenants) to look into how electricity might be generated by the individual to cut the cost of energy bills. Feed-in Tariffs set up by the government pay those producing electricity for every unit generated, whether it’s used in the home or sold back to the grid. So, not only can you reduce your dependency on high priced electricity from energy providers by setting up your own supply, but you can generate cash from it too.

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Gambling – What’s the Problem? Mon, 02 Oct 2017 10:45:05 +0000 Alex Hartley Problem gambling is, more often than not, something we associate with other people. It might happen only to the desperate; perhaps it’s just an issue for someone who already has an addictive personality. Most of us feel that we’re unlikely to have a problem with gambling. However, the reality is that it’s a growing phenomenon that is becoming increasingly costly – last year punters lost £13 billion via gambling habits.

Gambling addiction slot machinesGambling addicts come from every walk of life

It’s not just those who are desperate for cash who might risk it all on a gamble. Premier League footballer John Hartson is perhaps one of the most high profile people who has admitted to having a gambling habit. Despite the huge income that being a Premier League footballer generates, he still turned to gambling and his finances suffered enormously as a result. Hartson is now clean and free of the habit that cost him so much but is just one example of the many people in the UK who become trapped by this habit.

How popular is gambling?

A gamble could be anything, from getting addicted to playing the lottery, to having a serious habit betting on the horses or in casinos. According to the Gambling Commission 48% of people have gambled in the past four weeks. Men are marginally more inclined to be gamblers than women but very few people are willing to admit that they might have a problem with it. In 2012 just 0.5% of people over the age of 16 identified as being a problem gambler. However, the Gambling Commission has found that the number of those over 16s who are deemed to be problem gamblers has grown by a third in three years. It estimates that there are now around 2 million people in the UK who are already problem gamblers or who are at risk of being problem gamblers.

The rise of the home gambler

Online gambling has opened up the options for those who love to gamble, allowing bets both large and small to be placed from the comfort of your own home. 97% of online gamblers do it at home behind closed doors. There are lots of studies that indicate how much easier it is to make a purchase online when you don’t have to physically hand over any cash. And that has certainly had an influence over the increase in gambling, which – most of us can admit – feels far more consequence-free when you’re sitting alone with a laptop.

How does a problem gambling habit arise?

A decade or so ago there was no acceptance of gambling as an addiction i.e. being motivated by a need to relieve anxiety, as opposed to doing something because it was pleasurable. Gambling has always been seen much more as a compulsion – or simply as fun – than an addictive problem. However, that’s no longer the case as studies of gambling, and the impact that it has on the brain, have revealed that the behaviours associated with a gambling problem are actually far closer to those of drug addiction. Gambling is appealing because it presents the illusion of easy money – something that relieves anxiety for many people. However, more often than not, it leads only to money loss – which then drives the desire to keep going until any initial spend has been recouped to try and “make right” the error of losing cash in the first place. It can briefly release feel good chemicals into the body, which provide brief relief from other negative feelings about the self or situations. Eventually, gambling can become a complete obsession, a way of life and can lead to massive debts and total financial ruin.

Developing the gambling habit from an early ageHow does the UK deal with gambling?

The UK legalises and licences certain forms of gambling. Operators offering gambling must meet certain conditions or can face fines or having their very lucrative licences revoked. Illegal gambling attracts financial penalties and criminal sanctions. The Gambling Commission has jurisdiction over UK gambling operations, whether online or offline, and has powers under UK legislation such as the Gambling Act of 2005. Its objectives include ensuring that gambling is conducted in a fair and open way and preventing gambling from becoming a source of crime and disorder. So, for example, you cannot gamble in the UK if you are under the age of 18.

What to do if you have a problem

Gambling problems are becoming increasingly common and there is plenty of help available. You can visit your doctor to ask for help and advice to deal with the issues that are causing you to gamble. There are also three organisations in the UK dedicated to assisting those with a problem that you should contact if you need help:

National Problem Gambling Clinic – anyone over the age of 16 can refer themselves to this free service.

Gamcare – this service has a free hotline or you can speak to someone via a web chat.

Gamblers Anonymous – GA offers practical support in the form of a 12-step programme very similar to Alcoholics Anonymous.

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What you need to know about Aldi’s and Lidl’s UK supermarkets Fri, 29 Sep 2017 09:53:21 +0000 Alex Hartley Up until the 1990s, the UK had a pretty well established pecking order of supermarkets. From Waitrose and M&S at the top, to Asda at the more budget end, everyone pretty much shopped within their expected buying demographic. And then Aldi and Lidl arrived and changed everything.Aldi supermarket

Where did they come from?

Aldi and Lidl are German brands that landed in the UK retail market in the early 90s. Initially, they were designed to cater purely for those looking for cheap deals and low cost food and household items. However, today between them these two German giants now have a 12% share of the UK grocery market, which is spread across many different demographics. Lidl has plans to open another 60 shops in the UK across the next year and both are likely to remain a force to be reckoned with. Which means that even if you might not have thought about shopping there before you could now be one of hundreds of shoppers considering it.Lidl supermarket

How to shop at Aldi and Lidl if you’ve never been there before

Long gone are the days when you might have gone to Lidl or Aldi for cheap tins or packaged goods when freshness or provenance wasn’t really a priority. Both of these stores now have ranges that tap into consumer desires for food with a traceable heritage and have grown to understand the importance of the shopping experience. So, shopping at Lidl, for example, no longer feels like browsing a warehouse – since the focus on quality was introduced everything has been upgraded.

Get to know the product ranges. For example, Lidl now has a range of fresh fish that is MSC-certified, which means the fish has been caught sustainably. Aldi dedicates an entire page on its website to its organic focus. All Aldi own label baby food is organic and the range of organic fruit and vegetables at the store increases year on year.

Understand the limitations. One of the ways that these supermarkets keep their prices down is to avoid buying in the big name brands. So, if you’re looking to be brand specific in your purchases, especially if that brand is very well known or high end, then you’re unlikely to find what you’re looking for in a Lidl or Aldi store. However, if you’re willing to forgo the big name logos and labels and test to find the right quality and taste you could get more for your money without compromising.

Look for the copycat own label products. Lidl and Aldi sail pretty close to the wind when it comes to their own label ranges, which often bear a striking resemblance to big branded products. However, this makes them enormously popular with consumers as in many cases you’re getting virtually the same product for (often) half the price – just in different packaging. Brexit has had some impact on Aldi and Lidl with reports that the falling pound has meant some of the lower priced products have risen to around the same level of competitors. However, for many items the value is still there.

Work out how much you could save. The simplest way to quantify the true value of shopping at Aldi or Lidl is to put together a basket of your average weekly shop and see how much it costs compared to another supermarket. Use an app like MySupermarket, which will show you which stores offer the cheapest options when it comes to the goods that you buy the most. What you save depends on the products you buy and how you shop. However, there are plenty of surveys and studies to show that you will save at least something. For example, participants in a Telegraph survey saved 25% by shopping at Aldi and data from analysts Nielsen found shoppers spend £15 less at Aldi and Lidl than at the ‘big four’ Tesco, Asda, Sainsbury’s and Morrisons.

Don’t be put off by fears about quality. Traditionally, it was quality concern that drove many shoppers to higher end super markets. However, both Lidl and Aldi have put a lot of time and effort into improving quality and taste standards. And it seems to have worked – in a 2016 Christmas Good Housekeeping blind taste tests of mulled wine, smoked salmon and mince pies, Lidl and Aldi beat Fortnum & Mason’s and Harrods.

Listen to what others think. Mumsnet, for example, is full of opinions on whether Lidl and Aldi really are worth the hype – these are just a few of them:

“Lidl has more brands you will recognise. Aldi has (IMO) wider range of stuff. I can do weekly shop in Aldi and not need to go anywhere else.”

“Aldi is considerably cheaper than Tesco, shopping carefully or otherwise.”

“Aldi’s own brand personal care & household cleaners are not tested on animals and that swings it for me.”

“Aldi! I’ve shaved off at least 50 -70 quid a week shopping there instead of Tesco.”

“Not sure if our Aldi is different to everyone else’s but I find it good for quite junky food where I can much more fresh fruit and veg and plain meat (as in not the easy to cook with sauce etc) in Lidl.”


There are now 600+ Lidl stores in the UK and Aldi opened its 700th in February 2017. Most are smaller and more accessible than the big out of town hypermarkets other supermarket brands opt for. So if you want to start shopping at Aldi or Lidl there’s highly likely to be one near you right now.

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How is the move to smart energy meters going to help you? Wed, 27 Sep 2017 10:21:19 +0000 Alex Hartley Energy efficiency presents a big challenge, for the UK and countries all over the world. After the EU asked member governments to look at ways to improve energy efficiency, the UK government decided on an ambitious plan to install smart energy meters in every UK home by 2020. That’s more than 26 million households across England, Wales and Scotland with only two and a half years to go. Although, predictably, the government scheme has run into a few issues and deadlines have had to be extended, on the whole most agree the scheme is a positive move. But what are the benefits of smart meters, why are we getting them and what are the issues that have held the roll out back so far?Move from dumb to smart energy meters

Smart vs. dumb energy meters

Smart meters are primarily being used to give consumers more control over energy usage. A smart meter in your home will show you exactly how much energy is costing you – and how much of it you get through. This should make it cheaper as you’ll be able to get a better idea of how you use energy and find ways to cut back or use less. But it’s not just about reducing individual costs. An energy meter will also enable people to make decisions that are more environmentally friendly too.

What are the benefits of a smart energy meter?

  • See what you’re spending in pounds and pence – it’s much easier to understand how using less energy impacts on your finances when it’s there in figures.
  • According to Which? annual savings from smart meters will be around £11, rising to £47 by 2030.
  • The end of estimated bills – no more nasty surprises when it comes to energy bills. A smart meter means you can keep track of the bill that is accumulating and plan better for when it must be paid.
  • No more strangers reading your meter
  • Certainty, as opposed to estimates – you’ll see there in black and white how much you’re going to be paying, as opposed to trying to work it out via a meter reading.
  • No more overpaying by accident – you’ll only pay for what you use so you don’t have to spend weeks trying to get your cash back from a big energy provider.
  • Smart meters have been designed to provide clear and easy to understand information so you’ll even be able to see which of your appliances is costing you the most.

How can you get a smart energy meter?

Everyone in the UK should eventually get a smart energy meter as part of the government’s nationwide roll out. Your energy supplier should contact you to arrange the installation of the smart energy meter at some point in the next couple of years. However, you can also contact the energy supplier direct to find out when that is likely to be. Speed of implementation depends on a number of factors, such as where you live and what kind of home you live in. Installation involves:

  • Initial contact about the smart energy meter
  • Setting a date for installation (someone needs to be present when it’s installed)
  • Installation, during which you’ll be shown how to use the smart meter

What are the benefits for energy suppliers and the government?

The UK’s energy infrastructure is behind the times when it comes to the way it is measured and so the smart meter upgrade is one that has been a long time coming. Both energy suppliers and the government have targets to meet when it comes to energy efficiency and getting consumers to actively take part in reducing energy consumption will contribute significantly. For both energy suppliers and the government it’s a smart move because the costs of the roll out will largely be passed on to consumers via energy bills!

What’s the progress so far?

Around eight million homes in the UK have already been fitted with smart energy meters. However, the process has not been without its problems.

  • Many large energy suppliers have blamed the smart meter energy installation for their price rises e.g. Scottish Power increased prices by £10 a year, almost totally wiping out the potential consumer saving from having the meter.
  • A large proportion of the meters so far installed are SMETS1 meters. These first generation meters could be incompatible with the new national communications network, which links energy supplier systems to the smart meters. Currently, the SMETS1 meters revert to being ‘dumb’ if someone switches supplier, which means that customers are stuck with their current supplier if they want an energy meter to keep working!
  • The timing for installation has already slipped. In the Queen’s Speech over the summer, a Smart Meter Bill had to extend this from 2020 – 2023.

Smart energy meters are, in theory, a great idea. Whether they do genuinely save money for consumers depends on whether the technical issues are fixed and – most importantly – whether consumers really do take the time to monitor energy usage and act in response.

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The big business of charitable giving and how your donations are spent Mon, 25 Sep 2017 09:51:18 +0000 Alex Hartley Charity begins at home and in the UK we’re keen givers to great causes. According to statistics from the UK branch of the National Philanthropic Trust 61% of people donated to charity last year. Online giving increased in 2016 by more than 7% compared to the year before, with a fairly equal split in charitable causes between medical research, animal welfare and children or young people’s charities.Charitable giving & donations

How big is the UK charity sector?

At the end of 2016, data from the Charity Register indicated that there were around 167,100 charities in England and Wales. In 2015 – 2016 the UK voluntary sector as a whole received £7.6 billion in legacies, gifts and donations. So, in many ways, charities have become big business in the UK. Inevitably that has led to a few situations where money kindly donated has not made it to the right places. The founder of a breast cancer charity – the National Hereditary Breast Cancer Helpline – for example, employed her daughter using charitable cash, and in one year only 3% of the charity’s £909,634 costs were found to have been spent on ‘charitable activities.’ So, where does that leave giving to charity today?

How much of your cash actually goes to charity?

It is very difficult to provide concrete evidence of how much of every donation goes directly to the cause it’s designed to support. This also depends on the way that money is being collected or given. It’s not illegal to fund raise with buckets on the street, for example, but it’s often very difficult to work out where any donation received that way is going. Even with larger and more established organisations the transparency is not really there. Some 800 reports of charity fraud were made in 2016 and there have been some high profile instances of scammers trying to take advantage of generous hearts – such as those who posed as charitable organisations after the Grenfell Tower fire. There is no single standard for what percentage of a charitable donation must go to the good cause in question. The only way to definitively establish if that’s the case is to look at the charity individually.

Measuring the impact of your donation

If you want to see how your chosen charity operates then look at the numbers. By law, every charity must prepare a set of annual accounts. Most charities, especially the big ones, publish these figures on their websites – and you can also view them via the Charities Register. However, although you’ll be able to see what the charity earned and what was spent (and broadly how it was spent) this isn’t definitive. The only real way to understand how your donation is spent is to ask the charity for an explanation.

The benefits of charitable giving

Other than the warm and fuzzy feeling we get from helping the causes we really care about there are some other benefits to charitable giving in the UK.

  • Inheritance tax – if you leave a part of your estate to charity when you die you can significantly reduce the inheritance tax bill.
  • Income and capital gains tax – depending on what you’re donating (e.g. cash, land, shares) you could get income and capital-gains tax relief to deduct against total income so you pay less tax overall.
  • Payroll Giving – charitable donations made directly from wages are deducted before tax is calculated, leaving less salary on which tax is due.

Making sure your money is well spent

Although there is no guaranteed way to ensure that charitable donations get to the right place you can take steps to make sure your money has the best chance of reaching those who really need it. Our suggested checklist:

  • Make sure you’re dealing with a registered charity – you’ll be able to search the charity registration number on the Charity Commission
  • If you’re approached by someone collecting in the street then ask to see his or her ID. An official charity collector should have one. You can also ask them for more information about the cause they’re collecting for – if they’re genuine then they should be happy to give this to you.
  • Don’t get sucked in by upsetting images online and donate to causes you’re not 100% sure about. Make enquiries about the authenticity of any organisation, especially if they’re asking for cash via a money transfer service. Some new charities do genuinely operate this way, especially when small or if foreigners working abroad (e.g. rescuing dogs from Chinese dog meat vendors). However, if you don’t want your money to end up in the wrong hands it’s important to verify any organisation you’re considering first.

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Update on the leaseshold property scandal Fri, 22 Sep 2017 10:41:32 +0000 Alex Hartley The world of leasehold property has been a hot topic this year. For the first time many people have begun to question the logic behind paying for a property over which someone else still retains a measure of control. This has come into sharp focus with the leasehold scandal, which illustrated just how costly it can be for homeowners to buy a property that is ‘leased.’ Now, though, there is some light at the end of the tunnel with potential government intervention in this rather shady part of the property world.freehold vs leasehold property

The problem with leasehold

Most properties in the UK are available either ‘freehold’ or ‘leasehold.’ A freehold property purchase transfers entire ownership to the buyer, now and forever, as long as any mortgage payments are kept up. A leasehold property is sold on the basis of a long lease – for example 150 years – and when that lease expires ownership of the property reverts back to the freeholder. Most flats in the UK are sold on the basis of leasehold and many newly developed properties are also offered as leasehold.

The leasehold property scandal

Leasehold property is a form of ownership designed to be less costly. For example, if you own your property freehold then you’re responsible for everything in it, from the entire building, to the land it stands on. If you’re a leaseholder then it’s often the freeholder who has responsibility for common areas or the outside building itself, which means that they also have to cover the cost of maintenance and repairs. In theory, being a leaseholder should be less costly.

However, the leasehold property scandal has exposed how profits are being made in a way never intended from leasehold property. A large number of freeholds, particularly those attached to new developments, have ended up being sold on to third party investment companies who hike up the price of the freehold to any leasehold owners looking to purchase it. Many leaseholders have also found themselves trapped with a ‘ground rent’ (the annual fee payable from leaseholder to freeholder) that doubles or triples every year. Not only does this leave homeowners with huge costs to pay – increasing year on year – but it also makes many of the homes affected very unattractive to potential buyers.

The latest breakthrough

Government action – communities secretary, Sajid Javid, outlined over the summer that the government was planning to ban leasehold properties altogether. He also made clear that there were potential plans to reduce ground rents to as low as zero in the future, given the huge amount of protest there has been over the way this part of the leasehold contract has been exploited.

Industry action – a major UK developer (Countryside Properties) has agreed to buy back some freeholds it had sold on to ground rent company E&J Estates and to release a number of homeowners from ground rent clauses that double every 10 years. In August this year, E&J Estates wrote to a number of homeowners and apologised for the distress caused by the situation. It also stated that a number of the leaseholds had been sold back to the original developer, Countryside Properties.

Will it make a difference?

The acknowledgement of the issues caused by selling on the leaseholds – and by the exploitative ground rent clauses – is a step in the right direction. The actions taken by Countryside Properties will put pressure on other developers to do the same and could – with added government influence – start things moving in the right direction. However, right now it’s just one developer. And the move doesn’t apply to all the developer’s leasehold properties. For example, Countryside Properties leaseholds where ground rents double every 15 years – as opposed to 10 – are not included and neither are those where the freehold was sold on to a different third party that is not E&J Estates. That still leaves a very large number of people in a very difficult position.

What about those already affected?

The government’s plans to ban leasehold and reduce ground rents don’t help those who are already stuck with an out of reach freehold or a spiralling ground rent. And the consequences of being in that position can be harsh. One Guardian reader, for example, wrote in to the newspaper about his ground rent, which – in 2004 – had been set at £250 a year. As a result of the doubling provisions in his lease agreement, in another decade that ground rent will be £128,000 a year. His request to buy the freehold was met with a quote of £100,000+.

The solution for homeowners may not come easily. Many claim doubling ground rent clauses weren’t brought to their attention by their solicitors – which could potentially encourage affected buyers to look for damages from their legal advisers. Housebuilders are also affected – seeking compensation from developers, claiming that because of these clauses their properties have now become almost completely unsaleable. So, the entire industry is somewhat in disarray and – until more concrete steps are taken to deal with the exploitative loopholes of the leasehold – is likely to remain so for the foreseeable future.

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The Funny side of Munny – yes there is one! Wed, 20 Sep 2017 10:11:58 +0000 Alex Hartley “Do you want to make money from Facebook? It’s simple. Just go to your computer, turn it off – and go to work!” This is just one of the many jokes that you’ll find online about making cash. Although money is a pretty serious topic for all of us there are times when you need to dial up the humour on subjects like taxes, budgets, not quite living within your means and life envy of the seriously wealthy.

And now might just be the perfect moment. After all, it’s that time of year when the sun is even less likely to make an appearance, we’re back to the routine of school and work, and your summer tan has pretty much faded. Right now, we all need a reason to …

laugh it's the funny side of moneyPaying taxes is no laughing matter…

Although maybe it is because over the years HMRC has received what it considers to be some pretty hilarious excuses for not submitting tax returns. Not a joke exactly (although they obviously made the tax office laugh), the tried and test excuses from UK businesses that missed those all important deadlines make for some pretty interesting reading:

“My pet goldfish died.”  —Self-employed builder

“Our business doesn’t really do anything.”     —Financial services firm

“I’ve been too busy submitting my clients’ tax returns.”     —Accountant

Cash is “funny munny” to some people…

Tax – and where it ends up – tends to be a great source of material for comedians. That’s particularly the case in America where some of the best jokes revolve around what rich people (and the government) do with their cash. For example…

“Tax day is the day that ordinary Americans send their money to Washington, D.C., and wealthy Americans send their money to the Cayman Islands.” –Jimmy Kimmel

“Two things you need to know about taxes. They’ve extended the deadline to April 18, and when you write your check, just make it out to China.” –David Letterman

Every cloud has a silver lining…

Comedians are experts at finding some humour in even some of the bleakest situations. Bill Murray is one comedian well known for his dry wit, which even managed to make the recession feel a little funnier:

“A few decades ago we had Johnny Cash, Bob Hope and Steve Jobs. Now we have no cash, no hope and no jobs.”

But famous comedians aren’t the only ones who decided to find the humorous side in a cash crisis – the BBC set up a page for jokes about the 2008 financial crisis and some of them are rib ticklers..

“What do you call 12 investment bankers at the bottom of the ocean? A good start.”

“What’s the difference between Investment Bankers and London Pigeons? The Pigeons are still capable of making deposits on new BMW’s”

Inflation – hilarious…

You might not think that there are many jokes to be made about the cost of living. But some people have the serenity to laugh at the things they cannot change (without another election) and the courage to make a joke out of it – for example, “Despite the cost of living, have you noticed how popular it remains?”

And then there’s Jennifer Saunders’ character Edina Monsoon in the show AbFab who jokingly summed up what it means to be a modern consumer, “I DON’T WANT MORE CHOICE, I JUST WANT NICER THINGS.”

Jimmy Carr is one comedian who has also woven this topic into his shows, “I’d like to leave you ladies and gentlemen with this frightening fact: I’m not sure if you’re aware of this, but if you took all the money that we in the West spend on food in one week, you could feed the Third World for one year. I’m not sure about you people, but I think we’re being overcharged on groceries.”

Of course Jimmy Carr himself probably hoped that HMRC had a sense of humour when he got into trouble with his taxes. But he’s just one of the many rich and famous who have much more to laugh about when it comes to cash. Although American poet Dorothy Parker’s caustic wit doesn’t exactly paint that to be a good thing… “If you want to know what God thinks of money just look at the people he gave it to.”

But, when it comes to the stark contrast between lifestyles we want and the lifestyles we actually have, Victoria Wood always managed to put her finger right on it – via the medium of a good laugh. “Life’s not fair, is it? Some of us drink champagne in the fast lane, and some of us eat our sandwiches by the loose chippings on the A597.”

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How to turn getting fit and staying so into cash! Mon, 18 Sep 2017 10:53:34 +0000 Alex Hartley Obesity is one of the leading preventable causes of death. According to the UN Food and Agriculture Organisation one in four British adults is obese. That puts the British high up the world ‘obesity league’ above countries such as Ireland and Spain. Not only that but one in 16 people has diabetes in the UK, mostly Type 2, which is linked to poor lifestyle choices. Plus, nearly 10% of children in the first year of school in the UK are overweight. So, the UK is not exactly a shining example of good exercise good health

The problem

Many causes have been put forward as to why we have become such an unhealthy nation. From desk jobs and longer working hours, to the increase in TV time and addictions to unhealthy foods, there are lots of opportunities to become fatter and less fit. However, what stands out as a bigger problem than any other is a lack of motivation. We’re all happy to like Instagram photos that provide #fitspo but when it comes to getting up and achieving that for ourselves – not so much.

The solution?

Would you be more motivated to reach your exercise targets if there was a reward at the end of it? If achieving that daily run could net you cinema tickets or discounts on your food shopping? There is no one single solution to the issues that affect the UK population when it comes to health and fitness. But tackling the motivation problem is a great start – this is where the NHS England’s ‘Healthy Towns’ initiative, that was announced in 2016, is designed to make an impact.

Healthy Towns

The idea behind the Healthy Towns initiative is that the burden of lifestyle related illnesses on the NHS can be reduced by motivating people to be healthier. For example, there is a proposal to create an app that rewards people for reaching walking goals. Those rewards could be anything from cut price shopping, to discounts on sports kit or vouchers for entertainment. The initiative was launched in March 2016 and covers 76,000 homes and 170,000 residents. It extends right across the country and is intended to include many different projects and ideas. In Runcorn, Cheshire, for example, as well as the walking app there are also plans for outdoor gyms, free cooking lessons and free bikes. Simon Stevens, the head of NHS England, said:

“As these new neighbourhoods and towns are built, we’ll kick ourselves if in 10 years’ time we look back having missed the opportunity to ‘design out’ the obesogenic environment, and ‘design in’ health and wellbeing,”


A new perspective

According to a Design Council estimate the average Brit walks for less than nine minutes a day. Given that healthy adults aged 19 – 64 are supposed to aim for 150 minutes of moderate aerobic activity each week to stay healthy that means many people in the UK are falling far short of the recommended targets. This epidemic of unfitness doesn’t just affect individuals and the NHS but wider society too – it’s estimated that 130 million work days are lost every year due to ill health. That’s why everyone, from planners and developers, through to employers, are being encouraged to engage with this new perspective that encourages a healthier lifestyle for the benefit of everyone.

Rewards for fitness

It’s not just NHS England that has seen the potential in offering incentives and rewards in return for maintaining levels of fitness and reaching certain wellbeing goals. Wearable fitness tech – such as the Fitbit – can now be used to earn cash and prizes via performance. There are numerous schemes and programmes now in place where you can hook up your fitness tracker and use healthy habits to earn rewards, such as vouchers and cash back.

For example Bounts, which enables you to connect any fitness tracker to its app and start building up points. The points can be converted into offers from big name brands or the opportunity to take part in challenges – which can then be converted into even more points. Then there are apps such as Healthy Wage – this involves using the incentive of cash to reach a weight loss goal. When the goal is set, you make a wager on it i.e. how much you’re willing to bet on whether you’ll actually reach the goal. If you meet the goal then you win the cash prize, if not then it goes into the Healthy Wage pot for good causes.

If there’s one thing that most of us know it’s that the carrot is often more powerful than the stick when it comes to motivating human behaviour. If you’re keen to get fitter – or looking to lose weight – then it’s worth exploring the various rewards and incentives on offer to find a way to meet those goals and earn at the same time.

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How to avoid fake news and burst your “filter bubble” Fri, 15 Sep 2017 11:03:33 +0000 Alex Hartley Filter bubbles and “fake news” are not the same thing, but they both have an enormous impact on the news and information you consume, and therefore the opinions you are likely to form. If you want to remain open-minded and take a balanced view you need to be able spot fake news and burst your information filter bubble.

‘Fake news’ has been much in the headlines recently – mostly thanks to its hijack as a term by Donald Trump. While its purported influence in major historic events, such as the 2016 presidential election in America and Brexit referendum in the UK, is unnerving the attention it has generated has been useful. Because for the first time, many of us are beginning to appreciate how we digest the news and how it’s completely possible to exist in an information bubble of your own making.

How did we get here?

The personalisation of news has changed the way that we digest world events. 50 years or so ago we might have all watched the same news channels and read the same newspapers. Although there have always been accusations of bias against journalists and publishers, until now, we’ve never had a situation where individuals can totally filter out the news we don’t agree with. But today – mostly thanks to social media and Google algorithms – we do. The ‘Filter Bubble’ is a term for choices made for us by algorithms, for example in Google Personalised Search results and Facebook’s personalised news-stream. The bubble basically ensures that we see what we want to see based on past clicks or preferences. The result is that we effectively become isolated in our own cultural or ideological bubbles.

What’s the impact of the Filter Bubble?

Essentially, you only see and hear what you want to see and hear. As a result, you might start to believe that your view is the dominant view – which means that election results that don’t go your way, for example, can come as a big shock. You may also believe you’re right in everything you believe because the flow of news coming your way supports everything you think, with no challenge. This opens the door to “fake news,” which is basically a set of false facts presented as news to support a certain view. However, because what you’re seeing and reading is so tailored to your views – and not objective – fake news that is in line with your own beliefs (but still not true) is harder to spot.

How can you avoid the Filter Bubble?

  1. Delete your cookies. Cookies are data that is stored by your web browser as you’re browsing. If they’re enabled then they compromise your privacy and can be used by other sites to determine what to show you next. If they’re deleted regularly – or totally disabled – then your past interests and preferences can’t be tracked in this way. (see how to delete your cookies).
  1. Control your social profiles. Keep your data private, switch off Personalisation (on Facebook) and hide your birthday so you can’t be fed news based on assumptions about your digital profiles.
  1. Use an anonymous browser. Browsers like Tor don’t track what you do – at all. The software is free to download and means that you can digest a wide range of news, not just what an algorithm has picked for you. You can also choose to use Google Chrome in “incognito” mode & other browsers have equivalents.
  1. Step outside your comfort zone. Sign up for newsletters and read newspapers that you don’t necessarily agree with ideologically. The only way to get a true perspective on world events is to read as widely as you possibly can around the subject.
  1. Don’t immediately shout down opinions you don’t agree with. The issue of Trump or Brexit tends to generate heated debate – the consequences really matter for many people. However, shouting louder than someone who disagrees with you means you might miss out on an interesting perspective or idea.
  1. Go offline. Turn off your phone, shut down your laptop, go and speak to people in the real world.

information filter bubble

Top tips for spotting fake news

None of us wants to be taken in by the fake news phenomenon but how can you spot a piece of news that just isn’t real?

  • Who is the source? Investigate where this piece of news has come from – a party political think tank or an objective organisation? Do they have contact details and a real website?
  • Who is the author? Look into the background of the person, whether they are credible and whether they’re even real.
  • Reverse Google images. Check images that look suspect by doing a reverse Google image search. You might find that what you’re looking at attached to a current news story is actually five years old.
  • Don’t just read the headline. What does the story actually say?
  • Be wary of statistics. “9 out of 10 people” doesn’t mean 90% of everyone – it could just be 9 people out of a world population of 7.5 billion dressed up to sound like a majority.
  • What sources are provided? Where is the information coming from and are those sources credible?

Ultimately, the only way to get out of your bubble and away from fake news is to get out into the world and absorb as much of it as you can. From debating with other people, to reading all the papers, you’ll have a much more balanced perspective on life if you don’t just stick to your own views, feeds and websites.

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A summary of pawnbroking and how to use a pawnbroker Wed, 13 Sep 2017 11:13:27 +0000 Alex Hartley Pawnbroking is a custom as old as time – it even existed in the Ancient Greek and Roman Empires. The practice arrived in England with William the Conqueror in the 1050s and has been used by kings and paupers to help raise cash at essential moments. Even some of the most successful historical figures have a history of pawning their stuff – King Henry V pawned his jewels in 1415 to raise money for a war with France. The famous Medici family of Florence is thought to have provided the symbol of pawnbrokers worldwide – three spheres hanging from a bar. Wherever you see that sign then there’s a pawnbroker nearby.

Does pawnbroking still exist?

Yes, very much so. If you’re looking to pawn one of your possessions then you normally have two options. Either you can opt to sell the item to the pawnbroker or you can loan cash from the pawnbroker for a set period, such as six months, with the item as security. You can retrieve what you’ve pawned at any time by repaying the loan and the interest up to that point. If you can’t repay the loan then the pawnbroker keeps whatever possession you provided. In every case it’s the pawnbroker who sets the price that you’ll get for the item you’ve pawned. You’ll then expect to pay 7% to 8% interest every month.

How does a pawnbroker decide on a price?

Lots of factors come into play. For example, pawnbrokers will look at the resale value of the item. They will also bear in mind the supply and demand – rare, wanted items are likely to be worth more. The pawnbroker will also take into account any interest that is going to be paid on the loan and also how saleable an item is/whether it is damaged. Many pawnbrokers start with a price range of the wholesale price up to the retail price and then increase or discount based on these other factors mentioned to establish value. The pawnbroker then offers 50% to 60% of the item’s value as a cash loan.

What items is it possible to pawn?

The short answer is everything and anything. If you have something a pawnbroker can see some value in then you’ll get a price for it. This has resulted in some pretty weird and wonderful items being offered:

  • Gold false teeth
  • A fishing trawler
  • A racehorse
  • Toupees and wigs
  • A glass eye
  • A herd of cattle
  • A swimming pool (still in the ground)
  • Bodily fluids of famous rock stars
  • Prosthetic limbs
  • Urns of ashes of dead relatives

Different types of pawnbrokers have evolved for niche markets – there are even luxury pawnbrokers for big-ticket items. However, across the board, jewellery is probably the most common item offered as security for a loan in a pawnshop. That and items of furniture, watches, designer handbags and even the odd car or work of art.

Why would you use a pawnbroker?

It might seem strange for someone in possession of designer handbags, expensive jewellery or high-end cars to look to a pawnbroker for help. However, the pawnbroker provides a simple solution to what can be a big problem from all sorts of people: a lack of cash. You might have lots of expensive possessions but very little cash – so, by pawning something, you can create some cash to spend.
High street pawnbroker

How to use a pawnbroker

  • If you’re not happy you can make a complaint to the Financial Ombudsman Service – roughly 30% of complaints made against pawnbrokers are upheld.
  • Ensure you know the value of what you’re pawning if you want to get the best deal. Do your own research into supply and demand, wholesale and retail values and what similar items would sell for on an open market. You might even want to take proof of these to help the pawnbroker make the right decision.

The alternative to pawnbroking: short term lending

Payday loans and doorstep loans provide an alternative to working with a pawnbroker. There are a number of differences between these lending options and taking items to a pawnshop.

  • Payday loans and doorstep loans don’t require a valuable asset as security i.e. you don’t need to provide an item in exchange for the loan.
  • Pawnshop loans don’t have set value limits. What you can borrow depends entirely on the value of the item.
  • Payday loans and doorstep loans use factors such as salary and credit score to determine what you can borrow.
  • You can apply for payday loans and doorstep loans entirely online; pawnbroking must be done in person.

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How to stretch your budget at University Mon, 11 Sep 2017 10:58:08 +0000 Alex Hartley It’s now just a matter of weeks before 500,00+ students head off to university for the first time. And while there’s the prospect of learning, new friends, activities and adventures, the nightmare of debt, tuition fees and running out of cash also looms large for many. This year, tuition fees are rising to £9,250 at most UK universities. Rents are higher than they have ever been and we’re all feeling the pinch from post-Brexit price rises. So, if you’re a new student or one heading back to university in October 2017 how do you win at your finances without winning the lottery first?

Make the most of the money that you have

Money might be tight but there are ways that you can make it go further.

  1. Learn how to budget. According to research by Leeds Beckett University around 20% of students arrive at university worried about how to manage their finances. Budgeting is the foundation of making the most of the money you’ve got and staying in control. What is coming in, what has to go out (and when) and how can you reduce one, or increase the other, to create more wiggle room?
  1. Find the discounts. A huge number of stores offer a student discount now, from retailers like Topshop, through to cinema and food chains. These are always worth researching and using, particularly when it comes to paying for the non-essentials like a night out or dinner with friends.
  1. Be savvy about savings. If you’ve got £20 to last you until the end of the week then the smart choices are those that give you more for £20. Apps and websites come in very useful here, whether you’re working out where the cheapest place is to get your weekly shop with an app like MySupermarket or finding vouchers for discounts on travel or entertainment on Wowcher.
  1. Drink less. Despite discounted prices, booze remains a significant expense for party loving students. You’ll do your bank account – and your liver – a favour if you cut down what you’re imbibing at least a couple of days a week.
  1. Healthy food does come cheap. The best sources of nutrients and minerals are vegetables, beans and grains – and these are always much cheaper to buy than ready meals or meat feasts. Learn how to cook a few basic dishes that will fill you up without draining your bank balance. Soup, pasta bake, vegetable curry and frittata are some of the easiest and cheapest options that are healthy too.
  1. Get an overdraft. Everyone needs a financial safety net – student overdrafts are easy to arrange and come in very useful. Most high street banks will offer a student overdraft of up to £3,000 interest free. Unarranged overdrafts are much more expensive, so plan ahead instead.

University fees and living costs

Finding extra cash so that you don’t get into unmanageable debt

According to research by Save the Student, 66% of students don’t think that maintenance loans are big enough. So, for many, the only option appears to be to keep borrowing various loans and credit cards. However, there is another choice – additional income. Most student timetables leave at least some room for part time work, and there are other options to, which can significantly reduce the pressure on your finances.

Bars, restaurants and coffee shops – for casual shift work that is social and fun, and for which you don’t need any qualifications, a bar or coffee shop is ideal. You won’t make your millions but should end up with enough to supplement what you have without borrowing more.

Office work – depending on your course you might be able to get part time work in an office. For example, solicitors firms often take on students during the summer and roles such as secretaries, PAs, admin assistants and cold callers are all an option on a part time basis. Office roles tend to pay more but you’ll need to be able to commit to regular office hours.

Gig work – if you need a flexible income then working in the gig economy might be more appealing. Cycling for Deliveroo, selling your writing skills online or driving for Uber are just a few of the options.

Corporate sponsorship – if you’re keen to work for a particular business when you graduate and you’re doing the right degree then you might be able to get sponsored by them. This could mean financial help with course materials and living costs.

Bursaries and grants – there aren’t many of these around these days but if you’re on the right course (e.g. a teacher or a nurse) make sure you’ve explored all the options to get a grant or bursary to help with the cost of student life.

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Our “Money Matters” Spotify Playlist about Money & Wealth Thu, 07 Sep 2017 10:00:29 +0000 Amanda Gillam In a recent blog post we explored how popular music seems to talk more about our personal relationships than about our relationship with money. And this is the case even though we probably spend an equal amount of time worrying about each of them – we want to be happy in our choice of partner, and we want to feel happy that we have no money worries. And of course relationships and money are linked – as the saying goes:

Love flies out of the window when money flies out of the door.


Thankfully writers have spent much, much more time writing songs about love rather than personal finance! But we thought it would be interesting to make a playlist of songs where money and wealth have played a central role. Here you can find the Spotify playlist but we’ve also turned it into an infographic. We hope you enjoy the music – there’s a much greater variety than you might think. And if we’ve missed any songs about money that you think we should consider including in the playlist then tell us via the comments section below. And please share this infographic or embed it in your own website.

Top Songs about Money & Wealth

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Top tips for ebay Sellers – how to achieve the best prices Wed, 06 Sep 2017 10:37:15 +0000 Alex Hartley When ebay first launched in 1995 it was something of a revolution. An online marketplace where consumer to consumer and business to consumer sales could take place opened up a lot of opportunities. Now, thanks to the success of the site you can sell anything via ebay – all you need is someone who wants to buy it. And, as a result, ebay now sees around 2 billion transactions per day. Whether you’re a regular ebay seller making a living out of the site, or you use it occasionally to get rid of old clothes or electronics, it’s a great way to generate cash. However, the way that you use ebay is important – this not only dictates how successful you’ll be in getting a great price but also how to protect yourself from losing out to tips for selling on eBay

Protecting yourself on eBay

The London Metropolitan Police investigate thousands of ebay related crimes every year. Most are focused on unscrupulous sellers looking to rip off consumers but there are issues for those who are selling too. From buyers who claim not to have received an item, to the opportunities for scammers looking to steal your personal details it’s important to protect yourself when using this online auction site.

  1. Get to know the ebay seller protection policy and get familiar with the ebay resolution process. Buyers use the resolution process if they believe the item is not as described or hasn’t been received but sellers can contest it. You can also appeal an ebay Money Back Guarantee decision if you do it within the correct time limit (30 days) – get to know the rules now before you need them.
  1. Use PayPal for all transactions – PayPal also has a seller protection policy so you’re doubly covered.
  1. Make sure you post items within the stated handling time and send via a postal method where you can get proof of delivery. If you have that then any disputes raised by a buyer are likely to be decided in your favour.
  1. Ensure what you’re selling is authentic. If a buyer can prove it’s a fake then you won’t get the item back and you’ll still have to issue a refund.
  1. Don’t click on links in messages from buyers that don’t seem genuine and avoid giving away personal information.
  1. Stick to the sales structure provided by the website – don’t give a buyer your bank details for payments and don’t agree to a cash payment and in-person hand over of the item.

Getting the best prices

Listing items on ebay provides no guarantee that you will find the right buyer for them. You need to build a credible profile and bear in mind a few key marketing principles too. The best place to start selling with ebay is to buy. You’ll not only get to grips with the buyer experience but you’ll start to build an authentic profile with good ratings, which will establish trust with buyers. While you’re going through the buying phase – whether it’s old books or bottled water – look at how items are marketed, what kind of photos are used and the language other sellers employ to convince people to make a purchase.

Bear in mind that ebay charges a variety of fees to sell via its site. You can list 20 items for free every month but you still pay a 10% fee (the ‘final value fee’) of each one sold. Outside of the 20 free items the insertion fee is 35p per item. Then there are the PayPal fees to take into account – 3.4% per sale, plus 20p per transactions.

Tips for creating your listings:

  • Using the right words is key. You need to be accurate in your descriptions, including any brand names, colours, sizes and exact descriptions (e.g. ‘Hobbs 80% wool sweater,’ as opposed to ‘top’). When buyers search, ebay uses only the item title so if you want to get to the top of the search results make sure your key words are there.
  • Spelling mistakes will lose you opportunities. They suggest carelessness that is off-putting for buyers.
  • Some keywords are more effective than others. E.g. ‘authentic’ tends to get more conversions than ‘genuine.’
  • Give a full description. Items described in detail sell better.
  • Photos are essential. Clear images on plain backgrounds work well – you can list up to 12 for free so capture your item from every angle.

Tips for selling your items

  • If you’re using the auction method then browse other similar items and see what they sold for. Go for a modest opening price – London University researchers found that those auctions with a lower opening price tend to encourage more bidding.
  • Set your auction to close on a Sunday – this is when ebay is at its busiest.
  • Opt for a 10-day auction to allow for the most possible bids.
  • Consider a ‘Buy It Now’ price – this should be 30% higher than the auction price and you can remove it at any time. For items likely to be popular it’s an opportunity to make more money by cashing in on the desire not to miss out.
  • Allow a Best Offer. If you don’t have a specific price in mind then buyers can make you a best offer that’s good for 48 hours.

For ebay sellers, the most important tip of all is transparency. If there’s a problem with the item, include it in the description; if you can’t actually get it to the post office, make delivery by collection only. Problems like that are not insurmountable but not being truthful with buyers can end up being incredibly costly in the long run.

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Top tips on going back to school on a budget Mon, 04 Sep 2017 10:16:30 +0000 Alex Hartley The Best 2017 Back to School Deals

Although it hardly seems a minute since Roger Federer won Wimbledon – or since the sunshine of Glastonbury Festival – the summer of 2017 is just about over. And, as the school term looms, so too does the huge bill that comes with kitting out kids for another academic year. No one wants to go back to school for a new term without all the essentials so where can you find the deals to get everything you need for the family without breaking the bank?