Getting Loans and Credit & Managing Money - Feed How to successfully manage your personal finances Wed, 18 Sep 2019 13:40:26 +0000 hourly 1 39026437 Actions we all need to take now to combat global warming Wed, 18 Sep 2019 13:37:47 +0000 Alex Hartley Climate change has risen to the top of the global agenda this year. With climate emergencies being declared in multiple locations and global protests led by groups such as Extinction Rebellion there is much more awareness than there has ever been of the need to take steps to combat climate change and reduce CO2 emissions. We are now beginning to appreciate that, alongside the work that governments needs to do, there are household lifestyle changes that will also make a big difference.Household actions to reduce climate change

We all have to make changes

A report by The Committee on Climate Change has identified that the UK should be aiming to cut greenhouse gas emissions to net zero by 2050 in order to make a real impact on halting climate change. This target would mean that the UK could make a serious contribution to preventing global temperatures from rising by more than 1.5C in the long-term – this is thought to be the threshold for dangerous climate change. However, such a transformation requires considerable commitment from every household. Focusing on reducing corporate emissions and business energy waste simply won’t do it – consumers have to get involved as well. Eventually, achieving this kind of target will mean some drastic changes, such as:

  • The use of green electricity across the country for all energy needs
  • Eating less meat & dairy and switching to other sources of protein and fats
  • Investing in electric cars so that there are no petrol or diesel vehicles on the roads
  • Phasing out reliance on gas boilers in all homes across the UK
  • Switching from vehicle based transport to walking and cycling instead

What we must do right now

While the more drastic changes are likely to take some time to implement, there are steps that every UK household can take right now to make lifestyle changes that will have an impact. These include:

  • Changing how you eat. Plant based diets have been much in the news for their potential health benefits. Many people also believe that a plant-based diet is one of the best ways to have a positive influence on climate change. For example, switching from a high meat diet to one that has low meat content could help to reduce your diet related emissions by 35%.
  • Opt for a different approach to home heating. One of the recommendations in the Committee on Climate Change’s report is that households looking to help in the fight against climate change turn down the thermostat to 19C in winter. This is a step that should be taken at the same time as identifying ways to make the home warmer, such as improving insulation in the loft and cavity walls. You can also consider investing in a low carbon heating system if CO2 emission reduction is a priority for you – something like a heat pump, for example.
  • Re-evaluate the way that you travel. Long-haul flights are some of the most problematic when it comes to damaging emissions so it’s crucial to try to minimise these – and to think carefully before getting on a plane. On a daily basis, leaving the car at home and walking and cycling instead can be better for your health as well as the planet. If a car is a daily essential could you car pool with others? Most of us make journeys with wasted space in our cars because we don’t share.
  • Make your home more energy efficient. The less energy your property wastes the more efficient it is. The more efficient a home is, the less it costs to run and the more of an impact it’s possible to have when it comes to combating climate change. There are lots of small steps that can contribute to making a home more energy efficient. For example, you can invest in draught-proofing areas such as doors and windows, opt for energy saving light bulbs and choose appliances that rank highly in terms of energy efficiency ratings.
  • Buy an electric car. As prices have begun to drop and the UK has a more extensive charging network it’s more feasible than it has ever been to run an electric car, as opposed to a diesel or petrol model. You can get the best value from an electric car if you charge it in a smart way, for example at night when the energy grid is in low use.

The time for action has arrived – no longer should we suggest we can delay. Kicking the environmental can down the street has to stop. We all need to make the lifestyle changes now that will prevent the Earth’s climate from warming beyond the 1.5C limit. We know we can do it – it’s about changing long-held habits. We managed it with plastic bags; now we have to do it on a larger scale with our energy, transport and food consumption. Start now!

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Top tips for going Self-Employed Wed, 11 Sep 2019 11:29:36 +0000 Amanda Gillam For many people, being self-employed appears to be living the dream. Whether you’re looking to escape an unpleasant boss or get away from commuter life, switching to the self-employed lifestyle looks – on the surface at least – like a much healthier and more enjoyable way to work. However, that’s not always the case and many freelancers find it a tough and unpredictable life.being self employed

If you’re planning to go self-employed and you want to make sure that it lives up to expectations then it pays to be prepared. Here are our top tips for success:

  1. Start with savings. Before you make the leap to being self-employed it’s a good idea to do some groundwork first. The most important thing is to ensure that you having savings. It can take some time to get established in a new career, especially one that is a self-employed business and you may need funds to pay up front for networking, marketing or investment in essential equipment.
  2. Plan your move. While you’re saving up to go self-employed it’s a good idea to look into the viability of the way that you’re hoping to live in the future. Research the sector that you want to enter and identify your potential competitors, whether the market is saturated and who your clients and customers might be. Decide how you’re going to find work, what kind of pricing structure to use and whether there are any specific laws or regulations that you need to take into account.
  3. All work and no play. Many self-employed people struggle to set boundaries when it comes to building their business. If there’s work to do at 11pm on a Friday night and you need the money then why not just do it? It’s crucial to start out by creating separation between work and non-work in your life if you want to be positively self-employed. Decide what your working hours will be and turn off emails after that time. Don’t work weekends and keep special occasions free. If you don’t then burnout and exhaustion await.
  4. An accountant is essential. If you’re used to having tax, National Insurance etc dealt with by an employer then it’s very easy to get into a bit of a mess when all of that becomes your responsibility. Although you’ll still have to get to grips with the basics of this yourself a good accountant can help you navigate the waters of self-employed finance, from whether to operate as a company to what expenses can be set off against tax.
  5. Integrate tech into your life. Technology can be enormously useful for the self-employed today, enabling you to work from just about anywhere, whether that’s a hot desk or a sun lounger. The key is to choose the technology that will genuinely benefit your business and don’t take on so much that using it becomes another chore to manage.
  6. Get good at managing your money. It pays to be skilful when it comes to self-employed finances. You might have incredibly lean months so it’s important to have some cash set aside as a buffer for those times. You’ll also need to get used to putting aside a proportion of your income every month to make payments on an annual tax bill.
  7. Use credit cards as a back up. It’s easy to get into trouble with credit cards and if you’re self-employed and you have a few lean months you might be tempted to use them for essentials. However, the totals can soon add up and if you don’t have a 0% deal – or that deal comes to an end – life could get very tight, very quickly.
  8. Don’t waste money on non-essentials. For example, it’s a good idea to regularly audit your direct debits to check what’s leaving your account. Are you still paying for subscriptions that you don’t really use that are essentially now a waste of money? If so, that’s cash that you could be using in your business, or as a financial back up instead.
  9. Shop around for good deals. It’s even more crucial to pay less for something like a mobile phone or broadband when this becomes a business cost that could eat into your profits. So, shop around to make sure that you’re paying as little as possible for the services that you use regularly and take advantage of any discounts.

Being self-employed can help you to create a flexible lifestyle with a lot of freedom. However, it also comes with a responsibility for every aspect of your working life, from paying tax on time to defining your working hours. If you’re prepared for the leap then it could be the start of a wonderful journey.

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How to save a fortune on car servicing, maintenance and repairs Wed, 04 Sep 2019 09:54:35 +0000 Alex Hartley Buying a car, whether new or second hand, comes with a range of responsibilities. One of the most important of these is ensuring that the car is regularly serviced and that any necessary repairs are carried out. This can be a costly business. However, it’s worth the time and resources required to carry out servicing, maintenance and repairs properly. Not only will this ensure that you’re safe on the roads but it will also help the investment you’ve made in the vehicle to hold its value.low cost car repairs

Servicing – why bother?

Regular servicing means that all the key components of your car are in good condition and functioning properly. Depending on the type of servicing you opt for, this includes checking the brakes to ensure that they are fully functioning, assessing the engine and examining the tyres to make sure that they are at the right pressure and there are no issues, such as damage from the road. Other key areas for servicing are the steering, lights, suspension and windscreen wipers, as well as air and oil filters, spark plugs and fuel filters. There are a number of good reasons for committing to regular servicing, including:

  • A regularly serviced car will run more efficiently when it comes to fuel consumption
  • You’ll have the peace of mind of knowing that you’re not going to have to deal with engine failure or preventable tyre issues while out on the road
  • If your vehicle isn’t regularly serviced then you may have problems making a claim under the warranty
  • The car will function better and be easier to drive if it gets regular attention

Arranging servicing for your car

The more often a car is serviced, the easier it will be to keep in good condition and the more peace of mind you’ll have when out on the roads. When you buy a new car you’ll normally receive a recommendation from the manufacturer about how often you should get the car serviced. However, if you’re planning to sell the car on in the future it’s often worth arranging a more frequent service. Remember that an older vehicle is likely to need more regular servicing – try to avoid putting this off because of concerns about condition or cost.

Standard interim or full car service?

A full car service is usually recommended every 12 months or 12,000 miles. In between that you can take the car for an interim service. The interim service usually takes around 30 minutes to complete and is designed just to focus on the areas of the car that get the heaviest use, such as the clutch, gearbox and battery. A full service takes a lot longer – upwards of three hours – and will take into account not just the parts of the car under the most strain but other components too. The full service is intended to identify any issues the car might be undergoing due to regular driving and often results in the need to order new parts, make replacements or carry out repairs.

Cutting the cost of your service, maintenance and repairs

  • Shop around to make sure that you get the best price. If you’re planning to get your car serviced at a branded dealership then this is often the most expensive option when it comes to any kind of work on your car. Independent garages may be able to offer cheaper deals but make sure that they have experience with your type of car.
  • Identify exactly what you want to have done to the car. The easiest way to approach this is often to simply produce a list of bullet points and then ask each of the garages you’re looking at to quote for the same work. Be specific about what you’re looking for, as it’s common for garages to add on extras to increase the overall cost.
  • Look online. There are comparison sites for car servicing and repairs (e.g. Book My Garage) and these can not only help you to find the right garage but also one that will do high quality work at the right price.
  • Ask around. Recommendations from friends, family or colleagues can be invaluable when it comes to identifying a great deal on service, maintenance and repairs. You’ll also be able to find out about quality standards and any issues that others experienced.
  • Look for accreditation. This won’t impact so much on what you pay but will ensure that a certain standard of work is being carried out on your car.

Servicing, repairs and maintenance are all necessary for a responsible car driver. However, you can cut the cost of these if you know how.

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How to get the best deals for back to school 2019 Wed, 28 Aug 2019 09:54:56 +0000 Amanda Gillam Summer 2019 is almost coming to a close. Despite a last minute reprieve on the weather front it will soon be time to go back to school. For most parents that means a shopping list of items, from technology through to uniforms, sports kit and stationary. It can be an expensive time of year for anyone with children as a result. So, how do you make sure that you get the best value for Back to School 2019?Back to school deals

Technology deals

If you’re not shopping in the run up to Black Friday it can feel like technology deals are going to be hard to come by. However, there are plenty of them around for those looking to provide new tech to go back to school with. Curry’s, for example, has a range of offers on at the moment, including 30% off certain laptops. Dell is offering discounts of up to 33% on its back to school range of laptops and there are also deals available from Apple, including discounts on Applecare and free headphones.

Uniform and clothing essentials

Everything, from underwear to socks, can get a lot of wear and tear when kids go back to school so saving money on those initial purchases is always a good idea. Sainsbury’s clothing brand TU has created multipacks for school essentials that recognise your child is going to need more than one of everything and help you to save money as a result. There are offers on everything, from jumpers to polo shirts in a wide variety of different colours. Clothing retailer Next has also developed a back to school range with prices that start from as little as £3. Easy iron shirts and knitwear in multiple colours are all part of the range. There is also a ‘Uniform Builder’ tool that shows you all the options available in the correct size for a child’s age. M&S has run a fairly extensive campaign for its Back to School range this year, which includes some great deals on uniform. Prices for shirts start at just £4 and trousers at £5.50.


Whether your child has a bit of a stationary obsession or you just need to buy them the basics there are some great deals around. Paperchase is offering 3 for 2 across its entire Back to School range, which includes some low prices, such as a pack of 8 highlighters for £8. WH Smith is offering £5 off when you spend £20 or more, as well as half price deals across a wide range of Back to School items. Staples’ stationary discounts are all between 15% and 25% off with free gift offers available too.


Children go through shoes at an astonishing rate, especially when they’re spending breaktimes running around a playground. If you’re looking for great deals on school shoes this summer George at Asda has options from just £12. Clarks currently has a shoe sale on with up to 60% off – many of the shoes are summer sandals but there are also options that work for Back to School. The footwear retailer’s regular school age range starts from just £10.


There are a lot of retailers who offer great prices on Back to School bags, including many of those mentioned above. Claire’s Accessories stocks backpacks from just £10, as well as a range of other accessories, from scrunchies to purses. JD Sports has a wide selection of bags and offers a 10% student discount. Smiggle does Back to School bargain bundles that include items such as lunchboxes and rucksacks with savings of up to 34% in total.

Sports kit

Shoezone has kid’s trainers from £9.99 and if you sign up to the VIP club you can get a £5 discount when you spend £25 or more. There are lots of children’s PE kit items in the sale at Decathlon right now and the retailer stocks a range of low cost sports kit, such as trainers starting from just £6 and football shorts from £2.99.

As well as going direct to retailers for Back to School discounts there are other ways to save cash on these essential purchases. For example, the cashback site Quidco is offering up to 17% cashback on a wide range of back to school items, from stationary to shoes – so, you can earn money as you restock for the new term.

Back to School doesn’t have to cost a fortune if you know where to look for the best discounts and how to earn rewards as you go.

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Repairing rather than recycling – the rise of the Repair Cafe Wed, 21 Aug 2019 12:02:21 +0000 Alex Hartley The general trend among shoppers today is to buy less. Or, if that’s not possible, to buy something that can at least be recycled when it stops being useful, as opposed to ending up in landfill. The UK generates more than 222.9 million tonnes a year in waste and under 50% of this is recycled. Although huge progress has been made towards reaching targets such as recycling half of household waste by 2020, what happens to the rest of the unwanted items we buy? A new phenomenon is trying to teach consumers to see old, broken or damaged items differently. The Repair Café is an idea that has started to gain popularity for those looking for an alternative to simply throwing things out.Repair your broken items

What is a Repair Café?

It’s an idea that has been put into practice in a number of locations, including Reading and London, by those trying to drive change in consumer attitudes. Rather than taking items such as a damaged vacuum cleaner or jeans that have seen better days, to the tip or a charity shop you can go to the Repair Café instead. There, you’ll be able to find a new lease of life for items that might otherwise just have been thrown away. The Repair Café works like this:

  1. Identify items in your home that have seen better days but are not completely unsalvageable. Broken bikes, old pieces of furniture, damaged clothes or shoes and equipment like sewing machines are common.
  2. Book a 30-minute repair slot at the Repair Café.
  3. Take your item along to the Repair Café and speak to a repair specialist, watch them as they work and see how your item is transformed from old and broken to exciting and usable again. With the added benefit that you won’t have to buy a replacement, so saving you money and/or helping to stop you going further into debt.

Most Repair Cafes book on a first come, first served, basis so if you’re keen to get your items looked at then it’s worth getting in there early.

What can you take to a Repair Café?

These are just a few of the most common items: crockery, furniture, toys, bicycles, electrical appliances, clothes and shoes. As long as you can transport it to the Repair Café then you can take it in.

What are the benefits of the Repair Café?

  • You don’t just drop the items off. Instead, you’ll be sitting with the specialist while they carry out repairs on whatever it is that you’ve brought into the Repair Café. This can be a great learning experience and provides a form of training so that you can potentially carry out your own repairs in the future.
  • Giving a longer life to household items. Simply because most of us don’t have the skills to carry out repairs ourselves, we often throw out items that still have a lot of life left in them. Taking them to a Repair Café instead means that you can avoid going out and having to buy new items by reusing older ones in this way.
  • Understanding more about the products. As well as receiving some repairs training, you’ll be able to get more of an idea of how your items function. This includes the processes and materials that go into the manufacturing of products.
  • Benefits to the environment. When items are repaired and reused we don’t tend to buy new. The process of manufacturing – and, to a lesser extent, recycling – generate harmful CO2 emissions, which are detrimental to the environment. If demand for new items drops then so too does the CO2 that is produced in the process of manufacturing them.

Where’s your nearest Repair Café?

They are currently popping up all over the country. For example, you’ll be able to find them in Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest in London on various weekends from the end of September. There are Repair Cafes in Kent, Berkshire, Manchester, Oxfordshire, West Sussex and Wales – you can find most of the details online via the Repair Café website. As the phenomenon grows and more people become interested in repairing, rather than recycling or throwing away, it’s likely that even more of these Repair Cafes will appear.

The Repair Café marks a new approach to the way that we treat the items that we buy. It is hoped that, by showing people how to carry out repairs themselves, we will come to value the items that we buy more. The idea is that we start to move away from wasteful consumerism and a disposable mindset towards something more considerate, long-term and environmentally friendly instead.

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PPI August 29th deadline is approaching – Apply Urgently Wed, 14 Aug 2019 11:05:04 +0000 Amanda Gillam We’ve all become quite used to the ads encouraging us to “reclaim PPI.” You may also have received calls and texts, as well as flyers and letters from claims management companies. However, the window of opportunity in which to check whether or not you’re entitled to anything won’t stay open forever. In fact, if you haven’t yet started the process of making a PPI claim you have less than a month to do so.

What is PPI?

PPI stands for Payment Protection Insurance. If you’ve had any type of credit (such as credit cards, loans or mortgages etc) at any point in the past 30 years then it may have had a PPI policy attached to it, which you would have paid for. The purpose of PPI was to provide some security for the lender. In theory, the policy would have paid out if you were unwell, made redundant or met with an accident and, as a result, were unable to make repayments. The issue with PPI arises from the mis-selling. Often, these policies were sold to consumers without their knowledge – or they may have not even been eligible for the cover that the PPI policy should have provided. The PPI issues are so extensive that even if the policy was sold properly, the 50% commissions many lenders took mean that most people who had PPI will be eligible for compensation. So far, Lloyds Banking Group has been the lender facing the most significant bill. It is predicted to receive around 13,000 complaints a week between now and the PPI deadline on 29th August. Already, Lloyds has paid out more than £19bn in response to consumer compensation claims.

Is it really worth making a PPI claim?

So far, the amount of compensation paid since January 2011 to people who were mis-sold PPI is £35.3bn. In April 2019 alone, banks and other financial firms paid out £334m. The total number of PPI policies thought to have been mis-sold in the UK during the eligible timeframe is more than 64 million – your credit card, loan or mortgage could easily have been among these. As many consumers weren’t even aware that PPI was being added on to their borrowing, for most people, it is certainly worth investigating whether a claim could potentially be made.

If you have yet to make a claim for PPI compensation, your time is running out. The deadline of 29th August is unlikely to be extended and the FCA has made it clear that any claims submitted after this time simply won’t be eligible. So, the clock is already running on the potential for compensation that your PPI claim might have.

Should you use a claims management company?

No. A lot of PPI claims management companies sprang up in the wake of the FCA ruling on PPI mis-selling and they can be very aggressive when it comes to trying to convince consumers that they are the best option for collecting compensation. However, the process of claiming PPI – and even checking whether you’re eligible for compensation – is very simple and you don’t need a claims management company to help you do it. One very good reason to avoid claims management companies is that they charge a fee, which can be a substantial proportion of the compensation that you could be eligible to receive.

Check now to see if you’re eligible for PPI compensation

The relevance of the August 29th deadline is that after this date it won’t be possible to make a claim for PPI mis-selling. No matter how big your claim might be, after that point it won’t be possible to do anything about it. So, it’s crucial that, if you think you might have been sold PPI at any point, that you check now. You can do this in a number of ways:

  • Submit a claim using a free online form. These are available in various locations online, including the Which?
  • Contact a lender directly via letter. You can download a letter template and then send the letter off directly to the lender you borrowed from.
  • Use the lender’s website. As PPI has been an issue that has affected so many people, many lenders have set up dedicated space on their websites to deal with potential PPI claims.

Once you have made a claim for PPI compensation your lender will have eight weeks in order to respond. They may ask for extra information or documents if you have them. As long as you make a claim before the 29th August deadline then the lender that you contact will have to process it.

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Money & Happiness: What makes people happiest, and what role does money play? Wed, 07 Aug 2019 10:20:34 +0000 Alex Hartley The link between money and happiness is one that has been explored and reviewed for generations. Are happy people wealthier? Are wealthier people happier? We’ve all heard the phrase that “money can’t buy happiness” but how accurate is that when it comes to the science?can money make you happy?

What role does money have to play in our happiness?

There is plenty of scientific evidence to suggest that money can influence the way that we feel about life. Although you don’t necessarily have to be incredibly wealthy to be happy, having enough money to be financially comfortable does make a difference to happiness. For example, one study found that well-being is connected to income and rises with income levels up to an annual salary of about £55,000.

The link between income and satisfaction

Most of the studies looking at money and happiness have found that there is a link between a rising income and levels of general satisfaction with life. However, it’s not a particularly straightforward equation. A rising income, for example, is likely to have much more of an impact on those who are currently struggling or living on a low income. An increase wages or pay will have less of a positive impact on someone who is already very well off. And most of the evidence suggests that, as income goes up, the impact that it has on levels of satisfaction becomes smaller, especially after the point at which we are officially ‘comfortable.’

Are we happier for being richer?

One interesting take on the role that money has to play in happiness comes from looking at happiness levels in different countries. Countries that are richer don’t always have the happiest citizens – and as wealth increases in a particular location there doesn’t tend to be a corresponding spike in happiness. The trouble is that we often expand to live within our means and so the impact of any increase in wealth is soon forgotten. So, you might be just about surviving on a minimum wage in one job and experience an increase in happiness when you move to another role that sees your income double. However, all the evidence suggests that, within a year, you are likely to have adapted to that new level of income and be looking for another pay rise. So, in a way the boost to happiness received from an increase in income has been lost.

What actually makes us happy?

According to research, the ‘happiness baseline’ that all of us will return to is made up of three critical factors:

  • Genetics (50%)
  • Thoughts and actions (40%)
  • External circumstances (10%)

Many of us believe that being rich or having the right partner, for example, are essential for happiness. However, the science says that these things can only ever account for 10% of overall happiness. And while 50% of happiness is dictated by your genes – and, as a result, is a bit of a lottery – that still leaves a huge 40% that can be influenced one way or another by the way we think and by what we do. In order to take advantage of that statistic, happiness researchers tend to recommend steps like a daily gratitude journal, learning to love yourself, setting goals for your life and being able to forgive, both yourself and other people. Meditation is also thought to contribute to higher levels of happiness.

The habits of happy people

There are lots of different theories on happiness, some scientific, others not. However, there are some key habits that all happy people seem to share. These include:

  • Nurturing strong relationships with people who you trust and who will support you
  • Prioritising time over money – i.e. if you had the option of more time or more cash, recognising that time is the more valuable commodity
  • Taking the time to stop and recognise what you already have, especially when it comes to the good things in your life
  • Acts of kindness – they can be random or they could be something that you do on a regular basis (e.g. volunteering). Regularly being kind to others is something that happier people tend to do
  • Exercise – there’s a vast amount of evidence that indicates that exercise has a big role to play in making us happier. It can also be very effective when it comes to improving mental health
  • Prioritising the memories – spending money on experiences, as opposed to accumulating material possessions is something that happier people tend to do

Although happiness is something that many of us look for, very few of us would probably say that we’d achieved “being happy.” However, the good news is that you don’t need to be rich to be happy – positive thoughts appear to be worth more than their weight in gold.

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2019’s Best Money Management Apps Wed, 31 Jul 2019 10:58:17 +0000 Amanda Gillam If you made a resolution at the beginning of this year – or even if you’re starting now – money management apps can help anyone to more proactively meet financial goals. As tech gets smarter and we become more focused on becoming better savers there is more drive than ever to improve what’s already out there. Whether you’re looking to upgrade from a money management app you’ve been using for a while – or try one for the first time – these are the best options in 2019:Money management apps

Emma – practical guidance

Like many money management apps, Emma groups all your accounts into a single location. What’s distinctive about this particular app is that it will also help you to avoid going into your overdraft and proactively help you reduce your debts. It’s also a great tool for working out where you’re wasting money, for example by cancelling subscriptions that are bleeding you dry but you’re not really using.

Money Dashboard  – financial oversight

Many of us have a wide range of accounts today, from savings to credit cards and investments. Money Dashboard is a fairly straightforward money management app that groups everything together in one place so that you can get complete perspective on your financial situation. You can categorise both accounts and transactions and see both right across your financial network. You can also set goals and plans, as well as create budgets that have automated notifications if you start to get off track.

Monzo – proactive banking

Monzo is, strictly speaking, a bank but its app is also very popular if you’re looking to gain more control over your finances in 2019. It has many of the functions that other money management apps have, including the ability to set budgets and see a straightforward summary of your spending. What’s even more useful about opting for the Monzo app is that you can also use it to bank proactively, for example setting up standing orders or direct debits and paying people. Plus, if you’re using Monzo abroad you can avoid many of the fees that other banks and credit card providers tend to charge.

Chip – sneaky savings

The Chip app incorporates artificial intelligence to apply machine learning to your financial transactions. This smart app will analyse your spending and then start helping you to put aside savings by transferring a small amount every few days into a separate account. It has read-only access to your transactions so can’t totally take over your banking – the idea is that it analyses what you’re spending to work out what you can afford to save. The savings account is 0% interest unless you start referring other people to the app – it increases by 1% for every friend you invite, up to 5%.

Yolt – getting the best deals

If there is one money management app that is really useful when it comes to removing the rose tinted screen we often see our spending through, it’s Yolt. This app not only shows you where all of your money is, by bringing all the accounts together in one place, but reveals where it’s going too. It can be quite a shock to see just how much you spend on a daily flat white over the course of a year. The app enables you to monitor predicted debt, bills and subscriptions and also uses your spending information to help you find better deals, for example when it comes to utilities like electricity and gas.

Moneyhub (£0.99 a month) – advice over the phone

Moneyhub also provides perspective on all your financial accounts and allows you to set specific savings and financial goals. Unlike many other money management solutions it includes investment funds in the categories of apps that you can add into the app. It also has a very distinctive USP in that it can connect users with professional advisers over the phone, transferring over the data that has been shared via the app so that insightful advice can be offered.

Squirrel (£9.99 a month after first 8 months) – smart saving

Squirrel cleverly separates what you need for bills from your spending money so that you can see a clear distinction between the two. Many people find this incredibly useful when it comes to ensuring that they don’t overspend before they next get paid. It can also take control of the money that you have access to, releasing what you need for bills at the right time, as well as handing over spending money in amounts that will still help you to reach financial goals.

If you struggle with your finances then you no longer have to do it alone, as there are a wealth of money management apps here to help you get better at it.

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The attitudes of major religions to debt Wed, 24 Jul 2019 10:04:55 +0000 Alex Hartley Debt is very much a part of life today – in the UK we owe £72.5bn on credit cards alone. However, despite this there can be a lot of shame and guilt associated with borrowing money. That’s especially so if debt becomes a problem that seems impossible to deal with. Many people in the UK follow religion to help steer them through the stresses and strains of daily life. So, what do three major religions say when it comes to the issue of borrowing, credit and the principle of interest?


The bible and credit/loansThere are many different version of Christianity and even the words written down in the bible can be interpreted in different ways by those with alternative perspectives on an issue. There is plenty of confusing content in the Christian religious book when it comes to debt, including:

“The wicked borrows and does not repay, But the righteous shows mercy and gives.” Psalm 37:21.

However, overall there does seem to be a sense that borrowing money is not inherently ‘sinful.’ As the above quote indicates, it’s more about not repaying the money – this is when problems seem to arise. There are also a number of places in the bible where Jesus mentions borrowing in a relatively positive light, including:

“Give to him who asks you, and from him who wants to borrow from you do not turn away.” Matthew 5:42.

That being said, the bible does seem to urge caution for Christians when it comes to borrowing money.

“The rich rules over the poor, and the borrower becomes the lender’s slave” (Proverbs 22:7)

…is one particular passage that apparently indicates to Christians that borrowing isn’t going to be the best outcome in terms of the position in life that it could put you in.

Verdict: Christianity doesn’t preach against debt, more the need to be aware of the dangers it can present and to make sure that you pay it back.


Islam and loansIslam is another religion that also seems to take a fairly practical approach to borrowing money. However, there is a caveat that the money should be borrowed without interest. There is support for the idea of borrowing – and understanding as to why it might be necessary in a hadith:

Sayyidina Anas bin Malik related that the Prophet stated: “During the journey of Me’raj, I saw written on the door of Jannah: ‘The one who gives charity is rewarded tenfold. The one who gives a loan is rewarded 18 fold.’ I asked Jibrail : ‘Why does the one who gives a loan get rewarded more?’ Jibrail replied ‘The one who gets charity (they usually posses a small amount already) and the one who seeks a loan only does so when he is in dire necessity.” (Sunan Ibn Majah, P175)

Verdict: Islam is a religion that teaches people to give when they have plenty and to borrow if it is necessary. However, there is plenty of evidence to suggest that, like Christianity, Islam cautions against borrowing for reasons that are less than that i.e. where there is not a dire need for the money.


Judaism and borrowingFor those who follow the Jewish faith there is also some (often complex) guidance about borrowing money. The Book of Ezekiel classifies the charging of interest among the worst sins but there is little evidence that being Jewish precludes a person from borrowing. However, Jewish Law makes it clear that this only really applies in the case of making loans to other Jews. When money is being loaned to someone who isn’t Jewish there is no reason for a Jew not to charge interest. It’s worth noting that both the Torah and Talmud encourage lending money without interest but there is some evidence that the idea of secured loans was disapproved of. There are passages in Leviticus that take a pragmatic view of individual circumstances, encouraging loans for those who need them, particularly focusing on how lending can help those in difficult circumstances to find their feet once again. 

Verdict: Judaism also doesn’t rule out debt, as long as no interest is being charged between one Jew and another.


None of the major religions take such a dim view of debt that it is prohibited. In fact, although all of the major writings on the subject are ancient, they all acknowledge the part that lending has to play in a society where not everyone is on an equal financial footing. Even all those many moons ago there were people who benefited from lending that would help them transform their financial situation. The key for all religions seems to be that money is borrowed for the right reasons and that anyone who takes on a loan also pays it back.

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The most frequent uses of a personal loan Wed, 17 Jul 2019 10:35:14 +0000 Amanda Gillam Around £37 billion of personal loans are taken out in the UK every year. We are a nation of happy borrowers, whether we’re borrowing a straightforward loan, a payday loan or something like a guarantor loan. However, while many of us have that desire to borrow in common, the reasons for doing so are not always the same. These are some of the most frequent uses for a personal loan for UK borrowers.Common uses of personal loans

Consolidating other debts

Many people with multiple debts find it difficult to balance all the repayments involved, as well as the interest. A debt consolidation loan offers a way to make this easier – and can also bring down the cost of debt too. Ideally, borrowers looking for a debt consolidation loan will find one with an interest rate that is lower than other borrowings. The loan is used to pay off an existing loan or credit cards so that there is just one payment left to make each month – and less interest to pay overall. According to research by, around a third of those who make an application for a personal loan do so because they want to consolidate existing debt.

A life emergency

This very wide category could include anything, from locking yourself out of the house and requiring a locksmith, to paying for medical expenses abroad. Around 9% of personal loans taken out are required to cover something like this, often where the borrower doesn’t have any savings in place to avoid borrowing. Payday loans are one of the most popular options for emergency borrowing – around 760,000 are approved each year for a short-term loan to help deal with something urgent.

Making lifestyle improvements

Personal loans can be used for just about anything and many people choose to borrow to make changes to their lifestyle. Paying for holidays is one of the main reasons that people borrow money in the UK, for example, while home improvements account for around 24%. Other popular lifestyle improvements that people tend to need to borrow for can include covering the cost of a new car and paying for luxury items and treats. Most lenders now insist that borrowing should not be used for items such as luxuries or to pay for holidays. However, this is still one of the most popular reasons for borrowers to make lending applications.

The big life events

Most of us are accustomed to the fact that we will have to borrow – via a mortgage – in order to make a big property move like buying a house. However, there are also a range of other big life events that we tend to turn to personal loans to help handle the cost of. Paying for a wedding is one of the most obvious. Around 7% of those making applications for personal loans – according to the research – are doing so because they need more cash for impending nuptials.

Buying items for others

Another very common reason to take out a personal loan is if you’re looking to make purchases for others. This is especially so around Christmas time when parents who don’t have that much spare cash might be tempted to apply for a loan to help cover the cost of Christmas presents, food and entertainment. Gifts for children – at any time of year – are a big motivation for borrowing, as well as for spouses and partners, whether male or female.

Starting a business

Getting a new venture off the ground can be incredibly expensive and for many people commercial finance is simply not available. That’s why one of the most popular reasons for making an application for a loan is to provide funds to help keep cash flowing through a new business.

Making ends meet

Around 22% of people are borrowing to help them simply cover the cost of living according to This could be something as simple as using a payday loan to pay for a weekly food shop or borrowing a personal loan to ensure that you’re able to make payments to an energy provider. Although there are many people in the UK who do borrow for this purpose, it’s not a recommended reason to make an application for a loan. Sometimes, borrowing to make ends meet can actually make the situation worse – not only will you have the repayments on the loan to make but the cost of the interest too.

The average loan size in the UK is around £3,500 but the reasons for making an application to borrow are incredibly varied. From emergency situations to buying items for others, as consumers, we are motivated by many different things.

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Mortgage borrowers need more help to find better deals Wed, 10 Jul 2019 10:58:34 +0000 Alex Hartley Do you know how to find the cheapest mortgage deal? According to research from the Financial Conduct Authority (FCA) around a third of consumers are paying more than is necessary for their mortgage because they can’t find a cheaper deal. With mortgage debt making up more than 80% of total household liabilities in the UK, small steps towards enabling consumers to pay less could make a big difference to standards of living. The FCA is proposing changes to the way that information is provided about products and intermediaries that could give consumers the opportunity to make significant to find a better mortgage

Mortgage market study

The FCA research was released earlier in 2019 as part of the regulator’s final report on the mortgage market study. The study suggested that shopping around to find a cheaper mortgage deal is complicated and difficult. As a result, one in three Brits fails to find a new mortgage that would cut their monthly costs. According to the FCA findings, if those people had been able to find a lower cost mortgage they could have saved £550 per year.

A lack of transparency over products

The biggest issue identified by the FCA is a lack of transparency early in the sales process in terms of which products consumers qualify for. This has meant that many consumers are simply not getting the best mortgage deal for them because there is no easy way to see what their options are. According to the regulator, the solution to this issue must be industry-led with lender engagement identified as the key to ensuring that consumers are getting the right mortgages for their circumstances, at the right price. Some lenders are already developing tools to make it easier for consumers but these are still fairly limited. If the industry is not able to come up with a solution that gives mortgage borrowers more help to find better deals, the FCA has not ruled out the possibility of regulatory intervention.

Potential solutions

The FCA has suggested that finding a cheaper mortgage deal would be easier if eligibility and other qualification criteria were made available to other market participants at an earlier stage. This would mean that customers would more easily be able to see which mortgages they qualify for. Not only would this make it more straightforward for brokers to help match the right product to the right consumers but it should also provide more opportunity for useful tools to be developed for borrowers to use on their own.

The issue of intermediaries

Mortgage intermediaries represent another area where the FCA established that change would be beneficial for consumers. The report identified that the choice of intermediary has a direct impact on how much a consumer will pay for their mortgage. So, for example, there is a strong link between mortgages that cost more and intermediaries who tend to limit their business to just a few lenders. The FCA wants to see more tools in place to help consumers shop around to find an intermediary that is best suited to their needs. It has also suggested the creation of a directory that would help consumers to make a better informed choice about intermediaries.

New lending rules

The FCA has proposed new lending rules that deal with how customers are assessed by lenders in terms of whether or not they can afford to switch to a new mortgage. In the same report the regulator also tackled the issue of Mortgage Prisoners who are currently trapped in a previously agreed mortgage and unable to access a better deal that could significantly cut their costs. Many of these mortgage prisoners took out their loans before the financial crisis. Some are stuck on interest-only deals that mean none of the capital is being repaid. Others have become trapped either because lending criteria have become stricter or because their own personal circumstances have changed. For those who are now financial prisoners of a pre-existing mortgage, the FCA is proposing that modified affordability criteria be applied by lenders when it comes to assessing whether a borrower might be eligible for a better deal.

On the whole, the FCA research identified that the mortgage market is functioning relatively well. However, it also highlighted clear areas for improvement with respect to the transparency and range of tools that consumers have access to when it comes to finding a cheaper mortgage deal. If the recommendations go ahead, those who are currently not able to find those better lending options could be saving more than £500 a year.

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Is action about to be taken to release “Mortgage Prisoners”? Wed, 03 Jul 2019 10:26:47 +0000 Amanda Gillam New proposals have recently been announced by the Financial Conduct Authority (FCA) that are designed to help those who are trapped in their current mortgage. The motivation behind the proposals is to enable those who have been stuck with a bad mortgage deal to move on and find something more financially viable.release mortgage prisoners

Who are the mortgage prisoners?

They tend to be homeowners who applied for a mortgage before the 2008 recession began. At that time the criteria for borrowing were much more relaxed than they are now and lenders were less concerned about affordability. Mortgage prisoners may have borrowed on an interest only basis, meaning that they have been unable to pay any of their mortgage off in the last decade. Even for those who have made every single mortgage payment on time since 2008, there may still be issues in obtaining a good remortgage deal as a result of the stricter affordability checks that exist today. However, not all of those who are affected are long time borrowers – many are more recent. The FCA has defined four main categories for mortgage prisoners:

  1. People who don’t meet affordability criteria because their circumstances have changed
  2. Borrowers who no longer meet the requirements for affordability because those requirements have changed
  3. People in negative equity
  4. Those who had a Northern Rock “Together” loan and can’t afford to pay it off when they move

How many people are affected?

In 2016, there were around 30,000 mortgage prisoners in the UK subject to deals with authorised lenders. However, when unauthorised lenders are included this figure could be as high as 150,000. Some who were originally with a high street bank have found their mortgages in the hands of an unauthorised lender through no fault of their own. For example, many Northern Rock mortgages were transferred by the government to Landmark Mortgages, which is owned by US-based private equity firm Cerberus and is not a UK regulated lender.release mortgage prisoners

What will the FCA proposals do?

The proposals are designed to free those who have become prisoners of bad mortgage deals. The final rules are going to be published at the end of 2019. However, so far what has been revealed is that mortgage prisoners will have to be given “fair treatment” by lenders. So, where someone wants to switch and they have made all their mortgage payments on time the FCA is recommending a modified affordability assessment be carried out by a lender. It’s also important to note that this will only apply to people who are not looking to borrow any additional funds in the process of remortgaging.

Why is the FCA proposing the change?

  • Many people are stuck in mortgages where they are paying hundreds of pounds more every month than they would if they were able to access current deals
  • Interest-only mortgages are no longer widely available but were common pre-2008. Anyone stuck on this type of deal is only making repayments of interest, which means that the entire amount they borrowed for the mortgage remains untouched
  • As a result of conditions since the financial crisis, and the mortgages that were issued before it, many people now find themselves in negative equity that they cannot escape because of a current mortgage deal
  • As individual circumstances change, borrowers may suddenly find themselves below the thresholds that are required to remortgage

Are you a mortgage prisoner?

Hundreds of thousands of people around the UK may not even realise that they are a mortgage prisoner until it comes to the point of trying to remortgage. According to the FCA there are around 800,000 people in the UK who could have switched to a cheaper mortgage but haven’t done so. However, as a result of the new FCA proposals, it should become easier for anyone to switch, even those who have more recently taken out a mortgage and become trapped as a result of changing circumstances. There are a number of benefits that make remortgaging a good idea, including:

  • Making monthly repayments more affordable
  • Accessing a better deal on interest rates. For example, if you’ve kept up your mortgage repayments you will have paid off more of the equity of your property (other than with an interest-only mortgage), which means a lower loan-to-value ratio and cheaper interest rates as a result
  • Avoiding the lender’s Standard Variable Rate – this is the rate that your mortgage will revert to after the end of an offer period and is usually much higher than any deal you originally signed up for.

For many people, being a mortgage prisoner and unable to switch has been both expensive and frustrating. However, by the end of 2019 the FCA should have introduced new rules that make it much easier for anyone to choose a new loan with a better deal.

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The rules relating to property rental fees has changed Wed, 26 Jun 2019 15:21:46 +0000 Alex Hartley The fees that are charged by letting agents and landlords have been a cause of financial pain for tenants for years. Generation Rent has largely been forced out of the housing market by high prices and so demand for properties to let has increased significantly over the past decade. This led to increased pressure on the government to take action over the fees that landlords and letting agents were charging at various stages during the process of renting. As of June 1st 2019 tenants no longer have to pay these fees – but what has really changed?Change to property rental fee rules

The Tenant Fees Act

The Tenant Fees Act came into force on 1st June 2019 and effectively introduced a ban on all those added extras that tenants had previously been forced to pay. According to the government, the new piece of legislation will save renters across England £240 million a year – up to £70 per household. Some of the fees that have been wiped out by the new act include:

  • A fee for tenancy renewal for any tenancy renewed after 1 June 2019
  • Fees charged for check out or check in to a property
  • Any costs that were previously being charged associated with viewings
  • Charges for professional cleaning, for example at the end of a tenancy

The legislation has also been given teeth in the form of enforcement powers. Landlords or agents can be fined up to £5,000 for a first offence if they are still found to be charging banned fees after 1st June this year.

So, what can a landlord still charge for?

The purpose of the new act was not to leave landlords and letting agents entirely without any ability to share reasonable costs. What it has been designed to do is make sure that these aren’t being unfairly inflated. So, landlords – or letting agents – can still:

  • Charge for changes to the tenancy agreement requested by the tenant – the cost of this is now capped at £50
  • Ask for a holding deposit to secure the property for a tenant – the amount requested must be no more than a week’s rent
  • Request a security deposit for the property – this, too, has been capped and the maximum a landlord can now request is five week’s rent
  • Charge fees that are associated with utilities, communication services and Council Tax
  • Apply a default fee that a tenant is expected to pay – this has now been restricted to two key areas: late payment of rent and replacing a key or fob that gives access to the building. In order to be considered late, rent must be 14 days overdue and any interest charged must not be more than the Bank of England base rate plus 3%. Where a key or fob has been lost by a tenant, a landlord or letting agent is entitled to charge for “reasonable costs” – and must provide written evidence of this.

What does the industry say?

During the consultation period for the new legislation 93% of the tenants surveyed agreed with the changes that were being proposed. Perhaps unsurprisingly, many in the industry did not. The biggest issue was always going to be who would pay the costs that were no longer being billed to the tenants – or who will cover what agents and landlords see as lost income to which they are entitled. The – all too predictable – answer is that this is a cost that will be passed on to the tenant. Research from the Association for Residential Letting Agents (ARLA) identified that, as a result of a full ban on fees, tenants will pay an increased rent of £103 per year. David Cox, chief executive of ARLA Propertymark, said:

In order to remain profitable, landlords will increase rents to cover the additional fees they are now faced with and as a result, tenants will continue to feel the burn.”

There is evidence that rents are already on the up and projected to rise to by around 2% at the national level over the coming 12 months, according to the Royal Institution of Chartered Surveyors.

Pressure on landlords

Despite the desire that many landlords may have to pass on costs to tenants there is one thing standing in the way: a more competitive market. Although many smaller landlords have sold up over the past couple of years, those with bigger portfolios have continued to expand and this has led to a broader market with more choice for tenants. The upshot of this for landlords could be that putting up the rent to cover the costs of lost fee income might not be an option. Instead, in order to secure tenants and avoid an empty property, landlords may have to simply absorb the costs themselves.

The tenant fee ban should, in theory, make life cheaper for tenants. However, the way that landlords respond could remove some of the benefits. The eventual outcome depends very much on the balance of supply and demand in the rental market in the next few years.

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You could be in for a refund £300 thanks to Mastercard! Thu, 20 Jun 2019 13:54:07 +0000 Amanda Gillam Two years ago, a case against credit card firm Mastercard for imposing excessive card transaction charges was thrown out of the Competition Appeal Tribunal. However, in April this year the Court of Appeal decided that the Competition Appeal Tribunal must reconsider that decision. As a result, the credit card issuer could be forced to pay every UK adult £300. But how has the case come about and how can you ensure you’re entitled to the refund?
Refund on your Mastercard?

The origins of the case

The case against Mastercard was brought by former financial ombudsman Walter Merricks. He believes that in the 16 years to 2008, the credit card charges that Mastercard was applying to businesses meant that consumers were paying more for purchases than they should have. These ‘interchange fees’ were essentially transaction fees that Merricks says Mastercard profited from unnecessarily. The case alleges that these charges were a breach of competition law by Mastercard, based on a 2007 ruling by the European Commission that said the same. Merricks believes that anyone who was an adult in the UK during this time should be entitled to compensation as a result – even if they did not have a Mastercard!

Who might be eligible for a refund?

Merricks’ case creates a huge class action that could amount to a £14 billion liability for Mastercard if he ultimately wins. There are two key requirements for consumers to be eligible for the refund if the case is successful:

  • You must have been over the age of 16 in 1992
  • You must have been resident in the UK for three months or more between 1992 and 2008

There could be around 46 million people in the UK who would become entitled to this windfall if the case does go to trial and Mastercard loses. And because the action is about charges applied to any business transaction, not just those relating to Mastercard’s credit card customers, anyone who purchased anything during that time could have been affected.

Why did the case fail first time around?

The original case was brought by Merricks in the Competition Appeal Tribunal. The Tribunal ruled that the case could not continue to trial because it could not establish how the fees that were charged by Mastercard had been passed on to customers. It said that it was not possible to identify how retailers had absorbed the costs and so it would not be possible to work out what losses had been suffered individually. However, the Court of Appeal has now ruled that this was not a basis for stopping the case from going to trial. It effectively said that the Tribunal applied the wrong legal test when trying to determine whether the case should go ahead and progress to the courts. The Court of Appeal judges said that the original Tribunal ‘demanded too much’ information about how the fees Mastercard charged on transactions were said to have been ‘passed on’ to consumers and that it misdirected itself in terms of how any damages could be divided between those potentially entitled to them.

What do the parties involved say?

Mastercard is clearly not happy with the decision and has said that it will fight it all the way to the Supreme Court. Merricks – and anyone potentially affected in the UK – is obviously much happier that the case has been sent back to the Tribunal for review. The former financial ombudsman said he was “very pleased” with the way that the Court of Appeal had ruled.

What happens now?

The case will go back to the Competition Appeal Tribunal where it will have to decide whether it should go to trial. Only if the case against Mastercard goes to trial – and is successful – will there be an entitlement to the £300 payout that Merricks has predicted for UK consumers. If the claim does go ahead it will be the biggest class action in British history. It is the first mass consumer claim to have progressed under the new collective action system that was introduced by the Consumer Rights Act. The total cost to the card issuer is going to be somewhere in the region of £14 billion so it’s likely that Mastercard will fight the case as hard as it can to avoid that kind of liability.

Although the case could now potentially go ahead, it will be up to the Competition Appeal Tribunal to asses whether there is any basis for this mass consumer claim against Mastercard to go to trial.

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The Risk of Trying to Get Credit Through Social Media Ads or Chats Mon, 17 Jun 2019 10:52:12 +0000 Alex Hartley The credit industry is evolving fast in the UK. Applying for a personal loan via a website, or going into a high street bank, are no longer the only options. As social media messenger and chat services are increasingly used by businesses looking to engage more with customers so too are they being employed as a communication channel through which to offer credit. However, there are some significant risks involved in getting credit through social media ads or chats – and often the way that people are approached to apply can be very misleading.Loans Credit through Social Media

What’s the main issue?

The big problem is the way that credit is being offered through social media or chats, mainly because it’s just not clear when an advert is an advert. Often the “ad” may be very conversational and simply look like another user talking about a great loan product that they have used. Although many of these chats feature the hashtag #ad a lot don’t and there are clearly some issues in terms of whether users reading the “chat” appreciate the significance of #ad (i.e. it’s not a genuine user conversation). This more casual approach to promoting credit is also leading to lines being crossed in terms of whether enough information is supplied to consumers and whether borrowers are being encouraged to make unaffordable choices. There is some very clear guidance on this, including:

  1. The Financial Conduct Authority said in 2015 that financial promotions on social media should be fair, clear and not misleading, providing customers with the right information. Promotions that appear to be a natural conversation are at the least misleading and at the most not clear or fair.
  2. In 2016, the Advertising Standards Agency warned against any advertising that was intended to trivialise short-term, high-interest loans, for example promoting the use of this type of loan for non-essential purchases. However, many of the informal social media “conversations” that form the basis of these ads do exactly that, for example by suggesting that this type of finance is a good way to pay for a holiday or Christmas purchases.

Misleading and confusing

Perhaps the biggest problem with this approach to advertising credit is that it doesn’t make clear who the user behind the posts really is. Social media has become a key resource for consumers making product choices today and messenger and chat apps are often where individuals go for advice and recommendations. We are increasingly relying heavily on peer review and that is what this type of advertising is designed to take advantage of. This means that those who are influenced by it may be making a decision to apply based on what they think are positive reviews from other borrowers. However, in reality, they are being manipulated into trusting a particular lender as a result of what is effectively paid for advertising posing as a genuine conversation.

Hidden ads – an example

One lender has come under scrutiny for this kind of practice recently using Facebook posts promoting its loans via ads that have been cleverly disguised as genuine conversations:

  • A Facebook user asks a question such as “how can I get a fast loan to pay for a new boiler?”
  • An “unconnected” second user then replies recommending the lender and saying something positive about a previous experience with them
  • The original user replies including a link to the lender’s website and may or may not include #ad in the post
  • The replying user then says something more, perhaps about the speed of the approval or what the loan could be used for
  • The original poster replies again saying thanks and perhaps with a #sponsoredad hashtag

On the face of it, apart from the hashtags the conversation just looks like a helpful exchange between two Facebook users. However, the reality is that it’s a brand cleverly promoting its loans without being particularly up front about who is doing the posting. This clearly raises issues in terms of the guidance provided by the FCA and the ASA. It also means that anyone who is influenced by this on social media isn’t entering into a borrowing arrangement with all the facts. Plus, it could open up users to “recommended”fraudulent scammers and lenders with sky high rates and less than ethical lending practices.

Social media sites such as Facebook have indicated that they are keen to wipe out these practices but for now it’s up to users to be vigilant. If you want to avoid the risks associated with this type of borrowing it’s always better to opt for an online or high street lender that is FCA regulated and more transparent about its products, services and advertising.

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A Best Practice Step by Step Guide to Conveyancing Thu, 13 Jun 2019 10:13:20 +0000 Amanda Gillam Conveyancing is an essential part of the process of buying a property. Whether you’re a first time buyer, or you’re upgrading to a bigger home, you’ll need to ensure you have this covered. It’s best practice to work with a solicitor or a conveyancer to ensure that the conveyancing relating to your property is professionally and comprehensively completed. This is everything that you need to bear in mind during the process itself.All about conveyancing

What Does the Cost of Conveyancing Include?

It’s essentially all of the legal and administrative work that is involved in transferring property ownership. Conveyancing starts when an offer on a property has been accepted and will continue through the purchasing process. For simple transactions (e.g. buying direct from a developer) it is often easier to use a conveyancer as they tend to be cheaper – you can check the credentials of a conveyancer with the Council for Licensed Conveyancers. The other option is a conveyancing solicitor – if your property purchase may have complications (such as an old property or one with planning issues) this can be the better choice. All solicitors must be regulated by the Solicitors Regulation Authority. Conveyancing fees tend to vary but are usually somewhere within £300 – £1,100. This generally does not include disbursements such as:

  • Local authority searches – £100 – £200
  • Water and drainage search – (£30 – £40 + VAT)
  • Land registry office copies – (£4 – £8)
  • Land registration fee – (£20 – £910)
  • Environmental search – (£30 – £35 + VAT)

The conveyancing fee won’t cover the cost of stamp duty, which is charged as a percentage of the overall property price. First time buyers are currently able to enjoy a stamp duty holiday on the first £300,000 of properties worth up to £500,000.

The Step by Step Process of Conveyancing

Most conveyancing takes between two and three months to complete. However, there can be significant delays depending on the results of searches or where complex negotiations are required. Generally this is the order of activity:

  1. Find a property that you like the look of and make an offer
  2. While you’re looking for properties research your options in terms of a conveyancing professional
  3. Make sure you already have the process of obtaining a mortgage under way before you make an offer on the property
  4. Instruct a conveyancing solicitor when it looks like your offer is going to be accepted
  5. At this stage you may need to commission a survey of the property – the type of survey you’ll need will depend on the age and condition of the property
  6. Your conveyancing solicitor will get in touch with that of the seller to obtain a copy of the contract pack. This will be analysed by your conveyancer who will also start the process of carrying out searches against the property. There may be negotiations involved in the process of handling the contract. You’ll need to read the contract carefully and make sure you’re happy with the results of the searches before signing the contract and returning it to your conveyancer to hold onto
  7. The process of exchange takes place when the signed contracts are passed to the solicitor/conveyancer acting for the other side and the deposit is paid to the seller’s solicitor
  8. Documents, such as the completion statement and transfer deed, are prepared by your conveyancing solicitor to be signed ready for completion
  9. Your conveyancer will request the mortgage money from your lender so that payment can be arranged on the day of completion
  10. On the day of completion your conveyancer will transfer the remainder of the purchase price to the seller’s solicitor – less the deposit that you’ve already paid. In return you will receive documents such as transfer deeds and proof that any outstanding mortgages have been redeemed. On the same day you’ll receive the keys to your new property and can move in at any time
  11. After the process of completion, your solicitor will take care of sending transfer deeds and stamp duty to the Stamping Office and registering your ownership with HM Land Registry. Title deeds received from HM Land Registry are then sent to the mortgage lender

Conveyancing can be a frustrating process at times so it’s essential to have the right kind of professional support on your side. This is especially so as a property is often the most expensive purchase that many of us will make in our lifetime. Working with a conveyancing solicitor will give you the peace of mind of knowing that all the important details are being taken care of.

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Does it make sense to have a Mortgage over more than 25 years? Mon, 03 Jun 2019 10:16:26 +0000 Alex Hartley The UK is a nation of aspiring homeowners. While the proportion of home ownership recently hit a 30 year low and the rental sector doubled in size, many of us would still much rather own than rent. And the fact that rental costs are higher than they have ever been before may well have something to do with it. Given the desire that Brits have to become a homeowner, many are willing to do whatever it takes to get onto the housing ladder, including taking on a mortgage well above the average term. But is getting a mortgage for longer than 25 years really a good idea?mortgages over more than 25 years

The longer mortgage term

The process of applying for a mortgage involves agreeing with a lender the term over which repayments will be spread. The maths are pretty simple – the longer the term, the lower the monthly repayments. The type of mortgage that works for you depends on many factors – for example older applicants are often better suited to shorter mortgages and may even find that they aren’t eligible for anything longer. Generally, a mortgage with a term of 20 years or less is considered to be a shorter-term mortgage. Anything over 30 years falls into the category of a longer-term mortgage. According to data from Santander, half of home buyers would look at the option of a 40-year mortgage in order to ensure that they are able to buy now and also to reduce mortgage payments as much as possible on a monthly basis.

How does mortgage length impact on the numbers?

An example:

Purchase price: £250,000

Mortgage rate: 3%

Deposit: 30%

= borrowing of £175,000


Making an application for a 25-year mortgage based on the above example would mean payments of £830 a month. Opting for a longer-term 35-year mortgage would generate payments of £673 a month. But the total amount you will repay will be £283,000 rather than £249,000 over the 25 year period.

The pros and cons of the longer-term mortgage

The pros

  • With a longer-term mortgage you can reduce the payment you have to make each month. For many people, balancing monthly bills with existing income is the biggest financial priority and the opportunity to have smaller mortgage payments is very attractive. The mortgage is spread out over the longer term and, as a result, is more affordable.
  • If interest rates go up borrowers with lower monthly mortgage payments won’t struggle in the same way as those with much higher bills to consider.
  • It may be easier to meet lender affordability criteria with a longer-term mortgage, which makes borrowing more accessible for those on lower incomes.
  • As house prices continue to remain high and incomes stall a longer-term mortgage may be the only way for some borrowers to get onto the housing ladder at all.

The cons

  • A longer-term mortgage will cost more simply because the cash is being borrowed for a longer period of time. In some situations this may mean that double the interest is being paid – for example, for a borrower who is approved for a 40-year mortgage will pay twice as much as for a 20-year mortgage. However, remember that you do have the option to overpay on your mortgage, which could help to reduce overall payments.
  • Longer-term mortgages extend a lot further into your future. So, depending on your age you may have to think about how you will meet the mortgage payments after you have retired.
  • First time buyers today are older – the average age is now 33 according to government figures. A longer term mortgage may simply not be an option for someone in their mid 40s, for example, as the repayments will extend too far beyond the age at which the lender is willing to take a risk.

Characteristics of a shorter-term mortgage

  • Higher monthly payments
  • The mortgage is cleared more quickly over a shorter term
  • Less is paid in interest overall
  • More difficult to pass lender affordability criteria, especially for older buyers
  • No need to worry about retiring with outstanding debt to pay off

It’s always worth remembering that a longer-term mortgage isn’t necessarily a permanent commitment. Once a current mortgage deal comes to an end it’s entirely possible for any borrower in the right conditions to restructure the mortgage to a shorter term.

The option of a longer-term mortgage does have its drawbacks, primarily the increased cost of borrowing for 35 or 40 years, as opposed to 25. However, if that longer term is the difference between getting onto the housing ladder or not, for many, it may be worth the risk.

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Top tips for cutting the cost of your mortgage Thu, 30 May 2019 16:10:36 +0000 Amanda Gillam For most of us, a mortgage payment is one of the biggest monthly expenses we face. So, anything that enables that cost to be reduced is worth looking into. Whether you’re struggling to make your mortgage payments, or you’re keen to release more of your monthly income for other things, there are steps that you can take to help bring the cost of your borrowing down.cut you mortgage cost

Increase the length of your mortgage

If it’s an option for you to increase the term of the mortgage to a longer one then you’ll be able to pay less each month. This may depend on a number of factors, including age and income. It’s worth enquiring with your existing provider about whether this is possible and also looking at other deals with longer terms. But keep in mind that you may pay more interest in the long run by doing this.

Overpay on your mortgage wherever you can

Interest rates are currently very low, which makes this a great time to start making over-payments on your mortgage. If rates do start to go up in the near future any mortgage you have outstanding could increase in cost, depending on the rates deal you have in place. If you’ve overpaid on your mortgage now then you’re cutting the cost of what you’ll have to pay that increased interest on in the future.


You may find that when you come to remortgaging there are many more attractive deals out there than the one you currently have. If you’re looking to use a remortgage to cut your monthly costs you’ll need to:

  • Consider your credit score. If this is low then you may not get a better, cheaper deal than you currently have. It may be worth waiting until your score improves before attempting to remortgage to cut costs.
  • Remortgage before the standard variable rate (SVR) applies. This is the rate you’ll move to after any fixed deal expires. It tends to be higher than the fixed rate and so your monthly payments will increase if you don’t remortgage before it kicks in.
  • Make sure you factor in the fees. You could end up paying thousands in set up and exit fees and this may make other savings totally redundant.
  • Shop around for the best deal. There are a lot of different options for mortgages today and it makes sense to do plenty of research to find the best deals and the lowest costs.
  • Look at the Loan To Value (LTV) ratio. This is essentially what you owe against the value of the property. If property prices rise then your LTV ratio will go down and that will make it easier to get a better remortgage deal.

Move from a fixed deal

Fixing mortgage rates for a specific period of time can help protect your finances if interest rates do go up. However, this protection does tend to come at a premium i.e. you’ll pay more for it. Although no one knows what interest rates are going to do, a tracker rate – i.e. an interest rate that changes with the bank base rate – may work out cheaper for now. Just be aware that if interest rates go up your mortgage payments will too.

If you don’t yet have a mortgage, make careful choices

For those who are currently trying to find a mortgage you can reduce how much this costs you by:

  • Saving a bigger deposit. The more deposit you have, the smaller the mortgage you’ll need and so the less it will cost you.
  • Considering working with a mortgage broker. You will usually have to pay a fee to use a mortgage broker. However, their knowledge and experience can be invaluable when it comes to finding the best value deal – and that may offset any charges they make.
  • Paying the mortgage fee separately. Many lenders add the mortgage fee into the mortgage itself so that it is factored into your repayments. If you can, clear this separately – as fees are often in excess of £1,000 you can reduce your balance this way.
  • Finding a better deal. Many lenders offer fee free mortgages today – if that’s an option for you as a borrower it’s a reduction you can make in the overall costs.

If you want to cut the cost of your mortgage – whether you already have one or are currently looking for a deal – there are lots of ways to do it. Improving your financial position will always give you an advantage when it comes to dealing with lenders, whether that’s working on your credit score or overpaying on your existing mortgage.

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How going Green can save you money and save your planet Mon, 27 May 2019 10:39:18 +0000 Alex Hartley According to research, 88% of people who watched Blue Planet II with David Attenborough have now changed their lifestyle as a result. Footage, such as albatross parents feeding plastic to their chicks, left many people shocked by the impact that humans are having on the natural world. This is just one sign that there is great momentum right now behind the idea of “going green” and living a more sustainable lifestyle. And it’s not just the planet that can benefit from the changes that humans can make – your own bank balance could start to flourish too.Go green and be eco-friendly

What you should do to go green and save money

  • Switch to a green energy provider. With energy prices increasing it makes financial sense to look for a cheaper option and if that also improves your carbon footprint then everyone wins. Energy suppliers such as Tonik provide 100% green energy (which includes green biogas). Not only that but they can also help you to save money, around £240 a year compared to the big energy companies like NPower or British Gas.
  • Don’t buy bottled water. Plastic bottles are usually impossible to dispose of without filling up landfill and can be incredibly pricey if you’re drinking litres of water every day. Plus, there have been some health scares when it comes to the impact of sunlight on plastic bottles and how this can release toxic antimony and bisphenol A into the water. Switching to a refillable bottle instead will help you to cut down on costs, avoid health scares and is far better for the environment too.Plastic bottle waste
  • Go vegan. Cutting out meat and animal products isn’t just about improving your health or increasing your Instagram following. A recent study by the University of Oxford found that eating a vegan diet could reduce an individual’s carbon footprint by up to 73%. The study suggested that veganism could be the “single biggest way” for consumers to reduce their environmental impact on earth. This is because manufacturing of meat and dairy is responsible for 60% of agriculture’s greenhouse gas emissions. Going vegan can also be healthier for your bank balance too, as meat is often one of the most expensive products in any shopping basket.
  • Change the way you travel. There are so many options for reducing environmental impact by changing the way you travel. Walking is totally carbon neutral – and free – for example, and if you have a bike you can give up your gym membership and start cycling everywhere instead. For car-dependent households, consider switching to an electric vehicle – government grants can make these cheaper to buy and in a year or two these innovative cars will achieve price parity with petrol vehicles in terms of fuel.
  • Be a more considerate cleaner. When you’re washing clothes, use a colder temperature and stay away from the drying cycles, as these consume an incredible amount of expensive energy. Wait to do your laundry until you have a full load so that you’re not wasting energy and water on half a drum full of dirty clothes. If you want to save money and cut back on the use of toxic chemicals in your home you can also switch to old school cleaning products. For example, try baking soda instead of disinfectants and a combination of liquid castile soap, lemon or orange oil, and vinegar instead of manufactured washing up liquid.
  • Take control of your energy consumption in the home. If your energy bills feel totally out of control and you’re worried about the impact you’re having on the environment there are ways to start taking control of this. For example, you can install a smart meter so that you have real insight into where you’re using the most energy and where you might be able to cut back. Small changes like energy saving light bulbs can make a huge difference, both in terms of carbon footprint and also cost. Something as simple as ensuring you turn out the light when you leave the room can shave a lot off your annual energy usage and bills.

“Going green” is a choice but for many people it’s now becoming an essential way of life. Concern for the environment is driving us to take bolder steps towards living more sustainable lifestyles. Plus, the financial benefits of being more considerate and eco friendly are stacking up. If you want to make 2019 the year that you reduce your carbon footprint these tips provide a great place to start.

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How the Financial Services Compensation Scheme (FSCS) can and can’t protect you Thu, 23 May 2019 13:28:47 +0000 Amanda Gillam Since 2008 (the height of the “credit crunch”), news of companies failing seems to have been a fairly constant feature in the headlines. Often those who lose out the most are the every day people who have put their trust into a financial business in order to increase savings or put money aside for retirement. That’s why something like the Financial Services Compensation Scheme seems like such a fantastic safety net for consumers. However, this is a scheme that has its limits. If you’re hoping to rely on protection like this when you’re investing or saving your money, it’s important to make sure that the products and companies you’re using are covered.Financial Service Compensation Scheme (FSCS)

What is the Financial Services Compensation Scheme?

We have EU legislation to thank for the provision of the FSCS deposit guarantee scheme. All EU countries are required to set up at least one protection scheme. These days the amount protected is 100,000 (currently £85,000). The FSCS was set up to protect savings held in a UK registered bank, building society or credit union. For joint accounts the limit increases to £170,000. The scheme also covers a range of other financial products, including insurance policies and investments. If you’re claiming compensation with respect to an investment broker or management firm that has failed the maximum compensation limit is £50,000.

One of the major advantages of the FSCS is that the pay out to consumers is automatic so there is often no need to make a claim. Because all deposit takers – such as a bank – are required to maintain Single Customer View files, compensation can be automatically processed and paid out within seven days.

Who is the FSCS designed to protect?

It was set up to provide essential cover for consumers but also extends to small businesses. In order for an enterprise to come within the remit of the compensation scheme, business turnover must be low.

When can’t the FSCS protect you?

There are situations when the FSCS does not apply:

  • When you’re dealing with a foreign or unregistered bank or finance provider. The compensation scheme is only applicable where the firm involved is UK registered and regulated by the Financial Conduct Authority. It’s important to check whether the business you’re dealing with is covered by the regulator – you can verify this via the Financial Services Register. If the firm is not on the register, FSCS protection won’t apply.
  • If you’ve invested in a peer-to-peer platform. The FSCS does not extend to providing compensation for any investments you’ve made via peer-to-peer lending. That’s why it’s key to make sure you choose a peer-to-peer lending platform carefully – if it goes under then you will lose all your money with no safety net.
  • If the firm is still trading. The scheme will only kick in at the point that the firm in question has either gone into default or stopped trading.
  • Certain types of products. For example, pre-paid currency cards and savings schemes are not covered by the FSCS and nor is money held by PayPal.
  • Structured savings deposits. Some products that fall into this category do come with FSCS protection, including deposit-style accounts. However, if the product is an ‘investment-style’ structured product that relies on stock market performance it’s unlikely that this will be covered.
  • If your money is held with multiple institutions within the same group. Today many banks and building societies have merged and are part of the same group. FSCS compensation is available per one financial banking group or credit union and not for each separate bank and building society. So if you have £85,000 saved with two different institutions within the same group you will only be eligible to be compensated for one of the losses.
  • When you buy shares in a company that goes bust. The FSCS does provide compensation if there is a loss arising from bad advice or if an investment provider fails. However, there is no protection purely for buying shares in a business and that business subsequently goes under, as that is the risk with investing.
  • Any cash that is held in an offshore jurisdiction. If your money is saved in a location such as Jersey or Guernsey, for example, the FSCS won’t provide any protection.

An example of how the FSCS helps

Beaufort Securities was a broker dealer that failed in March 2018. Working with the company administrators, the FSCS arranged the transfer of money and assets belonging to more than 12,000 customers to another nominated broker so that investments could continue. It was also able to ensure that the majority of the affected clients were compensated for the costs of returning client money and assets.

The FSCS is a great scheme that provides automatic protection – as long as you fall within the limits of its remit. It’s always important to check that this is the case before you hand over any savings or cash.

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Personal loan rates are still falling but be wary of teaser rates Mon, 20 May 2019 10:58:18 +0000 Alex Hartley New research shows that the difference between actual and advertised lending rates has widened significantly. Since 2011, the discrepancy between what lenders advertise as loan rates to consumers, and what borrowers actually pay, has increased from 1% to 3%. This means that borrowers today are often paying much more for loans than they may have calculated based on initial advertising. This is despite the fact that personal loan rates have continued to fall for some time.personal loan interest rates

Long-term drop in borrowing costs

Despite the increase in the Bank of England Base Rate in 2018, personal loan rates have continued in a pattern of decrease over the past couple of years. Tesco, for example, recently decreased the rate on its £25,001 to £35,000 tier loan to 6.7% APR for a term of one to five years. Average loan rates decreased by around 3.9%, which was a positive development for borrowers looking to pay less for credit. The long-term fall in personal loan rates is, in part, a response by lenders to increased competition and an overcrowded market that sees many having to offer better deals to secure consumer applications. Loan rates tend to be a better deal than credit cards and there are some fantastically low deals available. So what’s the issue?

Teaser rate discrepancies

Recent research conducted for Shawbrook Bank by the Centre for Economics and Business Research (Cebr) found that, despite personal loan rates falling, consumers could still be paying more than anticipated for borrowing. The study identified that borrowers could be paying up to two and a half times the headline APR of an advertised loan. According to Cebr, the average advertised cost of a £9,000 loan in the UK is between 2.8% and 5.5%. In contrast, the average APR that borrowers are actually paying for a loan is 7%. The difference between the interest actually being paid on personal loans, on average, in the UK and the advertised rates is pretty substantial. It shows just how off the mark teaser rates can be in terms of the expectations that they create about what the costs of borrowing are.

What is the cost to borrowers?

The Cebr research identified a figure of £194 million as the cost to consumers of being accepted for a loan that doesn’t have the advertised interest rate. Perhaps more importantly, it also raises the issue of whether borrowers are actually able to make an informed decision about borrowing when the real costs of doing so are so much higher than those that are advertised. The difference between expectation and reality could be as much as a 150% increase in costs, which could unbalance even the most carefully calculated budget.

The impact on consumer finances

The reality of loans that cost more than the advertised rate is that borrowers may end up with larger monthly repayments to deal with. There is also the more sizeable interest burden which, depending on the size of the loan, could end up being substantial. Both could create affordability issues for consumers who may find that their new borrowing becomes too much for their monthly finances to handle.

Getting the best possible loan rates

The ability to actually get the teaser rates that are offered by lenders is dependent on key factors such as credit rating. A higher credit score will enable a borrower to get a lower interest rate on a loan. However, those without a perfect credit score may find themselves with borrowing costs that are significantly more than what was advertised with the loan. So, nurturing a positive credit history is going to be key for anyone looking to get anywhere close to the lower teaser rates that lenders offer. There are many different factors that might affect a credit score, including:

  • How much existing debt a borrower has
  • Whether repayments on debt have been missed or late in the past
  • Inconsistencies or mistakes on a credit file that are not corrected
  • A credit file that is connected to someone else’s (e.g. an ex partner) and that person has a negative credit score or poor financial habits
  • Levels of stability, such as whether a borrower has lived at the same address for some time
  • Any legal action taken against a consumer in the past, such as a County Court Judgement (CCJ)

Although this is a positive market for borrowing personal loans there are a lot of different factors to consider. Key among these will be credit history and whether a borrower has a high credit score or not. For those who don’t score highly it’s always important to check the actual rates available, not just those advertised, to see what the reality of the costs of borrowing will be.

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Is the FCA about to clamp down on guarantor loans? Thu, 16 May 2019 10:20:08 +0000 Amanda Gillam There has been plenty of criticism of payday lending in recent years. Issues with charges and rolling up repayments, for example, motivated the financial regulator to get involved to restructure the industry. Other types of lending, such as guarantor loans, have – so far – not come under the same scrutiny or received such criticism. However, the FCA has recently indicated that it has concerns about the way that guarantor loans operate. In particular, the number of guarantors who end up stepping in to repay loans has been identified as troubling. Could this be a sign that the regulator is about to take action?Financial Conduct Authority (FCA) logo

What are guarantor loans?

There are currently 12 guarantor lenders in the UK offering finance to individuals with less than perfect credit histories. The idea behind a guarantor loan is that a friend or family member – usually someone with a better credit score – guarantees the lending for the borrower. So, if the borrower is not able to make repayments on the loan then the guarantor will step in and ensure that the loan is repaid from their own pocket. The advantage of guarantor loans is that people with bad credit can borrow, both to obtain finance and also to start rebuilding their own credit record by keeping up with repayments.

What is motivating the FCA to act?

Affordability of lending has become increasingly important in every corner of the credit market. Ensuring that borrowers have the means to make repayments without undue pressure on their finances is essential for lenders who are looking to lend in line with best practice guidelines and regulations. In the context of guarantor loans, an increasing number of guarantors are being forced to step in and make repayments on behalf of borrowers – and this has attracted the attention of the FCA. This, it says, is an indication that loans may not be being approved on a true affordability basis.

Amigo Loans is the largest lender

Amigo Loans – which recently floated for £1.3billion on the stock market – is the largest guarantor loans lender by far. According to official Amigo statistics less than 10% of the loans it supplies to borrowers are repaid by a guarantor. However, it’s worth noting that Amigo recently got into some hot water over its targeting of “pilot loans” and this has also made the FCA sit up and take note. These are loans that are made available to borrowers who have a credit score so low that mainstream credit is out of reach. Pilot loans typically have very high interest rates – Amigo charges 49.9% – and in the year to March 2018, £99 million worth of pilot loans were issued by Amigo. Many of the new loans were thought to have been part of a drive to increase the size of Amigo’s loan book before its recent flotation. It’s behaviours such as this, as well as concerns about affordability for consumers, that have started to attract attention from the FCA.what it means to be a guarantor for a loan

The FCA focus

The FCA has already begun looking into the guarantor loans industry in more detail. Recently, the regulator published guidance for lenders looking to take a payment from a guarantor where a borrower is in default, for example. The guidance covered issues such as whether or not a lender is required to let a guarantor know before taking the payment. Default procedure is just one of the issues surrounding guarantor loans that the FCA appears to be getting increasingly concerned about. Others include:

  • Costs of borrowing. Director of strategy and competition at the FCA, Christopher Woolard, has also recently voiced concerns about the costs that can be involved in borrowing guarantor loans. Interest on guarantor loans can be charged at anywhere between 39.9% and 59.9%. The steep nature of these rates is something that Woolard has questioned given that the borrower may have a guarantor in place with a more positive credit rating than their own. Such a safeguard should, in theory, lower the risk for the lender therefore removing the justification for high interest rates. However, other bad credit personal loans that don’t require a guarantor are even more expensive!
  • Burden on guarantors. The average size of a guarantor loan is £5,000 with the average total repayment £7,500. Increasingly, more guarantors are being forced to step in to pay off the debts of friends or family members and the FCA is concerned about how this is likely to impact on those people. This may be especially difficult if someone dies or there are issues when it comes to the guarantor making payments.

Currently, there are no new restrictions to consider for the guarantor loans industry but that could be about to change. With the FCA interested not only in the cost of borrowing this kind of credit but also affordability, and whether guarantor loans work as a financial product, the industry could be about to go through a similar period of disruption as payday lenders have experienced in recent years.

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The lessons from the London Capital & Finance debacle Mon, 13 May 2019 10:39:27 +0000 Alex Hartley It’s been more than a decade since interest rates held any real potential for savers. As a result, any financial products that have a substantially higher rate of interest seem very attractive. London Capital & Finance plc (LC&F) offered a “Fixed Rate ISA” product with returns of 8% for those who were wiling to lock their money in for at least three years. However, the firm has now gone under and has taken most of investors’ money with it. So, what are the lessons that can be learned?london capital and finance logo

LC&F – what happened?

Essentially, what LC&F was offering was a high-risk bond scheme that generated £236 million in investments after an intensive marketing campaign that included lots of content on Facebook. The company has now collapsed and is in the hands of administrators as a result of not being able to pay its debts. Unfortunately for those who invested with LC&F it’s thought that the bondholders could get as little as 20% of their money back.

The role of search engines

Although the LC&F said that it was targeting experienced, high net worth individuals with its financial products, in reality many of those who ended up putting their money into it were actually inexperienced investors. In fact, potentially up to 50% of those who invested arrived at the product via a basic online search for terms like “best ISA.” Search engines took them to two “comparison” websites – and Both of these websites rated LC&F right at the top of their comparison lists.

Both of these websites are owned by a company that is owned by Paul Careless. What’s problematic is that Mr Careless also owns another company that was paid £60 million to handle the marketing for LC&F, indicating that the “comparison” websites may actually have been nothing more than a marketing tool. The connection is of great concern to investors who have now lost their money as a result of the collapse of LC&F and many feel they were misled into believing that the investment had been independently compared and highly rated.

What are the administrators saying?

LC&F loaned the money it collected from investors to 12 companies but would have had to have seen a huge return on it in order to be able to deliver the 8% interest it advertised. According to administrators it’s going to be difficult to get much of the £236 million that was invested back. Plus, the investments weren’t regulated, which means they are unlikely to be covered by the Financial Services Compensation Scheme (FSCS) – so far there has been no indication that the scheme will pay out.

What are the lessons to be learned?

  • It’s always a good idea to ensure investments are covered by the FSCS, especially for inexperienced investors. For those who read the FAQs page on the LC&F website it was there in black and white that the investments weren’t regulated, even though the business itself was.
  • It’s important to research widely. For those who went straight through to the two websites that were connected to the company responsible for marketing LC&F, without any further research it may have seemed like the bonds were independently assessed, compared and rated. However, outside of those two websites it would have been difficult to find anything that gave the same impression.
  • Learn to recognise marketing speak. For example, the LC&F marketing used the term “full asset backed security,” which sounds like the bonds were a low risk option. However, the term means nothing and is pure marketing waffle. Closer inspection of the terms and conditions for the bonds makes it clear that investors could lose anything up to 100% of the investment made in the bonds – i.e. they were very high risk.
  • If you’re not sure about the product, don’t invest. If you find terms confusing or you’re not 100% sure about outcomes it’s better not to hand your money over.
  • Nothing comes for free. Another element of the LC&F advertising was to claim that there were no fees, charges or set up costs. This would be a warning sign for an experienced investor, as it normally means that those charges have been hidden. With mainstream products, such as ISAs, it’s not possible to hide charges – they must be up front – however, unregulated products aren’t as transparent.
  • When something seems too good to be true it probably is. Most savers could achieve around 2% interest on mainstream products at the time that the bonds were being offered – significantly less than the 8% being marketed by LC&F. It’s important to understand that big returns always come with a big risk and to be sure that you’re willing to take that risk before signing up for anything.

For those who invested in LC&F the outcome looks bleak with no compensation scheme cover and a likely recovery of just 20% per investment. Hopefully the lessons that can be learned from the debacle may prevent a similar situation arising in future.

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What compensation can you get for poor broadband service? Thu, 09 May 2019 10:16:30 +0000 Amanda Gillam Whether you’re streaming films, working from home or gaming, poor broadband service can be incredibly frustrating. Buffering, dropped connections or less than impressive speed all affect customer experience and may mean you’re just not getting value for money. According to Ofcom, only around one in seven consumers who has had problems with their broadband service has received compensation for issues. Often, the compensation that is provided is in very small amounts. However, things should be about to change thanks to a new scheme that means customers are automatically compensated for certain problems that affect their service.your home broadband service

A new compensation scheme

Ofcom has established a new scheme that is designed to ensure that consumers who are having a bad broadband experience are automatically compensated. The scheme is not compulsory and only those providers who sign up to it are covered by its requirements. So far, BT, Sky, TalkTalk, Virgin Media and Zen Internet have signed up for the scheme and other providers, such as EE, Vodafone and Plusnet have indicated that they are intending to do so. The voluntary automatic compensation code of practice scheme was first announced in November 2017 and came into force as of April this year.

What issues is the scheme designed to cover?

It is predominantly aimed at issues that may arise with respect to faults. So, for example that could be repairs that have been delayed by engineers leaving a customer without service. It might be a newly purchased service that doesn’t start on time or engineers who don’t show up. There are more than 7 million cases where this happens each year so Ofcom considers the issue an important one.

How does it work?

There are three different levels of compensation depending on the issue that the customer has had to deal with, for example:

  • £25 – if an engineer does not come when they say they will or cancels within 24 hours
  • £8 – this entitlement is per day where a service stops and is not up and running again within two days
  • £5 – if a new service does not start when scheduled, the consumer is entitled to £5 a day in compensation

Currently, TalkTalk, Sky, Zen Internet and BT all provide their broadband services via the BT Openreach network. If the network has issues that cause problems for the providers, an agreement has been entered into that Openreach will compensation those providers. That money can then be used by the providers to compensate customers, as indicated above. Other providers, such as Vodafone, plan to start paying customers in the same way later this year.

Why isn’t the scheme compulsory?

According to Ofcom, the easiest way to ensure that customers start to receive compensation as quickly as possible is via a voluntary scheme such as this. Because so many of the big providers have signed up for the scheme 95% of homes in the UK should be covered by the right to compensation.

What about broadband speed?

Currently, the scheme doesn’t cover compensation for broadband speeds that aren’t quite up to scratch. If you feel like you’re having issues with broadband speed then there are a number of steps you can take:

  • Use a free online checker tool to establish how slow your broadband really is
  • Establish that equipment is working, such as the router, as this can also be responsible for slow broadband
  • Make sure you know what kind of speed your contract entitles you to. It’s also important to look at the small print, as many broadband providers won’t guarantee a maximum speed. However, if your service is falling below the minimum guaranteed speed then the provider may be in breach of your contract
  • Make contact with your broadband provider and highlight the speeds you were sold the contract on the basis of and the speed you’re actually getting – let them know that you feel the promises or statements made to you before you agreed to the deal were ‘misrepresentations’
  • Ask your broadband provider to check the access line speed to see if this is below the guaranteed minimum
  • Give your provider enough time to respond (e.g. 14 days) and if they don’t – or the response is not satisfactory – make a formal complaint to them. It’s worth checking whether the provider is signed up to the Ofcom Voluntary Business Broadband Speeds Code of Practice, which requires providers to offer certain support when there are speed issues e.g. letting you out of your contract without penalty

If you’re having problems with your broadband service there are steps you can take to remedy the situation, from the new compensation scheme, to making a complaint about speed. And, of course, you can always switch to a provider with better service.

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Feeling comfortable at work? Here’s what happening in the UK jobs market. Mon, 06 May 2019 10:26:32 +0000 Alex Hartley According to figures from the Office for National Statistics, the level of employment in the UK is currently at a record high. Despite the impending doom that many have forecast as a consequence of Brexit from the figures it would appear that, in terms of jobs at least, the economy is thriving. However, some have questioned the current boom in job creation as a false positive in terms of whether or not it’s an indicator of economic health – so, what’s really happening in the UK jobs market?

The movements in the UK jobs market

Job vacancies are increasing

The most recent numbers show that unemployment has hit record low levels of 4%. In the three months running up to January 2019, the number of unfilled vacancies increased by 16,000 to 870,000. This comes in the context of a slowdown in growth, both in terms of the UK’s economic growth and growth on a global level. For example, in 2018, the UK economy grew by just 1.4%, which is the weakest level of growth that the economy has seen in six years. The increasing number of vacancies is putting pressure on employers, especially in industries such as IT, health and food services, which are some of the sectors that have been the most affected. Many are finding it difficult to hire the volume of workers currently required to fill available positions. As a result of this new market – a candidate’s market – total average weekly wages rose by 3.4% in the year to December 2018.

The UK jobs market – under the surface

Although the figures seem to indicate that everyone is profitably employed, all is not quite as it seems:

  • Up to 844,000 people in the UK are employed on zero-hours contracts as their main job – these are arrangements that provide no job security and pay wages that often make it difficult to live off.
  • While pay growth has increased slightly, it is still significantly below the previous peak of 6.6% recorded in February 2007. It’s also worth noting that real wages fell by 10% between 2008 and 2015. This was the biggest cut in wages anywhere in Europe, other than in Greece.
  • A lack of economic growth in certain sectors has also led to some significant job losses. For example, the manufacturing sector shrank severely with substantial job losses in vehicle manufacturing – and several big retailers, such as House of Fraser, went into administration in 2018 taking large numbers of jobs with them.
  • More older people joined the UK workforce – the over 50s made up one in five of the UK workforce in the 1990s but now account for around a third. This is attributed predominantly to increases in pension age and the fact that many Britons simply don’t have enough set aside for retirement to stop work.
  • Many of the “jobs” that count as employment are not what we would traditionally view as employed roles. According to the Resolution Foundation, two thirds of the increase in jobs has come from a rise in atypical work, such as self-employment, zero-hours contracts and agency work.
  • Use of food banks has significantly increased. Around six million jobs in the UK now pay below the living wage, which has left many households trapped in a state of “in-work poverty” where, although they are employed, they cannot afford to live.

The hidden impact of Brexit

Another cause of the sharp increase in employment is being attributed to one of the less obvious consequences of Brexit. Bank of England rate-setter Gertjan Vlieghe suggested that, as a result of the uncertainty over Brexit, many companies are not investing in plant, machinery and efficiency driving technology, as they normally might in order to meet the needs of customers. Instead, businesses are hiring people to enable them to keep up with customer demand. Although this might seem like a positive step, the reasoning behind it is that people are much easier to hire and fire. Corporate spending has continued to fall over the past year and British workers are relatively easy to get rid of. If a Brexit shaped recession starts to bite, many businesses would find it difficult to reverse investment decisions in technology, plant or machinery but could reduce a workforce without too much effort. So, rather than being a sign of a thriving economy, according to Vlieghe, the increase in employment could actually be a sign of economic stagnancy.

It’s often difficult to determine what’s really going on with the UK jobs market purely from employment figures alone. As a result of all the different factors involved, from growth rates to the changes in types of employment we have seen in recent years, it’s clear that positive predictions need to be taken with a pinch of salt.

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How to avoid invalidating your insurance Thu, 02 May 2019 10:58:58 +0000 Amanda Gillam Most of us assume that when we buy insurance for our home, car or a holiday then we’re completely covered. We’ve read the details, found the right level of cover for our own circumstances and can enjoy the peace of mind of knowing that we’ve taken the right precautions. However, what many people don’t realise is that, even if your insurance policy is perfect for your situation, there are certain things that you can do that will invalidate your cover. If you don’t want to find yourself with a useless policy on your hands then look out for the following in the small print.How not to invalidate your insurance

Car insurance

  • Not belting your pet in. Insurers will often refuse to pay out for a car insurance claim if you had your pet in the car and they weren’t properly secured at the time of an incident or accident
  • Driving overseas. Most car insurance policies won’t actually cover you for driving overseas – don’t make assumptions about this, read the small print to make sure.
  • Using a domestic car for work purposes. If you have a car only for ‘social, domestic and pleasure’ then you’ll pay less for the insurance on it. However, if you then start mixing in work purposes the entire policy could be invalidated.
  • Getting behind the wheel of someone else’s car. Make sure your policy extends to third party cover for driving another car with the owner’s permission – many policies don’t provide this.
  • Not notifying of changes. If you make changes to your vehicle then you need to let an insurer know. Even something as minor as blacked out windows could give the insurance company a reason not to pay out.
  • A dirty windscreen. If you don’t take proper care of the car you could face a lot of resistance from your insurer if something happens. In particular when it comes to the windscreen – if this is dirty, muddy and grimy then an insurer may refuse to accept that they should pay out. You might also find yourself with a fine if you’re caught by the police with the windscreen in this kind of state.

Home insurance

  • Your windows have locks but you don’t use them – or you’re in the habit of leaving your windows open, for example when you leave the house. The same goes for a burglar alarm – if you’ve got one and don’t use it an insurer may refuse to pay out.
  • Leaving a key out for burglars. Ok, so you may not have left the spare key under the flower pot specifically for the burglar but if you decide to leave a set of keys outside the home this could completely invalidate your insurance.
  • You don’t report any theft to the police. There is a time limit on this too – you must report it within 24 hours or your claim may not be successful.
  • Not notifying your insurer about building work. Specifically, you need to tell them that builders are on site or you may not be covered for any damage they do, such as a burst pipe.
  • Posting about your holiday. This is fairly new but if you’re posting photos on social media that indicate you’re not at home – and then someone breaks in while you’re away – an insurer may claim that you’ve invalidated your insurance policy as a result.

Travel insurance

  • Paying for a holiday with points instead of pounds. If you’ve used loyalty points to pay for some or all of a trip, any insurance claims you make resulting from that trip may be refused as a result.
  • Certain activities and sports. The key with sports and activities on holiday is to assume you’re probably not covered and then check. Even something as simple as riding a banana boat may not be covered, which will leave you without insurance if you’re hurt during the experience.
  • Having a drink or two. Most people are beginning to realise that being drunk is highly likely to give an insurer a reason to refuse to pay out. However, what many of us don’t spot is that insurers often state that any alcohol consumption at all will invalidate the policy – you don’t even have to be over the limit.
  • Not taking care of your stuff. If you don’t properly secure your valuables then an insurer may not pay to replace them. So, if you leave your phone on your beach towel when you go for a swim and someone takes it you might find yourself with a refused claim.

It’s always important to read the small print when you’re taking out insurance. The most common ways that we invalidate policies are very often avoidable.

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Are you paying too much for your home energy? Mon, 29 Apr 2019 10:38:40 +0000 Alex Hartley Loyalty is something that most of us prize in other human beings. However, when it comes to the products and services that we regularly rely on it seems that it really doesn’t pay to be loyal. In particular, the cost of energy is leaving those who stay loyal to their energy providers seriously out of pocket. So, how do you know if you’re paying too much for your home energy and – if you are – what should you do about it?Using too much energy at home?

Why are we paying too much?

A study published earlier this year identified that 40% of customers don’t change energy suppliers because they believe that it is “too much hassle.” Many people simply don’t have time to keep track of the tariff they are on because they are too busy and, as a result, 20% don’t actually know which tariff they are paying for. As it turns out, this is a costly way to approach energy bills – customers who are trapped in poor value deals are paying a total of £4 billion too much for their annual energy supply. There are some substantial savings to be made by switching energy suppliers and yet 32% of people haven’t changed energy supplier for at least five years. Most of these people are likely to be on Standard Value Tariffs – the energy supplier’s standard rate, which kicks in after any discounts or sign up deals expire. SVTs are usually much more expensive than the new deals that are offered to switching customers so staying on them can push the cost of energy right up.

What can you do about your home energy bills?

Switch providers to reduce the “per unit” cost

If you’re one of those customers who hasn’t changed energy supplier for some time then you could be paying far too much. The first step to start making savings is to switch to another provider. Savings of approximately £275 a year are available to those who choose to switch so the benefits of doing so are very tangible. Plus, there are many more options for managing the process today so that switching energy supplier doesn’t have to be time consuming or a hassle. Most switching services make it very simple – and there are also options like weflip, which will do all the work researching the market and automatically switch you to the cheapest deal.

Make sure you’re not paying too up front

Recent research established that more than half of UK households have overpaid energy bills by an average of £84.80. Because energy use can shift seasonally, or when personal circumstances change, providers often end up taking larger payments than are necessary. Although they are legally obliged to refund a surplus this often only happens when the contract comes up for renewal or when a meter reading is provided. Keep an eye on any surplus on your account – if you want to ask for a refund you can do so at any time.

Reduce the number of units of energy consumed

Here’s a plan to reduce the volume of energy you consume:

  • Take control of your thermostat. If you’re willing to drop room temperature by just 1ºC you can reduce the cost of your annual heating bills by over £70.
  • Use energy saving light bulbs. Make the switch from traditional light bulbs to LEDs and you could save significantly – the average LED could cut £200 from your energy bills over its lifetime. You can also reduce energy consumption from bulbs by ensuring that you are using the best bulb for the room and also switching lights off when rooms aren’t being used.
  • Replace old appliances. Today, appliances are designed to be much more energy efficient than they used to be. Energy efficient washing machines, TVs, dishwashers etc can save you up to £241.
  • Upgrade your boiler. An old fashioned boiler will use more energy, not just as a result of its design but also the wear and tear to the system. Switch from an old G-rated gas boiler to a new A-rated condensing model and you could reduce annual energy bills by around £200.
  • Insulate your home. Ensuring that you have the right insulation for your property will help to stop heat escaping so that you require less energy to heat your home. Loft insulation, cavity wall insulation and solid wall insulation could help to reduce annual energy bills by £275.

If your energy bills have started to feel onerous there are solutions available – from switching your energy provider to avoid an expensive tariff, to taking steps to reduce your energy consumption, there is a lot you can do to make a difference. Given that most of your energy use is in the winter, and as it takes time to implement this plan, you should start right now!

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A guide to Equity Release Thu, 25 Apr 2019 10:53:32 +0000 Amanda Gillam If you own your own home then equity release is often highlighted as a quick and easy way to release some of the capital tied up in it. It is offered to those aged 55 and over and is designed to be a way to re-access some of the value in the property. As equity release is tax free it is a very attractive option for those who may need to create some cash flow. There are several products that now come under the equity release umbrella, from those that offer a lump sum to equity release you can receive in regular, smaller payments. Equity release is a big decision – and there can be substantial costs involved – so it’s important to ensure you have all the facts before you make a decision.release equity from your home

The two main types of equity release

  1. Lifetime Mortgage

A lifetime mortgage means that you retain ownership of the property. Just like a regular mortgage you can opt to make monthly repayments on what you’ve borrowed. Alternatively, you can simply allow the interest to roll up. If you do the latter, the property will be sold when you die – or go into care – and the mortgage repaid from the proceeds.

  • A lifetime mortgage is available to the over 55s
  • If you choose not to make any repayments, be aware that the debt can increase quickly (interest on the interest, etc)
  • Factors, such as your age and the property value, will have an influence but it’s normally possible to release up to 60% of the equity in your home with a lifetime mortgage
  • The “no negative equity guarantee” means that, even if there isn’t enough left to repay the mortgage after the property is sold, neither you nor your estate has to pay any more
  1. Home Reversion

Home reversion means that ownership of your property passes to the lender in exchange for regular payments to you and the right to live there until you die. The main obligations to bear in mind for home reversion are the requirements to insure the property and also to maintain it.

  • Home reversion usually has a minimum age of 60 or 65
  • You can sell all of your home to a home reversion provider, or just a part of it
  • Home reversion providers will usually give you between 20% and 60% of the market value of whatever you sell to them
  • Normally, home reversion providers will expect a certain level of maintenance to be carried out at the property
  • This type of equity release also comes with a “no negative equity guarantee”

Both options for equity release offer the opportunity to ring fence a proportion of the value of the property so that this can be set aside for a specific purpose, such as inheritance.

Key questions to ask if you’re considering equity release

Equity release is certainly not right for everyone and there are “horror stories” where things have gone wrong. Tread carefully.

  • Would it be better to downsize? If you sell and move to a smaller property you could release cash from the move without incurring the interest involved in equity release.
  • What kind of inheritance do you want to leave behind? Equity release is ideal for anyone who doesn’t have family or friends they want to leave inheritance too. However, if you do have people you want to provide for on your death equity release will reduce what is available to them.
  • How much is the equity release going to cost? Lifetime mortgages, for example, are not the same as regular mortgages. Average interest is around 5.1% and if you choose not to make repayments the interest will repeatedly compound. Both types of equity release may also come with an arrangement fee.
  • Are you likely to want to move home? It’s possible to move home if you have taken out equity release on a current property – however, the new property must provide enough security for the lender to allow the transfer of equity release to take place.
  • Is the provider a member of the Equity Release Council? This will ensure that your equity release product comes with the “no negative equity guarantee.”
  • How much do you really need to borrow? With equity release it makes more sense to borrow less initially and then borrow more at a later date, if necessary. That’s because, as soon as you start to borrow, the interest begins to add up.
  • How will it affect your benefits? Receiving a lump sum or regular payments may have an impact on any means tested benefits that you currently get.
  • Are you sure that equity release is for you? It’s important to be completely sure about equity release before you do it, as it can be difficult to unwind an equity release situation once it has been set up.

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All you need to now about UK Council Tax Mon, 22 Apr 2019 10:22:26 +0000 Alex Hartley Council Tax is charged by every local authority across England and Wales. The purpose of council tax is to cover the cost of local services, such as refuse collection. Council tax tends to be a yearly payment but most local authorities break this down into 10 monthly amounts, with a two month holiday from council tax payments every year. The amount that households pay depends on a wide range of different factors, including individual circumstances, the value of the property occupied and the requirements that the council has for income to fund its services.your council tax

Who pays council tax?

Everyone pays council tax. However, depending on your individual situation, you may be able to reduce the amount that you’re required to pay. There are specific circumstances in which the cost of council tax will be reduced, including where:

  • You’re the only adult in your property and you live alone
  • You are on a low income, are a student or live with students
  • You’re in receipt of certain specific benefits, such as Jobseeker’s Allowance
  • You live in a larger property as a result of having a disability or living with someone who has a disability

Why do we pay council tax?

The purpose of council tax payments is to provide a local authority with funds to put towards delivering local services for the community. This covers practical services, such as local police and fire forces, rubbish collection, transport and road maintenance and the administration of events such as births, deaths and marriages. It also provides funding for more community focused services, such as libraries and leisure and education services, as well as the upkeep of local parks and sporting facilities.

How is council tax assessed?

It operates on a series of bands, from A to H. A is the cheapest council tax band. Generally, the more expensive the property is, the more council tax will be charged to the person occupying it. If you think that your property is in the wrong band it’s worth getting it reviewed – some 400,000 households in England and Scotland are in the wrong council tax band. The amount of council tax due also varies by location – in England the cheapest average council tax is in Wandsworth, London while the most expensive is in Elmbridge Surrey.

Council tax is a ‘priority bill’

Council tax payments can cause serious problems for local residents, particularly as everyone is required to pay council tax and non-payment can create debt with serious consequences. If you’re more than 14 days late paying council tax then you will get a letter from the local authority reminding you to pay it. After that you’ll have seven days to make the payment and, if you don’t, the council can ask that you pay the entire year’s council tax up front instead of continuing with the monthly repayments. If you’re not able to then you may be taken to court, which can result in court-appointed bailiffs coming to your home, or repayments being taken straight from wages or benefits.

Council tax is rising

Local authority funding cuts by central government – of 60% – have meant that council tax has increased for many people. For example, for those living in band D homes it has increased by an average of £78, or 4.7% in 2019. This is the second largest increase in the last decade – it’s only lower than the 5.1% increase in 2018. Part of the rise has been attributed to the option that councils now have to apply a 2% increase to cover the cost of adult social care. New research suggests that 97% of councils are planning to increase the costs of council tax for local residents in 2019. At the same time, local services are set to be slashed in many locations, from children’s care services to repairing potholes in the road.

Is your local council efficient?

It’s difficult to establish definitively where money is being most efficiently used but bigger bills don’t necessarily mean that local people are benefiting from better services. The IMPOWER INDEX measures councils on the basis of productivity, using factors such as waste and recycling, health and social care interface and local housing and homelessness. According to this index, Leicestershire and East Riding of Yorkshire have been the most productive councils for the past two years. None of the London councils, where tax bills are often high, feature in the Top 10 of the productivity index.

Council tax is an essential consideration if you live in the UK. How much you need to pay will depend on a number of factors, including location and property type.

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How to Remortgage, and when not to Remortgage Thu, 18 Apr 2019 10:15:07 +0000 Amanda Gillam A remortgage means applying for a new mortgage on an existing property. Most people do this in order to repay an older mortgage and get a better deal but it can also be used to borrow additional money against rising property prices. A remortgage can be a delicate process that depends on a range of different factors, including your own personal financial circumstances. It’s always worth thinking carefully about whether this is the right time to make an application like this.when and how to remortgage

The benefits of remortgaging

  • Find a better deal. If you find a substantially better mortgage deal then switching could save you thousands. Bear in mind that you’ll normally have to cover the cost of an early repayment fee and an exit/admin charge if your deal isn’t coming to an end.
  • Avoid an interest rate hike. Depending on the type of mortgage you have, you might be able to protect against an imminent interest rate rise by switching. Fixed mortgages are usually the best way to achieve this.
  • Find a new deal. When you’re about to come to the end of an existing mortgage deal you’re in the perfect position to remortgage. Most good deals on mortgages last between two and five years so remortgaging once this initial period has expired will enable you to avoid the less attractive deal and higher interest rates that normally kick in after the initial period.
  • Pay less because your property is worth more. If your home has significantly increased in value since you first took out your mortgage then you may now be in a lower loan-to-value band, which means lower interest rates.
  • Borrow more. If your current lender has refused any further borrowing you might be able to find a new lender who will agree. The most common reason to borrow more is for home improvements – lenders are least likely to agree to funds that are going to be used to fund a new business.

How to remortgage

  • Check the market to see what deals are available. Most people remortgage to save money so, before you start the process, research the deals that are currently available and whether they are likely to help you save. Make sure you’re looking at the cheapest possible deals available to you in your individual circumstances. Price comparison websites are an easy way to do this – use one that includes direct only deals, as well as the deals available to mortgage brokers.
  • Make sure you know what the fees are. Remortgaging fees can cost thousands and you’ll need to factor these in to ensure you can see the true cost of remortgaging.
  • Can you afford the new mortgage? It might be worth having some frugal months beforehand so that you can easily pass the affordability checks.
  • Remember your credit score. Don’t miss any repayments, remember that all applications go on your file and try to correct past credit issues. Ideally, start working on your credit score a year before you remortgage and don’t make any applications for credit in the months before you’re hoping to get a new mortgage deal.
  • Use a mortgage broker. They tend to have a good understanding of affordability and can match you up with the deal you’re most likely to be accepted for. Just remember they don’t have to tell you about every mortgage on the market and there may be fees to pay.

When remortgaging is a bad idea

  • Your circumstances are different. For example, you’ve changed jobs or taken a pay cut and now would struggle to meet the basic criteria for a mortgage.
  • There are credit score issues. If, for whatever reason, your credit score is now in bad shape you’ll struggle to get a good deal if you remortgage now.
  • There’s not much left to pay off. For example, if you owe less than £50,000 there may be few deals available that will actually save you money.
  • The figures just don’t add up. Whether as a result of the economy or interest rates, if there aren’t any deals out there that are really beneficial it’s better to stay put.
  • You’ll be charged high fees. Early repayment fees can be thousands of pounds and there may also be other fees to pay too. Make sure these aren’t so high that they wipe out any savings you’d make by remortgaging.
  • You don’t have much equity. Most people would struggle to get a better deal on a mortgage if they need to borrow more than 90% of the property’s value.
  • Your home is worth less. If your home has dropped in value so your equity is worth less – or you’re in negative equity, where you owe more than the property is worth – it may not be a good time to remortgage.
  • Your current deal is pretty good. It may be that by shopping around you realise that your existing mortgage is actually one of the most attractive out there and there is no real need to remortgage right now.
  • And sometimes you may find that a secured loan is a better option

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The 10 habits of financially successful people Mon, 15 Apr 2019 10:50:35 +0000 Alex Hartley Financial independence is something that many of us aim for but few ever really achieve. However, all of us can take steps in the right direction. Following in the footsteps of those who have managed to take control of their money – and use it to create the life they want – is a great way to start. That’s why observing the habits of financially successful people provides such powerful motivation to begin doing things successful people

10 habits of financially successful people

  1. Live within your means. If you’re able to live within your means then you’re already half way to financial success, which is why this is the top habit to master. All that is required is to spend less than you earn. It sounds simple but can be overly complicated by factors such as impulse purchasing or not keeping track of your finances. Key to this is learning how to delay gratification when it comes to spending – i.e. wait until there is money in the bank rather than relying on credit. Learning how to budget so that your money goes further is also essential.
  2. Put aside something for the future. Around 15 million people in the UK have no pension savings and face a bleak future in terms of poverty in retirement. It’s crucial to start paying into a pension as early as possible so that you can build up the savings you need to enjoy later life.
  3. Be smart about regular spending. Financially successful people are not often financially loyal. They are much more likely to move their interests around to benefit from the best deals, whether that’s on broadband or interest rates.
  4. Always be a saver. No matter how small your income, make sure that you’re always putting some aside in savings. The mistake that many people make is to decide to start saving at some point in the future – i.e. when they are earning more. Don’t wait for a future point in time to start creating a financial buffer – even if you’re only able to save a small amount now, it will instantly start to give you options.
  5. Get out of debt. For many people today, debt is a reality from an early age. However, it will also drain your resources unless it is interest free. If debt is essential then get the best possible deal on personal loans or credit cards and then aim to pay this off as quickly as possible to avoid the damage that high interest rates can do to your finances. Here’s our guide for managing debt.
  6. Learn to make money in different ways. Relying on one income source is the financial equivalent of putting all your eggs into one basket. Financially successful people diversify their income sources, creating as many as possible. If one income source is compromised there are still others to support ongoing financial health.
  7. Don’t be a cash cow for anyone else. That could be a partner or relative who regularly relies on you for extra cash but never pays you back. It could be that friend who always orders twice as much as you at dinner and then insists on splitting the bill in half. Maybe it’s a colleague at work who always lets you pay for the coffee. All spending adds up, even the smallest amounts. If you’re regularly covering someone else’s share then it’s going to be difficult to be successful where your finances are concerned, so start saying no.
  8. Create a rainy day fund as soon as you can. Even those in the most apparently secure jobs can find themselves one day without employment. It makes sense to have a rainy day fund to provide you with a safety net in case the worst happens in future. If you’re self-employed or working part time then this becomes even more important. The initial goal should be a month’s worth of living expenses. After that, build up what you have until your rainy day fund could potentially see you through to six months or a year.
  9. Start investing extra cash. Investing is the fastest way to generate returns on the cash that you have available and there are lots of different ways to do it. Investing is a great next step after you have created a rainy day fund and set some cash aside for the future e.g. in a pension. Just remember that the higher the return, the riskier the investment is likely to be.
  10. Set financial goals. Financially successful people know that it’s important to have objectives where cash is concerned. This will not only motivate you to do more with your money but also force you to think practically about the steps involved in reaching the goals that you want to achieve.

These are just some of the habits of financially successful people that can serve as positive guidance for those (like most of us) who still have a lot to learn.

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How to find the best tenants Thu, 11 Apr 2019 10:06:48 +0000 Amanda Gillam If you’re a landlord then you’ll know just how much of a difference there is between a good tenant and a bad tenant. One will pay rent on time, look after your property and leave without a fuss. The other may damage your investment, force you to evict them through the courts and even threaten your financial stability. So, given how crucial it is to make sure that your tenants are on the right side of this divide, how do you find the good ones?the best tenants

Cast your net wide

If you use a wide range of channels to attract tenants to your property you’re more likely to have a bigger pool of people to choose from. Letting agents can be useful if you find one that understands your needs, and there are online agent like upad. There are also plenty of ways to advertise online and via sites such as Gumtree. Alternatively, you can use the ‘matching’ technology of websites like Ideal Flatmate, which put people together based on a list of preferences.

Meet your potential tenants

Face-to-face meetings will give you an opportunity to get a sense of who the person is. You’ll also be able to ask key questions about former landlords or financial stability and see instantly how they respond.

Check financial stability

A credit check is an essential part of the process – a bad credit history could include multiple defaults that indicate this person isn’t going to stick to financial commitments. If a tenant fails a credit check then, before rejecting them, look into why – it’s not always a red flag like a CCJ. It could be something as simple as no credit history because they’ve lived abroad. Plus, you can always ask for a guarantor if you’re not 100% sure.

Be proactive when it comes to references

A former landlord can tell you a lot about a potential tenant. Questions to ask include whether rent was paid on time and whether the property was well looked after. It’s always preferable to carry out referencing by phone as you can learn much more this way. If you’re using an agent for this part of the process be aware that they will probably only request a basic email reference.

Take a close look at rental history

Many landlords won’t actively criticise a former tenant but that doesn’t mean there weren’t issues. What is often more telling is to look at the tenant’s rental history. Have they got long periods of time with the same landlord or are they moving around every six months or so for no apparent reason?

Opt for honesty when it comes to what you’re offering

Don’t use marketing language that over-hypes the property on offer. If it’s a small second bedroom then use clear and honest language to describe it. You’re much more likely to find a tenant who is a good fit if you’re up front about the property on offer. This will also lay the foundations for a more positive, open relationship with them.

Be on top of your own obligations

Great tenants want to rent from great landlords. They expect landlords to:

  • Carry out an inventory on check-in and check-out
  • Protect their deposit
  • Provide an EPC and annual gas safety check certificate
  • Use an Assured Shorthold Tenancy agreement
  • Keep the property in good condition
  • Respond swiftly to requests for maintenance or repair
  • Offer a fair deal on rent
  • Carry out essential checks e.g. Right to Rent
  • Be on top of recent legislation, such as the ban on tenant fees that comes into force for tenancies after 1st June 2019

Google potential tenants

The volume of information that is available about people online today is quite staggering. As a landlord you’ll have the full names of prospective tenants so you’ll be able to Google them to see if there is any information that is relevant to your renting relationship. That could be any troubles they’ve had with landlords in the past or social media accounts that show a lifestyle you might not be happy with in a tenant. Just be wary of making decisions in this way that could open you up to accusations of discrimination (e.g. refusing someone because of their race).

Don’t rush in to the rental relationship

If you choose the wrong tenant then you could waste months of your life dealing with the issues they create and/or trying to get rid of them. So, give yourself the time to make the decision properly. Gather information, think it through and then go with your gut instinct.

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How to live with an environmental conscience Mon, 08 Apr 2019 11:50:52 +0000 Alex Hartley A decade ago, a greener lifestyle was a pipe-dream for most of us. While we might have been separating rubbish for recycling, there were few other options for living a more sustainable lifestyle, such as driving a non petrol car or opting for a renewable energy supplier. Today, that has all changed. As consumers increasingly express preferences for more environmentally friendly products and services, manufacturers and retailers are forced to listen. That’s why if you want to be more environmental in your daily routines, there are some very simple steps you can take towards achieving it.environmentally friendly lifestyle

Get on your bike

Around two million of us enjoy a bike ride at least once a week in the UK. However, if you’re keen to reduce your carbon footprint then getting on your bike, instead of in the car, to get to work is a very effective way to do it. Bikes are zero emissions transport and don’t have the same manufacturer impact as a car. Plus, they are great exercise too.

Buy an electric vehicle

If a car is an essential part of your daily routine then an electric vehicle (EV) is a considerably better option than a traditional petrol car. EVs are zero emissions – they are powered by a battery instead of by petrol. Today, the distance range of EVs is much greater than it has ever been – more than 200 miles – and charging points are springing up all over the country. Plus, purchase costs are coming down and there is financial support available for those willing to make this switch. Now it really is cheaper to run an electric car than a petrol/diesel one.

Request flexible working

The Live Earth Global Warming Survival handbook states that one million people working from home for just one day a week could save three million tonnes of CO2 every year. So, put that request in for flexible working and spend a day a week at your desk at home.

Don’t waste your food

Food waste is a big issue and many of us throw out a lot of perfectly good food because of misguided ideas on best before dates. Not only does this cost the environment in terms of wasted production and the expense of disposal but it can also eat into a household budget. Although it’s always a good idea to ensure that you stick to the best before dates on meat, fish and dairy, items such as vegetables and fruit can be judged more on smell and touch. You can also ensure that you minimise waste with more careful meal planning so that food is always purchased purposefully.

Choose products without microbeads

Microbeads have been found to be damaging to human health and they also have a very negative impact on the environment when washed down the sink. They are often an ingredient in scrubs and beauty products, as well as shower gels and toothpastes. If you want to make a difference with your buying choices, opt for natural products that don’t contain microbeads.

Get your energy from greener sources

There are now multiple providers – such as Bulb – that can provide you with energy that has come from green, more renewable sources. In terms of performance you won’t notice any difference but you’ll have the peace of mind of knowing that your energy is being delivered in the most sustainable way possible.

When you leave the room, turn it off

Devices and equipment left on will continue to use energy, which makes standby incredibly wasteful. Get into the habit of turning everything off at the plug when you leave the room. Not only will this help to reduce the impact that you have on the environment but it could also save you money too – up to £86 a year according to the Energy Savings Trust.

Buy online

From clothes and shoes through to your weekly shop, it’s actually much better for the environment to buy everything online. One supermarket van distributing multiple deliveries of groceries, for example, uses a lot less energy – and generates fewer emissions – than each of those people driving to the supermarket to buy items separately. So, while it might seem lazy to do all your shopping without actually leaving the house, making use of online deliveries could be essential to the process of reducing the environmental impact that you have.

Car pool and car share

If you know that you and others are going in the same direction then car pool to save on emissions produced (and cash spent on petrol). If you’re regularly on the same route as someone else you can considerably reduce your outgoings by splitting the costs of petrol in this way.

Give up plastic

8.3 billion tonnes of plastic have been produced since the 1950s and only 9% of it has been recycled. Plastic kills wildlife and natural environments – 73% of beach litter, for example, is plastic. There are many alternatives to plastic today, from taking your lunch to work in metal tins to getting your food delivered in recyclable boxes and opting for reusable water containers instead of plastic bottles. Whether to buy plastic is increasingly becoming a choice that we don’t have to make.

These are just a few of the steps that anyone can take to move towards living life in a more environmentally friendly way. With many of them you can start making a difference today.

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How to find the best landlords Thu, 04 Apr 2019 10:40:10 +0000 Amanda Gillam A great landlord is worth their weight in gold. As any tenant who has gone through tough times with a landlord will know, finding a good one can make life a lot easier. According to the National Landlords Association, 96% of landlords have good relationships with their tenants. However, all it takes is that one bad apple and life can become very difficult for all involved. So, how do find the best landlords?the best landlords

Choose a landlord with a professional accreditation

Organisations like the National Landlords Association offer membership to landlords as an indicator of credibility. To retain membership landlords must adhere to a code of practice and may have to take certain steps, such as obtaining insurance. There is usually a complaints process that tenants can follow if issues do arise with a landlord and disputes can be mediated via the accredited association.

Meet your landlord before you move in

There’s probably no better way to find out whether someone is going to be a good landlord, or not, than by meeting them face-to-face. Although many landlords prefer to enter into a new tenancy agreement via an agent, if you are able to get in the same room together you’ll be able to establish some common ground. You’ll also get a good sense of what they will be like to deal with.

Ask the landlord key questions

A good landlord should be fully aware of their responsibilities when it comes to what they need to provide with the property. This includes:

  • An Energy Performance Certificate (EPC). Providing an EPC is a requirement for every rented property.
  • Evidence of an annual gas safety check. This should be carried out by a Gas Safe Engineer every 12 months.
  • Evidence of regular electrical system checks. There is no timeframe on when electrical checks should be carried out but landlords are required to provide a safe property for tenants.
  • Evidence that your deposit has been properly protected. Landlords must protect deposits with a government authorised scheme and tell you when it has been done.
  • A tenancy agreement. A good landlord will use a Shorthold Assured Tenancy agreement.

If a landlord is suggesting skipping any of the above then they are likely to be problematic, as they are not taking their responsibilities seriously. There can be significant sanctions for landlords who don’t protect deposits or carry out the annual gas safety check. A landlord who is willing to risk those sanctions by not doing the basics isn’t going to be very dependable or easy to deal with.

Use technology to help

It’s simple to find properties to rent online but innovative companies have taken this to the next level by developing technology to match up landlords and tenants, as well as tenants and properties. Ideal Flatmate, for example, was developed to help match tenants to other tenants who were looking for a flat share. It has now also extended to offer landlords a way to advertise and also to pair up with tenants using the Ideal Flatmate matching technology. If you’re looking to trust technology to find you a great landlord who will be the right match then this kind of digital approach could be very effective.

Look for landlord reviews online

Increasingly, there is likely to be much more information about a potential landlord available online. That’s particularly so if you’re renting from a landlord company that has multiple sites across a city or around the country. A quick Google search will be able to identify any serious issues that other tenants have had with a landlord. It could also reveal prosecutions or problems such as illegal eviction, which are a big red flag if you’re looking to avoid problematic landlords. Sites such as Marks Out of Tenancy and Rental Raters also display real reviews from actual tenants who have rented from a landlord previously.

Make sure you carry out an inventory

A check-in inventory is a good idea when moving into a property. This provides the opportunity to identify any pre-existing issues, such as damage or damp. When combined with a check-out inventory, completed when the tenancy comes to an end, the check-in inventory will show what, if any, issues a tenant should be paying for from a deposit. Any landlord who does not want to do an inventory may be attempting to disguise pre-existing issues that they intend to later blame (and charge) a new tenant for.

There are ways to establish whether the landlord of a property that you’re interested in is likely to provide a good experience. From researching what other tenants think to making sure that the landlord is committed to their legal obligations, it’s not that difficult to obtain peace of mind.

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How to become a successful freelancer Mon, 01 Apr 2019 11:47:45 +0000 Alex Hartley #freelancelife might be the most misleading hashtag on Instagram. Invariably, it accompanies images of coffee and a great view, or cosy PJs on a cold Monday morning. However, being a freelancer isn’t an easy life – the reality is that, while you don’t have a boss or the requirement to show up to an office every day, it’s a lot of work and can be a huge risk. So, how do you make sure you succeed at it?Becoming a successful freelancer

Find a niche for your skills

Being successful at freelancing means ensuring that there is actually a market for what you’re offering. There are currently some 4.8 million people in the self-employed sector, according to the Association of Independent Professionals and the Self-Employed (IPSE). 42% of those are freelancers. Freelancers make up around 6% of the total UK workforce. So, if you’re thinking of going freelance you’re not the only one to be trying to make a success of it.

Over the past decade, the fastest growing sectors for freelancers have been healthcare, artistic, literary and media, as well as sports and fitness. However, it’s possible to freelance in almost anything today, thanks to more agile working styles, as long as the market is there.

Top careers for freelancers

If you’re assessing the top careers on a financial basis then freelance lawyers, investment consultants and software developers top the tables with average salaries of £40k – 60k. However, a freelance yoga instructor can make as much as a freelance business consultant (£37k – 38k) and also the same as a web or interiors designer. For those looking at lifestyle desirability as a way of judging the top careers for freelancers the situation is slightly different. Photographers, musicians and actors tend to top the desirability polls, followed by architects, designers and landscapers.

Setting up as a freelancer

If you’ve identified a market for what you can offer it’s crucial to begin developing the necessary skills if you don’t already have them. Anyone considering employing you on a freelance basis will want to see:

  1. Evidence of ability e.g. a writing or design portfolio
  2. Feedback from clients. If you don’t currently have any you can build this by doing a few initial jobs for a free or low fee
  3. Any necessary academic qualifications
  4. Up to date professional certifications where appropriate

You’ll also need to ensure that you have everything prepared to start your first job, such as any key equipment and a space where you can work. Many freelancers start out working on their sofa or kitchen. However, there are a range of options if you’re looking for something more professional – or with networking opportunities – such as co-working spaces.#freelancelife

How to market yourself as a freelancer

To get the work you need you need to make yourself as visible to as many relevant people as you can:

  • Network like mad. Contact everyone you know, personally and professionally, and let them know you’re going freelance. Opportunities for work can arise from the most unexpected connections.
  • Create a personal brand. What are you offering, what makes you unique and why should clients choose you?
  • Use social media. Many freelancers market themselves very successfully via social media. So, your profiles on LinkedIn, Facebook, Twitter, Instagram etc need to be updated and maintained.
  • Have a website. No matter how small your efforts, depending on what you’re doing, a website could be essential. It will provide a way for people to get information about you and can give you credibility.
  • Sign up to freelance jobs sites. Although the hourly rates are often low, sites like can be a great way to start building up a profile.

Top tips for success in the long term

You don’t want your success to be short lived. This is your personal business so treat it as one and apply these rules:

  • Always use a contract. If you’ve got paperwork in place then everyone knows what’s expected, when payment is due and what happens if it’s not made.
  • Take a deposit. The big risk for freelancers is not getting paid. If your clients won’t agree to pay up front then ask for at least a 50% deposit.
  • Be prepared to work weekends. When you start building up your business office hours may have to go out of the window.
  • Don’t treat freelancing like a hobby. If you want to make a living from it then focus on it full time.
  • Avoid taking on more than you can do well. It’s essential to maintain the quality of your work so avoid the trap of taking on too much and doing a bad job.
  • Be prepared for dry spells. It happens in freelance work – it’s a good opportunity for a holiday or a bit of planning or creative time. Don’t waste it panicking about where the next job will come from. And ensure you have built up a reserve cash fund so you can avoid borrowing. But if you need a short term loan then options are available.
  • Get organised. There is no boss breathing down your neck when you’re freelance. So, if you’re not good at time management, you need to get better at it, fast.
  • Put your phone down. When you’re at home it’s easy to end up falling down an Instagram vortex for an hour and be completely unproductive. Be disciplined with yourself to make sure you get the work done.
  • Get used to asking for work. As a freelancer, especially a new one, work won’t just come to you. It’s important to be comfortable pitching for jobs and approaching potential new clients.

Being freelance takes guts and hard work. However, if you do manage to establish a life like this it can be a great way to live, as well as very rewarding.

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How money can distort power in personal relationships Thu, 28 Mar 2019 10:52:41 +0000 Amanda Gillam Money can be a big issue in relationships – in fact it’s the number one topic that married couples fight over. And, behind cheating, it’s the second most popular reason for a divorce. The balance of money and power can also be used in the more sinister context of domestic violence and coercive relationships. One partner restricts or denies access to financial resources in order to retain control over the other. While domestic violence (thankfully) doesn’t affect everyone, most of us have experienced the tension that the balance of money and power can create in a personal relationship. Achieving equilibrium can pave a path towards contentment and happy relationships. However, when the balance is off it can spell disaster for the future of a power and personal relationships

How does money and power affect personal relationships?

Most couples feel some impact on the balance of power in their relationship from the way each one earns and handles their finances. For the large majority the power balance is something that shifts continuously over time, from one partner to the other and then back again. Many different factors can influence who currently holds the “power” in the relationship and money is just one of them. However, there’s no getting away from the fact that financial issues can be difficult to deal with. These are just a few of the ways in which money can affect positions of power between two people:

  • One person earns more than the other. Given the relentless presence of the gender pay gap, men in relationships tend to earn more than women. However, this is not always the case. Where one partner earns more than the other it can create a sense of entitlement for the higher earner or resentment and shame for the individual earning less.
  • Gender roles still persist. Where women do earn more than men, research indicates that this tends to make women feel more empowered when it comes to making financial decisions that affect the household. However, it may not go further than shared money decisions – even high earning women still often feel a gender based pressure to take on traditionally female roles, such as being the primary caregiver to children or handling most of the housework.
  • Spending habits are wildly different. Two people who have a different approach to finances can end up with a difficult power dynamic in relationships. For example, if one person is frugal and prefers to save they may tightly control the finances and take all the power from their partner, especially if that person is prone to splurging.

Some of us just don’t like to be in control

Many people view the ideal relationship as one of a balance of opposites. In the context of finances this might be one partner who is very good at budgeting and financial management and another who is a higher earner. Some of us are more than happy to hand over the management of our joint finances to the other person if they are better at it and more interested in doing it. In most relationships this is fine. However, issues can arise when the person who has delegated financial responsibility simply can’t get it back. For example, the partner in control is using it to wield power and so is unwilling to allow access to key financial information – or to cash.

Avoiding issues with money and power in personal finances

  • Talking about money helps to avoid issues arising. 54% of those in “great” marriages tend to talk about money with their other half either on a daily or a weekly basis.
  • Sharing finances is important. Separating the bank accounts, paying separate bills or maintaining your own personal accounts into which wages are paid doesn’t help couples to avoid issues with money – it can actually make them worse. If your finances are shared then you’re much more likely to have an equal power balance because everything is out in the open.
  • Dishonesty about spending can be a passion killer. And it can also kill relationships too. One in three people who argue with their other half admit that they have hidden purchases from them. Often, deceit can create a whole new power balance in a relationship, one that leaves the person being deceived feeling angry and frustrated – so much so that they might just walk away.
  • Aligning goals and expectations is essential. The couples who save together stay together. If two people have very different financial expectations and goals then there is a lot of scope for something to go wrong when one person’s needs are not being met.

Money and power go hand and hand in personal relationships. If you manage to work out a way to move forward together financially then the rest of your relationship has a great chance of success too.

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Survey: Is University Worth It? Mon, 25 Mar 2019 17:19:57 +0000 Amanda Gillam It’s well known that with the introduction of university tuition fees, going to university has become more expensive. And over time the amount that could be charged by universities has increased further.

At the same time, more and more people have been going to university, leading some people to question the value of a degree.

There have been reports of some graduates spending large amounts of money on a university education only for them to find that they don’t enjoy life at university much and more devastatingly that their degree doesn’t help their career in the way they thought it would.

So we wanted to understand if going to university is worth it?

graduating from universityOur Survey

Of course, using the material supplied by universities themselves to answer this question is somewhat biased. Most universities report how many of their graduates are in further study or work within six months of graduating. However, these numbers don’t tell you if that employment is related to the degree the graduate studied.

So we decided to ask the graduates themselves. We surveyed one thousand graduates and asked them what had made their university experience worth the time and money and what they felt had detracted from their university experience.

The Survey Results


Not all graduates who were surveyed were equally sure that attending university had helped them enter a career that they wouldn’t have been able to access otherwise. Only 41% of respondents felt that university had benefited them in this way.

8% of people said that they had met their life partner at university, citing this as a positive of the university experience.

10% of respondents felt that going to university hadn’t helped them at all in their chosen career and the same number felt that having a degree didn’t help them to secure a higher salary.

Generally, the positives outweighed the negatives with more people reporting good university experiences than bad ones. Only 2% of people felt that they hadn’t learnt about a subject they were interested in and 4% felt that university hadn’t helped them to go on and study further.

By Gender

How men and women saw their university experience varied considerably especially when it came to the impact that going to university had had on their careers.

Men were more likely to feel that one of the benefits of attending university was that doing so had enabled them to secure a higher salary in their chosen profession. 28% of men agreed with the statement “’Yes, it was worth it because I secured a higher salary in my chosen career than I would have done otherwise” compared to just 17.9% of women. Men were also slightly more likely to feel that their time at university allowed them to develop professional connections that benefited them later in their career. 17% of men cited this as a benefit of attending university compared to 13% of women.

By Age

The survey also showed some interesting trends based on age. Respondents over the age of 65 were the age group most likely to feel that their university education had helped them secure a career that they couldn’t have otherwise.

Respondents aged under 35 were the most likely to claim that attending university had helped them build professional connections.

Amanda Gillam, a Solution Loans finance expert, said

“A university education can be expensive. Whilst our survey has shown that many graduates have found their university education to be beneficial for their careers and wider lives, students need to ensure that their time at university offers value for money.”

“Students in financial difficulty, may be tempted to take out a personal loan, but this is something that needs to be considered carefully.”



Here is an infographic summarising the survey results which you are more than welcome to embed in your website.

Infographic: Was University worth it?

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The current trends of the UK property market Thu, 21 Mar 2019 12:04:58 +0000 Alex Hartley The UK property market is very much a mixed bag right now. Recent data from the Royal Institution of Chartered Surveyors (RICS) seems to show that estate agents currently have some of the lowest expectations at any time in the past decade. On the other hand, a slowing in price growth has meant that buyers have been able to find bargains and more people have gotten a foot on the first rung of the property ladder. Much of the uncertainty that currently exists is stemming from Brexit and the impact it may – or may not – have on UK property. Some experts predict significant falls in prices; others say the impact will be small. Either way, we are seeing some fairly solid trends that are worth keeping an eye on.The UK Property Market

It’s cheaper to buy than it was a year ago

This is the case if you’re looking to buy a flat or maisonette, according to the Office for National Statistics. Over the course of 2018, apartment prices dropped by 0.4%. Official data shows that the cost of buying a flat at the end of last year was £226,247, which was more than £800 less than the year before. There could be many reasons for this price drop, including hesitancy over Brexit and what leaving the EU could do in terms of interest rates. There has also been a significant slowdown in landlord purchases of properties as fewer investors buy apartments to rent out. This reduction in activity comes in the wake of cut backs in terms of tax allowances for landlords, as well as new stamp duty charges.

First time buyers are older than they used to be

First time buyers in the 1960s were an average of 23 years old – today most are in their mid 30s. A deposit of around £12,000 (today’s money) could have purchased a first home 50 years ago. Today most first time buyers need at least £20,000. The current trend for older first time buyers means many of the more recent developments are designed around properties that are aimed at this older market. This is why we have seen a surge in popularity of small houses, as well as flats and maisonettes.

House price growth in general remains stagnant

According to the most recent statistics, house price growth in the UK is the slowest it has been since 2013. In December last year, house prices rose by 2.5%, which was a drop of 0.2% on the month before. London and the south east have been the areas where this price drop has been felt the most. However, there is evidence to suggest that the trend for small – or negative – growth is spreading into other areas of the UK. For example, prices in the north east increased by 1.7% in November 2018 but, by December, had fallen by 1%.

Surveyors and estate agents predict the worst

A survey by RICS found that estate agents and surveyors are not positive about sales volumes in the near future – this was a trend right across the industry. The volume of transactions anticipated by those surveyed dropped to -25, which is the worst figure since 2017. However, for the next three months sales expectations have fallen to -32% – that’s the lowest figure since the survey first began in 1999.

Everyone is putting their plans on hold

Perhaps unsurprisingly, the trend for both buyers and sellers in UK property is simply to cease any activity at all. With Brexit now on the horizon, hesitancy over the impact that this could have on property values has seen activity come to a grinding halt. However, many experts have said that – especially for buyers – this doesn’t necessarily need to be the case. Particularly for those who are looking to remain in a property in the long term now could be as good a time to buy as any other, as long as the price is right. The market would most likely bounce back fairly robustly from a Brexit-related price crash and so buyers planning to stay for more than a year or so don’t have that much to fear.

These are some of the key trends in UK property right now. The most obvious and dominant theme is one of hesitancy. As no one really knows what the effect of the next few months will be most people are taking a “wait and see” approach, which is reinforcing general sense of stagnation.

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Non Standard Finance makes a bid for rival Provident Financial Mon, 18 Mar 2019 11:47:57 +0000 Alex Hartley In a move designed to create a “market leader in non-standard finance,” sub-prime lender Non-Standard Finance (NSF) has made a takeover bid for Provident Financial. What’s surprising about the step is that NSF is the smaller of the two rival enterprises and its ambitious, strategic move has not gone unnoticed. Provident Financial is not currently in great shape, as it is experiencing the fallout from an attempt to restructure a century-old business model with more technology and fewer staff. The larger lender has so far refused the offer from NSF, calling it “strategically and financially flawed” but that may not be the end of the story. Provident Financial’s problems began in mid 2017 and that year it declared a loss of nearly £150m. It’s share price collapsed on the back of the failed reorganisation and its share price has not yet recovered.

Who are the rival lenders?

Non-Standard Finance. Established in 2015 and now the third biggest home credit lender. NSF offers home credit (“Loans at Home“), bad credit personal loans (“Everyday Loans“) and guarantor loans (“George Banco and “Trust Two“). Expansion in the years since the business was established has seen it go from strength to strength. The current top man at NSF is John van Kuffeler who was formerly chief executive and chairman of Provident Financial.

Non Standard Finance logo

Provident Financial. A well-established lender (created in 1880) with more than 800,000 borrowers committed to doorstep loans repayments. The business also includes Vanquis Bank, which offers a credit card with a 69.9% interest rate. The larger lender has been struggling as a result of a number of key factors, including a difficult recent restructure and regulatory sanctions. The business’ Moneybarn arm, which handles car finance, is currently being investigated by the FCA. The regulator is looking at the way it treats borrowers who miss repayments. Vanquis has already been ordered to pay £168.8m in compensation and a £2m fine as a result of a previous investigation into failure to disclose certain charges. Provident Financial logo

The takeover bid

The bid made by NSF has been backed by shareholders with more than 50% of Provident Financial’s shares. It’s not the first time that a takeover has been launched, as NSF made a previous attempt in 2018. Then, too, Provident Financial rejected the offer but conditions have not significantly improved for the business since then. It’s as a result of this further perceived slide in performance that representatives of NSF have said they feel the rival lender has “lost its way,” justifying a fresh takeover bid in 2019.

Under the terms of the takeover bid, Provident Financial shareholders would receive 8.88 new NSF shares for each Provident share. The offer has been rejected by Provident Financial management, which has made clear that it doesn’t believe this represents a true value of the company. Although it has suffered a 76% drop in share value in less than two years, those in charge at Provident Financial still sees to believe that the deal isn’t a fair reflection of the business. In fact, the offer made by NSF was described by representatives of Provident Financial as “irresponsible” particularly as the business has recently been destabilised by its financial restructuring. They said a takeover could put at risk the progress that the company has made towards sorting out the myriad of issues that have overwhelmed it in recent times.

Also problematic to the target company is a proposal in the takeover bid to dispose of Moneybarn and sell off another arm of Provident Financial – its online Satsuma business. Provident chairman Patrick Snowball said, “this Offer does not reflect that times have changed and ignores the significant progress we have made with our customers, staff and regulators over the past 12 months.” However, this perspective was dismissed by John van Kuffeler who has made it clear he feels that the issues Provident currently has are not reversible other than by this kind of drastic action.

What’s the situation now?

Currently, the takeover bid is being publicly rejected, not just on the basis of the value offered, but also with respect to suggested takeover strategy. Investors still have to vote on whether to approve the deal but given that just over 50% of the shares are owned by three big investors  – Invesco, Marathon and Neil Woodford – there is already significant backing in place.

For consumers, the real question is whether a “market leader in non-standard finance” would be beneficial or whether this would create fewer opportunities for broader access to credit. Unless – or until – the proposed takeover happens there will be little certainty on what the doorstep loans market in the UK is going to look like in the near future.

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Electric cars really are now cheaper than petrol & diesel to own and run!! Thu, 14 Mar 2019 10:41:43 +0000 Amanda Gillam Electric cars are the environmentalist’s dream. However, they have long been viewed as a great option only for those who have the money to pay the increased costs of owning one. Now, a new study has revealed that these costs have dropped so far that we may already be at the point where electric cars are cheaper to run than petrol or diesel alternatives. If that’s the case then isn’t it time we all went electric?charging your electric car

Are electric cars really cheaper?

Research carried out by the International Council for Clean Transportation (ICCT) established that, over a four year period, it’s cheaper to own an electric car than a diesel or petrol model in five European countries (including the UK). The cost effectiveness of plug in vehicles comes from a combination of factors, including the price of fuel, government subsidies that are available on the cost of buying the car, as well as the lower taxes that apply to electric vehicles. The study focused on the VW Golf, comparing its electric, hybrid, petrol and diesel models. In what may come as a surprise to many motorists, it was the electric version of the VW Golf that emerged as the cheapest car to own and run. This isn’t the first study to identify electric cars as a cost effective choice. In 2017 University of Leeds research established that, in terms of depreciation and fuel costs, electric cars cost less. It assumed that car finance costs were unaffected by the choice of fuel type.

How about maintenance costs?

Another study carried out by automotive data experts Cap HPI focused on maintenance costs for all vehicles and once again established that the electric car is cheaper. Maintenance costs for a Renault Zoe, for example, amount to £1,100 over three years. However, in the same period the Vauxhall Corsa 1.0T 90 costs nearly £1,500. There are a number of reasons why maintenance costs can be lower for electric vehicles, including:

  • Electric cars have fewer moving parts than petrol or diesel vehicles so there are fewer elements to maintain
  • Driving styles tend to be less harsh for electric vehicles, which prevents wear and tear to key components such as the tyres
  • Electricity is a cleaner fuel than petrol or diesel, not just for the environment but the internal workings of the vehicle too

The cost of fuel

Many potential electric car buyers say they are concerned about the cost of running an electric car in terms of their annual electricity bill. However, it seems that here too there are opportunities to make savings. World Wide Fund for Nature research found that, while the average motorist spends £800 on fuel a year, an electric vehicle will add just £175 to the average electricity bill. If charging is done outside of peak times or using smart charging methods this can be reduced to just £100 a year.

What about the hybrid?

Many car owners nervous about making the switch to an electric model consider a hybrid car instead. However, the ICCT study showed that this option can actually be the most expensive of all. This is partly due to the fact that hybrid vehicles don’t get the same discounts as a pure electric car and also that they effectively have two engines so ongoing costs can be much higher.

Are we buying electric cars in the UK?

Sales of electric cars in this country increased by 21% in 2018 while diesel car sales fell by 30%. However, while there is clearly more interest in owning an electric vehicle, the increased sales still only amount to a 6% market share. This is in comparison to diesel vehicles which, even after a drop in sales, still make up 32% of the market. Most predict that demand for electric vehicles will continue to rise as more and more consumers tap into the cost, as well as the environmental, benefits. However, there is one obstacle: insurance. Currently, insurers charge more to cover electric cars than their petrol equivalents. Until that changes, electric vehicles won’t be cheaper to run across the board.

Electric vehicles represent an opportunity to make real, lasting changes to our transport habits. Not only do diesel and petrol vehicle emissions contribute significantly to global warming but they are at the root of the problem that many of our towns and cities have with air pollution. According to the World Economic Forum, 92% of the world’s population lives in a location where air pollution exceeds safe levels. In the EU it’s the cause of more than 500,000 early deaths every year. With technology now enabling electric vehicles to go further and cost less, the future for motorists worldwide is looking increasingly emissions-free.

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How the Government’s Help to Buy scheme can help you onto the property ladder Mon, 11 Mar 2019 11:09:37 +0000 Alex Hartley Help to Buy now has five years of history when it comes to supporting buyers looking to get onto the property ladder. The scheme was set up back in 2013 and, according to official records, has now enabled 494,108 properties to be purchased. Those who have benefited most from the scheme are first time buyers not looking to buy in London. For anyone currently struggling to get onto the property ladder, Help to Buy represents a chance to reach out for a helping hand.the property ladder

Help to Buy – the options

Currently, Help to Buy support is available as one of three options: the Help to Buy ISA, the Help to Buy Equity Loan or Help to Buy: Shared Ownership.

Help to Buy ISA. A savings scheme topped up by the government. A 25% bonus is paid on top of whatever is saved towards buying a first home, up to a maximum of a £3,000 bonus. Individuals can deposit an initial lump sum of up to £1,200 and then after that save up to £200 a month. A Help to Buy ISA is opened with a bank or building society offering this product. When the time comes to purchase a property, the conveyancer or solicitor is instructed to apply for the bonus amount.

  • Who can use it? The Help to Buy ISA is directly targeted at first time buyers. It applies to individuals, not households, so two first time buyers making a purchase together could each add their own bonus to the pot (i.e. £6,000 not £3,000).
  • Other conditions. Buyers must save a minimum of £1,600 before any bonus will be paid out. Below this there is no eligibility for the additional 25%.
  • Is this the right option for you? Yes, if you are not yet ready to buy but are looking for a way to optimise your savings. It’s also ideal if you’re purchasing with another first time buyer.

Help to Buy Equity Loan. Buyers can purchase with just a 5% deposit. The government provides an equity loan of up to 20% of the purchase price so that the buyer requires a mortgage of just 75%. There are no fees to pay on the equity loan within the first five years of using the scheme. An equity loan of up to 40% of the purchase price of the property is available to buyers in London, reflecting the significantly higher property prices in the capital.

  • Who can use it? First time buyers are eligible for the equity loan scheme as well as existing homeowners who want to move. The scheme is only available to people who don’t own any other property.
  • Other conditions. The property purchased must be a new build worth £600,000 or less. Homeowners who use the equity loan scheme cannot rent out the property.
  • Is this the right option for you? Yes, if you don’t have enough saved for a full deposit but can provide 5% of the purchase price. You’ll still need to have enough income and a good enough credit score to successfully apply for a 75% mortgage.

Help to Buy: Shared Ownership. Available for new build homes or existing properties offered through resale programmes from Housing Associations. Anyone looking to use this scheme must have household income of less than £80,000 a year (£90,000 in London). Purchasers buy between 25% and 75% of the value of the property and then pay rent to a Housing Association on the rest.

  • Who can use it? First time buyers, anyone in an existing shared ownership arrangement. It’s also available to buyers who used to own a home but can’t afford one now.
  • Other conditions. Shared ownership properties are always leasehold.
  • Is this the right option for you? Yes, if you meet the eligibility criteria and don’t mind only owning a share of the property.

A note about stamp duty

Stamp duty is a tax that is payable on every property purchase. However, if you are a first time buyer then you may be eligible for relief. As of November 2017, first time buyers purchasing a new property don’t have to pay stamp duty on any amount under £300,000. If the property is worth more than this, 5% stamp duty is payable on the amount between £300,000 and £500,000. There is no relief available over £500,000 so regular stamp duty rates apply. For the average first time buyer purchasing a property worth £300,000 or less, this represents a potential saving of up to £5,000.

Getting a foot on the property ladder has become notoriously difficult thanks to a shortage of homes and high prices. However, if you’re eligible for Help to Buy – and you find a property that works for the scheme – there are many more options available.

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How to prepare yourself for Brexit Day Mon, 04 Mar 2019 10:39:59 +0000 Amanda Gillam It’s difficult to believe it but Brexit is (probably) now only a matter of weeks away. As the 29th of March (probable departure date) approaches, we still don’t have a very clear picture of what life is going to be like after the UK departs the EU. However, despite this, it’s becoming increasingly important for everyone to be prepared. Whatever your income, occupation or family situation it’s likely that leaving the EU will adversely affect some aspect of your life. So, how can you prepare your household for Brexit, whether it ends up being a no deal or not?

Brexit Day March 29 2019Brexit Day (29th March)

This is the official leave date for the UK to break up with the EU, subject to any final agreed delay. On the day itself, asssuming an “orderly Brexit” , – and in the immediate aftermath – nothing significant should change if you’re not leaving the UK. The EU Withdrawal Act 2018 sets out that, whether there is a deal in place for Brexit or not, the same rules and laws will apply the day before and after the exit has taken place. Significant changes, it says, will be then agreed over time. However, the UK government is not entirely in control of how the exit from the EU pans out – much of this depends on EU countries and whether they will continue to keep importing and exporting, as well as overlooking details such as travellers using British driving licences. The government has emphasised that its focus is on stability. However, it has stated that its “continuity approach does not mean that everything will stay the same.” Instead precautions have been taken to allow for a period of transition. For example the Temporary Permissions Regime enables EU firms and funds passporting into the UK to still deliver services in the UK for a temporary period. So, initially at least, regular consumers aren’t likely to notice too much change.

A “disorderly Brexit” (the no deal Brexit which people talk about) where the UK crashes out without a deal will be much more damaging. This is why some politicians are seeking to get this option removed from the table. If a no deal Brexit occurs then expect highly disruptive customs checks leading to shortages of some fresh produce, food price hikes, and a fall in the value of sterling. It could even trigger a recession.

Do we need to start stockpiling?

Around 300 readers recently contacted a national newspaper to say they had started stockpiling food. This was after the National Farmer’s Union said that the UK could actually run out of food in a year after Brexit (if the government is not able to maintain the flow of goods). However, the risk of services failing or supplies running low is relatively low. So, for now at least you don’t need to stockpile beans, start your own small farm in your suburban garden or – as one spoof article suggested – conserve your toilet water and recycle it for use elsewhere in the home. However, there are some steps that anyone can take right now to help prepare a household for Brexit, despite the fact that none of us currently know whether that will be with a deal or without.Stock pile food ready for Brexit

What To Expect After Brexit Day

  • Foreign currency. One of the ways in which the Brexit vote had a big impact for British consumers was on currency. The pound has fallen substantially against the Euro in the wake of the 2016 referendum and could experience another crash after the actual exit takes place. The most immediate impact of this will be felt by anyone looking to travel to the EU – holidays are likely to become more expensive this year – or those buying from, or selling to, countries within it. If you’re concerned about the impact of this change then buy your currency or book your holidays now.
  • Interest rates. In November 2017, the Bank of England increased interest rates for the first time in a decade. Another rate rise has been forecast for as early as May this year if inflation and UK currency take a hit. Another rate rise will positively impact savers but not those with mortgages or unsecured debt. If you want to mitigate the effects of interest rates then now is the time to remortgage or clear your debts.
  • Although most experts agree there isn’t an imminent need to start stockpiling supplies there is a chance that the way we buy food may need to change after Brexit. Currently, around 30% of the food consumed in the UK has been imported from another EU country. 40% of the vegetables we consume here have come from the EU and 37% of the fruit. If you’re a fan of bacon then it’s worth noting that 55% of pig meat comes from the EU. While supplies are unlikely to run dry – especially as the government is rumoured to be urging food companies to stockpile ingredients – it’s possible that prices will increase. So, bacon, for example, could soon become a product that is just too expensive for the average household. Sugar is another ingredient that might be in short supply after Brexit as the UK only produces 900,000 tonnes of refined sugar a year. If food supplies are of serious concern to you then you could consider freezing your favourite imported products.
  • Energy supplies. Although there have been whispers about an energy crisis after Brexit this is unlikely to happen. It’s true that the UK imports 36% of its energy from overseas but that isn’t all from the EU. What may have an impact on energy is the fact that we’ll be leaving Europe’s internal energy market as we step out of the EU. The effect of this could be an increase in the cost of electricity. For anyone very concerned about the implications of this, a back up generator is a good idea to cope with both energy shortfall and price increases.Stock piles of key medicines
  • Perhaps one of the post-Brexit supply chains that has caused the most concern is pharmaceuticals. Without a deal in place there could be difficulties getting certain medical supplies into the country and we don’t currently have sufficient volume for our own population within the UK’s borders. There’s not a lot that patients can do about this, as the NHS won’t allow anyone to start stockpiling drugs. However, most big drug companies have already take steps to ensure that their product can get into the country no matter what is happening politically – and they are allowed to stockpile. Plus, this is one area where the government has been very proactive to make sure that shortages don’t arise – apparently planes have already been chartered to ensure that essential medicines can be brought into the country where necessary.

Preparing financially for the impact of Brexit

It’s household finances where most people are concerned about how Brexit is really going to affect them. So, what can you do now to protect yourself and your loved ones as far as possible?Brexit and your personal finances

  1. Review your investments. Although no one can predict what the stock market will do with great accuracy, if you’re investing in companies that are likely to be impacted by UK-EU relations then your investments are higher risk.
  2. Get to know your pensions. As a result of the above, find out where your pension funds are being invested to understand how much risk exposure there is in the event of a difficult Brexit.
  3. Re-evaluate your weekly shop. Start looking at the labels of what you purchase and find alternatives that have been grown locally or in the UK. If there are EU made products you don’t want to have to pay more for after Brexit then it might be a good idea to buy a small supply now. Three-month’s worth should give the dust time to settle.
  4. Tighten your belt. Life could become more expensive for all of us post-Brexit. So, now is the time to reduce spending and start putting away more cash for a “rainy day.”
  5. Clear some debt. If you have multiple credit sources, identify the one with the highest interest rate (e.g. credit cards) and try to clear some of this before March 29th. This will help to reduce the exposure that you have to an interest rate rise if it comes at any point this year.
  6. Buying or selling property. There is no clear way to deal with Brexit uncertainty when it comes to property. Some advocate buying now, others say there is a crash coming after Brexit, which will create some fantastic deals for buyers. If you’re selling a property then many experts advocate waiting until Brexit has passed in case the property just gets stuck on the market as buyers are too cautious to make big decisions before April this year.
  7. Create a financial plan for the year. As in any situation of uncertainty, having a plan not only helps to achieve objectives but can also reassure and make you feel more confident about the future. Include a budget that is likely to be realistic no matter what type of Brexit we end up with, a schedule of debt repayment and ideas for generating income so that you can increase savings if interest rates do rise etc. Make a list of all the factors that could potentially negatively impact you financially, as well as any possible opportunities.

Given how difficult the government has found it to establish any clarity when it comes to Brexit, it’s not surprising that consumers are struggling too. Although there are no definite solutions to the Brexit issue these are some of the steps you can take to ensure you have a fighting chance.

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What is the Financial Future of MIllennials? Mon, 25 Feb 2019 11:03:41 +0000 Alex Hartley If you believe the media hype, millennials are both the best and worst of generations. They are those most likely to struggle with cash, as well as those with the potential to be the wealthiest. According to some news outlets millennials have the most trouble getting onto the housing ladder – others say that it’s because of this generation that home ownership, as well as other institutions like marriage, are dead. But what’s the truth when it comes to millennials – especially millennials and money – and what are the true financial issues that this generation faces?

Millennials and their social life

Are you a Millennial?

Millennials are most often defined as the generation born between 1981 and 1997. So, there’s no doubt that many of the financial and employment issues that often affect this generation have arisen as a result of the financial crisis that followed immediately on from 2007. For many millennials their formative coming of age years were spent in times of great financial uncertainty and categorised by a lack of opportunity.

The financial issues that Millennials face

More debt than other generations. Millennials have much higher levels of debt than the generations that have come before. Attitudes to debt have changed substantially to those of Baby Boomers – it’s now much more socially acceptable to be in debt and much more a part of financial life. And then there’s education. The millennial generation didn’t have access to student grants – only loans. So, 33% of millennials had a student loan in 2017, as compared to 20% of Generation X 14 years ago. Plus, student loans are larger – the average millennial student loan balance is double that of Generation X. As a result, before many millennials have even entered the “adult” working world they are saddled with significant negative balances.

Less likely to be on the housing ladder. According to the Office for National Statistics, home ownership among 22- to 29-year-olds has taken a huge dive in the past decade. In fact, since 2008 the number of millennials with a foot on the housing ladder has fallen by 10%. According to estimates, around a third of millennials are unlikely to ever own their own home. This is perhaps not surprising given the sizeable debts that many millennials graduate with. Another factor is the huge increase in property prices that is way out of line with wages. Today the average property price in the UK is £225,621. The average salary for a 30 year old is £23,700. As most mortgage lenders will only offer up to four times salary, this means that the average 30 year old can’t afford the average property. And given that rents increase year on year there are fewer opportunities for those in this generation to save for a mortgage deposit.

Millennials and debt

Lower savings. Frivolous spending and a lack of understanding of the value of money are often accusations laid at the door of the millennial generation. However, it’s also worth noting that high levels of debt, as well as lower wages, could also be to blame for the fact that many millennials have not been able to put money aside for the future in the same way as previous generations. This is a trend that is burgeoning as we speak. In just four years, the number of people in their 20s with any savings at all dropped from 59% to 47%. However, it’s not all bad news on the savings front. Those millennials who have been saving have managed to amass more than they would have done a decade ago. Although the number of people with savings has dropped, millennials who do having savings now have an average of £1,600, up from £900 10 years ago. There is huge disparity in this generation among savers – those who have saved the most might have up to £15,000 whereas those with least could have as little as £100.

Outgoings are a burden. In 2017, British households spent more on outgoings than they had coming in according to official figures. In fact, they were spending £900 more than their income. This was the first time that this had happened in 30 years. General consumer attitudes are changing and, with debt much more widespread, we are seeing less frugality than previous generations may have displayed. However, this is not some inbuilt flaw of the millennial generation but much more likely to be the financial environment in which they were raised and currently exist.

Job security has changed significantly. It’s no secret that we no longer live in a world where anyone can rely on something like a job for life. However, many millennials stay in jobs that they are just not happy in – in fact 33% will do this because they don’t believe that there is anything better out there. Within the same generation there are those who are juggling multiple roles – this generation is the mainstay of the gig economy. Many millennials have a second job. Some of the most common of these jobs include influencer marketing, selling items on eBay and dog walking. These extra jobs boost millennial incomes by 20% a week but mean that 45% tend to be working for more than 40 hours a week.

Millennials at work

Not financially robust. 25% of 18- to 24-year-olds and 50% of 25- to 34-year-olds are not financially robust. So, in the event of a personal financial crisis – or another recession – this generation is very vulnerable. Wage growth has been weak in recent years and this is a very divided generation in terms of income. The top 10% of millennial earners is bringing in more than four times as much as the lowest earners. Many young people today are disappointed when it comes to income, which does not measure up to expectations. Around 50% of 16 to 17-year-olds expected to earn £35,000 by the age of 30 but the average salary for a 30 year old is £23,700. There have been some very real reductions in wages for this generation too – between 2007 and 2014, millennials experienced a 13% drop in real hourly earnings.

Bad habits. As well as being more open to getting into debt, millennials have more bad shopping habits. For example, 95% of millennials who took part in one survey admitted to impulse buying. One in five said that they were making impulse purchases every day. With the average impulse buy at £38.33 this soon mounts up over several days or a week. The UK as a whole has a bit of an issue with impulse spending and this seems to be particularly acute for millennials. Whether it’s the result of advertising exposure or being constantly online and able to shop, it’s clearly something that many young people struggle with.

Lack of provision for the future. In addition to very low levels of savings, retirement is a thorny issue for millennials. According to a recent report, the average person requires around £260,000 set aside for a comfortable retirement. But many millennials are simply not putting aside enough cash for those golden years – because after rent and bills there is just nothing left. It doesn’t help that pensions are more complex than they have ever been either. 53% of millennials struggle to understand their workplace schemes. Millennials are putting at least some cash into pension savings – according to Prudential seven out of 10 under 35s are saving into a pension pot. However, at least a quarter of these believe that they simply don’t have enough saved for retirement and those who aren’t paying into a pension have no financial provision at all.

Millennials and entrepreneurism

It’s not all bad news

Although it may seem a rather bleak picture for this generation, there are some positive points to note. For those with a deposit ready, if Brexit hits house prices as expected, this could make property a bit more affordable for a few people. There are also many financial products out there that are available to millennial consumers who are looking to save. From ISAs to apps that automatically transfer available cash into a savings account, this generation is the first to have the full support of technology when it comes to improving financial health. Wage growth has also started to pick up so there are opportunities for those on tight budgets to find a little more wriggle room in the monthly accounts to start creating savings.

Millennials aren’t viewed as having the best relationship with money. Many have had a difficult start, perhaps graduating with large debts or struggling with the balance of incomings and outgoings that is required to ensure personal finances are healthy. However, there are some signs that this generation may bounce back, in particular the willingness to learn and evolve and to use technology to help advance finance progress. In another 10 years, when the next generation is firmly in the spotlight, it could be a totally different story for many millennial adults.

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Best ways for parents to help their children financially Mon, 18 Feb 2019 11:07:54 +0000 Amanda Gillam Financial matters tend to be a topic that most families steer clear of. However, with house prices at almost unattainable levels and many young people struggling with cash flow, this may now be an unavoidable subject. For those parents who are in a position to help their children financially there are many different options to consider. Depending on the issues that sons or daughters are having, there are a number of ways that parents may be able to help from parents

The Bank of Mum and Dad

The phrase “Bank of Mum and Dad” used to be scathingly employed to discuss those offspring who never really broke away financially. From parents covering rent payments to those still paying allowances to children in their mid 20s, the Bank of Mum and Dad was previously a bail out for the privileged. Today, however, this has changed. Average property values are around £242,000 while the average wage is roughly £27,000. So, the average person cannot afford the average mortgage, which is a maximum of four times salary. Graduate salaries tend to offer somewhere between £19,000 and £25,000 and many recent university leavers are shouldering huge debt burdens (up to £57,000). As a result, the Bank of Mum and Dad has taken on new importance – it may be the only way that many young people can make any financial progress.

What does the Bank of Mum and Dad look like today?

Parents today spend an average of £18,000 supporting their grown up children in one way or another. This is most often with respect to helping young people to get onto the property ladder. According to Legal & General, in 2018 the Bank of Mum and Dad was the equivalent of a £5.7bn mortgage lender, supporting 27% of buyers. This is an increase on the number of people who received help from friends and family in this way the year before. Research carried out by the Family Building Society found that money given or loaned like this was mostly to help cover the cost of deposits. Around half was for this purpose and the rest to meet the cost of mortgage payments, stamp duty and legal costs. Average parental contributions when it comes to helping children get onto the property ladder are £59,248, rising to £76,290 in London.

The real differences between parents and the bank

While it makes a lot of sense for parents with resources to help children who are struggling, the reality is that this isn’t always done in the most sensible way. For example, there are frequently no written records kept about what has been given or loaned. Legal advice is only taken in around 15% of cases, even where loaning or giving money could affect future financial stability. Key details that a real bank might focus on are often left in doubt. For example, arrangements for repaying any loaned money may simply be casually discussed and the issue of what happens if one or both parents dies is rarely covered. 82% of people lending their children money don’t charge any interest and many don’t expect repayment in the foreseeable future. As a result, some parents go on providing this kind of financial support for years – 58% of respondents to the Family Building Society Survey had been providing support for two years and 43% for three years.

The bank of mum, dad and grandparents

What about parents without the cash flow to help?

Not every family has a spare five figures to help children, whether that’s to get on the housing ladder or not. As a result, many parents look for other ways to provide some sort of financial support. Being a guarantor is one of the most obvious options for parents who may be financially comfortable but not wish to give or loan cash to adult children. When it comes to buying property, high deposits and new rules on affordability have made in tough for many young people to get past lender criteria – having a guarantor can help. For example, a grown up child looking to get onto the property ladder with a £30,000 income and no other commitments could borrow up to £180,000 with a parent guarantor earning at least £45,000. Without that guarantor the same buyer would only be able to borrow a maximum of £120,000.

For parents looking to help by acting as a guarantor, whether that’s for a mortgage or a different type of loan, there are a number of things to consider:

  • Any lender will want to see evidence that the guarantor is able to step into the borrower’s shoes if necessary. That may mean providing proof of income or other assets.
  • Some children run into real financial trouble. Parents may be left to pick up the borrowing tab, which can be devastating financially.
  • There may be limits on who can act as a guarantor. Increasingly, lenders won’t accept those who are no longer earning or people over the age of 70.
  • Anyone living abroad is unlikely to be accepted as a guarantor. So, parents who have retired overseas won’t be able to help.
  • Signing up to a guarantor mortgage could put restrictions on parents’ future financial decisions. For example, parent guarantors who want to buy a bigger house in the future may find themselves unable to do so because of a guarantor mortgage.
  • Older parental guarantors may mean shorter mortgage terms. No matter what the age of the borrower, if the guarantor parent is older, a lender may put restrictions on the lending terms.

How to manage the Bank of Mum and Dad

For any families going down this route it’s important to set some ground rules, including:

  1. Creating a formal written agreement that sets out exactly what is being provided and stating whether the money is a gift or a loan
  2. Creating a clear schedule of repayments if the money is being loaned
  3. Working out what happens if one or both of the parents die after money has been transferred
  4. Defining whether any interest is payable
  5. Setting out what happens to the interests of any other children
  6. Explaining what happens to money given or loaned if the parents split upFinancial help from parents

Other ways for parents to help in the short or long term

Many young people today might need help financially to get past obstacles such as a low starting salary or a lack of savings. If giving or loaning money is not an option there are other ways that parents can help:

  • Equity release. This is an increasingly popular option for parents who want to provide cash to adult children without touching retirement savings. Between 2011 and 2017, the market for equity release grew from £789mn to £3.06bn. Many parents view this as simply providing inheritance early but it’s important to take financial advice to ensure that applicable interest and fees are properly understood.
  • Letting children move back home. It doesn’t cost anything to offer an adult child the opportunity to move home and save for a deposit while living rent free. However, it’s worth noting that relationships may need renegotiating when families are under one roof again as adults. Plus, it’s important to set savings targets so that children don’t get too used to home comforts and having all their washing done for them.
  • Acting as a financial advisor. Learning how to manage finances can be a process of making mistakes and (hopefully) being able to fix them. None of us are really taught how to do this well. Parents can provide financial support to children who are struggling by helping them to retake control of their finances. That might be teaching budgeting skills or creating a plan for getting out of debt.
  • Standing as guarantor for a loan. If it’s a short term cash fix that an adult child requires, there are a number of lenders who will be more willing to provide finance where there is a guarantor. Key to this will be understanding what the borrowing is for. It’s also crucial that any parent standing as a guarantor has the resources to make the repayments on a loan and won’t find themselves in financial hardship if the original borrower cannot make repayments.
  • Supporting a new business. For parents who are more willing to provide financial support that will generate income it may be preferable to put cash into an adult child’s business idea. This is a good alternative to approaching a business lender with high interest rates. As parents in this situation will essentially be investors it makes sense to draw up official investor documents and set out formally if any returns are to be received.
  • Pre-inheritance gift. There are benefits to making gifts to children before you die that you were planning to include in your Will. For example, anything you gift at least seven years before you die will be free from Inheritance Tax at the time of your death. For parents who don’t want to dip into their own retirement savings this can be a way to solve cash flow problems and improve tax planning.

There are many ways in which parents can help adult children financially today. From standing as a guarantor to providing cash towards a property deposit many people can – and do – step up to help.

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The 10 Best Movies about Money – Getting it, Spending and Losing it Thu, 14 Feb 2019 11:11:18 +0000 Alex Hartley Money makes the world go around – and it has certainly inspired the plot-lines for plenty of fantastic films over the years. Whether you’re a fan of iconic catch phrases or classic riches to rags – and back to riches – story-lines, the film industry has provided them all.

The Wolf of Wall Street (2013)

Critic Reviews

This Martin Scorsese epic has been described by fans as one of the director’s best works. It stars Leonardo di Caprio as Jordan Belfort, a New York stockbroker who made vast sums of cash via some fairly underhand dealings. The black comedy follows Belfort through his meteoric rise to the levels of the uber rich and then down to the lows of fraud, corruption, pennilessness and pursuit by the FBI resulting in three years in a minimum security prison.

Wall Street (1987)

Critic Reviews

Oliver Stone’s money making classic stars Michael Douglas as Gordon Gekko, a legend on Wall Street who eventually takes Charlie Sheen’s Bud Fox under his wing. Cue a series of very dirty dealings that threaten to harm significant human interests, all for the sake of generating cash. In the end Gekko and Fox end up pitched against one another and both have to answer to the law for crimes such as insider trading, losing almost everything.

Trading Places (1983)

Critic Reviews

This film has frequently been called a contemporary take on Mark Twain’s The Prince and the Pauper with two men from very different sides of the tracks whose lives accidentally cross. A homeless street hustler trades place with a high end stockbroker as part of a bet – with hilarious results.

Glengarry Glen Ross (1992)

Critic Reviews

Based on the Pulitzer Prize winning book of the same name, this film is all about the pressures of property sales. Four men who work in real estate are given an ultimatum one day – at the end of the week all but the two best salesmen will be fired. The film follows the way the men cope with the prospect of unemployment and penury with increasing desperation.

The Big Short (2015)

Critic Reviews

For anyone confused about how the 2007-2008 global financial crisis began, The Big Short makes is easy, simplifying the way the housing bubble brought everything down. The film is notable for its stellar cast, including Ryan Gosling and Christian Bale, as well as for the detail it employs to explain the complex financial scenarios and instruments that created recessionary circumstances.

Dirty Rotten Scoundrels (1988)

Critic Reviews

Competing con men Steve Martin and Michael Caine are looking to relieve an heiress of at least $50,000. Set in the lavish French Riviera the film follows the attempts of the sophisticated Brit and the rather more streetwise American to get their hands on the cash. In the end both fail but join forces to be more successful in future scams.

The Company Men (2011)

Critic Reviews

This film is all about the impact of downsizing during a recession on one family who had previously had bright prospects. Ben Affleck’s character Bobby Walker finds himself eventually losing his position and doing manual labour after his flashy desk job is withdrawn. The film has a happy ending though when Walker and many of his other sacked colleagues are hired to form a new business.

Jerry Maguire (1996)

Critic Reviews

It’s Tom Cruise’s character Maguire who utters the iconic phrase “show me the money” in this film, which is the tale of the rise and fall of a slick sports agent. When Maguire loses his job after a bout of honesty concerning issues in the industry, it’s left to him, working with American football player Rod Tidwell (Cuba Gooding Jr.) to get his business and professional life back on track.

The Money Pit (1986)

Critic Reviews

When Tom Hanks and Shelley Long’s characters are forced to leave their home they end up buying a million dollar distress sale mansion, which they scoop for just a couple of hundred thousand dollars. However, the house starts to fall apart as soon as they move in, draining all their cash and setting the couple on a road to increasing hostility. The film is a great example of how the pressure of property renovation can put strain on even the happiest couples – although it does all work out in the end.

Fun with Dick and Jane (2005)

Critic Reviews

This film is all about debt and how a very average middle class couple end up resorting to robbery after finding themselves up to their necks in it. Jim Carrey plays Dick, who loses his job when his employer goes under, taking the futures of all the employees with it. Although Dick is eventually able to make the situation right, the film ends with him announcing he’s taken a new role – with a company called Enron…

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Finance and Mental Health – getting credit and managing debts Mon, 11 Feb 2019 10:52:44 +0000 Amanda Gillam Financial difficulty and mental health are inextricably linked. Half of adults who have problem debt also have a mental health issue. It’s often unclear which came first, as either one can act as a trigger for the other. Although the benchmark is fairly low, lenders do have responsibilities when it comes to credit applications from those with mental health issues. There are also measures that have been put in place to help anyone who is suffering from mental health problems as well as struggling with debts.personal finance and mental health

The link between finance and mental health

Mental health issues are much more commonplace in the UK than many people realise. In fact, a quarter of the population is thought to be dealing with mental health difficulties at any one time. This could be something like anxiety or depression or a condition such as schizophrenia. There are strong links between financial problems and mental health. Getting into difficulties with debt is stressful and many people find it hard to see a way out. However, no debt problem is unsolvable.

Obligations on lenders

There are no legal obligations on lenders when it comes to consumers with mental health problems. However, a number of bodies within the industry have established guidelines in voluntary codes for their members, including:

  • The Lending Code (produced by the Finance and Leasing Association) requires that when lenders have been notified of a health issue (including mental health), they must take particular care. This includes being sensitive to a person’s condition and using appropriately trained staff to handle certain accounts.
  • The Credit Services Association (relevant to companies dealing with unpaid credit accounts) code of practice requires “due regard and to deal sensitively with people where evidence has been given, or is apparent, that the individual is incapacitated by mental or physical disability.”
  • The Money Advice Liaison Group guidelines set out specifically how a customer with mental health issues should be treated. These guidelines are recent and voluntary but indicate an industry shift towards taking factors such as this into account.
  • The Financial Conduct Authority (financial industry regulator) Consumer Credit source book requires lenders to have specific policies in place for customers who are in arrears and vulnerable, including where they have mental health difficulties.

Telling creditors about mental health issues

Most lenders have policies and guidelines in place to help them deal sensitively with customers who have mental health problems. Telling a lender about issues that you’re having may mean that you’re entitled to protection under the Equality Act 2010. It also gives your creditors a range of options when it comes to resolving the situation. For example, you can request that creditors contact you using a certain method at a specific time only, such as by letter or phone during the day. Creditors can also agree to suspend collections or to delay sending your case to a credit reference agency.

What can you do if you’re worried about debts?

  • Start by asking for help with debt. There are a wide range of free support services that provide advice and information to anyone who is struggling with debt. Christians Against Poverty and Citizens Advice are just two of the options.
  • If you’re facing an emergency situation then deal with that quickly. For example, if you are being chased by debt collectors, there are agreements in place that mean you can get relief from being pursued as long as you’re proactively trying to get help with your debt problems.
  • If you don’t feel like you’ve been fairly treated then make a complaint. The first step is to complain to the creditor or lender. If you don’t get a reasonable response then you can refer this to the Financial Ombudsman Service. For many people with mental health issues, a complaint is often made on the basis that they were not treated by the lender in accordance with the Lending Code’s guidance on mental health and debt.
  • Get to grips with your spending. Many of us are emotional spenders who will buy items to make ourselves feel better, often at times of stress or when we don’t feel good. It can be helpful to review how you spend money and whether unhealthy patterns of spending related to mental health issues, such as depression, have been contributing to debt problems.
  • Seek help for your mental health issues. There are many resources available for anyone with mental health issues – the first step is often to speak to your doctor to see what is available on the NHS for free.

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Tips to help you improve your home’s energy efficiency Thu, 07 Feb 2019 09:59:59 +0000 Amanda Gillam Energy efficiency is something that has the potential to affect every homeowner. The average UK household spends around £1,200 each year on gas and electricity. Unit prices continue to rise over time. Around 40% of us are concerned that we won’t be able to keep our homes warm this winter. The way energy is used and conserved has a big part to play in this. Whether you’re looking for ways to save money in the colder months or your home just never feels warm, there are lots of steps you can take to improve your home’s energy efficiency.improve home's energy efficiency

Installing or upgrading insulation

Insulation can make a big difference to how warm your home is. For example, according to the Department for Energy and Climate Change, in the UK homeowners waste a total of £500 million heating homes where the heat is escaping through non-insulated lofts. Loft insulation could save you anything upwards of £160 a year depending on the type installed. Solid wall insulation, for example, can generate savings of £245 a year on the average heating bill for the average gas heated home.

Double glazing and protecting against draughts

Anywhere that heat has the potential to escape can reduce your home’s energy efficiency. This could be around the side of doors or where windows meet walls. One obvious solution is to install double or even triple glazing to provide extra layers of protection against the winter chill and to trap heat in. Thick, heavy curtains can also make a big difference when it comes to keeping rooms warm, especially in older homes.

Replace an inefficient boiler

Not every boiler is the same these days and those that aren’t energy efficient could be adding £200 a year to your heating bills. Boilers have an alphabetical rating, from A to G. The most energy efficient boilers are rated A and the least, G. With a better boiler you’ll not only be able to save on energy bills but reduce the emission of carbon dioxide, a major contributor to global warming.

Use energy efficient lighting

It hardly seems worth making such tiny changes as replacing all your light bulbs with more energy efficient options. However, these little improvements really do make a huge difference. Not only do they dramatically reduce impact on the environment but can help to cut your household spending too. LED bulbs are the most energy efficient and come in a very wide range of different colours and levels of brightness. And no longer are low energy bulbs seen as farcical in the start up time and brightness stakes. New LED bulbs are both bright and low energy.

Install solar panels

There are a number of ways in which you can use solar panels to help improve the energy efficiency of your home. If you invest in solar panels that have photovoltaic cells then these can actually generate power to feed back into your home to reduce the volume of energy required from other sources. According to the Energy Saving Trust it’s possible for the average home to generate around 40% of its energy needs this way. If your home generates more power than it needs then it can be sold back to the National Grid via a feed-in tariff.

Switch off and cut back

Sometimes it’s the simple things that make a real difference and this is the case with energy efficiency. You can make your home more efficient simply by becoming more mindful of the way you’re consuming electricity. Switch off lights and appliances in empty rooms, set heating so that it’s only on when required and choose more efficient appliances, such as energy saving kettles. According to British Gas it’s possible to save £130 a year just by cutting back on the energy you use.

What about older properties?

Many homes built decades, or centuries, ago were not designed with energy efficiency in mind. However, there are lots of steps that you can take to improve this. Start with the basics, such as repairing broken windows, blocking gaps, fitting draught excluders to letterboxes and outside doors and ensuring that radiators aren’t being blocked by furniture. Insulation for the loft – and also for the loft hatch – as well as adding insulation to the pipe work can also make a big difference.

Paying for energy efficiency improvements

If you’re on a budget, paying for the improvements that could potentially deliver energy efficiency can feel quite challenging. There is financing available to help, including grants. The Energy Company Obligation is a government scheme that requires energy suppliers to promote measures to improve the ability of low income, fuel poor and vulnerable households to heat their homes. This may include upgrading heating systems and boilers – call the Energy Saving Trust (0300 123 1234) to see if you might be eligible. If you don’t qualify for a grant then you may find it could still make sense to pay for the work yourself – whether by using savings or taking out a loan.

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Category: Energy, Top Tips]]>
Top 10 Money Tips for 2019 Mon, 04 Feb 2019 11:33:01 +0000 Alex Hartley At the end of 2018, a poll established that three quarters of Brits are currently worried about their financial situation. Half of UK adults are financially vulnerable and three million people in the UK are struggling to pay their bills. So, money worries are the Number 1 concern for a lot of people this year. If your top new year’s resolution for 2019 is to get your finances to a better place then there are some very simple ways do tips for 2019

Focus on savings

Particularly given the current uncertainty over Brexit, putting money aside to create a financial buffer is one of the best ways to improve your financial situation in 2019. Aim to save 5  -10% of your monthly income and by 2020 you could be feeling much more comfortable.

Automate the way you manage your money

If you’re forgetful when it comes to saving or find it difficult to stick to a budget, automating money management can help you achieve more. There are a number of apps available to help you do this now. Chip, for example, is an app that uses software to work out how much you can afford to save each month and then transfers this into a savings account for you. Even something as simple as setting up standing orders or direct debits can help to ensure all your payments are made on time and no fees are incurred. Automation can also help to ensure you never pay more than you need to. Flipper is an auto energy switching service that continuously switches consumers to ensure they are always getting the best and cheapest energy deals.

Pay off debt

Prioritise the debts that have the highest interest rates so that you start paying less for what you’re borrowing. If you can, switch to a credit card or personal loan with a lower rate of interest than what you’re currently paying. 0% deals can be helpful when it comes to clearing bigger balances so shop around for cheaper ways to borrow.

Renegotiate what you pay for regular bills

2017 research by Which? found that more than half those surveyed had managed to successfully renegotiate the price of regular household bills such as car insurance, mobile phone tariffs and energy bills. According to the research, it’s possible to save more than £700 by taking another look at what you pay and then haggling with your current providers – or switching – to reduce the cost.

Become a budgeting whizz

Sometimes it’s the simplest solutions that are the most effective. If you’re not budgeting then you’re not making sense of your money. List your monthly outgoings and what you have coming in every month. Monitor what you spend for a month so that you’re aware of where your income actually goes. Then start making adjustments to reflect your monthly spending goals, one month at a time. If you’re not keen on manual budgeting there are plenty of apps to help with this, including Squirrel.

Spend less

Once you start budgeting effectively you’ll be able to see where you’re spending the most and where there might be opportunities to save. If you’re really committed to better finances this year, sacrifices may have to be made. Start by eliminating luxuries for a couple of months, reducing your household spend by cutting out meat or alcohol, or giving up the gym membership.

Be loyal

Joining loyalty schemes can help you to accumulate points that you can “spend” instead of the cash that you’re trying to save. Most big retailers offer worthwhile loyalty schemes today. The best way to maximise your returns is to spend consistently with the same brands.

Avoid auto-renewal

Many regular household bills and payments – such as car insurance – will be set up to auto-renew annually with the same provider. This means that you have zero opportunity to renegotiate and may not even notice that you’ve committed to another year. Uncheck auto-renew on all your regular payments and shop around for the best deals once a year instead.

Be more self aware

The human brain is complex but learning to understand how you think about money could transform your finances this year. What are your triggers when it comes to overspending, do you tend to ignore bills and how seriously do you take your money goals? It may be that all you need is to adjust the way that you approach how you handle your money to end up more financially stable.

Increase what you earn

A little extra income each month can make a big difference to staying on budget and hitting savings goals. Ask for a pay rise at work, sell off unwanted Christmas gifts online or join the gig economy and make a little extra cash from skills such as carpentry or driving. There are lots of ways to generate more cash and your finances will feel the benefit of even a small increase in income.

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How much more attractive can money make you? Thu, 31 Jan 2019 08:00:27 +0000 Amanda Gillam Does money make someone more attractive?

It’s an age old question, but one that has never been more relevant considering the rise of social media and the increasing use of dating apps forcing people to showcase the “best” version of themselves in the online world.

And we’re conscious that there’s a growing number of people getting into financial difficulties as they try to project a certain lifestyle and status. So, we thought we’d put it to the test, to find out whether it pays off to project that wealthier image.

What we did

We created two identical dating profiles on Tinder for “Niall”, our 22-year-old young professional with a degree from a good university.

The only difference between the two profiles was the photos on one were doctored to make Niall appear richer and more successful.

In some pictures we changed his clothing. Specifically adding on a watch and changing brand names to designer fashion labels. We added in car keys on others and placed Niall in different surroundings on his richer profile. This saw us change a bedroom selfie to be taken in a premium hotel, a bog-standard background to be switched to a Parisian hotel room complete with view of the Eiffel Tower, and a graffiti-covered wall to a sportscar.

We swiped right 1000 times on each profile and waited for the matches to come in.

The Results

There was one clear winner. “Rich Niall” secured 292 matches compared to just 179 for “Normal Niall”. That’s 64% more matches for the profile showcasing a more luxury lifestyle.

tinder matchesBut it wasn’t just on the matches front where wealthier Niall came out on top. He was also ahead of his normal self when it came to the number of direct messages he received, as well as the holy grail of Tinder triumphs; the Super Like.

Rich Niall received four super likes to zero and 20 messages compared to 14.tinder additional engagement

Our finance expert (and amateur psychologist) Amanda Gillam commented on the results of the study.

“Unfortunately we live in a materialistic world where money and wealth can sometimes impact on how attractive we find others. By nature we judge people instantly – first impressions are critical. The rise of swiping dating apps like Tinder has simply amplified this behaviour.

“We wanted to test out how much the appearance of wealth changed perceptions and made that person appear more attractive. If you’re evaluating someone with one swipe, you look for things you like in their profile pictures. In this case, we can clearly see that the appearance of wealth is one of those important deciding factors.”


So by spending some time improving your appearance you can make yourself more appealing on Tinder and other dating apps or social media platforms like Instagram. Perhaps it’s nothing new but first impressions definitely count when it comes to success in both the online and real worlds.

Its also important to remember that some financially savvy love seekers will be wondering how good you are with money. As this 2016 survey shows, 50% of us wouldn’t date someone with bad credit. And a significant proportion of men (35% for older, 54% for younger) rate a prospective partner’s wealth and financial stability as more important than their appearance.

If you want to spend, always do so within your budget. And if you do use credit, it’s vital that you pay back what you’ve borrowed at the end of each month. Here are our top 10 pieces of essential financial advice.

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Your personal finances and a “No Deal Brexit” Mon, 28 Jan 2019 11:49:59 +0000 Alex Hartley January is the most financially depressing month of the year for many of us. And this year it certainly doesn’t help that Brexit is pending. With so little clarity about what Brexit looks like – and yet another government defeat on the Brexit proposal – a lot of people are getting increasingly nervous. There is a continuing and significant threat that the UK will leave the EU on March 29th without a deal – the so-called “No Deal Brexit”. So, what kind of an impact could that have on your personal finances?impact of brexit on your money

Your Mortgage

It’s unlikely that a No Deal Brexit will have a significant impact on a mortgage – as long as that mortgage is with a UK provider. That’s currently the case for most UK homeowners. However, if a mortgage has been provided by an EU company then this could raise an issue. This will be the same for any financial services that are being provided by an EU business to a UK customer. However, it’s not all bad news, as if there is a problem this won’t take effect straight away. Instead, from 29 March 2019 a three year grace period will start that will allow EU companies to continue to provide services until a deal has been worked out.

Your Pension

There could be serious issues with pensions for Brits who are currently living in EU countries. For those Brits in the EU receiving financial services such as a pension from a UK business, unless that business has an EU subsidiary, 29 March 2019 may be the stop date for receiving those services if there is no deal. In order to overcome that, the country in which the Briton is based would need to have an agreement in place with the UK about provision of financial services. Either that or the EU would need to agree to allow UK financial services companies to continue to provide services into the EEA after March 2019.

Your Household Costs

A no deal Brexit could see a number of costs spiral and there may even be shortages of every day items, especially when it comes to anything that is imported from the EU. For instance it it predicted that food costs could increase overnight by 10%. Other regular costs could also be affected. For example, if there is no deal then there will be no obligation on mobile phone operators to waive roaming charges so Britons in Europe could find themselves with this additional cost to pay once again. It may even be necessary to purchase a new driver’s licence for anyone who is travelling from the UK to the EU after a no deal Brexit. As UK driving licenses would no longer be valid in the EU, an International Driving Permit would need to be purchased instead.

Your Property’s Value

It’s very difficult to anticipate the scale of a predicted adverse impact of a No Deal Brexit on British property. It’s been reported that Mark Carney, governor of the Bank of England, told UK ministers that such a situation could see a price crash of up to 35%. However, this is a worst case scenario that also included a rise in interest rates and unemployment. The key factor with house prices is that they are likely to rebound over time. So, even if the UK property market does experience a serious dip as a result of a No Deal Brexit, values could begin to climb back up again once the situation starts to stabilise.

Your Savings or Debt

There’s no doubt that the best position for anyone to be in going into Brexit is to have a significant pool of savings and low – or no – debt. However, that’s just not the situation for millions of Britons, especially in the months just after Christmas. The main issue for many will be a potential interest rate rise by the Bank of England, which could increase the cost of debt. That’s not currently on the cards but no one really knows what will happen post-Brexit and rates have been minimal for some time. More challenging could be the impact of losing a job or having a self-employed business affected. Especially for those who are already struggling financially. There are many ways that this could happen, for example an EU company may close a London office or red tape may make EU imports prohibitively costly.

A No deal Brexit is pretty much the worst outcome for anyone in the UK, particularly given the uncertainty this will create with respect to personal finances. However, all we can currently do is to wait and see how the government will attempt to resolve all the issues this creates.

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How to prepare for the next financial crisis Thu, 24 Jan 2019 11:50:57 +0000 Alex Hartley In early December 2018 the International Monetary Fund (IMF) indicated that a new financial storm was brewing. It said that, not only were we on the cusp of yet another financial crisis, but that it was highly likely that the financial systems of the world would be ill prepared to deal with it. Such a crisis could be triggered by any one or more of a number of perhaps local events. For instance the UK, the world’s fifth largest economy, crashing out of the EU without a proper deal could be enough to cause global ripples or may be even an economic tsunami. All of us are connected to the financial systems that would be impacted by such a crisis, whether via savings, a pension or the value of a home. So, what can you do to prepare for the worst and try to protect the assets that you have?next financial crisis

Work harder on boosting your savings

Having money put aside for a financial crisis is the best way to give yourself a buffer. For most people, losing a job is likely to be one of the worst consequences of a financial crash but if there are savings in the bank this won’t hit you quite as hard. Enough to cover three to six months worth of expenses should provide the buffer that you need.

Reduce your outgoings

If there’s a financial crisis then money is going to have to go further for everyone. So, it makes sense to cut back now so that you’re in the right habit. Plus, the less you spend now, the more you’ll have set aside to add to that rainy day fund.

Spread your savings out to reduce risk

As we have seen in recent years, banks can, and do, go under when there is a financial crash. So, it makes sense to spread your savings out to reduce the risk. Remember that multiple banks may be under the same ownership, such as Lloyds and Halifax, which both come under the umbrella of the Lloyds Banking Group. This will also be relevant if you need to seek compensation if your savings are lost. You can get up to £85,000 compensation for each financial institution you have savings with from the UK’s Financial Services Compensation Scheme.

Be on top of your household budget

One of the main reasons people get into trouble with money, whether during a financial crisis or not, is as a result of an inability to budget. What are your weekly and monthly outgoings? How much would you need to cover three or six months without work? What is your regular monthly income? All of this information will be crucial when it comes to staying in control of your cash no matter what happens to the economy.

Reevaluate your pension

This will depend on where you are in life. If you’re relatively young then any negative change to your pension can still be made up before you reach pensionable age. However, if you’re close to retirement, a financial crash now could leave you with no time to make up any losses as a result of such a disaster. So, for many people, it makes sense to change how pensions are invested to reduce risk – this usually means switching to safer investments, such as bonds and cash, as opposed to equities.

Don’t overpay on your home

If you’re a homeowner – or you’re buying right now – getting the best possible deal is essential. House prices are predicted to plateau in 2019 and a 2% drop is forecast for London. So, it might be better to wait to buy until the mid-end of the year when sellers will be keener and prices may be lower. Take advantage of the cuts to stamp duty for first time buyers and negotiate hard on associated costs to make sure your expenses stay low. If you’re remortgaging you might want to consider a longer term deal (e.g. five years). This will give you as much security as possible when it comes to your repayments even if there are widespread financial troubles.

Make sure your debt is affordable

No one knows what will happen to interest rates over the next few years but they could go up. If that happens anyone with debt will become vulnerable. So, it’s crucial to start paying off as much of what you owe as possible right now. If that’s not an option then switch to a more affordable repayment plan that will help to keep the costs of your debt low.

Identify extra income opportunities

Maybe it’s time to fix up the spare room so you can rent it out. Or you may have always wanted to sell the paintings you do at the weekend. Monetising your skills and talents to help give you other options if the worst occurs is a great way to prepare for a financial storm.

No one knows what’s going to happen to the world economy in the coming months and years but taking these steps can at least help you to be prepared. And 2019 looks like it could be more volatile than many recent years. As the cub scouts say, “be prepared”.

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Case Study: How Bob & Karen dealt with unemployment and debt Mon, 21 Jan 2019 11:05:28 +0000 Amanda Gillam So, this is a real tale. A tale that’s probably repeated across the UK thousands of times each year, but a tale worth telling as we can all learn from it. What happened to them could happen to any one of us and could do so with little or no notice.

Bob and Karen (names changed) are real friends of mine. They live in the North West, are aged in their early fifties and have one teenage child. They are a close and loving family who work hard and play hard. But Bob’s reached that tricky age when it comes to finding work. A few years ago he was restructured out of his job and then spent 12 months finding another one. One thing you can’t accuse Bob of is not being resilient, but even for him 12 months out of work when you have a family to support and a mortgage to pay was the most stressful thing imaginable, even with a reasonably good redundancy payment.

But finally Bob found a new job with a similar salary. The fact that while being unemployed the family had been a bit casual about cutting costs could be forgotten. Savings could be restocked and all would be right with the world. Except that dream only lasted 18 months. He lost his job once more in the summer of 2017. You can imagine the feeling of failure and fear that swept over him. He had to tell Karen of their plight once more.

Unemployment 2.0

Bob knew precisely what he needed to do to find work and was probably wiser about how long it might take. He had received a redundancy payment which gave the family some leeway. In fact considering how short a period he’d been employed for it was quite generous. But what the family had not done during his brief employment was increase their savings once more. This time they were starting the job search with less of a buffer.

After 6 months of job hunting Bob and Karen estimated they could survive financially for a few more month. But still they didn’t cut their costs. By May last year they were in dire straits and finally they started heeding the advice me and other family members were giving them! And just in time.

Unemployment and the Family Finances

So, this is the specific advice I gave Bob and Karen. You could argue that it’s applicable to anyone in their financial situation – no job, no income and household costs that have to be met.

Get the Numbers on the table

Bizarrely they never talked to each other about the money situation. Karen would always say that that was Bob’s responsibility. She had no idea what the family finances looked like. For her ignorance was bliss. And Bob’s a proud man who feels he needs to fix things and to not burden his wife with the problem. But as the old saying goes “a problem shared is a problem halved”, or at least there’s the chance of confronting the problem together.Ways to save money

We finally got them to:

  • Identify how much they spend each month and on what
  • List their debts (both secured debt like their mortgage, and unsecured like their credit cards and store credit)

Cutting Household Costs

Bob and Karen were “told” to slash their monthly costs to the bone – removing from their spending all those things that they really didn’t need to spend money on (e.g. Sky subscriptions, gym memberships, etc) and switching their “have to’s” to cheaper alternatives:

It’s worth noting that the average British household spends nearly two thirds of it’s income just running the home. 45% of take-home pay goes no paying the mortgage or the rent! But with the average household net income being £27,600 p.a. this means that households are doing well to save the £100 per month on average that they do. But even this does not create much of an emergency fund should the worst happen.

Dealing with Existing Debts

persistent credit card debtThe last thing to do in this situation when you owe money is to stick your head in the ground. Do this and you’ll wreck your credit rating and potentially suffer the loss of any asset secured on the debt (e.g. house). So, we got Bob and Karen to confront their debts and got them to talk to those to whom they owed money. The advice I gave them was this:

  • Contact your lenders/creditors – be honest and tell them your situation. These days lenders must act with forbearance (i.e. be tolerant) and if you are honest with them they are for more likely to want to help you. It is likely to be much better to renegotiate a less burdensome repayment plan than fail to meet a payment on your current terms. Missing payments will harm credit ratings and continued could trigger court proceedings.
  • You will have more creditors than you realise – potentially anything where you’re paying in arrears, or have some form of contractual commitment over time e.g. mortgage, credit card companies, items bought on store credit, utility companies, mobile phone contracts, local council (council tax), etc.
  • Free advice is available – take it!

Developing an Income stream

Finding a new well paid job was Bob’s “job number one”, but there would have come a time when either he or Karen would have had to swallow their pride and take a temporary job (at least) that could have helped keep the wolves from the door. As it happens it never quite got to that, but stacking shelves at the local supermarket was floated at least once. But of course in the UK we’re fortunate enough to have a benefits system that is a backstop – one that gives you a breathing space while you find proper employment.

What Bob and Karen actually did was this:

Having cut their costs to the bone and established what benefits they could claim Bob and Karen knew what gap there was that needed to be filled with some form of work, at least in the short term.

Getting back to Work

job hunting in your 50sObviously Bob’s was looking for a “traditional” job that he believed fitted his experience and status. The tough call here is that having turned 50 find work was only going to get harder and the issues he’s faced at interview (e.g. short time in the previous job) were going to continue to come his way. I felt he needed to look at other options in parallel with looking for the job he really wanted. Other options that still took advantage of his skills and experience were as follows:

  • Interim management – doing a similar job on a short/medium term basis while still hunting for the preferred one
  • Freelancing
  • Consultancy
  • Part-time work

I Bob’s case he also needed to completely re-engineer his CV to help “hide” gaps in it:

Karen began to look at various forms of part-time work that included shop assistant, postman, and Uber driver. But she wanted to make sure that her work would not impact on looking after her teenage child. Flexibility was the key.

Another income option they seriously considered for a while was letting the spare room in their house. It could have brought in around £500/month, and under the Government’s “Rent a Room” scheme the first £7500 of any such income is tax free.

How did it all turn out?

Well, having been unemployed for 12 months and having applied and been interviewed for numerous jobs finally Bob landed one. Relief all around. But to get the job Bob has had to take a backward step that means he isn’t earning what he did before. So now Karen has to work to help balance the books. It’s changed family dynamics and it’s changed some priorities. Hopefully they’re not letting their spending get out of control and are saving properly into an emergency fund in case the unthinkable happens and Bob’s job should disappear once more.

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Category: Income & Work, Money & Finance]]>
Why are funeral costs rising so fast and what’s being done about it Thu, 17 Jan 2019 11:10:14 +0000 Alex Hartley An investigation by the Competition and Markets Authority (CMA) has established that the expenses involved in a funeral in the UK have risen sharply. Costs have gone up significantly above inflation for more than 10 years now and the CMA found that bereaved friends, relatives and partners were being taken advantage of by the funeral industry at a time of emotional vulnerability.funeral costs rising fast

Why have funeral prices risen?

The funeral industry in the UK is worth £2 billion and the report by the CMA has been incredibly critical of the way that prices have increased over the past decade. Perhaps the most damning part of the report identified that there was no quality improvement being delivered as a result of the increased costs – and that the industry itself was not facing the kind of rising prices that would justify hiking prices. So, according to the CMA, the cost of a funeral has gone up simply because the industry feels that it can charge more.

The cost of dying

The average cost of a funeral in the UK is £4,271 – this is an increase of 68% over the past decade. A cremation now costs an average of £3744 – inflation has been 25% over the past 10 years but the increase in the cost of a cremation in the same period represents a price rise of 84%. The up front costs of a funeral can be fairly significant but many mourning families have also found that there are multiple extra expenses added to the final bill that push this total up even further. These could amount to several thousand pounds more than originally anticipated. The main issue is that funerals are usually being organised at a time of great emotional pressure and stress. The accusation being levelled at the industry is that the vulnerability this creates in the average human is something that it is exploiting for greater gain.

Finding a cheaper funeral option

It is possible to pay less than the average for funeral costs and also to ensure that added extras don’t push the prices up. However, there are obstacles to this. For example, funeral prices are not available online so there is currently no way to compare the options other than manually doing this with each individual provider. Around £1,000 can be saved by shopping around when it comes to organising a funeral. However, grief is another big obstacle. People often don’t have the energy or the inclination to spend time researching funeral costs when feeling distressed by the loss of a loved one. And, according to the CMA, funeral providers have taken advantage of this by increasing costs.

The government does provide some help via the Social Fund Funeral Expenses Payment – this covers reasonable costs for crematoriums and cemeteries and a £700 cap on other fees. However, this still leaves many people significantly short of the cost of the average funeral and for many that has meant that the only solution is getting into debt.

The need for regulation

Currently, the funeral industry is not regulated and many, both in the industry and representing consumer organisations, believe that it’s time for that to change. The National Association of Funeral Directors does have a code of practice that its members are required to adhere to. However, given the escalating costs involved in paying for a funeral, it’s clear that self-regulation is not enough to stop consumers being exploited.

The government, too, has concluded this. In addition to the investigation by the CMA, the Treasury has also been looking into prepaid funerals. These are financial products but are not regulated by the Financial Conduct Authority in the same way as other financial packages, such as pensions. The government has concluded that current self-regulation is just not sufficient to ensure fair treatment of consumers and so full regulation is being considered.

A good blueprint to follow may come from Scotland. The Scottish Government has already taken steps to correct the imbalance within the industry, appointing an inspector to look into funeral homes in Scotland. It is also in the process of creating regulation for the sector, as well as a social enterprise fund that is designed to provide a wider range of cheaper options for funerals that are easier for those on low incomes to manage. 

Even those within the sector acknowledge that the funeral industry in the UK has been taking advantage of consumers at a very vulnerable time for many years. Given the findings of the CMA it’s clearly time for the situation to change and for the government to look at ways to regulate.

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Paying for Christmas 2018 – the lessons for Christmas 2019! Mon, 14 Jan 2019 10:39:56 +0000 Amanda Gillam In the run up to Christmas most of us spend an extra £1,000 a month – on top of an average of £2,000 existing monthly outgoings. During November and December we all get a bit trigger happy when it comes to spending and a lot of this ends up on credit cards. That’s why January can feel like a rather bleak month. The lights, food, fun, friends and family time have all been replaced by big bills and not much time to pay them off. In 2018 research established that it would take most Brits until April to pay off Christmas debt! This year, with financial instability as a result of Brexit and various rising costs, that time period could be even longer.paying for Christmas

A negative festive cycle

Overspending is something that most of us do as Christmas approaches. It feels normal to go a little over the top to make sure that everyone has the food and gifts that will make it a special time. However, all those purchases can seem fairly unnecessary in the cold light of January. As the new year starts, the pressure of other outgoings, from rent and food to travel expenses, will make repaying Christmas debt very difficult. As a result, almost half of us identify January as the most difficult financial month of the year.

Paying for Christmas 2019

Next Christmas might be the very last topic you want to think about right now. However, planning ahead for it could help you to avoid a situation where you’re stuck with a big bill to deal with in January 2020. So, what can you do to pay for Christmas differently?

  • Don’t spend as much as you did last time. Christmas isn’t really about all the stuff it’s about the people and what you do together. That may sound like a cliché but it’s true. You can still have a fantastic yuletide in 2019 and spend less. While it’s fresh in your mind now, write down all the things you bought this year that you didn’t really need or want in the end, and use it as a reminder not to waste the money next year.
  • Cut back on other spending in the run up to Christmas. That might mean a cheaper summer holiday or maybe a few weeks without spending on extras in September and October. Being thrifty in the months before the festive season will give you more flexibility during that expensive time.
  • Start saving now. It’s amazing how small monthly savings can add up over the course of the year. Create a budget for this year now based on what you spent last year. Break that down into 10 monthly payments with the goal of having what you need to pay for next Christmas by October. Top this up with any small windfalls that you get over the course of the year.
  • If debt is your only option be smart. If you know you’re going to be borrowing to pay for Christmas then make sure you have a plan in place for repaying the debt. Do your research into the types of credit that may be available to you and find the lowest possible interest rate. If you’re eligible for a 0% credit card then you’ll be able to borrow without paying anything, as long as you finally repay within the time limit.
  • Join a Christmas club. If you know that you’re not that disciplined when it comes to saving, a Christmas club could help to make the festive season more affordable next year. The idea is that you pay for Christmas in small monthly repayments throughout the year and then you get access to your cash – plus bonus – in November.
  • Plan to buy your gifts in the sales. If you’re really struggling then the cost of brand new Christmas presents might be difficult to justify. So, instead of the expense of full priced items, agree with family and friends to buy your gifts in the post-Christmas sales instead and just be together on Christmas Day. You’ll get more for your money and people might enjoy getting a slightly later gift.
  • Increase your income. There are lots of ways to add to your income – even an extra £50 a month between now and next October could give you an additional £500 to work with for Christmas. Car boot sales, selling unwanted items online, joining the gig economy and being paid for skills such as photography or writing could all help to generate a little extra cash.

If you are struggling to pay off Christmas this year, you’re not the only one. However, there are steps that you can take to give yourself more chance of a financially freer in January 2020.

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Parking Fines vs PCNs Thu, 10 Jan 2019 11:40:29 +0000 Alex Hartley Figures released earlier in 2018 indicate that car park penalty tickets issued in the UK have reached a record high. Analysis of government driver data found that the number of tickets issued by car park management firms reached 5.56 million. Controversy has arisen over the way that parking tickets are issued and, in particular, how the private parking industry handles – and profits from – consumers. If you find yourself with a parking fine then you don’t have to simply accept it and pay up.

types of parking ticket

We’re paying more for parking infringements

According to the RAC Foundation the number of car park penalty tickets has risen by a fifth in almost 12 months. Such a significant increase indicates that either we are becoming a lot more careless when it comes to how and where we park – or the industry is finding more ways to make money from us. Parking fines can be a profitable business, both for private companies and councils. In 2016/17 around £819 million was generated from the on and off street activities of the UK’s local authorities. Most of the councils making large surpluses from their parking activities were located in London. However, local authorities in Brighton & Hove and Milton Keynes also had surpluses that topped more than a million.

Parking tickets

There are three main types of parking tickets: Penalty Charge Notices and Fixed Penalty Notices issued by a local authority and Parking Charge Notices issued by private parking firm. All tend to be yellow and look very similar but private parking tickets are far less enforceable – and all can be challenged.

A Penalty Charge Notice

• Issued by the local authority for parking where you shouldn’t, as well as other issues such as traffic infringements.
• Payment is required within 28 days. After that a ‘charge certificate’ is issued with payment terms of 14 days for the original fine plus 50%. If the amount is still not paid within 14 days then a court order will be generated demanding payment.

A Fixed Penalty Notice

• Issued by the local authority, police or Driver and Vehicle Standards Agency (DVSA)
• Payment is also required within 28 days or the amount owed is increased by 50%
• Where a Fixed Penalty Notice is not paid prosecution is usually the next step – this may mean a bigger fine in the long run, as well as having to cover court costs.

Parking Charge Notices

• Issued by private parking companies who manage car parks for supermarkets, railway stations etc e.g. Britannia Parking Group, Euro Car Parks, NCP and ParkingEye.
• As the issuing firm is private, they set their own requirements and conditions with respect to payment dates and fine amounts.
• Typical actions that will attract this type of parking charge notice include not paying for a parking ticket or parking in the wrong place.

Challenging a parking ticket

You can challenge a parking ticket, no matter what type it is. This year saw an 8% drop in challenges taken all the way to an independent adjudicator. However, for those who do make this effort, 56% win.

Penalty Charge Notice

  1. If you receive a Penalty Charge Notice you’ll have 28 days in which to challenge it – do this within 14 days and, even if the challenge is rejected, you may only be required to pay 50% of the fine.
  2. If your challenge is accepted then you no longer have to pay the fine.
  3. Where an initial challenge is rejected, a further 28 days is allowed for a formal challenge. If you make a formal challenge you will need to be able to explain fully why you believe that the Penalty Charge Notice shouldn’t apply. It’s often useful to provide evidence to support your arguments, such as photographs of signs or markings that were missing or witness statements from people who can back you up.
  4. If your arguments are still not accepted, you’ll have a further 28 days to pay or take your case to an independent tribunal.

Fixed Penalty Notice

Challenging a Fixed Penalty Notice is usually done via a magistrate’s court.

Parking Charge Notices

  1. Private parking firms actually have no power to enforce parking tickets or issue fines. When you receive one of these tickets what’s actually happening is that the firm is issuing an invoice for breach of contract. For that contract to be valid, the terms (i.e. the terms on which you’re parking) must be 100% clear. If not then tickets should be simple to challenge. These businesses have no power to tow your vehicle (they could be fined £5,000 if they try to) or to use bailiffs. And, no matter what threats are made, private parking tickets can only be enforced against drivers via the courts.
  2. Check whether the parking firm belongs to the British Parking Association (BPA) or the Independent Parking Committee (IPC). These are the two trade bodies for the industry. If the ticket has not come from a firm that belongs to either of these then you do not have to pay the fine.
  3. Appeal to the parking firm and set out why you don’t believe the notice is valid – for example, you may not have been able to buy a ticket for a station car park because the ticket issuing machine was broken. Supply as much evidence as you can e.g. photos of the broken machine.
  4. If your appeal is rejected then you can contact the Parking on Private Land Appeals (POLPA) body, which is run by the Ombudsman Service.

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Most People don’t have an Emergency Fund! Mon, 07 Jan 2019 13:02:13 +0000 Amanda Gillam It’s so important to put away funds for a rainy day. When household essentials that we take for granted break, need replacing or reach the end of their lives it can be a big financial strain to replace them.

If you were required to replace your existing boiler, you’d be looking at a cost of over £1,000 including fitting. To completely replace your roof, you’d pay in the region of £5,000. For a home rewiring it would set you back £2,750.create an emergency fund

For many of us, we simply wouldn’t have the funds set aside to cover these expenses. Too often that means borrowing to make up the shortfall. Whether that takes the shape of credit cards, personal loans, or cash loans, the outcome is the same – money owed and debt accrued.

Put away a just a little every month

We looked at the average cost of replacing essential items and their lifespan to calculate the monthly savings you’d need to accrue to replace them at the end of their lives. It turns out, you would need to save £138.67 per month to cover one replacement for all of your essential household items.

That’s certainly a manageable figure for many households and a better option than plunging yourself into debt. Of course there is no guarantee that each item won’t need replacing in a shorter time frame or that things won’t break consecutively, but £138 is the figure you should try and work towards.


Total cost


Monthly cost



15 years


Fridge freezer


11 years




12 years




13 years




11 years


Vacuum cleaner


8 years


House rewire


25 years


New roof


30 years


Plumbing problem


3 years


New water pipes


50 years




Per year


Vet bill


13 years







Results of our UK Survey

We also surveyed a portion of the UK population to understand how we’re doing as a nation when it comes to putting away funds for a household emergency.

We saw that 60% of Britons have £1000 or less stored away for this purpose. That isn’t enough for a boiler replacement, meaning many families would be left struggling in winter if anything were to happen to their current heating solution.

More worrying is the fact that 10% of the country have no savings at all in place to help them out with a household emergency.

Just under a quarter of us do, however, have over £5000 in savings. Enough to completely replace your roof if it came to it, or re-wire your home.

Our Question: You’re suddenly faced with the cost of repairing a car or an important household item (e.g. freezer/washing machine). How much money do you already have saved for such an emergency?

Current amount saved for emergencies




Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000


Regional UK Differences in amount saved

People in Liverpool seem to be the most prepared for funding an emergency with those in Norwich a close second.




Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000





Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000





Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000





Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000





Between £1 and £100


Between £101 and £250


Between £251 and £500


Between £501 and £750


Between £751 and £1,000


Between £1,001 and £2,000


Between £2,001 and £3,000


Between £3,001 and £4,000


Between £4,001 and £5,000


More than £5,000


Why is an Emergency Fund Important?

Our personal finance expert Amanda Gillam said:

“It’s so important to not be short-term when it comes to your finances. Too often we see people overstretching themselves to use credit for major purchases, meaning that their monthly income goes on paying off debt rather than for savings.

“Whilst saving isn’t always the most exciting thing a person can do with their money, its vital that if people can save that they put something aside for when times are hard. It’s important to consider the consequences of being caught out if something goes wrong at home and a household item needs to be replaced or repaired.

“Whilst borrowing money can help meet these short-term needs, in some cases unplanned borrowing can lead to people getting into financial difficulties over time. By simply putting away a small of money each month people can avoid these potential problems.”



Top tips to help you save

By putting something away every month, you’ll be in the best position to cover yourself in the case of an emergency. The following are essential tips to help you do just that:

  • Learn how to budget – calculate your income vs. outgoings and make sure you don’t overspend each month.
  • Cut your outgoings where you can – moving to a better deal for your energy bills, taking a packed lunch to work and car sharing for your commute are all great ways to trim your expenses.
  • Learn to live within your means – living lean means you know how to get the most out of your food shop without wasting anything, where to get the best deals or the benefits of shopping second hand.
  • If you have credit cards, pay them off at the end of every month or keep the balances as low as possible to avoid unnecessary spending on interest.

A rainy day emergency fund should be a reality, not an impossibility.

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Buy Now, Pay Later from Klarna Thu, 03 Jan 2019 11:57:14 +0000 Alex Hartley Klarna is a name that you may have seen appearing with increasing frequency if you shop online these days. It’s a new type of financial service that offers the option to try before you buy – and pay later. A number of big retailers, including JD Sports, have begun to offer this type of finance to customers. However, they have been warned that the result of doing so could be to push customers into debt. So, is the new service a convenience for customers or simply a debt trap?

Klarna logo

What is Klarna?

It’s a Swedish bank that started trading in the UK in 2015. It has done incredibly well – H&M bought a 1% stake in the bank for $20m, making Klarna one of those elusive types of tech startup: a unicorn (i.e. worth more than $1 billion). So far, Klarna has established partnerships with some of the biggest names in online shopping, including Topshop and ASOS. Its financing is designed to overcome one of the biggest bugbears digital shoppers have: the time it takes to process refunds. Many online retailers now offer free returns in an attempt to tap into the practice among younger shoppers of ordering large volumes of items and then returning a lot of it. With Klarna, there’s nothing to pay up front. Instead, the customer can order as much as they want to and, as long as it’s returned within 14 or 30 days (depending on the retailer’s terms), no payment will be taken at all. Only the items that are kept have to be paid for.

Does Klarna credit check?

Yes they do. But they only carry out a “soft” credit check so between 70% and 80% of applicants are accepted in the UK. The firm will check personal details and then look at whether an individual has had any repayment issues in the past. If not, credit is approved. This may sound ideal for enthusiastic shoppers but as one Twitter user pointed out “it’s fine until you realise you owe them £200.” Klarna does say that they don’t charge interest or fees on amounts that are not paid within the 30-day repayment period. They have said that they will “work with” a customer who is having repayment issues to try and help them get back on track. And any customers who have problems with Klarna won’t be allowed to continue to increase what they owe.

However, the reality is that if Klarna customers can’t afford to make repayments on what they have racked up with a retailer they have just 120 days to pay the bill after the initial “try or buy” period expires. After that their account is passed to a debt collection agency and a whole range of charges and fees could start to apply. There may also be an impact on the individual’s credit score and this could be the start of problem debt for many. That’s especially so for younger customers in their late teens or mid 20s – consumers who may not have that much experience with financial matters.

Easy access credit issues

Minimal credit checks mean that it’s all too easy for anyone to obtain credit with Klarna. This is especially objectionable as it comes at a time when we are already in the middle of a mounting debt crisis affecting many consumers in the UK. However, the big issue with Klarna is the fact that it is targeting so many younger consumers as a result of the stores that it’s choosing to partner with. As many debt charities have pointed out this approach does not encourage budgeting. Instead, shoppers are encouraged to buy what they want now and pay it off at a later date. This is an attitude that has led many consumers to buy more than they can afford and to end up in a position where they are stuck in a cycle of repayment for something that they didn’t really need.

Although Klarna has emphasised that it has affordability checks in place these are quite basic. And, as Iona Bain, founder of the Young Money Blog, says

“my experience tells me that young consumers aren’t great at focusing on the details when it comes to debt… Unless you’re keeping a very close eye on liabilities like these, the risk that they get out of hand is very high indeed.”

Your Money Blog

More than a million people have already used Klarna’s service this year and interest in it as an option is increasing. Given the heavy weight of debt already shouldered by many UK consumers it’s worrying that this type of easy access credit could expose much younger generations to a potential debt trap.

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The Impact of Brexit on UK Expats Mon, 31 Dec 2018 11:00:53 +0000 Amanda Gillam Currently, around a million Britons live and work in the EU. This includes a mix of people, from families to students. There are also significant numbers of pensioners living in Europe – 1 in 5 expats is retired. For anyone who has made their life in the EU, the state of Brexit is worrying. With a deal in place many benefits and rights will continue. However, if the UK ends up in a “no deal” situation then there may be no consistent treatment of expats. Instead, each individual experience would depend on how the country in which that person is living treats UK nationals. Life is likely to change for expats in the EU either way – there are some key rights and benefits that could be affected.

effect of brexit on uk expats

The right to work

As EU citizens, British nationals currently have the right to work anywhere in the EU. However, even with an agreed deal on the table, when Brexit happens this could be replaced by a system of work permits. There are also issues that may affect individuals in non-traditional circumstances. For example, Brits living in EU states and providing cross border services – such as a British translator, based in Berlin providing services to Spanish and Italian businesses – may struggle to continue. The original Brexit withdrawal agreement does not allow Brits who are resident in EU member states to provide cross border services to companies in other EU states. This is just one way in which Brexit – with a deal or not – could be devastating in business terms for some expats.


The social services sections of the existing deal would ensure that benefits continue to be paid largely as they currently are. It’s highly unlikely that the UK government would allow a situation to arise where benefits being paid to expats in the EU are simply stopped if there is no deal. However, the confusion that could ensue post-no deal Brexit may mean payments are delayed and access to entitlements temporarily lost.


Access to healthcare for EU based expats would continue if there is a deal. However, a no deal situation may mean that restrictions are introduced and private health insurance may become essential. This would be particularly problematic (and expensive) for retired expats who may not be able to get insurance based on their age, or who may have to pay a high price for it. Without a deal, the Healthcare International Arrangement Bill would provide the legal basis to fund and implement vital reciprocal healthcare schemes after the UK leaves the EU. However, this won’t be in place by the time the current arrangements come to an end.

The right to remain

The government has indicated that, even in a no deal situation, EU nationals in the UK would have a right to remain. Although the EU hasn’t confirmed the same for UK expats in Europe, it’s unlikely that EU countries would risk a mass exodus that could damage the local economies that benefit from UK expats. Complicated situations could arise in relationships that involve two partners, one from the UK and one from an EU member state. Restrictions on the right to work could affect families like this, depending on where they are based after Brexit.


There are a number of different issues that may affect pensions.

  • The triple lock. Thanks to reciprocal agreements between the UK and EU, pensions for expats living in Europe currently increase in line with inflation as if the pensioner lived at home (called “the triple lock”). If there is no deal then pension payments would still be made but may not be inflation-proofed.
  • Financial services. There is a potential issue with a no deal Brexit that could mean that payments from British companies, including pension and insurance companies, being made to expats in the EU may be disrupted or not be made for some time after Brexit happens.
  • Aggregated pensions. For anyone who has worked in multiple EU countries, a system currently exists that aggregates pension pots as if the individual had lived in one country. This can be crucial, as the length of time spent in one country may not have been long enough for pension rights to vest. The aggregated arrangement means that pensions rights accrued in different countries are combined. Loss of access to this aggregated system as a result of a no deal could mean loss of contributions.
  • Pensions for Britons who worked abroad. Brexit with an agreement most likely means that the social security parts of the deal will ensure Britons who worked abroad and then moved back to the UK will still receive pension payments from EU employers. If there is no deal then this will require bilateral agreements with 27 different countries, each of which could end up being slightly different.


Studying abroad will become more costly and complicated for expats and their children. For example, if there is no deal then British citizens who aren’t EU members will have to pay “foreign student” fees to study. It could also mean the loss of access to the ERASMUS programme which provides funding for an EU study year abroad.

Property ownership

British expats looking to return to the UK could have issues disposing of properties acquired in EU member states where they have lived. In addition to attracting capital gains liabilities, these properties may not provide enough equity to buy in the UK given the disparity between UK and EU house prices.

The value of sterling

A no deal situation will likely see the pound take another plunge. If that happens then UK expats could actually be at an advantage, especially those planning to return – as long as they are being paid in Euros. The value of any savings would increase if transferred into pounds and UK property would be more affordable with more Euros to the pound.

Perhaps the biggest issue that expats face is the chaos that could ensue in a no deal situation. It would require negotiation with 27 different countries to sort out all of the above and, unlike in the UK, Brexit is just not such a pressing priority for other nations.

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Discrimation against people on benefits Thu, 27 Dec 2018 12:34:06 +0000 Alex Hartley “No DSS” used to be an addition to adverts for rental properties that many people thought went out with the twinset. However, the reality is that many tenants are rejected today for no other reason than they are on benefits. This isn’t always a decision that the landlord themselves gets to make. Often the terms of their own contracts or legal documents may also prevent them from renting to benefit tenants. Now, the Commons Work and Pensions Committee has told the government that it must address the “blacklist” that is being created by mortgage lenders, insurers and landlords who refuse to rent to tenants on benefits.

Tenants on Benefits

Discrimination by Mortgage lenders

The issue of mortgage lenders preventing landlords from renting to tenants on benefits has become increasingly pressing. In October this year it emerged that NatWest refuses to allow many of its buy-to-let landlord borrowers to rent to tenants on housing benefit. In one particular case, NatWest wanted a landlord to evict the tenant on benefits before they would agree to any additional borrowing. This is a policy that NatWest applies to any landlord with fewer than 10 properties. It said to one landlord “the options available to you are to seek an alternative tenant or move your mortgage to another lender.”

There are currently around 4.2 million housing benefit claimants in this country and “no DSS” requirements enforced by banks risk widespread discrimination against those individuals. Essentially, they will be on a black list while on benefits and will only have access to certain types of properties. NatWest is now reviewing its buy-to-let policies on the issue after significant public and political pressure and it’s hoped other banks will follow suit.

Discrimination by Insurers

Issues also arise for landlords when it comes to insurance. In particular, very few insurers are willing to provide rental guarantee insurance for landlords who are renting to tenants on benefits. Where an insurance company is willing to provide cover for DSS tenants, they will often charge landlords a premium in order to do so. As many landlords are looking to pay as little as possible for costs like insurance, this creates an impossible situation in which it’s detrimental to landlords to take tenants on benefits on.

Discrimination by Letting agents

Tenants on benefits face discrimination at almost every turn today. A study by Shelter and the National Housing Federation found that one in 10 agents in England won’t let a property to a tenant on benefits. The research uncovered evidence that at least five of the leading letting agents in the country were actively discriminating against tenants on benefits. The decision not to rent to this type of tenant was being made even where required financial criteria had been met. Agent Haart was found to be the worst offender – a spokesperson for the agency said

“it is not our policy to refuse housing benefit tenants – anyone who passes referencing checks is able to rent properties listed with our branches…This research has brought to light that some of our branches are misinformed and we are working to ensure that this policy is being followed across our network.”

Haart estate agency

Discrimination by Landlords

Of course there are landlords who are not prohibited by mortgage or insurance from taking tenants on benefits who still refuse to do so. In 2017, Shelter surveyed more than 1,100 landlords and found that 43% had an outright ban on letting to tenants on benefits. An additional 18% said that they would prefer not to rent to tenants receiving benefits.

“No go zones”

This approach has created whole areas of towns and cities across the UK where tenants on benefits are simply not able to live – often the more affluent districts. And there is evidence that it has gotten worse over the past couple of years, as welfare cuts and issues with Universal Credit have made it more challenging for anyone on benefits to ensure rent payments are made on time. This has only made landlords more wary of renting to tenants on benefits. While many different demographics are affected, this kind of discrimination disproportionately affects women. 95% of single parent housing benefit claimants are women and 60% of adult housing benefit claimants are female.

The overall impact of the “no DSS” approach taken by mortgage lenders, agents, insurers and landlords is to discriminate against people on benefits. As many of these tenants are already struggling in difficult circumstances it can make day-to-day living considerably worse. However, the key lies not just in changing attitudes in the rental and financial sector but also ensuring that the benefits system doesn’t give landlords any reason to refuse to rent to those receiving benefits.

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The world of work is changing, but is the Financial Services industry? Mon, 24 Dec 2018 10:41:45 +0000 Amanda Gillam We don’t work like we used to. Jobs for life and nine to five hours are a thing of the pasttoday we are much more likely to switch companies, be freelance or work in temporary positions. However, the range of financial services available doesn’t support these evolving lifestyles. Criticism has been levelled at financial services providers whose products are largely designed for people in steady, full time work.

changing world of work

What does the world of work look like today?

  • Self employment is up by 40% since 2000. Some people become self employed looking for more flexible lifestyles, others are forced into the position by circumstances.
  • The gig economy is an entirely new phenomenon and something that has only started to gain ground in the past couple of years as more people sign up to work for companies like Uber.
  • 900,000 people are now on zero hours contracts and many more are working for agencies.
  • Changes to the labour market can be seen across multiple demographics. For example, today the over 55s are much more likely to work for themselves.

The challenges of a different working environment

Although freelancers, zero hours workers and agency workers have different rights when it comes to their employment they all have one thing in common: a fluctuating income. This is one of the biggest challenges for these workers, particularly because many financial products and services are not designed with this in mind. Today, modern workers are much more likely to require financial products that take into account:

  • The need to ensure continuous cashflow even with fluctuating income
  • Coping with late payment of invoices
  • Managing income that changes month to month
  • Buffer zones for low income months
  • The need to be tax efficient

Mortgages are a particularly big problem

It’s particularly difficult for anyone with a slightly different lifestyle to get a mortgage, especially since the financial crisis when lenders became very averse to risk. Mortgages in the UK are geared towards employed individuals in regular jobs. According to Together, 54% of mortgage applicants have been refused a mortgage for reasons that most people would not consider to be abnormal or extreme. Many freelancers today choose to work tax efficiently by being paid through their own limited company. This, too, can cause problems. Often, income is withdrawn as dividends, which some lenders simply don’t take into account as income in lending criteria. Retained profits can also be problematic as these are earnings, which stay within the business.

Pensions are difficult too

People working non-traditionally do tend to have more choice when it comes to pensions, both in terms of the type of pension and the contributions that are made. However, pensions are largely still more beneficial for those who are traditionally employed. There isn’t the infrastructure in place at present to ensure that no one working in this way is missing out on retirement savings – the workplace pension, for example, isn’t a requirement for gig economy workers or anyone earning less than £10,000 a year. Currently, 45% of self-employed workers between 35 and 55 have no private pension. Many don’t realise that there are tax breaks that apply to pension savings for the self-employed. And then there is the issue of income – large numbers of people working under more flexible options are on low wages that just don’t leave room for pension savings.

Why isn’t the financial services industry catching up?

Some disrupters are already seeing the potential of this market – providing more flexible services that don’t tie people into onerous commitments. For example, apps exist to help track income, spending and profit and use this data to create not just a tax statement but also a fully digitised tax return. Some of the more agile providers are combining this with flexible finance – small loans (e.g. £100) that are offered when it looks like the account holder is going to need a little short term cashflow support. Loans are interest free and paid back within 30 days. But the market for more flexible financial services is still embryonic. The traditional financial services industry is notoriously slow when it comes to evolution. However, there is change afoot, driven by the increasing numbers of potential customers who just aren’t working in traditional ways. As the labour market continues to move towards a more agile model, financial services providers are going to have to do more to keep up.

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Update: The Proposed Debt Breathing Space Thu, 20 Dec 2018 12:08:40 +0000 Alex Hartley Debt is an issue for a lot of us in the UK. There are currently four million people who are unable to meet regular bills and repayments. Many are struggling to manage mounting debts that are constantly increasing as a result of interest and penalties and fees for missed payments. Once debt problems start it can be a vicious cycle. In the UK there is no protection from creditors for people in serious financial difficulties – which is why the Breathing Space scheme was suggested.

No protection from creditors

Currently, in the UK the only circumstances under which debtors are protected from their creditors is where a formal debtor insolvency procedure, such as an Individual Voluntary Arrangement, is in place. Even where a formal Debt Management Plan has been agreed, there is nothing to compel the creditor to accept it. So, creditors can continue to chase for payments and add fees and interest to outstanding amounts already owed. This effectively condemns a debtor to a formal debt or insolvency process unless a money miracle occurs. The stress of such a situation can be completely paralysing. 43% of people told National Debtline that they had not asked for help with their debt problems sooner because of the stress of the situation.

debt breathing space

A bit of Breathing Space

A scheme to give people in financial trouble support with debt was suggested back in 2017. In October 2018, a consultation was published on the idea of a Breathing Space scheme designed to provide support for people in financial difficulties. This would establish a 60-day period of relief during which legal protection against creditor action would provide the opportunity to get professional help and take steps to deal with financial problems. The scheme is not yet in place and the consultation remains open until the end of January 2019. However, what is currently being proposed is:

  • Breathing Space will cover most personal debts, as well as business debts incurred by sole traders earning less than £85,000.
  • No fees or charges can be added to the debts that are protected by Breathing Space during the 60-day period.
  • Creditors cannot take enforcement action against a debt – any actions will effectively be paused.

It’s important to note that charges can be added to any ongoing liabilities and enforcement action with respect to those debts can still take place.

Breathing Space eligibility

There are a number of conditions that must be met for someone to benefit from the Breathing Space protection, including:

  • Before applying for Breathing Space, debt advice must be sought from an organisation that is either FCA regulated to offer debt advice, or exempt. There is an exception for anyone who is in mental health crisis – under these circumstances the initial meeting is not required.
  • The debt advisor will then look at the individual’s situation and decide whether there is a realistic chance that Breathing Space could give a debtor a way to reach a debt solution.
  • Breathing Space won’t be eligible to anyone more than once in a 12 month period.
  • For the Breathing Space protection to continue to apply, any ongoing liabilities that a debtor has must continue to be met. Full cooperation with the debt advisor and their suggestions and advice is also required.

Update on the proposed Breathing Space scheme

Most people in financial difficulties want to sort their own problems out and are not looking to walk away from their responsibilities. Breathing Space could offer the respite that is required to reduce the stress involved and find a way forward with a clear head. However, the current 60-day period that has been suggested is not viewed as sufficient by many. The debt charity StepChange, for example, said that it takes an average of 10 weeks for a person in financial difficulties with debt to get advice and then take steps to help themselves. It has been suggested that the scheme be extended to a year to make it more realistic.

Implementation in 2019?

The proposals for Breathing Space are still not set in stone – and won’t be until next year. There remain a number of issues to work out, such as whether Breathing Space will include public sector debts, including council tax. According to Citizens Advice, a third of all debt issues are with public sector creditors and around half of these relate to council tax. It’s crucial that the Breathing Space scheme does not exclude the areas where people struggling with financial difficulties really need the most help.

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How to legally minimise your inheritance tax Mon, 17 Dec 2018 10:27:01 +0000 Amanda Gillam In 2017, £5 billion was paid in inheritance tax. That represents the highest amount ever raised from UK taxpayers. However, although the number of people paying inheritance tax is rising, most people still won’t have to cover this cost. Currently around 30,000 estates are subject to inheritance tax each year and the rest don’t meet the threshold. That’s not to say that this won’t change – particularly given the increases in the values of property over the past decade, many more people could soon leave behind an estate of enough value to meet the minimum threshold for inheritance tax. So, what can you do to legally avoid or reduce that potential bill?

reduce inheritance tax

What does inheritance tax involve?

£325,000 – this is the base figure that can be passed on without attracting any inheritance tax for an individual. This jumps to £650,000 for couples who are married or in a civil partnership. If you’re a couple passing on your home then the addition of the Main Residence Allowance means you have an extra £125,000 to create a total individual allowance of £450,000, or joint allowance of £900,000. Once your estate passes the threshold, inheritance tax is due at 40%.

Although there are many different complexities involved in inheritance tax, perhaps the most important step to take if you want to ensure your estate avoids it is to make a Will. If you die without a Will then you die intestate and you will have no control at all over what happens to your assets when you die. That means that it’s impossible to do any estate planning or make smart decisions that could help you to reduce or avoid an inheritance tax burden.

Taking steps to reduce or avoid inheritance tax

  • Use a trust. You can transfer assets out of your individual ownership and into a trust before your death. The effect of this will be to remove those assets so that they are not considered as part of your estate when you die. Cash, property or investments can be placed in a trust for the benefit of someone like your spouse or children and won’t attract inheritance tax. If you’re going to use this option you’ll need to get legal advice on the type of trust to use and any taxes that it could attract.
  • Transfer assets as a gift to your partner. As long as you are married or in a civil partnership, and your spouse was born in the UK, then there are no limits on what you can gift to them.
  • Gift something to someone else. If you give a gift of cash, assets or property to anyone who is not your spouse or civil partner then this could be given free of inheritance tax. The “could” arises because this gift has to be given at least seven years before you die. For those seven years it will remain part of your estate and could be taxed. After the seven year period has passed it will no longer form part of the estate for inheritance tax purposes.
  • Consider a charitable donation. There are two financial benefits to making charitable donations in your Will. The first is that anything you donate will be inheritance tax free so this is a simple way to reduce your liability. Secondly, if you donate 10% or more of your estate to charity the rate of tax due on the rest drops from 40% to 36%.
  • Don’t scrimp and save. It doesn’t make sense to spend a lifetime accumulating assets and property only to then lose 40% to the government because you’ve gone over the threshold. Especially if you’re only just above the taxable amount it may be simpler to enjoy spending some of what you have now.
  • Pay more into your pension. You can leave your pension to anyone when you die, it doesn’t have to be to a spouse or partner. Although it will depend on your pension and when you die, your beneficiaries could pay no tax if you die before the age of 75 – or just their normal income tax rate if after (with the pension income added to their own taxable amount). There are different rules for different pensions so it’s worth taking independent financial advice.
  • A deed of variation. This is a document that can be used to alter your Will after death, for example to change what is inherited, and how. It’s not the best option, as it will require the agreement of all the beneficiaries but it could be a useful tool if all other attempts to reduce a large tax bill have failed.
  • Life insurance. Although not a way to avoid inheritance tax, a life insurance policy can be an essential option for reducing what your beneficiaries have to pay. The pay out under the life insurance policy can be used to cover the cost of the inheritance tax.

Inheritance tax isn’t inevitable for everyone. However, if your estate is affected it’s worth taking the time to try and reduce your liability.

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UK Government to explore option of providing zero percent loans Thu, 13 Dec 2018 11:51:02 +0000 Alex Hartley There were many measures announced in the 2018 Budget that were slightly controversial, which meant that others didn’t get quite as much attention. One of the “quieter” proposals put forward in the Budget this year was a move to help tackle the issue of “problem debt” in the UK. To help those on low incomes currently struggling with debt problems, the government is going to look into the option of a no-interest loan scheme. The scheme would be designed to help people pay back debts with high interest rates that have become a problem – without generating more interest while doing percentage loans

Why are zero-interest loans being proposed?

There are roughly three million people in the UK currently using high cost credit. These are often short term loans that carry painfully high interest rates – as high as 292% per annum. Even though the Financial Conduct Authority has capped short-term credit interest at 0.8% per day (292% per year) this can still generate significant sums, especially if borrowing is extended. As a result, there are still a lot of people struggling with high cost credit and the government – under pressure from MPs and charities, in particular – has committed to looking into the options for doing something about it. Given that the high cost credit industry has expanded significantly under this government’s leadership, many hope it won’t be too little too late.

The UK’s high cost credit industry – cause for concern

The high cost credit industry in the UK is already somewhat in disarray with the recent collapse of payday loans giant Wonga. This year the Bank of England indicated serious concern with respect to the rate of increase in borrowing on credit cards and via personal loans and car loans. On average, UK households spent £900 more than they were earning last year. This is notable because it’s the first time that spending figures have surpassed income figures since the 1980s when credit cards first took off.

Who will be affected if zero-interest loans are created?

Those on low incomes struggling with high levels of debt will feel the positive benefits. Although the exact criteria have not yet been established it’s assumed there will be an income threshold and that proof of financial difficulties will be required to be able to borrow. Payday loans lenders or credit card providers charging unreasonable rates could lose business if the loans are introduced and loan sharks, in particular, are being targeted.

Is it likely to be successful?

A similar scheme was pioneered in Australia by Good Shepard Microfinance. Interest free loans of up to $1,500 were offered to people struggling with debt issues and financial problems. 27,000 people took up the zero-interest loans in Australia in 2017. Borrowers were given 12 – 18 months to repay the loans and no interest was charged. The results of the scheme in Australia indicated that it was successful, particularly as four out of five people were able to stop applying for payday loans as a result.

What else is the government doing?

Labour’s 2017 election manifesto included proposals for ‘breathing space’ for people with debt issues – and this also made an appearance in the Chancellor’s 2018 Budget. Breathing space is designed to give anyone with debt problems some respite from legal action by creditors. The government has not yet gone so far as to introduce an interest rate cap on all forms of borrowing, not just payday loans. This is something that has been suggested by MP Stella Creasy who said, “Waiting for people to get into problems when we know what prevents them is not only cruel, it’s much more costly for all concerned.” A cap is supported by debt charities and other organisations that help people who are in financial difficulties.

What’s the timing?

The study into whether a zero-interest loans scheme is feasible for the UK is going to be launched in 2019. This will establish whether or not there should be a pilot scheme. Many personal finance experts have pointed out that action needs to be taken sooner than this and that a pilot should really be up and running by next year. Millions of people in the UK are already struggling with debt and this is likely to be exacerbated by spending over the Christmas period.

In terms of the economy, the implications of the expansion in high cost borrowing could be severe if large numbers of borrowers become unable to make repayments. For anyone currently in financial difficulties, if these proposals are put into place, then the zero-interest loan could be a lifeline.

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All about Bank Overdrafts – the good, the bad and the ugly Mon, 10 Dec 2018 11:59:52 +0000 Alex Hartley More than 2 million people in the UK are in permanent overdraft. So, this type of borrowing has very much become a part of daily life. Overdrafts can have many uses, from providing a safety net when your payments come out at the end of the month, to resources to make a one off payment. They are a short-term borrowing option (a form of high cost short term credit like payday loans) and if you’re applying for an overdraft you should aim to use it temporarily. Like any type of credit, the more you know about overdrafts, the easier it will be to make sure that you get the best deal.costly bank overdrafts

What is an overdraft?

It’s a type of credit facility that allows you to borrow via your current account. You can borrow and repay the money as you choose, as long as you don’t go over the overdraft limit. An overdraft needs to be agreed with the bank in advance and there will usually be charges to pay.

  • Authorised overdraft. This is where there is an agreement in place that you can go “into overdraft” on your account i.e. beyond the point where there is £0 available. The bank will authorise an overdraft up to a certain figure (e.g. £500) and you’ll be told in advance what you’ll pay for the overdraft in terms of fees and interest.

  • Unauthorised overdraft. This is essentially where you keep spending even when you have £0 in your account but the bank has not agreed to it. An unauthorised overdraft may also arise if you go over the overdraft limit the bank has set. If you find yourself in unauthorised overdraft then try to get out of it as soon as possible. This type of overdraft attracts the most significant fees and costs and they can accumulate, fast. Many lenders charge a fee per day so the longer you are in the unauthorised overdraft, the higher the cost climbs. If you go into unauthorised overdraft you may have to pay:
    • A monthly fee (£5 -£35+)
    • A daily fee (£1 – £6 per day up to a max monthly limit)
    • Transaction fees (up to £25 per transaction if the bank allows a payment to go through)

How to keep your bank overdraft costs down

  • Don’t go over the limit – as soon as you do, the costs begin to mount
  • Make sure your limit is high enough – if it’s too low you may end up going over it
  • Opt for an interest free overdraft – these are always provided to students and it’s also possible to find one if you’re not at university. 0% overdrafts are usually offered for a limited period and may require a certain level of monthly payments into the connected account.
  • Make sure you know what the fees and charges are for both authorised and unauthorised overdrafts in advance. The only way to ensure you’re getting the best deal on your overdraft is to have a clear idea of what those costs are and how they compare to other options.
  • Shop around to find the best deal. Like any other type of credit today lenders are competing for customers and you could get a better deal by banking elsewhere.
  • Try to stay in credit. If you don’t use your overdraft then there’s nothing to pay for. This may mean reviewing how you manage your money, for example looking at ways to cut back, budgeting and avoiding cheque payments, which can come out at unexpected times.

Paying back an overdraft

If your overdraft costs have escalated, or you just want to reduce your level of debt, then you may want to pay back your overdraft. You’ll need cash in the bank to repay whatever you borrowed. If you don’t have it then you could:

  • Use a personal loan. Borrow what you need to pay off the overdraft and then repay the loan on a monthly basis. This is a good option if the interest rate on the loan is lower than the overdraft costs and/or you know you’d never get around to paying the overdraft off any other way.
  • Transfer the balance to a credit card. There are some specialist money-transfer cards that allow you pay cash in to your bank to pay off your overdraft. Look for a 0% card with a low transfer balance fee. This is especially useful if you have a large overdraft to pay off.
  • Spend less. Sometimes there’s just no other option than to reduce your outgoings if you want to get debt free.

An overdraft can be a useful credit facility to have. It’s important to be aware of the potential fees and to be confident that you won’t fail to stay within the limit and end up in a costly unauthorised overdraft as a result.

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Why the UK should remain in the EU Thu, 06 Dec 2018 08:27:11 +0000 Amanda Gillam There has always been lots of emotion surrounding the UK’s membership of the European Union (EU) not least in the recent period following the June 2016 referendum. We’re in the final furlong of preparation for Brexit but as you’ll know there is a growing clamour for a second referendum given the parliamentary problems with the deal struck by Theresa May.

A second referendum may not be your first choice, but it may be the only way to help decide the final path for the UK given the lack of consensus within Government. Not only that but there is a growing number of leave voters who are beginning to regret their decision given that Brexit is not turning out the way that was expected (more of this later).

With these facts in mind I thought it would be helpful to keep away from emotion and try to focus on some of the most important facts – things we ought to be aware of in case we’re asked to make our choice again at the ballot box.

All of this is really important (obviously) as, for reasons that will become obvious, any decision we might make in the future will be irreversible (at least on the current terms we have).

What are the Benefits of being in the EU?


The benefits to the UK of being a member of the EU can be summarised as follows:

  • It gives freedom to UK citizens to live, work and retire anywhere in the EU’s other 27 countries
  • It sustains millions of UK jobs – because of the EU customs union and single market
  • UK businesses depend on European markets
  • Holidays within the EU are much easier – and safer
  • You are less likely to get ripped off – there are numerous forms of consumer protection
  • It provides greater protection from terrorists, paedophiles, people traffickers and cyber-crime
  • The UK has greater influence at a world level than it would have in isolation

The UK’s economy has grown disproportionately strongly

(source: FT

The UK has been part of the EU since it joined the EEC in 1973 (the UK applied in 1961). In the following 45 years the UK has gone from being the “sick man of Europe” to one of the wealthiest. Being part of the EU has allowed the UK economy to grow faster than the average rate achieved by Germany/France/Italy and become more prosperous than the average of these three largest EU economies. It is theorised that being a member of the EU has exposed UK industries to competition to a point where while some suffered many, many more became much more competitive and have capitalised on the European market opportunity.


UK growth rate vs G/F/I

And academics have shown that the financial benefit to the UK has massively outweighed the annual cost to us of membership, especially after the rebate and inflows from the EU structural fund (see later) have been taken into account.


The CBI summarises the benefits to the UK of EU membership as follows:

  • Access to a $16.6 trillion p.a. single market of 500m people – no tariffs, and common standards. Our trade growth with EU countries is probably 50% higher than if we had remained outside the EU
  • EU is a springboard for trade for UK and produces a higher quality of trade deal with other parts of the world than we could ever achieve on our own
  • Membership has increased flows of investment to the UK
  • Free movement of labour has brought economic benefits to the UK – plugging skills gaps and filling positions UK people simply don’t want. And UK citizens have also had the chance to work unimpeded in Europe. At least 750,000 UK born citizens live elsewhere in the EU.

What do we pay for EU “membership”?

Annual net contribution is currently 7.3bn or 0.4% of GDP. This is only £116 per person, and less than Sweden, Denmark, Finland, German and the Netherlands. The UK is the second largest net contributor to the EU budget after Germany. The UK’s net contribution compares to €16bn spent by the UK on foreign aid (inc. in India and China which should no longer really be thought of as less developed economies).

EU country net contributions

(img source:

The UK’s regions receive EU funding for economic development


There is undoubtedly a large flow of EU structural funds to the recently-joined states such as Poland, Baltic states, Czech and Slovak republics, etc. But within the UK there are regions that currently benefit substantially – in fact Cornwall and West Wales will receive similar amounts to Romania and Bulgaria.

UK regional funding from EU

Here are some examples of how EU funding has helped the UK’s regions & discover how EU funding has helped your local area by searching your post code here.

The UK’s Favourable Opt-Outs


Over the years as the has EU developed policy and legislation the UK has negotiated a series of highly valuable opt-outs. In the following areas the UK is not bound by these rules or has other special arrangements:

  • Economic & Monetary Union
    • No obligation to join the Euro
    • No participation in the Banking Union – the UK supervises its own banks
    • Cannot be penalised under EU rules
  • EU budget rebate – considerably reducing the UK’s net budget contribution
  • The UK is not a member of the Schengen agreement – it has control over its border (i.e. passport control)
  • The UK can choose whether it wants to participate or not in new EU justice and home affairs
  • UK labour law is not trumped by EU law

All of these opt-outs have been hard fought for – it is virtually impossible to see any other member state ever having such generous arrangements. Should the UK leave the EU and at some later date wish to rejoin it would not benefit from them again – it would not have the negotiating position to be able to. So, the UK’s current deal with the EU should be seen as the best it will ever have.

What are People’s Concerns about the EU?


Given all the positive facts about how the UK benefits from its membership of the EU it may seem extremely odd that 52% of voters wanted the UK to leave. So, what were factors driving people to vote that way?

  • Loss of UK sovereignty and the belief that the EU structure is inefficient and too dictatorial
  • Immigration – the UK doesn’t have control of its borders (though this is only relevant to EU nationals)
  • Jobs – EU nationals are “taking our jobs”
  • Resentment about how the EU spends its budget – and that by inference the UK’s net contribution doesn’t justify the benefits it confers (e.g. trade and inward investment)
  • Given that the majority of UK SMEs don’t trade with the EU it is unreasonable that they are “saddled” with all the regulation and bureaucracy
  • The UK needs to be a truly independent nation with broader connections around the world

Some of these issue and concerns have been addressed above. It seems that while it is possible to show that annual budget contribution does provide significant value for money it has simply been impossible (so far) to get this message across to the UK public. But what about the issue of immigration from the EU and the impact on UK jobs?

Which UK jobs are now typically done by EU migrants?


The “loss of jobs” to immigrants is one significant factor in people’s perception of the EU and its impact on everyday life. However, it’s important to differentiate between EU and non-EU immigrants:

  • The % of UK total employment represented by foreign-born people rose from 7.2% in 1993 to 18.0% in 2017 BUT 51% of the absolute increase was from an increase in non-EU nationals.
  • As at 2017 there are 5.5m foreign born workers but only 2.3m of these were from the EU
  • There are proportionately more EU born workers in lower skilled jobs (e.g. retail and hospitality) while proportionately more non-EU nationals in professional jobs (e.g. pubic administration and education).
  • In 2017 40% of food & drink processing workers were EU born while 25% of doctors were non-EU born

Anecdotally it is said by those who employ EU nationals in relatively lower skilled jobs that they do this because they cannot find UK nationals who are prepared to do the work. If this is true then who will do this work if EU nationals start to leave the UK?

What are the Economic Implications of Leaving the EU?


In general leaving the EU’s Single Market will create barriers to trade and reduce investment in the UK. This will reduce competitiveness and also mean the UK workforce will become less productive (GDP/head). Various Brexit scenarios (including “no deal”) have been modelled by a number of respected organisations and include:

  • NIESR/People’s Vote study – by 2030 our GDP will fall short of baseline by 3.9% or £100bn p.a. (equivalent to the output of Wales or The City of London). Under a “no deal” Brexit these numbers are 1.4x worse
    • Trade with the EU will halve.
  • Bank of England:
    • Disruptive exit – GDP falls 3% in 2019; House prices fall 14%, Unemployment reaches 5.75% (currently 4%)
    • Disorderly exit – GDP falls 8% in 2019; House prices fall 30%, Unemployment reaches 7.5%. A much worse outcome than the recession following the 2008 financial crisis.

Brexit financial scenarios

Why did People Vote to Leave the EU?


Prior to the vote the most important issues facing the UK were seen as migration (48%), UK sovereignty (re. the EU) (32%) and the economy (27%) – the Leave campaigners focused on migration & the EU and the Remain campaigners focused on the economic impacts of leaving. The Remain campaign was very poor – they failed to make the case to stay; they failed to sell the significant benefits of being part of the EU.

The situation was not helped by the fact that the UK population feel and act less European than the populations of any other EU member country! Irrespective of why this might be it does mean that there is less respect for EU institutions.

Also, was the vote simply a chance to vent more general frustrations? For instance a widening North/South divide with the North feeling left behind. And people who feel left behind are more prepared to gamble for a brighter future!

Also there is a view that there was a media bias (intentionally or otherwise) towards the Leave message.

What do recent polls tell us about people’s feelings?


Polling companies have been tracking opinion about the EU for many years, and of course since the 2016 referendum there has been a particular focus:

  • “If there were a referendum on the UK’s EU membership how would you vote” – a majority would vote “Remain”, and by a clear margin. AND it’s interesting that the % Remain has grown from c.38% in early 2012 to 52% now! (apart from the blip in June 2016!)
  • “If there were another referendum…” – all 6 polls since early November 2018 have Remain in the lead
  • “In hindsight do you think Britain was right/wrong to vote to leave the EU?” – since September 2017 the vast majority of polls show people think Britain was wrong to vote Leave, and the gap has been growing strongly since June 2018. As it stands the gap is now 12% (56% Wrong vs 44% Right) [YouGov 4/12/18]

Brexit “Facts vs Fear” Video

A 12 minute video narrated by Stephen Fry which attempts to separate fact from fiction.


It seems to us the chain of events goes something like this:

  • History (and perhaps geography) has dictated that UK citizens feel less European than other members of the EU
  • Facts tell us that becoming a member of the EU has allowed the UK’s economy to grow much more strongly than it would otherwise have done. We are all the richer for it and the financial benefits have greatly outweighed the costs.
  • UK governments over the decades have failed to “sell” the benefits of the EU to to UK citizens. In fact it may feel to your average UK citizen that the UK government is more at odds with the EU than in line with it, although in general this is probably not true
  • A failure by the UK government to equalise the benefits of economic growth around the nation has led to frustrations that have simmered for years.
  • The June 2016 referendum:
    • was ill-judged in the first place
    • was not fact based
      • the Leave campaign was well organised but based on fiction
      • the Remain campaign attempted to focus on facts but was badly organised and never gathered any momentum.
  • As at December 2018 the draft Brexit agreement seems to be Brexit in name only. It does not deliver on the Brexit “promised” by the Leave campaign. All evidence now suggests that to leave on these terms just so the government can claim they’ve achieved Brexit is complete folly. The UK will be forever damaged economically and it will accelerate its decline on the world stage. This is not what people voted for. It is time to reverse this decision before it is too late.
  • The UK should remain in the EU:
    • to continue to capitalise on the inherent benefits of the economic and cultural grouping
    • to help shape its future and reform it from within, rather than running from it because we fear it
    • and every older UK citizen should try to be more European in their outlook – our younger generations already are!

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Where to get free financial advice Mon, 03 Dec 2018 11:17:24 +0000 Alex Hartley Whether you are struggling with debts, or just looking for ways to better manage your money, financial advice is always useful. There are lots of options if you need free financial advice in the UK, as well as a range of help and support resources available to guide you to the right decision. ask for free advice when you need it

What financial issues can you get help with?

No matter what the problem, there is usually an organisation able to provide some free financial advice to help you solve it. That could be:

  • Tax issues, including filling out tax returns, dealing with tax codes and handling tax investigations or being unable to make payments.
  • Housing topics, such as how to get on the housing ladder, the typical costs involved in renting and how to deal with bad landlords or developers.
  • Problems with debt, which could include being unable to make payments on a mortgage or having credit card debt that is out of control. If you’re looking for guidance on the best type of debt for you, as well as how different credit options work then there is also plenty of advice available.
  • Dealing with benefits, including handling claims, identifying the benefits you might be entitled to and understanding government reform that changes your entitlement.
  • Appeals, for example if you’re appealing against charges that have been applied to your bank account that you feel are not fair.
  • Buying financial products – from mortgages through to ISAs and stocks and shares, free financial advice is essential if you want to ensure you make the right decisions.
  • Pensions and retirement saving, including working out how much you’ll need in your pension pot for a comfortable retirement and what your savings options are. 

Is “free” advice really free?

Some organisations do genuinely provide free advice where there is no charge for the services. There are also other ways that financial advice may be offered, including:

  • Subscription fees. Some organisations provide a range of free financial advice for a small regular subscription fee.
  • A commission basis. It used to be the case that an Independent Financial Advisor could charge a commission on financial products sold and use this as a way to cover the cost of advice provided. However, changes to regulation mean that this arrangement is no longer acceptable and shouldn’t be offered. Instead, if you’re going to use a financial advisor then the initial meeting is all you get for free and after that charges for services will need to be explicitly stated. 

Organisations that offer free financial advice

  • The Money Advice Service. Completely free advice, including online guides to help improve finances and useful tools and calculators. You can also get free support online or over the phone.
  • Which? This consumer rights organisation has a range of resources, including the website and a magazine. Some information is available for free but Which? is a largely subscription based service so there is a fee involved if you want to access features such as the legal service.
  • The Pensions Advisory Service. There is plenty of useful information available on the website, whether you have a workplace pension or a personal pension. Plus, the PAS has a telephone advice service, as well as web chat, and you can send an email enquiry too.
  • Citizens Advice. This network of independent charities is made up of 316 branches across the UK and also has a website. Citizens Advice is a popular option for support on financial issues – 4 in 10 people have used it at some point in their lives. You can get advice from your local Citizens Advice by searching for it via the website or using the phone or online interactive services. Topics covered include legal matters, benefits and renting and housing issues.
  • The Financial Conduct Authority (FCA). The FCA is the regulator for the finance industry in the UK. Although there is no interactive advice option, the website contains information about consumer rights relating to financial topics such as mortgages, insurance and banking. This is also the place to come if you want to make a complaint about an individual or organisation in the finance industry.
  • Age UK. If you’re over 50 you can get free advice on financial matters, from benefits through to pensions.
  • Tax Help for Older People. You need to be 60+ to be eligible for free advice from this service and with an annual income of less than £20,000. Advice covers every aspect of tax for older people, including pensions and dealing with HMRC.
  • Step Change. If your financial issues concern debt, Step Change offers free online advice on every aspect of owing money.
  • The National Debtline. For those who need advice on how to handle debts and debt problems, including bankruptcy and bailiffs, the National Debtline provides free, impartial advice.
  • Shelter. If your issues relate to housing, debt, health issues or benefits, Shelter can provide support.

Solution Loans

Our website also contains a massive amount of information and guidance that may help you. We can’t give you advice as we’re not regulated to do so but you can use the tools and guides on our website to let you decide what is right for you. So what can you find on our website?

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Getting compensation following recent Bank IT problems Thu, 29 Nov 2018 10:47:01 +0000 Amanda Gillam “IT issues” seem to have been a very common theme for the banking industry in 2018. The introduction of a new computer system at TSB in April meant that 1.9 million customers lost access to their online accounts. Then, in September, Royal Bank of Scotland, NatWest and Ulster Bank customers were locked out of their accounts for a morning without explanation. And these are just a few of the issues that the personal finance industry has encountered this year. But if you’re one of the many customers affected by the recent banking IT problems, what can you do?banking compensation

Where are the IT problems coming from?

Although most big banks are very cagey about their IT systems, these very public failures have exposed some serious tech issues in the sector. Almost every significant name in personal finance has had issues over the last 12 months – Barclays customers were locked out of their accounts in September and IT issues at Co-operative Bank and Cashplus have also caused serious problems. As the giants of the banking sector struggle to keep up with the more agile, smaller competitors that are entering the market, these IT issues seem to be the result.

Why are IT problems no longer acceptable?

As more banks start trying to drive customers towards doing everything online or via an app, it’s become clear that such extensive IT issues are simply not acceptable. Nicky Morgan MP, who is head of the Treasury Committee, has written to RBS and Barclays demanding an explanation for the problems that arose. She has also asked these huge financial institutions to pay compensation to the customers who lost out as a result of the IT failures. In her letter to RBS and Barclays, Nicky Morgan said,

“it simply isn’t good enough to expose customers to IT failures, including delays in paying bills and an inability to access their own money. High street banks justify the closure of their branch networks on the basis that they are providing a seamless online and mobile phone banking service. These justifications carry little weight if their banking apps and websites cannot be relied upon.”

What kind of losses can arise from IT problems?

  • Basic costs – for example, fees or interests charged because payments were missed or late as a result of IT problems. Failing to make mortgage or credit card payments or going over your overdraft limit are two obvious examples. Or may be you had to borrow cash from elsewhere to cover your costs.
  • Additional costs – for example, you may have had to spend money on phone calls to try to sort out issues or even legal fees if a large purchase – such as a home – was delayed.
  • Non-financial losses – you could be compensated for trouble and stress, for example if missing a significant payment triggered a debt collection process that otherwise would not have been started.
  • Losses arising from fraud – for example, if you have been contacted by a fraudulent third party claiming to be the bank during the IT issues and lost money as a result.

Compensation for IT problems

In her letter to the high street banking giants, Nicky Morgan also raised the issue of compensation for customers who had lost out. Guidance from the Financial Ombudsman sets out a number of steps that anyone can take if issues have arisen as a result of IT faults that are the responsibility of a bank.

The first step is to make contact with the bank. This could be via email, phone call or letter. It’s usually a good idea to make sure that you have a record of the contact made so that you can refer back to this later. When you contact the bank be clear about:

  • The date and time of the IT issues you’re referring to
  • How you were affected because of the IT issues that arose
  • What losses you suffered
  • How you want the bank to rectify the situation

You’ll need to give the bank at least 15 days to respond to your complaint and after that you can get in touch with the Financial Ombudsman.

What can the Financial Ombudsman do?

  • Collate the total number of complaints to get perspective on how many people were affected, and how
  • Look at the facts of the case, ask questions and demand answers from the bank
  • Assess whether the consumer has been treated fairly by the bank
  • Require the bank to put a situation right if the Financial Ombudsman determines that they have done something wrong and the consumer has been affected negatively as a result. In practice this could mean getting the bank to cover any losses that have been suffered and also ordering them to pay compensation where there has been inconvenience caused
  • Order corrections to be made to a credit file where negative additions have been made as a result of IT bank issues

Ever since an RBS software update locked millions of customers out of their accounts in 2012, some for up to a month, the focus has been on improving IT issues in the finance sector. We have now reached a point where banks must raise their standards or risk high volumes of compensation claims as a result.

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Payday loans, mis-sold credit and getting compensation Mon, 26 Nov 2018 11:53:36 +0000 Alex Hartley If you have ever taken out a quick payday loan – or other short-term credit option – then you could be due compensation. A recent surge in the number of complaints against payday lenders has caused the Financial Conduct Authority (FCA) to step in an provide guidance for payday lenders – in no uncertain terms – when it comes to responding to these complaints. That guidance requires payday lenders to speed up responses to complaints – and make compensation payments. So, if you’re one of those who feel you have been mis-sold one of these expensive loans, you should be able to get your compensation quickly.mis-sold a payday loan?

Payday loans – where are we now?

According to figures from the Financial Ombudsman, the number of complaints about payday loans has rocketed. In fact, in the year to March 2017 there was a 178% increase in complaints and a payday lender was the most complained about firm in the finance sector. Complaints against CashEuroNet, which owns Quick Quid and Pounds To Pocket, trebled in the first half of this year, making it the most prominent complained about company. Not only are complaints higher but the number of complaints being upheld has been increasing too. More than two thirds of complaints made to the Financial Ombudsman about payday lenders were upheld. 72% of complaints made against Wonga were upheld and 69% against Quick Quid. When compared to the number of complaints upheld against non-payday lender Barclays (28%) these figures are incredibly high.

The FCA’s response

The FCA has taken an uncompromising approach to the payday loans industry, insisting that compensation payments should be brought forward even if doing so threatens the lender with bankruptcy. In the light of Wonga’s collapse earlier this year, that’s a very real possibility for many payday lenders to consider. The main reason Wonga gave for its collapse was the significant increase in the number of mis-selling claims against it. While the lending giant blamed claims companies for its issues, the practices that caused the complaints were clearly problematic. In the light of this – and the ever-increasing number of complaints – the FCA has said that payday lenders must contact customers about potential compensation if the creditworthiness assessments that were carried out were not compliant. So, the FCA wants payday lenders to be proactive where there could be significant “detriment” to customers as a result of past lending practices. This could even involve contacting customers who have not yet complained.

What makes a creditworthiness assessment compliant?

According to the FCA, a payday loans lender must “make a creditworthiness assessment and the assessment should include the lender taking reasonable steps to assess the customer’s ability to meet repayments in a sustainable manner without the customer incurring financial difficulties or experiencing significant adverse consequences.”

Essentially, this means that the payday loan must have been assessed by the lender as affordable for the borrower. “Affordable” means that you can pay it off the following month as well as covering all your other outgoings at the same time. An indication that the loan was not affordable would be where the borrower made a late payment or was not able to cover the cost of repaying the loan as well as other outgoings, such as rent and bills.

What compensation is available and how do you get it?

A successful claim for compensation will mean all interest and charges on the payday loan get repaid, plus statutory interest of 8%. Any loans deemed unaffordable will also be removed from your credit history. If you believe that you have been treated unfairly by a payday lender and you want to make a claim then you should:

  • Gather all the information you need. For example, you’ll need to find account numbers, dates and the number of loans you had. Look at your bank statements and credit report to find the right details.
  • Identify why your loan was unaffordable. You’ll need to establish how much your other total commitments were first to show why the loan repayments were not affordable to you. Factor in everything, from household bills, to shopping and travel. The more obvious the lack of affordability is, the quicker your claim will be processed.
  • Put it in writing. You will need to create a letter to go to each lender. This should state that you believe you have been treated unfairly and that your loan was unaffordable – and why. Make sure you say that you’re looking for a refund of all interest and charges, plus the 8% statutory interest.
  • Your lender has eight weeks to reply to your claim. You may get an offer of compensation in that time (especially now that the FCA has intervened). Be wary of being offered a “gesture of goodwill” payment, as this is unlikely to be the full amount you’re owed.
  • Ask the Financial Ombudsman to investigate the complaint. If you’re not happy with what you’ve been offered then you can refer your complaint to the Financial Ombudsman who can make a financial award in your favour.

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Data Shows Debt Prone Millennials Have Poor Grasp of Financial Basics Wed, 21 Nov 2018 11:57:42 +0000 Amanda Gillam Debt is a way of life in the UK. We borrow to buy our homes, we get our cars on finance and we’ll use a credit card to pay upfront for a holiday.

However, it seems that too many of us don’t have a full understanding of the ins and outs of how debt works and specifically how interest in calculated.

At Solution Loans, we wanted to test the financial literacy of those in the UK, asking them specific questions around debt and other financial products.Financial literacy

Q1 & Q2: Interest and APR

We asked the two following questions, giving five multiple choice answers for each:

  • Q1: Please explain how APR works
  • Q2: Please explain how compound interest works

The picture across the country

Looking at the UK as a whole, of those surveyed, we saw that just 46% of people aged over 18 know that APR stands for annual percentage rate and represents the amount of interest and other charges you’ll pay annually on any money owed.

Just 58% were clear on compound interest and able to identify it as interest added onto interest already earnt on the starting sum.

This is a worrying trend as the latest figures show as a country we owed nearly £1.6 trillion in household debt in June 2018, with the average debt per household (including mortgages) equating to £58,540.

Yet we still don’t understand the intricacies of borrowing and the interest we’re required to pay.

The plight of Millennials: Generation Debt

That’s the picture across the nation as a whole. It becomes even more worrying when we look at those aged between 18 and 34, so-called Millennials.

Often known as Generation Debt due to the way the financial crash, the property market and the rise in tuition fees has impacted their lives, they are the most financially illiterate age group when it comes to understanding debt and borrowing.

Only 35% of 25 – 34 year olds and 36% of 18 – 24 year olds understand APR. Only 36% and 40% of the same age groups respectively can explain compound interest.

Q1: Please explain how APR works      
Correct Answer: APR stands for annual percentage rate and represents the amount of interest and other charges you’ll pay annually on any money borrowed
18 – 24 25 – 34 35 – 44 45 – 54 55 – 64 65+
36.2% 34.9% 42.5% 50.8% 60.5% 45.8%
Q2: Please explain how compound interest works      
Correct Answer: Compound interest is interest added onto interest as well as the starting sum
18 – 24 25 – 34 35 – 44 45 – 54 55 – 64 65+
40.4% 38.2% 45.5% 65.5% 75.8% 72.5%

This is compared to 75% of those aged 55 – 64 understanding compound interest and 60% being able to explain APR.

Q3: Balance transfer credit cards

For those with credit card debts, a balance transfer credit card is always a good option to begin to make a dent in the money owed rather than simply paying back the interest.

Yet again, it seems to be something missed by the financially illiterate.

As a whole, the nation has a better understanding of a balance transfer, with 68% knowing that it is where part or all of the debt owed on one credit card is moved to another card.

However, Generation Debt is again lagging behind.

Just 38% of 18 – 24 year olds understand what a balance transfer credit card is, while 45% of those in the 25 – 34 age bracket know how this works.

Q3: In relation to a credit card, what does balance transfer mean?      
Correct Answer: A balance transfer is where part or all of the debt owed on one credit card is moved to another.
18 – 24 25 – 34 35 – 44 45 – 54 55 – 64 65+
38.3% 44.6% 60.5% 80.2% 82.6% 81.0%

Q4 & Q5: Auto-enrolment pensions & guarantors

Financial illiteracy isn’t just about debt. We asked a couple more questions:

We saw that 57% of people understood that auto-enrolment makes it compulsory for employers to automatically enrol employees in a pension scheme, with the employer also required to pay into the scheme.

That means that 43% of people in the UK can’t explain what one of these is, despite nine million people having joined the workplace pension scheme since it began in 2012.

Things are a little better when it comes to understanding the responsibility of a guarantor, with 71% answering this question correctly as a person who agrees to repay the borrower’s debt should the borrower default on agreed repayments.

The picture on a UK regional basis

We broke the picture down across different regions and cities throughout the UK. On a regional basis, we can see that the South West of England has the highest financially literacy and Central England the lowest.

Here are the regional standings:

  1. South West England – 69% (average across all five questions)
  2. Scotland – 65%
  3. Wales – 64%
  4. Northern England – 62%
  5. Northern Ireland – 60%
  6. South East England – 58%
  7. Central England – 57%


On a city by city basis, the strongest performer was Liverpool with a combined score of 71% across each of the five questions. In second place was Bristol with 69% and Glasgow in third with 66%. The least financially literate city in the UK was Birmingham with an average score of 50% across the five questions.

The hope for the future

Our finance expert Amanda Gillam commented on the findings of our study:

“We found that when it comes to understanding how financial products work and specifically how interest and debt is calculated, as a nation our financial literacy is lagging. This is especially the case for the young. These are the people that have been hit the hardest since the financial crash, but that also seem to have the biggest gap in their financial knowledge. It’s key for future generations that this is taught, and a full understanding is achieved.

“There remains a key responsibility on behalf of the individual that when they take out a financial product, they look through the terms and conditions carefully and make sure they understand exactly what they’re signing up for. The financial service provider must also do all that they can to make sure everything is clear for the consumer.

“Unfortunately, debt simply isn’t going away. Financial literacy, therefore, has to improve.”

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Financial Literacy & Education on Solution Loans

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Why a Secured Loan could be better than Remortgaging Mon, 19 Nov 2018 11:12:54 +0000 Alex Hartley If you already have a mortgage and you’re looking for additional finance, or to protect your existing deal, remortgaging isn’t necessarily the best option. In fact, increasing numbers of consumers are looking to a secured loan as a more flexible and simple approach to restructuring finances. Many have found that a secured loan is actually a better option than remortgaging.
use your house as security

How does a secured loan work?

A secured loan is lending like any other in that you apply to a lender to borrow a specific amount and repay that, with interest, over an agreed period of time. When you apply for a secured loan you’re offering something you own as security for the borrowing – in this case your house. The lender will take a charge over it to protect its loan if you’re unable to repay. Even if you have a mortgage (often referred to as a “first charge”) on your property, it’s usually still possible obtain a secured loan (a “second charge”). You may find that some of the best lending rates for a second charge are available by applying for that secured loan with your mortgage lender, although we’d recommend you use a broker, like us, for more choice.

How much does a Secured Loan cost?

What you pay for a secured loan will vary from lender to lender, and depending on your credit history. As a secured loan is a “second charge” the interest rates tend to be slightly higher than those available for a mortgage. This is because the secured loan lender will only get paid after the first charge lender if there is a default and the property has to be sold to pay off creditors.

When is a secured loan a better option than remortgaging?

If you identify with any of the statements below then you might find a secured loan a better choice than going through the process of remortgaging.

  • “I need finance, fast.” Remortgaging is not a swift process – in fact, mortgages take longer than any other type of lending to arrange. If you need to have access to urgent finance then a secured loan might be a faster choice. If a valuation is required then this may slow the timetable down (although it’s likely to be faster than remortgaging). Depending on your circumstances, many lenders will be able to expedite the approvals process to within a day or so.
  • “My mortgage rate is great and I don’t want to change it.” New mortgage rates are not as attractive today as they were so if you already have a rate that works you may not want to change it simply to extend your finance. In this situation, a secured loan could be a far better option than remortgaging.
  • “I’m looking for 95% Loan to Value (LTV)” Today, most mortgage lenders won’t offer more than 90% LTV. So, if you need a higher number than this a secured lender may be the only choice. It’s worth noting that in order to be approved for a more than 90% LTV secured loan you will need to have simple and straightforward circumstances.
  • “I want to borrow but I have bad credit.” Lending decisions are based on individual circumstances and so, even with bad credit, you could still be able to remortgage. However, secured lenders tend to be more flexible when it comes to applicants who don’t have the perfect credit score. It will also be possible to obtain a secured loan with a smaller deposit.
  • “I’m newly self-employed.” Lenders partially rely on statements of income from employers to determine whether a loan or mortgage is affordable for the borrower. So, becoming self-employed can significantly complicate the situation. Most mortgage lenders look for between one and three years’ worth of accounts when assessing the creditworthiness of a potential borrower. If you’ve recently become self-employed and don’t have these records – or the structure of your business is now different you may struggle to satisfy mortgage lender conditions but could still be acceptable for a secured loan.
  • “I want to borrow on an interest-only basis.” Most lenders just don’t offer interest-only mortgages today so it’s not possible to repay in this way if you remortgage. However, some secured lenders can work with interest-only (i.e. repayments that only cover the interest on the loan and not the capital amount borrowed too).

Secured loans are proving increasingly popular – there has been a 6% year-on-year rise in new second charge business completions and 85% of mortgage intermediaries say that this type of lending is on their books. For those who are looking for fast finance, recently self-employed or keen to preserve an existing mortgage deal, a secured loan could be a far better choice than remortgaging.

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The real life consequences of being made bankrupt Thu, 15 Nov 2018 10:55:53 +0000 Amanda Gillam UK consumers are very familiar with debt. In just one month this year, collectively we took out more than a billion pounds worth of consumer debt. According to the Office for National Statistics, 12% of people say they always, or most of the time, run out of money at the end of the week or month and need a loan or credit card just to get to the next pay day. As a result, debts can be swiftly accumulated, often to the point where there is no prospect of paying them off. When that happens, bankruptcy becomes a very real possibility.

Bankruptcy and the British public

In the first quarter of 2018 there were 4,188 bankruptcies, which made up 15% of the total number of 27,388 individual insolvencies in the period. Individual Voluntary Arrangements (IVAs) are by far the most popular type of individual insolvency – there were 16,676 during the first quarter of 2018. These are closely followed by debt relief orders, which made up 24% of the total numbers in the first three months of this year. In comparison with the last quarter of 2017, the number of bankruptcies rose almost 10%.

What does it mean to go bankrupt?

If you’re unable to pay your debts then any creditor to whom you owe more than £5,000 can apply to have you declared bankrupt. Bankruptcy is only usually recommended if your unsecured debts are more than £20,000 – for lower figures something like an IVA is usually more appropriate, if your creditors agree.

When bankruptcy happens, any assets you have will transfer to a trustee in bankruptcy who will sell off what they can to make payments to your creditors. The other debts will be discharged 12 months after the bankruptcy order has been made. This effectively means that none of the creditors to whom you owe those debts can try to collect on them. There are some exceptions to this, including recent taxes and child support payments. While this may sound like a great solution – essentially wiping the slate clean – in fact there are some other, much less appealing consequences to going bankrupt that give many people pause for thought.

  • Your credit score will plummet. Going bankrupt is one of the most damaging influences on your credit score. The purpose of a credit score is to demonstrate your ability to manage credit and being unable to make repayments on debts to the point at which you become bankrupt shows a complete inability to manage credit. So, if you do go bankrupt it’s unlikely you will be able to borrow for some time afterwards. It is possible to rebuild your credit score but you will need to be patient. Even after the bankruptcy has been discharged, it will remain on your credit file for five years.
  • You won’t be able to get even basic credit. Without a good credit score it’s no surprise that credit cards and loans simply won’t be accessible. However, you also won’t be able to apply for a current account where the account has an overdraft or a chequebook. You may also have trouble renting, as landlords will carry out credit checks, and monthly payments for something like insurance won’t be possible so all payments will have to be made up front.
  • Your situation becomes a matter for public record. All your personal financial information, as well as the fact that you’re going bankrupt, becomes data that anyone can access. Although really sensitive information – such as your birth date or tax payer ID numbers – are protected, anyone can discover the financial trouble you’re in.
  • Possessions can be taken. There are ways to exempt your property from being available to the bankruptcy trustee to sell and if the cost of selling an item would be higher than the potential profit then the sale usually isn’t pursued. However, if you do go bankrupt you may find that possessions, such as a car or electronic equipment are sold to raise money to pay your creditors.
  • Your assets will be frozen. Bankruptcy essentially makes your financial affairs an open book and takes the control away from you. When you are declared bankrupt your accounts will be frozen while the trustee in bankruptcy works out how to proceed.
  • You may still end up having to make payments. If your income is deemed high enough then you may find yourself making repayments on the debts that were owed – for up to three years.
  • Some employers won’t employ a bankrupt. Depending on your profession you may struggle to obtain (or keep) a job. This is particularly so in professions that carry a lot of responsibility, for example law or accountancy.

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Forgotten Pensions – how to trace what you’ve forgotten you had Mon, 12 Nov 2018 11:19:00 +0000 Alex Hartley Recent statistics on Britons’ retirement savings have made for some fairly grim reading. A survey by the Financial Conduct Authority found that 41% of people have a Defined Contribution pension scheme, which is dependent on changes in the stock market with respect to how much will eventually be paid out. The survey also found that most people with this type of pension have very little in it – two fifths have less than £5,000. Which is why it’s especially surprising to find that many of us have “forgotten” pensions that are sitting unclaimed – currently to the tune of £19 billion!forgotten lost pensions

What is a forgotten pension?

On average we will have around eleven jobs throughout the course of a lifetime. We move jobs a lot more today than in years gone by and pensions that are set up for one job can be forgotten when we move onto the next. Many people don’t entirely forget but assume that a small pension from a shorter-term job is simply not going to be worth pursuing. However, if that pension was well invested that could be completely untrue – one woman who spoke to The Guardian newspaper said that an old pension she had traced out of interest was now worth £10,000.

The “lost pensions mountain”

Data on the large number of forgotten pensions comes from the Association of British Insurers. The ABI recently published a study indicating that there are currently some 1.6 million pension pots in the UK that have been forgotten about. Their total combined value could be as high as £19.4 billion. So, there is a significant volume of retirement income currently sitting unclaimed, which could be invaluable to those who don’t yet have enough for a comfortable life in those golden years.

How to find your forgotten pensions

You may be the type of person who has always kept scrupulous records of your finances and knows where all your retirement savings are. However, for many of us, especially where moving jobs has been fairly frequent, it’s highly likely that a few slipped through the cracks. So, what can you do to find any forgotten pensions that you might have and make sure that you benefit from them?

  1. Go back through your paperwork. Can you match a pension to every period of work that you’ve been through? If there are any gaps, that’s where the forgotten pension might be. Start the process by writing out a list of all your previous employers and the dates you started and finished with each one. Note next to each one the relevant pension scheme name.
  2. Where you can see there was a pension but you don’t have to details, contact the schemes – or the previous employers if you don’t have the scheme details. Find out if they are sitting on top of a pot of your cash. Companies that have closed or evolved can be traced via Companies House.
  3. If you don’t have the right information you can use the government’s Pension Tracing Service, although you will need either the name of the employer or the name of the pension fund in order to be able to use this. The Pensions Advisory Service may also be able to help and you can always speak to old colleagues to see if they have details of the right provider.
  4. Consolidate whatever you find if it’s practical to do so. It will be easier to keep track of your pensions if they are all within the same plan. However, there may be some financial penalties involved in moving your pension out of one plan and into another so make sure you research this thoroughly before taking any action.
  5. Keep better records going forward. It doesn’t matter what stage you’re at in life, your future is going to be easier to manage if you’ve got a good idea of your pension and retirement savings and how to access them. Make sure you keep the paperwork you find and provide your current contact address to all the providers where you have established that you have a pension.


Pensions have changed significantly over the years and employers are now required to manage them differently, especially when it comes to exits. For example, if you left a pension scheme prior to 1975 it’s likely that any contributions you made while employed would have been refunded to you. If you made five years of contributions to a pension scheme between April 1975 and April 1988 – and you were over 26 at the time – then it’s highly likely you have a pension waiting for you. After 1988, if you completed two years in a scheme with an employer then you’re also likely to have a forgotten pension waiting to be found. If you do have a forgotten pension then it could transform your retirement prospects so it’s worth taking the time to investigate.

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How to avoid being ripped off for your mobile phone – like 4 million people are! Fri, 09 Nov 2018 11:14:01 +0000 Alex Hartley According to research carried out by Citizen’s Advice, 4 million people in the UK are currently paying for mobile phones they already own. This amounts to a total of around £490 million being wasted. Confusing contracts mean that millions of people are still being charged for their phones under combined handset and data tariffs long after the value of the phone has actually been paid for. The issue has become so significant that now the telecoms watchdog Ofcom has launched a consultation to establish a way to make the process fairer and clearer for consumers. the great mobile phone ripoff

The way we pay for our phones has changed

83% of UK mobile phone users have a smart phone today – and we spend an average of two hours every day on those phones. Looking up arrival times for a bus, online shopping, reading the news, browsing social media, answering emails or swiping on dating apps, these are just some of the activities that make having a smart phone so essential to so many people. As a result, when we sign up for a mobile phone contract today, for most of us it’s a smart phone that we’re getting. Buying that smart phone outright would cost several hundred pounds. However, mobile phone operators such as EE and Vodafone have evolved the way they charge customers so that the cost of the handset can be factored into the monthly fee. And this is where all the issues have arisen.

The issue of overcharging

According to Ofcom research, roughly two in three people who pay on a monthly basis for their phones are signed up to a contract that integrates payment for the handset itself with the cost of monthly phone usage. In theory, the idea is sound – if you can’t afford to pay for the phone separately then dividing the cost into monthly payments makes sense. However, when the contract comes to an end, many mobile phone providers keep charging the consumer at the same price every month. Even though that price includes a proportion of the cost of the handset that has now been fully paid for. This, effectively, creates a penalty for anyone who doesn’t upgrade at the exact moment that their old contract finishes. One in three people go beyond their original contract period and, on average, end up paying another six months worth of monthly charges after the contract has ended – at the same rate. Citizen’s Advice worked out that this was roughly a £22 over payment per month, which is £490 million when spread across the four million people thought to be in this position.

Is it cheaper just to buy the phone?

Yes. According to Citizen’s Advice research, in 73% of cases it would be cheaper just to pay for the cost of the phone and then buy the rest of the service separately. The problem is that most of us can’t see this because mobile phone contract wording disguises how much of each payment is actually the cost of the phone and how much relates to usage. In fact more than half of people who paid for their phone as part of a bundled contract like this thought they were taking the cheaper option.

How is this being tackled?

Ofcom has launched its consultation process and is looking at introducing a requirement that mobile phone providers have to notify people when they get to the end of their contract. However, Citizen’s Advice has suggested that this should be simpler – just require the mobile phone provider to stop charging for the phone once it has been paid off and automatically drop the monthly fee. In addition, the proposals would require more transparency when it comes to the issue of pricing so that customers can actually see what they are paying for the phone. The Ofcom consultation comes to an end in November and the results will be published in 2019.

What can you do to avoid being overcharged?

  • Make sure you know when your contract ends so you don’t go beyond the minimum period – make a note of it in a calendar or diary so that you know when to act
  • If you’ve already gone past the minimum period, upgrade your phone so that the full monthly cost is justified
  • Switch to a SIM only deal – these can be significantly cheaper and you’ll never end up in the position of being overcharged for the handset. The only downside is that you won’t get a new phone with your new contract so you’ll need to pay for the handset separately.

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The Problem of Personal Fraud in the UK Tue, 06 Nov 2018 17:36:02 +0000 Amanda Gillam Across the UK more and more cases of fraud are being reported every year. Whilst businesses face a significant threat from fraud, personal fraud that targets individuals is also on the rise and has the potential to leave people in dire financial straits.

Bad credit loan specialist, Solution Loans wanted to understand the extent of the problem for ordinary people in Britain so submitted FOI requests to all UK police forces and received a response from 32 of them.UK Fraud

Who is at most risk to personal fraud?

The results were very surprising. Whilst the common view of fraud is of old people being taken advantage of, the age group most likely to be victims of fraud are so-called Millennials.

One fifth of all the cases reported to the police in the UK across a three-year period from 1st August 2015 to 31st July 2018 were against those in the 18-29 age bracket.

This was compared to just 9% of cases being committed against those aged 60-69.

Millennials regard themselves as digitally savvy, but in reality, many of them are far too ready to share details like email address and even their mother’s maiden name online. Because they spend so much time online they are more likely to be targeted by online scams, especially those operating on social media.

online fraud and deception

Where is personal fraud happening across the UK?

Everywhere. It’s a problem for police forces to solve up and down the country. Some areas affected include:

  • West Yorkshire – 9,098 cases in a three-year period
  • Northumbria – 4,630 cases
  • Humberside – 3,069 cases
  • Leicestershire – 1,793 cases
  • Gloucestershire – 1,530 cases
  • Norfolk – 1,078 cases
  • Cleveland – 1,050 cases
  • Cumbria – 806 cases

How much does it cost individuals?

The answer to this is a lot. Much more than you would expect.

In Northumbria, 14 of the cases involved individuals losing over £100,000 each, while the average cost of fraud in Leicestershire was £26,000, £7,237 in Humberside and £2,417 recorded by the British Transport Police.

Those are huge sums.

How easy is it to convict?

It’s a very hard crime for the police to secure convictions. Of the data we were provided with, we saw that in Cumbria of the 414 cases of personal fraud from 1st August 2017 to 31st July 2018, only 39 resulted in convictions. That’s just 9.42%.

This is compared to a success rate of 15.12% from the British Transport Police in the period 1st August 2015 to 31st July 2016.ActionFraud

What should I do to protect myself?

It’s important to be vigilant. You should start by following our five tips to keep yourself, your personal information and your finances safe.

  1. Never share your banking details over email or text message – even if this looks like a legitimate request from your bank, always ignore it. Your bank will never ask you to do this.
  2. Always keep any other personal information, like your PIN number, confidential.
  3. Regularly update your passwords and PIN numbers, and never have the same password for multiple accounts.
  4. Shred documents that contain personal information, rather than binning them.

Keep on top of your credit score. You should always keep a close eye on your bank account activity, but by keeping a regular check on your credit score you’ll know if someone has stolen your identity to apply for credit cards, store cards or personal loans.

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Why it doesn’t pay to be a loyal customer! Mon, 05 Nov 2018 12:00:52 +0000 Alex Hartley Loyalty is something that most of us value in the people that we choose to surround ourselves with. However, when it comes to being a consumer, all the signs are that loyalty is something that the brands we commit ourselves to tend to take for granted. If you’ve ever looked at advertising by your mobile phone provider, insurer or bank and wondered why the rates and prices you’re seeing are much lower than what you’re currently charged then you’ve seen first hand why it doesn’t pay to be a loyal customer. Now, a new study by Citizen’s Advice has put a figure on this “loyalty penalty,” which could be as much as £877 per person.loyalty costs a lot or money

Where does the loyalty penalty exist?

The research carried out by Citizen’s Advice covered five different sectors: savings, mortgages, mobile phones, broadband and home insurance. It looked into what new customers pay and what loyal existing customers pay, identifying the difference between these two amounts as effectively a penalty for remaining loyal to a particular bank or mobile phone provider. Across the five markets that Citizen’s Advice investigated it found that a loyal consumer could potentially be paying a loyalty penalty of £877. This includes:

  • £439 for a mortgage. This is the difference between what a new customer on a fixed rate would be offered compared to an existing customer being moved from a two-year fixed-rate mortgage on to the lender’s standard variable rate.
  • £113 for broadband. This figure represents the deficit in terms of the cost of the cheapest basic price new deal compared to what a customer would pay for sticking with the same provider after the end of the initial contract period.
  • £13 for home insurance. Compared to the new customer deals, someone with the average cheapest combined policy would pay an extra £13 after 1 year and £110 after 5.

The total also includes Citizen’s Advice research indicating that loyal customer pay £264 for a mobile phone contract and £48 for a cash ISA, as compared to the rates offered to a new customer.

Why do we pay more?

90% of people believe that they should be rewarded for loyalty. And yet many of us are not very good at spotting when we are not. Citizens Advice found that 39% of us are completely unaware that we’re paying any more for essential services because of the loyalty penalty. 35% say that they just find it too difficult to shop around. 25% say they feel that it’s difficult to get out of a contract for an essential service – i.e. we’re more inclined to stay put even if we’re being charged more because of the perceived hassle involved in switching. Providers in these markets are not exactly being proactive when it comes to informing customers where there is money to be saved either. 75% of broadband customers, for example, are not aware of ever being told that they could reduce what they pay by simply switching to a cheaper deal.

What can be done to change the situation?

Citizen’s Advice has a number of legal powers and has used these to submit a “super complaint” to the Competition and Markets Authority, which has 90 days to respond. It is hoped that the authority will take the opportunity to find a way to stop consumers from paying the loyalty penalty, whether that’s more transparency over how it arises or automatically informing consumers when they are affected.

What can you do right now?

Shop around. There are plenty of price comparison sites that will show you exactly what deals are available to you for the essential services that you need.

  • Mobile phone. If you’re paying for your handset through your monthly charges, make sure you don’t keep paying the same amount at the end of the minimum contract term when the phone is paid off. Ask your provider for a discount if you’re a longstanding customer – show them what you’d get as a new customer elsewhere and ask them to match it. Switch to a SIM only deal to save money.
  • Find a new mortgage as soon as you reach the end of the fixed period and don’t end up on the lender’s standard variable rate simply because you don’t make the effort to find a better one.
  • Switch as often as your contract allows so that you’re always getting the cheapest rate.
  • Look into online banking, as rates are often better than on the high street. Ask your bank to match what they offer to new customers.
  • Home insurance. Use a price comparison site to find the best deal on the home insurance that you need for your property.

The only way to avoid falling victim to the loyalty penalty is to be proactive when it comes to shopping around for the best possible deals. Making these savings could mean you stop having to take out small loans to bridge the gap to payday.

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What does this week’s Budget mean for you? Tue, 30 Oct 2018 21:15:44 +0000 Amanda Gillam The Autumn Budget has been delivered by Philip Hammond. In his third budget as Chancellor, Hammond has introduced a range of measures that are designed to stimulate the economy. He also declared that the era of austerity is “finally coming to an end.” These are the main elements of the 2018 Budget most likely to affect us all:UK Budget 2018

What we pay in tax

Income tax rate thresholds will move upwards as of April next year:

  • The personal allowance threshold – i.e. the part of everyone’s income that is tax free – will rise from £11,850 to £12,500.
  • Higher rate taxpayers also get a boost, as the point at which income is taxable at 40% will rise from £46,350 to £50,000.

How much we earn

  • Changes to the National Living Wage were announced, effective from April 2019. An increase of 4.9% will mean that the minimum wage payable to workers in the UK, aged 25 and over, rises from £7.83 to £8.21 an hour.
  • Despite the Chancellor announcing that austerity had at last come to an end, a £1.5bn benefit freeze is still planned for next April. The controversial Universal Credit system is “here to stay,” according to the Chancellor who also outlined that work allowances for Universal Credit will be increased by £1.7 billion. An additional £1 billion has been set aside to help benefit applicants make the transition to the new system.
  • According to the Chancellor there are now 3.3 million more people in work than in 2010. However, he did not provide a breakdown as to whether this included freelancers and those on zero hours contracts. The 2018 growth forecast has been downgraded to 1.3% from 1.5% but has been raised to 1.6% for next year.

Our homes

The Budget contained more stimulation for the housing market with guarantees of up to £1bn for smaller house-builders and new partnerships with housing associations to try to create another 13,000 homes. An allocation of £500 million to the Housing Infrastructure Fund should mean another 650,000 homes can be constructed.

Enabling better healthcare and protecting mental health

The NHS is going to get another £20.5 billion over the next five years and the Budget also allocates an additional £2 billion a year for the provision of mental health services. More emergency resources will be put into place, both for mental health – including mental health ambulances and a round the clock crisis helpline – and physical health, including £10 million for air ambulances.

How we travel

Fuel duty will remain frozen in this Budget. That makes nine years in a row that there has been no increase in fuel duty. £30 billion has been earmarked for the UK’s roads, including dealing with potholes and carrying out repairs to motorways. There will also be a 30% increase in infrastructure spending.

Educating the next generation

£400 million has been allocated as a one off “bonus” for schools to help primary and secondary educational institutions to buy the “extras” that they need. Funding has also been set aside for 10 University Enterprise Zones, where universities and business work together to increase local growth and innovation.

Sustainability and the environment

Philip Hammond announced a plastic tax on any packaging that does not contain at least 30% recyclable material. Although many people have called for a tax on plastic takeaway coffee cups this was not part of the Budget. The Chancellor indicated that the industry should be given the chance to make progress on the issue – but that if it does not, a tax will be considered in the future. In terms of other environmental issues, £10 million has been set aside to deal with abandoned waste sites and £60 million for planting trees.

The cost of alcohol and cigarettes

As expected, it’s going to continue to cost more to drink and smoke in the UK. The duty on a bottle of wine will rise to 8p – in line with inflation – as of February. However, duty on beer, cider and spirits has been frozen. Duty on tobacco is going up by inflation +2% and the cost of a pack of 20 cigarettes will rise by 33p. Cigar costs are also on the increase – up by 17p for a 10 gram pack.


No one is going to be particularly overjoyed to see that another £500 million has been earmarked in the Budget to pay for the preparations that are currently under way for the UK to leave the EU. The Chancellor also announced that a commemorative 50p coin will be minted to mark the UK’s exit from the Union!

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Need a £250 loan? Here are some options Mon, 29 Oct 2018 10:54:38 +0000 Alex Hartley The average payday loan amount is £260. Thousands of people make use of the short-term credit industry to help cover unexpected costs and gaps in household finances every year. However, as giants like Wonga disappear, where can you go if you need a £250 loan and payday loans are not an option – or if you prefer to borrow differently?£250 cash loan

Sign up with a new, ethical lender

CreditSpring is currently offering up to two £250 loans every year to its customers, both of which are completely interest free. As long as the loans are repaid on time then there will be no interest to pay. If you want to have access to the lending facility then you need to be a member and that costs £6 a month. So, although the loans themselves are interest free, the total annual cost for accessing them would be £72. That could still be cheaper than some payday lenders charge in terms of interest and the monthly fee would also give you access to other membership services. You’d need to have a relatively clear credit history – definitely no CCJs or arrears, for example, – and an income of at least £20,000 in order to borrow. Plus, you’d need to have been a member for at least 14 days. Repayments on the interest free loan would be £62.50 a month.

Or can also use our payday loan comparison service to help you find the best cash deal.

Use an overdraft

An overdraft is basically a revolving credit facility. You’re given the freedom to use credit up to a certain amount and repay it, as and when you choose. Fees and interest on your overdraft will depend on which lender you bank with. A month’s worth of authorised overdraft borrowing could amount to anywhere between £3.70 with a Nationwide FlexAccount to £23.25 if you have a standard account with Barclays. If you don’t currently have an overdraft then you’d need to apply for one – you’re much more likely to be successful if you do this with a bank you have a history with. An unauthorised overdraft situation should be avoided at all costs, as you will always pay much more. Some banks charge up to £80 if you spend more than you have in your account without prior permission. The effective APR% of an unauthorised overdraft can be greater than a traditional payday loan!

Borrow from a credit union

The reason that credit unions are a good idea is that they are only allowed to charge interest of 3% a month. That’s an APR of 42.6%, as compared to payday loans, which can be up to 1,500%. The only downside of a credit union is that you need to be a member before you can apply to borrow. Some credit unions also require evidence of savings before they are willing to lend, which is something that many people who might have looked for a payday loan just won’t have. However, they are cheap – the interest over one month on a £250 loan could be as low as £4.65 (Leeds Credit Union).

Look at other lending options

Payday loans are not the only way to borrow quickly. Even if you don’t have a perfect credit score there are still other options available as an alternative to payday loans lending. Especially if you’re looking to borrow more than £250 then you may want to consider:

  • Doorstep loans – they sound old-fashioned but they have moved with the times. No bank account is required, and it is real cash that is brought to you at home.
  • Other online lenders – many new lenders are emerging to fill gaps left by payday lenders, many offering more medium term loans. Oakam, for example, will even lend to those on benefits or with CCJs.
  • Guarantor loans – ideal for anyone with credit history difficulties – a third person provides a guarantee to the lender so that if you’re not able to make the repayments on the loan that person will step in and do it for you. These loans are repaid over a minimum of 12 months.

Apply for a credit card

Although not strictly speaking a loan, credit cards do give you swift access to amounts of £250 and above that you can borrow for as short a period as you need. Finding the right deal is key for credit cards. If you need the money to make a purchase then find a deal that offers 0% on purchases for the first six months or more. That will give you six months to repay what you’ve borrowed without any interest charges – or you can just pay off the credit card next time you get paid as you would a payday loan. If you do choose a credit card, make sure you only request the credit limit that you actually need or you could find yourself with a much larger debt that takes a lot longer to pay off.

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Debt Relief Orders: What they are & how to use one Thu, 25 Oct 2018 15:23:15 +0000 Amanda Gillam Debt is a common part of life in the UK. According to The Money Charity, people in the UK owed £1.5955 trillion at the end of July 2018 – that works out at roughly £84,412 per household. However, recent figures have revealed that there are millions of people in the UK who are struggling with their debts. A recent survey by Nationwide Building Society found that 57% of people who were in debt were experiencing problems with that debt and felt they were struggling. Many reported significantly increased levels of stress and anxiety as a result of problems with debt. So, what can you do if you’re just not coping with the debt that you have? do you need a debt relief order?

The Debt Relief Order (DRO)

One option is to look into whether you might be able to benefit from a DRO. This is a type of insolvency, so should be a last resort. It is an appropriate choice if you get to a point at which you’re really struggling with your debt repayments and can see no way to get clear of them. A DRO could provide a way to get back on top of your finances without having to pay significant fees to anyone else to help you manage the process. Would you qualify for a DRO?

  • In order to qualify, your unsecured debts must amount to less than £20,000
  • You will need to be living in England, Wales or Northern Ireland to be eligible for a DRO
  • DROs are designed for people who have few, if any, assets. So, if you’re a homeowner, the DRO will not be the right option for you
  • The DRO is specifically aimed at those who are on a low income and are unable to repay unsecured debts they have signed up for
  • The way that the DRO operates means that you will not have to make any payments towards your debts for 12 months and, after that, they will be written off

What’s the process of obtaining a DRO?

If you want to go down this insolvency route there are 12 organisations in the UK that are able to submit the DRO application on your behalf, including the charity Step Change. There is a one off fee of £90 that is due to the Insolvency Service when you make the application for a DRO. One of the major benefits of a DRO is that it provides a formal insolvency resolution to your debt problems but you don’t have to appear in court during the process. It will also prevent your creditors from pursuing you for your debts during the 12 month period of the DRO.

Are there any downsides to obtaining a DRO?

Yes. The major downside is that this is an insolvency process and so it will appear on your credit history, just as a bankruptcy would. The presence of a DRO on your credit history will be a large negative influencing factor when it comes to your credit score.

What are the other options?

  • A Debt Management Plan (DMP). The idea behind a DMP is to ask creditors to reduce interest or stop charges and give you the option to only pay what is affordable to your creditors. However, a DMP is voluntary and creditors don’t have to comply with your request.
  • Opting for bankruptcy means that your debts are effectively wiped and creditors can’t pursue you for them. This is a legal process and your bankruptcy will appear on a public register. It will also stay in your credit file and any assets you have (e.g. a car) may be incorporated into the bankruptcy process and lost as a result.
  • Individual Voluntary Arrangement (IVA). This is a proposal to creditors to restructure your debt repayments over a period of five or six years so that those debts become more affordable. There are usually fees to pay with an IVA and your IVA will be on public record. IVAs will also show up in your credit history and have a negative impact on your credit score.
  • Equity release. If you have built up a significant volume of equity in your property then you may be able to release a proportion of it to help with debt repayment. This is an option only available to the over 55s and interest rates and fees can be high, especially if you try to repay the equity you have released.

Depending on your situation, there are always options for anyone who is struggling to cope with the impact of debt. From a DRO, to bankruptcy or simply releasing equity from your home, there is always a solution.

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Your rights if you’re being refused credit by companies Mon, 22 Oct 2018 10:59:44 +0000 Alex Hartley If you need to borrow money then getting the notification that your application has been declined can be incredibly frustrating. Whether you were hoping to obtain a mortgage, were trying to get a new credit card or even a mobile phone on contract, if you’re not eligible – but you’re not sure why – then you may not know how to remedy the situation. And you need to remedy it otherwise you’re only option will be a so-called bad credit loan. So, what can you do next?Your credit file

Find out why your application was declined

There could be many different reasons for not being accepted for credit. You may already have too much debt or be struggling with a bad credit score. However, it may be a much less obvious reason, such as not being on the electoral roll. You may also find that you’ve been rejected for credit because of a mistake in your credit history. Or it could be the result of a fraud that you have no knowledge of. The first, and most important, step is to find out why your application for credit was declined. You can do this by calling the lender or by putting the question in writing.

Do you have a right to know the reasons?

Yes. Mortgage lenders are required by the Banking Code to give you an explanation for the denial of your application. Loan & credit card providers are also under and obligation to inform you of the primary reason for the application being declined. The same applies to any type of credit, whether you’re applying for a mobile phone contract or a credit card. Most credit providers will have guidelines on their website that set out how you can find out why your application was rejected.

The information in your credit report

If your application for credit has been declined this is often because of the information in your credit report. So, as well as asking the lender for their reasons it’s also a good idea to look at your credit report so you can see the information that they based their decision on. You can check your credit report with one of three main credit reference agencies in the UK – Experian, Equifax or Callcredit. Most offer the first month of access for free with a small charge after that if you don’t cancel. Go through your credit report and look out for any anomalies. For example, you may find that your credit report is still linked to an ex-partner that you used to share a joint account with and it may be this that is dragging the credit score down. If you see any signs of fraud in your credit report – e.g. new credit cards or loans that you don’t recognise – then you should contact your bank straight away.

Automated rejections

If your application has been rejected as part of an automatic credit approvals process and you don’t believe this took into account all of your circumstances then you can appeal the decision. The GDPR, which came into force in May of this year, brought with it a new obligation on banks to review a credit application rejection that was not made by a human. So, if your application was rejected and it was processed via software you can insist that it be reviewed by a real person. In many cases, a credit situation may be more complex than a computer is able to appreciate and so review by the human eye could be essential to ensuring that a fair and accurate decision has been reached.

Appealing lending decisions

If your application was rejected other than on an automated basis then you still have a right of appeal. You will need to contact the lender who made the decision – often within 30 days to ensure that the original information you supplied is not out of date. If you aren’t given any reason for a declined credit application then you can make a complaint about the way that your request has been dealt with by the lender to the lender’s complaints department.

What else can you do?

It depends on the reason for the application rejection. However, there are a number of steps you can take to ensure that your application is more successful next time.

  • Stop making credit applications – the more applications you make, the more this will negatively impact on your credit score.
  • Work on whatever is missing from your credit report – that may be correcting errors, paying back some debt or asking a lender to remove a black mark e.g. for a missed payment.
  • Look at a different type of lender – there are many more options than just mainstream lenders. For example you may have more luck with guarantor loans or homeowner loans.
  • Review your spending – especially if the rejection was on the basis of your balance of income and expenditure (i.e. affordability), it might be time to review what you spend vs. what you earn.
  • Existing debts – if you already have various lines of credit then borrowing yet more may not be feasible if it impact the total affordability of all debts.

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Are you in “persistent credit card debt” like 6.3 million others in the UK? Thu, 18 Oct 2018 11:32:36 +0000 Amanda Gillam It’s not that difficult to get into trouble where credit cards are concerned. From unsolicited credit limit increases, to cards that don’t come with proper affordability checks, credit – and lots of it – is often very freely available. The consequences of this are becoming obvious, as increasing numbers of people in the UK find themselves in persistent credit card debt. This is the kind of debt that is almost impossible to pay off and new Financial Conduct Authority (FCA) rules (that had to be implemented by 1 September) have been designed to try to help find a way out.persistent credit card debt

What’s the current situation?

There are more than six million people in persistent credit card debt in the UK. This is essentially debt that is being serviced but not paid off. So, it could be a balance of several thousand pounds on which someone is only ever making the minimum payment. As a result, any payments made go towards the bank’s interest costs and not towards reducing the balance on the credit card. Many of these people fall into younger age brackets – for example, research by Experian found that 12% of credit card holders aged between the ages of 18 and 24 don’t pay off any credit card debt in a typical month. Almost half of these people said they simply couldn’t afford it.

What will the new rules do?

As of September this year there is now more protection for those who are in financial difficulties or who are struggling with persistent credit card debt. The rules are designed to help those who are simply servicing their debts, for example paying £2.50 in interest and charges for every £1 they borrow. The FCA has said that it hopes the new rules will translate to savings for customers of between £310 million and £1.3 billion a year in lower interest charges.

As a result of the new FCA rules, lenders are required to take a little more responsibility for borrowers who are seriously struggling with their debt. That includes a timetable defined by the FCA that escalates issues based on how long the individual has been in persistent credit card debt.

  1. 18+ months in persistent credit card debt – at this stage a lender is required to make contact with a customer and let them know that, unless they change their debt behaviour, their card is likely to be suspended.
  2. 27+ months in persistent credit card debt – after just over two years struggling with debt, customers will be sent a reminder of the above information by the lender.
  3. 36+ months in persistent credit card debt – this is the point at which the FCA requires lenders to be more proactive in terms of solving the situation. Lenders should offer borrowers a reasonable way to repay the balance on the card, which could include switching the credit card to a loan. Lenders will also be required to demonstrate ‘forbearance,’ which may mean cancelling interest, reducing fees or waiving charges, for example.

Do the new FCA rules go far enough?

Many people believe that they don’t and some experts have highlighted that the changes are really too little, too late. Given the size of some current interest rates, getting debt free can be serious challenge that these new rules do little to support until there has been persistent debt of at least 36 months. For example, a typical credit card debt of around £3,000 would take around 27 years to pay off if the customer only ever made the minimum payment. It has been suggested that the rules should have gone further to include:

  • Higher monthly minimums – paying more off each month so that the balance is being reduced, as well as interest payments made.
  • Fixed monthly minimums – as the balance goes down, minimum payments do too but a fixed monthly minimum that remained the same would mean the balance was cleared more quickly.
  • More stringent affordability checks – whether or not someone can afford the debt that they take out is a key issue and current affordability checks are viewed as inadequate by many, particularly given the issues that many people now have with the amount they have borrowed.
  • Opting out of unsolicited credit increases – some credit card firms have already agreed to voluntary measures that allow customers to opt out of automatic credit increases to help stop a bad debt situation from getting worse. Many hope that this will become more widespread.

Issues with credit card debt in the UK are nothing new. However, the FCA is making the first move towards trying to turn the situation around with these positive steps that at least send the right message.

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Category: Credit Cards, Ditching Debt]]>
Little lifestyle changes that will save you a lot of money Mon, 15 Oct 2018 12:05:18 +0000 Alex Hartley When it comes to saving money we are often more focused on finding the big ways to cut costs. However, the smaller savings really do add up. If you’re looking for opportunities to save money without making big changes then these are just a few of the lifestyle hacks you can try to help you achieve much bigger savings overall. And saving money means there will be much less of a need to consider short terms loans to cover the budget gap! change your lifestyle to save money

Push your big purchases until the end of the month

If you’re buying something that requires interaction with a sales rep then the end of the month is the best time to get it. All sales reps have quotas to fill – if you wait until close to their deadlines to make your purchases then you’ll have more leverage when it comes to bringing the price down and saving you money.

Make your coffee at home – or take your own cup

Avoiding the daily £3-4 spend on coffee can add up to huge savings, which is why it’s one of the lifestyle hacks most often suggested. If you really can’t do without that daily dose of someone else’s caffeine expertise then buy a reusable cup and take that to your local coffee shop each day. Everyone, from independent coffee shops to Starbucks and Costa, will give you a discount if you do.

Track your spending with an app

There are lots of different apps available now to show you how much you spend and where most of your money goes. Find one that will consolidate all your accounts so that you can see your bank accounts and debt in one place and have a clear overview of your finances. When you start tracking your spending you’ll find it much easier to identify where you’re wasting money and where there are opportunities to make savings.

Be your own personal chef

If you’re buying your lunch every day then you could be spending anywhere up to £50 a week on food. The most frugal savers know that batch cooking is a lifestyle hack that will quickly bring spending down. Whip up a sizeable batch of something on a Monday and then eat it for the next few days in a row – it will do your body no harm to eat something delicious on repeat and it will be cheaper and minimum hassle too.

Buy a water filter

You might be surprised to realise just how much you spend on bottled water each year if you really add up the cost. A water filter jug at home gives you a plentiful supply of fresh and ready to drink water with all the nasty bits filtered out. You’ll not only be making financial savings but also environmental ones too, as you’ll be sending less plastic to landfill.

Make sure you’re hydrated

While we’re on the subject of water did you know that many people frequently mistake thirst for hunger? If you feel yourself getting peckish, drink a glass of water before you eat. You might find that’s enough to satisfy your body if it was really thirst that you felt and you’ll save money on the food that you don’t consume as a result.

Ask for a cut price deal

From your internet provider to the energy company you use and the business that you bank with, it’s always worth asking if they can reduce the cost of your services. Most businesses have some leeway available, especially for loyal customers, but they aren’t that likely to offer it up unless you ask for it first. So, try requesting a lower monthly payment or reduced interest rate – even a small decrease in these costs can make all the difference.

Clear your browsing history when shopping online

New customers get the best deals so it’s always worth clearing your cache and history online. Get into the habit of making purchases as a guest rather than signing up for an account that brands can track to make sure you always see the best savings.

Learn to be happy with what you have

It sounds like hipster mindfulness nonsense but you can save a lot in the long run by learning to be happy with what you already have. Appreciating existing possessions instead of constantly looking to acquire new ones is the best way to bring your spending down.

Reduce the brightness on all your screens

From smart phone to laptop and desktop, you can reduce the screen glare to help save cash. All screens have a default setting of high brightness but if you alter this to a lower setting you can save up to 40% on your energy consumption. Plus, you’ll also be taking better care of your eyes.

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Category: Better Budgeting & Saving]]>
You could be due £000s of refunds. Have you claimed yet? Thu, 11 Oct 2018 12:39:48 +0000 Alex Hartley Life is expensive these days. So, if there is an opportunity to save money or – even better – to get some cash back from a purchase made then it makes sense to take it. There are more potential refunds available than most people realise – in fact, you could save thousands of pounds on refunds when you know where to look for them. These are just a few of the potential savings that are available to anyone who takes advantage of them.claim your refunds

Student loan refunds

Repaying student loans is not exactly something that graduates look forward to doing. When you leave university you’re meant to have a break between finishing university and starting to make repayments. For most people that break is about nine months, as the requirement to start making repayments only applies from the April after graduation. There is also a threshold limit and if you don’t earn enough to reach this level then you’re not required to start making student loan repayments. However, if you have an employer who is not particularly savvy about when student loan payments begin, or has the wrong information about your university dates, then you may have been making payments unnecessarily. All you have to do to get that money back is call the loan provider and ask them.

Energy bill refunds

The cost of energy is constantly increasing and yet many people don’t realise that they are paying too much. If your energy bills are being taken by direct debit then you may be overpaying. Energy companies tend to bill on the basis of estimates and so you can often end up paying too much if the actual energy usage is lower. As a result your account may be in credit and you can request that back as a refund. Some people who have done this have found themselves with hundreds of pounds of credit to refund. All you have to do is go online and see whether your account is in credit. If you are significantly in credit you can also ask for your direct debit estimates to be lowered.

Uniformed worker tax rebates

It requires a really good accountant to take advantage of all the different tax rates and rebates that are available depending on what you do for a living. However, some of these are easy to access yourself. For example if you wear a uniform to work – whether that’s an actual uniform or just a branded top – , as long as you wash it yourself, you may be able to get a tax rebate. The tax rebate will be between £12 to £74 a year and can be backdated up to four years so you could receive several hundred pounds back.

Refunds for legal fees

Specifically, if you have a Lasting Power of Attorney that you took out between 1 April 2013 and 31 March 2017 in England and Wales then you’re highly likely to have paid around £110 for it. This is actually more than you should have paid and so you’re entitled to a refund of up to £54 for each Power of Attorney. A Lasting Power of Attorney (LPA) gives someone you trust the power to act on your behalf if you no longer have the mental capacity to do so. This could cover the way that your money and property is handled, as well as crucial decisions such as those involving medical matters. LPA refunds are easily claimed, either via the Office of the Public Guardian’s website or by calling 0300 456 0300.

Tax rebates for partners

If you are married or you’re in a civil partnership then you could be due a tax rebate. The marriage (and civil partnerships) tax allowance applies to couples where there is one person who is paying basic rate tax and the other partner is a non-tax payer. If you or your other half is not working then you can apply to have 10% of your annual tax free allowance transferred across to the partner who is working. This would result in a rebate of several hundred pounds a year. The rebate was introduced three years ago and claims can be backdated to the date that it was launched, making an even more impressive refund total possible.

These are just some of the rebates that are available to those who fit the criteria. With even one or two of these rebates it could be possible to save several thousand pounds, creating cash that you can use elsewhere whether that’s for holidays or home improvements.

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Category: Money & Finance]]>
The Very Real World of Virtual Currency Sun, 07 Oct 2018 15:26:10 +0000 Amanda Gillam The world of video games is a very real place. For those with little to no interest in computer games or online worlds, it might come as a surprise to even know that many of these games have their own currencies. And it’s not just like the old-school coins in Super Mario, this currency is a real thing that drives the games’ bespoke economies through in-game purchases, often called microtransactions. These range from small scale to off the scale.

gaming and in-game purchases

To many people playing the games, a small purchase here and there doesn’t really feel real. It feels like something that exists purely in the game. However, virtual currency and in-game purchases are very real. For kids, teenagers and adults alike.

At Solution Loans we’ve seen an increase in people seeking financial assistance to cover debts racked up through purchasing items with in-game currency.  It’s an ongoing and increasing problem for many, not just the few.

Money made by the video gaming companies

It’s certainly a very real phenomenon for the gaming companies, one which is extremely lucrative.

The below table shows what the top 10 mobile games make every single day.

Game Daily Revenue (US $) Daily Revenue (GB £)
Fortnite 1,822,162 1,403,064
Candy Crush Saga 1,325,069 1,020,303
Pokemon Go 1,047,624 806,670
Toon Blast 695,016 535,162
Clash of Clans 614,642 473,274
Roblox 507,598 390,850
Slotomania Vegas Casino Slots 312,473 240,604
Candy Crush Soda Saga 298,610 229,929
Toyblast 261,140 201,077
Homescapes 207,877 160,065

But it’s not just mobile games that continue to generate revenue through in game purchases. EA Sports for example, reportedly makes $650 million for in-game purchases for their flagship game FIFA. This is done through their Ultimate Team Feature – it’s also something the gaming giant has been heavily criticised for.

So how do they manage to eek so much revenue out of these in-game features? They target specific players, often termed “whales”.

These whales equate to just 0.15% of mobile gamers, but they rack up a whopping 50% of all in-game revenue. The gaming companies therefore set up the entire in-game economy to target this small percentage of players.

When it comes to the size of the purchases, the important transactions range between $9.99 and $19.99 with 47% of revenue coming from microtransactions within this scale. This is compared to just 6% of revenue coming from purchases ranging from £0.99 to $1.99.

Let’s have a look at this in context of the biggest game mentioned above and one that’s continually in the headlines, Fortnite.

Each whale will currently need to spend £11 per day for Fortnite to hit its daily revenue.

That doesn’t sound that much really, but annually it equates to £4,015 per person. Not good if the whales are kids or teenagers. To put it into context that’s more than a season ticket for an entire family to watch Premier League champions Manchester City for a full season.fortnite

Overspending on and addiction to microtransactions

Unfortunately overspending on microtransactions is a common problem that happens all too often. In some instances, it can even lead to addiction.

There’s been examples of individuals spending over $10,000 on FIFA in just a few years – hence the criticism. One Australian teenager accrued debts of $13,500 on microtransactions across the various Star Wars games.

We’ve also seen one Reddit user describe an addiction to Yugioh Dual Links, racking up spend of over $1,000. This latter cost may not seem in the same scale as the other figures mentioned above, but it is certainly enough to cause financial problems.

The biggest concern is also the user’s talk of and recognition of an addiction to the game.

It’s the word addiction that is most troubling.

This is clearly a very real problem which has led to some countries like Belgium banning lootboxes (a vehicle for microtransactions). However, these are still very much legal in the UK and US.

How does this compare to the average gamer?

Let’s look at Fortnite again to see what the average gamer spends on in-game purchases.

– 68.8% of all players have spent money on in-game purchases on Fortnite

– For 36.78% of those who have spent money on Fortnite, it’s the first time they’ve ever made in-game purchases

– The total average spent per player is $84.67

– 25.3% of all Fortnite players, also pay for subscriptions to Twitch – a streaming service that enable them to subscribe to watch other people play the game

spending on games microtransactions

How does the pricing structure work and how do people get lured in?

The in-game currency on Fortnite is called V Bucks. Here’s how much you can get for your pounds when you transfer.

  • 500 + 100 bonus (plus a specific outfit and backpack) – £3.99/$4.99
  • 1000 – £7.99/$9.99
  • 2500 + 300 bonus – £19.99/$24.99
  • 6000 + 1500 bonus – £49.99/$59.99
  • 10000 + 3500 bonus – £79.99/$99.99

As you would probably expect, it’s not just a case of a simple transaction. To lure gamers into spending more, you get more bang for your V-Bucks the more you spend.

Specifically, you can get around 150 for each pound spent with the £3.99 starter pack, and 168 for each pound in the £79.99 selection.

With Fortnite it’s all about the cosmetic, with purchases being for material items rather than a specific competitive advantage. Interestingly, going back to the above survey, 20% of players weren’t actually aware they didn’t gain an advantage by spending.

Video game spending and the UK Economy

Let’s look at this phenomenon in the context of the UK economy.

In the UK, the consumer spend on games was valued at a record £5.11bn in 2017 – this was up 12.4% from the previous year’s spend (£4.33bn). This includes spend on microtransactions as well as for the games themselves.

When looking specifically at microtransactions and in-game spending this was valued at £908.7million in 2014.

We can only speculate but this will almost certainly have increased by now.

The global impact

And globally the numbers are huge.

In 2015, global in-game spending was valued at $22billion, which is expected to rise to $32billion in 2020.

Looking at the value in pounds on a daily basis, that equates to £5,8850,752.79. Every single day across the world in 2018.

It’s big business and is starting to make its mark in the real world.

Specifically, the value of the currency in World of Warcraft has grown so much in comparison to real world economies that it is now worth seven times the currency of Venezuela.

We’ve also seen a criminal element creeping in too with money laundering a very real problem in games including FIFA, World of Warcraft, Star Wars, Final Fantasy and many more.

In fact, Korean police even arrested a gang transferring $38million to China, all laundered through Korean games.

With such a huge status globally and flourishing economy, individuals who can work the system stand to make vast sums from trading.

Trading platforms are where money can be made. Specifically, the owners of trading platform OPSkins were making over $12,000 a day in 2015 from their marketplace for virtual weapons.

It’s not just platform owners who are making the big bucks either, with those that buy and sell products as traders cashing in too. One user, simply referred to as Todd, has estimated to have made $42,321 from trading virtual cats on a game called Kyrptokitties.

Those with money are also splashing the cash on in-game purchases with the biggest ever a nightclub on the game Entropia Universe – this was for a value of $635,000.

The opportunities from gaming, whether trading in-game currency or being paid to game are huge. This has led to parents even hiring coaches for their children on games like Fortnite, hoping for lucrative success from their kids’ hobby.

Learn how to spot the signs

With huge potential to make money for the gaming companies and the ease of spending in crucial moments within games, the potential for addiction is a very real concern. As a parent try and do the following:

  • Monitor how much time your kids spend gaming
  • Find out from them which specific games they are playing
  • Learn as much as you can about the games your kids are playing and if they include in-game purchases
  • Limit their time playing these games & check for how they react when you try do this – a clear sign of addiction is an inability to let something go
  • Look for specific signs including if they are hiding their gaming use, specifically doing it at night
  • Check how much they talk about the game and how much their life begins to revolve around it – a sign of addiction is an obsessional attachment to the game

Gaming can be a good thing; however, it can often be fraught with potential problems and difficulties.

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Category: News]]>
ITV’s Tonight programme looks into debt in Britain Thu, 04 Oct 2018 11:02:49 +0000 Amanda Gillam At the end of August, ITV’s Tonight programme broadcast an edition that was focused on consumer debt and the problems it’s currently causing. It identified the time-bomb that exists in the UK with millions of people only just managing by taking out loans and maxing out credit cards. With eight million people in the UK struggling to sleep at night because of their debts, the UK is officially in a debt crisis and the Tonight programme looked at some of the most common scenarios, what could be done to help people and what impact high levels of debt were having on mental health. ITV Tonight programme

The UK’s debt crisis

The average British household owes £58,000 and with interest rates set to rise, as the Tonight programme highlighted, debt levels in the UK are only likely to increase. There are a lot of signs of serious issues among UK consumers, for example in 2017 the average family spent £900 more than they earned. Savings levels are at record lows and the UK currently owes £19 billion in every day costs, such as utility bills and council tax. As the show highlighted, people who find themselves in a debt crisis have often ended up there as a result of a series of unfortunate events. It’s not wild spending on shoes and holidays that can plunge someone into unmanageable debt but often something as simple as a change of life – losing a partner, suddenly having health problems or being made redundant. The Tonight programme spoke to a couple who had found themselves in more than £30,000 of debt simply as a result of these small life changes that ended up having a snowball effect.

What are the options for anyone struggling with debts?

The Tonight programme looked at a number of different options for people with debt problems, including:

  • Individual Voluntary Arrangements (IVAs) – under an IVA the debtor pays off just a proportion of the debt. For example, the couple who owed £30,000+ paid off £9,000. However, they were also required to pay around £8,000 in fees and it’s these fees that may mean IVAs are not always the best idea.
  • Although going bankrupt is often viewed as a last resort, it can be a preferable option for many people. It costs just £700 per person to go bankrupt and debts are written off after a year with no fees due to advisors.
  • Write to your creditors – for those looking for respite from debt to provide a small window to get finances in order it’s possible for a borrower to write to creditors and ask if they will accept a token payment of £1 for a period such as a month. The government is currently looking at introducing a “breathing space law” that would provide a six week break on debts to try to support those who are really struggling so there is a basis for requesting this from creditors.
  • A Debt Relief Order – for those who owe less than £20,000 and who qualify (the qualification is means tested), a Debt Relief Order means that debts can be written off after a year for a £90,000 fee.
  • Claiming compensation – anyone struggling with debt who believes that a lender has not treated them fairly, can write to the lender to request compensation as a result. The Tonight programme used the example of Ian who received £300 for unfair treatment by a payday lender.
  • Equity release – for those who are asset rich but cash poor, equity release can be a great way to free up some of the cash in a home to help deal with debt issues. According to the Equity Release Council, 30% of those who take out equity release are doing it to tackle a current debt. However, equity release is not for everyone, especially those who want to leave the full value of a property behind for the next generation. Interest on equity release loans accrues steadily and doubles every 12 years plus there can be penalties if the original loan is paid off early (i.e. before death).

The impact of debt on mental health

One of the key consequences of debt that the Tonight programme highlighted was the fact that it has an impact on our mental health. The charity Christians Against Poverty, interviewed on the show, revealed that six out of ten of its clients were behind in rent or mortgage and simply covering regular living costs was a problem for many. They said that a third of their clients had attempted or thought about suicide because they were struggling with debt.

Debt is something that many of us have in the UK and it can be very useful. As the Tonight programme highlighted, if it is not affordable or becomes unmanageable then it can have a big impact. What’s important, if you are struggling, is to seek help as early as possible.

Where to find Debt Help

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The downsides to student debt Mon, 01 Oct 2018 10:50:33 +0000 Alex Hartley A large student debt is a cause for stress – that’s not news. Ever since fees were introduced (and repeatedly increased) for UK students there have been concerns about the impact of graduating owing such significant sums. Despite the fact that debt problems are widely acknowledged as a major cause of depression, when it comes to students, as a society we seem to expect graduates to simply knuckle down and get on with making the repayments. However, a recent report has highlighted that the level of student debt required for many people to graduate today is having wide ranging and damaging impact on the lives of graduates. Rather than simply restricting spending on luxuries, a new report indicates that the burden of student debt repayments can impact on job satisfaction, mental health and long-term financial future.The burden of student debt

What does the survey say?

The research has been carried out by the Centre for Global Higher Education, who are based at the UCL Institute of Education and the University of Michigan. Although the team are US based they have been tasked with reviewing a range of research, not just relating to US students and educational institutions but to those in the UK too. The study took place over several decades and is considered to be a fairly authoritative work of research in terms of graduate lives in both countries. It made a number of key findings, including:

  • Home ownership. Being able to buy your own home is a major step in the process of establishing a positive financial future. The research found that student debt was linked negatively to home ownership. Not only are those with student debt having to delay home ownership as a result of those debts but they are also much more likely to be restricted to purchasing lower value properties.
  • Career trajectory. For many people, debt restricts career choices – often graduates have to take any job after university simply so that repayments can be made. This tends to lead to overall lower job satisfaction and can restrict career progression.
  • Financial future. High levels of student debt can often result in lower levels of net worth. People have less time to save for the future and so may end up without adequate retirement savings. Some even find themselves in financial distress and unable to service the debt.
  • Restricting entrepreneurial choices. The study found that those who graduated with high levels of debt rarely went on to explore entrepreneurial ventures. Although many students would have liked to pursue their own business, the combination of a sizeable student debt and the challenges of obtaining new business finance were off-putting. The need to cover repayments on student loans made the uncertainty of an entrepreneurial venture in the early years impossible to tolerate.
  • The impact on mental health. The Centre for Global Higher Education found that the existence of student debt had a significant negative effect on both students and graduates. It wasn’t just those graduating with a debt hangover who found the situation depressing and stressful but also those currently using the cash for study.

Student debt without the negative impact?

As this study showed, the existence of debt can make life very difficult for both students and graduates. It’s not ideal to have to borrow to obtain a qualification but there are ways to make it work.

  • Keep perspective on the future. If you’re borrowing to pay for studies now remember that there will come a point when the loan needs to be repaid. Plan for your career when you graduate and be prepared to take steps to ensure that you have the necessary income in place.
  • Don’t borrow what you don’t need. Student life is more expensive than it used to be but can still be lived relatively cheaply. When you’re signing up for a student loan, borrow only what you need to complete the course and don’t get tempted to borrow to pay for extras, such as travel or socialising.
  • Find ways to make your money go further. There are many benefits to being a student, from discounted rail travel to the money that you can save with an NUS card. Be proactive about finding ways to make your money go further so that you don’t need to borrow to survive.
  • Work while you study. Most student schedules will allow for at least a part time job and even a small amount of income could help you to survive on what you have, rather than getting into debt to get through the student years.

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Wonga’s demise – an update on developments Thu, 27 Sep 2018 10:21:17 +0000 Amanda Gillam We recently covered the news that Wonga was being gradually wound up after a series of declared losses. Today, the payday loans lender is still in some fairly serious trouble but may have a saviour in the most unlikely of forms. In what must be a fairly unusual move, the Church of England has considered stepping in to buy Wonga’s debt book in order to stop this from falling into the wrong hands. The idea is to prevent more borrowers being further exploited by what MP Frank Field called “another loan shark.” So, how might Wonga’s transition to the side of the angels actually work?

Wonga websiteSelling Wonga on at a “knock down rate”

Wonga’s £400m loan book is ripe for exploitation as a result of the desperate state of the company. Many – such as MP Frank Field – have suggested that this could well result in it being sold off at a knock down rate to another lender looking to squeeze cash from it. For those who currently owe Wonga money that could leave the door open to exploitation. It’s this exploitation that Frank Field is trying to avoid by appealing to the Church of England to buy the Wonga loans book and protect the 200,000 lenders that would be affected. The Church is uncertain about whether it is best placed to become involved.

Why should The Church step in?

Effectively, if the Wonga loan book is sold on at a discount to another lender it could leave current borrowers in a difficult position. A new lender could (and very likely would) raise the interest rates that are applied to existing loans, which would make these loans even more unaffordable. The Church of England has an £8.3bn investment fund (something that may come as a surprise to many…). Given the resources at its disposal, is there any way that this could be used to help “liberate” the poor, as Frank Field put it? According to a representative of the Church of England, it is meeting soon to discuss its options in terms of a response. As the Church of England was recently revealed to have shares in Amazon – which it is refusing to give up despite Archbishop Welby previously saying Amazon was “leeching off the taxpayer” – many are hoping it will bail out Wonga, if only to silence those who have been critical of where the church spends its cash.

What does the short-term borrowing market look like now?

Although Wonga has gone as a borrowing option for consumers there are still many other lenders out there who are willing to supply short-term credit. However, a huge increase in claims against payday lenders – driven by claims management companies – could change the landscape of this financial market for good. It was the volume of claims against Wonga that eventually brought the firm down and a wide range of other short-term credit lenders could share the same fate. If the majority of these lenders didn’t survive the tsunami of claims heading this way, what would the market look like?

  • A lack of available credit. Despite all the criticism of short-term lenders they do provide credit to borrowers where other lenders will not. Without that availability of credit it’s difficult to see how those with low incomes and/or poor credit ratings will be able to obtain finance.
  • The bank of mum and dad. According to the Financial Conduct Authority’s Financial Lives survey, 3.6 million people (7% of UK adults) are borrowing from friends and family, which is more than the 6% borrowing from payday loans lenders. This number could double without a short-term credit alternative to the likes of Wonga. However, the Bank of Mum and Dad does not offer endless resources and, as has recently been highlighted, could soon run dry
  • An increase in borrowing from illegal lenders? The worst case scenario may well be that, with the loss of lenders such as Wonga from the market, illegal lenders, such as loan sharks, move in to fill the gap where mainstream lenders are not willing, or able, to do so.
  • The emergence of a new type of short-term credit. The market as it stands does offer other options for those who don’t have the kind of credit history that would enable borrowing from a mainstream lender. Guarantor loans, for example, provide an opportunity to borrow where a friend or family member is willing to guarantee the repayments if necessary. We could also soon see a new type of short-term credit lender providing a different type of deal that sits somewhere between the payday lenders of old and the typical high street lender with their more stringent conditions but lower interest rates.

The Wonga story continues to unfold and many are waiting to see how this is going to affect the market as a whole – the rest of this year could be critical for Wonga borrowers.

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Do budgeting and banking apps work? Mon, 24 Sep 2018 16:17:11 +0000 Alex Hartley We are frequently being told today that the best way to improve budgeting and money management is to get an app for that. From apps that squirrel away tiny savings from your daily spend, to those that identify the cheapest place to buy your groceries from, there’s no doubt that technology should, in theory, be designed to make life easier. But do budgeting and banking apps really work or are they just one more thing to think about?

money management appsWhy would you have a budgeting or banking app?

Saving time and saving money are the two main motivations for those who download financial apps to their phones. Some of the apps on the market really do help people to achieve miraculous financial progress. Others may just end up being a costly mistake. If you want to make sure that you’re investing in the right type of app then it’s worth knowing what to avoid:

  • A lack of support – if you have an issue with your app then it may be important to have access to a customer services team.
  • A cost to buy – it’s often difficult to know whether you really need an app, and whether it’s the right app for you, until you’ve used it for some time. Which is why it’s frustrating that some apps charge up front.
  • A lack of functionality – particularly if you’re paying for your banking or budgeting app, it’s important to make sure that it has the functionality that you’re looking for from it. For example, does the app integrate with the banks where you hold your accounts, how easy is it to import transactions and can you add transactions via an iWatch or mobile while on the move?
  • Poor ease of use – there is little point to an app if you’re limited in terms of what you can do with it because you don’t really understand how it works. Any app that requires a degree in computer science to master the basic functions is going to be a bad investment. Those that are simple and clear to use are the ideal choice.

Which apps are worth investing in?

Although it will be a matter of personal preference, to a certain extent, with respect to the apps that you enjoy the most, there are some which are widely viewed as being a good investment.

Money Hub


  • Combines all your financial interests in one place, from savings to investments
  • Provides a way to analyse spending
  • Enables spending goals to be set
  • Has a “find an advisor” option to connect you to professional advice if required


  • It’s not free – the app costs £0.99 per month

Money Dashboard


  • It’s free
  • Provides analysis of incomings and outgoings so that you can see where you’re spending your cash
  • Has an inbuilt budget planner which is tied into the spending of the month before
  • You can centralise all current accounts, savings and credit cards into the app


  • The app supports 59 providers – this includes most high street banks so should be sufficient for the majority of people but it’s worth checking your chosen providers are included



  • If you’re bad at spending all your salary in one go, this app will help. It releases money into your main account in small bursts so that it’s impossible to break the bank on payday
  • Let Squirrel know when your bills are due and it will make sure there is money in your account to pay them at the right time
  • Your income is paid into your account in weekly instalments so it’s impossible to over spend (this can be overridden in emergencies)


  • It costs £3.99 a month
  • You need to have your salary paid into a separate account – it’s run by Barclays so is totally legitimate but this could be an issue for some people

Other helpful banking and budgeting apps

  • Vouchercloud – helps you to find the best deals and discounts close to you based on your current location
  • Stocard – a digital wallet for all your loyalty cards so that you don’t have to miss out on the opportunity for discounts. You’ll have a barcode for the shop assistant to scan in the store instead of the card itself
  • Quidco – earn cashback on purchases with this app – all you need to do is snap and upload your receipt when you’re shopping
  • MySupermarket – if you want to make sure you’re saving as much as possible when it comes to groceries, MySupermarket will show you where your cheapest options are to buy

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Consumer credit growth slowest for 3 years – what’s this telling us? Thu, 20 Sep 2018 10:10:22 +0000 Amanda Gillam Something is happening in the UK economy right now. The number of British consumers increasing their borrowing grew by the smallest margin for three years. This, combined with a very small fall in the number of mortgage application approvals, has led to concerns about economic growth in the UK, particularly with Brexit on the horizon. So, UK consumers are not borrowing at the same rate as they might have been previously. But what does that tell us about the economy as a whole and what we can expect in the near future?consumer credit growth slowing

The official growth figures

According to the Bank of England, unsecured consumer credit grew by 8.5% in July of this year. That’s a drop of 0.3% on the figures for the month before and significantly below average for the past three years. These new statistics come in the wake of nationwide concerns about the high level of UK unsecured borrowing. Official figures provided this year indicated that, in 2017, British households spent, on average, around £900 more than they had coming in.

What could be causing the drop in growth?

  1. British consumers are starting to curb spending habits. It could be the imminent arrival of Brexit and fears over an increase in the cost of living. Or an anticipation that interest rates might rise again. Whatever the reason, unsecured consumer credit growth could simply be slowing down because people are spending less. Many consumer groups have reported a new caution with respect to spending habits and the consequence of this could be people cutting back on non-essential purchases.
  2. Lenders are not as willing to lend. With rising numbers of personal insolvencies and uncertainty about the financial future – especially interest rates – it’s not just consumers who are nervous. Lenders reducing the credit they make available to consumers in order to minimise their own risks could also be causing the drop in unsecured consumer credit growth. With a small slowdown on secured lending – e.g. mortgages – also happening during this time, it’s possible that lenders are reigning in their risk in general.

What does the slowdown say about the UK economy?

Although consumer spending and borrowing trends change fairly frequently, conclusions are already being drawn in terms of what this change could mean for UK economic stability.

  • Weaker levels of consumer spending. British consumers have been spending at high levels in recent years, as official figures have confirmed. If there is less demand for credit then this means that there is less money flowing back into the UK economy via credit spend.
  • A potentially weaker economy? Consumer spending is what drives the British economy and if this is beginning to drop away, the result could be a weaker economy overall.
  • The reality of unsustainable levels of debt. Debt has always been a part of British spending habits ever since it first became widely available to consumers. However, debt levels have been identified as worryingly high by experts in recent years. New consumer borrowing fell from £1.5bn in June to £800m in July – which is significantly below average for the past three years according to the Bank of England. Could this be a sign that we are finally acknowledging that debt levels may be unsustainably high?
  • More people are starting to feel overwhelmed by debt. Roughly 3.4 million people are now struggling with serious problem debt according to the charity StepChange. The slowdown in consumer credit growth could be an indication that this is beginning to bite for more people and across a wider section of the British economy. If current debts become unaffordable then consumers are much less likely to continue borrowing.

It’s still possible to borrow – and borrow well

Although many levels of borrowing have fallen, credit is still available to those who are looking for it. And it’s still possible to borrow in a positive way.

  • Make sure your monthly repayments are affordable – after the repayment comes out do you have enough to comfortably meet all your obligations?
  • Shop around for the lowest interest rate – there are some good deals out there, especially if you have a sound credit rating
  • Limit the number of applications that you make – if you submit a lot of applications in a short space of time then you could damage your credit score
  • Borrow only what you need – debt can be a great way to get ahead in life as long as you’re not borrowing in excess of what you really need
  • Compare your loan & credit options before committing to your preferred solution.

Although the slowdown in UK consumer credit growth is certainly a sign that people are spending less, it remains to be seen what this means for the economy – and whether it will continue. Factors such as interest rates and Brexit will heavily impact in ways that are simply not forecastable yet.

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Off to Uni? Here’s how to keep your finances under control Mon, 17 Sep 2018 11:42:13 +0000 Alex Hartley Money is a big issue for students – or, more precisely, a lack of it. If you don’t have the Bank of Mum and Dad to rely on (or sometimes even if you do), years at university may well be lived on a shoestring. So, if you’re about to head off to university for the first time, getting your finances ready for the experience – and planning how to cope with the cash pressures you’ll feel – is essential.Off to university

How to get your finances ready for university

It’s estimated that most students spend more than their student loan by around £150 each term. But with some careful choices you can ensure that your own spending is well managed:

  • Find the right bank. Different banks offer a variety of deals to students and some are better than others:
    • Look for an incentive to open an account with a specific bank, such as a free rail card or instant cashback. Opt for the incentives most likely to help you reduce your spending.
    • Make sure the bank has a good reputation for customer service on student accounts – spending hours on the phone trying to fix problems could be costly.
    • Is access to ATMs free with this bank and are there cash machines on campus?
    • Does the bank require a minimum amount of cash to be paid in each term?
    • How good is the savings interest rate?
  • Investigate overdrafts. Debt is a necessary part of life for most students but you don’t have to pay over the odds for it. Student overdrafts are typically interest-free but the size of the interest-free part of the overdraft can vary depending on the bank. Find the bank that offers the largest interest free overdraft with increases in years two and three. Just remember that, at the end of your university years, the interest-free element will go and everything will have to be repaid.
  • Get used to budgeting. Living life constantly at the edge of your finances is no fun at all at any stage in life. So, get used to budgeting the money that you have from the first day of the new term. Calculate your income and outgoings and see where adjustments will need to be made to keep you on track.
  • Get ready to feel rich (for about a day). Most student finance is paid on a three monthly basis so you’ll get a huge one off payment which might be more than you’ve had before. The most basic advice here is: don’t spend it. Instead, transfer the money into a separate account and work out your budget. Then transfer money across as and when you’ve calculated that you need it.
  • Avoid credit cards. Introductory deals on credit cards might seem to offer 0% on purchases – but there is always a time limit on this. If that time limit expires before you start working then your monthly repayments will significantly increase, eating further into your student finances.

There’s an app for that

Personal finance apps are plentiful and they can help you to better manage your budget, no matter how small.

Yolt. This app is free and will enable you to centralise your account information in one place. It provides smart spending insights and also helps to set and manage budgets.

Chip. Another free piece of tech, Chip is a smart app that will work out what you can afford to save and transfer it into your savings account automatically. So, you’ll be accumulating savings without even trying.

mySupermarket. Food and household products can be a big expense as a student – this app shows you where to find the best prices on the items you want to buy.

VoucherCode. From cinema tickets to nights out you can find deals to save cash on luxuries and experiences with this app.

Quick tips for student money saving tips

  • Use your NUS discount – most shops on the high street and online will give you a decent discount with it (e.g. 50% off Spotify, 10% off ASOS)
  • Stop smoking (or don’t start) – just five cigarettes a day will set you back £730 a year
  • Negotiate your rent – you don’t have to accept the monthly rental you’re offered and if you’re not staying the full 12 months then request a discount from the end of term time
  • Shop around to reduce energy costs – not all providers charge the same and you might be able to pay less by switching
  • Use sites such as Quidco to get cashback on everything you buy
  • Insure your phone – it will probably end up in the toilet after a night out or get stolen on campus and the cost of replacing phones is high
  • Don’t join a gym – use the free facilities at university or just take up running instead

Make sure you reclaim your tax – if you’ve been working and you’ve been taxed you should be able to reclaim this as long as you haven’t earned more than your personal allowance (£11,850).

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What can you do now that Wonga has gone bust? Thu, 13 Sep 2018 11:12:55 +0000 Amanda Gillam Payday loans lender Wonga has gone bust in quite spectacular style. Despite attempts to restructure the business it has now been scheduled for “an orderly wind down” instead. Wonga became the poster business for the payday loans sector, achieving huge success and then being hit hard by regulatory sanctions. Its loans were described by experts as “unneeded, unwanted, unhelpful, destructive and addictive.” So, not many tears are being shed as the lender bids farewell. But what are the implications for anyone who has a loan with Wonga – and where do you go now if you’re looking for short-term credit?Wonga website

Wonga – what happened?

Wonga was launched in 2006 and was a pioneer of short-term high cost credit. The company grew quickly, backed by investors, and in 2011 tripled profits to £45.8m on revenues of £185m, making 2.5m loans. But with interest rates up to 5,000%, complaints were already being made against Wonga and in 2013, the Financial Conduct Authority (FCA) announced a cap on the total cost of payday loans. In 2014, the FCA forced Wonga to write off £220m in debts and interest for 330,000 customers. Then, in 2015, Wonga reported losses of £80 million, followed by another loss making year of £66 million in 2016. By summer of this year the vultures were circling.

The final blow

One of the most significant reasons for Wonga’s collapse this year is a general increase in the number of claims being brought against payday loans lenders. Claims management companies are increasingly targeting payday loans lenders on behalf of consumers. In 2015, Financial Ombudsman figures showed complaints against Wonga at just 269. By the end of 2017 this figure was 2,347 in the second half of the year alone. The Ombudsman is also reputedly giving consumers more time to make complaints against Wonga and it’s these claims that have scuppered the lender as it was trying to make a comeback. Of course, Wonga isn’t the only company likely to be affected by compensation claims. These claims are on the basis of loans made before 2014 when the new rules kicked in and could make survival difficult for any payday loans lender that has strayed into misselling or overcharging.

What happens if you currently have a Wonga loan?

Your debt still exists. Wonga has more than 200,000 customers still owing more than £400 million in short-term loans – if that’s you then the company’s own financial woes don’t release you from your debt. In the short-term the repayments will be overseen by administrators but the failure of the business does not wipe out the loan. Wonga has said that all of its customers should still continue to make payments as per their loan agreements, which are still valid. Anyone struggling with their payments can contact Citizens Advice or StepChange for free advice.

What are the cash loan alternatives to Wonga?

  • Compare other payday lenders – Wonga is just one of many lenders offering payday loans. If this is the type of finance you’re looking for you still have plenty of choice. It’s important to ensure that you can afford the repayments on a payday loan as the interest can be high – shop around to find the best interest rates for your loan.
  • Instalment loans – there are plenty of other credit options if you’re looking for small unsecured loans – you can borrow as little as £100 or as much as £25,000 with personal loans with repayment terms that are flexible.

Will the payday loans industry survive?

There has been a marked shift in the targeting of payday loans lenders over the past 12 – 24 months. In April 2017 claims management companies were responsible for around 10% of the claims being made against payday lenders. However, by the end of the year that proportion had increased to more than 60%. So, claims companies are now aggressively targeting payday lenders – which could leave many in the same position as Wonga. Whether that would mean a loss to the personal finance market as a whole depends on your perspective. According to James Daley, managing director of campaign group Fairer Finance,

“It’s not surprising that Wonga are in this position because they exploited a market that was loosely regulated. They were in the vanguard of giving people quick access to credit with high prices and high fees and they didn’t treat their customers well.”


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Is the buoyant UK Car Finance market sustainable, or is it a bubble about to burst? Mon, 10 Sep 2018 10:56:06 +0000 Alex Hartley There is no doubt that the car finance market in the UK is active – but is it healthy? New figures have revealed that, not only are UK consumers spending more than ever before on car finance, but that many are struggling to understand their lease agreements. With around 90% of all car purchases in Britain currently made using finance (according to the Finance & Leasing Association), are we seeing the emergence of a thriving industry or sitting on a consumer debt bubble that could do untold damage if it bursts?car finance at bursting point?

A thriving market

The car finance industry in the UK was worth around £44billion in 2017. Figures from February 2018 showed an increase of 13% in value on those from the year before, which is a healthy percentage for any sector. However, while these figures are great for the businesses involved in the UK car finance industry, they are a little more sobering when considered in the context of consumers. The increase in value within the car finance industry is being driven by a rise in spending by consumers. In fact, a new report found that UK households are borrowing more than £100million a day on finance to buy cars. On average, drivers are putting an average of £15,000 on credit to get behind the wheel – 209,547 cars were bought in this way during the month of May alone.

Is there anything to worry about?

According to the Finance & Leasing Association these figures are simply a reflection of rising demand for new car purchases and certainly nothing to worry about. However, what is concerning many commentators is the debt bubble that this represents to a nation already heavily indebted, whether that’s via credit cards, personal loans or mortgages. There have also been accusations of heavy handed tactics from car dealers desperate to close a sale pushing people into car finance purchases. And the Financial Conduct Authority has warned about some companies that are pushing unaffordable repayment plans with high interest rates to customers because staff have been incentivised with high sales commissions.

Why is car finance so popular?

After a house or flat, a car is probably the most expensive purchase that many of us will make in our lifetimes. Using credit such as car finance may be the only way to do this affordably. Personal Contract Plans (PCPs) are by far the most popular way to enter into car finance, often accessible with a deposit of around 10% and then requiring the consumer to make a number of payments over a period of two or three years. When the contract comes to an end, the consumer can either simply return the car to the dealer or buy it by making a balloon payment. However, some experts have highlighted that these deals are not as cheap as they might seem. Interest rates can be between 4% and 7% – often more expensive than a straightforward personal loan – and motorists often find themselves with a huge number of additional charges to deal with at the end of the contract.

The individual monthly cost

A survey carried out on behalf of Kwik Fit found that there are currently around 4.7 million drivers in the UK paying off their vehicles with car finance – that’s around £1bn per month! For each driver the monthly amount payable equates to an average of £226. However, this can vary considerably depending on where you are in the country. Motorists in London, for example, pay on average £269.01 while Scottish drivers benefit from the lowest monthly finance amounts with an average monthly car loan fee of £188.36. Even this can be a significant proportion of monthly income that could be unaffordably increased by even a small change to economic conditions, such as an interest rate rise.

Issues with car finance agreements

It’s not just cost variation and hidden charges that experts have warned might cause issues in the car finance sector but also the paperwork used. Research by the finance company Admiral found that a large number of consumers are confused by car finance deals. Many still sign up despite not fully understanding what the contract entails. When the goal is to get the car that a consumer wants, many will take whatever deal is on the table but, as Scott Cargill, UK CEO of Admiral Loans says, it’s crucial that consumers…

“…are clear on the different finance options available…Most importantly they need to choose a deal that’s affordable and right for them in the long term.”

The concern is that consumers who don’t really understand their car finance deals, or who don’t really understand the implications of taking out a loan, could end up getting into trouble in the not too distant future.

The car finance sector in the UK is currently thriving with companies generating cash and consumers getting the vehicles they want to drive. However, whether the current finance infrastructure is sustainable, especially if economic conditions change and interest rates rise, is something that no one can yet predict.

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Why UK estate agents are struggling, and can you benefit from this? Thu, 06 Sep 2018 11:12:23 +0000 Amanda Gillam As we move more and more of our business and personal interactions online, it seems that the property sector is the latest to feel the digital pinch. A report by accountancy firm Moore Stephens revealed in July 2017 that around 19% of estate agents are currently struggling to survive. Although the estate agent has not traditionally been a sympathetic figure, what would a failure in these high street businesses mean for the sector and what is the future of UK estate agency as a whole?UK estate are struggling

The situation on the high street today

The Moore Stephens report highlighted that insolvencies of high street estate agents are on the rise. Countrywide – which is the largest chain of estate agents in the UK – has issued two profit warnings over the past year. It has also seen its share price plunge by more than 60%. Foxtons is another well known chain that has shown signs of issues recently. Well known for its branded cars and fancy high street offices, the chain has been failing to attract business with a 15% decline in revenues in the first quarter of 2018. It too has seen its perceived value take a dip as a result with 25% shaved off its share price since May this year.

Online portals are suffering too

Specifically, those portals that are dependent on the traditional bricks-and-mortar structure of high street estate agents could run into some serious problems. Online property portal Rightmove, for example, was reported in July this year to be the biggest faller on the FTSE 100. Although its revenues grew 10% for the six months ended June 30 and operating profit was also pretty healthy, many industry experts have predicted problems for portals like Rightmove because of the dependence on high street firms. Rightmove charges on a per office basis and so with multiple high street firms shutting down offices as a result of a drop in revenues, Rightmove’s own income could soon start to suffer. As a result, there is a perception that Rightmove will struggle to grow under the current circumstances unless it starts to diversify its services.

Where are the causes of these issues?

  1. A drop in property sales. Clearly, the decline in the number of property sales in the UK in recent years is a big factor in the problems high street firms are currently dealing with. Sales across the UK fell by 1% over the past year. Between 2014 and 2017, London experienced a 20% drop in sales. 2018 seems to be a key year for an accumulation of issues to hit estate agents with a sharp rise in the number of firms reportedly getting into difficulties. Just under 5,000 firms reported being in trouble last year but this year that figure has significantly increased to 7,000. Consumers are switching from moving property to improving their property driven in part by recent changes to stamp duty bands and % rates.
  2. The rise of the online or hybrid estate agent. Perhaps the biggest factor in the decline of high street estate agents is the rise of the online competitor. Online estate agents and hybrids (i.e. those that operate online but also have ‘real life’ representatives) are becoming increasingly popular, not least because of the value that they represent to consumers. Online estate agent Purplebricks, for example, charges a flat fee to sellers looking to find a buyer for their property, as opposed to the commission charged by a traditional high street agent. Online agents have fewer overheads and are gradually establishing a perception of being more consumer friendly. High street firms are often considered over priced, frequently found to be charging hidden costs and have real trust issues with consumers to overcome.
  3. Banning letting fees to tenants. Although the plan to ban letting agent fees to tenants has yet to take effect in the UK (it is due to be put in place next year), this is also making many high street firms nervous. Letting agent fees generate significant revenues for property firms and if they cannot be collected that could leave a serious revenue gap.

Times are tough for high street estate agents but the current conditions present a significant opportunity for many well established brands to evolve. This is an industry that many believe has ridden roughshod over consumer interests, overcharged everyone and generally been unaccountable for shoddy practices for far too long. Surviving may simply be a case of reevaluating where resources are allocated and finding ways to offer genuine value to consumers instead of charging a high commission in return for a ride in a branded car. If the end result is that consumers benefit from better deals then it’s difficult to see how the impact of the current need to change could be negative.

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The rise of rented property licencing – How it works and who it affects Mon, 03 Sep 2018 13:14:19 +0000 Alex Hartley The lack of regulation in the private rented sector has been a hot topic for several years now. Over-inflated pricing and low standards often leave tenants feeling hard done by and living in poor conditions. One step that has been taken to try and combat this is rented property licencing schemes. These are now appearing all over the country and are designed to help highlight bad landlords and raise standards for tenants. However, the schemes are also attracting criticism as a cynical money making exercise and there are claims that the worst of the UK’s bad landlords will still continue to operate as before under the radar.

rented property licencingWhat is rented property licencing?

Councils can make it compulsory for every private landlord operating within a specific area to have a licence to rent out their properties. Rented property licencing is selective and so can be applied to some areas and not others. This is different to the type of licence that would be required for a landlord of a house in multiple occupation, which previously was the only type of licence required in the rental sector.

What does the requirement for a property licence entail?

It gives councils the opportunity to police the rented property sector. Any landlord will need to have a licence to operate if they are within one of the defined areas. In order to get that licence – and to maintain it – they will need to allow the council to check whether they are a “fit and proper person” to be a landlord. There may also be other requirements to meet, such as health and safety standards – for example, the council may want to see copies of certain safety certificates and also be informed of the location of smoke detectors, as well as being shown details of tenancy agreements. Licences usually last for around five years and then must be reapplied for.

Who will these licencing schemes affect?

Any landlord within an area where a scheme is being run by the local council. According to the Residential Landlords Association, at least 55 councils currently have a licencing scheme in place or would like to set one up. For example, a new scheme in Bexley, London, now covers Thamesmead North, Abbey Wood, Lower Belvedere and parts of Erith. There are schemes across many London areas, as well as in other parts of the country, such as Gateshead, Liverpool and Nottingham.

How much does a licence cost?

The cost of the licence is set by the local council and so can vary depending on location. For example, obtaining a licence in Gateshead would cost £550 to £1,000 while in Nottingham it would be £780, or £480 for a locally accredited landlord.

It’s also worth noting that it will be expensive for landlords who breach their licences – this could result in criminal prosecution or a civil penalty of £30,000.

Are there any exemptions?

Not for most private rentals. Even though local councils have acknowledged that there are already landlords who are doing an excellent job of fairly managing their properties, no exemptions are allowed from the licencing schemes. However, there are some properties that don’t fall into this category and so will be exempt, including holiday lets, student lets if the university is the landlord, business premises and properties where the tenant is a family member.

What’s the problem?

The main issue is that many landlords feel that this is rather a cynical money making exercise on behalf of local councils. Councils have responded to say that the fees that are charged are purposely kept low and are designed to only be enough to cover the council’s costs in administering the scheme. Another issue identified by landlords is that the schemes rely on landlords making themselves known to local councils. The issue here arises because criminal landlords are highly unlikely to make themselves known to councils and so the scheme could completely pass over those who were actually its intended target.

What does this change for tenants?

It should mean that standards rise across the rentals sector around the country. It will also make it possible to check whether a property is licensed – by law, councils must keep a register of all the licences that they have issued. Most councils have a searchable online database. The effectiveness of the scheme will, in part, come from the way that tenants use it. If tenants no longer rent from landlords who are not licensed then those landlords will be forced to obtain a license in order to make money from their properties. This will bring them within the remit of the local council and should help to ensure that all landlords meet certain minimum standards.

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Amigo Loans, the guarantor loan lender, floats on the Stock Market Thu, 30 Aug 2018 10:22:38 +0000 Amanda Gillam Earlier this year it was announced that guarantor loans lender Amigo was to float on the stock market. When the floatation happened on 4th July it was something of a first for the UK financial sector. While Amigo is not the first sub-prime lender to float – others such as Provident Financial and Non-Standard Finance (owners of George Banco) have already done so – this time it’s different. Why? Well because Amigo falls outside the Financial Conduct Authority’s (FCA) definition of ‘high-cost credit’ – i.e. 100% or more APR. So the Amigo float is quite a landmark moment but what does it mean for consumers and for the industry as a whole?
Amigo Loans advert still

Where did Amigo come from?

Financial Processing Limited changed its name to Amigo Loans in 2012, operating as a subsidiary of the Richmond Group. The Richmond Group was a loan brokerage company set up by James Benamor in 1999. Benamor is now worth an incredible £1.1 billion as a result of Amigo Loans’ stock exchange flotation. From modest beginnings, Amigo has built up quite a history and has lent 185,000 customers over £700 million. It has an average APR of 49.9% and claims to be one of the cheapest alternative loans providers in the market. It is also one of the biggest – Amigo says that it is currently the largest guarantor loans company in the UK.

What does Amigo offer?

The rise to success experienced by Amigo has been built on the basis of offering credit to those who can’t get it by other means. The guarantor loans provided by the company are designed to be an alternative option for those who can’t access credit via banks and other sources. Amigo offers medium term loans of up to £7,000 with a maximum repayment schedule of five years.

What are guarantor loans?

Effectively, guarantor loans enable anyone to borrow even without a perfect credit score, with a troubled financial history or where there is no asset – such as a property – to secure the loan against. With a guarantor loan, a trusted friend or family member provides an assurance to the lender that the loan will be repaid by the borrower. If that does not happen then the lender can pursue the guarantor for repayment of the loan instead. Guarantor loans are a way of accessing credit no matter what an individual financial history contains and careful repayment can help to rebuild damaged credit scores.

The stock market listing

The outlook for Amigo’s stock market listing was very positive with a valuation of £1.3bn on the company. Although it is a business that is built on higher cost credit, the APR charged by Amigo means that it falls outside of the FCA’s definition of high cost credit, which requires an APR of 100%. With the FCA encouraging many borrowers to move away from the 100+% APR of true high cost credit, Amigo has benefitted significantly in offering a much lower rate of interest. This idea of Amigo being “better value” is particularly understandable when you compare this to rates that are offered by some payday loans lenders, which can reach up to 5000% APR. While there are much lower rates available on lending via regular banks, accessing those rates often requires a very positive credit history, which many people don’t have. Amgio has created its own market by offering an in between – you don’t need to have a perfect credit history to access a lower rate.

Who will benefit from the flotation?

According to the business’ founder James Benamor, directors and employees will make £326.8m from the company now that it has floated. On the day of flotation the company exceeded expectations with shares jumping to 310p, against an offer price of 275p in early trading on the London Stock Exchange. As Amigo currently has roughly an 88% share of its niche market, positivity has been high surrounding the stock market flotation.

What about the future for Amigo loans?

In July of this year – two weeks after flotation – Amigo lost 10% of its stock market value in just a single day when a Times investigation that revealed it was allowing customers to manipulate affordability checks. This loss amounted to around £140 million. There have also been concerns expressed about the way that Amigo does business – for example, it was revealed that Amigo often took aggressive court action over a missed payment after just three months. Despite this, the company remains fairly buoyant but will need to proceed with caution. Given the changes the FCA has made to regulation concerning the way consumers are treated by lenders in other markets, such as payday loans – the costs of which inevitably fall to the lenders to bear – any hint of trouble could bring the newly publicly trading company to a painful place.

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What you need to know about Debt Collectors & Bailiffs Tue, 28 Aug 2018 12:12:56 +0000 Alex Hartley Being in a position where you have to deal with debt collectors and bailiffs can be difficult. However, even if you owe money and are in debt, there are still rules about how you can be treated. It’s important to know your rights if you’re threatened with bailiffs because there are only very specific circumstances in which someone can enter your home and remove your belongings. Unfortunately, many companies and over-zealous councils have taken this too far and individuals who don’t know their rights have been unable to stop them as a result.debt collectors & bailiffs

What are debt collectors and bailiffs?

The two terms are often used interchangeably but in reality they are very different:

Debt collectors

This is someone who will come to your home to collect a debt on behalf of a debt collection agency. That agency may be working on behalf of a lender or someone else who you owe money to. Debt collectors are rarely used these days as they have no power to remove anything from your home. Debt collectors can:

  • Come to your home
  • Ask you to make a repayment on the debt
  • Try to set up a payment arrangement

Debt collectors cannot come into your home without your permission, come to your workplace, take anything, intimidate or threaten or pretend to be a bailiff.


It is the bailiffs (or enforcement agents) who have the legal powers to remove items from your home – but only if they have a court order. Bailiffs are used by the courts in various circumstances, such as where there has been non-payment of council tax, parking fines or County Court Judgments.  Bailiffs can:

  • Take items from inside your home if you let them in
  • Remove items from outside of your home if you do not let them in (for example, your car)
  • Receive payment in cash for a debt owed (make sure you get a receipt)

What to do if a debt collector comes to your door

  1. Ask to see ID – note down their name, as well as the debt that they’re here to collect and the creditor they’re collecting on behalf of
  2. If you don’t want to open the door to a debt collector then don’t – you’re not under any obligation to do so
  3. On the whole it’s better to pay your creditor directly than to hand over any cash to a debt collector on your doorstep (an exception to this, of course, is if you have a credit agreement with a doorstep lender like Provident)

What to do if a bailiff comes to your door

  1. Bailiffs must have a court order – find out which court sent them and ask for details of the court order. If there is no court order then the bailiffs have no legal right to take anything. The only exception is if they are collecting on behalf of HMRC.
  2. Bailiffs must give you at least seven days notice before a first visit. They cannot enter your home by force, they cannot come in other than by the door, between the hours of 9pm and 6am or if only under 16s are present. If you know the bailiffs are coming then keep the doors locked and make sure everyone in the household knows not to let in anyone that you don’t know.
  3. You should always ask to see a bailiff’s ID. This could be a badge, ID card or enforcement agent certificate. You’re entitled to ask for exact amounts owed, as well as which company they are from and what the contact details are for that company. Don’t be afraid to take the time to check up on the bailiffs – for example, if they say they are a county court bailiff check with the court they say sent them. If they say they are a certificated enforcement agent you can check this on the register of certified bailiffs.
  4. What bailiffs can take –  luxury items such as TVs or games consoles.
  5. What bailiffs cannot take – anything that you need to live. For example, they cannot take your clothes or your fridge. They also cannot take items that don’t belong to you (you would have to be able to prove this).
  6. A controlled goods agreement. Bailiffs won’t normally remove items from your home the first time that they visit. They will usually make an inventory of what is there and you may be asked to sign a controlled goods agreement and make a debt repayment plan. This effectively means that if you don’t stick to the debt repayment plan then the items listed under the controlled goods agreement can be taken.

If you have been contacted by bailiffs it’s important that you don’t ignore the situation. Bailiffs charge fees for their visits and these can escalate quickly, especially if there are repeated visits when they can’t get in. You will need to take steps to deal with the debt in a way that you can manage. If you feel that you’ve been treated unfairly by bailiffs, or that they haven’t followed the rules then you can make a complaint. MPs recently criticised councils for over-zealous use of bailiffs and there is increasingly a view that the debt collection industry needs to be better controlled and managed so things could change in the future. However, for now, the basic rules are as outlined above.

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How to make money from clutter – cash from the stuff you no longer need Thu, 23 Aug 2018 11:24:17 +0000 Amanda Gillam Recent years have seen a boom in interest in self-storage, as we acquire more and more “stuff” with less space to put it in. If you look around your home today, can you honestly say that you need – and use – everything in it? Have you been paying for a storage unit for years, conveniently ignoring the rising cost, as you have nowhere else to store your stuff? Increasing pressure to economise, as well as the wide range of opportunities to sell old possessions now mean that those items cluttering up your home or storage unit could be put to good use. In fact, as well as clearing out your home and reducing your storage needs, you could generate some cash from all that clutter.

clutter and stuffThe best places in your home for collecting clutter

Every surface, cupboard or shelf could be a place to find clutter that you could convert into cash. In particular, these locations tend to be a goldmine for items that have been put away, never to be used again:

  • Under the stairs
  • In the spare room
  • In the attic
  • Under the bed
  • On top of the wardrobes
  • In the garden shed

The forum you choose to sell in will make a big difference

Some options are better than others when it comes to selling old items on. Clothes, for example, are often best sold on eBay while unopened kitchenware or bedding can be easily sold via apps like Shpock. If you have items such as glassware, silverware, crockery and ornaments, you might want to consider taking them to a car boot sale, as you can often achieve a higher price by selling these in a way that allows the buyer to handle the item first.

  • If you’re selling on old tech, such as smart phones, then you’ll often get the best price from a dedicated refurbishment and reconditioning outfit like Gazelle.
  • CDs, DVDs and old games don’t sell that well as single items – you’ll get more for these if you sell them in bulk. If doesn’t matter how old these items are, as long as they still play, sites like Music Magpie will take your old collections off your hands.
  • “Big ticket” items are best sold where you’re going to be able to reach the widest possible audience. So, if you have designer bags or shoes that you know are worth a substantial amount, use Amazon or eBay to get the best possible price from the broadest audience.
  • Bear in mind that you’ll be responsible for ensuring that your buyer receives the item too and that can affect where you decide to sell it. For example, if you’re selling something heavy it’s better to use Facebook or Schpock so that you can find someone local. With eBay you could end up with a buyer thousands of miles away, making postage an issue.

Top tips for selling

  1. Don’t forget to highlight the imperfections. If your items are damaged or slightly marked or broken, make a point of highlighting this in photos and in any description you provide. If you’re selling via a site like eBay and you don’t mention issues like this then you could be forced into a refund.
  2. Some items are much more difficult to sell and it can be better simply to give them away. Used children’s toys, for example, may be better donated to a local playgroup and printers rarely sell online.
  3. Providing free postage is an easy way to convince a hesitant buyer. A low purchase price with high postage is off-putting so try to factor your postage cost into the purchase price so that you can offer postage for free.
  4. Bear in mind the impact of the seasons when you’re selling. If you’re trying to make some money from a pair of used skis, for example, then you’re less likely to have success during the summer months when people are thinking about beaches and not the Alps.
  5. Don’t underestimate the value of what you have to someone else. It’s true that your trash may be someone else’s treasure. You may have exactly the books, shoes or clothes that someone else is looking for even if those items no longer have any value to you.


Successfully selling clutter to make some cash requires a little organisation in terms of how you approach the selling process. If you find the right forum then you could be very pleased with the results.

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How pressure is being kept up on Loan Sharks Mon, 20 Aug 2018 10:43:36 +0000 Alex Hartley Illegal moneylenders are increasingly being recognised as a serious problem in the UK. So much so that steps are being taken, both locally and nationally, to increase awareness and reduce the opportunities that loan sharks have to recruit new customers. Around 300,000 people in the UK are currently in debt to illegal moneylenders. It’s often not until documents have been signed and the money spent that borrowers begin to realise just how exploitative the arrangement really is. That’s why the government is stepping up its efforts to ensure that loan sharks find it increasingly difficult to survive.

loan shark illegal money lenderThe issue with loan sharks

Debt can be useful in life – it can be used for essentials, such as housing or health, and it is something that millions of Britons manage every day. However, the issue with illegal moneylenders is that the terms being offered for the debt are very onerous. Interest is high – and can be increased at any time – and there is nothing to stop these unregulated lenders from adding on fees and charges at random. If individuals struggle with repayments then the consequences can be severe. Tony Quigley, head of the England Illegal Money Lending Team, said,

“These criminals use callous methods to enforce repayment and victims are often subjected to threats, intimidation and violence.”

Governmental pressure

Around £100,000 has already been seized from loan sharks and this will be put towards supporting their victims. The Treasury has also earmarked £5.5m – which is an increase on the funding for last year – to help fund the cost of investigations into loan sharks and to pay for more support for those who have fallen victim to this type of lender. This money will be used in a number of different ways, including:

  • Supporting Illegal Money Lending Teams, which will have powers to investigate potential loan sharks and to carry out prosecutions where appropriate.
  • Providing more support to those who are at risk of being targeted by loan sharks, including encouraging potential victims to join a credit union and investigate other available finance options instead.
  • Funding regional awareness projects in areas where there is illegal money lending activity. For example, a new education project will be set up in Northern Ireland to support vulnerable communities there.

Police pressure

It’s not just government projects that are being used to help keep up the pressure on loan sharks, as the police are also getting involved. West Mercia Police, for example, are working with the England Illegal Money Lending Team on a “bite back” campaign that is designed to expand awareness of the issues people may face in borrowing from a loan shark – and to make it more difficult for illegal moneylenders to operate. The campaign includes staff training, a targeted leaflet drop, as well as school visits so that educating people on the issue of loan sharks begins as early as possible. It is hoped that the campaign will raise awareness of the problems of illegal lending but also help to identify some of the worst local offenders and make it more difficult for them to operate.

What are the regulated alternatives if you need credit?

Illegal lenders often position themselves as friendly, informal lenders who won’t demand the same credit checks or financial history as another lender might. However, the checks and balances that banks are required to carry out tend to be there for a reason. A lender willing to advance money without doing those checks is unlikely to care whether the amount being borrowed is actually affordable. Which is often where the trouble begins. There are many other legal alternative credit products available that don’t carry the same risks. Use a fully regulated credit broker to explore the following options:

  • Payday loans. Payday loans have gone through a period of evolution and the industry is much more controlled now, with limits on how much lenders can charge in fees and how often repayments can be rolled over. Payday loans are best if you need a truly short-term borrowing solution – and with proof of income, a poor credit score doesn’t need to be an obstacle.
  • Guarantor loans. If you have bad credit there is another alternative to illegal lenders. Guarantor loans enable you to borrow even with a poor credit history, as long as you have someone who is willing to guarantee the repayment for you. A guarantor should be over 18 and a homeowner.
  • Homeowner loans. If you own a property then a bad credit score doesn’t have to prevent you from borrowing legally – with homeowner loans whatever you borrow is secured against the property so lenders tend to be a bit more flexible.
  • Doorstep loans. If it’s the local, informal approach of illegal lenders that appeals, doorstep loans offer this setup legally – a representative of your lender will come to your home, both to set up the loan and to collect repayments.

The clock is ticking for illegal lenders in the UK with renewed focus on stamping out these kind of exploitative arrangements. And with the broad range of financial products available to borrowers, even those with bad credit, there’s just no need to borrow from loan sharks anymore.

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Join our SEO Partnership Programme – SEO Professionals Fri, 17 Aug 2018 07:10:00 +0000 Amanda Gillam Launched today is our brand new programme that aims to give SEO specialists a bigger share of the pie – something that rewards SEO effort more equitably. Like many roles the typical SEO consultant or business is paid in relation to the time they spend on the task. This caps the rewards even if the website “goes exponential”. How would you feel about an arrangement where your SEO effort gives you the opportunity to grow your income in line with website growth? Well, that’s what we have in mind.
SEO partnership programme

A Revenue Share Agreement

Our SEO Partnership programme is open to any SEO professional (individual or company) who can demonstrate their superior SEO skills. If you have what it takes to nurture a brand new website in the UK personal finance market through a strong growth phase to a sustained strong performance then we’d like to hear from you today.

Rather than a traditional remuneration method we want share the revenue growth achieved through the search engine optimisation of brand new websites – sites that will only be marketed and developed through SEO.

Our parent company, Affiniti Digital Media Ltd, is planning to launch a number of new UK personal finance websites each of which requires a strong SEO partner. If this sounds exciting, if you could commit a substantial effort for an extended period of time and are prepared to invest your time now for a much larger return in the medium term then this programme could be for you.

Discover more about our SEO partner programme and if it floats your boat, and if you can see the bigger picture then we’d like to receive your application.

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How will consumers benefit from the cap on rent-to-own lenders? Thu, 16 Aug 2018 11:52:17 +0000 Alex Hartley UPDATE Nov 22 2018: The FCA has confirmed that it intends to cap the maximum charges that can be applied so that they are no more than the original cost of the item. Plus, the retailer will need to benchmark the price of the item against 3 other retailers. The FCA estimates these changes will save consumers £22.7m per year. There will be a 2 day cooling off period for extended warranties. There is a final period of consultation until 17 January 2019, with the intention to implement the new rules on 1 April 2019.

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The UK rent-to-own sector is currently undergoing quite a transformation. Back in autumn of 2017 it was revealed that the Financial Conduct Authority (FCA) had found some serious irregularities in the way that rent-to-own was being managed. Rent-to-own businesses were found to have failed to properly assess customer ability to repay in a number of cases. Where this was established, the FCA ordered businesses like BrightHouse to make compensation payments. Under a £14.8m compensation scheme agreed with the FCA, a quarter of a million people were to receive compensation from BrightHouse. In addition to ordering compensation payments, the FCA also discussed a cap for rent-to-own lenders and it’s now been revealed that this could save consumers even more.

BrightHouse rent to ownHow does the cap apply?

Rent-to-own is designed to offer options for consumers who are unable to pay for items, such as a sofa or a fridge, at full price up front. In exchange for a weekly or monthly payment to rent-to-own companies, these items can be leased and there is usually an option to purchase at a future date. Issues arose when it was revealed that consumers were paying vastly more for items via rent-to-own than they would simply buying the item outright. For example, The Guardian found that a £600 computer at Curry’s was costing consumers more than £2,000 at BrightHouse. However, the FCA has now taken steps to change this, suggesting a 100% cap that will save customers money. Effectively, it means that no one signed up for rent-to-own will ever pay more than twice what they originally borrowed.

Where are the benefits for consumers?

Citizens Advice found that the cap, which is due to come in from April 2019, could save customers, on average, up to 30%. The charity carried out an analysis of a range of the products currently available with rent-to-own lenders to establish how much consumers could potentially save on each one. The results showed savings of £174 on a 6kg washing machine – before the cap, rent-to-own customers could have paid an average of £584 but after the cap this would be limited to a maximum of £409. A saving of £123 could be made for customers looking to rent-to-own a 50cm electric cooker, £302 on a 60cm fridge freezer and £640 on a two-seater leather sofa.

Currently, rent-to-own firms can charge whatever they like for items – and tend to do so as long as there are customers who are willing to pay. As well as the charges for the items themselves, lenders often add on additional fees for delivery and installation. When the payments are broken down into a much smaller monthly or weekly amount it’s often easy for consumers to lose sight of the overall total cost. What the new cap will do is ensure that these payments don’t escalate beyond a certain level.

When will consumers benefit from the cap?

Currently, the 100% cap is a proposed change that is part of new rules being drawn up for the rent-to-own industry and due to come into force in April of next year. It is similar to a cap that was introduced into the payday loans sector in 2015 and which has had a very positive impact – the volume of unmanageable debt has been cut by half. In both situations it was the excessively high interest being applied to the debts that was causing people to end up paying five or six times more than they borrowed. Citizens Advice estimates that the cap on rent-to-own could result in total savings of £62million.

Why was the cap necessary? 

Complaints about rent-to-own lenders have soared in recent times. These are often based on high interest rates or an excess of added-on fees. The Citizens Advice research found that nearly 60% of those who signed up for rent-to-own ended up paying late payment fees, for example. On average these added on an extra £72 to the total cost of the loan. The new FCA rules propose to cap these charges at £15 per agreement, per year. There has also been a lot of misunderstanding between consumers and lenders over the terms of these loans, which are often fairly opaque and unclear about the total cost to a borrower. The same research also established, for example, that 25% who purchased a rent-to-own product weren’t aware of the total amount they would end up paying. 

The rent-to-own sector makes owning items more affordable for many people – with the new proposed rules in place it will also offer a much fairer deal.

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Top 14 tips for discussing money with your partner Mon, 13 Aug 2018 10:58:59 +0000 Amanda Gillam Money is one of the main reasons that couples run into trouble and have disagreements. Different attitudes towards cash, not being entirely honest about money troubles and sudden financial problems can cause some serious issues. Communication is the only way to ensure that money doesn’t cause problems between you and your partner. It may not be easy to discuss financial topics, especially if it involves admitting to mistakes, but it’s essential if you want to survive as a couple. These tips are designed to help make it easier for anyone to start an honest and open dialogue where money is concerned.

how to discuss moneyStarting the money conversation

  1. Make it a priority to be honest and open about your finances from an early stage in the relationship. Find out whether you have different views on borrowing, for example, and whether your credit histories are similar. The more you know about your partner’s finances now, the less potential there will be for unpleasant surprises further down the line.
  2. It’s not just about what you have or what you’ve done. Attitudes to money will also have a big influence over how compatible you are financially and so whether you’re more or less likely to have money issues. Try to find out early on whether your attitudes to cash are similar – do you both like to save or is one of you a saver and the other a spender?
  3. Discomfort now is better than resentment later on. It’s never comfortable to talk about topics like money but better to feel that discomfort now than to be resentful later on as a result of a lack of miscommunication.
  4. Keep up the discussion. The longer you’re together, the more likely it is that there will be changes in your joint and individual finances. Make it a feature of your relationship that you regularly sit down and make time for financial chat.

How to discuss money with your partner

  1. Treat it like a business discussion. It’s tough to talk about money to a loved one who will be affected by your financial decisions. However, if you take a more objective view and discuss financial issues like you might with a business partner you will find it easier to be more practical and less emotional.
  2. Start the conversation when the time is right. 11pm at night is not the right time to start a discussion about money. Pick a moment when you’ve both got the time to dedicate to a conversation and neither of you is overly stressed.
  3. If you’ve got to raise a difficult topic do it gently and give your partner the context. Instead of just blurting out the problem and saying you don’t know what to do, explain how the situation arose, why you’re worried and why you need their help with it.
  4. Keep the conversation balanced. Take turns to speak, listen to each other and take the time to think about what has been said before you react to it.
  5. Make your plans together. If your finances are shared then you’re both going to be affected by any outcome so plans are better made jointly. Ensure you both agree on any plan of action that you choose and that you’re both on board with the steps that are required to get you to a specific place.
  6. Avoid confusion. If you don’t both understand the situation then that confusion could cause some serious issues further down the line.
  7. Ask questions. If you feel like your partner’s attitude to money is confusing or upsetting then ask them questions about why they feel like they do and why they’ve taken certain steps. Finding out more about an issue or attitude is more productive than getting angry about it.
  8. Focus on shared goals. Having shared goals can help with financial attitude alignment. Set your goals together and then identify all the small steps that are going to take you from here to there as a couple.
  9. Be honest. It’s always worse in the long run to fudge the issue now. Dishonesty about money can cause a lack of trust that may filter into many other areas of the relationship too.
  10. Take a step back if you need to. It’s very easy for financial discussions to become heated. If you feel like the conversation is getting too much then take a step back and a little time apart and then come back to it later on.


According to relationship support charity Relate it’s important for couples to sit down and dedicate regular time to talking about financial realties, practicalities and attitudes. Making the effort could even save your relationship in the long run

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UK Household debt is worse than it’s ever been! Thu, 09 Aug 2018 11:57:42 +0000 Alex Hartley Household debt and consumer spending have frequently made the headlines over the past year. In 2017, the government was warned by ratings agency Standard & Poor’s that the UK consumer credit bubble of £200 billion was simply not sustainable. Now, the Office for National Statistics has revealed that British households are in deficit for the first time since the credit boom of the 1980s. With a combination of unbalanced household spending and over-reliance on credit, the financial future for many UK consumers does not currently look that bright.household debt

A significant deficit

According to figures from the Office for National Statistics, in 2017 UK households spent on average £900 more than the income that they received. It’s this overspend that has put British households in deficit for the first time since the 1980s. Those households that spent more than they earned were either forced to borrow to cover the £900 deficit or had to use savings to bail themselves out. This is a worrying sign for economists who have already predicted that UK consumer finances are fairly finely balanced. Thanks to the impact of Brexit, as well as low wage growth, there is already tremendous pressure on household spending with many more people turning to credit cards and personal loans to pay the bills.

UK household debt worse than at any time on record

The Office for National Statistics has highlighted that the total shortfall in household spending amounted to nearly £25 billion in 2017. This is worse than at any time on record and means that the UK currently has a deficit that is equivalent to 1.2% of GDP. But where is the debt coming from? According to official figures:

  • In 2017 British households took out £80bn in loans!
  • Last year, unsecured credit – for example, personal loans, credit cards and payday loans – climbed to a record high of more than £205bn
  • Only £37 billion was deposited with UK banks

There is a widespread perception that these excessive levels of debt – and low levels of saving – are a sign that UK households are living beyond their means. However, many charities have warned that this is not the case. StepChange, for example, said

The reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try.”

Personal insolvencies hit a 6 year high

Debt statistics are not the only rather depressing figures to emerge this summer, as personal insolvencies have also hit new levels. According to The Insolvency Service, which is a government agency, the number of people declared insolvent hit a six year high in the three months running up to June 2018. The figures represent a 27.3% increase on those from last year with a total of 28,951 individual insolvencies in the second quarter of the year. This is the highest figure there has been for IVAs since they were first introduced in 1987.

The significant increase has been driven up by the record numbers of Britons who have been forced to take out individual voluntary arrangements (IVAs). An IVA gives someone who is not able to manage their debt on existing terms the opportunity to restructure the agreements that are in place with creditors. IVAs made up nearly two thirds of the total number of personal insolvencies in the second quarter of 2018 with Debt Relief Orders responsible for 24% and bankruptcies 14%.

Data from The Insolvency Service has also identified that some locations in the UK are far worse for personal insolvencies than others. In 2017, it was Stoke-on-Trent that had the highest rate of personal insolvencies in the country, followed by Plymouth, Hull and Scarborough. However, across the UK all the signs are that there are now many more people struggling with debt and personal finances than was previously the case. What is particularly worrying many experts is the fact that the Bank of England could continue to gradually raise interest rates. Should that happen, even servicing existing debt could become impossible for many people and the number of personal insolvencies could rise further still.

What to do if you’re struggling with debts:

  • Make a list of everything you owe so that you can see the full extent of it
  • Speak to your creditors about changing the way you repay your debts – for example making smaller monthly repayments over a longer period of time
  • Find ways to economise – cut back on luxuries, be thrifty with what you spend and prioritise meeting your debt repayments
  • Look for other ways to earn a little extra – could you rent out your spare room, work additional hours or take on a few additional earning gigs?

Ask for help before it’s too late – the earlier you ask for help, the more options you’re likely to have. StepChange and the National Debtline are just two of the options available.

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Key consumer rights legislation that protects you Mon, 06 Aug 2018 10:29:21 +0000 Amanda Gillam In the UK there is a fairly comprehensive consumer rights framework designed to protect individuals when dealing with businesses. From protection when buying products and services online, to getting a refund from your bank if you’ve been the victim of card fraud, consumer rights legislation in the UK has many different situations covered.Consumer rights legislation

Consumer Rights Act 2015

When this legislation came into force it replaced the Sale of Goods Act, Unfair Terms in Consumer Contracts Regulations, and the Supply of Goods and Services Act. It provides various protections, including with respect to:

  • The products you buy – these must be of satisfactory quality, fit for purpose and as described. This includes digital products, so anything purchased online must match the description you were given, for example.
  • Your right to reject – the act gives you 30 days to reject items that are of unsatisfactory quality, unfit for purpose or not as described.
  • Delivery – until the goods are in your physical possession, the retailer remains responsible for them.
  • Unfair contract terms – unless terms in the contract are prominent and transparent, they can be assessed for fairness. Contract terms found to be unfair can be ignored and you may also be able to cancel the contract without a fee.

Consumer Rights Act travel amendments

From October 2016, the Consumer Rights Act was extended to enable consumers to make a compensation claim for poor service on almost all transport services, including train and coach journeys.

Consumer Contracts Regulations

These regulations give you the right to receive certain information, including a description of the goods and the total cost of goods. They also give you cancellation rights if you have entered into a contract, other than in a store, for example at a distance over the phone, online, from a catalogue or face-to-face with someone who has visited your home.

Consumer Credit Act (1974)

UK consumers are protected by this piece of legislation with respect to entering into loan or hire agreements. The Act entitles you to a cooling off period once you’ve entered into a loan or hire agreement and sets out key information that must be provided by a creditor, such as the rate of interest and any conditions attached to the interest rate. It also provides extra protection for purchases made on your credit card.

Consumer Protection Act 1987

If a product you have purchased has caused damage, death or injury as a result of being defective then this legislation gives you the right to make a claim against the producer. Products covered will be anything that can be packaged up and sold.

Consumer Protection from Unfair Trading Regulations 2008

These regulations are designed to protect consumers from unfair trading practices and misleading and aggressive tactics. This includes a list of practices that will always be considered to be unfair and which have been banned, including “limited” offers – where it is falsely stated that the product will be available for a short period of time – and “bait and switch” where one product is offered with the intention of selling something different.

Payment Services Regulations 2017 (PSD2)

If you’re the victim of a card fraud then it’s these regulations that require your bank to refund you for any fraudulent transactions that have resulted in you losing money. There are a few conditions, including that you report the loss or theft of a card, or the fraudulent transactions, straight away.

Package Travel Regulations

If you book a package holiday that isn’t as described in the brochure when you were sold it then you may be able to make a claim against the operator using these regulations.

Misrepresentation Act 1967

This Act is designed to prevent consumers from being convinced to buy something or enter into a contract on the basis of a false or fraudulent claim. If that’s the situation you find yourself in then the Act may enable you to claim compensation.

General Data Protection Regulation (GDPR)

The GDPR gives consumers much more control over the way businesses handle their data. It enables you to find out what data is held about you, ask that it is all deleted and means you can claim for misused data, among many other things.

Denied Boarding EU Regulation (Regulation 261/2004 EC)

If you are departing from an airport within the EU (regardless of airline) and your flight is delayed or cancelled then this regulation entitles you to compensation. The exception is if the airline can prove that the cancellation is caused by extraordinary circumstances that they couldn’t have avoided.


You can find out more about your consumer rights at Which?

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A layman’s guide to the Consumer Credit Act 1974 (amended 2006) Thu, 02 Aug 2018 12:07:30 +0000 Alex Hartley The Consumer Credit Act 1974 is designed to give consumers protection with respect to loan agreements, credit card purchases and a range of ancillary issues, such as accessing credit information. Together with the Financial Services and Markets Act 2000, and a number of European consumer credit regulations, it provides a comprehensive set of protections for consumers using credit in the UK.Consumer Credit Act

What does the Consumer Credit Act cover?

In most situations, the protections available under the Consumer Credit Act will only cover credit of between £100 and £30,000. Those debts that are covered by the legislation are called “regulated” debts and these include credit cards, store cards, payday loans, personal loans and hire purchase agreements. Some types of debt are not covered by the act, including mortgages, charge cards, debts that are owed to another individual, debts to an unlicensed lender (e.g. a loan shark) and debts owed to a utilities company.

Entering into credit agreements

The Consumer Credit Act 1974 (CCA) establishes key foundations for the way in which financial bodies can enter into credit agreements with UK consumers. This includes:

  • Information that must be provided to a consumer before a credit agreement is signed. For example, the nature of the agreement, name and address of the creditor, duration of the agreement, type of credit and credit limit, details of the interest rate and any charges, as well as the total amount payable.
  • The way that credit agreements should be set out, in terms of content and form.
  • How Annual Percentage Rates (APR) should be calculated.
  • Key procedures to deal with changes to the credit agreement, such as early settlement, default or termination of the agreement.
  • The requirement to credit check consumers using information provided by the consumer and also by a credit reference agency.

Cancelling credit agreements

You can cancel a credit agreement that you signed in your own home according to the rights that the CCA gives you. Together with various European regulations, the CCA gives consumers the right to cancel credit agreements in a number of situations, including when you entered into a credit agreement over the phone or at a location not on trade premises (for example at a temporary marketing display). In most cases you will have a cooling off period in which to change your mind – this may be between 5 and 14 days, depending on how you entered into the credit agreement. You should always be given information about the cooling off period before signing anything – if you haven’t been provided with this then ask. It’s worth noting that if you’re entering into an agreement for more than £60,260, or an agreement secured on land, then you may not have a right to cancel.

Your rights if you have debt problems

The CCA provides a number of key protections for anyone who is getting into trouble with their debts, including:

  • A creditor must issue a default notice if you fall into arrears with a debt, so that you have time to get your account back up to date.
  • A default notice has to take a particular form, including informing you what is owed and what action will be taken if the amounts are not paid. A default notice should give you seven days to get your account up to date.
  • If you’re in default with your debts then your creditor must provide regular statements and correspondence to keep you informed about the debt, interest and any charges.
  • If you’re not happy with the way your debts have been handled you can make a complaint to the Financial Ombudsman Service.

Hire purchase agreements

Where you have paid a third of the total price under a hire purchase agreement then the CCA prevents the creditor from taking the goods back without first getting a court order. Consumers are entitled to ask the court to suspend the order and accept instalment repayments of what is owed instead.

Additional protection for credit card purchases

Where you have made a credit card purchase for between £100 and £30,000 and you have a claim for breach of contract or misrepresentation against a retailer of goods or services, you may also have a claim against the credit card provider. This could be useful, for example, where you used your credit card to buy services from a company that has become insolvent. As the insolvent company won’t now deliver the services, and is unlikely to be able to repay your money, being able to make a claim against the credit card provider provides another way to get your money back.

These are just some of the protections in the CCA – you can find the full legislation here.

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All about Annual Percentage Rate / APR% Mon, 30 Jul 2018 10:39:36 +0000 Amanda Gillam At first glance, interest rates seem like they should be quite simple. Interest is the rate that you’re charged to borrow money, such as a personal loan or a credit card. However, especially when it comes to the Annual Percentage Rate (APR) and compound interest, it can be a lot more complicated.Annual Percentage Rate

Interest rate vs. APR

The main difference between an interest rate and an APR is that, if there are any fees involved in the borrowing (for example, an annual credit card fee) then this will be factored into the APR and not into the interest rate. That’s why the interest rate quoted is often lower than the APR. If there is no arrangement fee to pay for the card or loan then there may be no difference between the interest rate and the APR.

The basics of interest

Interest is pretty straightforward to start with – if you’re paying 10% interest on a £1,000 loan then that will cost you £100 over the course of a year or £33 if you borrowed the money for just four months. Compound interest, however, can make things a little more complicated.

Savings: The way that compound interest works is – to use savings as an example – you earn interest on the money that you save for the first year. Then after the first year you’ll be earning interest on those original savings – and you’ll be earning interest on the first year’s interest. So, you can earn a lot more interest on savings that way.

Debts: Unfortunately, this also applies to debts. So you’ll pay interest on the original borrowing and you’ll then also pay interest on the debt interest applied to that original borrowing, which increases each year. The longer the period over which you have the debt, the more interest you pay. It’s easy to underestimate how much this can add to your debts – for example, if you borrowed £1,000 at 15% over 20 years without making any repayments, with compound interest applied, you’d owe £16,400. If there was no compound interest on that debt the interest would be just £4,000.

You can explore how interest rates and repayment period affects the total amount you repay by using our loan calculator – it’s capable of looking at loan values from just £500 to £25,000+ over periods as long as 10+ years. You’ll soon realise the impact of the APR% and the effect of compound interest.

The different types of APR

All lenders are required to tell you what the APR is for a loan or credit card before you borrow so it’s a useful comparison tool when you’re trying to decide which is the best credit option for you. However, there are two different types of APR and you won’t necessarily get the first one that you see when you’re looking at a loan or credit card.

  1. The representative APR. This is the rate that is generally advertised with a financial product, such as a loan or a credit card. However, only 51% of people whose applications are accepted will actually get the representative APR or better. Most APRs are calculated using an assumed credit limit and will factor in the annual interest you’re likely to pay on every day purchases, as well as any fees or charges that apply. However, these are all estimates. So, for example the representative APR on a credit card is calculated assuming a credit limit of £1,200 – but that doesn’t mean that is the credit limit you’ll be offered. Another point to note with the representative APR is that – for credit cards, for example – this advertised rate is always the purchase rate. So, it is the rate that you’d pay if you were offered the representative APR for any purchases you make. There might be a totally different rate for balance transfers.
  2. The personal APR. This is the rate that you will be offered for the loan or credit card you’re looking for once you’ve actually made the application. Lenders tend to reserve the representative APRs for the customers they think are the most attractive so, unless you have a great credit score, then your personal APR could be quite different. Your personal APR will be compiled from a number of key factors, including how old you are, how much you earn, how much you spend and what your credit score is. The better your credit score, the more likely you are to get a good personal APR.

APRs and 0% borrowing

0% credit cards are a very attractive opportunity. It basically means that you won’t have to pay the APR on any debt you have on the credit card until the offer period runs out. Some cards offer 0% on balance transfers and others on spending – there are also some cards that will give you 0% on both. When you’re signing up for a card like this make sure you still check the APR and that you’re happy with it. Once the 0% period expires then the APR will kick in and you’ll have to be prepared to pay it if you have outstanding debt.

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What does the recent failure of VISA’s card payment system tell us? Thu, 26 Jul 2018 11:51:58 +0000 Alex Hartley On 2nd June 2018, millions of people across Europe were unable to make any payments with their Visa cards as a result of a huge system failure. This network crash was, unfortunately, not the only situation in which we have seen technology-reliant systems grind to a halt recently, inconveniencing thousands of customers. There have been hacks and attacks on customer data at big name banks, as well as IT switch overs that have had chaotic consequences. But what does the latest problem with cashless paying really tell us?visa payments system

Cashless payments have their problems too

The drive towards cashless payments and using technology, as opposed to notes & coins, to pay for things has been quite relentless. From Apple Pay through to wireless payments, we are increasingly being encouraged to leave the cash at home and make payments for everything electronically. However, the Visa catastrophe shows that cashless infrastructure can have some serious problems. If the system you’re relying on to make payments crashes then you simply can’t make those payments. So how vulnerable are we really making ourselves by becoming reliant on this technology?

A diversified market would be a better option

Currently, Visa and MasterCard dominate electronic card payments. There are consequences for consumers in terms of competitive pricing and a lack of choice. However, this also means that if one of these players experiences serious problems then a very big chunk of customers will be affected. If the UK had a more diversified market, with a wider range of options, then one payment provider being affected wouldn’t have such a wide ranging impact.

What happens if you fall outside the system?

Another consequence of having a market dominated by big players is that they can exclude large numbers of people from taking part. What happens if you fall below the criteria to be eligible for a Visa card for example? If we move towards a completely cashless society then anyone who doesn’t meet the criteria for these two big card providers could find themselves completely excluded from economic participation.

How reliable is the technology?

Specifically, how reliable is the technology being used by your individual bank and the point at which this integrates with Visa or Mastercard systems? Although banks are highly likely to promote themselves as innovative and ahead of the curve on the technology front, many of the infrastructures that underpin UK banks are decades old. Often, the work has simply not been done on reconciling old systems with new and it may be here that the problems arise. Pinar Ozcan, professor of strategy at Warwick Business School told the Independent newspaper that

“most of us trust an established bank with our money, not realising that these banks’ IT systems date back to the 1970s and they have not updated these systems significantly since then, precisely due to the fear of the system breaking down in the process.”

What about your data?

Law firm Osborne Clarke surveyed 2,000 people and found that more than three quarters of those people were concerned about the amount of data they would be sharing if electronic payments completely replaced cash. The perspective that big financial institutions will have on the lives of customers by being able to see every single payment – and the judgements that could inform at the bank – is very unnerving for some.

Is there any good news?

We are increasingly moving towards a cashless society and, despite the recent network crashes and the confusion that caused, there is light at the end of the tunnel.

  • Soon, if systems crash you could just use a a card from a different provider. More payment options are becoming available as alternative banks are appearing, which means that the market is being diversified. So, in the future, if you do find yourself the customer of a provider like Visa with a system that has crashed then you should just be able to use another card from an unaffected provider.
  • Improving technology will become a dealbreaker. The likelihood is that banks that don’t update systems and invest in the latest technology to ensure systems are not outdated will simply lose their customers. Losing customers is one of the biggest motivators for financial organisations when it comes to investing in services and infrastructure so it’s highly likely that the current situation will be improved.
  • Electronic payments encourage transparency. Although electronic payments provide more data about our own transactions, they also mean that there is less opportunity for a black market than exists with cash. Cash is not traceable and so can be moved around the world to pay for anything, from drugs to terrorism. More electronic payments could, in theory, reduce this kind of impact.
  • Those who handle data are being held to higher standards. Already the GDPR has ushered in a new era of data protection and emphasis on institutions handling data to be more proactive about protecting and collecting it. It’s likely that these obligations will increase and financial institutions will have to be more responsive, not least due to the lost of customer trust that results from a data breach.

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The rise of the SIM-only phone contract Mon, 23 Jul 2018 10:16:49 +0000 Amanda Gillam The SIM card is effectively the brain for your mobile phone, carrying the unique phone number, storing personal data and enabling phone operation. It’s the most important component in a phone and, as telecoms operators are beginning to discover, increasingly the only part of the phone that consumers want to contract for. SIM-only contracts are gaining popularity predominantly because they offer much cheaper deals than those contracts that also factor in the cost of a phone. But what does this mean for the mobile phone market in the UK and, if you’re looking for a SIM-only contract, where can you get the best deals?sim-only phone contracts

SIM-only contracts – the market

At the start of 2017, SIM-only deals represented around 27% of the market for mobile phone contracts in the UK. By the end of 2018 that figure is predicted to reach 34%. And by 2021, the experts have said that around 54% of consumers are likely to be on SIM-only contracts. This is a trend that is taking shape right across Europe – in fact, Spanish consumers are now almost exclusively using SIM-only contracts.

Why are SIM-only contracts so popular?

The obvious appeal is that SIM-only contracts are cheaper. You pay less for a deal that only covers the SIM because the cost of the phone is excluded from the price. Traditional mobile phone contracts bundle everything in to the estimated monthly cost, including the price of the SIM and the price of the handset. This can considerably increase what you pay for your contract. If you buy an iPhone today, for example,  – straight from the Apple Store – you’ll pay £549 for 4.7 inch iPhone 7 and £699 for a 5.5 inch phone. The new iPhone X starts at £999. Given these costs it’s not difficult to see why a traditional mobile phone contract costs more than a SIM-only deal. And yet, at the same time, mobile phone operators are still making a pretty tidy profit on traditional deals with consumers. It’s this awareness of being profited from, as well as the desire to cut monthly costs, that is driving more and more people towards opting for a SIM-only deal.

How does a SIM-only deal work?

  • The contract. Although you’re not getting the phone you still have to sign up for a contract to get the best prices for a SIM-only deal. You’ll usually be offered either a 12 month contract or a 30 day rolling contract.
  • The phone. In order to use your current phone with a SIM-only contract it will need to be unlocked. If you got your phone via a contract with another provider then it will be locked to the network that sold it to you. It’s simple to get your phone unlocked – if you’re out of contract on the phone then your old provider has to do this for free. If your contract is still running on your phone – or you bought it as a pay-as-you-go – then you might be charged to get it unlocked (up to £15).
  • The switch. Make sure you give enough notice on your old phone contract – most require 30 days. Remember that if you’ve signed a contract for two years then you won’t be able to leave until after those two years are up. If you want to keep your old number you’ll need to get a PAC (Porting Authorisation Code) from your old provider.

SIM-only deals to look out for

The best deal for you will be one that gives you the usage you need. You can see how much data, text and voice minutes you used last month via your existing provider and base your search for a new deal on that. Some of the best deals around at the moment include:

  • Virgin Mobile. A 12 month contract with unlimited texts, 1500 minutes and 2GB of data costs £7 a month.
  • A 1 month contract with 5000 texts, 2000 minutes and 2.5GB of data is £7.50.
  • Vodafone. A 12 month contract with unlimited texts and calls and 3GB of data is £8 a month.
  • A 1 month contract with 5000 texts, 500 minutes and 5GB of data is £10 a month

The future of the UK mobile phone market

If the predictions are right then it’s likely that the majority of consumers in the UK will move to a SIM-only deal in the next three or four years. This means that the big mobile phone operators will need to offer better SIM-only deals to be more competitive – or improve the appeal of their traditional contracts. For the handset manufacturers there are implications too – Apple and Samsung, for example, are already looking at putting more resources into “direct to consumer” sales to take advantage of the increase in the number of consumers looking to buy a handset to go with their SIM-only deal. These days it could make more sense to take out a loan to pay for the phone outright and buy the sim separately.

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All you need to know about acting as a rental property guarantor Thu, 19 Jul 2018 11:21:19 +0000 Alex Hartley The cost of renting in the UK is increasing – rents across the UK rose 2% in March 2018 and renters now pay an average of £919 a month. For those based in London, the average rent is £1,560. As rents rise far in excess of wage growth, it becomes increasingly difficult for tenants to cover their monthly housing costs. The risk that this creates for landlords is something that many have been attempting to provide for by asking for rental guarantors. If you’re asked to be a guarantor for someone else’s rent then what exactly is involved and how should you handle it?acting as a rental property guarantor

Why is a guarantor necessary?

Landlords tend to ask for a guarantee where there is any risk that the tenant may not be able to make the rental payments on a property. So, for example, landlords renting to students often ask for guarantees because students don’t have an income. Anyone who doesn’t pass a credit check may also be asked to provide a guarantor, as well as those who are under 21 and tenants who have worked for their current employer for less than six months. Anyone on a low income who can’t show any savings to cover future rental payments may not be able to rent without a rental guarantor. The use of guarantors is now widespread for things like loans, and utility payments, but this is fundamentally nothing new.

What does a guarantor do?

Effectively, the guarantor will step in and make the rent payments if the tenant is not able to do it themselves. If the guarantor doesn’t make the payments then the landlord will be able to take legal action against the guarantor. The guarantor will be liable for any rent that goes unpaid but may also find that the landlord asks them to cover other costs, such as the expense of repairing any damage that the tenant has done to the property.

Who can be a guarantor?

Guarantors must be over the age of 18 and landlords tend to insist that the guarantor lives in the UK. This is because it’s much more difficult to take legal action against a guarantor if they are based overseas. Most landlords also insist that the guarantor is a UK homeowner and some may require a guarantor to be able to show that they have enough income to cover any potential payments that must be made under the guarantee.

What’s the process of becoming a guarantor?

  1. Guarantors will be asked for references and also credit checked, just like a tenant
  2. Guarantors may be asked to provide proof of home ownership and/or sufficient funds to cover the liabilities under the tenancy agreement
  3. A guarantee document will be produced – legally, this must be in writing and set out the rights and obligations that the guarantor has
  4. Guarantors must see and review the tenancy that they are guaranteeing – if the guarantor is not given enough opportunity to read and question the tenancy agreement, and raise any points that they don’t understand, before signing the guarantee then the guarantee may not be valid.

What do you need to think about if you’re planning to be a guarantor?

  • How well do you know the person you’re being a guarantor for? If you don’t know them that well, or you’re not 100% sure that they will do their best to make the rent payments themselves, then you might want to think twice about taking on this legal obligation.
  • Can you afford to pay the rent? Many people agree to become a guarantor without really thinking about the potential consequences. If the guarantee is activated then you will have to cover, not only your own outgoings but also –potentially – all the payment requirements under the guarantee. For example, if you’re guaranteeing a tenant in London paying an average rent and you have to cover eight months worth of payments that is a minimum of £12,480.
  • What does the tenancy agreement require of you? You might find that you’re actually required to do more than cover the cost of the rent – make sure you read the tenancy agreement to see what extra expense there could be.
  • When does the guarantee come to an end? This should be stated in the guarantee document but there is no standard length of time. Some guarantees are for a fixed period – e.g. a year – but others are open ended. If you have an open ended guarantee then you would remain liable as long as the tenancy exists.
  • Are you guaranteeing a joint tenant? Especially in student houses it’s common for guarantees for joint tenants to cover the entire rent. So, you might think you’re only guaranteeing the rent of the person who has asked you to be their guarantor but, due to the joint tenancy, you will be liable for all the rent for the entire property. In that situation, if there is a default then the landlord would reach out to all the guarantors – but if (in a worse case scenario) none pay up then the responsibility could be yours.

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Family days out in London for under £5 Mon, 16 Jul 2018 10:29:56 +0000 Amanda Gillam London is one of the world’s great cities – a vibrant and colourful melting pot of culture, activity, art, politics, people and learning. There is a lot that our Capital has to offer to growing and impressionable minds. Summer is the ideal time to take your family to explore everything that London can inspire – and you don’t have to bust your budget to do it either.days out in london

Take the bus

You could sign up for an expensive London bus tour – or you could just get on a regular London bus. Perching on the top deck of a bus is an excitement that never wanes for children (sometimes for adults too) and many of London’s iconic and exciting landmarks sit alongside some of the most regular old transport routes. The Number 8, for example, will take you past St Paul’s Cathedral, Bank and into the vibrant buzz of Shoreditch. Or you can ride the Number 11 to see Westminster Abbey, the Houses of Parliament and Nelson’s Column. Kids go free on most London buses and adult fares are just £1.50.

Attend a masterclass

London is filled with cultural institutions, many of which tend to run free courses to give something back to the communities that support them. The Theatre Royal Haymarket, for example, runs masterclasses that are the ideal opportunity for budding thespians to get inspired. Well known actors share their top tips and there is also the opportunity for attendees to ask questions. The masterclasses at the Royal Haymarket are free.

Have fun down on the farm

You don’t have to leave London to enjoy a day down on the farm thanks to the wonderful Hackney City Farm project. The farm is free for everyone and has donkeys, pigs, goats, sheep, geese and calves, to name a few of the animals that call Hackney their home. There are regular arts projects that anyone can get involved in, as well as an organic farm shop where you can buy farm produce, including eggs laid fresh that day. Whether you want to teach kids where their food comes from, or just to widen their experience of animals, a summer day down on the farm is great fun – and free.

Go cycling along the canal

When you think of London you don’t often think of water but actually the city is defined by its waterways, both those hidden and out in the open. The Regents Canal, for example, runs for 14km and has a total of 13 locks. If your children are confident on bikes then it’s a wonderful, often very relaxing, ride alongside the water with plenty of spots to stop for a drink or an ice cream. The canal travels from Paddington to Limehouse via Camden, Islington and Hackney – if you leave the path at Victoria Park then you’ll have time for an end of day picnic in the evening sunshine.

See the changing of the guard

Since the recent wedding between Meghan Markle and Prince Harry there’s been a significant surge in interest where the royals are concerned. If your family has been caught up in royal fever this summer then take them to the epicentre of it all in London – Buckingham Palace. The palace itself is quite an inspiring sight to behold but if you get there just before 11.00 in the morning then you’ll also be able to see the changing of the guard. Nearby Green Park is the ideal place to have a picnic lunch once you’ve watched this legendary military ceremony.

Hang out by the water

London has plenty of spots where you can take the family to cool down on a hot summer day – and many of them are free or charge very little. Hampstead Heath ponds is probably one of the most iconic places for an urban bathe in the natural ponds in the north of the city. Adult entry for a day pass to the ponds is just £2 and for children it’s £1 so it’s possible to enjoy a day by the water for around (or under) £5 depending on the size of your brood.

A day out at the park

London has an abundance of parks with a wealth of facilities to keep children entertained through the summer months. Brockwell Park is one of the best in South London, for example, and has a sandpit, paddling pool and a range of activities, from climbing frames through to a zip wire.

Get a dose of culture

If it’s artistic inspiration you’re looking for on a day out with your children then London offers plenty of options, all of them free. The Tate Modern, Tate Britain, The Royal Academy and The National Gallery are just a few of the locations where you can see art from throughout the ages without paying for it.

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Real Life – How to balance your household budgets when living on benefits Thu, 12 Jul 2018 11:51:29 +0000 Alex Hartley Many of the money decisions we make today are based on what to do with the disposable income that we have. That’s the amount that’s left after covering basic costs, such as food, rent and utilities. A large proportion of people have experienced a drop in disposable income, particularly since the financial crash in 2008. But there is perhaps no section of British society that has been quite as hard hit as those on on benefits

What is life like on benefits?

Many of the government’s austerity measures have been aimed at reducing the strain that benefits place on the public purse and this has resulted in a lot of cuts. Those of working age who claim benefits have had their incomes frozen since 2015 as part of general austerity measures. According to the Institute for Fiscal Studies, by 2020 on average these households will have lost £450 a year.

Who claims benefits?

There could be any number of reasons for someone finding themselves in a position where they have to claim benefits. Medical conditions that prevent people from working mean that life is restricted to what the state can provide. Redundancy and being unable to find another job could be the reason for signing on for benefits for some and, for others, it’s responsibilities such as being a full time carer for someone with medical issues. Stories in certain parts of the UK media have been rife about those living the Life of Riley on benefits but the reality of where this leaves personal finances, in disposable income terms, can come as quite a shock.

How much do you get on benefits?

Radio 4’s consumer affairs programme You & Yours recently spoke to two single women and a couple who were living on benefits. Each of these households had the following to live off:

A single person with medical issues

  • Universal credit £480 a month
  • Personal Independence Payment (PIP) for long term health condition or disability £55 a week, paid per month

A single job seeker

  • Job seekers Allowance £115 a fortnight (reduced by £15 a fortnight to repay job centre loans)

A couple, one the carer for the other

  • £150 a week income support + PIP

The reality is for many people on benefits that, after the cost of gas, electricity, council tax, food and other routine bills have been covered they have just a couple of pounds left.

What kind of sacrifices have to be made?

On this kind of income, the idea of going out at the weekends or going shopping for new clothes is simply a pipe dream. Job seekers may find it hard to get to appointments they can’t walk to because they can’t afford the bus fare. This opens up the risk of benefits being stopped because appointments haven’t been attended. The luxuries that many people take for granted, such as holidays, being able to get onto the property ladder and even just travelling to see relatives, are all out of reach. And getting credit when on benefits is going to be tricky too.

Tips from those who balance budgets on benefits

When it comes to coping with the cost of every day living expenses there are a number of ways in which people on benefits cope, including:

  • Prioritising paying bills by transferring money into a separate account to ensure that these essential costs are met first
  • Establishing another separate account so that money can be put aside for basic living
  • Always creating a list before going shopping – no spontaneous purchases
  • Checking the cupboards and fridge before going shopping to ensure that nothing is being purchased twice
  • Choosing shopping times carefully – product markdowns often happen in the late afternoon, which can be a great time to get more for less

The basics of budgeting

  1. Work out all your income – total monthly benefits, any wages and any other income.
  2. Add up your outgoings per month – look at your household bills and add up exactly how much you pay every month. Be as exact as you can about your supermarket spend per week, don’t forget the cost of insurance and loan repayments, as well as any regular travel costs that you have. If you have additional expense for pets or childcare include those here too.
  3. If the budget doesn’t balance – i.e. if you have more going out than coming in then you’re going to have to make adjustments. For example, could you switch to a different energy provider and pay less for your gas and electricity?

Once you know what your affordable monthly budget is then stick to it. The more faithfully you commit to what your income allows you to spend, the more likely you are to be able to balance your household budget, even on benefits.

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How to entertain the kids this summer on a limited budget Mon, 09 Jul 2018 10:28:06 +0000 Amanda Gillam The summer holidays are imminent and while the kids maybe looking forward to it, for the adults the pressure is on. Obviously everyone loves spending time with their children – and there’s plenty of quality time to enjoy during the summer – but it can be a challenge to work out how to entertain everyone. That’s especially so if you’re on a serious budget. In fact, a recent study found that for low income families the summer holidays often entail poor childcare support, limited access to activities and food worries. Some children may end up feeling isolated if parents are out at work and many kids in low income families end up frustrated and bored. But is it possible to entertain kids over the summer on a limited budget? entertain the kids this summer

Hit the park

Sometimes the simplest ideas are the best and the park offers all sorts of benefits on a summer’s day – for no spend at all. From socialising with other kids to joining in games of football and ensuring everyone is thoroughly exhausted by the time they get home, the park has plenty of advantages. If you’re not keen on your local park then jump on a bus or walk a little further to find one that offers something new.

Free art galleries and museums

The summer holidays are the perfect time for a little cultural enrichment and exposing growing minds to ideas and art that they might not yet have seen. Museums and galleries all over the UK offer free entry during the summer holiday so your only cost will be lunch and transport. In London, for example, you’ll be able to visit the Tate Britain, Tate Modern, Science Museum, the Museum of London and the British Library, to name just a few.

Put your kids to work

There’s no reason why the summer holidays should be all about lie ins and lazy days. It’s also a great time for kids to learn a little work ethic – and earn some summer spending money. Depending on where you live (and how old your children are) there could be many opportunities for earning a little extra cash, from a paper round, to fruit picking, working in a shop or walking the neighbour’s dogs.

Have a creative day

If you have children who are easily bored then it might be essential to ensure that minds are kept occupied. A creative day means getting all the creative tools – from pens and crayons through to cameras and music making software – and setting your children a creative challenge. That might be to write a story, alone or together with you, to design invitations to a summer BBQ or to create a theme song for the summer. If you don’t have the money to pay for courses and learning days, there is still a lot that you can do with what you have at home.

Play tennis

If Wimbledon fever grips your family this year then get your children out onto the tennis courts hitting a few balls to burn off some extra energy. You’ll find tennis events and days out all over the country and free tennis taster courses in August, as well as open days and competitions. Tennis rackets can easily be purchased second hand or you can rent one for the day instead of buying new.

Team up with another family

Often the best entertainment for children is… other children. Play dates, shared picnics, joint bike rides and movie and pizza days with another family offer cheap solutions to ensuring that children have others to interact with during the summer holidays. Sharing time with another family can also help to solve issues of childcare with parents splitting the responsibility of looking after both sets of children and reducing the amount of time off work required.

Go camping

Children love to camp. There’s something about tents and setting up a little temporary sleeping spot that generates lots of enthusiasm with kids. Camping is a great, way to enjoy a summer holiday with your children that won’t come with a huge price tag – all you need are the tents and the cost of the pitch fee. If you don’t have the time or money to travel to a campsite then camping out in the garden can be equally fun. And if you don’t have a garden, indoor camping is just as good – set up the tent, roast some smores in the microwave and sit around telling ghost stories in the dark.

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How to cut the cost of your large motoring fuel bill Thu, 05 Jul 2018 10:59:28 +0000 Alex Hartley According to RAC Fuel Watch, petrol prices in the UK have hit a three year high. We’re now paying more to fill up our cars than at any time since 2014, with the cost of unleaded up to £1.21 and the cost of diesel rising to £1.23 a litre. This increase in fuel prices is being driven by a rise in the cost of oil, which has now also peaked at the highest level since May 2015. So, are we stuck paying higher prices for motoring fuel now that the costs are rising – or is there a way to cut the cost?