Why are some people better at saving money? Could your pension be at risk? How to kick start your business with a guarantor loan? Find out the answers to these questions and more from the independent loan broker Solution Loans, with lots of money saving tips and expert financial advice on a range of issues, from family budget travel to cheap home improvements and more.
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UK consumers are very familiar with debt. In just... You're reading the blog post The real life consequences of being made bankrupt that was written by and first published on Getting Loans and Credit & Managing Money.
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.
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%.
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.
Recent statistics on Britons’ retirement savings have made for... You're reading the blog post Forgotten Pensions – how to trace what you’ve forgotten you had that was written by and first published on Getting Loans and Credit & Managing...
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!
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.
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.
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?
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.
You're reading the blog post Forgotten Pensions – how to trace what you’ve forgotten you had that was written by and first published on Getting Loans and Credit & Managing Money.
According to research carried out by Citizen’s Advice, 4... You're reading the blog post How to avoid being ripped off for your mobile phone – like 4 million people are! that was written by and first published on Getting Loans and Credit & Managing...
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.
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.
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.
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.
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.
You're reading the blog post How to avoid being ripped off for your mobile phone – like 4 million people are! that was written by and first published on Getting Loans and Credit & Managing Money.
Across the UK more and more cases of fraud... You're reading the blog post The Problem of Personal Fraud in the UK that was written by and first published on Getting Loans and Credit & Managing Money.
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.
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.
Everywhere. It’s a problem for police forces to solve up and down the country. Some areas affected include:
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.
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.
It’s important to be vigilant. You should start by following our five tips to keep yourself, your personal information and your finances safe.
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.
Loyalty is something that most of us value in... You're reading the blog post Why it doesn’t pay to be a loyal customer! that was written by and first published on Getting Loans and Credit & Managing Money.
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.
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:
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.
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.
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.
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.
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.
The Autumn Budget has been delivered by Philip Hammond.... You're reading the blog post What does this week’s Budget mean for you? that was written by and first published on Getting Loans and Credit & Managing Money.
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:
Income tax rate thresholds will move upwards as of April next year:
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.
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.
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.
£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.
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.
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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