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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The cost of renting in the UK is increasing... You're reading the blog post All you need to know about acting as a rental property guarantor that was written by and first published on Getting Loans and Credit & Managing Money.
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?
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?
- Guarantors will be asked for references and also credit checked, just like a tenant
- Guarantors may be asked to provide proof of home ownership and/or sufficient funds to cover the liabilities under the tenancy agreement
- A guarantee document will be produced – legally, this must be in writing and set out the rights and obligations that the guarantor has
- 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.
- What are your responsibilities as a guarantor for a loan?
- What are your legal rights as a tenant?
- Been asked to be a guarantor? Here’s what you need to know
You're reading the blog post All you need to know about acting as a rental property guarantor that was written by and first published on Getting Loans and Credit & Managing Money.
London is one of the world’s great cities –... You're reading the blog post Family days out in London for under £5 that was written by and first published on Getting Loans and Credit & Managing Money.
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.
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.
- Unexpectedly cheap and brilliant UK weekend destinations
- Tips & tricks for finding the cheapest summer holiday deals
- Summer travel tips for student budgets
Many of the money decisions we make today are... You're reading the blog post Real Life – How to balance your household budgets when living on benefits that was written by and first published on Getting Loans and Credit & Managing Money.
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 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.
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
- Work out all your income – total monthly benefits, any wages and any other income.
- 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.
- 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.
You're reading the blog post Real Life – How to balance your household budgets when living on benefits that was written by and first published on Getting Loans and Credit & Managing Money.
The summer holidays are imminent and while the kids... You're reading the blog post How to entertain the kids this summer on a limited budget that was written by and first published on Getting Loans and Credit & Managing Money.
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?
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.
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.
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.
- 6 ways to enjoy time off when you can’t afford a summer holiday
- How to save money over the summer
- 11 best destinations for weekend city break
You're reading the blog post How to entertain the kids this summer on a limited budget that was written by and first published on Getting Loans and Credit & Managing Money.
According to RAC Fuel Watch, petrol prices in the... You're reading the blog post How to cut the cost of your large motoring fuel bill that was written by and first published on Getting Loans and Credit & Managing Money.
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?
Five ways to cut the cost of your motoring fuel
Choose your petrol station carefully
Where you buy your fuel could actually have a big impact on how much you pay for it, as individual petrol stations have discretion over how much they charge.
- Find a busy petrol station – the more petrol they are selling, the more deliveries they are getting and the more likely they are to be able to sell fuel at a cheaper price.
- Choose a petrol station surrounded by plenty of others – if your petrol station is the only one for miles around then they are likely to charge a lot more than a petrol point that is just down the road from the competition.
- Opt for a big petrol station – like any other product, petrol is a wholesale purchase and it tends to be the bigger players who are able to negotiate the best deals.
- Avoid petrol stations in pricing hot spots – very rural areas, expensive cities (such as London), airports and motorways are where you’ll find the highest petrol prices. Opt for somewhere more middle of the road – the suburbs or a provincial town – and you’re likely to get a much better deal.
Make your car more fuel efficient
You may not be in a position to switch your car for an electric or hybrid model but there is still a lot you can do to ensure that it consumes less fuel including:
- Check the pressure of your tyres – if it’s too low then this will increase the drag on the car, which will mean it consumes more fuel.
- Ditch the roof rack – your car has to work hard to power forward with a roof rack attached as a result of the wind resistance. Taking the roof rack off can improve fuel efficiency by 10%.
- Don’t use the aircon unless you really need it – air conditioning is a gas guzzler so, if you want your car to consume less fuel, then keep it off unless it’s really necessary.
- Change the way you drive – amazingly, you can save around 30% on fuel costs if you change your driving habits. Avoid too much stopping and starting when you drive, try to slow naturally, as opposed to using the brakes, and accelerate smoothly without over revving.
And if your monthly budget will allow investigate whether changing your car to help you save fuel costs in the long run makes overall financial sense.
According to PetrolPrices.com you could save more than £220 a year by using its petrol price comparison website. It’s free to sign up and provides a breakdown of average fuel prices by location and by brand. You can sign up for price alert emails, use the website or download the app to find the cheapest petrol station along your route. The app is a particularly useful tool, as it means that you can avoid buying petrol at motorway fill up stations when on the road, which are often some of the most expensive.
Get your fuel from the supermarket
Supermarkets can be a great place to fill up, as their prices are often some of the most competitive. This is especially so as you’ll often find a supermarket petrol station in an area where there are lots of other petrol stations – so there are some great discounts available if you buy fuel where you shop. It’s also worth looking into whether your regular supermarket loyalty scheme offers you any discounts on fuel. For example, some provide discount vouchers for petrol – the best way to use these is to pick them up when you’re buying what you’d normally purchase from the supermarket. Avoid a situation where you’re buying more just to get the fuel vouchers, as it could end up being cheaper just to buy the full price fuel.
Buy your fuel with a cashback credit card
With the cashback that you earn you can reduce what you pay for the fuel that you buy. However, to ensure you get the gain from this you’ll need to clear the balance on the card every month to avoid paying any interest on the balance (as this would most likely outstrip the cashback saving).
- Why car sharing may be cheaper than car ownership
- How car sharing can save you £1000 each year
- How to make running and maintaining a car less expensive
You're reading the blog post How to cut the cost of your large motoring fuel bill that was written by and first published on Getting Loans and Credit & Managing Money.
Living in a country like the UK – or... You're reading the blog post Life inside China’s “Social Credit System” – is Big Brother really watching you? that was written by and first published on Getting Loans and Credit & Managing...
Living in a country like the UK – or the US or anywhere in Europe – sometimes it’s easy to forget how different the rest of the world really is. Shows such as Black Mirror have explored the idea that a system of “social credit,” where your value is defined by the ratings you receive from the people you interact with, but the concept is still (mostly) fiction. Not so in China though, where the government has now proposed an initiative for developing a “national reputation system” called the Social Credit System that is designed to be in place by 2020.
What is China’s Social Credit System?
The Chinese government has pitched the Social Credit System as an attempt to promote trustworthiness in its economy and society. It is effectively a huge ranking system that will monitor Chinese residents and rank everyone based on their “social credit.” It’s not been made clear exactly what would cause your social credit score to take a plummet under the new system but some of the potential score damaging behaviours include smoking in non-smoking zones, bad driving or posting fake news online. The system is currently being trialled at various locations around China and the government hopes to have the basic infrastructure established by 2020.
Is there a blacklist?
Yes. In a scenario that could have been written by Charlie Brooker of Black Mirror fame, there is indeed a blacklist for “bad citizens.” Some of the consequences of a low social credit score, or of being blacklisted as a citizen, include:
- Travel restrictions – according to Channel News Asia, so far nine million people in China have been banned from buying domestic flights because they have low social credit scores.
- Education bans – Beijing News reported that 17 million people who had refused to carry out military service in China faced educational consequences, including being prevented from applying for high school or enrolling in higher education.
- A lack of luxury – those who refused military service were also reportedly banned from some holidays and the best hotels.
- Job insecurity – although there are no reported examples yet, job opportunities could also be determined by social credit score, So, if your social credit is low then the coveted management jobs with big state owned companies and banks would be considered out of your reach.
What about being an exemplary citizen?
If you make it onto the list of “good citizens” then there are many advantages, from discounts on energy bills through to lower interest rates or being able to rent without having a deposit. Your social life could also benefit, as it’s reported that China’s biggest dating website is boosting the profiles of those who have a high social credit score.
Will it work?
There are a lot of problems with introducing this kind of system into any country and it’s likely to feel more than a little unnerving for anyone who has read George Orwell’s 1984. It effectively means setting up a mass surveillance tool to track Chinese citizens, as well as big data analysis technology to process information and generate usable conclusions on their trustworthiness. The conclusions are based on a set of criteria defined by a government that is notoriously intolerant of rebellion or free thinking. What is it that really makes a “good citizen”? Some characteristics are obvious, such as saving a child from a runaway car or paying your taxes on time. But then you also get into much more shadowy areas – for example, would a Chinese citizen who hijacked a truck of stolen dogs headed for the notoriously horrendous Yulin dog meat festival (to save them from being skinned and boiled alive) be a hero or a villain in the eyes of the social credit system?
Why is China introducing a social credit system?
Chinese society suffers from a lack of trust – according to sociologist Zhang Lifan. Years of life under the Communist Party has left citizens with the expectation that they could be cheated at any time, or get into trouble, without having done anything to deserve it. A system of social credit could give people more control over their own destinies. However, it’s also worth noting that the Communist Party in China has long been looking for a way to more effectively monitor its citizens, their loyalties and ideological outlooks. Former President Jiang Zemin in 1995 called for “the informatization, automation, and intelligentization of economic and social management.” Then in the 2000s the country attempted to introduce an automated system of social surveillance through policing projects. So, while there may be a desire to improve society and regulate the economy it’s clear that the Social Credit System will also be a tool for steering and controlling the behaviours, hearts and minds of citizens. If you live in China big brother really will be watching you.
- Big changes to the UK’s privacy legislation
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- 3 signs your credit rating is taking a hit
You're reading the blog post Life inside China’s “Social Credit System” – is Big Brother really watching you? that was written by and first published on Getting Loans and Credit & Managing Money.
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