Weekly Round-Up, 13th July 2018

Pancakes

HousesAccording to the latest research from the Halifax, house prices continue to remain broadly flat, with the annual rate of growth marginally slowing from 1.9% in May to 1.8% in June. Activity levels, like house price growth, have softened compared with the final months of last year and mortgage approvals have been in the low range of 63,000 to 67,000 since the start of the year, whilst home sales have remained flat so far this year. This is in contrast to the continuing strength of the UK jobs market with job creation still strong and pressure on household finances easing as real income growth edges up.

Figures suggest, at the half way stage of the year, the annual rate is within the Bank’s forecast range of 0-3% for 2018 and they continue to see very positive factors of continuing low mortgage rates, great affordability levels and a robust labour market. The continuing shortage of properties for sale should also continue to support price growth.

UK home sales grew by 1% to 99,590 in May but in the three months to May sales were 4.8% lower when compared to the same three months a year earlier. This weakness reflects the slowdown seen in mortgage approvals over the past year. Completed sales since December according to HMRC seasonally adjusted figures have held steady, averaging close to 99,000 per month.

After falling for 26 months in succession, new instructions edged up in May. Furthermore average stock of homes for sale on estate agents’ books held broadly steady, albeit close to historic lows. On the demand side, new buyer enquiries fell again, although the pace of decline has slowed since the start of the year.

Here Comes The Sun

Stacking coinsIn its latest report on the Mortgage Market, UK Finance have reported that the mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity. There is also a particularly encouraging increase in homemovers, after a period of relative sluggishness in this important segment of the market.

The statistics indicate that there were 32,200 new first-time buyer mortgages completed in the month, some 8.1 per cent more than in the same month a year earlier. The £5.4bn of new lending in the month was 12.5 per cent more year-on-year. The average first-time buyer is 30 and has a gross household income of £42,000. For Homemovers, there were 31,100 new mortgages completed in the month, some 4.4 per cent more than in the same month a year earlier. The £6.6bn of new lending in the month was 4.8 per cent more year-on-year with the average homemover being 39 with a gross household income of £55,000.

Completed remortgages totalled 36,000 in the month, some 7.1 per cent more than in the same month a year earlier. The £6.3bn of remortgaging in the month was 6.8 per cent more year-on-year. There were 5,500 new buy-to-let home purchase mortgages completed in the month, some 9.8 per cent fewer than in the same month a year earlier. By value this was £0.7bn of lending in the month, 22.2 per cent down year-on-year.

There were 14,600 new buy-to-let remortgages completed in the month, some 15 per cent more than in the same month a year earlier. By value this was £2.3bn of lending in the month, 21.1 per cent more year-on-year.

Affordability remains a challenge for some prospective buyers and this is reflected by a gradual increase in loan to income multiples, Meanwhile purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.

One Claimed Every Minute

Blurred TaxisThe Association of British Insurers (ABI) has revealed that the number of travel insurance claims made in 2017 increased by 30,000 year-on-year to 510,000, costing £385 million and amounting to one claim every minute throughout the year. This is the highest amount paid since the £455 million Icelandic ash cloud pay-outs of 2010 and was largely driven by a significant rise in cancellation claims.

After a slight (£2 million) increase, medical expenses still make up a majority of the £385 million claims paid, despite an 11% increase in the value of claims for trip cancellations from £130 million to £145 million. Medical expense continue to be the most expensive type of claim, with an average of nearly £1,300 and many claims climbing to the tens of thousands of pounds.

The significant increase in cancellation claims was driven by notable airline disruption, restrictive bad weather at home and abroad, as well as the cost of the average family holiday increasing by more than £500 in 2017 according to estimates from Travelex. This further highlights the importance of buying travel insurance as soon as the holiday is booked – not at the last minute. Travel insurance acts as a guardian angel when overseas and should be an essential element of a holiday shopping list. Insurers are paying out £1 million every day to cover the unexpected costs of illness, injury or cancellation. Medical expenses can often cost tens of thousands of pounds, whilst the large increase in cancellation claims shows just how important it is to purchase cover as early as possible.

Keep Paying

Medical care iconsChanges to State benefits covering mortgage payments during prolonged loss of income due to sickness will not lead to a mortgage protection pay-out being means-tested against any benefit entitlement, a request for clarification from the Department for Work & Pensions (DWP) by the Building Resilient Households Group has revealed.

The introduction of a Support for Mortgage Interest Loan (SMIL), which came into effect on 6 April 2018, increased the need for mortgage holders to consider protection in order to protect payments in the event of long-term sickness absence or due to other causes. SMIL is help towards paying the interest payments on your mortgage or other loans for home purchase, repairs and home improvements. This help is in the form of a loan. Before 6 April 2018, SMIL was paid in the form of a benefit. However, now it is paid as a loan. Until now there was uncertainty as to how a received insurance pay-out would be treated under the new system. According to Building Resilient Households Group, the DWP has confirmed that any income received from an insurance policy specifically intended to cover mortgage payments will be disregarded when entitlement to means-tested benefits is assessed. This applies to both legacy benefits and Universal Credit.

The DWP also pointed out that two provisos should be noted. Firstly, if insurance pay-outs are restricted to the payment of a mortgage (direct to lender) they will be fully disregarded, but if the claimant has choice over how to spend the payments then any portion which DWP judge to be intended and used for mortgage cover will be disregarded.

Secondly, if a claimant applies for a SMIL their insurance pay-out will be taken into account when their offer of a loan is considered – however this is unlikely as people receiving an insurance pay-out covering mortgages would generally have no need for a loan.

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Weekly Round-Up, 6th July 2018

Second Steppers

Moving HouseMany homeowners ready to take their second step on the property ladder now rely on financial help from family and friends to help make the jump from their first home, according to the latest Lloyds Bank Second Steppers report. More Second Steppers are having to borrow from family and friends to trade up the property ladder, with one third (33%, up from 27% last year) saying that they require financial support from their mum and dad, grandparents or friends.

The average amount that Second Steppers expect to borrow has also increased by over £4,000 (£4,219) compared to last year to £25,450, despite 57% having already received financial support for their first property worth an average of £19,824. In addition, nearly three-fifths (58%) say they wouldn’t be able to make their next move up the home-owning ladder without generous family and friends coming to the rescue.

As well as using equity from their current property (62%) and personal savings (39%), over one in five (22%) second steppers will mainly look to borrow from the Bank of Mum and Dad to raise the deposit required to fund their next move. Grandparents will also be asked to support (13%) and even friends (6%). Where second steppers look to borrow from the Bank of Mum and Dad, parents have had to make sacrifices. Over half (54%) will raid their own savings to provide help and just under half (48%) of these plan to downsize to release more equity to support their kids. Two-fifths also plan to remortgage to raise money to give to their children so they can trade up the property ladder. Just under a third (29%) also said they will sell another property to help and nearly a fifth (19%) said they would sacrifice holidays or hobbies in order to support their offspring.

But movers are also planning to make sacrifices to sell their first home and achieve their second property aims. Almost three in ten (28%) Second Steppers have said that they will have fewer children than originally planned due to the challenges they have faced whilst trying to make the next move. This is up by 16% from last year. More Second Steppers are also delaying having children due to the difficulties faced. Although today’s Second Steppers need to borrow more from family and friends, two in five (40%) say that conditions have improved since last year. There has also been an increase in the number of Second Steppers who are saving to support their next move, with 67% saying that they are making regular contributions to their savings, a slight increase from last year (61%). The number of Second Steppers overpaying their mortgage to help increase equity has also increased from 41% to 47%.

Remortgage Leads The Way

Close up of credit cardsAccording to the latest figures from UK Finance, the trade body that represents Banks in the UK, estimated gross mortgage lending for the total market in May to be £22.2bn, 8.8 per cent higher than a year earlier. The number of mortgage approvals by the main high street banks in May has also risen, increasing by 3 per cent compared to the same month a year earlier.

As in April, increased approval numbers were driven by remortgaging, some 18 per cent more than a year earlier. In contrast, approvals for house purchase were 3.8 per cent lower than the same period a year earlier. May’s increase in mortgage approvals was driven by strong growth in remortgaging, as a large number of fixed-term mortgages came to an end and homeowners took advantage of a competitive market to shop around for attractive deals. Increased efforts by lenders to contact their customers before their current mortgage deal expires have also contributed to this rise.

Credit card spending was 2.3 per cent higher than a year earlier, with outstanding levels of card borrowing having grown by 5.7 per cent over the year. The total of 193 million credit card purchases in May was well above the previous 12 month average of 181 million, reflecting increased retail sales. Outstanding overdraft borrowing was 3.9 per cent lower compared to the same time last year. The modest growth in card spending reflected a boost to retail sales amid the good weather over recent bank holidays and the Royal Wedding celebrations.

Personal deposits grew by 1.6 per cent in the last 12 months, although this was a lower annual rate than seen historically. Deposits held in instant access accounts were 4.4 per cent higher than a year earlier reflecting a mixed picture of the economy as household incomes continue to be squeezed. This may explain the growth of deposits held in instant access accounts, with consumers increasingly choosing to keep their money close to hand.

Happy Birthday

Elderly Couple_300x200pxTo mark the 70th anniversary of the NHS, Aegon asked a panel of 700 consumers from age 18 to 64 to reflect on aspects of life that might influence their financial well-being at age 70 such as work, health and caring responsibilities. This year the NHS joins an increasing number of people who are celebrating their 70th birthdays. And just as the NHS is facing up to future challenges, so will individuals if they don’t plan beyond their 70th birthday to ensure they have all they need to be financially secure in later life.

The survey revealed that more than one in four people (26.9%) think they will be working either full or part time at age 70, with women (24.5%) slightly less likely than men (27.5%) to think this despite them on average living longer. This suggests a clear move away from the previous practice of women retiring at 60 and men at 65.

Working into later life is only possible for those who remain in good health, and it’s positive to see that 45.8% of people believe they will still be fit and healthy enough to work if they choose to at the age of 70 although it’s risky to have no fall back plan should health deteriorate. In general the survey revealed that most people envisage being physically and mentally fit and able at the age of 70.

Nearly one fifth of people (19.5%) think that they will still be financially supporting family when they are 70. And an additional 21.8% were unsure. This suggests the bank of mum and dad will be a feature of an increasing number of septuagenarians.

Travel Claims

Blurred TaxisThe Association of British Insurers (ABI) has revealed that the number of travel insurance claims made in 2017 increased by 30,000 year-on-year to 510,000, costing £385 million and amounted to one claim every minute throughout the year. This is the highest amount paid since the £455 million Icelandic ash cloud payouts of 2010 and was largely driven by a significant rise in cancellation claims.

After a slight (£2 million) increase, medical expenses still make up a majority of the £385 million claims paid, despite an 11% increase in the value of claims for trip cancellations from £130 million to £145 million. Medical expense continue to be the most expensive type of claim, with an average of nearly £1,300 and many claims climbing to the tens of thousands of pounds. As an example, a millennial’s average medical claim was three times more expensive than their average non-medical claim (£261 compared with £812).

The significant increase in cancellation claims was driven by notable airline disruption, restrictive bad weather at home and abroad, as well as the cost of the average family holiday increasing by more than £500 in 2017 according to some estimates. This further highlights the importance of buying your travel insurance as soon as you book your holiday – not at the last minute.

Weekly Round-Up, 22/06/2018

No Change 6, Change 3

At its meeting ending on 20 June 2018, the Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6-3 to maintain Bank Rate at 0.5%. In the MPC’s most recent projections, set out in the May Inflation Report, GDP was expected to grow by around 1¾% per year on average over the forecast.
A key assumption in the MPC’s May projections was that the dip in output growth in the first quarter would prove temporary, with momentum recovering in the second quarter. This judgement appears broadly on track. A number of indicators of household spending and sentiment have bounced back strongly from what appeared to be erratic weakness in Q1, in part related to the adverse weather. Employment growth has remained solid. Although manufacturing output recorded a decline in April, and this was accompanied by a fall in goods exports. More broadly, the prospects for global GDP growth remain strong, and while financial conditions have tightened somewhat, they continue to be accommodative.
Consumer Price Inflation was 2.4% in May, unchanged from April. According to the Committee, inflation is expected to pick up by slightly more than projected in May in the near term, reflecting higher dollar oil prices and a weaker sterling exchange rate. Most indicators of pay growth have picked up over the past year and the labour market remains tight, suggesting that domestic cost pressures will continue to firm gradually, as expected.
The Committee’s best collective judgement remained that, were the economy to develop broadly in line with the May Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to its target at a conventional horizon. For the majority of members, an increase in Bank Rate was not required at this meeting. All members agreed that any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent.

Protecting Tenants

The Ministry of Housing, Communities and Local Government has published new guidelines which aim to protect tenants from poor living conditions. Following the announced legislation on HMO minimum room size last month, any landlord who lets a property to five or more people from two or more separate households, must be licensed by their local housing authority.
The move, affecting around 160,000 houses in multiple occupation (HMOs), will mean councils can take further action to crack down on the small minority of landlords renting out sub-standard and overcrowded homes. Landlords will also be required to adhere to council refuse schemes, to reduce problems with rubbish. The guidance document includes further details on extending mandatory licensing to smaller HMOs and introducing minimum bedroom sizes as the Government continues to rebalance the relationship between tenants and landlords.
These new guidelines have also come alongside a government announcement reviewing how well selective licensing is working and how it is being used by councils. In areas where selective licensing has been implemented, landlords must apply for a licence to rent out a property. In doing this, councils can decide whether a landlord is a ‘fit and proper person’ using varying criteria. The licence fees are also an issue as landlords may need to pass these costs onto their tenants, which will place a greater burden on the most vulnerable people in the private rented sector (PRS).

Working Longer

The proportion of UK employees who say they will work beyond the age of 65 has remained at three-quarters (72%) for the second year running, significantly higher than in 2016 (67%) and 2015 (61%), according to the latest research from Canada Life. Nearly half (47%) of those who say they expect to work beyond 65 will be older than 70 before they retire, up from 37% in 2017, while almost a fifth (17%) expect to be older than 75. Workers aged 35-44 are most likely to say they expect to retire after their 75th birthday (27%).
A series of economic factors are driving employees to work for longer. Nine in 10 (90%) UK employees say that the rising cost of living is the main reason why they expect to work beyond 65 with 87% saying the same of poor returns on savings due to low interest rates, with consumers still yet to see last November’s interest rate rise passed on3, and 86% of employees point towards inflation. Opinions remain divided about the UK’s ageing workforce as it brings a new set of challenges for workers to contend with. Over a third (36%) believe that an ageing workforce might mean that older workers will have to re-train or learn new skills to stay in work, while three in ten (30%) think it could make it harder for young people to move up the career ladder. But more than two fifths (41%) are positive that a mix of older and younger employees creates a workforce with a wider range of skills, which is beneficial for employees and employers alike.
This comes as just 6% think the government is helping to promote older workers however, down from one in ten (11%) following last year’s announcement of an increase in the state pension age.4 So far, only 13% think that employers are encouraging older employees to stay in the workplace, and little more than a sixth (15%) believe that older people are appreciated and respected in the working environment. Support for older workers in the workplace can come in many different forms, but often the simplest are the most effective. Nearly half of employees (45%) think flexible working or part time opportunities are most important when it comes to supporting an ageing workforce. Out of those planning to work beyond state pension age, 60% say that they would be more likely to work for an employer that offered health and wellbeing benefits.

Couples, Families and Singletons

The stereotype of students seeking out a chaotic existence in a communal house no longer typifies those renting a home from a private landlord, according to research from Nationwide – in fact they are more likely to be couples (47%), families (11%) or those living alone (30%), rather than young people living with university friends (7%). More than a third of men surveyed (35%) rent a home alone, compared to one in four (25%) women, with lack of affordability or a change in life circumstances most likely to be the cause.
The YouGov survey of more than 2,000 tenants renting from a private landlord provides a broad snapshot of diverse experiences and expectations depending on age, life stage, route to renting and location – as well as highlighting many everyday realities for renters across the UK. For almost half (46%) of those surveyed, their main reason for renting was that they could not afford to buy. However, for more than one in ten (11%) a change in circumstances, such as the breakdown of a relationship, leaves them renting – and the likelihood of this grows with age, with 15 per cent of over 55s citing this as their main reason for renting. Having to leave a previous home (6%) and lack of social housing (4%) also feature – while others rent because of the flexibility it provides (6%) or to have easier access to their work (5%). While more than three quarters (78%) of those surveyed, renting flats or houses, rent the whole property, one in five (19%) just rent a room – though this figure rises to more than a third (36%) of those renting in London, likely due to both affordability and availability.
Once in, UK tenants renting from a private landlord stay an average of four years and two months, though almost one in three (31%) stay for five years or more and one in eight (13%) stay for a decade or more – rising to almost one in five (19%) of those renting on their own. One in five (20%) of those staying put for a decade or more are 45-54 year olds and more than one in four (28%) are 55 plus. According to the study, the older the tenant, the longer they seem to stay, with average length of tenancy duration for 18-24 year olds at just over a year, 25-34 year olds at two years four months, 35-44 year olds at four years five months, 45-54 year olds at five years eight months and those 55+ staying six years nine months in the same home.
The average UK monthly rent is £562.05, though one in seven (14%) pay more than £800. After paying for food, rent and bills, the average Brit has £314.45 monthly disposable income left – though men are left, on average, more than one hundred pounds better off than women (£372.84 v £264.69).

Positive headlines

According the latest research from the Royal Institution of Chartered Surveyors (RICS), the UK housing market saw a stable trend in new instructions in May, with the headline indicator turning positive for the first time in more than two years (27 months). However, although the numbers of houses coming on to the market has increased marginally, average stock levels on estate agent’s books across the UK was steady at 42.5, which is still close to an all-time low
Looking at demand from buyers, while the number of new enquiries fell overall, the decline was modest in comparison to the beginning of the year. Demand from new buyers was reported to have increased in London, the South West, Yorkshire and Humber, West Midlands, Scotland and Northern Ireland. In terms of agreed sales RICS suggest although sales held steady for the second successive month at the headline level (with the least negative reading for fourteen months), the regional breakdown suggests that activity is rising firmly in just four regions; the West and East Midlands, Scotland and Northern Ireland.
No change was seen for house prices in May (net balance -3%) following a marginal decline in April. However, as with the other indicators, there are large regional dimensions to this headline figure. London continues to show the most negative trends, with downwards movement also seen across the wider South East. Notably, after nearly three years of solid price growth, momentum also appears to have slipped across the South West, as the price balance remained in negative territory for the second month in a row. By way of contrast, house prices continue to rise in the Midlands, North West, Wales, Northern Ireland and Scotland.
RICS expect near term price expectations to decline marginally on a UK-wide basis, with the net balance coming in at -9%. That said, this is mainly driven by a negative outlook for prices across the south of England. For the lettings market, demand for rented properties remained unchanged (on a non-seasonally adjusted basis) extending a run of five consecutive reports where respondents have reported flat tenant demand. Alongside this, landlord instructions remain in decline. Given the lack of supply, rents are envisaged to increase further at the national level over the year ahead.

Supermarket Sweep

New research from Lloyds Bank has found that living near a local supermarket can push up your property’s value by £21,500 compared to homes in nearby areas without a supermarket chain. The report also reveals that having a premium brand on your doorstep means buyers typically need to pay top prices. Homes in areas with a Waitrose, Marks & Spencer or Sainsbury’s are most likely to command a higher house price premium when compared to the wider town average. The “Waitrose effect” commands the biggest cash premium – costing £43,571 (12%) more than average house prices in the wider town (£420,112 v. £376,540), followed by properties close to a Marks & Spencer with a premium of £40,135 and Sainsbury’s (£32,707). Homes within easy reach of all three supermarket chains are trading at an average premium of 12%.
In the past year the premium attached to living within walking distance to a Marks & Spencer has grown by £10,143 (from £29,992 to £40,135) the largest rise amongst the supermarkets chains. By comparison, the price premium near a Waitrose has grown by a relatively modest £7,000 in the past year. Homes close to a Tesco, the UK’s largest supermarket, are also worth over £21,000 (£21,369) more than other properties in the nearby area (£278,647 v. £257,278); closely followed by Co-Op (£21,020) and Iceland (£17,445) stores.
Interestingly, smaller local stores like a Little Waitrose, Sainsbury’s Local or Tesco Extra attract a higher average premium of £58,109 compared with a larger superstore (11%, or £30,580). But it’s homes near to budget supermarkets which were found to have seen the biggest house price rise: properties near to Lidl, Aldi, Morrisons and Asda have increased 15% (£29,316) over the past four years. This is a faster increase than for all supermarkets (10%). Showing houses near discount stores can also be popular and the cheaper supermarkets are catching up fast. Over the past four years average house prices in localities with an Aldi grew by a fifth (20%, from £178,809 to £213,765) a much faster increase then then the rest of the town (16%, from £182,395 to £211,463). Other areas with a supermarket chain to record the fastest price growth in the past four years include those with a Co-Op (up 16% from £224,679 to £259,969) and Morrisons (up 14% from £203,756 to £233,261).
In addition, in 2014 property prices close to an Aldi traded at a discount of -£3,586 than the wider town. In 2018 house prices in areas with this “discount” retailer now fetch a higher price premium, compared to the rest of the town, at an average of £2,301. Homes near a Lidl are also worth £5,411 more than other properties in the nearby area.

Times they are a’changin

As the traditional 9-5 working day becomes less and less common, the times at which people want to go to the pub, grab a meal or work out at the gym are changing. A new report from Barclays shows that although over a quarter of hospitality and leisure businesses recognise this growing demand, opening hours are not keeping up with changes to modern working lives.
Since our leisure time has shifted, a quarter of workers would now like to go to a museum in the evening (between 6pm-11pm), over one in ten (13%) film fans would choose to go to the cinema in the small hours (11pm-5am), and almost one in five (19%) late-night diners would choose to get a takeaway after closing time (11pm-5am). The new Barclays Corporate Banking Hospitality and Leisure report, Open All Hours? finds that only a third (37%) of British workers now work traditional 9-5 hours, with over a fifth of British workers (22%) saying they need different opening hours. The report also finds that a similar number (19%) expect 24-hour hospitality services. By responding to this demand, restaurants (£2.2bn per annum), takeaways (£2.1bn), and pubs, bars and clubs (£1.2bn) could benefit the most.
As Britain becomes more health conscious, gyms and sports clubs have been quick to adapt, with almost one in five (18%) hospitality and leisure business leaders surveyed already changing their opening hours.
Takeaway services, on the other hand, have left nearly a third (32%) of workers hungry for more, having been unable to order a takeaway as the business was closed. While digital food delivery services have provided customers and restaurants with an easy to use platform for home delivery, almost a third (32%) have been unable to get a takeaway. This desire to order a takeaway at unusual hours is even higher among young workers (18-24 year olds), with (37%) keen for delivery between 11pm and 5am.

Unhappy Father’s Day?

As the nation celebrates Father’s Day this Sunday, peace of mind may not be the obvious gift choice, but it’s clear that financial protection is something which millions of fathers in the UK, and their families, could benefit from. Research from Scottish Widows reveals that more than half (58%) of men in the UK with dependent children have no life insurance, meaning that just over 4.5 million dads[1] are leaving their families in a precarious situation if the unforeseen were to happen. Worryingly, this has increased by five percentage points compared with 2017, a year-on-year increase of around 542,000 individuals.
And despite a fifth (20%) of dads admitting their household wouldn’t survive financially if they lost their income due to long-term illness, only 18% have a critical illness policy, leaving many more millions at risk of financial hardship if they were to become seriously ill. If they were unable to work due to serious illness, 16% of fathers say they could only pay their household bills for a minimum of three months. More than two-fifths (45%) say they’d have to dip into their savings to manage financially, but 17% admit that their savings would last for a maximum of just three months and 12% say they have no savings at all.
On top of this, many fathers are leaving themselves and their families unprepared for other aspects of illness or bereavement. Sixteen per cent of them aren’t sure who would take care of them if they fell ill, and more than two fifths (42%) don’t have the protection of a will, power of attorney, guardianship or trust arrangement in place for their families. This is an especially risky position for the two thirds (66%) of UK fathers who are the main breadwinner in the family, and it’s clear that many are in lack of a ‘Plan B’.

Subdued

According to the latest House Price Index from Halifax, house prices grew by 1.5% on a monthly basis, in contrast to a decline seen by the lender in April. The month on month figures are, on the face of it, more volatile than the quarterly or annual measures. In the three months to May house prices were 0.2% higher than the previous quarter and on an annual basis they are 1.9% higher. Both of these measures have fallen since reaching a recent peak, in the final months of last year.

Halifax suggest that these latest price changes reflect a relatively subdued UK housing market. After a sharp rise in January, industry data mortgage indicates that approvals have softened in the past three months, whilst both newly agreed sales and new buyer enquiries are showing signs of stabilisation having fallen in recent months.

Halifax highlight that the continuing strength of the labour market is supporting house prices. In the three months to March the number of full-time employees increased by 202,000, the biggest rise in three years. Halifax are also seeing pay growth edging up and consumer price inflation falling, and as a result the squeeze on real earnings has started to ease. With interest rates still very low Halifax see mortgage affordability at very manageable levels providing a further underpinning to prices.  The average house price is now £224,439

Almost Critical?

The Association of British Insurers (ABI) has published a new Guide to Minimum Standards for Critical Illness Cover following an extensive consultation and review of the Statement of Best Practice for Critical Illness Cover through 2017/18. The review was one of the most comprehensive to date, and has seen the Guide redesigned to ensure greater clarity and understanding for customers when comparing critical illness products. The ABI has also developed an accompanying consumer guide to provide people with clear information on what critical illness insurance is and the questions they might ask themselves before purchasing this insurance product.

The new Guide to Minimum Standards was put to public consultation in November 2017 with the consultation process concluding in late January 2018. The ABI received a strong response from insurers, advisers, charities and other interested organisations. Respondents to this consultation supported the proposed changes to the Guide, which has seen an enhanced minimum standard definition in several areas, and other changes to definitions reflecting the evolution of medical understanding and treatment for a number of serious illnesses.

The revised version was drafted through the work of the ABI Critical Illness Working Group and the ABI Protection Committee, before being approved by the ABI Board earlier this month. To view the new Guide to Minimum Standards, please click here. To view the new Consumer Guide, please click here.

Helping drive the economy

Research from Santander reveals the drivers behind today’s “pocket money economy” and illustrates the ways in which the UK’s children are learning about earning money, paying taxes and receiving fines in their own homes.  While 77 per cent of parents provide their children with a basic amount of pocket money, Santander’s data also showed that ‘extra’ money is being given by a third of parents for a range of activities including helping around the home, behaving well and performing well in sports. The average amount earned in a month for these activities is £7.70 with the highest earning activity being getting to school or college on time.

But for those who step out of line and fail to carry out their duties, financial ‘fines’ can be expected with 18 per cent of parents taking money away for failing to complete household chores and 15 per cent for behaving badly at school. Meanwhile 13 per cent of enterprising parents are applying ‘tax’ to children’s earnings to support the running of the home. A further 42 per cent of parents who pay pocket money would consider ‘taxing’ their children and believe this to be a great way to prepare them for the real world.

Differences in ‘income’ were clear across the UK with children in London being given an average of £26.70 basic pocket money against a national average of £18.36. And when it came to earning extra money, boys on average will get 33 per cent more than girls (£6.99 vs £4.67) for carrying out household chores and 50 per cent (£8.28 vs £4.18) more for good behaviour at school.

When children were asked what motivated them to complete household chores, money (43 per cent) is by far the biggest incentive with other motivators such as being given chocolate and crisps registering with just 24 per cent of children and being told they are good or getting to stay up longer appealing to only 23 per cent. When asked about saving, 84 per cent of children who get pocket money said they like to save the money they receive from their parents (89 per cent boys vs 77 per cent girls).

Record breaking

The so-called Beast from the East and Storm Emma that caused widespread disruption in late February and March led to property insurers paying out a record breaking amount in burst pipe claims in the first quarter of the year according to figures out today from the Association of British Insurers (ABI).

In the first quarter of 2018, in total, £1.25 billion was paid by insurers under domestic and commercial property insurance policies – the highest quarterly figure for two years

Insurance pay-outs to homeowners and businesses for storm, flood and burst pipe damage jumped to £361million, a massive 290% rise on the £93 million paid in the previous quarter. Some 86,000 claims were handled, compared to 29,000 in the previous quarter.  £194 million was paid to help homeowners cope with the misery of burst pipes which was the highest amount ever paid in a single quarter and compared to only £4 million paid out in quarter 4, 2017.

On commercial insurance, weather damage and escape of water claims also rose, up to £188 million, compared to £107 million in the previous quarter.

Weekly Round-Up: 1st June 2018

Small fall

According to the Nationwide Building Society UK annual house price growth slowed modestly in May to 2.4%, from 2.6% in April. House prices fell by 0.2% over the month, after taking account of seasonal factors. Annual house price growth has been confined to a fairly narrow range of c2-3% over the past 12 months, suggesting little change in the balance between demand and supply in the market over that period. The Society suggests that there are are few signs of an imminent change with surveyors continuing to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent.

Looking further ahead, Nationwide highlight that much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. Overall, they continue to expect house prices to rise by around 1% over the course of 2018.

In the report, data from the Ministry of Housing, Communities and Local Government shows that, over the last 20 years, the total housing stock in England has increased from 20.6 million to 24 million dwellings, a rise of 16%. There have been significant shifts in the ownership of the stock, which in turn has influenced trends in property type over time with the most striking shift being in the proportion of the stock owned by private landlords. While last year’s data showed a small decline in the stock of privately rented dwellings, they still account for 20% of the total stock, double the proportion in 1997. The counterpart of this shift has been a decline in the proportion of homeowners (from 68% to 63%) and social landlords (from 22% to 17%).

Outdoor Living

Britain is a nation of green-fingered gardeners, who invest significant time and money in private outdoor spaces, according to new research from Lloyds Bank.

More than nine in ten (92%) of the population have access to a private outdoor space such as a garden, allotment or balcony, and almost eight in ten (79%) have their own private garden. People are proud of their patches, spending an average of five and half hours per week on maintenance. The north east of England is Britain’s most green-fingered region, committing an average of seven hours per week to garden maintenance, while those in the south west with a private garden dedicated just five hours per week in the summer of 2017.

Unsurprisingly, those over 55 spent an average six hours a week in the garden last summer while those under 34 spent less than four hours per week tending to their turf. Gardens come at a cost, with Brits spending an average £170 on their outdoor spaces during British Summer Time (April – September) and, interestingly, taking the time to shop in store more often than online. Of those surveyed, 8 in 10 (79%) opted to purchase outdoor plants and seeds in store, 7 in 10 opted to purchase tools and equipment (70%) and house plants (68%) in store, and more than half (52%) headed to a store to choose their fencing, decking or garden buildings.

Almost a third (32%) of those with a private garden paid for garden maintenance services last summer, spending on average £195. This figure is higher for those aged over 55, who spent on average £207 on maintenance services. Two fifths of Brits fund the cost of their gardens from regular income while a further 15% make use of a credit card or loan.

High Cost

The Financial Conduct Authority (FCA) has announced new proposals designed to protect millions of people who use overdrafts and high-cost credit. The changes the FCA are consulting on follow an in-depth review into the high-cost credit market and are expected to reduce the costs for consumers and give them greater control over their finances. These changes are wide-ranging and some specific proposals are being consulted on from today. In addition, the FCA will gather additional evidence and carry out further analysis before any formal decisions can be made on a number of other issues.

High-cost credit is used by over three million consumers in the UK, some of who are the most vulnerable in society and the FCA have proposed a significant package of reforms to ensure they are better protected including the possibility of a cap on rent-to-own lending. Overdraft costs will be made more transparent and prevent people unintentionally dipping in to an overdraft in the first place. In 2016 firms made an estimated £2.3 billion in revenue from overdrafts; 30 per cent of this was from unarranged overdrafts. The majority of unarranged overdraft charges are paid by only 1.5% of customers, who pay around £450 per year in fees and charges./p>

The FCA is also consulting on mandatory rules to make it easier for customers to manage their accounts which include mobile alerts warning of potential overdraft charges and stopping the inclusion of overdrafts in the term ‘available funds’.

As part of the review the FCA looked closely at the rent-to-own sector. Costs for the 400,000 customers can be high – sometimes exceptionally. The FCA has seen examples where people have paid over £1,500 for essentials like an electric cooker, which could be bought on the high street for less than £300.

The FCA will now carry out the detailed assessment of the impact that a cap could have on the rent-on-own sector and how it might be structured. Additionally, the FCA intends to strengthen protections for vulnerable users of high-cost credit in stores and at the door, by introducing new requirements to raise standards in disclosure and sales practices.

The FCA has already transformed some high-cost sectors, with firms making substantial improvements and paying more than £900 million in redress to customers across consumer credit. The series of measures announced today builds on this work./p>

Not to me

The results of Royal London’s second State of the Protection Nation report reveal that the top reason people gave for not taking out protection was that they think premiums are too expensive (69%). They also believe they won’t get ill and they don’t need insurance. Despite this many people want to protect their lifestyle and loved ones from the financial impact of dying or becoming seriously ill. Nearly half of advisers (49%) feel that consumer inertia is one of the greatest barriers to people buying protection, sending out a clear message that education is key to removing the barriers.

Nearly half of the people surveyed (46%) felt they were unlikely to go on sick leave for three months or more, 44% thought they were unlikely to have an accident that meant they were unable to work and a third (34%) felt it was unlikely they would contract a serious health condition or illness. Research from Pacific Life Re1 shows that the chance of being off work for two months or more before age 65 is 26% for males and 37% for females. Even if illness struck nearly half (43%) felt they could manage for a year if they were unable to work due to serious illness or injury, 55% said they would manage for six months and 71% would manage for three months. Yet the reality is only 2 in 5 could survive financially for more than six months if they were unable to work.

Despite only a small percentage of consumers saying they had life insurance (3%), critical illness cover (3%) and income protection (5%) through their employer, the majority of people felt they didn’t need income protection (58%), critical illness cover (47%) and life insurance (34%). The industry and advisers believe in the value of products available, but consumers are still reluctant to buy insurance.

The results revealed inertia plays a part in people’s decision not to buy, as 20% of full-time working people recognise they need income protection but don’t have a policy. Over a third (38%) of people working full-time feel they don’t need income protection, but just 8% said they didn’t need it because they had cover with their employer. Royal London’s figures show that 58% of people with a mortgage have life cover in place if the home owner dies, leaving 42% unprotected. But worryingly 71% of people with a mortgage would have no protection in place if they were diagnosed with a critical illness, and 81% of mortgage owners have no income protection in place. The reason this is concerning is that people are far more likely to be diagnosed with a critical illness or have an injury that stops them working than to die before retirement age so more people should consider critical illness or income protection.

A quarter (25 %) of people who don’t own any life insurance, critical illness cover or income protection said they were confident that this lack of cover was in line with their needs. This figure doesn’t get much better when they look at those in full time employment (30 hours a week or more) with 27 % saying they were confident.

Weekly Round-Up: 25th May 2018

Your Data, your choice

Today marks the biggest change to UK data protection law in a generation. The General Data Protection Regulation (GDPR) is an evolution of the current Data Protection Act (1998) and comes into effect. Regulated by the Information Commissioner’s Office (ICO), the new law gives people more control about how their data is used, shared and stored and requires organisations to be more accountable and transparent about how they use it.
For the last two years, the ICO has been helping organisations prepare for the new law by producing guidance and targeted online resources, holding and speaking at dozens of events and setting up a dedicated helpline for small businesses. Now it is launching a long term campaign to help people understand why their data matters and how they can take back control.
The collaborative public information campaign ‘Your Data Matters’ aims to increase the public’s trust and confidence in how their data is used and made available. The ICO highlights that almost everything we do – keeping in touch with friends on social media, shopping online, exercising, driving, and even watching television – leaves a digital trail of personal data. People should know that sharing their data safely and efficiently can make their lives easier, but that digital trail is valuable. It’s important that it stays safe and is only used in ways that people would expect and can control.
The GDPR gives people more and stronger rights when it comes to their personal data. Your Data Matters will help people understand how they can exercise those rights. The ICO has collaborated with a range of public and private sector organisations to produce publicity materials that can be used by anyone wanting to spread the message to their customers or clients. The ICO has also launched a new Twitter account for the public, @YourDataMatters, to complement its successful @ICOnews account, which has 63,500 followers.

Slow Down in the City

According to the most recent data from the Office for National Statistics average UK house price annual growth has remained steady recently between 4 – 5%. Over recent years, UK house price growth has been strongly driven by London. However, the rate of growth in London has been slowing down, and is now appears to be negative for the first time since 2009.
In the case of London, the ONS highlight a fall in demand relative to supply meaning the market is reaching a new equilibrium with a lower price, so more people should be able to afford to purchase a home. One challenge is that the supply of houses is not necessarily straight-forward. Its slow, expensive and subject to numerous planning regulations by national and local government with reforms to Stamp Duty Land Tax (SDLT), along with reductions in mortgage interest relief, contributing to an increase in price particularly for second-home buyers – this includes those buying with buy-to-let mortgages, for instance. This partly explains why demand was already falling from the spring of 2016, when these changes took effect.
The ONS observations suggest that the fact that the UK voted to leave the European Union may have deterred foreign buyers, not only from the EU but also further afield. For Europeans, there has simply been a fall in demand as net migration from these countries has fallen. For many overseas buyers (and indeed some domestic buyers), a house in London isn’t just a home. London property is an asset which usually turns a profit (either to let, or to sell later) much higher than elsewhere in the UK, as evidenced by the relatively high foreign ownership. With the referendum and subsequent uncertainty regarding Britain’s political and economic environment, perceptions of the future value of London property have been adversely affected. This is what you might call a fall in ‘speculative demand’.
As an incentive Chancellor Philip Hammond announced the abolition of SDLT for first-time buyers in the last Autumn Budget. Given the average house price in London is £472,000, this is more likely to benefit home-buyers outside of London, as the relief only applies to properties worth up to £300,000.

Feeling Flat

The average price of a flat in the UK has risen by £75,074 over the last five years, equivalent to £1,251 per month, according to new research from Halifax. Despite their popularity dipping, the average price of a flat has grown from £157,061 in 2013 to £232,135 in 2018. Flats now account for 15% of all home sales. Although six in every 10 property sales last year were either terraced or semi-detached properties, flats have increased in value by 48%, compared to 39% for all property types over the same period.
Meanwhile, terraced homes have seen average prices rise by £60,482 (41%, the second largest increase in percentage terms) since 2013, while detached homes recorded an increase of £73,638, although this is the smallest increase in percentage terms at 27%. Terraced properties remain the most popular property type among first-time buyers. However, the proportion of sales has cooled slightly over the past five years from 40% to 37%, whilst the popularity of detached properties has increased from 6% to 8%. Terraced homes remain the most affordable property type in the UK with an average price of £208,311, followed by semi-detached (£225,123) and flats (£232,135). It’s a different story outside London, as flats are the most affordable properties (£166,386), followed by terraces (£184,529).
However, only buyers in the North can snap up a terraced home for less than £125,000 – below the lowest stamp duty threshold – with terraces in the region costing £116,740. Five years ago, seven regions had the average price for a terraced home below £125,000. Flat prices in London have more than doubled over the last five years, contributing significantly to the national increase. The average price of a flat in the capital now stands at £393,235 – £276,377 more than flats in Wales (£116,858). Despite a rise in value, the popularity of flats appears to be waning across the regions. They are the best performing property in only two out of 11 regions – North West (51%) and the South East (50%, joint top with terraced homes).

At Risk

At Risk
People in the UK are under-protected should serious illness strike, according to new research from Scottish Widows. Despite more than a fifth (21%) of people admitting their household wouldn’t survive financially if they lost their income due to long-term illness, fewer than one in 10 (9%) have a critical illness policy. People are, in fact, more likely to insure their mobile phones (12%) than to protect their own health.
Taking out life insurance also appears to be falling down the population’s priority list, with just 27% having a life policy, equivalent to 14 million people. This has dropped by 7percentage points compared with 2017, a year-on-year decrease of 3.6 million individuals.
This is an especially precarious position for the two-fifths (42%) of UK households that are reliant on just one income, and it’s clear that many are in lack of a ‘Plan B’. Despite 43% of people saying they’d rely on their savings if they or their partner were ill and unable to work, a third (35%) admit their savings would last no more than three months if unable to work and more than half (54%) say they’d last no longer than a year. Three in ten (30%) – or 15.5 million people [3] – say they aren’t saving anything at all.
One in five (19%) say they’d rely on state benefits if they or their partner were unable to work for six months, but at a time when welfare reform is resulting in significant changes to benefits such as child and working tax credits, income-based job seeker’s allowance, income support, housing benefits and bereavement benefits. On top of this, people are leaving themselves and their families unprepared for other aspects of illness or bereavement. One in five (20%) people aren’t sure who would take care of them if they fell ill, and nearly half (48%) don’t have the protection of a will, power of attorney, guardianship or trust arrangement in place for their families.
The research also reveals that a lack of trust and understanding could be contributing to the UK’s protection gap. On average, people think that just a third (34%) of individual protection claims are paid out by insurance providers each year, based on the misconception that insurers will do anything not to pay. In reality, however, virtually all protection insurance claims (97.8%) were paid in 2017. In addition, almost four-fifths (78%) of people are unaware that cover often comes with practical advice and emotional care, as well as financial support, without having to make a claim.

Weekly Round-Up: 18th May 2018

IO, Lets go

mortgagesFigures out this morning from UK Finance show the number of interest-only mortgages has almost halved in the past six years. There are currently 1.7 million outstanding interest-only mortgages (including partial interest-only), down 46 per cent since 2012, when this data was first collected. The total value of the interest-only mortgage book is £250 billion, down 37 per cent in the same period.

There has also been a particularly steep decline in higher loan-to-value mortgage as many borrowers continue to redeem ahead of schedule or switch to a repayment mortgage. However, the trade body for Banks and Lenders highlight that there remains plenty more work to do over the coming years to ensure that those remaining borrowers who have so far been reluctant to engage have viable repayment plans in place.

UK Finance continue to encourage all borrowers with interest-only mortgages to contact their lender or broker as soon as possible, as the sooner they do so the more options will be available. They will also be developing new best practice for lenders in this area, to reflect the changing regulatory landscape and help the industry engage successfully with more borrowers.

Up 2

UK Finance’s Mortgage Trends Update for March 2018 has revealed a small increase in lending to first-time buyers compared to a year earlier, while remortgaging levels softened slightly after a busy start to the year.
There was £5.1bn of new lending to first-time buyers in the month, up two per cent year-on-year. 31,200 new first-time buyer mortgages were completed in the month, some 1.9 per cent fewer than in the same month a year earlier. The average first-time buyer is 30 and has a gross household income of £42,000. New lending to homemovers in the month was £6.1bn of, 4.7 per cent down year-on-year. There were 28,400 new homemover mortgages completed in the month, some 7.8 per cent fewer than in the same month a year earlier. The average homemover is 39 and has a gross household income of £56,000.
The £5.6bn of remortgaging in the month was 9.7 per cent down year-on-year. There were 32,400 new homeowner remortgages completed in the month, some 12 per cent fewer than in the same month a year earlier.
5,500 new buy-to-let home purchase mortgages completed in the month, some 19.1 per cent fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 20 per cent down year-on-year. UK Finance research suggests the recent softening of the buy-to-let market is mostly down to a number of recent tax and regulatory changes including the limiting of landlords’ Mortgage Interest Tax Relief (MITR), the three per cent Stamp Duty Land Tax (SDLT) surcharge and new underwriting requirements introduced by the Prudential Regulatory Authority (PRA). There were 12,600 new buy-to-let remortgages completed in the month, some 0.8 per cent more than in the same month a year earlier. By value this was £2.0bn of lending in the month, the same year-on-year.

The Fraud Fighters

DebtAn innovative new team of fraud-fighters has already frozen £1million from fraudsters trying to trick people known as ‘money mules’ into receiving and transferring cash. Lloyds Banking Group’s ‘mule-hunting team’ was formed to stop the movement of money from scams, shutting down fraudsters’ attempts to shift money using cutting-edge defences developed by specialists from across the bank.
The offer of quick cash is being used by criminals – most commonly on social media – to recruit money mules. Last year, 8,652 18-24 year-olds in the UK were already lured into working with fraudsters between January and September.
If caught moving fraudulent funds, mules risk being left with no bank account and a damaged credit score, meaning they could be unable to apply for a mortgage, loan or even a phone contract in the future – as well as facing up to 14 years in prison.
As part of the industry-leading pilot, the Lloyds Banking Group team has developed a number of new techniques to rapidly analyse data, spotting tell-tale signs, patterns and behaviour to halt fraudsters in their tracks. It can identify mule accounts and block them using the new defences and has already stopped more than £1 million being transferred to fraudsters’ accounts since the beginning of 2018.
For all of the frozen funds, Lloyds Banking Group is contacting the sending banks in order to help them get the money back to the victims. The bank is now planning to roll-out the trial, incorporating these new methods into its state-of- the-art fraud systems, to help stop fraudsters getting away with their ill-gotten gains.

Dying Matters

Its Dying Matters Week and research from Royal London shows one in three adults (33%) have dealt with the financial affairs of someone who has died, yet only a quarter (23%) have their own comprehensive file of financial information.
Royal London has a top five list of things to-do, to help loved ones after an individual has gone. The first step is to write a will that ensures that the right people inherit and while most of us know how important it is to have a will and keep it up to date, many of us don’t do it. Royal London research shows that three in five adults (60%) don’t have a will, and a quarter (26%) of those are aged 55 and above. It’s especially important for cohabitating couples to have a will, as the surviving partner does not automatically inherit any estate or possessions left behind.
If there are children in the family it’s important to decide on guardians, but three in five (58%) parents with children under 18 haven’t chosen guardians should they die. Parents need to think about who they would want to step into this role and ask them if they’d be happy to do so. They then need to be included as guardians in the will. More than one in 10 (12%) adults admitted that it would be very difficult for anyone to handle their financial affairs after they died. Pulling together all personal and financial information into one simple document can really help loved ones. Royal London has produced a ‘When I’m Gone List’ to help keep note of all important financial documents and funeral wishes in one place.
Royal London’s research shows that the average cost of a funeral is around £3,800, with one in six people (16%) saying they struggled with the cost. Having a plan in place to pay for a funeral will mean the family won’t have to find several thousand pounds at a difficult time. And finally having a conversation with the family can remove a great deal of uncertainty for them at a difficult time. Royal London research shows that for those that have had to arrange a funeral, two in five (41%) were not left any instructions from the deceased. Starting a conversation might include talking about funeral wishes with loved ones or showing them where important documents are kept.

Weekly Round-Up: 8th May 2018

Wellbeing at Work

Stressed at workThe eighteenth annual survey report from the Institute of Chartered Institute of Personnel and Development (CIPD) examined trends in absence and health and well-being in UK workplaces. The survey of over 1,000 HR professionals provided important insights into one of the most pressing issues of the modern workplace: the health and well-being of people at work.

There are grounds for optimism in the survey with indications that more employers have a standalone well-being strategy in support of their wider organisation strategy, hopefully reflecting the growing recognition that organisations need to take a strategic and integrated approach to people’s health and well-being. Most organisations believe their health and well-being activities are having a positive benefit. There are also grounds for concern. The survey reveals that mental ill health is an even more significant issue for organisations than it was in 2016: over a fifth (22%) now report that mental ill health is the primary cause of long-term absence compared with 13% in 2016, and there has also been a significant increase in the number of reported common mental health conditions among employees in the past 12 months.

Employers’ recognition of mental health as a workplace issue has clearly increased in recent years, and it’s encouraging that the CIPD survey shows the proportion raising awareness of mental health across the workforce has increased from 31% in 2016 to 51% in 2018. The reasons for work-related stress and mental-health-related absence affecting people’s psychological health tend to be external and outside the organisation’s control.

The ageing population means many workers have increased caring responsibilities that can put pressure on their work–life balance, for example, and the wider political and economic climate – such as the uncertainty created by Brexit – can also influence people’s sense of well-being. Further, the survey shows the mixed impact of technology on mental well-being, with 87% of our respondents citing an inability to switch off out of work hours as the main negative effect on employees.

Pays to be savvy

Savvy Spending63% of UK consumers have undertaken some form of ‘savvy spending’ since the start of 2018 according to the latest Lloyds Bank Spending Power Report. In the monthly Ipsos MORI survey of over 2,000 bank account holders in the UK, 47% have actively searched for vouchers and discount codes before spending. A quarter (24%) have chosen to spend money with a specific brand because they received a voucher or discount code for it, whilst 18% have joined a mailing list in order to gain access to exclusive deals and discounts.

The Lloyds Bank research has found that women (72%) are much more likely than men (54%) to claim to have used various methods of ‘savvy spending’ to save money. Over two thirds (68%) of women report using vouchers, discount codes, rewards and/or cashback when spending money compared to 51% of men, and a third (34%) of women have signed up to a mailing list or loyalty scheme to gain access to discounts compared to fewer than 1 in 5 (19%) men. Women are much more likely to report that they are saving towards a short (34% vs. 21%) or long term (29% vs. 16%) goal, which may be their motivation to take advantage of these techniques.

Perhaps unsurprisingly, parents are more likely to undertake some form of ‘savvy spending’, with a higher proportion of this group claiming to have used vouchers, discount codes rewards and cashback (68%) than those without children (56%). Those earning over £35,000 (68%) and individuals aged 34 and under (70%) also report using these methods more than their counterparts (54% of those earning up to £34,999, and 55% of those aged 35+).

Away from the make-up of the savvy spender, our research shows that 71% of those who have used the techniques feel they have saved on holidays and days out since the start of 2018. Over half (55%) of shoppers are saving on their everyday groceries and dining habits, whilst just 29% report making savings on their bills.

Take the strain

DebtMore than half of people in the UK with debt are struggling according to a new poll that reveals most people take on the strain themselves rather than seek help. The Nationwide Building Society poll of more than 2,000 UK adults reveals that of those in debt, 57 per cent are experiencing debt problems and feel like they are ‘juggling’ their debts. The research was commissioned to encourage people in persistent or problematic debt to ask for help from their building society or bank as early as possible, rather than struggle alone.

Money worries can lead to emotional issues, with the research showing almost one in three (29%) feel stressed, anxious (28%), depressed (20%) and embarrassed (16%) when thinking about the debts they have. The survey also highlighted that more women experience negative feelings about their debts, with more than a third (36%) reporting feelings of stress, compared to a fifth of men (22%). According to the survey, almost six in ten (58%) say they have never sought help with managing their debts. Among those who do seek help, just seven per cent approached their financial services provider, whereas more than a fifth asked for help from friends and family (21%).

While only a small number of Brits with debt have asked for support from their financial services provider, nearly half (45%) of all respondents stated that the responsibility for managing debt should be shared equally between lender and borrower. However, more than one in ten (12%) have used a debt counselling service in a bid to get out of the red.

Act Fast

Stroke patientTraditionally stroke is associated as a condition that affects older people, but in fact one in four now occur to people of working age or younger: that number is set to rise as the working population gets older according to RedArc who work with insurers, intermediaries, employers and membership organisations, to add value to insurance products and employee assistance programmes. RedArc statistics show that 60 per cent of the stroke patients that the organisation treats are between the ages of 40 and 59 – well within the confines of what is considered traditional working age.

With many health conditions and disabilities more prevalent in older workers, employers will increasingly need to support employees to remain healthy in the workplace, and to have strategies in place to ensure a smooth return to work from serious illnesses.

May is stroke awareness month and RedArc advise organisations who currently feel un- or under-prepared in supporting stroke survivors in the workplace helping them to understand the signs of a stroke and the actions they need to take. A stroke occurs when the blood supply is cut off to the brain which can cause some areas of the brain to be damaged or die. The individual can be left with serious physical and mental impairments, depending on where it happens in the brain.

For survivors of stroke, under the Equality Act 2010, an employer has a responsibility to ensure that a disabled employee has the same rights and access to opportunities as able-bodied staff. This may mean that the employer needs to make a number of reasonable adjustments to the individual’s working environment and working practices.

Weekly Round-Up: 30th March 2018

Remortgage leads the way

Gross mortgage lending in February is estimated as £19bn. According to the February 2018 UK Finance update on lending, this is 4.9 per cent more than a year ago but it is still below 2017’s monthly average of £21.4bn. The data shows that in February re-mortgage approvals are up over 9 per cent in both number and value compared to February 2017.

The figures suggest an increase in re-mortgage approvals compared to last year. There is speculation that interest rates will rise later on in the year and as a result, borrowers are looking to lock into attractive deals. UK Finance has also seen a continued rise in credit card spending which reflects the growing number of transactions carried out using cards. In conjuntion to this, it has been document that other forms of borrowing such as overdrafts are continuing to fall.

The trade body highlights that real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales but suggest that the pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.

In February, we have seen modest year on year growth of commercial lending which is driven by investment within the manufacturing sector. Credit balances have risen at an even faster rate as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence.

Be in control!

Causes of cancer can be placed into two rough camps: those which can be controlled and those which can’t. The latter includes signals such as random changes to people’s genes as they get older, or hereditary mutations. By their nature, there’s not much anyone can do about these risks. But for the many causes that people do have some control over, such as smoking, there’s a potentially life-saving chance to act. Armed with information about what increases risk, people can make changes that stack the odds of avoiding cancer in their favour. Politicians can see where action is needed most. The goal of new data Cancer Research UK released this week is to provide that information.

The data comes from a new landmark study led by Cancer Research UK researchers. It looks at the things in people’s lives that cause cancer and calculates how many cases in the UK are linked to each of these risk factors. Cancer Research UK have done calculations like this before, but this new research uses all the latest available data and evidence to give more accurate estimates. Because some risk factors have become more common since the previous analysis and others have become less common, it’s important to update these figures. The findings, published in the British Journal of Cancer, show that more than 135,000 cases of cancer could be prevented in the UK each year largely through lifestyle changes – that’s around 4 in 10 cases. And while what’s behind these cancers may not come as a surprise, the results confirm how the things we do each day can add up.

The team did this for all the modifiable risk factors and found that in total, more than 135,000 cases of cancer could be prevented through changes such as stopping smoking, keeping a healthy weight and eating a healthy diet. Enjoying the sun safely, avoiding certain substances at work, protecting against certain infections and cutting back on alcohol can also help.

It’s important to say again that this research can’t tell what has caused or will cause an individual’s cancer. The data come from comparing large groups of people. So, while research has shown that, for example, being overweight can increase the risk of cancer, it doesn’t mean you will definitely get cancer if you are overweight. And this is true for the other risk factors as well.

Twice the customers

According to the latest analysis by the Equity Release Council, the volume of new customers taking out equity release plans in 2017 was almost 10,000 more than in the previous year, as the number of people unlocking housing wealth for the first time increased by a third. As a source of retirement finance, equity release is now helping more than twice as many new customers as it was five years ago. More new plans were agreed in the second half of 2017 than in the whole of 2012.

All strands of equity release activity – across new customers, returning drawdown customers and further advance customers – grew in the second half of the year compared with the first, with the 14% rise in overall customer numbers driven by a 20% increase in new customers and a 19% increase in further advances. Returning drawdown activity was more consistent, with the number of returning customers rising 5% from 12,585 in H1 to 13,209 in H2.

Growing interest in the equity release market from consumers is a sign that more homeowners consider housing wealth to be a potential source of finance in later life, and are finding an increasingly flexible range of products enabling them to unlock some of its value. One sign of this shifting mindset is that back in Q2 2016 just 29p of housing wealth was unlocked by over-55s for every £1 of savings accessed via flexible pension payments, following the introduction of ‘pension freedoms’ a year earlier. This rose to 38p of housing wealth for every £1 of pension payments over the whole of 2016, climbing again to 47p during 2017 and reached 56p in Q4 2017, as property becomes increasingly important as a supplementary source of retirement finance.