Weekly Round-Up: 11th November 2018

Softly Softly

London StreetAccording to the latest analysis by the Halifax, the annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013. However, this remains within the Lender’s forecast annual growth range of 0-3% for 2018 as prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. Halifax see this continuing to be the case over the coming months and they remain supportive of their 0-3% forecast range.

HMRC have highlighted that, in the three months to September, sales were unchanged from the previous three months. The volume of residential transactions has been broadly flat over the past year and is likely to remain so in the coming months. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – fell by 1.3% month on month to 65,269 in September.

Finally respondents to the Royal Institute of Chartered Surveyors monthly UK Residential Market Survey continue to cite the mixture of affordability constraints, a lack of stock, economic uncertainty and interest rate rises as holding back activity to a certain degree. The lack of new instructions coming to market continues to impede activity and new instructions were down for the second consecutive month.

Don’t stand for it

Credit CardMore than 15 million people in the UK routinely miss out on refunds, replacement products and getting problems sorted because they don’t know how to complain with confidence, new research reveals. In a study for the Financial Conduct Authority (FCA), which is encouraging people to check if they were mis-sold PPI and make a complaint before they miss their chance, 28% of Brits admit they put up with situations including queue jumpers, sub-standard meals and poor service because they lack the confidence and know-how to speak out.

The study shows the art of complaining is at risk of dying out, with younger generations the least likely to be proactive about getting problems resolved or their money back. Less than half (46%) of 16-24 year olds would complain about bad service in a restaurant (versus 71% of over 55s) and 16-24 year olds wait for over a week, on average, to complain about an issue, whereas over 55s take 2.5 days to speak up.

The FCA’s research, launched to highlight the upcoming 29 August 2019 deadline for PPI complaints, also shows younger groups are the most likely to leave it too late to complain, with 25-34 year olds twice as likely as over 55s to delay so much that they miss their chance.

Different generations’ views on what it means to complain may be fueling complaining’s status as a dying art. Younger people are more likely to see it as critical and ‘causing a scene’ than their parents, who associate it more with empowerment – taking a stand or making a protest. Just two in five (44%) under 35s relate complaining to ‘getting a good deal’ versus 68% of over 55s. In contrast, more than a quarter (27%) associate it with ‘awkwardness’, compared to just 11% of over 55s.<\p>

Hitting the right note

Cash MachineDuring an event at the Science Museum to launch the character nomination period, the Governor of the Bank of England announced that the new polymer £50 note will celebrate the UK’s achievements in science.

Mark Carney said that that the new £50 will celebrate the UK’s contribution to science from a wealth of individuals whose work has shaped how people think about the world and who continue to inspire people today. The banknotes are designed to be an opportunity to celebrate the diversity of UK society and highlight the contributions of its greatest citizens. Members of the public have six weeks to nominate a historical character who has contributed to science and influenced UK society. They could have worked in any field of science including astronomy, biology, bio-technology, chemistry, engineering, mathematics, medical research, physics, technology or zoology.

The Governor has also announced the appointment of four experts in the field of science to the Banknote Character Advisory Committee – Dr Maggie Aderin-Pocock, Dr Emily Grossman, Professor Simon Schaffer and Dr Simon Singh. They will join the permanent members on the Committee in creating a shortlist from the range of characters put forward by the public. The Governor will then make a choice from the shortlist and the final decision will be announced in 2019 alongside a concept design for the new note.

Spotlight on General Insurance

Customer care webpage interface wordThe Financial Conduct Authority has announced the launch of a market study into general insurance pricing practices which demonstrates that Insurers must continue to emphasise the core value of Treating Customers Fairly, particularly when it comes to charges faced by customers both new and those demonstrating a level of loyalty. Focusing on two of the most commonly held general insurance products home and motor insurance, the market study is also set to expand the regulator’s emerging work on how insurers use data and information on personal characteristics to price policies across different groups of customers, and particularly those classed as vulnerable.

Alongside the market study announcement, the FCA has also published a discussion paper setting out its approach to considering fairness of pricing in general. Both publications are available on the FCA’s website and have received widespread media coverage, indicating the level of public interest in this topic.

The FCA’s announcement follows concerns identified during its supervisory work, and previous publications such as its July 2018 research note on price discrimination in financial services. The FCA has identified four key issues related to pricing practices on which the market study will focus on consumer outcomes; the fairness of outcomes; the impact on competition; and remedies to address any harm the regulator identifies. The information gathering exercise is due to conclude by the end of January 2019, with an interim report in the summer to be followed by a consultation on any proposed remedies by the end of 2019.

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Weekly Round-Up: 22nd October 2018

Up across the country

For SaleThe Office for National Statistics has released the latest data on its UK House Price Index (HPI) tracing house price inflation, the rate at which the prices of residential properties purchased in the UK rise and fall. The UK HPI, introduced in June 2016, includes all residential properties purchased for market value in the UK. According to the data, average house prices in the UK have increased by 3.2% in the year to August 2018 (down from 3.4% in July 2018), remaining broadly stable at a national level since April 2018.

Over the past two years, records indicate that there has been a slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where prices decreased by 0.2% over the year, down from being unchanged (0.0%) in the year to July 2018. The average UK house price was £233,000 in August 2018. This is £7,000 higher than in August 2017 and £1,000 higher than last month. On a non-seasonally adjusted basis, average house prices in the UK increased by 0.2% between July 2018 and August 2018, compared with an increase of 0.5% in average prices during the same period a year earlier (July 2017 and August 2017). On a seasonally adjusted basis, average house prices in the UK increased by 0.3% between July 2018 and August 2018

House prices in England increased by 2.9% in the year to August 2018, down from 3.3% in the year to July 2018, with the average price in England now £250,000. House prices in Wales increased by 6.2% over the last 12 months to reach £162,000. In Scotland, the average price increased by 4.1% over the year to stand at £153,000. The average price in Northern Ireland currently stands at £133,000, an increase of 4.4% over the year to Quarter 2 (Apr to June) 2018.

Happy to be Scottish

Edinburgh cityHappiness levels in Scotland have risen for a third consecutive year, according to the latest Bank of Scotland Happiness Index. The annual nationwide survey asks Scots how happy or unhappy they are in their local communities, to create an official cheeriness barometer ranging between -100 (very unhappy) to +100 (very happy). Overall, Scots are slightly chirpier than last year as the Index recorded a score of 44.9 (an increase of 1.2 points compared to 2017) and 5.9 points happier than they were three years ago.

Anyone looking for their next home might want to consider Central Scotland, with its leafy suburbs and The Helix – home of The Kelpies – as it’s been crowned the happiest place to live. The Highlands & Islands is the second happiest – perhaps partly because of its stark beauty and outdoors community – followed by the Lothians. Clouds may be gathering over West of Scotland though, as it fell to the bottom of the table this year. Getting older doesn’t necessarily mean becoming grumpier as the Index reveals that over 65s remain the happiest age group. They’ve consistently been table-toppers for the past three years. But at the other end of the age scale, 18 to 24 year olds’ happiness levels have grown by the highest number of points in the last year, and over the last three years. Those aged 35 to 44 are at the bottom of the table for the second consecutive year, and 24 points below the over 65s.

Two’s company when it comes to a happy home as for the third year in a row those households with two residents say they’re the happiest. Families of four have slumped four places to the bottom of the table, replacing those living alone, who move up just one position to fifth place. They say money can’t buy happiness but according to the latest Index, the more Scots earn, the happier they are. This year, Scots with a personal income of more than £60,000 are happiest, but last year, the magic number was between £40,000 and £59,999 – it’s moved to second place.

Lost in pension

Elderly Couple_300x200pxThe scale of the UK’s lost Pensions Mountain is exposed last week by research carried out on behalf of the ABI. In the largest study yet on the subject, the Pensions Policy Institute (PPI) surveyed firms representing about 50% of the private defined contribution pensions market. From this PPI found 800,000 lost pensions worth an estimated £9.7 billion. It estimates that, if scaled up to the whole market, there are collectively around 1.6 million pots worth £19.4 billion unclaimed – the equivalent of nearly £13,000 per pot. This figure is likely to be even higher as the research did not look into lost pensions held in the public sector, or with trust-based schemes typically run by employers.

Insurance providers make considerable efforts and spend millions every year trying to reunite people with lost or forgotten pensions. In 2017 more than 375,000 attempts were made to contact customers, leading to £1 billion in assets being reunited with them. However, firms are unable to keep pace with a mobile workforce that moves jobs and homes more often than ever before, so a digital solution through the Pensions Dashboard is now more important than ever. This would enable anyone to see all their pension savings, including the State Pension, together in a single online place.

Nearly two-thirds of UK savers have more than one pension, and changing work patterns means that the number of people with multiple pensions will increase. People typically lose track of their pensions when changing jobs or moving home. The average person will have around 11 different jobs over their lifetime, and move home 8 times. The Government predict that there could be as many as 50 million dormant and lost pensions by 2050.

Selection welcome

Pound CoinsFollowing HM Treasury’s announcement last week, the Bank of England confirmed that it plans to issue a new £50 note. This will be the final note in the latest series, all of which will be printed on polymer. The Bank will announce a character selection process for the new £50 note in due course, which will seek nominations from the public for potential characters to appear on the new note. Having successfully moved to polymer with the £5 and £10 note, the Turner £20 note will be issued on polymer in 2020 and the new £50 note will follow this.

The Bank of England is very excited to be starting the process of introducing a new £50 note highlighting the need to provide the public with high quality notes that they can use with confidence. Moving the £50 note onto polymer is an important next step to ensure that the Bank can continue to improve the notes in circulation, they are cleaner, safer and stronger and harder to counterfeit. And, because they last around 2.5 times longer than paper notes, they are also more environmentally friendly.

Weekly Round-Up: 12th October 2018

Top of forecast

London StreetAccording to the Halifax, with the annual rate of house price growth easing to 2.5% in September from 3.7% in August and the quarterly rate of growth remaining at 1.8% for the second month, their analysis is seeing a steadying in house price inflation across these more stable measures. This is set amongst mortgage approvals and completed house sales remaining broadly unchanged, although a gradual pickup in wage growth has helped to support household finances.

The annual rate of growth is near the top of their forecast range for the Lender of 0% to 3% for 2018, as a low supply of new homes and existing properties for sale, combined with historically low mortgage rates and a high employment rate, continue to support house prices.

Quoting HMRC seasonally adjusted figures Halifax supported their assumptions by highlighting that the number of completed UK home sales remained near the monthly average for the past 12 months. On a monthly basis, sales rose between July and August to 99,120. In the three months to August sales increased by 1.2% from the previous three months. The volume of residential transactions has been broadly flat over the past year and is likely to remain so in the coming months.

On the range

Stacking coinsHouseholds borrowed an extra £2.9 billion secured against their homes in August the latest analysis from the Bank of England reveals. Net lending has been relatively stable over the past year or so, but this was the lowest monthly secured net lending since July 2016, and the annual growth rate ticked down to 3.1% in August. It has now been around 3% since late 2016, and remains modest compared to the pre-crisis period.

The number of mortgages approved for house purchase – which gives an indication of how much new mortgage lending might be expect to see in coming months – increased to 66,440 in August. This was the highest level since January 2018, although approvals for house purchase have remained within a narrow range in recent years. The number of approvals for remortgaging – which could lead to an increase in gross lending and repayments, with little impact on net lending – increased to 53,125 in August. This data has been volatile recently, and this was the highest since November 2017.

The net amount of new consumer borrowing, excluding mortgages, increased slightly to £1.1 billion in August, up from £0.8 billion in July. Despite this increase, lending remains a bit lower compared to much of the past two years. This weakness reflects subdued net lending for other loans and advances (which includes personal loans, overdrafts and car finance), which increased slightly to £0.7 billion from £0.6 billion in July. Net credit card lending increased to £0.5 billion on the month, in line with the average of the previous 6 months.

Police imposter

Cash MachineA worrying knowledge gap has been highlighted as research reveals a large percentage of people would willingly withdraw their own money at the request of a fraudster posing as the Police. The poll, by Nationwide Building Society, of more than 2,000 people shows that people in the UK are at risk of putting themselves in compromising situations due to a lack of awareness of scams and the ways in which criminals try to trick people into handing over their hard-earned money.

Although the poll shows that fraud education work is getting through to many, with just over a third (34%) indicating they would not fall for the scams posed in the research, three in ten (30%) would still transfer their own money into another account ‘to keep it safe’, if requested to do so by someone they believed to be representing the Police. This is despite the fact that neither the Police nor National Crime Agency (NCA) would ever ask anyone to do this.

It appears goodwill or a sense of civic duty could prove to be the main downfall for unsuspecting victims, with 29 per cent willing to withdraw their own cash from their bank branch or building society in order to hand it over to the ‘authorities’ to check for suspect fingerprints. While the Police or NCA would never request such action, scammers posing as law enforcement sometimes claim that branch staff are engaged in illegal activity in order to dupe their victims into playing an active role in handing over their money. In addition, more than a fifth (22%) of those surveyed would be prepared to withdraw their own money to purchase counterfeit goods from a retailer, hand the items over to the Police and then wait for a refund. Again neither the Police nor NCA would ever request a member of the public do this.

On a regional basis the research shows that Londoners are the most at risk, with more than half (54%) willing to follow any of the requests, followed by those living in the West Midlands (52%), and those in Wales and the North East (both 49%). The survey shows men are far more cautious than women, with more than a third (37%) not prepared to help the Police in any of the ways suggested. This compares to just 30 per cent of women who said the same.

An experience worth sharing

Health Monitor_300x200pxAviva has published research, commentary and advice to support this World Mental Health day which took place on October 10th. They found that almost two in three (65%) UK adults say they have experienced a mental health condition at some point in their life.

Despite the prevalence of mental health conditions, the taboo persists. Just 52% of UK adults would feel comfortable telling people about their mental health condition and 10% of UK adults believe the stigma surrounding mental health conditions has worsened in recent years. According to the research, three in four (71%) women have experienced a mental health condition at some point in their life, compared to 58% of men.

The most prevalent mental health conditions were anxiety, stress, depression, panic attacks and insomnia. In the same way they would if people were physically ill, Aviva in encouraging people to feel able to speak up when their mental health is impacted, as the stresses and strains of everyday life can take their toll on everyone from time to time.

World Mental Health Day was an opportunity to encourage everyone to get rid of the stigma surrounding this topic and be more aware of the impact of mental health. Aviva say that no one should feel uncomfortable talking about how they feel nor of asking for help to find the best ways to manage their condition which can be as simple as talking to a family member, friend or doctor to tell them how you feel or a couple of minutes meditating and deep breathing can work wonders alleviating stress and anxiety.

Just 30 minutes of physical activity can tackle issues such as stress and insomnia and rather than browsing the internet or watching TV, a more calming activity such as reading or taking a bath can help to combat sleepless nights.

Weekly Round-Up: 5th October 2018

Slowly does it

Credit CardAnnual house price growth was stable in September at 2% according to the latest analysis by the Nationwide Building Society. Figures suggest that annual house price growth has been confined to a fairly narrow range of between 2-3% over the past 12 months, indicating little change in the balance between demand and supply in the market.

The Building Society has stated that future House Price growth will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. All indicators point to subdued economic activity and ongoing pressure on household budgets which 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, Nationwide continue to expect house prices to rise by around 1% over the course of 2018.

Regional house price developments were more varied than the national picture. For the fifth quarter in a row London prices fell in annual terms, though the decline remained modest at just -0.7%. Indeed, prices in the capital are around 3% below the all-time high recorded in Q1 2017 and are still more than 50% above their 2007 levels. The Outer Metropolitan region also saw a slight year-on-year fall, with prices down 0.3% in Q3. The weakest performing region was the North, where prices were down 1.7% year on year. Yorkshire and Humberside was the strongest performing region in England, and also the UK, with prices up 5.8% year on year. The East Midlands continued to see relatively strong growth, with prices up 4.8% year-on-year.

Northern Ireland saw a pickup in annual price growth to 4.3% and was the best performing amongst the home nations. Wales saw a slight softening in growth, with prices up 3.3% year on year. Price growth also slowed in Scotland, from 3.1% in Q2 to 2.1%. England was again the weakest performing nation, with prices up just 1.4% year on year.

The high cost of renting

StudentsPeople in their 20s who want to rent a place for themselves face having to pay out an “unaffordable” amount in two-thirds of Britain, BBC research shows. They face financial strain as average rents for a one-bedroom home eat up more than 30% of their typical salary in 65% of British postcode areas.

Many housing organisations regard spending more than a third of income on rent as unaffordable and the research reveals that a salary of £51,200 is needed to “afford” to rent a one-bed London home. Even flat-sharing – the choice of many young employees – does not entirely resolve the issue as 12% of postcode areas in Britain remain “unaffordable” for two people in their 20s sharing a two-bedroom home.

Analysis by the BBC’s data team shows that a gross annual income of £24,800 would be needed for the average one-bedroom rental flat in England to become affordable under the 30% measure. In Scotland £20,700 is needed and in Wales £17,600. Many people can pay more than 30% of income on rent, but housing organisations say this puts considerable strain on the rest of their finances. Compare this to 1980 when UK private renters spent an average of 10% of their income on rent, or 14% in London. There was, however, at that time many more people renting from councils or in social housing at that time.

Landlords have also faced increased costs, including their mortgages, insurance, maintenance and licensing, that need to be covered from rents. These costs have increased as the government introduces new measures such as the removal of mortgage interest relief and changes to stamp duty. This has landlords have been divesting their properties as their businesses become less financially viable, resulting in fewer properties available to rent, while demand for properties across the UK remains high.

No ordinary complaint

FuneralCitizens Advice has revealed customers who stay loyal to their providers are losing out on over £4 billion a year. The national charity has this week lodged a super-complaint with the Competition and Markets Authority (CMA), calling for the regulator to outline how the problem can be fixed. The consumer champion has indicated that the practice of overcharging loyal customers is widespread and they have found that across 5 essential markets (mobile, broadband, home insurance, mortgages and savings): British consumers lose £4.1 billion a year to the loyalty penalty.

It has been alleged that 8 in 10 people are paying a significantly higher price, in at least one of the markets, for remaining with their existing supplier with loyalty penalty being, on average, £877 per year – equal to 3% of the average household’s total annual expenditure.

The Government’s recent price cap in the energy market should bring down loyal customers’ bills by £75 per year on average. The charity also found the loyalty penalty is disproportionately paid by vulnerable consumers, such as older people and people with mental health issues. These groups are particularly likely to struggle with switching.

This is the fourth super-complaint Citizens Advice has made since being given the power in 2002. Their complaint on payment protection insurance (PPI) in 2005 helped to generate a huge win for consumers, with at least £32.2 billion returned to customers in refunds and compensation so far. Citizens Advice have identified the scale of the problem in 5 essential. By submitting this complaint the organisation is asking the CMA to investigate all markets where the loyalty penalty exists however as the sectors are so diverse there is no one-size-fits-all solution. The charity is calling for the CMA to work closely with other regulators and the Government to ensure the right action is taken in each market.

Time to learn?

To letSix million women in the UK declare they don’t know how to check their breasts for cancer and a staggering 80% of women are unclear on what could increase their risk of breast cancer. Amongst the proportion of women who know how to check for signs of breast cancer (77%), only 14% say they feel very confident in what they are doing.

The figures by Bupa Health Clinics are released to mark the start of Breast Cancer Awareness Month, to demystify fact from fiction when it comes to breast health and help improve the confusion women have. Amongst the findings, a quarter (24%) think stress increases the possibility of being diagnosed with breast cancer – however, there is no evidence to suggest this is true. In addition, over two million women believe wearing deodorant and over half a million believe wearing fake tan can play a part in the probability of being diagnosed with breast cancer. However, all of these beliefs are unfounded.

A third of women (32%) also falsely believe that turning 40 will increase the chances of developing breast cancer, but in reality, it’s those over the age of 50 that are more at risk. Despite not being informed on all aspects of breast cancer, women are checking themselves, and doing so on average three times a month. The report by Bupa Health Clinics also found information overload is leading millions of women to believe health myths, which could potentially damage their health and wellbeing. As many as 60% of women admitted they found their health difficult to understand and of those, over a quarter (28%) said frequently changing advice and conflicting information from friends is the cause.

So big is the problem, the report suggests four million women are avoiding the doctor simply through their lack of knowledge about female health.

Weekly Round-Up: 28th September 2018

Time to Remo

Credit CardAccording to UK Finance, the trade body representing high street banks, remortgaging continued to dominate in August, as homeowners took advantage of a competitive market to lock into attractive deals. Growth in credit card spending also remained fairly strong, reflecting the boost to retail sales from the warm weather as well as the growing use of credit cards as a preferred means of payment.

Gross mortgage lending for the total market in August was £24.1bn, some 1.2 per cent lower than a year earlier however the number of mortgage approvals by the main high street banks in August rose by 0.7 per cent compared to the same month a year earlier. Within this, remortgaging approvals were 9.2 per cent higher than for the same period a year earlier. There was a fall in house purchase and other secured borrowing of 4.3 per cent and 2.1 per cent respectively.

Credit card spending was 7.6 per cent higher than a year earlier, with outstanding levels on card borrowing growing by 5.8 per cent over the year. Outstanding overdraft borrowing was 7.2 per cent lower compared to the same time last year. Against this personal deposits grew by 1.2 per cent in the last 12 months. Deposits held in instant access accounts were 4.3 per cent higher than a year earlier.

Overall, according to UK Finance, the economic outlook remains mixed as household incomes continue to be squeezed by rising inflation.

Away at college

StudentsParents expecting to send their children to university believe it will cost them on average, £17,165 over the length of the average degree course, the latest Lloyds Bank Spending Power Report has revealed. Ten years ago, this would have been enough to cover the total cost of tuition fees at every university in the UK, with some change left to spare. Now, two thirds (66%) of parents who anticipate sending their child to university expect to support them financially while at university. On average, these parents think they will have to spend £5,721 annually on their student offspring, which is actually less than one year’s tuition at many institutions today.

Just over one in ten (14%) parents are not anticipating helping their child financially while at university. The amount is potentially as large as it is because parents feel they will have to support on all aspects of university life. Just under two thirds (65%) believe they will have to support with accommodation costs, and a similar number (64%) on items essential for study. Over half (58%) said they anticipate supporting tuition fees and even support their travel to and from their child’s travel to and from their classes (52%). However, just under one in four (23%) are prepared to fork out for luxuries.

For parents earning over £35,000, just over one in four (26%) will be prepared to help with luxuries compared to just 17% of those earning under £35,000. For these lower earners, over two thirds (68%) would spend the extra money on items essential to their child’s study. Families more generally are reporting muted confidence in their own finances, preferring to squirrel money away rather than spend. Almost a quarter (23%) think they will have much more money in six months’ time, with 78% planning to save this extra income against 37% planning to spend.

The need for families to save the change could be a direct result of continually high living costs. An analysis of Lloyds bank own data has shown that year-on-year change in consumer essential spending rose 3.1% in August. Fuel spend rose sharply year-on-year by 10.4%, and Gas and Electricity spend rose by 6.3%.

Not living longer

FuneralIn their latest analysis of trends in the average number of years people will live beyond their current age measured by period life expectancy, analysed by age and sex for the UK and its constituent countries, the Office for National Statistics has stated that life expectancy at birth in the UK did not improve in 2015 to 2017 and remained at 79.2 years for males and 82.9 years for females.

The slowdown in life expectancy improvements in the UK has continued, as 2015 to 2017 saw the lowest improvements in life expectancy since the start of the series in 1980 to 1982. Some decreases in life expectancy at birth have been seen in Scotland, Wales and Northern Ireland whilst in England life expectancy has remained unchanged from 2014 to 2016. This slowing in improvements is reflected in the chances of surviving to age 90 years from birth, which has also seen virtually no improvement since 2012 to 2014.

Within the UK, life expectancy at birth declined by 0.1 years in 2015 to 2017 for males and females in Scotland and Wales, and for males in Northern Ireland; life expectancy at birth remained unchanged from 2014 to 2016 for females in Northern Ireland and males and females in England. Life expectancy at age 65 years in the UK did not improve for males and females in 2015 to 2017 and remained at 18.6 years for males and 20.9 years for females.

Across all four UK countries, life expectancy at age 65 years remained the same in 2015 to 2017 except for males in Northern Ireland where a decline of 0.1 years was seen. Around one in five newborn males and one in three newborn females in the UK in 2015 to 2017 could expect to live to at least age 90 years; the chance of survival to age 90 years has remained virtually unchanged since 2012 to 2014. In the UK life expectancy remained lower than in many other comparable countries internationally.

HMO warning

To letWith an extension of the rules bringing a wider range of houses in multiple occupation (HMO) into the mandatory licensing regime coming into effect on 1 October, landlords have less than one week to apply for a licence. The Government made the announcement about mandatory HMO licensing in January, but many industry commentators are concerned that landlords may not have applied for their licenses and are encouraging all owners to make sure they do so before 1 October to be compliant.

This licensing requirement applies to all properties that is occupied by five or more persons or by persons living in two or more separate households, and meets the standard test under section 254(2) of the Act, the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats, or the converted building test under section 254(4) of the Act.

Properties that fall into scope of the new definition but are already licensed under a selective or additional scheme, will be passported over to the new scheme at no cost to the landlord. A few Landlords maybe under the misconception that there was a six-month grace period, as was originally proposed. This is not the case and it is important that no-one is found committing an offence through ignorance.

Feedback to the National Landlords Association (NLA) suggests that a number of landlords have tried to apply for licenses, but the local authority has purported not to know anything about it or simply didn’t have the systems in place to process the applications. The NLA is calling for all local authorities to be up to speed with the changes and the challenges being faced in implementing them.

Weekly Round-Up: 21st September 2018

Licensing Laws

HousesIn England on 1 October, the criteria for what kind of House in Multiple Occupation (HMO) needs a mandatory licence is being extended. The UK Government announced in May 2015 that it would be changing the criteria for Mandatory HMO Licensing in England in a bid to address poor conditions and overcrowding in the private rented sector. This means that from October this year, all HMOs must be licensed if they house five or more occupants, from at least two unrelated households irrespective of the number of storeys that the property has.

Local Authorities will determine whether a property meets a specific test to conclude whether it will need to be licensed. This includes: ‘The Standard Test’; ‘The Self-Contained Flat Test’; and ‘The Converted Building Test’. Previously a large HMO had to have a mandatory licence when it housed five or more occupants from at least two unrelated households, but only if the property had at least three storeys. Since 6 April 2016, all large HMOs have had to be licensed with the local Council, typically licences last for a maximum of five years.

If a property is currently licensed under a mandatory or additional scheme, the existing licence will remain valid until it expires. This means that Local Authorities must only enforce existing conditions of the licence until expiration. These landlords should receive necessary information from their Council about the new requirements prior to the expiration of their current licence. The new mandatory licensing conditions will then apply from the renewal of the existing licence. Further changes mean that rooms used for sleeping in will have to adhere to minimum room sizes. For example where there are children aged 10 and under the room size is 4.64 square metres, a person aged 10 and over is 6.51 square metres and where its 2 people aged 10 and over the room size is 10.22 square metres.

Operating without a licence, failing to comply with an Improvement or Overcrowding Notice, breaching conditions of the HMO licence, and breaching Management Regulations will be a criminal offence and can result in prosecution with an unlimited fine or a Fixed Penalty Notice of up to £30,000 and a Rent Repayment Order (RRO) of up to 12 months’ rental income. Landlords should also be made aware, that where they have a licensable property and they fail to attain a licence, they will not be able to issue tenants of that property with a Section 21 notice.

In the slow lane

New House KeysAccording to the Office for National Statistics, the UK House Price Index average house prices in the UK have increased by 3.1% in the year to July 2018 (down slightly from 3.2% in June 2018). This is the lowest UK annual rate since August 2013 when it was 3.0%. The annual growth rate has slowed since mid-2016 and has remained under 5%, with the exception of October 2017, throughout 2017 and into 2018. Introduced in June 2016, it includes all residential properties purchased for market value in the UK. It should be noted that, as sales only appear in the UK HPI once the purchases have been registered, there can be a delay before transactions feed into the index.

This slowdown in UK house price growth over the past two years is driven mainly by a slowdown in the south and east of England. The lowest annual growth was in London, where ONS data indicate prices decreased by 0.7% over the year, down from an increase of 0.3% in the year to June 2018.

The average UK house price was £231,000 in July 2018. This is £6,000 higher than in July 2017 and £2,000 higher than last month. On a seasonally adjusted basis house prices in the UK increased by 0.3% between June 2018 and July 2018, compared with an increase of 0.5% in average prices during the same period a year earlier (June 2017 and July 2017).

Detached houses showed the biggest increase, rising by 4.6% in the year to July 2018 to £352,000. The average price of flats and maisonettes increased by 0.6% in the year to July 2018, to £208,000, the lowest annual growth of all property types. Weaker growth in UK flats and maisonettes was driven by negative annual growth in London for this property type. London accounts for around 25% of all UK flats and maisonette transactions.

Protect the young

Close up of credit cardsNew data from Barclays has revealed that young people are five and a half times more likely to fall victim to scams than those over 65, with 30 per cent of 18-24-year-old scam victims not believing ‘there is not much to do’ to protect themselves in future. However, impersonation scams, where a criminal pretends to be from the police or the victim’s bank and asks the victim to make a payment, sees the largest concentration in the over 65s. These can be particularly devastating, with a third of cases reported to Barclays over £5000.

Nearly two thirds of high value shopping scams are from London, East and South East England, whilst Plymouth, Sheffield and Southampton are also identified as scam hotspots with one in 10 people (11 per cent) in the cities having been scammed in the last year. Looking at the last five years, this figure in London jumps to one in five people (19 per cent), 17 per cent of people in Plymouth and one in 10 (13 per cent) people in Sheffield. Looking at the UK as a whole, this translates to one in five people being a victim of scam, with exactly half of the victims (50 per cent) under the age of 34.

Barclays top tips for preventing scams include never share your PIN, Passcode or Password with anyone – even if they claim to be from the police or your bank, do not click on any links, or open any attachments in emails from people you don’t recognise, and no genuine bank or the police would ask you to transfer money to a ‘safe account’ – so ignore anyone who asks you to do this, whether it’s by phone, email or any other method.

Resilience required

Backup planMillions of UK adults do not feel financially resilient and would not be able to manage a financial shock or loss of income, according to a new report from Zurich UK. Developed with neuroscientist Dr. Jack Lewis, the Cost of Resilience examines the impact that money, including having products designed to protect and insure against loss, have on feelings of resilience.

According to the research, one in three (34%) adults, the equivalent to more than 17.6 million adults  across the UK, say they would not be able to recover quickly from an unexpected financial shock, such as an unanticipated period without household income or a sudden need to spend a significant sum. A further one in seven (15%) have no idea whether they would be able to cope or not. Yet, the report found that almost a quarter (24%) of UK adults have no savings to fall back on and almost the same number (26%) do not feel in control of their life.

While a third said they would struggle to recover from a financial shock or loss of income, only one in ten (11%) have Income Protection, a financial product that shields your pay against being unable to work through illness or injury. Instead, people are more likely to have insurance for their home (71%), holidays (70%) and mobile phone (18%). The report also found that should an individual experience a financial shock or loss of income, UK adults would struggle to make financial sacrifices, with giving up the family home (51%), car (37%) and holidays (23%) proving the most difficult. More than one in ten (11%) have no idea of the impact a financial shock would have on their household income and they wouldn’t know what sacrifices they’d have to make.

Weekly Round-Up: 14th September 2018

On Hold

Pound CoinsAt its meeting ending on 12 September 2018, The Bank of England’s Monetary Policy Committee (MPC) that sets monetary policy voted unanimously to maintain Bank Rate at 0.75%. In their most recent economic projections, set out in the August Inflation Report, the MPC anticipates GDP to grow by around 1¾% per year on average over the forecast period, conditioned on the gently rising path of Bank Rate implied by market yields at that time.

Although modest by historical standards, the projected pace of GDP growth was slightly faster than the diminished rate of supply growth, which averaged around 1½% per year. According to the MPC, CPI inflation remains slightly above 2% through most of the forecast period and in anticipated to reach the target in the third year.

The BoE highlighted that UK GDP grew by 0.4% in 2018 Q2 and by 0.6% in the three months to July, with the unemployment rate falling to 4.0% and the number of vacancies rising further. Regular pay growth has risen further to around 3% on a year earlier. CPI inflation was 2.5% in July. The Bank is still concerned about further protectionist measures by the United States and China, which, if implemented, could have a somewhat more negative impact on global growth than was anticipated at the time of the August Report. The MPC continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal. Since the Committee’s previous meeting, there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the withdrawal process.

The Committee judges that an ongoing tightening of monetary policy over the forecast period is still appropriate to return inflation sustainably to the 2% target however any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent.

Learning the hard way

StudentsWith nearly two-and-a-half million students planning to start or return to university this September with as much as £3,000 worth of possessions, the Association of British Insurers (ABI) is urging students to make sure their valuables are insured and to protect their belongings against theft or damage as the new year kicks off. Given the National Union of Students estimate that 1 in 5 students are victims of crime while studying at college or university, the ABI is issuing top tips to remind students of what they should be doing to keep their possessions protected:

The first is to check an existing home insurance policy to see whether cover can be extended to cover possessions at university, or there may be insurance cover already in place in student halls. There is a word of warning to check the limits on the value of possessions in these policies and if too small, students should consider taking out a separate policy. The ABI also encourages Students to avoid leaving valuables like laptops unattended when they are out and about, as this increases the chance of theft.

Valuables at home when the room or property is unoccupied should either be hidden or kept out of view. Students can security mark their valuables with their details or register them on www.immobilise.co.uk, a police-supported national property register, to help police identify valuables if they do go missing.

Finally for those moving into student halls, to minimise risk, remember to shut windows and lock the door when out of your room. For those moving into private accommodation, make sure your front and back doors are strong and secure, with good quality locks.

With students taking on average more than £3,000 worth of stuff with them to university, it’s vital they make sure they have proper protections in place. Students moving into privately rented accommodation may be unaware of the burglary risk in their area and ensuring the right cover is in place will mean one less thing to worry about further down the line.

Remo July

HousesThe residential remortgaging market saw its strongest July in over a decade, as homeowners pre-empted the latest Bank of England rate rise by locking into attractive fixed-rate deals according to UK Finance, the trade body representing High Street Banks. There was also considerable growth in remortgaging in the buy-to-let sector, showing that while recent tax and regulatory changes are impacting on new purchases, many existing landlords remain in the market. The number of first-time buyers has returned to modest year-on-year growth. However, according to UK Finance, affordability remains a challenge for many prospective borrowers, underlining the importance of clarity over the future of schemes such as Help to Buy.

In numbers there were 46,900 new homeowner remortgages completed in the month, some 23.1 per cent more than in the same month a year earlier. The £8.7bn of remortgaging in the month was 26.1 per cent more year-on-year. There were 32,600 new homemover mortgages completed in July, some 3.8 per cent fewer than in the same month a year earlier, the average homemover is 39 and has a gross household income of £57,000.

There were 31,400 new first-time buyer mortgages completed in July, some 1 per cent more than in the same month a year earlier and 5,500 new buy-to-let home purchase mortgages completed in the month, some 14.1 per cent fewer than in the same month a year earlier. There were 14,700 new buy-to-let remortgages completed in the month, some 7.3 per cent more than in the same month a year earlier. By value this was £2.4bn of lending in the month, 9.1 per cent more year-on-year.

Living longer

Health Monitor_300x200pxA new report by Public Health England titled The Health Profile for England report has highlighted that, as a society, people are living longer with life expectancy in England reaching 79.6 years for men and 83.2 for women. We are also healthier at every age group than ever before however, stubborn inequalities persist – in the richest areas people enjoy 19 more years in good health than those in the poorest areas.

A major theme of the Health Profile for England report is future trends in health, which will aid policymakers to prioritise efforts to prevent ill health not just deal with the consequences. Some of the most notable findings suggest that the number of people aged 85 years old or more has more than tripled since the 1970s and will include more than 2 million people by 2031. The death rate for dementia and Alzheimer’s disease – already the leading cause of death in women – may overtake heart disease in men as early as 2020 and is likely to become the leading cause of death in men too

The number of people with diabetes is expected to increase by a million – from just under 4 million people in 2017 to almost 5 million in 2035 and in the last 7 years, smoking prevalence has dropped by a quarter to 15% and as little as 10% of the population could still be smoking by 2023. UK women’s health is faring worse than their European counterparts, ranked 18th lowest out of 28 EU member states for premature death. UK men are doing better by comparison and are ranked 10th.

Low back and neck pain and skin disease (dermatitis, acne and psoriasis) are the 2 leading causes of morbidity for men and women, with hearing and sight loss also ranking highly for both sexes. Mental health problems and substance use affect younger adults the most, accounting for more than a third of the disease burden in those aged 15 to 29 years.

The new report also shows that good public health is not defined by health policy alone – a high-quality education, a well-designed and warm home, a good job and a community to belong to are just as important.

Weekly Round-Up, 7th September 2018

Driving remortgage

HousesAccording to the latest analysis by UK Finance, July saw steady growth in gross mortgage lending, driven largely by remortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise. Card spending has also strengthened, reflecting increased expenditure during the holiday period and an uplift in retail sales due to the World Cup and warm weather. However UK Finance suggest that the broader economic outlook remains mixed, with households continuing to see their incomes being squeezed by rising inflation. This may explain the shift towards deposits held in instant access accounts, as consumers opt to keep their money close to hand.”

Putting more detail on the figures, UK Finance published gross mortgage lending figures for the total market in July of £24.6bn, some 7.6 per cent higher than a year earlier whereas the number of mortgage approvals by the main high street banks in July fell by 0.8 per cent compared to the same month a year earlier. Within this, remortgaging approvals were 2.8 per cent higher than for the same period a year earlier. There was a fall in house purchase and other secured borrowing of 0.6 per cent and 11.7 per cent respectively.

Credit card spending was 8.1 per cent higher than a year earlier, with outstanding levels on card borrowing growing by 5.3 per cent over the year. Outstanding overdraft borrowing was 4 per cent lower compared to the same time last year and personal deposits grew by 1.2 per cent in the last 12 months. Deposits held in instant access accounts were 3.8 per cent higher than a year earlier.

Back to school

FamilyProviding their children with a good education is a priority for most parents and is often on the list of key considerations for families looking to decide where to live. While there is most definitely a premium attached to some neighbourhoods surrounding the best state schools across the country, there are also many that come in under the county average, particularly outside of London and the South East where homes remain more affordable versus average earnings according to the latest research from Lloyds Bank. House price growth in areas with top performing state schools has significantly outpaced the rest of the country in the last five years for example house prices near top schools grew by 35% (£104,365), compared to the English average of 20% (£49,082) over the last five years. The average house price in areas close to top performing state schools is now £400,850 compared to the average of £293,824 – a difference of £107,026.

Two thirds (21) of the top performing schools are in locations where average house prices have grown by at least £80k in the past 5 years and half (10) of which are in Greater London. House prices in the postal districts of the top 30 schools are on average £30,968 (8%) higher than other locations in the same county (or local authority in London). The largest premium (149%) is nearby to Beaconsfield High School in Buckinghamshire (ranked 29th) where homes are now worth over £1million when compared to the county average of around £600k. This is twice the premium of Cheshire, home to Altrincham Grammar School for Girls (ranked 10th) and Loreto Grammar School (ranked 20th) which has the next highest house price premium when compared to the country average (£434,756 compared to £249,829 or 74%).

Out of top 30 schools, 11 are priced under the English average. Properties close to the High School for Girls in Gloucestershire (ranked 19th) are £129,982 (44%) below the county average, followed by King Edward VI Handsworth School in the West Midlands (ranked 6th) at £86,953 (42%) below the county average and Kendrick School in Berkshire (ranked 12th) at £135,919 (32%) below the county average. The most affordable are properties near King Edward VI Handsworth School in the West Midlands (ranked 6th) where house prices are just 3.7 times average local earnings.

The average house price in the postal areas of the top 30 schools is nearly 10 times (9.9) average local earnings – compared to 7.9 across England. Homes close to the Henrietta Barnett School in Barnett (the best performing state school in the country) are the least affordable at 22.2 times gross average annual earnings in the area.

Support for the bereaved

FuneralHigh funeral costs have left many families taking on a mountain of debt, with research showing a huge increase in the amount being borrowed by the bereaved over the last five years. The Mutual Insurer Royal London are calling for more support to be offered to families struggling to pay for funeral costs, and as a result being forced into debt.

This new research from Royal London reveals that the average cost of a funeral is £3,757, with costs having stabilised this year (£3,784 in 2017). The Royal London National Funeral Cost Index, in its fifth year, shows that London has consistently been the most expensive region in the UK for a funeral, with the average funeral costing £4,838. Kensal Green, in London, remains the most expensive location, with the average cost of a funeral at £7,489. Burial funerals in Kensal Green have also increased and now cost almost £12,000. Northern Ireland also remains the least expensive region, with a funeral in Belfast costing an average of £2,950.

One in 10 (12%) took on debt to pay for a loved one’s funeral, with the average amount of debt taken on by individuals rising to an all-time high of £1,744. Of those who struggled with funeral costs, three in 10 (28%) people borrowed money from friends and family and one in five (21%) took on debt. Sadly, one in 10(9%) continue to sell possessions to give their loved ones a decent send-off.

Families struggling with funeral costs could be entitled to help from the Government to pay for necessary costs but the research found that the support offered is inadequate. Funeral director’s fees, a coffin, hearse and collection and care of the deceased are not seen as necessary costs by the Government and only up to £700 is offered to bereaved families to cover costs. This leaves bereaved families with an average shortfall of £1,500 if they use the services of a funeral director.

In the fifth year of Royal London’s research into funeral costs, the average cost of a UK funeral has risen by 6%, from £3,551 in 2014 to £3,757 in 2018. Individual funeral debt has increased at a much higher rate – 34% – in the last five years, with people now taking on an average debt of £1,744, compared to £1,305 in 2014.

Healthy Heart

Health Monitor_300x200pxPublic Health England (PHE) is calling for adults across the country to take a free, online Heart Age Test, which will provide an immediate estimation of their ‘heart age’. If someone’s heart age is higher than their actual age, they are at an increased risk of having a heart attack or stroke. Cardiovascular disease (CVD), with stroke and heart attack being the most common examples, is the leading cause of death for men and the second leading cause of death for women.

A quarter (24,000) of CVD deaths are in people under the age of 75, with 80% of these preventable if people made lifestyle and behaviour changes to improve their heart health (around 19,200 deaths per year – the equivalent to 50 deaths a day or one every 30 minutes). Knowing their heart age helps people to find out whether they are at risk and consider what they can do to reduce this risk. High cholesterol and high blood pressure can both increase someone’s heart age, making them up to 3 times more likely to develop heart disease or have a stroke. In England, one in four adults have high blood pressure, yet a further 5.6million are living with the condition undiagnosed, placing millions of lives at risk of premature death and ill health.

The Heart Age Test asks a number of simple physical and lifestyle questions and provides an immediate estimation of someone’s heart age, as well as a prediction of the risk of having a heart attack or stroke by a certain age. It also gives suggestions on lifestyle changes to help people reduce their heart age such as losing weight, quitting smoking, exercising regularly and cutting back on alcohol.  The Heart Age Test has been completed more than 1.9 million times and four out of five (78%) people have a heart age higher than their actual age. Worryingly, 34% have a heart age over 5 years and 14% at least 10 years over their actual age.

Weekly Round-Up: 24th August 2018

Organised fraud

Close up of credit cardsThe Association of British Insurers’ (ABI) most comprehensive analysis yet into insurance fraud published this week highlights that every minute an insurance fraud is now detected in the UK. For the first time, the ABI’s annual detected fraud figures include data on application fraud – where details such as age, address, or claims history are deliberately miss-stated.

A total of 562,000 insurance frauds were detected by insurers in 2017 and of these there were 113,000 fraudulent claims, and 449,000 dishonest insurance applications. The number of dishonest insurance claims, at 113,000, were valued at £1.3 billion. The number was down 8% on 2016, while their value rose slightly by 1%. The fall in number reflects the industry’s collaborative work in detecting and deterring fraud.

The number of organised frauds, such as staged motor accidents, fell 22% on 2016, with frauds worth £158 million detected. This reflected the work of the Insurance Fraud Bureau (IFB), who are currently investigating a rising number of suspected frauds, and the Insurance Fraud Enforcement Department (IFED). IFED is the specialist police fraud unit investigating insurance fraud, such as staged motor accidents and illegal insurance advisers (so-called ghost brokers). Since its formation in 2006, IFED has secured over 400 court convictions for insurance fraud. The value of fraudulent detected motor insurance claims, at £775 million, rose by 4% on 2016. The number of these frauds, at 67,000, showed a small rise.

Fraudulent property insurance claims fell. The number detected dropped by 11% on 2016 to 22,000, with a value of £100 million. Insurers detected 449,000 cases of confirmed or suspected application fraud, where people lied or withheld information to try and get cheaper cover. Motor insurance made up the bulk of dishonest applications, with typical lies including the nature of the applicant’s occupation, and driving record, where previous claims and motoring convictions were not disclosed.

A cyclist claimed £135,000 compensation from a council for injuries he said he sustained when he fell off his cycle after hitting a pothole. However, evidence showed that the accident happened when he fell off on a slippery road at another location. He was jailed for three-and-a-half years. In another example, a bodybuilder, who claimed £150,000 for a back injury, was exposed when he was filmed doing a press-up challenge. He was ordered to pay £35,000 in legal costs. The ring leader of a gang who staged a bus crash to try to get £500,000 in insurance pay-outs for fake injuries was jailed and banned from driving for two years. Using a rental car, he staged the crash, following which eight of his fellow fraudsters on the bus claimed for fake injuries to necks and hips. Finally a student was convicted after attempting to claim £14,000 through six invented claims following a trip to Venice, including the alleged loss of an iPod, laptop and designer watch.

Loopholes

Fraud_300x200pxIt was only relatively recently, in 2015, that the Financial Ombudsman (FOS) shared their insight into banking complaints involving telephone fraud. In those days it appeared that as older people were more likely to use landlines meant they were particularly at risk of “no hang up” scams.

But, according to their latest review in today’s connected world, it’s often loopholes in new technologies, rather than in old ones, that fraudsters are using to their advantage. FOS highlight that the first step toward being scammed for an individual may be putting their details into an identical, but fake banking website – or responding to a text message that, on the face of it, looks like it’s from their bank.

Unlike most other complaints FOS see, complaints about fraud and scams involve – whether it’s accepted or suspected – the actions of a criminal third party. So it’s understandable that, in many cases, both the bank and their customer tell FOS in strong terms that they’re not responsible for what’s happened.

This makes it harder for FOS to reach an answer that both sides are happy with. But it doesn’t mean usual standards don’t apply. As case studies from FOS illustrate, they will expect to see clear evidence that banks have investigated thoroughly – and reflected hard on what more might have been done to protect their customers and their money.

FOS also often hear from banks that their customers have acted with “gross negligence” – and this means they’re not liable for the money their customer has lost. However, according to FOS, gross negligence is more than just being careless or negligent. And as their case studies show, the evolution of criminals’ methods – in particular, their sophisticated use of technology and manipulative “social engineering” – means it’s an increasingly difficult case to make.

If there’s anything to be salvaged in the wake of fraud and scams, it’s what everyone can learn about how they happened and what needs to change.

Party Hard

Health Monitor_300x200pxEating a large meal could help detect early signs of metabolic conditions such as type 2 diabetes, according to new research the British Heart Foundation part-funded, published in the journal Cell Reports. A team of researchers, led by Dr Samuel Virtue and Professor Toni Vidal-Puig of the Cambridge University Metabolic Research Laboratories and the Medical Research Council’s (MRC) Metabolic Diseases Unit, have made the observation whilst studying a gene called PPARy2. This gene controls the formation and function of fat tissue, which stores energy in the form of fat.

Researchers found that in mice that lack PPARy2, lipids – a form of free fat – were not sufficiently stored in fat tissue and were redirected to other organs, which is an early sign of metabolic disease and diabetes. Although the young mice without PPARy2 looked ‘healthy’, they went on to develop insulin resistance (the process that underlies early diabetes) as they got older. The glucose tolerance test (GTT) is a diagnostic test used routinely to detect diabetes. A glucose drink is taken after a period of fasting and the test measures how well the body’s cells are able to absorb glucose.

When the team performed the GTT on the mice without PPARy2, the results were similar to normal mice. But  when they replaced the glucose in the GTT with a large, fatty meal – equivalent to eating a Christmas dinner – signs of metabolic disease emerged, including 10 times the levels of insulin found in normal mice given the same fatty meal, increased blood glucose and increased blood fatty acids. The researchers believe this is because PPARy2 is especially important in clearing free fats from the blood quickly after a high fat meal by storing them inside fat tissue. In mice without PPARy2, the fat tissue was overwhelmed by the high fat meal and the lipids built up in the blood or were redirected to other organs, eventually leading to insulin resistance as the mice aged.

Together with Professor José Manuel Fernández-Real, of the University of Girona, the team also demonstrated that PPARγ2 levels in humans are lower in obese individuals, demonstrating that their findings could also be relevant to humans. The study was jointly funded by the British Heart Foundation (BHF), MRC and Wellcome.

Lenders ordered

Pound coinsUK Finance has published their data showing mortgages lending by their members in 2017. The figures show their members’ gross mortgage lending in the latest calendar year and balances outstanding at the end of 2017, rounded to the nearest £100 million and ranked on the same basis. This means that the very smallest lenders, those with under £50 million of lending, do not feature in the figures. The data accounted for some 97 per cent of the total mortgage market – as published by the Bank of England.

For 2017, gross lending totalled £257 billion, up four per cent on 2016. This was lower than the 11 per cent growth seen in 2016. However, within this UK Finance have seen increased competition for business. This year there are 65 lenders in their results for gross lending, up from 60 lenders the year before. The largest lenders saw more modest growth. Although Lloyds has continued to increase lending activity with a seven per cent rise compared to 2016, the next three lenders on the table (Nationwide Building Society, Royal Bank of Scotland and Santander) all saw lower volumes than in 2016, compared to the previous year and corresponding contractions in market share.

Despite this, there was no change in the top ten gross lending table, with all lenders retaining the same rankings as in 2016. Lloyds Banking Group remains at the top of the balances outstanding table, despite a decrease in book size of one per cent. RBS had an increase of seven per cent for their balances outstanding, allowing them to overtake Barclays on the table and become the lender with the fourth largest mortgage assets in the UK. Below the top five, HSBC, Coventry, Virgin Money and TSB all increased their market share of outstanding mortgage assets.

2017 was a good year for the mortgage market with more lenders competing for business, and gross lending continuing on an upward trend. In their our most recent market forecasts, UK Finance predicted gross lending of £260 billion in 2018 – an increase of about two per cent. Lending in the early months of 2018 has, so far, outpaced their forecasts, driven largely by stronger-than-expected remortgage activity. The uncertainties UK Finance set out last year – not least those relating to the UK economy – remain; these have the potential to affect the path of lending for the rest of this year and beyond. However, the market has shown this year that, yet again, it is competitive and robust enough to continue to help UK mortgage customers as their needs change.

Weekly Round-Up, 17th August 2018

Seven in pocket

Pound CoinsGirls are getting more pocket money than boys for the first time in a decade, averaging £7.09 a week according to the Halifax Pocket Money report. The average weekly amount boys receive has dropped by 14p since last year to just £6.91, 18p less than the girls receive.

The overall average amount of pocket money children receive has also dropped for the first time in four years. The average weekly amount kids receive is now £7.01p, a 3p drop from last year’s average. Halifax estimates this equates to a national weekly pocket money deficit of £235,405 or enough money to buy 21,420 LOL dolls. When it comes to how parents dish out the dough, cash is still king, with 84% of parents giving cash to their kids, compared with only one in five (19%) paying it directly to their bank account, and just 3% paying it via a pocket money app.

The majority of parents still encourage their kids to save up the old fashioned way, with the piggy bank keeping a place in many homes, as 60% of parents say they still use one themselves, and three-quarters (76%) of kids say they use one too. Around a third (36%) of parents said they give their children enough pocket money to enable them to understand the value of money and the benefits of saving. It seems to be working too, as more than half (54%) say they believe their children are good at managing money, and four in five (80%) say they feel their kids understand the value of money. Only a quarter of parents (28%) make their children earn their pocket money by doing housework and chores, and nearly half (48%) would withhold pocket money if these jobs are not done properly.

Half (51%) of parents said they would stop giving pocket money as a way to punish bad behaviour, on a par with grounding as one of the most commonly used ways parents try to keep behaviour in check. It seems boys’ expectations to be higher earners start from an early age too, as just over half (51%) said they believe they should be given more pocket money, compared to just 41% of girls. Over half (53%) of girls said they felt they were given the right amount of money.

While almost a quarter of parents (22%) say they give their children as much pocket money as they can afford, nearly half (43%) say they don’t think their children actually need any pocket money at all. But it’s not just parents who are prepared to part with their pennies, as four in ten (39%) kids say they also receive pocket money from grandparents and other relatives.

Keeping watch

Credit CardThe Dedicated Card and Payment Crime Unit (DCPCU) has prevented £25m of fraud and carried out 84 arrests and interviews under caution in the first half of 2018, figures published today reveal.

The DCPCU, a specialist police unit sponsored by the finance industry, achieved estimated savings of £25m from preventing and disrupting fraud in the first half of the year. This brings the total savings from reduced fraud activity to over £540m since the unit was set up in 2002. 26 fraudsters were convicted between January and June 2018 in cases investigated by the DCPCU. This resulted in 33 years imprisonment for those given custodial sentences.

In the same period, the unit has disrupted seven organised crime groups and recovered 8,651 stolen card numbers. In addition, over £122,000 of compensation was returned to victims following the confiscation of criminal assets by the DCPCU.

The DCPCU are warning that criminal gangs are becoming ever increasingly sophisticated taking advantage of new technologies to commit fraud online. But through close cooperation between enforcement and the industry, the aim for the task force is to stay one step ahead and ensure there is no place for fraudsters to hide.

Travelling Lite

Suitcases at an airportAccording to the latest statistics from the Association of British Insurers, every week 3,000 holidaymakers every week need emergency medical treatment abroad and are helped by travel insurers with £3.9 million paid out- a six year high. Typical payouts include a £233,000 medical bill for a 15-day hospital stay in the US following a stroke, £185,000 for a 10-day stay in a US hospital to treat a blood clot, and £95,000 for treating a road accident injury in Central America.

The costs of needing emergency medical treatment abroad are exposed this week by the Association of British Insurers (ABI). Analysis by the ABI of the 510,000 travel insurance claims reveals that last year Travel insurers helped 159,000 British travellers who needed emergency medical treatment abroad – the equivalent of just over 3,000 a week with the total medical bill estimated to be £201 million.

The cost of an air ambulance back to the UK alone can be very expensive. Typical claims to cover a return trip to the UK include £35,000 from the US, £12,000 from Majorca, and £25,000 from the Canary Islands. Yet despite such jaw-dropping costs, an estimated one-in-five people admit to having travelled abroad without travel insurance, leaving them unprotected against potentially financially crippling medical bills. Of the total 510,000 travel insurance claims dealt with last year, 159,000 medical expenses accounted for 52% of claims costs, cancellations accounted for 38% and lost baggage or money for 4%.

Fear of financial shock

Stacking coinsAccording to new research released by Zurich UK, it appears that British adults have some thinking to do when it comes to their finances. From the report it is worrying that one in three (34%) do not feel they would be able to recover from a financial shock or loss of income, and do not have the savings in place they need to feel financially resilient. In the findings from its Cost of Resilience study Zurich suggest that the most valuable asset we have is ourselves and our ability to generate an income. Therefore, it’s a concern that nine in 10 are likely to prioritise insuring their mobile phone over themselves.

The report, which was developed with neuroscientist Dr Jack Lewis, also found that 24% of UK adults have no savings, 15% have no idea whether they would be able to cope with a financial shock or not, 11% have income protection, 71% insure their homes; 70%, holidays; and 18% mobile phones and just 37% believe they need to have savings to feel resilient.

The report calls on Insurer’s to encourage people to review their circumstances, assess the solutions available, consider what support exists to protect them and reduce feelings of financial vulnerability. Awareness of products such as an income protection plan, which is designed to provide a regular income if you are unable to work due to illness or disability, needs increasing which in turn could help individuals to feel less vulnerable and more financially resilient.

The report concludes that there is a need to educate people and help them to understand that there are products to ease the stress and worry of a financial shock and loss of income.