Monthly Archives: June 2016

Weekly Round-up, 17th June, 2016.

People like me.

Halifax has launched a new online feature allowing people to see comparable spending habits with people similar to themselves across Great Britain using its new ‘People Like You’ tool. It provides tailored insights showing the spending habits for the chosen demographic, meaning people can also look at comparable data for what their spending and saving may look like when they are older or if they are considering moving to a different area.

For example, just under three fifths (58%) of 18 to 30 year old women living in the South East are active or very active in shopping around for insurance products compared to more than four fifths (84%) of 18 to 30 year old women living in the East of England who say the same. And just over a third (35%) of men over 64 living in the Yorkshire and Humber region spend less than 10 hours online a week compared to a third (33%) of 46 to 64 year old men in London who say they spend between 11 and 20 hours online a week.

Sourced by YouGov Profile data, the tool has highlighted that as a nation one in 10 (10%) of us spend over £100 a month eating out a third (30%) of people age 64+ splash out on expensive holidays (over £999). Two fifths (41%) took their most recent holiday in the UK and our most popular hobbies are reading, gardening and cooking.

On average, almost a quarter (24%) of people don’t have any savings, with only a third (33%) having over £5k, just under two fifths (38%) of people have less than £125 disposable income a month, but 14% have more than £750 and a third (32%) of people have a mortgage, just over a quarter (26%) own outright, a third (30%) rent and just over a tenth (12%) live with their parents.

Generation Family.

Families are the most common household type in the private rented sector (PRS) for the first time, according to the latest research from the National Landlords Association (NLA).
The findings show that more landlords now let to families with children (48 per cent) than any other household type, overtaking young couples (47 per cent).

This represents a shift compared to four years ago, when young singles made up the largest group (53 per cent), followed by young couples (51 per cent), and then families with children (51 per cent).

The PRS now accounts for approximately 5 million households in the United Kingdom and, according to the latest English Housing Survey, the proportion of families in the PRS has increased from 30% in 2004-5 to 37% in 2014-15 – an increase in roughly 1 million (912,000) households in ten years. For the majority of families surveyed, renting privately is a stable option, with almost 8 in 10 (76%) reporting they were happy with the length of their tenancy, and a similar proportion (79%) reporting their tenancy was renewed or stayed the same at the end of the initial fixed term.

As a result, the perception of renting as a barrier to family life is breaking down, with nearly two-thirds of renting families (60%) saying that it was not. 77 per cent of families considered their rented accommodation to be home, and the majority (65 per cent) reported that they were free to personalise it however they chose.

Employee not benefiting.

Almost two-thirds (61%) of respondents do not have any form of income protection to replace lost income if they develop a serious injury or illness, according to research by Canada Life Group Insurance.

Its survey of 1,004 UK employees, also found that 44% of respondents who do not have income protection would rely on their savings to support them if they were to become seriously ill or injured. However, with respondents’ average savings totalling £8,849, the research found that respondents would run out of funds in approximately four months.

The research also found that 43% of respondents without income protection would apply for state benefits if they found themselves unable to work and 9% of respondents are not concerned about losing their income as they believe they could live off state benefits.

34% of respondents incorrectly thought that the benefit provided by the government if you are ill or disabled is over £200 a week, when it actually stands at £172 a week and 53% of respondents could not live off the weekly Employment and Support Allowance (ESA) of £102.15.

Donations welcome.

Aegon has become the first UK protection provider to offer donor cover as part of a critical illness (CI) policy. This forms part of a range of changes to Aegon’s multi-benefit proposition for both Personal and Business Protection announced this week.

Donor cover has been added to the list of additional CI definitions (partials). This cover, currently not offered by any other provider in the UK, enables a living donor to claim £2,500 if they donate a kidney, bone marrow or a portion of lung or liver to a family member. The payment will help support donors through the operation and recovery involved in donating an organ.

Other changes to CI cover include two new ABI+ definitions, six additional critical illness definitions (partials) and changes to some of the existing additional critical illness (CI) definitions. These additional CI definitions (partials) are now available to children and step children are also now covered under the CI policy.

British Pathe: “Dream House” (1957)

If you are house hunting in 2016, you may not be surprised to see estate agents including items such as solar panels and ground-source heat pumps in the property particulars, especially for detached, remote properties. But the integration of these technologies into our homes isn’t as recent a development as you may think. In fact, British architect Edward Curtis built his family’s solar powered home, hailed at the time as “Britain’s most modern home”, in 1957 in Hertfordshire.

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Weekly Round-up, 17th June, 2016.

Everyday Athletes.

At Vitality, they see Everyday Athletes everywhere – whether that’s walking the dog, running for a bus, or taking the stairs – the little (or big!) things really do add up.

This week saw the launch of their Everyday Athletes marketing campaign. Everyday Athletes is all about demonstrating to clients that they don’t have to be a professional athlete to live a healthy lifestyle and benefit from having a Vitality policy. It’s about the small things we all do that can make a big difference to our wellbeing, and doing more of the things we all already do like taking the stairs, doing the gardening or carrying the shopping home. The campaign includes anew nationwide TV advertising campaign and an Adviser Home Page where you can keep up to date with all the latest from the campaign.

Stamping Down.

According to the latest statistics from the Council of Mortgage Lenders (CML), the stamp duty change on second properties that came into effect on April 1 resulted in activity across the market being brought forward into March causing an expected slowdown in April’s lending figures in the aftermath. As a result, house purchase activity experienced a sharp fall month on month, which was especially evident for buy-to-let.

Affordability metrics for first-time buyers have remained relatively stable. Even though the typical loan size decreased to £129,950 from £133,000 last month, this was offset by the household income of borrowers also decreasing slightly from £40,600 in March to £39,700 in April, which meant the income multiple stayed the same at 3.46.

Home movers showed a similar trend with the average amount borrowed decreasing to £163,000 from £180,000 in March, and the average household income of a home mover also decreasing from £58,400 to £52,500, causing the income multiple to go up from 3.21 to 3.26 month-on-month.

Remortgage lending was the only lending type to show both month-on-month and year-on-year increases in April. April saw the highest volume of loans for remortgage in a month since July 2009, and the highest lending value for remortgage since January 2009.

Report, what report?

Nearly 7 million UK adults in the Near Prime sector have never checked their credit score, according to findings from the first research into the Near Prime market by NewDay. In their report titled Understanding the Near Prime Market: The Consumer Perspective, they found that the Near Prime market comprises 10.2-13.6m UK adults who find it difficult to obtain a credit card from traditional lenders due to having a thin credit history, an adverse credit history and/or other constraints such as a low income or an inconsistent address history.

According to the report, over a quarter (28%) of all Near Prime consumers are unaware that a poor credit rating can exclude them from accessing credit, while well over a third (38%) believe that missing one payment means it is impossible to ever improve their credit score.

The report also finds that a significant proportion of Near Prime consumers are unaware of the adverse effects of a negative credit history, with three quarters (75%) not realising that a poor credit rating could lead to having to pay more for items such as a mobile phone tariff, broadband services and energy bills. Credit usage amongst Near Prime consumers is also worth noting: the majority of Near Prime consumers (45%) stated that they use their card for emergencies; this was closely followed by those who said that they use it for everyday shopping (41%). In addition, over a third (38%) use their card only to purchase big ticket items such as flights or computers.

Interestingly, the research on attitudes towards late payments – an area which can have a profound impact on a person’s credit record – reveals that 43% of Near Prime consumers, over 4.2m consumers, have not missed a payment on any of their financial obligations in the past 3 years. Of the remaining 57% that had missed a payment in the past 3 years, 40% of these had missed 2 or fewer.

Slowly does it.

The Consumer Prices Index (CPI) rose by 0.3% in the year to May 2016, unchanged from April according to the Office for National Statistics…

This continues the position seen since the beginning of the year of a rate which is a little above zero. With the exception of March, when the rate was influenced by the timing of Easter, headline inflation has been 0.3% for all months of 2016.

Rises in transport costs, restaurant and hotel bills and the price of telecommunication services were the main upward contributors to change in the rate. These upward pressures were offset by falls in the price of clothing, food and games, toys and hobbies. CPIH (not a National Statistic) rose by 0.7% in the year to May 2016, up from 0.6% in April.

Take the test.

The Seven Families project has launched an online financial vulnerability test for the public to highlight the potential need for income protection. The online quiz provides a ‘finvincible’ (financially invincible) outcome and recommends appropriate action on whether people need to review their situation, speak to their employer about benefits or are generally ok already.

Designed to be shared across social media, the test is set in a circus and takes people through 17 questions to give an overview of their lifestyle and financial security.

The multiple choice questions cover who the key earner in the household is, dependents, social behaviour such as smoking and drinking, as well as whether people have debt and savings. The #finvincible test can be found at https://www.facebook.com/7Families/

Wedgie in Wales.

A 78 mph police chase came to a sudden stop in the early hours of Wednesday morning when the fleeing driver took a wrong turn and got his car wedged in a pedestrian tunnel.

Officers from Gwent Police stopped a vehicle to conduct checks on the car and driver in Caerphilly, South Wales, around 1.10am on Wednesday. But although the driver stopped, when officers approached the vehicle he drove off.

Police gave chase for around seven minutes at speeds of up to 78 mph before the driver left the road and drove down a footpath which leads to a tunnel under a railway line. As he entered the tunnel, the car got wedged and the 27-year-old driver was arrested.

Gwent Police Areas Support West Inspector, Gavin Clifton said:

“The driver, a 27-year-old man from the Caerphilly area, was arrested, he failed a roadside drug test and was arrested on suspicion of dangerous driving, disqualified driving and failing to stop which was ironic”

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Weekly Round-up, 9th June, 2016.

Interesting stats.

The Council of Mortgage Lenders (CML) has given an update on how the stock of existing interest-only mortgages is evolving. Lenders and borrowers are continuing to work together to minimise the risks that can arise from interest-only loans, compared to repayment mortgages.

The tone of the interest-only conversation is much changed since 2012, when the CML started collecting this data. At that point the basic facts – a stock of some 3.2 million interest-only loans, and little information on how these borrowers intended to repay at the end of the term – posed risks that, whilst hypothetical, had the potential to be significant.

Since then, the CML and lenders have been proactively contacting interest-only borrowers and exploring options where there may be difficulties in repaying the loan. The Financial Conduct Authority (FCA) has repeatedly endorsed the industry’s approach, calling it “a prime example of a model demonstrating good conduct outcomes and putting customers first.”

By 2014 the industry had made good on its initial commitment to this contact programme, to cover all borrowers with interest-only loans maturing on or before 2020. But lenders have embraced this as a long-term project, not as a one-off box-ticking exercise. They are embedding interest-only borrower contacts in their business-as-usual processes for customer engagement. And the book continues to show improvement.

In the CML’s new data they estimate that, as at the end of 2015, there were 1.7 million pure interest-only mortgages outstanding, with a further 500,000 on a part interest-only, part repayment basis.

Stop putting it up.

Unrequested credit card limit increases are making debt problems worse for thousands of people and must be stopped, says StepChange Debt Charity. The charity is calling on the Financial Conduct Authority to ban the practice and make credit limit increases something that people must opt-in to. The charity also says that in some instances, credit limits are being increased when people in financial difficulty ask their creditors for help.

A survey of the charity’s clients revealed that 54% of those with credit cards had seen their limit increased without them asking for it. Of those, 49% said this had made their debt problems worse. 11% of credit card users said they approached their creditors for help with financial difficulty and subsequently saw their credit limit increased.

Previous data released by the charity shows that over 200,000 people asked it for help with £1.7bn of credit card debt last year alone. Based on the survey results, the charity is estimating that more than 100,000 of its clients had their limit increased without asking for it in 2015 and as a result, over 50,000 saw their debt problems get worse.

Currently, credit card companies can decide to increase someone’s credit limit without asking them as long as they give them at least a 30 day window in which to decline. StepChange Debt Charity is urging the Financial Conduct Authority (FCA) to stop credit card companies increasing someone’s credit card limit without their consent. It wants credit limit increases to become ‘opt-in’, rather than opt-out, to help stop people being offered credit that they did not decide they needed and did not decide they could afford, and to prevent those who are already struggling from being pushed further into difficulty.

Minimum wage.

The average weekly allowance parents give to their children has risen to its highest level for nine years, according to this year’s annual Halifax Pocket Money Survey.

On average, children now receive £6.55 per week from a parent or guardian, an increase of almost six per cent in the last year. Not since 2007 have children received more pocket money, which suggests a loosening of the family purse strings after almost a decade. The number of children receiving pocket money has also increased by three per cent in the last 12 months to four in five (81%).

On average, eight year-olds receive £5.06 with 15 year-olds receiving £7.85. However, it is nine year-olds who receive the least on average (£4.68) and 14 year-olds who receive the most (£8.03).

Despite the pocket money pay rise, just over two fifths (42%) of children still believe they should receive more pocket money than they do, up one per cent on last year. However, over half (51%) believe they receive the right amount of money. Just over one in five (23%) believe their friends get more pocket money than they do (down 2% on last year) and almost half (45%) say knowing how much their friends get is important to them, a significant increase on 2015 (37%).

Work from Home.

New research released by comparethemarket.com for ‘National Work From Home Day’, has found that nearly a quarter (24%) of those surveyed would rather work from home one day a week than receive a pay rise, while seven million admit suffering from “procrastination or inertia issues” when working in an office. The study found that nearly half of you (48%) are far happier when working from home and nearly a third (32%) “feel more productive” when you do so.

The top five reasons picked for better productivity when working from home were fewer interruptions, an ability to structure their day to suit their needs, the flexibility of working hours, more control of their ‘to do’ list and fewer meetings.

Despite the benefits for employees and employers, comparethemarket.com found that almost half (48%) of people never actually work from home, even though 60% said they would if their company gave them the option.

The study also revealed that home working is “more productive” for nearly three quarters (73%) of those who are 45+ year olds being more productive at home, compared to 30% for 18-24 year olds. Over 45s also reported feeling “more in control of their workload”, “less stressed” and “generally happier” when working from home – an important insight given that 36% of the UK’s working population will be over 50 by 2020.

Two Brain cells – no problem.

Snails are not known for their quick thinking but can make complex decisions using just two brain cells, scientists have learned.
One cell tells the mollusc if it is hungry or not while the other lets it know when food is present. The discovery, made using electrodes to measure activity in the brains of freshwater snails searching for lettuce, could help engineers design more efficient robots.

Lead researcher Professor George Kemenes, from the University of Sussex, said: “What goes on in our brains when we make complex behavioural decisions and carry them out is poorly understood. Our study reveals for the first time how just two neurons can create a mechanism in an animal’s brain which drives and optimises complex decision-making tasks. It also shows how this system helps to manage how much energy they use once they have made a decision. Our findings can help scientists to identify other core neuronal systems which underlie similar decision-making processes. This will eventually help us design the ‘brains’ of robots based on the principle of using the fewest possible components necessary to perform complex tasks.”

Food-searching is an example of a goal-directed behaviour essential for survival. During such goal-directed decision making, an animal must integrate information about both its external environment and internal state while using as little energy as possible. The study is published in the journal Nature Communications.