Weekly Round-Up: 4th January 2019

Stable and Steady

HLP-housing-smlOverall mortgage borrowing across the residential property market remains stable and the trend in households’ cash savings remains steady, that’s the message from UK Finance, the trade body for High Street Banks.

According to UKF, total credit card spending increased in November while borrowing growth remains constant compared with November last year. The increase in spending, which is largely offset by cardholder repayments, reflects the growing use of credit cards as a preferred form of payment, particularly in travel, as consumers take advantage of stronger customer protection and value-added benefits.

The trade body’s analysis revealed that the number of mortgages approved by the main high street banks in November was 10.6 per cent lower than November 2017 led by a reduction in re-mortgages. Approvals for house purchase were 1.2 per cent lower but remortgage approvals were 20.3 per cent lower. Approvals for other secured borrowing were 12.2 per cent lower.

£11.3bn of credit card spending in November was 7.5 per cent higher than November 2017. Over the past twelve months, the outstanding level of credit card borrowing grew by 5.3 per cent. Personal borrowing through loans and overdrafts grew by 2.5 per cent in the year to November.

Cracks appearing

subsidenceMore than 10,000 households made claims worth a total of £64 million to deal with the impact of subsidence in just three months of this year, the Association of British Insurers (ABI) has revealed. The figures for July, August and September are the highest level of subsidence claims since the record-breaking heatwaves of 2006 and 2003. The hot weather of 2018 saw some UK regions experience the driest months on record, particularly in the South East which is also well-known for building on subsidence-prone clay soil.

From the previous quarter, the number of claims jumped from 2,500 to 10,000 – rising in value from £14 million to £64 million. This increase of 350% is the highest quarter-on-quarter jump since records began more than 25 years ago. Subsidence usually occurs when the ground beneath a building loses moisture and shrinks. This can be caused by a number of things including prolonged dry spells which cause soil to lose water and trees and shrubs which can absorb significant volumes of water from the soil.

Subsidence is routinely covered by buildings insurance. Each claim is unique depending on the building, circumstance and severity involved so there is no typical approach to repairs. In some extreme cases a home may need to be monitored for a period of time and, if the home is uninhabitable during this process – the insurer may cover the cost of alternative accommodation for the homeowners until they are able to move back in.

Cyber aware

shutterstock_500191807smlParents are potentially putting their family finances at risk by giving children access to smartphones and tablets without taking simple steps to protect against cyber security risks, new research from Nationwide Building Society shows.

The research highlights that more than one in ten parents (13%) will have purchased a smart device for their children at Christmas – adding to the 70 per cent of children who already have their own devices. The research, which surveyed over 2,000 parents with children aged two to 16, found that one in four (24%) parents admit that they do not know what malware is – with almost three in ten (28%) mums admitting to this lack of understanding, compared to one in eight (12%) dads (please see notes to editors for regional breakdown). Parents also admitted to taking a variety of risks, including not using strong passwords or changing them regularly.

The research also found that despite eight in ten (86%) parents sharing their smart devices with their children, less than half (46%) of parents have talked with their children about the dangers of cybersecurity. In contrast, over three in five (61%) have talked with their kids about their personal safety online. Nationwide’s research found four in ten (44%) parents admitted to not monitoring their child’s use of the internet when using a smart device, which could lead to unexpected consequences. Eight in ten (84%) parents were not confident their children know how to distinguish a fake email from a genuine one or recognise a fake download link (85%).

Despite this, less than half (46%) of parents have talked with their children about the risks of cybercrime – of these, around a third (35%) assume their smart devices are safe, one in ten (10%) don’t think the risks are that high, while eight per cent don’t have the time and a further eight per cent don’t understand the dangers.

Lack of understanding

illnessOfficial figures show a million workers are off sick for more than a month every year, with new Royal London research showing half (52%) of workers would worry about their income if they were to become too ill to work for longer than a month. 42% do not think £92 a week would be enough to live on if they were to go off sick for a long period of time.

Nearly two-thirds (60%) found their employer’s sick pay policies difficult to understand, with one in six workers not knowing what their employer’s policy is. Employees are entitled to £92.05 a week Statutory Sick Pay (SSP) for up to 28 weeks, yet two in five (42%) didn’t think this was enough to live on if they were off sick for more than a year.

Employers may enhance SSP, but different companies have different policies – a quarter of those surveyed thought the opposite, and mistakenly believed sick pay policies were the same across all companies and industries. Some employers offer contractual sick pay, which is more generous than SSP and you could be entitled to it from the first day of sick leave.

The average UK worker stands to lose almost £450 in pay if they were off sick for a week without contractual sick pay. Employees are therefore being urged to think about how they would manage their finances if they were faced with this situation.

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