Consumers rely on lottery in case they lose their jobs

Whilst a huge number of us buy lottery tickets every week in the hope of hitting the jackpot or at least securing something substantial, the chances of actually winning big are minute and for the majority of us will never happen. However, despite this, recent research has revealed that there are many people who are hoping that a lottery win will sort them out financially in the event that they lose their jobs.

Worryingly, a large number of people now have no insurance in place to protect their income in the event of a job loss and are instead looking at other options to tide them over financially, with some stating that they would use savings, others relying on family and friend to help them out, and some relying on a lottery win to ensure that they can get by if their income is suddenly cut off.

The research was conducted by British Insurance, and according to the results, around 59 percent of workers were worried about the security of their jobs, which equates to around 17 million workers. This figure reflects an increase of 7 percent compared to the survey last year. However, fewer people now have any protection in place, with 20 percent of workers having protection in place last year but only 14 percent having protection according to this year’s survey.

One official from the company said: “Although we’re told the UK is coming out of a recession, this confidence is clearly not shared by the majority of workers. And with economists predicting that the economy will stagnate over 2012 or suffer a deep recession if the eurozone situation deteriorates, it’s advisable to have a plan to replace any future lost income without dipping into savings or falling into debt.”

Tags: future, economists, Gambling, survey, Recent research, Worryingly, eurozone, recession

Property prices end 2010 on low

It has been revealed by a major High Street lender that property prices in the UK ended last year on a low, having slid from the start of the year. The price of property in the UK was said to be around 1.6 percent lower at the end of 2010 than at the start of the year. The data was released by the banking giant Halifax, which said that property prices fell by 1.3 percent in December compared to the previous month.

It is thought that property prices have been driven down by a number of factors. One of these is that many homeowners are flocking to sell their homes whereas there is a distinct lack of interest from buyers. This is because many buyers are unable to get the mortgage finance that they need due to continued restrictions in the mortgage market, and many others simply don’t want to make a huge financial commitment in the current financial climate and with the uncertain future with regards to jobs.

A spokesperson from the Halifax said that if homeowners become more reluctant to sell this year the falling property price trend could be halted. He also said that it was unlikely that there would be much change in terms of movement in the property market over the course of this year, and this was because interest rates were unlikely to change.

The Halifax said: “Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

Another mortgage expert added: “While there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities, not least the capital, the right type of property is still commanding the right sort of price.”

Tags: Real estate, future, earnings growth, end, type, percent

No luck over challenge for UK retirement age

It has recently been announced that a law that enables employers in the UK to make employees retire at the age of sixty five is to be upheld, at least for the near future. The decision was made by the High Court, and means that workers in the UK may be forced to retire at that age whether they want to or not, and without any sort of payout from the company. Read more

Tags: future, uk, court, finance, Superannuation in Australia, retirement, year, Law Crime

Many Brits too scared to spend

It has been revealed in a recent report that many people in Britain are too scared to spend money, with a third of Brits having scared themselves into spending less. Read more

Tags: recent report, analyst firm, future, holidays, turnaround, fear, spending

Offspring claim financial independence whilst taking cash from parents

A recent study has found that there are many young adults in the UK who class themselves as being financially independent, yet they are still taking money from their parents to help fund a wide variety of things. Read more

Tags: class, financial independence, financial future, Parent, future, way, cash, help

Fixed-rates “still” popular

New research has revealed that fixed-rate mortgages continue to be popular among homebuyers even though they have become more expensive in recent months. Read more

Tags: series, Homebuyers, Stephen Smith, fixed rate mortgages, future, personal finance, purchase, Fixed-rates

Female savers set to miss out on Isa benefits, say experts

Many female consumers are not preparing for their financial future with 20 million set to miss out on investing in the individual savings accounts (Isas), one financial expert has claimed.

According to new research from the Co-operative Bank, two thirds of women in the UK are without an Isa.

Of the third that do hold one, less than a third intend to invest ahead of this season’s deadline in comparison to more than a half of male spenders who possess one.

Scott McPhail, savings product manager at the Co-operative Bank, said that financial planning is essential for women and not a maybe.

“Women can often retire earlier, and live longer than men, but many are simply not making enough provision for their futures and are failing to take advantage of tax-free savings,” he said.

Despite this, the research showed that women are more likely to be concerned about the state of their finances than men.

Meanwhile, the Association of Investment Companies has warned consumers to take care in researching the various Isa products on offer before making a purchase.

Tags: new research, male spenders, future, half, finance

Start saving if you are under forty

According to a recent report younger consumers in their twenties and thirties have become so reliant on credit that many are simply spending all of their money on frivolous spending or repaying debt rather than putting money away for their future.

Twenty and thirty-somethings are now being urged to put money aside into savings or investment for their future to reduce the risk of being left without an adequate retirement fund when they reach retirement age.

The government’s state pension has declined over the years, and with increased life expectancy and higher living costs to also consider younger consumers now need to start thinking about their future in terms of how they will manage financially.

Historically, most people in their twenties and thirties tend not to think much about mortgage provisions, but this has become an increasingly important consideration for the younger generation if they wish to enjoy a certain standard of living when they come to retirement age.

One official advised younger consumers to start putting money into savings or an investment fund as early on as possible to ensure that they had a tidy sum available for when they retire. Increased life expectancy means that consumers must put aside more money to cover the cost of living after retirement, and this has made it even more important for younger consumers to start putting money aside as early as possible.

Consumers in their twenties and thirties are advised to cut back on their frivolous spending, try and avoid getting into further debt, and start putting money aside on a regular basis. Many younger people are wasting a small chunk of their income each month on repayment of interest on their debts, all of which could be used towards saving for the future.

Tom Smith
5th November 2007

Tags: interest, earnings, Banking, salary, wages, future, retirement

Many first time buyers taking a ‘wait and see’ stance

Over the past couple of years things have been extremely difficult for first time buyers in the UK.

Firstly there were problems being able to raise the money needed to purchase a property, with house prices soaring in the UK requiring buyers to obtain larger mortgages.

For first time buyers there is not equity from a previous property to rely on, which means that they have to take out a loan for all or the majority of the value of the property they wish to purchase. In order to address this problem many lenders have started offering increased income multiples and longer repayment periods on mortgages for first time buyers.

However, there is now a fresh problem for first time buyers to consider. Rising interest rates mean that in addition to having to take out a huge mortgage in order to buy a property these buyers also have to deal with huge repayments because of the increased interest rates, which have shot up by 1.25% in the past year.

Even those starting out on fixed rate mortgages have to put up with a high fixed rate, and will therefore be stuck with this high rate for a fixed period even if interest rates start to fall again in the near future.

Rumours of house prices falling towards the end of the year, combined with predictions of further interest rate rises, has now seen many first time buyers take a step back, with many deciding to rent and wait it out to see what happens before rushing to get onto the property ladder in the current economic climate.

One first time buyer stated: “I am desperate to get onto the property ladder, because I feel that the chances of ever getting my own place are getting slimmer and slimmer. But with all of these rumours about decreasing house prices and rising interest rates I want to see what happens before I make any long term commitment.”

Tom Smith
6th October 2007

Tags: interest, first, time, future, bank, rise, england, increase, wait, buyer

Students given warning on credit cards

As thoughts begin to turn towards the new academic year, British students were advised by experts at Barclaycard yesterday that, while credit cards can be a good way of managing finances if used wisely, they can also drive up debt.

Students’ attention was also drawn to the relatively high rates of repayment demanded by card lenders in the UK.

The lender gave the advice at its new student website, which advises customers to shop around for the cheapest credit deal.

Barclaycard’s managing director of UK cards, Amer Sajed, said of the site launch: “Cards can be a lifeline for students managing a tight budget. They can help make the most of your time at university and establish a credit record for the future, but only if they are used sensibly.

“Our new site includes some blunt advice to help our customers make the most of the benefits and avoid the pitfalls.”

Tags: cheapest credit deal, good way, managing director of UK cards, british students, university, Credit Cards, education

Financial benefits of quitting smoking

Smokers are being encouraged to kick the habit ahead of the June 1st ban on lighting up in public.

The health benefits of kicking the habit are clear but Alliance & Leicester is encouraging smokers to look at the financial benefits of stubbing out.

Around 24 per cent of people in England smoke and with the average 20-a-day smoker spending £1,909 each year on cigarettes, their banking situation is suffering as a result.

Alliance & Leicester points out that this money would be better invested in a high interest savings account which would see the saver earn up to £1,962.

“Kicking the habit isn’t an easy thing to do, but the benefits speak for themselves,” said Ross Dalzell, manager for savings at Alliance & Leicester.

“The English population spends billions of pounds on cigarettes each year – money which could be going towards that new kitchen you’ve dreamed of, a two week holiday in the sun, or simply kept as a nest-egg for the future.”

Around 70 per cent of people who smoke say that they want to quit and there is hope for those who want to kick the habit.

Figures show that 21 per cent of women and 27 per cent of men are now ex-smokers.

The smoking ban is introduced in England from July 1st and will mean that lighting up is prohibited in all workplaces, including pubs, restaurants, airports and train stations.

Tags: public.The health benefits, billions, population, result, england, future, English, ex-smokers.The smoking ban

Govt still committed to Hips

The government remains committed to the introduction of Home Information Packs (Hips) in August.

Secretary of state for communities and local government Ruth Kelly has reassured homeowners that the government has no plans to back out at this late stage.

Hips will be mandatory in the sale of any house with four or more bedrooms from August 1st, with a view to a wider roll-out in the future.

Some concern had been raised that Hips would be completely scrapped following a humiliating government u-turn over whether they should be introduced to all home sales.

It was eventually announced that Hips would only apply to homes with four or more bedrooms but Ms Kelly has now offered some more details on how the packs will be phased into the entire property market.

She outlined how many energy assessors will be needed for the phased introduction and homeowners are being offered financial incentives to get a Hip before the August 1st deadline.

The reassurances from Ms Kelly have been welcomed by the Association of Home Information Pack Providers (Ahipp).

“Ruth Kelly has today provided much needed clarity for consumers, the Hip industry and energy assessors and she has reaffirmed the government’s commitment to the future of Hips,” said Ahipp director general Mike Ockenden.

“We now call upon all industries that touch the home buying and selling process to get behind the implementation of Hips, in order to deliver the benefits to home sellers and buyers.”

Tags: packs, future, hips, phased introduction, energy, Home Information Pack, law, market

Bleak retirement picture

Most of us will be unable to retire at the age we want to, will rely on our parents for financial support and will endure a reduced standard of living once we do.

That is how the majority of independent financial advisers (IFAs) see the future as saving and banking properly become less common in the UK.

Insurance firm Aegon gauged the opinions of 100 IFAs on issues surrounding retirement and they painted a fairly bleak picture.

A total of 88 per cent predicted that the average retirement age will increase in the next ten years, with the same number believing that most people will not be able to retire at the age they want to.

Eight out of ten IFAs say that parents now have to support their children for longer than ever before and 74 per cent think that we all receive less inheritance.

Perhaps the most worrying finding for some people is that 71 per cent of IFAs believe that most people are resigned to seeing their standard of living reduce significantly once they retire.

“The third wave of the Aegon IFA Insights survey reveals that the IFA community expects those planning for retirement to face increasing pressures from all sides,” commented Graham Dumble, director of risk and regulation at the firm.

“So it’s not surprising they expect the British public will have to work longer into their retirement years or accept a lower standard of living in retirement.”

Tags: director, inheritance, House Targaryen, Aegon UK, IFAs

Green mortgages to become the ‘norm’

Gordon Brown announced during his Budget yesterday that people who take out a mortgage on a carbon-neutral home will no longer have to pay any stamp duty.

This news, announced during what is widely expected to be the Chancellor’s final Budget, was welcomed by many as the kind of financial break that is needed to encourage us all to reduce our carbon footprint.

In light of the announcement, the Co-operative Bank has revealed that it believes eco home loans will soon become the norm in the UK.

The firm is so confident that environmental concerns will have a big impact on the future of mortgage lending that it is planning to update its current green portfolio.

“We plan to extend our green mortgage proposition, which is currently available on all our products, by developing an innovative solution to reward and encourage homeowners to actively reduce their CO2 emissions,” revealed David Anderson, chief executive at the bank.

“We are convinced that green mortgages will be the most common form of home loan in the future and that is why we are working on several features that will make our range even more eco-friendly.”

A number of other lenders have also confirmed that they too will be extending their current portfolio of green loans.

The Co-operative Bank’s claim that eco home loans will be the norm in the future has been supported by a recent survey, carried out by More Than insurance, which revealed that 70 per cent of Brits wants all new build homes to be carbon neutral.

A fifth of all Brits also said that they would be willing to pay more for an environmentally-friendly home.

Tags: survey, future, More Than insurance, green mortgage proposition, Subprime mortgage crisis, gordon brown, norm, chancellor's final budget

Youngsters buying to let

The buy-to-let (BTL) market in the UK is beginning to be dominated by people aged between 26 and 35 years.

It has traditionally been a market for older people but new figures from Mortgage Trust show that the youngsters are catching up.

Around 26 per cent of new investors who own one property are aged between 26 and 35, while the same age group also makes up 16 per cent of BTL investors with up to three properties.

This rise in numbers appears to be a fairly recent phenomenon, with the number of 26 to 35-year olds with up to three BTL properties rising from 14 per cent in the last six months alone.

“Traditionally buy-to-let has been perceived as something for the more mature investor,” commented John Heron, managing director of Mortgage Trust.

“However, recently we have been witnessing an increase in the number of younger professionals choosing to make a considered and long term investment in property.

“We are seeing a new generation of young people who are preparing for the future by making long term financial plans. New landlords are looking at an investment that will see them safe for the long term – possibly even into retirement,” he added.

As many younger people struggle to put money into a pension scheme, investing in property and then renting it out is a great way to ensure financial security for the future.

Tags: new figures, Business Finance, market, long term investment, investment, future, increase, heron

Interest rates remain 5.25%

The Bank of England has decided to hold interest rates at 5.25 per cent.

It is good news for those with a mortgage, loan or credit card and will be welcomed by the majority of borrowers.

Many experts had been predicting a continued rise in base rates in the coming months, following a steep increase from 4.5 per cent to 5.25 per cent in five months.

However, a number of factors, namely falls in the stock market, commodity prices and a fall in inflation, have reduced the chances of an imminent rise.

The Bank of England’s Monetary Policy Committee (MPC) changes the base rate to keep inflation as close as possible to the government’s two per cent target.

Recent months have seen inflation running well ahead of this, sparking the quick succession of base rate increases.

Last month the MPC was split in its decision to hold rates and economists are predicting that March’s decision will also be a split one.

That does not bode well for the future, although two MPC members have come out indicated that they are strongly against any future rises.

Tags: future, cent, succession, bank, interest rates, finance, bank of england

New buyers will feel pinch

First time buyers will be adversely affected by recent interest rate rises, says the Royal Institution of Chartered Surveyors (Rics).

The organisation believes that people taking their first step onto the property ladder are likely to fall behind with mortgage repayments as a result of the rise.

Conversely, Rics points out that buy-to-let investors are less likely to suffer the same fate, with age being cited as one of the key factors.

Figures show that those with a buy-to-let mortgage are generally older and have more disposable income, making them more secure in the market.

Rics says that 0.96 per cent of all mortgages in the UK are in arrears, with only a tiny percentage of these being buy-to-let properties.

“Buy-to-let investors will be less at risk from repossessions in the coming months,” said David Stubbs from Rics.

“Older, wiser investors are likely to ride out periods of interest rate rises looking to the benefits of long term capital growth rather than short term rental income.

“January’s surprise interest rate rise is likely to soften new buyer enquiries in the coming months but those buyers who have already taken the housing market plunge could find mortgage companies knocking at their doors in the near future as affordability conditions bite.”

Tags: rate rise, Business Finance, interest, interest rate, future, periods, ladder, interest rate rise