Tag Archives: personal finance

News

Five things you need to know before sending money abroad

Millions of Brits provide financial support to their families overseas, with an average of £7.7 billion being sent from people in the UK to support loved ones each year1.

With money transfer apps becoming the new norm, it is now easier than ever to send money to family and friends back home. People can make payments from the comfort of their homes or on-the-go without having to enter a physical store or bank.

However, as with any modern apps, there are a few things to bear in mind in terms of online security whilst sending or receiving money from abroad. The experts at global cross-border payments company WorldRemit have compiled some top tips for any first-time sender.

1. Secure your email address

Most companies require an email address to set up an account, therefore it’s important that you ensure that your email is protected with a strong password to prevent anyone from gaining access to not only your emails, but any apps you use via this address.

Strong passwords include a combination of lower and uppercase letters, numbers, and symbols, it’s also important to ensure that you don’t use the same password for multiple applications.

2. Avoid public wi-fi

Although it seems convenient to connect to a public wi-fi to make a quick money transfer, the open access can be a security threat, allowing unauthorised users to intercept your sensitive personal information or gain access to your device.

It is recommended to avoid logging into online banking or money transfer apps, or managing your mobile wallet using a public network.

Instead, either waiting until a secure wi-fi network is available, or using mobile data, is the safest way to use money transfer apps while you’re out and about.

3. Research the app you’re downloading

Before you download a money transfer mobile app, try to find more information about the company online. If there is little to no online presence, stay away from it. On social media, always look for the verified “blue tick” next to the business name. Last year, WorldRemit launched a Transfer Tracker App which allows recipients of money transfers to track their funds. The app is free to download through the Google app store in a number of countries including India and Nigeria.

4. Keep your operating system up to date

Whenever your smartphone’s operating system, internet browser or applications notify you that there are updates available, be sure to install them as soon as possible.

Many of these updates are fixing bugs or weaknesses in order to help you stay safe online.

5. Use a pricing comparison tool to get the best deal

The cost of sending money abroad takes numerous factors into account, for example, the exchange rate as well as any sending fees.

Be sure to use a pricing comparison tool to ensure you’re getting the best deal ahead of making the commitment and sending the funds.

A spokesperson from WorldRemit added: “Sending money overseas for the first time may seem like a daunting task, but it’s actually easier now than ever before.

“With WorldRemit, you can send in 70 currencies to more than 130 countries worldwide, in a safe and secure manner, and it can be done within minutes – it’s as easy as sending a text message.

“If it is your first time sending money to your loved ones overseas, we have customer service advisers available to help 24/7, to make your money transfer journey as seamless as possible.”

For more useful tips on staying safe when transferring money visit: https://www.worldremit.com/en/blog/tips-and-guides/money-transfer-app/

News

The average Brit accrued £2,263 in debt over the last year

Brits estimate they’ve built up £2,263 in personal debt, excluding mortgages, since the first lockdown came into place on 23 March 2020.

In lieu of Debt Awareness Week (22nd – 28th March 2021), research  from  leading  savings site VoucherCodes.co.uk reveals how much debt the nation has accrued over the last year, and investigates the feelings surrounding people’s financial situations.

Over a third (36%) of people have worried about their money every day over the last year. For those that have borrowed money this year, a quarter say they’ve accumulated up to £1,000 in debt (23%), while 15% say they owe up to £2,000, rising to £3,000 for one in 10 people (10%).

The data shows those aged 25-34 have built up the highest amount of debt since lockdown 1.0 began, at an average of £2,673 per person, suggesting that the financial impact of Covid has been felt most strongly by this age group. At the other end of the scale, those over 55 accrued on average £1,777 of debt – the lowest build-up of any age group and almost £1,000 less than millennials.

Total personal debt in the UK is now estimated to sit at £6,338 per person on average, excluding mortgages. Interestingly, the study reveals that women currently owe an average of £5,852 – almost £1,000 less than the average man (£6,854).

Across the country, findings show that over half (52%) of residents in Cardiff are currently in debt, the highest in the UK. Manchester and London follow closely behind with 48% and 45% respectively. On the other end of the scale are Brighton, Norwich and Plymouth, in which just 34% of residents admit to currently being in debt.

Now Britain’s roadmap out of lockdown has been revealed, many are looking forward to restrictions easing over the coming months, however this study reveals others are worried about the financial implications this will bring. Over a third of people (34%) feel anxious about life returning to ‘normal’ from a financial point of view, as lockdown has meant less of a need to budget. People are also nervous about their total debt levels when lockdown ends as one in 10 even predict that their debt will increase further before the end of lockdown (12%).

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, commented: “A year on from the first national lockdown, this research proves just how much of an impact the pandemic has had on our finances and our concerns around money. It’s particularly worrying to learn that more than a third of us have had anxieties about finances every day this year.

“With many of us feeling daunted about managing money after lockdown, now is the perfect time to put in place some simple habits that will help keep your finances in order. These are my top three tips:
1. Regardless of your financial situation, it’s always worth shopping around to find the best deals on the things you need to buy. Installing a free browser extension such as DealFinder from VoucherCodes will make this really easy as it automatically finds and applies the best discount codes available – a quick and simple way to make sure you get the most out of your money every day.
2. Many banking apps now allow you to set spending limits to help you keep a secure grasp on your monthly spending throughout the month – so if you’re particularly bad at budgeting this simple feature will make sure you don’t overspend. You can also set up account balance alerts, so if you’re getting close to going overdrawn you’ll get a notification to ensure you can take action.
3. If you are able to, setting up a direct debit to your savings account will help ensure you keep some money back for things you really need – it’s often helpful to do this at the start of the month so you don’t end up spending it by accident. Many of us really struggle to save, but even as little as a few pounds each week will add up.”

News, Property

Three in five house sellers stung by unexpectedly large estate agency fees

The majority of UK homeowners are unprepared for the large estate agency fees when selling a house, a new study has revealed.

The research[1], conducted by free online estate agent, Strike, surveyed 1,000 people who have sold a house in the last decade and found that nearly three in five (58%) sellers had to pay more than they’d expected. Over a third (34%) were charged significantly higher fees than they had budgeted for.

These figures are higher for those who have sold their homes recently, with 62% hit by unexpected charges in 2019, compared to just 48% in 2010. This trend correlates with an increase in prices over the same period, with fees having risen by 42% from £3,035 in 2010 to £4,319 last year.

With average house asking prices reaching record highs this year[2], these figures will continue to grow, as most agency fees are calculated by taking a percentage of the property’s value.

Over the last decade, the average price paid by UK sellers to estate agents is £4,779, but many pay far more. More than one in ten (11%) Brits pay over £10,000 to move.

Interestingly, millennials pay far higher estate agency fees than other age groups. On average, 25-34 year olds are charged £6,421 when selling, with nearly a fifth (19%) paying over £10,000. This is more than double the amount paid by other generations, with 55-64s spending just £2,836.

Gender is another factor, with men paying 19% more than women. Male sellers pay an average of £5,226 to sell their home – £820 more than women (£4,406).

The most important variable, however, is location, with sellers in London paying by far the largest fees in the UK. With an average of £6,573, estate agencies in the English capital charge more than twice as much as those in other major cities, such as Cardiff (£3,255), Manchester (£3,265) and Glasgow (£3,273).

The cities with the largest estate agency fees are:

London – £6,573
Birmingham – £5,622
Southampton – £5,481
Bristol – £5,316
Belfast – £4,667
Norwich – £4,338
Liverpool – £4,221
Edinburgh – £3,690
Sheffield – £3,405
Glasgow – £3,273
Manchester – £3,265
Cardiff – £3,255
Newcastle – £3,167
Leeds – £3,000
Nottingham – £2,854

Despite such high fees, more than two in five (44%) UK sellers were unhappy with the service provided by their estate agents. Dissatisfaction was greatest in Belfast, where 58% said they were unimpressed. Homeowners in the Northern Irish capital were also the most likely to pay more than they expected (83%), suggesting a strong link between fees and overall selling experience.

Sam Mitchell, CEO at Strike, said: “Estate agent fees are often the most significant expense when moving house, especially with the current stamp duty relief, and it’s really interesting to see which factors affect how much people pay.

“At Strike, we help people sell their homes for free, which saves them thousands of pounds, no matter where they live. With no estate agency fees, you have more money to spend on the things that really matter, like your new home.”

For expert advice on how to save money when selling your home, visit: https://strike.co.uk/latest-news/how-much-does-uk-waste-estate-agent-fees

FInance, News

Overdraft changes 2020: What do the changes mean?

Portify considers the new fee structure for overdrafts

The FCA forced banks to change their overdraft fee structure in April of this year. Data showed a finite number of consumers were shouldering the majority of the fees charged from unarranged overdrafts. In 2016, more than 50% of revenue banks made from unarranged overdraft fees came from just 1.5% of customers.

Complex overdraft fees and the variance of fee structure amongst banks made it difficult for consumers to calculate the true cost of an overdraft and compare offers. Banks are now only allowed to charge one annual interest rate for overdrafts.

Source: The ultimate guide to overdrafts 2020

Around 26 million Brits use an overdraft each year. Overdrafts are either arranged or unarranged. An arranged overdraft is an agreement consumers reach with their bank that allows them to spend more than they have in their account up to a specific limit. The limit and interest fees are agreed upon in advance. An unarranged overdraft is an overdraft consumers have not agreed on with their bank. An account enters an unarranged overdraft when it is overdrawn or the amount overdrawn goes above your arranged overdraft limit.

The FCA announced the following changes as of this year:

  • Banks must introduce a single annual interest rate or EAR on all overdrafts
  • Charges for unarranged overdrafts can no longer be higher than for an arranged overdrafts
  • Banks must eliminate any fixed fees (i.e. daily or monthly fees)
  • The advertising and pricing of overdrafts must be standardised so the customer can compare overdraft offers
  • Refused payment fees need to correspond to the amount of the refused payment
  • Banks must do more to identify customers in financial difficulty and help them reduce their use of overdrafts

As a result of these changes, many banks have increased their annual interest rates on overdrafts. Barclays has one of the lowest interest rates of the high-street banks charging 35% EAR. Natwest now charge an EAR of 39.49%, Santander and HSBC have upped their EAR to 39.9%, and Lloyds have changed their interest rates to between 27.5% and 49.9% EAR.

The new interest rates may seem high, but this is good news for consumers with unarranged overdrafts. The costs for unarranged overdrafts have decreased significantly, as the table below shows. However, some banks such as Barclays and Nationwide are no longer offering unarranged overdrafts to their customers. For Lloyds, Bank of Scotland and Halifax customers, there are no changes in charges for borrowing £100 over 7 days. Arranged overdraft customers, on the other hand, may find themselves worse off after the changes. The cost of the average arranged overdraft at HSBC, for example, has risen to £6.96 to £11.76 annually.

Data for Portify’s guide to overdrafts in 2020 shows banks have not only changed the way they charge fees for overdrafts, but have also have reduced or eliminated any interest-free buffer’s on overdraft facilities. TSB previously offered at least a £35 interest-free buffer on all accounts. The bank has now removed the interest-free buffer on unarranged overdrafts completely, as have Lloyds.

These changes will not impact any individual currently on a payment holiday due to coronavirus. Once the payment holiday ends, these new fees will be introduced. All consumers with overdrafts, both arranged and unarranged, should check how the new fee structure may impact them.