Month: February 2020

water cost
Wealth Management

The Money-Saving Tip That 97% of Businesses are Missing Out On

Since April 2017, around 1.2 million non-domestic English water customers have been able to choose their own water suppliers. This is referred to as ‘market deregulation’. Now, businesses can choose to buy their retail water services from any licenced company, regardless of how much water they use a year.

In Ofwat’s ‘State of the Market Report 2018-19’, the water regulator found that:

• Just over half (53%) of all customers are aware of the possibility to choose their retailer (48% last year).
• Around 13% of customers have been active since market opening, in that they have switched, renegotiated or considered doing so (10% last year).
• Switching rates of 3% largely unchanged in the second year of the market.

Despite the low switching rates, Ofwat estimates that customers were able to save around £10 million in bills in the second year of the market.

 

Switch and save to get ahead – here’s how:

When it comes to changing your business water supplier, there are a few important things to consider. For example, you need to think about the main differences between your existing and potential new water supplier to ensure you’re getting a beneficial switch.

So if you’re a small business thinking of making a change, follow our useful guide below to help you through the process.  

 
What are the benefits of an open water market?

Increased competition in the industry will encourage water suppliers to offer more enticing benefits to customers. Therefore, small business owners expect some of the following incentives:

• Reduced costs
• Improved service levels
• Lower management overheads
• Easier to meet regulatory compliance
• New solutions to water management challenges
• Improved corporate, social and environmental responsibility
• A greater understanding of water consumption habits

If your business hasn’t switched water suppliers yet, you may be missing out on significant savings. That’s why in this article, we outline everything you need to know about changing your business water supplier.

water

Here are our simple steps to switching water suppliers

Step 1: Understand your water consumption habits

Take a look at your previous water bills (ideally from the last three years). Look at how much you’re using and how much it’s costing you. If you operate over multiple sites, be sure to audit your business total, as well as the numbers from each individual site.

 
Key questions to consider for each site:

1. How much water do you use?
2. How much wastewater do you produce?
3. How much are you spending on water and/or wastewater – the average per month and per year?
4. How much trade effluent do you produce and what is the cost?

 
Step 2: Find the right water supplier for your business

Finding the right supplier is the most important step in the process. You need to spend time considering your options, as well as thinking about what the supplier can offer you.

 

Questions to consider:

• Is your supplier transparent and helpful in the quoting process?
• Do you want a transactional supplier?
• Would you prefer to work with a company that offers a higher level of customer service?
• Do they offer a wide range of value-added services?
• Do they offer a deal that suits your consumption habits?

 
Step 3: Collect and compare quotes

Once you’ve narrowed down your list of suppliers, the next step is to collect and compare quotes from them. Some suppliers quote their services differently, so make sure that you’re comparing ‘apples with apples’.
What you’ll need to get a quote:
• Your organisation’s name, address and postcode
• Annual consumption figures
• Supply pipe ID (a unique reference number on your meter and on your water bills)
• Your business’ point of contact for water-related services

 

Top tip for a QUICK WIN when it comes to your business water

If finding a supplier and comparing quotes sounds like a lot of work, that’s because it is! That’s why many businesses choose to partner with a business water broker who can do all the hard work for you. With their bulk-buying power, a broker may be able to get you cheaper rates than if you were to go straight to a supplier.

When you choose to switch using a broker’s services, you just need to sign an agreement and they will take it from there. They will contact your existing supplier to let them know you’re moving and get you set up on the new supplier’s systems. They’ll also deal with any queries and requests you have regarding your water services and can offer a full water management service.

 

Step 4: Enjoy the benefits

Switching suppliers can bring a multitude of benefits:

• Increased competition in the market can mean better prices and better service.
• If your business has several sites, you can consolidate your water to one single supplier, with one bill covering all your locations.
• When you use a water consultant, you can bundle your water and energy to streamline your business services even further.
• You’ll have access to billing and consumption data that can help you optimise your operations.

Stop flushing money down the drain – secure cheaper rates for your business water for a better bottom line.

Cash Isa
Private BankingPrivate ClientWealth Management

Death Of The Cash ISA – Big Banks Are Struggling To Cope With The Mass Cash ISAodus

Cash Isa

Death Of The Cash ISA – Big Banks Are Struggling To Cope With The Mass Cash ISAodus

The latest market insight and research from peer to peer lending platform, Sourced Capital of the Sourced.co Group, has revealed that a mass exodus of Cash ISA investors submitting transfer out requests from their Cash ISAs is causing a backlog with the big bank lenders.

Sourced Capital was recently advised by HSBC that transfers were taking a while to process and were requesting no calls for updates due to the substantial backlog, yet further indication of the death of the Cash ISA as investors look for more lucrative options.  

This is a trend that has been apparent for some time due to record low-interest rates and one that will no doubt be exacerbated with the Bank of England’s decision to keep rates frozen yet again at 0.75%. 

In fact, since 2008 the number of accounts subscribed to a Cash ISA has declined every year except one, with the total number down -36.38% all in all, averaging an annual decline of -4.69%.  

Some of the biggest annual declines have come over the last year and the year prior to that, with the number of Cash ISA accounts dropping by a notable -8.22% and -16.19% respectively.

Prior to the economic crisis, available rates averaged at 5%, but in more recent times this return has diminished to around 1.45%.

It’s clear that the preference of investing in a Cash ISA is well and truly on the slide and those looking to make their money work harder are opting for alternative investment options like the Innovative Finance ISA. 

The IFISA is a category of ISA which was launched in April 2016 for UK taxpayers. Previously, there have been two main types of ISA: Cash ISAs and Stocks and Shares ISAs. Similar to these ISAs, the IFISA allows you to invest money without paying personal income tax. This enables you to invest your money into the growing peer to peer market. 

Like cash ISAs Each tax year, you get an allowance of up to £20,000 to put into IFISAs which you can distribute across your different ISAs should you wish to. In addition, you can transfer your previous year’s ISA investments into your IFISA and while your capital is of course, at risk, an IFISA can bring returns of as much as 10-12%.  

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“A prolonged period of extremely low-interest rates has been great for some and has helped stimulate borrowing and spending activity, most notably across the UK property and mortgage sectors. However, it hasn’t been great for those attempting to accumulate a sizable savings pot with the return on their hard-earned cash remaining really rather poor.  

It comes as no surprise then that the declining health of the Cash ISA seen in recent years has now progressed to an almost fatal level as more and more investors remove their cash and look elsewhere for a more favourable return. This exodus has been spurred by more innovative options providing a better return and has become so prevalent that even the biggest lenders are struggling to cope with the paperwork.”  

CASH ISA – Number of accounts subscribed in current year (thousands)

Period

Number of accounts subscribed in current year (thousands)

Change / growth (yearly)

2008-09

12,234

x

2009-10

11,426

-6.60%

2010-11

11,859

3.79%

2011-12

11,187

-5.67%

2012-13

11,682

4.42%

2013-14

10,481

-10.28%

2014-15

10,288

-1.84%

2015-16

10,118

-1.65%

2016-17

8,480

-16.19%

2017-18

7,783

-8.22%

Total Growth

-36.38%

Average Annual Growth

-4.69%

Biz Stone
BankingMarkets

Twitter Co-Founder Backs Uk Bitcoin Banking App

Biz Stone

Twitter Co-Founder Backs Uk Bitcoin Banking App

London-based fintech firm Mode, advised and backed by Twitter co-founder Biz Stone, has launched its Bitcoin banking mobile iOS app.  This will make Bitcoin – the world’s most popular digital asset which many refer to as ‘digital gold’ – accessible to everyone at the touch of a button.

The platform is available to users globally, except in the United States of America.

A Mode account can be opened in less than 60 seconds, with Know Your Customer (KYC) requirements completed in less than two minutes through AI-enabled identity verification technology. Once users are whitelisted, depositing GBP via bank transfer and buying Bitcoin takes seconds.

Mode’s launch is supported by new research (1) which reveals that many current and potential Bitcoin investors are unhappy with the platforms and services currently on offer.  Findings (2) also reveal the potential for strong Bitcoin market growth, as 42% of people who currently own Bitcoin plan to buy more, 51% of people surveyed indicated they may buy Bitcoin soon, and just a small fraction of respondents, around 7%, said they have no intention of currently buying the digital asset.

Through its new easy to use app, Mode aims to bring down the barriers and open up the Bitcoin market to everyone, not just tech-savvy or professional investors. As a result, users can get started with only £50, and unlike many other apps, Mode only charge a very competitive fee of 0.99% at the time of purchasing and selling Bitcoin. Mode doesn’t charge for transferring GBP in and out of users’ accounts, and funds are credit almost instantly via Faster Payments – a process that can take up to 5 days with some of the most renown crypto exchanges.

Users can buy Bitcoin with bank cards or via a bank transfer, which is then safeguarded through one of the world’s leading digital asset custodians, BitGo. 

In addition to its new app, Mode has also announced plans to launch a Bitcoin interest-generating product later this year, which would allow users to earn passive income on their Bitcoin holdings without having to touch their assets.  

Biz Stone, co-founder of Twitter, joined Mode as an advisor of the project. He has also invested in Mode and acts as a non-executive director of R8, Mode’s parent company.

Although there are multiple existing ways to access the Bitcoin market right now, few appeal to the everyday person, who wants to buy and hold some Bitcoin. Most of the current apps all have one problem at their core—access.” Biz Stone commented; “Mode has removed needlessly complex processes from their app, building a beautiful and responsive UI and UX rivalling that of the major challenger banks—while also launching a completely new and innovative Bitcoin product.”

 

Ariane Murphy, Head of Communications and Marketing, Mode, said: “Our new app not only enables us to capture the huge growth in the Bitcoin marketplace, but also tackles many of the issues people have with the current platforms and storage services available, which our research shows are significant. The Mode app addresses transaction restrictions issues, low speed/high cost, lack of security and most importantly, tackles the poor user experience typically associated with Bitcoin apps.”

“Until the beginning of this year, we pilot-tested our app with some 1,000 early subscribers and their feedback has been very positive.  This, coupled with the strong growth in the marketplace, means we are confident that now is the right time to launch to the wider pubic.”    

 

Challenges to tackle in the digital asset markets – new research

Mode recently conducted research (1) with people who already own digital assets, revealing that 41% of respondents described the process of transacting Bitcoin through existing solutions as average or poor, with just 13% describing the process as excellent. 

Some 37% say the level of security offered by the platforms they have used is again average or poor, with 41% claiming security is good and 21% excellent – signifying some room for improvement.

In terms of overall user experience, just 56% describe other digital asset services as good or excellent, with 32% saying it is average and 11% describing their experience as poor.

Mode is part of R8 Group, a UK fintech group which raised $5m in a heavily oversubscribed funding round in April 2019, backed by an experienced management team with extensive experience in the financial services and technology sectors. Prominent members of the R8 Group include serial entrepreneur Jonathan Rowland, and Twitter co-founder Biz Stone.

savings
ArticlesCash Management

Low Interest Rates and Inflation Are Wiping Out The Nation’s Savings

savings

Low Interest Rates and Inflation Are Wiping Out The Nation’s Savings

The latest research by the peer to peer lending platform, Sourced Capital of the Sourced.co Group, has revealed how high inflation rates and below-par interest rates on savings accounts are making it tough for the nation’s savers.

Sourced Capital looked at the annual rate of inflation seen since 2012 on an annual basis and compared this yearly change in the cost of living to the interest secured on an annual basis via the average savings account rate and a one year, fixed-rate ISA, to see how if saving is really worth the time and investment anymore.

Inflation effectively shrinks the value of your money over time and according to the Consumer Price Index, which tracks the cost of household items, the value of £1,000 on the high street at the start of 2012, would now have climbed to £1,153 today.

But what about your savings? Had you invested that £1,000 in the average savings account with your bank or building society back in 2012, your money today would have climbed to just £1,048.

Opting for the average cash ISA with an annual fixed rate would have seen your £1,000 investment reach £1,126 today.

As a result, the interest earned on these savings options would have been wiped out due to the increasing cost of inflation.

In fact, since 2012 inflation has increased at a greater rate than the return available from the average savings account each year, with an ISA proving a better option in just two of the eight years (2015 and 2016).

With traditional routes to saving no longer providing a sufficient return, many armchair investors have turned to Innovative Finance ISAs, which while pose the same capital at risk as other investment platforms, provide much greater returns of up to 10%.

Looking at the last three years alone since they have grown in popularity, the value of £1,000 on the high street according to the CPI would now have climbed to £1,067 today. Again, a traditional savings account would have returned just £1,008, while a fixed rate ISA is slightly better but still offers a loss compared to inflation at £1,037.

An IFISA however, would have returned £1,331, £264 higher than the loss due to the rate of inflation over that time.

Period

Average Inflation rate (CPIH)

Example amount – relative value/cost

Average Instant Access savings rate

Example amount – savings

Average Fixed Rate ISA 1 year

Example amount – savings

start

£1,000

£1,000

£1,000

2012

2.6%

£1,026

1.45%

£1,015

2.54%

£1,025

2013

2.3%

£1,050

0.86%

£1,023

1.77%

£1,044

2014

1.5%

£1,065

0.67%

£1,030

1.49%

£1,059

2015

0.4%

£1,070

0.54%

£1,036

1.41%

£1,074

2016

1.0%

£1,080

0.35%

£1,039

1.07%

£1,086

2017

2.6%

£1,108

0.15%

£1,041

1.05%

£1,097

2018

2.3%

£1,134

0.23%

£1,043

1.31%

£1,111

2019

1.7%

£1,153

0.42%

£1,048

1.30%

£1,126

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“It’s been a tough ask to get any form return on your savings in recent years and this has been largely down to interest rates remaining so low in an attempt to stimulate the economy through consumer spending.

Of course, the flip side to this is that inflation has remained fairly robust and has sat between 1.5% and 2.6% in all but two of the last eight years. As a result, not only has the return on our savings been minimal, but the increasing cost of living has pretty much wiped out any return available.

It’s no surprise that as a result, alternative methods of investing have come to the forefront and the likes of the Innovation Finance ISA have grown in popularity with armchair investors and investment professionals alike. While there is, of course, an element of risk, investing in peer to peer products particularly in the property sector has seen consistently higher returns over the last few years, despite quieter market conditions due to Brexit uncertainty.”

mediation
Family OfficesLegal

Keeping Divorce Out Of Court: Why Mediation Matters

mediation

Keeping Divorce Out Of Court: Why Mediation Matters

By Kirstie Law, at Thomson Snell & Passmore

People are increasingly looking to facilitate a smoother and faster divorce by keeping it out of court.  As such, former couples are turning to mediation as a way of resolving the issues arising from their separation (including financial and child arrangements).

Mediation can provide real benefits in appropriate cases. It reduces tension and hostility and helps couples make their own informed decisions about their futures. The process involves the couple working with normally one mediator, (but in some cases two mediators/co-mediators,) who encourages them to come to a solution that works for them both and their children.  The mediator is impartial, but will give the couple information as to the law and, for example, how in his or her experience the court might deal with a particular issue.

 

Children and mediation

With Children Act proceedings, if the case is being decided by a judge, he or she will want to know what is in the best interests of any children concerned.  This is often achieved by the court appointing a CAFCASS officer who normally visits any children with each parent before preparing a report, including recommendations for future child arrangements.

Some mediators are qualified to see children as part of the mediation process.  Having had an initial meeting with the parents, (who both have to agree to the mediator seeing any children) the mediator will then have a meeting with the child(ren) without the parents, although another adult will be present.  Having seen the child(ren), the mediator will report back to the parents any points that have been specifically agreed with the child(ren). If the child(ren) asks for some things not to be repeated to the parents the mediator MUST respect this.  The only exception to this confidentiality is if the child(ren) discloses he/she or another child is at risk of harm, in which case the appropriate referrals, e.g. to social services, is made.  This is explained to the child(ren) at the start of the process. 

The mediator will make an effort to ensure that the environment is relaxed, including providing appropriate child friendly refreshments. The child(ren) will also be given the opportunity to doodle or draw a picture.  Most mediators will also write to the child(ren) in advance of the session (in a way that is age appropriate) inviting them to attend. 

It is important to emphasise that the child(ren) is/are not being asked to decide what will happen, but told that mummy and daddy want to know what the child(ren) feel(s) about the current situation and any suggestions the child(ren) has with regard to arrangements going forward.

The feedback from both children and parents who have been involved in mediations where the children have had direct involvement and the opportunity to discuss issues with the mediator is extremely positive.  Mediation can be concluded very quickly enabling the whole family to move on and hopefully the parents to co-parent more successfully.

 

Finances and mediation

With financial proceedings, if the case is being decided by a judge, he or she will have quite a wide discretion as to what settlement is appropriate in any given case.  This can make it very difficult to predict the outcome with potentially thousands of pounds being spent obtaining an order that no one is happy with.  The mediation process can take into account the priorities of both (e.g. one wanting to keep the house, the other a pension) and consider whether a clean break settlement is the best solution.  It is arguably far easier to live with a settlement into which you have had input than one that has been imposed on you.

The mediator will want both to provide financial disclosure but the couple can decide when, and for what period, this is provided (the court process requires bank statements for a year but if the decision to separate is mutual and recent the couple can in mediation agree a shorter period).

It is normally possible to have a first mediation appointment within a week of the mediator speaking to both.  By contrast the first court hearing is normally three or four months after the court processes the application.

The mediation process is therefore normally significantly quicker and cheaper, and usually improves rather than damages the couple’s relationship, hopefully making future co-parenting easier.

 

Shuttle mediation

Shuttle mediation is a form of mediation where, instead of the former couple being in the same room as the mediator, they are in separate rooms and the mediator effectively shuttles in-between. 

Shuttle mediation can be used in cases where mediation is not appropriate because one or both of the former couple, for whatever reason, do not feel comfortable being in the same room.  This could for example be due to past coercive or controlling behaviour, or if one person is still finding it difficult to come to terms with the end of the relationship.

The potential disadvantage of shuttle mediation is that there is inevitably a duplication of costs because the mediator has to repeat what has been said by the other person.  There are also usually advantages to having the discussions directly, but in the presence of an independent mediator.  Witnessing these discussions directly can enable the mediator to assist with improving communication going forward particularly if, for example, there is a need for future co-parenting.

Ultimately the most important thing with regard to mediation is that both feel comfortable to discuss issues openly with the mediator and do not feel pressurised as a result of the other person’s presence. 

Shuttle mediation can be used for the whole of the mediation process or just to deal with a particular issue that the parties feel would be easier to discuss if they are not in the same room.

 

Final thoughts

The breakdown of a relationship can be a painful and difficult time for all involved. By opting for mediation, it is possible to help mitigate the stress of a divorce or separation, by making the process smoother and faster, and helping to ensure an outcome that works for everyone.

housing ladder
Cash ManagementTransactional and Investment Banking

An IF-ISA Can Get You Onto The Housing Ladder 7 Years Faster Than A Cash ISA

housing ladder

An IF-ISA Can Get You Onto The Housing Ladder 7 Years Faster Than A Cash ISA

The latest research by leading peer to peer lending platform Sourced Capital, part of the Sourced.co Group, has looked at how best to invest when it comes to saving for a house in order to save years’ worth of painstaking saving.

Cash ISAs have become a popular way for many to stash away the cash with the aim of climbing the ladder, with the Help to Buy ISA in particular helping many save that all important deposit.  

While buyers can no longer take advantage of the scheme there are a whole host of Cash ISA saving accounts that average a return of 2.12% a year with a maximum annual investment of £20,000 allowed.  

This means that investing £20,000 a year on the current average UK house price of £235,298, and when taking into account the addition of compound interest, maximising the benefits of a Cash ISA would see you pay off the cost of a property in 10 years compared to the 11.8 years it would require to save £20,000 a year with no benefit from interest.  

With the lower cost of buying in Northern Ireland and Scotland, it would take 6 and 7 years respectively, instead of 7 and 7.7 years saving £20,000 a year straight up, and in the North East a Cash ISA can also cut your saving time to 6 years instead of 6.5. 

In London, you’re looking at a longer saving stretch of 19 years although this is marginally better than saving for 23.8 years without the help of an ISA.

However, investing in an Innovative Finance ISA (IFISA) through a peer to peer platform such as Sourced Capital could help you pay off your property much faster, with annual returns hitting 10% and higher.

With backing from the UK government, showing their confidence in the sector, there is now encouragement to invest in property through peer to peer lending. The IFISA is a category of ISA which was launched in April 2016 for UK taxpayers. Previously, there have been two main types of ISA: Cash ISAs and Stocks and Shares ISAs. Similar to these ISAs, the IFISA allows you to invest money without paying personal income tax. This enables you to invest your money into the growing peer to peer market. 

Like cash ISAs Each tax year, you get an allowance of up to £20,000 to put into IFISAs which you can distribute across your different ISAs should you wish to. In addition, you can transfer your previous year’s ISA investments into your IFISA.

While this investment option allows for a much quicker return across the board, nearly 3 years faster in the UK as a whole, the time saving is most notable in London where an IFISA investment could accrue a big enough saving pot to buy in the capital at a cost of £475,458 in just 12 year’s, as opposed to 19 year’s via the average Cash ISA – a seven year difference! 

Stephen Moss, founder and MD of Sourced Capital, commented: 

“Record low interest rates over such a prolonged period have been great for those looking to secure a mortgage, however, those still trying to accumulate a savings pot have suffered where the rate of interest is concerned.

As a result, the consumer has become savvy when it comes to saving and the market has been flooded with a whole host of options to make our money work harder. While some Cash ISAs are proving popular, the peer to peer sector has really led the way with some of the best rates of return and whether you are trying to save a mortgage deposit, or pay off your property completely, there are a number of platforms like Sourced who can help you reach your goal far quicker than some of the more mainstream options.  

As always, the biggest hurdle is educating the consumer on the additional options open to them and although their capital may be at risk, investing via more professional platforms in the peer to peer sector can bring a much better return.”

Sale Credit
ArticlesCash Management

Point Of Sale Credit: Latest Trap For Consumers

Sale Credit

Point Of Sale Credit: Latest Trap For Consumers

Applying for credit at the till or checkout is becoming more and more common. Klarna, one of the biggest ‘Buy Now Pay Later’ credit companies promote their product as a way to improve customer’s spending power, both in store and online. The concept is, rather than saving and waiting to pay for an item, you can seamlessly apply for credit at the checkout. This sounds extremely convenient for consumers who need to purchase a crucial item and otherwise might have had to rely on payday loans or emergency funding. The risk, however, is frivolous purchases and over-buying. 70% of consumers asked in a recent survey said they had used a Buy Now Pay Later (BNPL) scheme. 73% of those who admitted to using BNPL said it led to debt problems later down the line.

 

Increase Basket Sizes

Clearpay, another major competitor in the UK BNPL market, published that offering financing options at the check out increased online basket size by 20 – 30%. This data fuels Klarna’s statement that these payment plans increase customers spending power, but it does not take budgets into account. Although, assumedly, this does mean that customers get 20 – 30% more goods, they also have an increased bill. BNPL schemes distance the consumer from their payment, as money is not taken immediately from their bank account. This suggests that consumers that add to their basket when they find out they can spread the cost, might not take the time to think about the affordability aspect.

For retailers, offering Klarna or BNPL options at the checkout could be beneficial. Of course, these systems are most popular online, but in-store consumer credit is becoming more accessible. This is said to motivate sales again, which translates to a higher spend for customers.

 

Turning Browsers Into Buyers

BNPL credit continues to develop because it helps to bridge the gap between online convenience and real-life experiences. Consumer trends in 2020 highlight that customer experience is how companies will add value to their physical stores. It is suggested that Klarna, Clearpay and other schemes allow you to enjoy shopping online in your spare time, whenever that might be, and then take your ‘fun’ browsing one step further.

One of the biggest obstacles for online shopping is the returns process. Especially, for retailers targeting younger demographics who might need their returns credited sooner rather than later in order to manage other bills or outgoings. BNPL is the solution. If you return goods before the first payment, no money will leave your account. Yet this does depend on keeping track of returns and payment dates. It also runs the risk of fun, hobby browsing turning into an expensive, out of control habit.

 

An At-Risk Audience

The younger generation are known for their “on-demand” lifestyle. BNPL could be seen to feed this desire, because it means you do not need the money available to pay for new items. BNPL credit companies have identified the younger, Gen Z or millennial demographics as their target audience. This is evidenced by the stores they choose to partner with, most of which are apparel brands with an audience of 16 – 30 year olds. 

In the UK, the Financial Conduct Authority are the financial industry’s watchdog. After the sharp rise of BNPL credit companies, it’s not surprising that they promised stricter regulations. These were introduced in November 2019 and were estimated to save the consumer around £40 – £60 million per year. Klarna’s marketing tactics were also called into question, as it dissolved the responsibility and association with a purchase. Although there might be immediate financial benefits for companies that use BNPL, there might be a moral or ethical issue in the future that could deter sales. Interestingly, the CEO of Next, the clothing and homeware retailer, described the service as dangerous, stating, “there is a difference between spreading of the cost and just deferring it”.

pension
ArticlesPensions

43 Or Younger? Here’s How To Recoup Your Years Of Lost Pension Income By Investing Today

pension

43 Or Younger? Here’s How To Recoup Your Years Of Lost Pension Income By Investing Today

In October this year, the pension age is due to increase from 65 to 66 years old, with a further increase to 67 by 2028 and plans to increase this even further by 2046 to 68 years old.

Leading Peer to Peer investment platform, Sourced Capital, has looked at the lost pension income for those facing the additional three years at work, the current median age of those in line to work until they’re 68, how long they still have left in the workplace, and just what they would need to invest today via private pension funds vs peer to peer platforms, in order to recoup their lost pension income between now and the time they retire.

Not only are we set to work for longer, but we’re also in line for a pension pay cut to the tune of £8,767.20 for the first year for those working to 66, climbing to £20,588.71 for two additional years for those working until the age of 67, and an eye-watering £47,582.06 over three years for those working until the age of 68 when also accounting for the minimum pension increase of 2.5% per year*.

That means anyone born after 6th April 1978, at a current median age of 42.5 years old, faces being nearly £50k out of pocket from lost state pension income as a result of the Government moving the pension age goal posts.  

However, there are moves you can make now to bridge this gap and increase your lost pension pot through investing wisely.

A Private Pension Fund

Over the last decade, private pension funds have averaged a return of 5.9% per annum. 

Therefore investing £1,000 today based on this average while considering compound interest and a yearly compound interval, would return just £4,314 over a 25.5 year term. Nowhere near enough to bridge the pension gap.  

Investing into the same scheme with £10,000 would return a more favourable return of £43,137, but it would take an investment of £14,370 today in order to make both your money back and the additional pension loss of £47,582 by the time you hit 68 (£61,987). 

For those with deeper pockets, investing £50k would return a total of £215,684 over the same period, while £100k would bring a return of £431,367.  

Peer 2 Peer Platforms 

But, a more interesting investment option is a Peer to Peer platform such as Sourced Capital. While your capital is at risk, with annual returns of as much as 10%, you could bridge the pension pay gap with a much smaller initial investment today.

In fact, with a return of 10% per a year, it would take an investment of just £4,595 today to see a return of £52,215 over a 25.5 year period, enough to recoup your initial investment along with an additional £47,620 to cover your three years of lost pension income.

Founder and Managing Director of Sourced Capital, Stephen Moss, commented:

“The requirement to work for longer is one that won’t sit well for those that have paid into pension schemes for many of their working years, only to see as many as three years worth of pension payments vanish to the tune of almost fifty thousand pounds.

But there’s a silver lining and for those that stand to lose the most, there are other investment options available that could see them recoup this lost pension pot by investing less than five thousand pounds now with an eye on the future.

In fact, the right investment now could not only recover these lost in pension payments but could do so by the age of 65, allowing you to retire ‘early’ without any financial penalty.

As with all investments, there is an element of risk. However, opting for the right platform can help reduce this dramatically. For example, all of our investors get a first charge against the property invested in, which gives a greater level of protection and lowers risk but is something that not all platforms do.  

We always recommend that investors only opt for FCA approved companies which again reduces risk, while we also only loan at a maximum loan to value of 70%. We also offer all investors the chance to view a project and to learn directly from us which again, is something that other platforms don’t offer, but for us, it provides greater transparency and trust while helping improve knowledge on a particular investment.” 

corona virus
Natural CatastropheRisk Management

Coronavirus: Protecting Your Assets From An Epidemic

corona virus

Coronavirus: Protecting Your Assets From An Epidemic

Around the ­world, concern is growing for Coronavirus. As the death toll in China soars, incidents are being reported across the world, with the virus now having a knock-on effect on travelling, the financial markets and is triggering rising panic.

With the Hang Seng Index, FTSE 100 and Nikkei falling, it’s no wonder that global investors are concerned. “This should serve as a forewarning to investors, to ensure first and foremost that their portfolio is well-diversified across asset classes, regions, sectors and currencies,” advises Granville Turner, Director at Company Formation Specialists, Turner Little.

“This is not only the best way to mitigate risks but also ensures you’re well positioned to take advantage of opportunities when they arise. It’s important to understand in cases such as this, that economic impact is not directly related to the number of people who get sick, or even die in some cases, but depends on the indirect effects of the decisions that both individuals and businesses make on how they react to the threat,” adds Granville.

“The most important thing to do is plan. Effective planning ensures that no matter what happens, you will always remain in control of your assets. A robust plan employs legal strategies and can include separate legal structures or arrangements such as corporations, partnerships or trusts. It’s important to remember that most asset protection measures don’t work if you’re already in trouble, so the most effective protection must be put in place before you even think you need it,” advises Granville.

Turner Little specialises in creating bespoke solutions for both individuals and businesses of all sizes. The knowledge and expertise of our specialists, ensures we are able to assist with any enquiries, no matter how complex. To find out more about how we can help you plan, get in touch with us today.

car insurance
ArticlesInsuranceRisk Management

Just One In Five ‘Fully Understand’ Motor Insurance Add-Ons

car insurance

Just One In Five ‘Fully Understand’ Motor Insurance Add-Ons

Drivers have an average of more than two paid-for add-ons with their car insurance policy – but just one in five say they fully understand the extra cover they have, a new report* from insurance data analytics expert Consumer Intelligence shows.

Breakdown cover was identified as the least well-understood additional policy with more than two out of five wrongly believing all policies provide cover from the first instalment.

Consumer Intelligence’s research shows 22% of motor insurance customers are confident they know the full details of the cover provided by the add-ons on their motor policy. Around a quarter (24%) admit to being in the dark about the extra cover they have bought.

Add-ons include a wide range of additional cover such as Protected No Claims Discounts, Uninsured Driver Cover, Windscreen Cover, Legal Expenses, Courtesy or Hire Car, Breakdown (UK/European), Personal Injury Cover, Personal Belongings Cover, Key Cover and Wrong Fuel Cover.

Consumer Intelligence’s research found 89% of drivers are willing to pay for at least one add-on  to their motor insurance with Protected No Claims Discounts seen as the most valuable.

John Blevins, Consumer Intelligence Product Manager, said: “Add-ons are clearly very much valued by drivers as they are willing to pay extra on their car insurance for them.

“It is however worrying that so few people fully understand the cover they have and are either not making the full use of it or believe they have more cover than they do.”

Consumer Intelligence’s report on add-ons and market benchmarking can help insurance brands to find out how they compare and how they can improve their competitive position.  It is available to download at https://www.consumerintelligence.com/motor-insurance-add-ons-report