All posts by Susannah Griffin

bank
ArticlesBankingCash Management

Cold Shoulder From Banks As Hiring Freeze Puts Pressure On Cashflow For Recruitment Firms

bank

Cold Shoulder From Banks As Hiring Freeze Puts Pressure On Cashflow For Recruitment Firms

The Association of Professional Staffing Companies called for a more responsible approach from the banking sector as a survey of its membership painted a picture of demands for personal guarantees, offers of alternative loans to the Government backed Business Interruption Loan (CBIL) and inflated interest rates.

The survey, which questioned 120 recruitment firms found that over a third of businesses who felt that the CBIL could benefit their business either do not know how to access it; find the criteria prohibitive or the process too complicated and difficult.

“Banks are asking for personal guarantees from business owners as there also seems to be a tendency to try and sell you anything but the Government scheme” said one APSCo member while another said: “The terms appear to be arbitrary rather than qualified by the Chancellor. One bank is charging 12% with a threat to seize homes if repayment terms are not met.”

The survey also revealed that hiring is at a near standstill with 22% of recruitment firms reporting that permanent hiring is at zero and almost half (47%) reporting a decrease in hiring activity of 90%.

Two thirds of recruitment firms have had up to 25% of their contractors terminated in the last week; 15% have had up to 50% terminated and 17% have had up to 100% terminated.

Commenting on the results Ann Swain, Chief Executive of APSCo said:

“The banks have to be made to take a responsible approach so that firms can get access to the cash they need as the Chancellor intended. We are, along with the Recruitment and Employment Confederation, writing a joint letter to Government asking them to urgently review the banks approach so that this lifeline can be made available as soon as possible. The collapse in hiring activity has hit recruitment firms very hard not least because the furlough scheme does not cover those who have been made a job offer but who have not started. 

“This of course is understandable and we appreciate why the Government could not stretch its already generous package further. This does mean though that there will be many recruitment firms unable to invoice for work that they have already done which makes it even more important that they are able to rely on the banks to do the right thing.”

hsbc
ArticlesFundsStock Markets

How Clued Up Are You On The FTSE 100?

hsbc

How Clued Up Are You On The FTSE 100?

Brits incorrectly believe household favourites Tesco and Sainsburys are in the top 10 biggest companies of the FTSE 100, according to a new poll by IG Markets.

The trader polled 2,000 adults, alongside the launch of its Decade of Trade tool, to discover how clued up the general population are on the FTSE 100. The results show that as a nation we are fairly savvy when it comes to our knowledge of the stock market and over two-thirds (77%) are knowledgeable on the definition of shares.

Online trading platform, IG Markets, created the Decade of Trade tool to help Brits gain an understanding of the FTSE 100 and to allow traders to view not only how companies in the markets are performing now, but how they have performed over the last ten years. The tool covers twelve world markets including the FTSE 100, DAX40, ASX200 and HANG SENG.

When asked to name which companies are in the top ten of the FTSE 100 from a list, Brits identified eight out of ten businesses correctly. The mistakes came from thinking the supermarkets had a bigger presence than they do, with Brits believing Tesco (23rd in the FTSE 100) and Sainsburys (100th in the FTSE 100) to be in the top 10 market share.

 

Perceived top 10 of FTSE 100

Actual top 10 of FTSE 100

BP (+3)

HSBC

HSBC (-1)

Royal Dutch Shell A

GlaxoSmithKline (+4)

BP

Unilever (+6)

Royal Dutch Shell B

Tesco (+18)

AstraZeneca

British American Tobacco (+2)

Diageo

Royal Dutch Shell A (-4)

GlaxoSmithKline

Royal Dutch Shell B (-4)

British American Tobacco

Sainsbury (+91)

Rio Tinto

AstraZeneca (-5)

Unilever

 

Brits failed to identify beverage company, Diageo, whose brands include Smirnoff, Baileys and Guinness and mining corporation, Rio Tinto, as top 10 FTSE 100 companies.

Brits were also tested on their knowledge of the FTSE’s sector market share. The results showed there is a perception that Oil and Gas, Chemicals and Banks and Persona are the three largest sectors of the FTSE 100 when it is actually Oil and Gas, Banks and Persona and Household Goods.

Respondents were also asked what they perceive to have the biggest impact on the FTSE 100, and just over a quarter (27%) thought the Brexit referendum would have the biggest impact on the stock market.

 

Top five things Brits think have impacted the FTSE 100

  1. Interest rates (43%)
  2. Economic releases about earnings reports (35%)
  3. The Bank of England quarterly inflation report (27%)
  4. Brexit referendum (27%)
  5. Eurozone politics (26%)

 

Almost four in ten (39%) correctly thought all of the above factors have an impact on the FTSE 100.

To view the Decade of Trade tool, click here: https://www.ig.com/uk/special-reports/decade-of-trade

will
Family OfficesWealth Management

Disputing A Will: Key Considerations

will

Disputing A Will: Key Considerations

By Monika Byrska, Partner at Thomson Snell & Passmore

As a jurisdiction England and Wales is proud of its testamentary freedom.   Anyone can make a Will and in their Will leave whatever they own to whomever they want.   Not far away from us geographically, in the Channel Island of Jersey, testators can truly freely dispose of only a third of their estate.  Two thirds of their estate will be distributed to their closest family, whether they like it or not.   Similar “forced heirship” provisions exist in most continental jurisdictions.  We are not so restricted in England and Wales.  We can leave all we have to our favourite child, the “cats’ home”, or a neighbour.  However, are we as unfettered in our freedom as we think? 

Research published by Direct Line Life Insurance in 2018 suggested that over 12.6 million Brits would be prepared to go to Court to dispute a Will of a family member if they disagreed with the division of their estate.   Apparently, inhabitants of Southampton are most likely to dispute their loved one’s Will (31% of those surveyed).   They are closely followed by Londoners (29%) and Brighton residents (26%).   When it comes to contesting a partner’s Will, Brighton tops the tables – 16% of those surveyed would contest their partner’s Will if they were disappointed by it.   If the law gives us testamentary freedom, how and why can people argue over the provisions of our Will? 

Looking at my own practice, it seems to me that one of the most common reasons for people to have concerns over Wills is an allegation of undue influence.  Though in practice, evidentially, it is one of the most difficult grounds on the basis of which one can pursue a Will challenge, the concern that a Will was signed only because of the influence of the evil sibling, greedy carer or child, are stories I hear most often.   These cases are difficult, as how do you gather evidence of coercion that forms the basis of undue influence? By its very nature, coercion is always carried out in private, shielded from the prying eye of others, even those closest to the victim.  At the same time, because undue influence will often be tainted by a history of mental or sometimes physical abuse of the victim, when discovered, it is very difficult to just let it pass.  Undue influence challenges are often not cases only about the money, but about justice, which those close to the deceased wish to achieve. 

The second most common ground for Wills being challenged is an allegation of lack of capacity, i.e. a situation where the person making the Will was not of sound mind.   Does mental illness or neglect mean we cannot make a Will?  It need not do. However, for those disappointed by a Will, an insinuation that the deceased could not have possibly known what they were doing, because they were elderly, showing signs of dementia, will be enough to spark up a Will dispute. That is why it is so important that Wills, especially those which are likely to come as a disappointment for friends and relatives, and those prepared for the elderly or vulnerable, ought to be prepared professionally.    

In addition to the two most common grounds, Wills may be challenged on the basis of lack of knowledge and approval or lack of proper formalities (i.e. being wrongly signed or witnessed). Estates may also be challenged under the Inheritance (Provisions for Family and Dependants) Act 1975 by closest family: spouses, partners, children and dependants for whom “sufficient provision” in a Will has not been made.    

Despite the testamentary freedom we like to boast about, there are therefore legal routes allowing us to try and change the provisions of the Will of our loved one, after their death.  The trend is only upwards.  Looking at official court statistics the increase in the number of probate cases issued in the Business and Property Court of England and Wales was 24 % in 2017 (when compared to 2016), 30% in 2018 and 18% when comparing the first three quarters of 2019 with the same period in 2018. 

Millions of pounds are being spent on such disputes.  The financial and emotional burden that they bring on those bereaved may be reduced only if you involve a specialist early on; someone who will have the required experience, but who will also be ready to provide you with their honest, emotionally detached from the family feud, opinion. Law does create possibilities to impact how wealth will be distributed post-death.  However, those possibilities are limited and the courts will defend the English principle of testamentary freedom.  There are no better words to summarise the position than those of Deputy Master Arkush in one of his judgments (Rea v Rea [2019] EWHC 2434 Ch):

 “On one level it is understandable that the defendants feel disappointed, upset and resentful that they have not benefited from their mother’s will. In my judgment they have allowed these emotions to override a more considered reflection (…)[It] is not my task to decide whether the 2015 Will was justified or fair. I am only required to decide if it is valid…”

high street bank
ArticlesBanking

Do You Trust Your High Street Bank?

high street bank

Do You Trust Your High Street Bank?

With the likes of Goldman Sachs and National Savings & Investments (NS&I) cutting the interest rates on savings accounts, consumers are beginning to lose trust in the value of high street banking in the UK.

“Today, the biggest threat to savings isn’t market risk. It’s the fact that a majority of Britons feel that banks have not rebuilt public trust despite over ten years of restructuring since the 2008 financial crisis. The unhappiness of customers with their high street banks is becoming cliché,” says Granville Turner, Director at Company Formation Specialists, Turner Little.

“With mobile banking set to be more popular than visiting a high street bank by 2021, it’s no wonder that consumers are starting to look further afield when it comes to managing their finances. If an offshore investment makes you a better return, and doesn’t increase or even reduces your risk, then it makes perfect sense to invest. If the same investment also saves you money in taxes or allows you to take advantage of foreign economic conditions, then again, why would you not consider it?” adds Granville.

Offshore accounts are often multi-currency accounts, and can be opened by anyone over the age of 18. Whilst it’s often necessary to invest at least £500 or, in exceptional cases, £10,000 to open an offshore savings account, there are many that require a minimum deposit of just £1. A common perception is that some of the most common offshore accounts available to UK-based savers are in the Channel Islands or the Isle of Man, but this is not the case, and anyone considering an offshore account might be well advised to look further afield.

Offshore accounts are often available with both variable and fixed interest rates, and offer easy access to your funds. Whilst there are a number of strict checks in place to prevent offshore accounts falling foul of criminals who want to evade tax, opening an account is easier then it seems, providing you meet the minimum requirements set by the bank you choose.

“Whilst offshore accounts may not be for everyone, this rapid rate of technological change is set to continue over the coming decade, as people embrace the ever-widening number of ways to manage their finances, depending on their needs and lifestyle,” says Granville.

Mechanical Clock
ArticlesTax

Five World-Changing Inventions With Big R&D Claims Today

Mechanical Clock

Five World-Changing Inventions With Big R&D Claims Today

R&D tax credit specialists, RIFT Research and Development Ltd, have looked at five historic advancements that not only changed the world but would have eligible for some big R&D tax credit claims if they had come about today.

 

5. The Wheel

Perhaps the first invention that changed the course of mankind notably, the wheel enabled us to transport goods quicker and in greater quantities, while facilitating the birth of commerce and agriculture. Created in 3500 B.C., but only used on chariots some 300 years later in its primary function, the wheel doesn’t just help us to travel easier but it also has a wide array of other applications, such as its use within machinery.
Should the wheel be invented today through R&D it would qualify in the transport and storage sector and see an R&D tax credit claim total somewhere around £71,000.

 

4. The Battery

In the 1800s a lack of consistent electrical lines meant a consistent supply of power was non-existent. Then an Italian, Alessandro Volta, developed the first battery using zinc and silver discs placed alternatively to form a cylindrical pile. This new device produced a repeated number of sparks that could operate a number of devices without mainline power. Today, the battery has evolved through R&D and now almost every day to day electrical device relies on one with a focus on smaller sizes with longer battery life and the latest advancements coming through their use in cars to reduce pollution.
If invented today, the battery would qualify for an R&D tax credit claim of £80,000 within the electricity, gas, steam and air conditioning sector.
3. Semi-conductors
Not the sexiest invention but semi-conductors form the firm foundation for all electrical devices and are pretty much the cornerstone of the digital world. The first device to contain one was developed by Bell Labs in 1947 but should they have waited until today, their work would be in line for an R&D claim to the tune of £105,000.

 

3. Semi-conductors

Not the sexiest invention but semi-conductors form the firm foundation for all electrical devices and are pretty much the cornerstone of the digital world. The first device to contain one was developed by Bell Labs in 1947 but should they have waited until today, their work would be in line for an R&D claim to the tune of £105,000.

 
2. Mechanical Clock

Our ability to tell time is pivotal to the way we live and work and without clocks to help us we would be living in a world of unorganised chaos. The clock was technically an R&D advancement on the sundial but when Yi Xing created the mechanical clock in China in 725 AD it would be the first that was widely accessible within society and would go on to change the world dramatically.

Today Yi Xing’s work would be in line for a £107,000 R&D tax credit claim within the professional, scientific and technical sector.

 
1. Penicillin

Last but not least, Penicillin is probably the most important medical advancement of years gone by that would qualify for an R&D tax credit claim today. Discovered by Alexander Fleming in 1928 and then researched and developed over the following 20 years, the drug revolutionised the way we treat a wide array of medical problems and helps fight infection without causing us harm in the process.

Like the clock, if invented today Alexander could have submitted an R&D tax claim of £107,000 for his work within the professional, scientific and technical sector.

 

Director of RIFT, Sarah Collins, commented:
“R&D has been changing the world before the term was even coined and in these cases, the impact of the developments made have changed the human race and created the modern world as we know it.

Of course, had these advancements been made today, the work carried out to develop them would have qualified for a pretty chunky claim where R&D tax credits are concerned. Instead, the government’s R&D pot of gold will have to remain for those making modern-day improvements in their respective sectors in today’s world.”

money loss
ArticlesRisk Management

Emergency Measures Called For To Support Insurers And Organisations Buying Cover

money loss

Emergency Measures Called For To Support Insurers And Organisations Buying Cover

  • Most Coronavirus linked losses will be uninsured, but investment profits for insurers have fallen dramatically – exacerbating hard market conditions
  • Insurance premiums set to rise, some insurers will withdraw cover, and more exclusions will be included in policies
  • This could lead to a major long-term shift in which risk is transferred back to companies, further limiting their activities as they attempt to manage their response to the ongoing economic disruption

Mactavish, the leading independent expert on commercial insurance procurement and dispute resolution, is calling for the Government to consider introducing Coronavirus related emergency measures to support insurers and organisations buying cover – especially those facing renewals in the next few weeks.

It says that without this, the impact of Coronavirus could have a significant impact on insurers over the medium-to-long-term.  However, this is not because of claims linked to the virus, but because of the effect of the losses insurers have incurred in their investment businesses.  It warns this could lead to premiums rising dramatically, insurers pulling out of sectors and classes of business, and an increase in claims being rejected along with payment of settlements being slowed down.  All which will worsen an already severe expected recession.

Mactavish is calling on the Government, insurers, brokers, business trade bodies and other relevant parties to enter into a dialogue about possibly introducing the following measures:

  • Insurance premium tax – which is currently 12% –  be temporarily suspended
  • The government should consider providing
  • cheap loans/funding to insurers to help support their cash flow/reserves
  • Insurers should temporarily freeze any increase in insurance rates
  • Insurance renewals should be automatic
  • Government should loosen its capital requirements on insurers
  • The Government should explore ways to compensate insurers from any losses incurred from these measures

 Mactavish believes the value of insurance claims paid out as result of the impact of Coronavirus will be much smaller than many predict because it will predominantly fall outside of traditional “Business Interruption” insurance. To be insured against the virus, organisations would have had to opt in for ‘contagious disease’ extensions on their policies, which very few do.  Even if they did do this, almost all such extensions are limited in both the range of diseases covered and the financial limit of cover as well as being subject to a wide range of conditions – which means very few offer any real protection in a situation such as this.

The bigger issue facing insurers is the losses they are continuing to suffer as a result of ongoing capital market falls and interest rate cuts.

Bruce Hepburn, CEO, Mactavish said: “In recent years, insurers have increased their riskier asset classes, in addition to their traditional investments in low risk corporate and sovereign bonds, many of which are increasingly returning low yields. Partly as a result of this decline in yields, insurers have tended to move away from long-term debt towards short-term gilts which must be rolled over more frequently. In addition to this, they have also increased their exposure to illiquid assets such as private equity and infrastructure, making it more difficult to manage their reserves and cash flow.

“For insurers, the impact on the investment landscape will be more pronounced than Coronavirus itself. It could see insurers increase their premiums to recoup poor returns and improve their cash reserves, reject more claims, slow down the process of settlements, and stop providing cover in certain markets. They may also include more restrictions on the policies they do underwrite”. Bruce Hepburn said: “The overall impact of coronavirus on the insurance sector could be more devastating than 9/11.

“We predict that insurers will now move to a model in which their businesses are primarily sustained by underwriting profits, rather than the traditional combination of underwriting and investments.”

“Prior to the emergence of Coronavirus, insurers were already coming under considerable pressure and we were already seeing the classic symptoms of a hard market. Coronavirus has just made this situation worse. In the long run, this could herald a seismic transfer of risk back onto companies who will in turn be forced to allocate more of their own capital to protecting themselves against high-severity losses, limiting their activity and ability to create returns for shareholders.”

“Given all of this we are calling on the Government to find ways to provide financial support for insurers and help alleviate any increase in premiums at a time when businesses are increasingly struggling to survive.  On a short-term basis, with the right support from the government, insurers could also offer to freeze premium increases for the short-term.” 

tax claim
TaxWealth Management

R&D Tax Credit Claims Could Pay 178k UK Salaries For A Year

tax claim

R&D Tax Credit Claims Could Pay 178k UK Salaries For A Year

While growth in R&D tax relief claims has increased by 35% annually since inception in 2001 to over £4bn last year the scheme is yet to be fully utilised by UK business according to R&D specialists RIFT Research and Development Ltd. 

However, even with many remaining unaware that the work they are doing could qualify, the number of claims made does demonstrate the huge amount of innovative work taking place across the UK.

To highlight this great work and put the sums claimed into perspective, RIFT has looked at how many people this sum could employ based on the average annual net salary and which region is top when it comes to R&D Tax Credit claims.

The research shows that there has been a huge £4.3bn claimed across all R&D tax credit schemes to date and with the average net salary currently sitting at £24,365, that’s enough to pay the wages of 177,711 for a whole year!

As you might expect, London is home to the largest number of claims with £1.2bn submitted and even with the higher annual salary of £31,567, the R&D work going on throughout the capital could employ 39,281 for a year.

R&D claims in the South East and East of England have accumulated enough to pay the annual wage for 30,109 and 21,863 people respectively. 

The West Midlands, North West and South West have also seen R&D claims total enough to pay the wage of over 10,000 people for a year. 

Northern Ireland and the North East have seen the lowest amount claimed, but with a similar average wage and claims totalling £75m and £85m, the great work going on in these areas could still pay the average annual salary for between 3,5000 and 4,000 people.

Location / Region

Amount claimed – All Schemes (2017-18)

Average NET annual salary (2019)

Number of people R&D credit claims could employ at average salary

London

£1,240,000,000

£31,567

39,281

South East

£810,000,000

£26,902

30,109

East of England

£555,000,000

£25,385

21,863

West Midlands

£395,000,000

£22,622

17,461

North West

£275,000,000

£22,510

12,217

South West

£225,000,000

£22,293

10,093

Yorkshire and The Humber

£175,000,000

£21,862

8,005

East Midlands

£180,000,000

£22,509

7,997

Scotland

£175,000,000

£23,207

7,541

Wales

£95,000,000

£21,399

4,439

North East

£85,000,000

£21,484

3,957

Northern Ireland

£75,000,000

£21,468

3,494

    

UK overall

£4,330,000,000

£24,365

177,711

Director of RIFT Research and Development Ltd, Sarah Collins, commented:

“R&D tax credits are a great way of paying back those companies that are committing to some outstanding work in their respective fields and regardless of how small the developments being made, they are all contributing to the future of their sectors and UK business as a whole.

While many of us are very aware of this, we wanted to put into context just how much the claims being submitted equate to when you consider an everyday part of life like the average wage. 

However, there is still so much great work that isn’t being recognised in terms of its qualification for R&D tax credits and while it’s staggering to think R&D claims could fund 178,000 peoples wages for a year, we also wanted to highlight this huge Government cash pot to those that aren’t currently claiming but should be.” 

Sources: Gov.uk and ONS.

Sweden
Cash ManagementWealth Management

Sweden Set For Dramatic Growth In Digital Wealth Management

Sweden

Sweden Set For Dramatic Growth In Digital Wealth Management

Nucoro, the London based fintech company providing bespoke investment and savings technology focused on delivering digital investment solutions to third parties, believes Sweden is set to see huge growth in its digital wealth management sector.

It believes there are three key factors driving this – a rapidly growing population of mass affluent and high net worth individuals; the fact that a significant percentage of Sweden’s workforce are employed in the technology and the telecommunications sectors, and the country’s huge and growing focus on fintech.

Growing population of mass affluent and high net worth individuals

Analysis of industry data by Nucoro reveals that 7% of people in work in Sweden earn over $90,000 a year or 906,000 Swedish Krona (SEK).(1) It’s analysis also reveals a growing pool of wealthy people in Sweden, many of whom Nucoro believes are increasingly open to using digital wealth management services.(2) There were around 200,500 millionaires in Sweden in 2018, and this is set to rise to 245,000 (an increase of 22%) by 2023. In terms of those Swedes worth $30 million or more, there were around 3,820 with this level of wealth in 2018, and this is expected to rise to 4,700 – an increase of some 25% – by 2023.

 

HNWs and the technology and telecommunications sector

Nucoro’s analysis of industry data reveals that around 16% of Sweden’s wealth is derived from the technology and telecommunications sectors.(3) This is one of the highest percentages of any country, and it means that many Swedes are comfortable using digital wealth management services. 

 

Strong focus on fintech

Sweden was one of the earliest adopters of technology in financial services, and this is reflected in its fintech sector, which attracted a record investment last year. Sweden’s fintech sector saw investment of €778 million in 2019, the seventh largest amount of any country in the world, and in Europe only the UK and Germany received more.(4)

Stockholm has one of the most thriving fintech scenes in Europe. It has 114 banks and nearly 400 fintech companies. Some 18% of the Swedish capital’s citizens are employed in the tech sector, and the most common job in Stockholm is a programmer. (5)

Nikolai Hack, COO Nucoro said: “Sweden is an incredibly attractive market for the digital wealth management sector. Over the next few years, we expect to see a rapidly increasing number of services in this area being launched to cater for a growing pool of people who are comfortable using digital platforms to manage their investments and wealth.

“We are keen to work with both traditional and non-traditional financial services companies in Sweden to help them develop propositions in this area.”

From client onboarding to portfolio construction through to billing, Nucoro combines all the tools required to build the next generation of savings and investment propositions. To help financial services companies move forward, Nucoro offers a new technology-based foundation built without legacies – a complete overhaul to the models of client service and accessibility. It offers a radically different approach to the relationship between technology providers and the organisations adopting their solutions.

Nucoro offers a fully automated, AI-powered wealth management platform to UK retail investors called Exo Investing.  Within the first year of operation, Exo won two industry awards (Best digital wealth manager OTY + Industry Innovator OTY at the AltFi awards 2018), was named as a finalist in three more and selected to two disruptive company annual indexes (Wealthtech 100 and Disruption50’s 100 most disruptive UK companies).

Nucoro is making this technology available for financial services companies based in Sweden that have the ambition to truly innovate and future-proof their businesses – and are struggling to realise their digital ambitions.

(1) https://www.averagesalarysurvey.com/sweden
(2) Nucoro analysis of Knight Frank Wealth Report 2019
(3) Global Data: ‘Wealth in Sweden: HNW Investors 2018’
(4) Innovate Finance: January 2020
(5) Invest Stockholm: Stockholm Fintech Guide

credit score hotspots
BankingWealth Management

MoneySuperMarket Reveals The UK’s Credit Score Hotspots

People living in the Eastern Central London postcode (EC) have the highest average credit scores in the UK, according to the UK’s leading price comparison site MoneySuperMarket.

Analysis of over 200,000 credit reports from MoneySuperMarket’s Credit Monitor1 reveals that those in the EC area have the highest average credit score at 583 out of a possible 710 points – 21 points higher than the UK average.

According to MoneySuperMarket data, the Surrey town of Guildford has the second highest average score across the UK – 13 points higher than the average score in London (565).

 

Postcodes with the highest credit scores:

Location

Average Credit Score

EC – Eastern Central London

583

GU – Guildford

578

KT – Kingston upon Thames

577

RG – Reading

W – Western London

576

E – East London

RH – Redhill

575

 

By contrast, residents in the north of England and parts of Scotland have some of the lowest credit scores in the country. Sunderland (548), Wolverhampton (549) and Kilmarnock (550) are the three lowest scoring postcodes. 

 

Postcodes with the lowest credit scores:

Postcode

Average Credit Score

SR – Sunderland

548

WV – Wolverhampton

549

KA – Kilmarnock

550

DN – Doncaster

550

HU – Hull

551

 

Sally Francis-Miles, money spokesperson at MoneySuperMarket, commented: “Although your credit score isn’t directly impacted by where you live, our research shows those with an EC postcode are the top credit scorers in the UK and are therefore likely to be most highly rated by lenders.

“What will strengthen your credit score is making sure you are registered on the electoral roll – it’s easy to do too. Using a credit card can also help. It doesn’t automatically improve your credit rating, but if you repay the balance in full every month, it shows lenders that you are reliable and credit worthy.

“Additionally, free-to-use monitoring services, such as MoneySuperMarket’s Credit Monitor, offer personalised tips to help increase your credit rating.”

 

MoneySuperMarket’s top tips for improving your credit rating include:

-Debt repayments – keep on top of repayments for loans, mortgages and credit cards
Avoid multiple credit cards – having credit cards that are no longer used can have a negative impact on your credit score
-Ensure a sensible use of credit – try not to use a high proportion of the available limit to avoid appearing over-reliant on credit

For more tips and information, visit MoneySuperMarket to see if your area falls into a credit score capital of the UK.

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

market
ArticlesMarkets

Top Five UK Money Transfer Markets Receive More Than £10bn

market

Top Five UK Money Transfer Markets Receive More Than £10bn

New analysis reveals the top five money transfer markets for UK residents that account for nearly one third of the total sent home.

New analysis by Paysend, the UK based fintech, reveals that just five markets account for nearly one third of the total money transferred home from the UK.

Paysend analysed the latest data from the World Bank.  It shows that foreign workers, international students and expats in the UK send money to more than 130 countries worldwide.

However, of the £24.2bn sent home in 2018, more than £10bn is sent to just five markets.  The top 10 markets account for more than half of the total, receiving £13bn in total.

Rank

Market 

Amount sent

1

India

£3.04bn

2

Nigeria

£2.97bn

3

France

£1.63bn

4

Pakistan

£1.44bn

5

China

£1.14bn

6

Poland

£1.13bn

7

Germany

£990m

8

Spain

£900m

9

Philippines

£591m

10

Kenya

£563m

Alberto Macciani, CMO of Paysend, said: “Moving money changes lives. We can see how a group of new internationalist workers, students and expats are driving the growth of money transfers in the UK. Often these transactions are life changing for those that send or receive them. Money transferred might go on education, healthcare, or to give families the ability to buy a home or start a business”. 

“Rather than simply acting as a ‘hand out’, research shows that money sent back home creates independence and sustainability, for the recipient and their communities and especially for women it represents a vital source of independence and equality.” 

Launched two years ago, Paysend’s card-to-card money transfer service, Global Transfers, already serves over 1.3m users worldwide.

The growth stems from the emergence of increasingly mobile segments of the work force and the continued growth of international students.  These are people who live and work in one country while financially providing for, or relying on, others in another country. 

Some 270m foreign workers will send $689bn back home this year, according to the World Bank. This figure is a landmark moment.  Global money transfers have overtaken foreign direct investment as the biggest inflow of foreign capital into emerging economies.

Alberto Macciani continued: “Global Transfers enables our customers to move money in an instant.  With fixed, transparent and low fees, more of our customers’ money is enjoyed by those they care about. We focus on making our key corridors more efficient, but at the same time we work to improve our geographic coverage to ensure we are building a true global outreach.

We’ve made what was once a laborious, slow and expensive process to pay, hold and spend money across borders now simple, quick and low cost.  We will launch new services soon to make paying, holding and sending money globally even easier and cheaper.”

tax
ArticlesTax

7 Of The Most Common Tax Mistakes (And How to Avoid Them)

tax

7 Of The Most Common Tax Mistakes (And How to Avoid Them)

Entrepreneurs are talented individuals. For many of them, however, wearing the many hats required to succeed in their role means there is little time left for the onerous aspects of the job. Under these circumstances, it can be all too easy for potentially costly tax mistakes to emerge. In fact, a 2019 survey suggests that 19% of those who completed a tax return in the past two years believe they may have made an error that resulted in lost income.

In this article, we’ll be taking a look at seven of the most common tax mistakes and how best to avoid them. 

  1. Not Allowing for Allowances

Whilst the majority of people will be aware of the Personal Allowance, there are a variety of other allowances for you to take advantage of. An example of this is the Personal Savings Allowance, which entitles basic rate taxpayers to earn up to £1,000 worth of interest tax-free.

The extent of this allowance is dependent on the rate of tax you pay. Higher-rate taxpayers are subject to a reduced allowance of £500, whilst those in the 45% tax bracket cannot benefit from either a Personal Allowance or a Personal Savings Allowance. This is because these allowances are removed on a tapered basis in cases where a person’s income exceeds £100,000 per annum.

The range of allowances available doesn’t stop there. If you have capital assets at your disposal, you can generate a further £12,000 of gains before paying Capital Gains Tax on the profits. Self Employment and Rental Income Allowances are also available, allowing you to earn up to £1,000 tax-free from either of these income streams. If income exceeds £1,000, you can take a round sum, £1,000 deduction with no requirement for receipted expenses or claim actual expenses if this figure is higher.

There is also a Dividend Allowance available, which charges the first slice of dividend income at 0%. As such, it is perhaps better described as a tax rate rather than an allowance. Having said that, any freebie from HMRC is nonetheless worth taking.

 

  1. Counting the Cost of Expenses

Another way in which entrepreneurs miss out has to do with claiming expenses. Not every business cost is a tax-deductible expense, but there are a number of areas in which many business owners overlook making a legitimate claim.

Generally speaking, you can only claim relief for expenses on things that are used ‘wholly and exclusively’ in the business. However, there are some exceptions in cases where there is a split of use, for example in cases where you work from home or are using a personal car for work. 

The expenses you’ll be able to claim will be calculated differently depending on whether you’re employed (possibly by your own company) or self-employed. You’ll only be able to claim for things for which you have not been reimbursed by your employer in order to avoid you receiving the same benefits twice.

It’s important to note that receiving tax relief doesn’t mean you’re getting an item for free – the reimbursement amount is dependent on your marginal tax rate. If you’re a basic-rate taxpayer, this means you could be refunded 20% of the cost, while higher-rate taxpayers may receive up to 40% of the cost back.

 

  1. Failing to Maximise Pension Contributions

It’s possible to secure extra tax relief through making the most of your pension contributions. While employer-funded contributions and those deducted from pay do not generate additional relief, you could get an extra bonus from the taxman if you make personal contributions into your own pension plan or self-invested personal pension (SIPP).

All contributions of this kind currently benefit from basic-rate tax relief at source, meaning that the benefit to people paying tax at this rate goes directly into their pension fund. Higher and additional-rate taxpayers may be entitled to further tax relief on personal contributions paid by claiming extra tax relief from HMRC.

There is a limit on the amount of pension contributions on which you can obtain tax relief during the tax year, although this doesn’t mean that you can’t contribute more. You can also carry forward unused allowances from the previous three years as long as you were a member of a pension scheme throughout that period of time.

 

  1. Missing Out on Readily Available Tax Reliefs

Many entrepreneurs are unaware of the range of tax breaks available to them, causing them to miss out on invaluable opportunities to reduce their tax bill. Common examples include Research & Development (R&D) Relief, Entrepreneurs’ Relief, Investors’ Relief and Business Relief on gifts. Whatever the case, enlisting professional tax advice can go a long way in helping you make a successful claim. 

 

  1. Not Accounting for Payments on Account

Cash flow is a crucial consideration for any business, but personal tax cash flow is deserving of equal consideration. The majority of people are aware of the deadline for paying any outstanding tax bills, but unless 80% or more of your outstanding tax is deducted at source (e.g. for employees) or the amount due is less than £1,000, you will also need to make advance payments with regard to the following year’s tax liability.

Each instalment will generally be half of the previous year’s tax bill, with one half due on 31 January and the other on 31 July. This means that in January, you could be paying one-and-a-half times your annual tax bill. If you don’t believe your tax bill for the following year will be as high as it is now, you can ask HMRC to reduce your payments. However, if you underestimate the amounts due, HMRC will charge you interest back to the original date of payment.

 

  1. Not Making Charitable Donations

Whilst the primary reason for making a charitable donation is often altruistic, doing so can also provide you with a valuable tax break. The same can be said for the charity in question, with gift aid increasing the value of donations through allowing charities to reclaim the basic tax rate on your gift. In practice, this means that a gift of £100 would instead be worth £125 to the charity.

In a way that is similar to pension contributions, higher and additional-rate taxpayers can claim extra tax relief on charitable donations. If, for example, you donated £500 using gift aid, the total value of your donation will be £625 to the charity. This means the additional tax relief you can claim is £125 if you pay a tax rate of 40%, or £156.25 if you pay a rate of 45%.

 

  1. Not Seeking Expert Advice

Perhaps unsurprisingly, faulty tax returns are not accepted by HMRC. As such, tax return forms that are not completed in the correct manner or fail to provide a sufficient amount of information are likely to be rejected, resulting in further hassle in the long run.


One of the best ways of avoiding a long and drawn-out process is to seek professional tax support from an expert tax accountant. If you’re unsure about any aspect of your tax return, enlisting help early on can help save you significant time and expenses.

car dealer
ArticlesFinance

How to Find the Cheapest Car Loans

car dealer

How to Find the Cheapest Car Loans

If you’ve found your ideal vehicle, whether it’s a dream premium sports car or a practical SUV to run the family around, you’ll now need to finance it. If you’ve got the savings to do so, great, but for the majority of you this will not be an option. You’ll need to look for finance options to do this instead, involving finding the right lenders to offer you the terms that you need. This should be a simple process but can be difficult due to the sheer amount of options out there. Here are some of the ways you can reduce your costs and find the cheapest car loans.


Compare Online

One of the easiest ways to find the best offers for a loan against a car is by using an online comparison tool. You should check how the offers are ranked, ensuring that you look at the deals that are best overall. The reason why you should do this is just because an offer has the lowest value repayments per month, doesn’t mean it will be the lowest value overall. You may have to pay a higher interest rate with lower monthly repayments. A comparison site will be able to speed up the process of searching for loans much quicker, as within a few clicks you’ll be able to see all the available offers for you on the market. This can include banks and online direct lenders so that you have a full overview. Filtering the results correctly will help you see the best overall deals, and with most online lenders, you can get quick approval and same day funding if approved.

 

Check Your Credit Score

Ideally, you’ll already know what your current credit score is, especially before you start applying for loans. You can do this by getting in contact with a credit reference agency who can show you what your rating is. Normally, you can see your score without charge, but if you want to see a more detailed report, you’ll need to either sign up or pay a one-off fee. If your score is currently showing good to excellent, you won’t need to worry too much about finding out the details of your score. However, if it is lower than expected or showing fair to bad, you should spend the time to find out what is causing this. You may already know what is causing this, such as multiple missed repayments or a default against your name. By finding out what the issue is, you can then work out if applying for further finance is going to be beneficial or only cause you to have a negative mark on your report.

 

Consider Leasing as Well as Car Loans

With so many loan options available, you may have overlooked the option to lease the vehicle you want. With a reported 9 out of 10 people confused over motor finance options, you may prefer to look at the available lease options. Leasing means you can choose a car to have over a 3-5 year period, paying monthly instalments, sometimes with a deposit upfront. At the end of the term, you can then give the car back and change to a different one if you prefer. Although you won’t own the car outright, it’s an increasingly popular way to afford a higher value vehicle. Monthly repayments are usually affordable, and you have the option of changing your vehicle to another new one every few years. 

 

Pay a Bigger Deposit

If you can afford to, you should definitely pay a bigger deposit when searching for car loans. If you can raise the funds, or preferably save up over a number of months, you can pay a larger upfront cost. This way, you can reduce your monthly loan amount considerably, saving huge amounts in interest. The idea is to not have to take out a loan over too long a period, meaning the amount of interest should be lower overall than if you kept it for an extra year or two. It may seem like you’re spending more money to begin with, but overall the total costs involved will be much less. If you can find lenders that will take a larger deposit you should consider doing so. Some lenders may not prefer this as they will not make as much interest on your loan, so shop around and ensure that the one you go with will allow this. Additionally, if there is an option to clear the balance quicker or earlier, you should go for loans that allow this. Keeping these points in mind will help to ensure you will always find the cheapest loans on the market for you.

bank of england
BankingCash Management

Traditional UK Banks Are Failing To Engage With Users

bank of england

Traditional UK Banks Are Failing To Engage With Users

One in five UK bank customers happy to see branches close in favour of improved digital experiences.

Boomi™, a Dell Technologies business, announced the results of its research on banks’ engagement with their customers. The research finds almost one in three (30%) UK adults consider the search for a better customer experience in digital interactions the main driver for changing banks.

The research quizzed 6,000 adults across the UK and Europe on the customer experience provided by their bank, and how the bank meets their needs.

Currently, nearly one in five (17%) UK customers believe their traditional bank feels ‘a bit old’ and they are looking for an improved digital performance. A fifth (22%) would even be happy if their bank closed its branches if it resulted in an improved mobile app / online banking experience. This figure rises to over a third (39%) among those aged 18-24, who also prioritise having a good banking app (58%).

The results showed traditional UK banks are not engaging with customers like they used to, and are failing to adapt and mitigate this, showing a deep disconnect between modes of communication chosen by banks (email 39%, mobile app 24%), versus those preferred by customers (phone 71%, email 69%, mobile app 62%). Most customers remain with their banking provider just through force of habit (39%), despite citing a good online banking experience (37%) and a good mobile banking experience (35%) as paramount.

The most dissatisfied customers are in the UK

On average, other European countries such as the Netherlands (33%) and Sweden (33%) are happier with their digital banking experience than UK customers (24%). The survey also found that EU banking customers (72%) don’t change banks, but add additional banks, with one in five holding a digital bank account with challenger banks like Monzo, Starling or Revolut as well as their ‘traditional’ bank account.

As of January 13th 2018, Open Banking has required banks to increase transparency and open APIs to enable third-party developers’ access to their account holder data and services. Just 21% of respondents, however, report their current bank offers open banking services, while 66% are not sure if it does – indicating a requirement for further education on the topic.

“New account holders won’t hold the same loyalty to their bank as previous generations have. New players entering the market have challenged the industry status quo thereby setting a new standard around the digital banking experience, forever changing customers’ expectations. Customers are looking for more than better products when choosing their next provider,” said Derek Thompson, VP of EMEA at Boomi.

“It’s therefore critical that banks assess their current IT ecosystem, ensuring they’re not held back by their legacy infrastructure and can quickly unite their digital ecosystems, deploying more agile technology to transform customer experience,” he added.

When asked why they bank with their current provider, a good all-round customer experience (44%) was the main reason cited by respondents, followed by having “always been with them” (39%) and “enjoying a good online banking experience” (37%).

amazon
Corporate TaxTax

Amazon Is The Global Frontrunner In Research And Development

amazon

Amazon Is The Global Frontrunner In Research And Development

The latest research by R&D tax credit experts, RIFT Research and Development Ltd, has looked at which names are driving the R&D sector when it comes to spend on sector innovation around the world.  

RIFT looked at the total spend on research and development as well as what percentage of revenue this accounted for.

Top of the list is world-beaters, Amazon, although they remain largely involved in technology and retail as their core business. The US-based business behemoths not only have the retail game on lockdown, but they top the R&D table as well, with the latest figures showing a huge R&D spend of 17.38 billion pounds in a single year. The development of delivery drones must be expensive although it’s money well spent, with Amazon’s evolution ensuring that their giant R&D spend equates to just 13% of revenue!

Tech and software giants, Alphabet, the world’s fifth-largest technology company by revenue and one of the world’s most valuable companies, take the second spot in the R&D spend league table.  The parent company of Google, they spent £12.47bn in a year on research and development, although again, this equated to just 15% of revenue.

Volkswagen takes bronze as one of just three non-tech focused companies in the top 10 R&D spend league table. The German car manufacturer is also the first outside of the US with an R&D spend totaling £12.12bn over the last year.

Samsung (£11.77bn), Microsoft (£11.33bn), Huawei (£10.45bn), Intel (£10.07bn) and Apple (£8.90bn) rank fourth to eight as the tech takeover continues, while Swiss medical multinational Roche Holding, who operates worldwide under the two divisions of pharmaceuticals and diagnostics places ninth with £8.30bn spent on R&D.  

In at the tenth spot is Johnson and Johnson, again largely involved in pharmaceuticals and consumer packaged goods, with an R&D spend of £8.11bn.

Other companies to feature in the top 20 range from Daimler, Ford, Facebook, BMW and Bosch.

Director of RIFT Research and Development Limited, Sarah Collins commented:

“It goes without saying that some of the biggest names in the business will be spending considerable amounts of money on bettering their proposition through innovation, research, and development and those with the huge budgets to do so are also some with the lowest percentage of R&D spend as a percentage of revenue. 

While R&D certainly lends itself to a wider array of work in certain sectors, such as automotive, pharmaceuticals, engineering and software development, it certainly isn’t restricted to these sectors alone and it’s great to see so many vast and varied businesses taking advantage of R&D tax relief in the UK in particular. If you’re an SME pioneering change in your individual sector, make sure you are making the most of Government rewards for doing so and no matter how insignificant you think a step forward might be, the chances are it qualifies as research and development.”

Company

R&D spend $ (US billions)

R&D spend £ (GBP billions)

R&D Intensity (R&D to Revenue %)

Industry group / sector

Country / nationality

Amazon.com

22.62

17.38

13%

Retail / technology / services

United States

Alphabet

16.23

12.47

15%

Software and services

United States

Volkswagen

15.77

12.12

6%

Automobiles and components

Germany

Samsung

15.31

11.77

7%

Technology hardware

South Korea

Microsoft

14.74

11.33

13%

Software and services

United States

Huawei

13.6

10.45

15%

Technology

China

Intel

13.1

10.07

21%

Semiconductors

United States

Apple

11.58

8.90

5%

Technology hardware

United States

Roche Holding

10.8

8.30

19%

Pharmaceuticals / biotechnology / Life

Switzerland

Johnson & Johnson

10.55

8.11

14%

Pharmaceuticals / biotechnology

United States

Daimler

10.4

7.99

5%

Automobiles and components

Germany

Merck & Co

10.21

7.85

25%

Pharmaceuticals / biotechnology

United States

Toyota

10.02

7.70

4%

Automobiles and components

Japan

Novartis

8.51

6.54

17%

Pharmaceuticals / biotechnology

Switzerland

Ford Motor Company

8

6.15

5%

Automobiles and components

United States

Facebook

7.75

5.96

19%

Software and services

United States

Pfizer

7.66

5.89

15%

Pharmaceuticals / biotechnology

United States

BMW

7.33

5.63

6%

Automobiles and components

Germany

General Motors

7.3

5.61

5%

Automobiles and components

United States

Bosch

7.12

5.47

8%

Engineering / technology

Germany

Sources

IdeatoValue

Strategy&

 

 

 

 

aspen
BankingFamily OfficesPrivate Banking

Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy Families

aspen

Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy Families

Thirty years ago, the family business started by Daniel’s grandfather and great uncle was sold. Daniel and his three siblings received nearly sixty million US dollars each, as did each of their cousins. In 2016, Daniel, who had created a successful real estate and development business and on the advice of his financial and tax advisors, transferred to his four adult children twenty-five million US dollars each. The age range for the adult children spanned nine years, and one daughter worked in Daniel’s business. From the day gifting was announced it has resulted in family disruption. The surface discord resulted from a perceived economic injustice concerning “the time value of money” since all siblings received an equal share rather than a share based on their age. But the deeper disharmony stemmed from an unresolved historical emotional impasse between the father and one of the adult children dating back to the child’s teenage years. 

As Aspen Consulting Team, (ACT) we help members in family businesses and legacy families address the psychological dynamics of love and money, the interplay between emotions and economics, in the family system. 

Love and money are symbiotic and immiscible. They are connected, but do not mix naturally. The wrong mixture results in entitlement, disruption, and conflict; the correct mixture results in gratitude, opportunity, and resilience. The wealth connection in a family business and/or legacy family requires
Emotional Economics: The Challenges of Mixing Love and Money in Family Businesses and Legacy FamiliesMar19081
adult children to stay integrated in their family of origin much longer than typical families. The financial interdependence provides great benefits and at the same time creates complexities. A basic operating principle in our work is that the deeper the economic interconnections the higher the potentiality for emotional conflicts.

Every family business and/or legacy family is a system, a combination of small subset systems (individuals) connected to mid-size systems (family units), nested within larger systems (extended and generational family units), and linked to much larger systems (business and wealth management). Everything is connected and influenced by everything else. Within this system transitioning wealth takes place at two levels where the highest goal is to provide an inheritance without creating entitlement. 

• The “external” work is wealth creation and management. The task of continuing the vision set by the founders, operating with the values that made the family successful in the first place, protecting assets, defining financial goals, policies, and strategies, adjusting to taxes and market changes, understanding investments and ROI, implementing shareholder agreements and distributions, creating foundations and estates, and increasing the financial portfolio. Legal and financial advisors help with this work.
• The “internal” work is relationship harmony and management. The task of connecting and inspiring family members, strengthening the family culture, adapting to generational values, maintaining agreements, managing interpersonal stress, working as a team, responding to special demands, and enjoying the process as members of each generation face opportunities and transitions. This is the space in which ACT works.

There are always two parallel objectives in our work. The first objective is to create guidelines to “prevent the emotional tail from wagging the economic dog.” The second objective is to “not cut off the emotional tail.” Emotions, when accessed correctly, are powerful guides and cannot be ignored without damaging relationship harmony and overlooking important decision-making data. There are more emotions in an economic experience than meets the mind’s eye.

Emotions are actions, many of them are public and visible to others as they are expressed in body language or are verbalized. Feelings, on the other hand, are always hidden, unseen and perhaps unrecognized, to anyone other than their rightful owner. Feelings are the most private property we own. Emotions precede feelings, much to the common mistaken view. “We have emotions first and feelings after because evolution came up with emotions first and feelings later.”2 We, and our emotional system, are designed to solve the basic problem of how to continue life by being either competitive or cooperative and on the economic survival level this involves money. 

A study conducted with children, ages 3 to 6 years, showed that they did not understand the economic value of money, but they comprehended its emotional value. The first group sorted coins and banknotes, while the second group sorted buttons and candy. The children who worked with money demonstrated an increase in egotistical behaviors, were less eager to help the researchers, corralled more awards for themselves, were less likely to share their rewards with the other children, but were more persistent in completing individual tasks. Handling money reduced feelings of helpfulness and generosity while increasing perseverance and effort. These results are very similar to the results of a comparable study that looked at adult behavior. According to Agata Gąsiorowska, economic psychologist and a coauthor of the study:3

“Money is such a strong symbol in the world based on economic exchange that even small children are influenced by its significance. Money causes people to switch from the view of the world that values close relationships to the world that values market exchange, where the notions of ‘me’ and ‘my gain’ are in the center.”

Emotions, often considered “gut feelings” or conscious experience, really involve many systems
within our brain. Emotions create a burst of activity devoted to one thing, survival. Emotions trump non-emotional events, like thought, reason, and decision-making, even in the most rational analyst and business leader, because they are older in the human developmental process than economics. Emotions kept our ancestors alive long enough to create and give us an inheritance. Emotions, even those in our memory system, trigger certain features, feelings, and stimuli that are designed for homeostasis. 

Homeostasis is a self-regulating process by which our biological and psychological systems try to maintain stability while adjusting to conditions that are optimal for survival and success. In love and war, as in family and business, when homeostasis is successful, individual and collective life continues and flourishes. There are “natural triggers” like the sight, sound, and smell of a predator and “learned triggers” like the sight, sound, and smell of money that aid us in the pursuit for homeostasis.4

About 10,000 years ago, when the first farmer created more than his or her family could consume, the economy of the marketplace began. Before the agricultural age, our ancestors were daily hunters and gatherers, collecting and consuming without the ability or surplus to “store up” resources. When farmers took their extra bags of gain to the marketplace they needed a symbol of exchange. In time, this symbol became money. 

From that time forward, there are few interactions or decisions in a legacy family that do not involve money and a drive for the family to flourish. The recent college admission scandal in the United States is a brazen example. 

Money is an emotional trigger in families and how we react to it may be either positive or negative. In order to have a positive environment, family leaders must work toward stability between two social systems that continuously change as individuals change. The two social systems are the homogeneous system of being similar, the drive for family unity, and the heterogeneous system of being dissimilar, the drive for personal autonomy. These systems create interpersonal tension and ambiguity, along with creativity and drive that must be anticipated and proactively managed in a legacy family and family business. Wishing that anxiety or conflict would depart the family system or that love and harmony would show up is usually not enough. 

The tension among family members is from four psychological positions; Fight, Flight, Freeze and Flow . Three positions, Fight, Flight, and Freeze , are an extension of our evolutionary survival system. The fourth area, Flow, is the way to happiness and success.5 It requires psychological awareness, behavioral adjustment, and positive action on the part of family members and leaders and is difficult to create and maintain as family members grow and change.

• Fight: When both personal confidence (autonomy) and relationship security (unity) are low, one’s psychological position is hostile-dependent. This shows itself in behaviors of “moving against” others in the family or family system. The feelings and behaviors expressed are often confusion, anger, resistance, and opposition.

• Freeze: When personal confidence (autonomy) is low and relationship security (unity) is high, one’s psychological position is co-dependent. This shows itself in behaviors of “moving in” with others in the family or family system. What we often see is enmeshment, clinginess, entanglement, low selfesteem, fear, and anxiety.

• Flight: When personal confidence (autonomy) is high and relationship security (unity) is low, one’s psychological position is counter-dependent. This shows itself in behaviors of “moving away” from others in the family and/or family system. This is seen in acts of isolation and detachment, which can look like independence, if it were not for the financial dependence. 

• Flow: When both personal confidence (autonomy) and relationship security (unity) are high, one’s psychological position is inter-dependent. This shows itself in behaviors of “moving with” others in the family and/or family system. This is experienced as cooperation, maturity, accountability, and resilience. This, of course, is the most optimal position for family members.

For economic success and relationship harmony within a legacy family or family business, family members must purposefully address emotional historical impasses, resolve sibling rivalries, find comparable values, and work toward mutual goals. The psychological tools for doing this work are what we have termed “thick trust” and “mature adult communication.” 

Long-term success in family and business life requires a willingness to trust one another. The question is how we measure the trust. Scientific research shows that most people’s accuracy in discerning if another person can be trusted is imprecise. Much of the time, we have weak or no guidelines other than a set of emotional clues we have used in the past. Trust is dynamic—not static. The more we have at risk, the greater the need for trust. It is helpful to think of trust in three levels.6

1. One-Way Trust. Only one person has trust on the line. If the other person cannot be trusted to follow through on promises or commitments the relationship ends, as do any potential gains or losses. 

2. Mutual Trust. This is a reciprocity style, often called quid pro quo and “tit for tat,” for regulating equilibrium in transactional relationships. It is the most familiar type of trust in business, worked out among and between the same parties over a long period of time. Both parties play the roles of giver, taker and matcher, and exchange these roles for mutual benefit. When trust is broken, the relationships and transactions end.
3. Thick Trust. This is the highest form of trust and is required for family members to work together for the long-term. Family business relationships are complex because they occur across different settings and include a diverse series of interactions, both personal and professional. Action at one level may have ramifications at other levels, and every action has the potential for benefit or harm. Trust at this level, like in a marriage, requires the strength, resilience, and skill of mature character to overcome and forgive mistakes. 

Trust and trustworthiness are forms of social and relationship capital. A subjective way to think about your trustworthiness or that of another person in a family business is the following formula. Personal Character plus Competency Skills divided by Self-Interest plus Psychological Awareness plus Behavioral Adjustment determines Thick Trust.  

TT=[(PC+CS)÷SI]+(PA+BA)

A solid foundation of trust allows communication to be clear, constructive, and proactive, what we call Mature Adult Communication (MAC). We suggest that family members have a formal agreement to use MAC when important economic and emotional decisions need to be made. The first step in MAC is to clearly define the issue. Much of what is called “failure to communicate” is not having a clear and collective understanding of the problem or issue. The second step is to explore all the psychological dynamics, emotions, and feelings around the issue. This is often the hardest step and may require outside consultation. The third step is to have full commitment by all family members involved in the issue to the decision-making process (who, how, and when a decision will be made) and to make a clear and firm decision, with an evaluation process if necessary.

MAC eliminates what statistician and author Nassim Taleb calls narrative fallacy, “ a wrong ruler will not measure the height of a child. ”7 This is how we fool others and ourselves by a flaw in a story of the past, often emotional, which shape our decisions for the future. An accurate diagnosis of the problem sets the stage for the correct treatment. Decisions that address the wrong description of the situation can be made with a high level of determination, confidence, and authority, but will still be defective and require correction at a later time with greater expense. 

Creating, managing, and transitioning wealth within a family is a balancing act. It requires addressing the struggles not only among and between individual family members, but the tension created by money. The connections from our emotional system to our cognitive system are stronger than the connections from our cognitive systems to our emotional system. If this were not true, Daniel’s adult children would not have entered into the discord that has alienated and estranged family members.

aspen
Thomas Edward Pyles, MA & Edgell Franklin Pyles, PhD

Edgell and Tom, a father and son team, consult with family businesses on leadership strategies, particularly succession, and with legacy families on the complexities of mixing love and money. They are the co-authors of MAPS for Men: A Guide for Fathers and Sons and Family Businesses. Fourth generation business owner Charles S. Luck, IV, wrote, “MAPS for Men is one of the most comprehensive guides to families in business that I have ever seen.”

“Edgell and Tom weave a tapestry of insight for anyone seriously interested in building family relationship bridges that endure generational transitions.” Dennis Carruth, President, Carruth Properties Company. 

“I have clearly seen results. In all cases it is an inflection point to a fresh and positive perspective.” Chris Branscum, Family Office Advisor, JD, CPA.

“I have worked with Edgell for more than twenty-five years. He has provided counsel to our family, including our two adult sons, my business, and my YPO group.” James Light, Chairman, Chaffin Light Management Company. 

“Our family legacy is now in the fifth generation. I truly appreciated Edgell and Tom’s work. The lessons learned will bear fruit for many years and generations to come.” David Hardie, Founder and CEO, Hallador Management, LLC.

“The psychological and spiritual counsel offered by Edgell and Tom has proved very helpful to my family and business.” Jeff Wandell, Founder and CEO, Prairie Gardens and Jeffrey Alan’s. 

“Dr. Edgell came into my life in a time when I had failed and did not like myself in many ways. He helped me, at the age of 58, on a new journey of bliss.” M. Ray Thomasson, PhD, President, Thomasson Partner Associates, Past President, American Association of Petroleum Geologist, Past President, American Geological Institute.

“Edgell enriches lives of those he touches in a most profound way.” Paul Schorr, Past President, Chief Executives Organization.

Sources:

1. Erik Erickson, Identity, Youth, and Crisis.

2. Antonio Damasio, Looking for Spinoza: Joy, Sorrow and the Feeling Brain.

3. The study was conducted by an international research team, including: Agata Gąsiorowska, Tomasz Zaleśkiewicz, and Sandra Wygrab, SWPS University in Wrocław, Lan Nguyen Chaplin, University of Illinois, and Kathleen D. Vohs, University of Minnesota.

4. Joseph LeDoux, The Emotional Brain, The Mysterious Underpinnings of Emotional Life.

5. Mihaly Csikszentmihalyi, Flow, The Psychology of Optimal Experience.

6. Elinor Ostrom and James Walker, editors, Trust & Reciprocity, Interdisciplinary Lessons from Experimental Research.

7. Nassim Taleb, “A Map and Simple Heuristic to Detect Fragility, Antifragility, and Model Error.”

vineyards
RegulationTax

What Do Sex Toys, Architects and Vineyards Have In Common?

vineyards

What Do Sex Toys, Architects and Vineyards Have In Common?

They are all sectors that could be claiming for Research and Development Tax Credit, according to R&D specialists RIFT Research and Development Ltd.

While growth in R&D tax relief claims has increased by 35% annually since inception in 2001 to over £4bn last year and has already returned £26bn in total tax relief to businesses across the nation, the scheme is yet to be fully utilised.

Introduced by the Government, it encourages scientific and technological innovation across a plethora of UK business sectors. But while RIFT has worked with some of the more traditional companies to have made the most of it, in areas like construction, manufacturing, business and finance, they believe many are still failing to take advantage of the financial benefits and have highlighted some of the more unusual work that could qualify. 

Architecture

Architects are often presented with issues when planning whether it be social or environmental and the engineering or technology-based advancements made to overcome these can often qualify as R&D. 

Some examples of architectural practices that may fall within the R&D framework include designing bespoke features, testing and prototyping, improving energy efficiency, adapting practices when working on heritage or listed structures, tackling acoustic issues, new thermal or lighting requirements and seeking BREEAM, Passivhaus or LEED certification.  

Catering

Catering is home to a whole host of R&D opportunities including work that makes innovative use of the effects of preservatives, increases a product’s nutritional value, helps increase the shelf life of a product, changes the flavour of an existing product, or even the texture or form. For example, advancements in liquid-based breakfast items.

This also includes work on reducing allergens and additives or even the processes, techniques, equipment and ingredients used, whether it be a commercial kitchen or an industrial food production unit or factory. One recent area where plenty of work would qualify is the production of gluten-free food and developing this offering across a wide variety of products that weren’t available before.

Car Manufacturer and Dealers

At times, nontechnical activities can qualify, including areas such as the design of a car’s shape should the manufacturer be able to demonstrate advancements in aerodynamics, performance or fuel consumption. 

Even the more day to day tasks of re-designing your showroom CRM system to make the day to day running of your site more efficient can qualify.  

Clean Tech

Clean tech is perfect for R&D Tax Relief and if you aren’t claiming you’re missing out. But you don’t have to be designing carbon-neutral products in a lab, even driving innovations in areas such as recycling, renewable energy, solid waste management, or sewage treatment could see you qualify.

Textiles

Textiles is another sector rife with opportunity, driven by design and creation but also heavily reliant on production methods, the way you bring a design to life and the efficiency of the machines used to produce the fabric could all qualify for R&D if you’re doing something new to pioneer efficiency and reduce waste.

Sex Toys

Believe it or not, the sex industry is consistently producing pioneering work that would easily qualify under the R&D tax relief framework. Whether it is a new technology, stimulation technique, material or even the way these products are made, any and all new advancements tend to be leading innovation in the sector. 

Football Clubs

Yes, football clubs. Largely due to the advancements being made within the performance departments on a medical basis. This can include nutritional plans, rehabilitation methods and activities, research and information into specific injuries, all of which can help reduce the time a player is unable to play and the speed and the quality of their recovery. 

Vineyards, Breweries and Distilleries

Increasing output while maintaining standards and costs has seen many companies producing wine, beer or spirits carry out R&D-worthy work. Again, removing additives or preservatives can advance a product, or by increasing alcohol content, creating new processes to help scale up productivity or even experimenting with new materials to develop unique flavours for sale to the industry.


Director of RIFT Research and Development Limited, Sarah Collins commented:
 

“Research and development is happening in every corner of British business but many are failing to recognise that the work they are doing qualifies. We’ve highlighted just a few of the more unusual, but if you’re doing something different to advance your business or product, why not get all the help you can and claim some financial relief on the costs incurred to develop these advancements.”  

marketing
ArticlesFunds

Aligning Marketing and Sales

marketing

Aligning Marketing and Sales

Geoff Webb, VP of Strategy at PROS.

It might surprise you to hear that in many financial services organisations, the CMO (Chief Marketing Officer) often has the biggest IT budget. The reason is relatively straight-forward: in recent years there has been an immense investment in MarTech, and it’s made the discipline of marketing very tech-heavy. So much so in fact, that marketing departments now spend more time staring at dashboards, spreadsheets, and AI-fueled analytics than almost any other part of the business.

In fact, this trend is accelerating. Gartner research into CMO budget spend in 2018 revealed that as many as 57 percent of CEOs are prepared to invest more in marketing.

Yet, while this huge focus on technology has armed CMOs with an incredible level of insight (including where your mouse goes on their site, what kinds of content you read online, and so on), it has also resulted in a rather one-sided technology investment, especially for B2B financial services firms who are eager to demonstrate to their customers that they both understand and care about them as individuals.  

We think it’s time for perception surrounding ownership of the technology budget to change. While marketing departments may be happily sailing on an ocean of usable data, their colleagues in the sales department may be struggling to respond to an explosive change in buyer behavior and expectations.

The reality is that today’s CRO’s (Chief Revenue Officers) are facing extraordinary pressure to transform their departments – especially in the face of a growing shift towards digital commerce models. Once upon a time, a sales executive could rely on experience, insight, and interpersonal skills to close a deal and keep the customer buying – but today, that’s a much more difficult task.


Evolving with your sales team

An increasing number of buyers are now moving away from the traditional model of calling up their sales rep and asking for a quote. Instead, they’re seeking the convenience of being able to buy online, without needing to pick up the phone, send an email, or – heaven forbid – meet in person. Simply put, for the day-to-day business of buying, purchasers want the speed and convenience of e-commerce. Yet studies also show that buyers want to know there will be a well-informed sales executive available at the end of the phone, should they need one.

Managing this shift from meeting in person to being mostly offline/sometimes in person isn’t easy, and requires sales professionals to be fully informed about their customers, have visibility into transactions as they’re occurring (should the customer need help) and be ready to provide insight and guidance.

The solution to supporting this change for the sales team lies – just as it did for the marketing team – in the deployment of technology. In the same way that MarTech has transformed marketing teams, sales departments need to adopt highly specialised technology that can help them to be more personalised, faster, more efficient, and ultimately capitalise on the increased number of leads.

When we look at where much of the investment in sales automation technology is currently, we see it at the operational level. As is stands, sales professionals can spend as little as 36 percent of their time actually selling, meaning they are dwindling away precious time and productivity on administrative tasks. However, there is a deeper need to be met for sales leadership, a more fundamental question as we shift towards more complex, multi-channel digital selling – how do I make my sales people not only more productive, but more informed?


Getting personal

We’re now seeing the emergence of several next-generation sales technologies that are able to go beyond operational efficiency and provide the same degree of analytic-based insight to CROs that marketing technology provides to CMOs.

Top of the list are technologies that can enable more intelligent quoting for complex products (where configuration can be highly time-consuming and prone to expensive errors), and some good examples of this are products like heavy equipment or high-tech medical devices.

Arming sales executives with the tools they need in order to support these kinds of purchases, replete with information not only about the product, but about the specific needs of that customer, can slash the time needed to respond correctly to a request. Studies show that delivering highly personalised responses to buyers not only increases win rates, but also increases the value of the sale. Customers are much more likely to pay additional for something if they know that the product being offered is personalised to them and designed with their specific needs in mind. This includes the product itself, how it’s packaged, how it’s delivered and how it’s priced.

Driving the bottom line together

Yet, all these changes are indicative of a more profound change that looms on the horizon for financial services firms.

Aligning marketing and sales has long been a challenge that has vexed the c-suite. At their heart, misalignments often arise from a lack of common understanding regarding the nature of their customers and the market needs. And these misalignments are expensive and disruptive, wasting time, effort, and opening cracks in customer satisfaction that agile competitors can exploit to steal market share.

But what if sales and marketing had a common, clear, and consistent understanding of their customers and their needs? What if, instead of arguing about messaging and focus, sales and marketing teams were completely aligned?

One of the keys to achieving this will be sharing the same big data lake and analytic/AI engine to give rise to a unified and common sense of the who, where, what, and how of customer engagement. This changes everything – because now the entire business becomes a single, focused unified force to deliver precisely what the customer needs, every day, with every interaction.

It might seem ironic that technologies such as big data, cloud platforms and AI will serve to transform the most ‘human’ aspects of financial services sales and marketing, yet this is exactly what’s starting to happen. What’s more, freed of disruptive disagreements about what customers want, businesses can finally start to align all their energy into delivering a customer experience that sets them apart.

So, while the CMO might be getting the lion’s share of the tech budget today, we expect to see more sharing with other teams to happen in future. Of course, adopting this more hybrid sales model might bring cultural, organisational, and even revenue implications with it, but the rewards on offer couldn’t be clearer.

offshore
BankingCash ManagementOffshore

5 Reasons Why You Need To Bank Offshore

offshore

5 Reasons Why You Need To Bank Offshore

Offshore banking is often associated with negative connotations in regard to tax evasion and criminal activity, but this couldn’t be further than the truth. Despite what you may hear, offshore banking is completely legal. Put simply, they’re bank accounts held in a country other than the one you permanently reside in.

So why do you need one? James Turner, Director at York-based Turner Little, takes us through the benefits of banking offshore.

They’re not just for the ultra-wealthy

A common misconception is that offshore banks are just for ultra-high net worth individuals, who want to hide their money. Anyone can benefit from using an offshore bank account, depending on what their needs are. At Turner Little, we work with our clients to specifically identify their needs, and tailor our solutions based on our extensive experience and understanding of the banking industry.

They’re safe

Offshore banks are often considered to be politically and economically stable, with any associated risk considerably reduced. Using an offshore bank, based in a highly regulated, transparent jurisdiction that offers individuals an element of protection with a deposit compensation scheme, enables you to feel safe in the understanding that your wealth will be protected from the risks of capital accessibility restrictions, control and potential currency devaluation.

 
They provide flexibility and control

Banking offshore is completely flexible, often offering the same high level of service you would expect with traditional, onshore banking. It has always been a successful way of ensuring you maintain control over your long-term finances, which ultimately means you have greater freedom without depending on any one country. This convenience and flexibility is especially relevant for those who travel regularly, or have international assets.

You’ll always have easy access

Offshore banks have evolved over the last decade, and offer 24/7 online banking. This means that no matter where you are, you’ll always have easy access to your funds. Depending on which bank you choose, you’ll also have access to accounts in multiple currencies, allowing you to manage accounts and automate payments whenever you need.

You’ll be able to build on your investment portfolio

Many countries offer tax incentives for foreign investments and provide you with a wide choice of both funds and investments. There is no shortage of opportunities that are fiscally sound, designed to promote a healthy investment environment and, most importantly, legal.

m bills
BankingWealth Management

Slovenian mBills Pioneering with the Next Step in Mobile ePayments

m bills

Slovenian mBills Pioneering with the Next Step in Mobile ePayments

Innovation in the Fintech space can come in many forms. Whilst the idea of seamless mobile payments is far from a novel one, with many firms around the world moving to capitalise on a growing demand for accessible financial services, mBills mobile wallet has swiftly differentiated itself in the Slovenian market. Eager to find out more, we spoke to CEO, Primož Zupan to find out more about their expertise and services.

Fintech, long associated with swift moving developments and a certain innovative spark, has been the great driver of change in a comparatively sluggish market. Where brick and mortar giants have been slow to adapt, leaner more proactive entities have seen exceptional success through an ability to cater – intrinsically – to ever-changing consumer behaviour. This is where mBills have secured their success.

Indeed since 2015, mBills has been providing cutting edge solutions in the e-payment space. Through utilising mobile smartphone technology, they have, essentially, put the consumer at the centre of every transaction – giving them back control of their finances. This is especially important when considering the market that mBills primarily operates in – Slovenia. As Primož discusses, the novelty of mBills services helped them to quickly forge an impressive reputation in the industry, “mBills was the first mobile app on Slovene market to introduce mobile wallet solutions to its users and has since than implemented and significantly expended variety of solutions, constantly keeping the user and the best possible user experience in the centre of development.

“The vision of mBills is to give the user a complete control and overview of finances, so that paying, purchasing or ordering financial products will be at the user’s fingertips in one app, regardless of the bank, communications provider or operating system.” This user-centric ethos has resulted in mBills experiencing a burgeoning client base of consumers eager to make use of the company’s ‘next-generation’ approach to financial services – as Primož continues. “Our user database is steadily growing, and we have received huge positive feedback from both users and thought leaders of the industry. The ultimate vision of mBills is to give the user a complete control and overview of finances, so that paying, purchasing or ordering financial products will be at the user’s fingertips in one app, regardless of the bank, communications provider or operating system.”

“mBills mobile wallet is available to everyone and at any time – whatever the bank, operating system and mobile operator.”

Through their ‘all in one’ app, users can make quick and easy point of sale payments, pay monthly invoices, and manage their e-wallet, ensuring that budgets are followed, and finances are maintained. Moreover, through their partnerships with cash programs such as mintPOS, VASCO and microGRAMM, mBills has ensured their longevity for the years to come.

“As a fintech start-up MBILLS is basically run by a team of enthusiastic individuals who put their heart and soul in the product. We all share the same vision and complement each other to reach it faster, therefore staying ahead of the competition.”

All in all, mBills is a firm with the future firmly in mind. Even among the competitively crowded ePayment landscape, they have distanced themselves from the competition by prioritising the user experience. It’s a mindset that has proved to be the key to the firm’s enduring success and looks set to secure their longevity in the years to come.

Specifically, for Primož, the future sits with development of the app’s integration and features: “We plan to expend the variety of features in the app that will further cater to the needs of our users – making mBills the only application you need on your phone for keeping a track on your finances, enabling savings, donations, ordering financial products, supporting different loyalty programs, purchasing etc. Ultimately, we aim to fulfil our promise to become a ‘digital solutions’ provider. These multiple in-app solutions will simplify user’s everyday life. The future of mBills looks very exciting .”

offshore banking
BankingOffshoreWealth Management

Offshore Banking: Breaking The Taboo

offshore banking

Offshore Banking: Breaking The Taboo

It’s not what you think. Offshore banking is often slandered, and most commonly associated with tax evasion. But this begs to question – what do people really know about offshore banking? James Turner, Director at York-based Turner Little tells us everything we need to know about offshore banking.

“Offshore banking, simply put, is banking done in a country other than the one you live in. That’s it. It doesn’t mean tax evasion, it doesn’t mean hiding money, it doesn’t mean fraud, it’s perfectly legal – and convenient.

“There are both financial and legal advantages to banking offshore. At Turner Little, we recommend clients consider the why, before they consider the where. Banks in certain countries tend to be less stable, whilst other offshore jurisdictions are incredibly stable and provide easy account set-up and access online.

“One clear benefit is having access to a multi-currency account. If you have international financial obligations, the ability to transfer money between currencies is a relatively fast and painless experience, with some offshore banks able to provide competitive rates in comparison to regular banking services.

“Depending on the bank you choose, offshore banks can act as a private banking facility, where lending and credit facilities can be more flexible and tailored specifically to your needs. A good offshore bank will also be able to provide you with a wide array of funds and investments that are appropriate to your risk profile and the outcomes you want to achieve.

“Offshore banking is also one way you can ensure your financial information is kept private. It’s also a way in which you can protect your assets against financial instability. Offshore banking works if you use it correctly, and if all the documentation is correct – this is where we come in. At Turner Little, we familiarise ourselves with the regulations necessary for compliance in a multitude of offshore jurisdictions – so you don’t have to. When the rules are followed, offshore banking is legal and gives you the means to better protect your assets, providing you with both financial strength and freedom.” 

insurance cost
Cash ManagementInsurance

Five Ways To Save Money On Fuel This Christmas

insurance cost

Five Ways To Save Money On Fuel This Christmas

As all motorists will know, fuel prices are one of the many hidden costs of owning a car, and with fuel prices set to reach a six-year high, now is the perfect time for motorists to start thinking about how to get the most out of their tank.

To help motorists cut costs over the festive period, the UK’s leading car parts provider, Euro Car Parts has shared their top five ways to save fuel by driving more efficiently.

 

  1. Drive at one speed through speed bumps

Some driving styles can mean extra fuel is used when driving over speed bumps, and learning how to properly tackle them could save motorists a lot of money. 

Motorists can avoid any unnecessary fuel consumption by driving at a constant speed between bumps. Accelerating or braking too often in between speed bumps is when most fuel is used. 

 

  1. Don’t overfill your tank

It might be common knowledge that carrying excess weight reduces fuel efficiency, but did you know that overfilling your tank can actually make your car less efficient?

Although it seems counter-intuitive, brimming your tank will lead to extra fuel being used to transport the extra weight, and by only filling it up to half full you can cut extra weight and save money in the process. 

 

  1. Managing your revs

Most drivers barely look at the RPM (revolutions per minute) count when changing gear and rely on the sound or ‘feel’ of the engine. However, in doing so, you could be over-revving without even knowing, and wasting precious fuel with each gear change.

The most fuel-efficient RPM to change up a gear is 2,500 for a petrol car and 2,000 for diesel. So next time you’re changing gear keep an eye on the revs count, stick to that number and the pennies you’ll save will soon stack up.

Additionally, try to avoid dropping your revs too low, as this could cause unnecessary strain on the engine and waste fuel. Staying above 1,500 revs in petrol and 1,300 in diesel cars should comfortably avoid this.

 

  1. Slow down on high-speed roads

Driving at high speeds down dual carriageways and motorways means your engine is operating at a higher RPM than it is on slower roads. 

However, by simply slowing down a little on those fast roads you could end up saving a lot of money. The most efficient speed to drive at is between 55-65mph, and driving at 70mph compared to 80mph could save you 25% more fuel.

 

  1. Turn your engine off

It might seem obvious, but it’s worth remembering that keeping your engine idle whilst stationary and not using your car still burns fuel.

Leaving your car running on a cold winter’s morning, or keeping the engine on whilst sat in stationary traffic, wastes a lot of unnecessary fuel. If you know you’re going to be stationary for some time, it’s a good idea to turn off the engine to conserve your petrol or diesel.

Chris Barella, Digital Services Director at Euro Car Parts, said: “Driving more economically can save a lot more money than drivers may realise. By following these tips not only are you kinder on your wallet, but you’re also helping to cut down on unnecessary emissions”.

For more information on driving efficiently and saving fuel visit during the winter months visit: https://www.eurocarparts.com/blog/top-5-winter-driving-tips

divorce
Family OfficesHigh Net-worth IndividualsReal Estate

Divorce: Jurisdiction and Financial Relief Applications

divorce

Divorce: Jurisdiction and Financial Relief Applications

By Stephanie Kyriacou, associate in the family team at law firm, Shakespeare Martineau.

Many high-net-worth individuals (HNWI) lead truly international lifestyles, travelling the world, owning multiple residences and holding assets all across the globe. However, whilst this internationally-mobile way of living certainly has its benefits, for couples navigating the emotional process of divorce, dealing with multiple legal jurisdictions can often cause issues, particularly if one side of the divorcing party has been unfairly treated by the foreign courts.

Luckily, if an individual believes that they have suffered financial hardship as a result of a financial order in a foreign jurisdiction, there may be an avenue which they can pursue to balance the scales, provided by the English and Welsh courts. The UK’s legal system has long been considered one of the most fair and agreeable around the world in terms of settling financial matters upon divorce, and there is a reason why London itself is known as the ‘divorce capital of the world’.

Sadly, the foreign courts are often not as generous as their English and Welsh counterparts and the disparity between the sums awarded can often result in extreme financial hardship for spouses who get the raw end of the deal.

This access to financial relief in the UK revolves around Part III of the Matrimonial and Family Proceedings Act 1984 (MFPA 1984). This act allows spouses who have been divorced overseas, and who have a proven connection to the UK, to access financial remedy in the UK, if they have been treated unfairly by foreign courts and have exhausted all avenues to correct that unfairness in that overseas court.

However, whilst this piece of legislation can offer a lifeline to those individuals who have not received adequate financial provision in an overseas jurisdiction, there are a number of criteria which need to be met before an application can be made under Part III of the MFPA 1984. The application itself is a two-stage process and the applicant must first apply for permission (leave) to make the application. The factors the court will examine when determining whether to allow an application to proceed to the second stage can be found in sections 15-16 MFPA 1984. If the applicant is successful at the first stage, they will proceed onto the second stage, whereby they will go on to make the substantial application for financial remedy.

When determining whether to make an order, the court will base its decision on the connection that both parties to the marriage have with England and Wales, and with the foreign court, as well as any financial benefit which the applicant or a child of the family has or will receive as a consequence of the foreign divorce. Other factors which will be considered include any rights that the applicant has, or has had, to apply for financial relief from the other party under the foreign court – including reasons why they may not have done – as well as the availability of any property in England and Wales and the extent to which an English order will be enforceable, along with the elapsed time since the foreign divorce.

Whilst putting the wheels in motion as soon as possible after the foreign divorce has been granted is preferable, the case of Z v Z [2016] EWHC 911 is authority that even with a five-year delay, a court will still consider an application if the other criteria are met.

Whilst the requirements for making at Part III application may seem quite complex, at face value they centre on being able to evidence a strong link to the UK, either through residency or assets. The case of Agbaje v Agbaje [2010] UKSC 13 is the leading authority in this area and a provides a good illustration of how a Part III application for financial relief can be made, and what the courts will be considering when choosing whether to grant an application. In this case, the husband and wife were Nigerian and had been married for 38 years, with assets totaling circa £700,000, much of which were tied up in two London properties. All five of their children were born in London and the couple had spent large chunks of their life in England. Despite the wife living in London, the husband applied for a divorce in Nigeria and his wife was awarded £86,000 worth of property assets in Lagos, and £21,000 as lump sum maintenance payment. Not happy with this financial award, the wife issued proceedings under Part III of the MFPA 1984 and was awarded 39 percent of the couple’s total assets, allowing her to carry on her life in London.

This is a relatively common situation which is experienced by a large number of the spouses of HNWIs, but should give hope that in the event of hardship or mistreatment in divorce proceedings handled by a foreign court, there is a safety blanket offered by the MFPA 1984. Whilst many high-net-worth individuals will have factored pre-nuptial agreements into their marriages, which include clauses dictating where they would like their divorce heard in the event of a relationship breakdown, some will not, and it is those who the English and Welsh legal system supports through this channel.

engineering
FinanceTax

UK Engineering Companies Are Potentially Missing Out On £10 Billion Of R&D Funding Each Year

engineering

UK Engineering Companies Are Potentially Missing Out On £10 Billion Of R&D Funding Each Year

 

Engineering companies in the UK are potentially missing out on over £10 billion of R&D funding each year, new research has revealed.

The study[1], commissioned by innovation specialists MPA for Advanced Engineering 2019, found that one in five (21%) innovation active engineering firms are not taking advantage of the government’s R&D Tax Credit scheme, which allows companies to claim back up to 33p for every £1 spent on R&D activity.

On average, engineering companies invest £386,000 a year on R&D activity, meaning they are potentially able to claim £100,360 in funding[2]. With over 100,000[3] UK engineering firms not claiming, despite describing their company as innovation active, a staggering £10.2 billion is going unclaimed each year.

Reasons for not claiming the funding vary, but the most common answer given by engineers is that they don’t believe their companies are eligible (10%).

However, the research revealed that many engineering companies probably qualify without them realising. Some examples of indicative qualifying activities are, if your company develops new processes to improve efficiency, quality or performance; overcome unplanned technical difficulties or create bespoke solutions for clients.

Two-thirds (67%) of workers think that their firms are ‘innovation active’, which is the most accurate indicator that a company is eligible for the R&D Tax Credit scheme. Despite this, only a third (37%) say that their companies claim the available funding.

Another barrier blocking engineers from claiming is a lack of awareness about the initiative. Nearly a quarter (24%) of the surveyed engineers who aren’t claiming admitted that they didn’t even know that the scheme exists. Even among those who think they are innovation active, one in fourteen (7%) said that they were completely unaware of R&D tax credits.

While many are yet to take advantage of the scheme, engineering companies in the UK are planning on investing heavily in research and development. Over the next year, over one in five (22%) businesses in the industry are planning on spending over £1 million on innovative projects.

Nigel Urquhart, Senior Technical Analyst at MPA, said: “Engineering companies in the UK are respected all over the world for their quality and innovation, but a worryingly low number of them are claiming the R&D funding they are entitled to.

“Our research has highlighted that more work needs to be done to raise awareness of the R&D Tax Credit scheme, as these innovative companies could save themselves hundreds of thousands of pounds. This money could then be reinvested to fund further innovation, which would ensure UK engineering stays at the forefront of the industry.”

 

To see whether your company is eligible for the R&D Tax Credit scheme, visit:  https://mpa.co.uk/services/rd-tax-credits/

[1] Survey of 250 UK engineers conducted by The Engineer on behalf of MPA in September 2019

[2] R&D tax credits calculator: https://mpa.co.uk/services/rd-tax-credits/

[3] Office for National Statistics: ‘Engineering Industry in the UK’ (December 2018) – there are 721,940 active engineering enterprises in the UK. 485,143 (67%) of these are innovation active. 101,880 (21%) of these innovation active companies are not claiming R&D funding: //www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/adhocs/009383engineeringindustryintheuk

boring money
BankingCash ManagementTransactional and Investment Banking

New Charges Calculator Tackles ‘Shocking’ Lack of Clarity in the Investment Industry

boring money

New Charges Calculator Tackles ‘Shocking’ Lack of Clarity in the Investment Industry

Consumer investment site BoringMoney.co.uk has launched an independent fee calculator which provides investors with a single simple £ fee across 20 leading platforms and robo advisors.

According to research from the company’s 2019 Online Investing Report, two thirds of investors are not fully confident they understand what fees they are currently paying. Additional Boring Money testing shows that even those who feel confident often miscalculate in reality, as a result of complex fee structures and ambiguous additional charges.

Holly Mackay, CEO of Boring Money commented: “Trying to work out what we pay for investment services remains shockingly difficult. Customers tell us they want to see a single £ fee, but instead they have to build complex Excel spreadsheets with multiple inputs to try and work out what each provider costs.”

The Investment Fee Calculator – found at www.boringmoney.co.uk/calculator – enables investors and would-be investors to compare fees across 20 leading investment providers. In an industry first, the calculator also pulls in both customer ratings and the Boring Money rating so that customers can choose whether to focus on price alone, or take a broader view of the service.

Although designed to be simple to use – with pre-programmed assumptions for those who don’t know how many trades a year they make, or how exactly their investments are split between funds and shares – more experienced investors can override these assumptions to tailor the calculations more accurately.

Alongside the unveiling of the calculator, Boring Money is also launching a campaign for fairer fee disclosure.

Mackay says: “There’s endless talk and very little action. We know that customers want to see fees in simple £ amounts. We know they want to be able to compare.

“We are calling on the industry to improve this fundamental part of disclosure and acknowledge that transparency is not the same as clarity. We think every part of the chain – from platform to asset manager – should have some way for consumers to understand in simple £ terms what any given investment would cost. So they can make informed and confident decisions.” 

The campaign comes against the backdrop of the FCA’s recent Investment Platforms Market Study, in which the regulator very clearly stated that it expects the industry to show “progress in making charges more accessible and comparable for consumers who are shopping around”.

Major players in the industry have shown support for Boring Money’s cause.

Andy Bell, Chief Executive of AJ Bell Youinvest commented: “Seeing an investment platform’s charges in pounds and pence is significantly easier for people to understand than percentages. It’s something we’ve provided on our website for a while now and the Boring Money calculator is a good addition to research tools available to investors.”

Highlighting the importance of understanding fees, he added: “Price isn’t everything of course and people will also want to look at service and the reputation of the platform provider, but making sure you have the best value platform for your needs can save thousands of pounds over a long term investment.”

fintech
FX and PaymentTransactional and Investment Banking

New Financial Technologies Are Changing Lives

fintech

New Financial Technologies Are Changing Lives

By Ronald Miller, CEO, Paysend

Fintech is revolutionising traditional financial services and helping to change lives. PwC, the professional services firm, reports that the majority in the banking sector believe at least some part of their business is under threat by the fintech revolution. 

New fintech firms are disrupting traditional financial services and are giving birth to a whole new generation of starts ups.These start ups are changing the way we move money around the world with significant and positive economic and social implications.

Most financial services used to be the preserve of big businesses.  Now new technologies are automating processes, reducing start-up costs and making it possible for challenger brands to disrupt this industry. However, the changes we witness are creating far more than a shift of power from big business to new players in the sector. 

Fintech is giving consumers greater control of how they pay, hold and spend money.  It is creating a revolution in the way that funds move between people and countries. Global money transfers, where workers in one country send money to their families back home, is not a new phenomenon. 

However, World Bank figures show that there are now 270m people globally who live outside their home country, sending an estimated $689bn home.  This is almost ten times as much as it was in 1990.

Very often these transactions are life changing for those that send or receive them. Money earned in the UK often goes further in emerging economies.  Some of it goes to provide seed money for small enterprises and family businesses.

Global money transfers will soon overtake foreign direct investment as the biggest inflow of capital into developing countries.  In some countries, the money received will represents a third of their total GDP.

Technology has helped foster this dramatic rise. What was once a laborious, slow and expensive process to move money across borders is now simple, quick and low cost. Fintech has made it easier than ever to move money around the world. 

Over the last two years, at Paysend we’ve helped nearly 1.3m customers transfer money to more than 70 countries worldwide. We grow by each day as more people use our service for instant and flat-fee transfers. We believe in the power of technology to ease money transfers to allow more people to benefit from it and as a result imnprove their lives.

Ronald Millar is CEO at Paysend, the UK-based global fintech company, with a unique card-to-card money transfer technology, serving 1.3m customers worldwide.

telecoms
Cash ManagementFundsMarketsTax

UK Telecoms Industry Boasts Fastest Growing R&D Spend Of Any Sector

telecoms

UK Telecoms Industry Boasts Fastest Growing R&D Spend Of Any Sector

The telecoms industry is the UK’s fastest growing sector when it comes to spending on R&D, the latest ONS data has revealed.
Telecoms businesses increased their spending on research and development by £192m to £947m, according to the latest statistics for 2018 which were released recently.

This was a rise of 25.4%, taking it to a four-year high. However, the sector is still some way off its all-time high of £1.5bn set in 2007, analysis by R&D tax relief specialist Catax shows.

Total R&D spending by telecoms firms totalled £755m in 2017 and £797m in 2016.

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising £1.4bn to £25bn in 2018 — up 5.8%. Manufacturing was associated with £16.3bn of R&D spending, up 4.7%, but pharmaceuticals remained the biggest product group with £4.5bn of R&D spending, up 3.3%.

The number of staff employed by UK businesses also continued to grow, rising 7.3% annually to exceed 250,000 full-time equivalents for the first time.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said: “The telecoms industry is extremely important to the UK strategically and it is reassuring to see such growth in investment.

“There is still some way to go if this investment is to recover to levels seen before the financial crash, however, and it is vital this happens if Britain is to continue to be a key technological player on the world stage.

“More broadly, this is the second full year that Brexit Britain has shrugged off the political poison after the EU referendum and posted great gains in terms of R&D investment, running head and shoulders above the long-term average.

“For the first time in history a quarter of a million people nationwide are engaged full time in keeping the UK at the cutting edge. This is going to make a huge difference to Britain’s prospects outside the EU.

“The rate at which UK businesses are adding R&D staff to the workforce remains impressive, virtually matching the previous year with a rise of 7.3%.”