Category: Cash Management

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Marketing Expense Management for Start-ups: a How to Guide

One of the most essential aspects of any company start-up, is your business marketing. How you manage your marketing can be pivotal to the overall success of your company, and how well it develops and grows.

One key part of this vital process is knowing how to effectively manage start-up’s marketing budget.

In this article, you’ll receive a how to guide on marketing expense management for star-tups, including what the process is, and how expert software can help optimize how you conduct it.

What is marketing expense management?

Marketing expense management is the process in which you handle all of the marketing expenses throughout your business.

Marketing is crucial for any business – particularly a start-up – so there can likely be many different transactions and payments being made across the company to support your marketing efforts.

For instance, you might be paying for a software which aids your marketing process, paying companies to advertise your business, or purchasing resources to develop your marketing team.

Regardless of what they are, all these different marketing expenses need to be effectively managed by your company, to ensure you maintain a firm grip on how much corporate spend is being funnelled into this area of the business.

This can include tracking every transaction made across the company, uploading any receipts, monitoring the regular spending on certain services, and various other aspects of marketing expenses.

One of the best ways to help you conduct marketing expense management, is to implement spend management software.

This expert tool helps boost the process with a more effective and efficient way of handling your marketing expenses, as well as offering a range of features to enhance how you control your spending, all from one central platform.

How to use spend management software to enhance your process

There are many different ways spend management software can help you better manage your start-up’s marketing expenses. Here’s how to execute a few of them:

Implement spend controls

One of the best things to do when using your spend management software is to implement spend controls on your marketing expenses.

These are useful features which give you a firmer grip on how your money is being spent on marketing.

For example, you can use the software to set spend limits across all of your marketing efforts. This means that any transactions which overstep your set limit will be automatically prevented, and you’ll be notified promptly.

This will ensure that no transactions within your marketing efforts are out of your control, and every expense can be tailored to suit your start-up’s needs.

Gain full visibility on budgets

Another highly important aspect of marketing expense management is having full visibility on budgets across your company.

In order to effectively manage your expenses, you need to be fully aware of each and every budget you’ve set for your marketing efforts, and how well they’re being followed.

Your software can achieve this for you, with real-time data on every marketing expense, including what was paid for, how much was spent, who completed the transaction, and how much of a particular budget has been spent.

This is vital for showing you how closely your start-up is sticking to budgets, so you can make any necessary adjustments as you see fit, and stay on top of your corporate spend.

Adhere to meaningful spend insights

Spend management software not only helps control your marketing expenses, but goes one step further in showing you how you can make them much more cost-efficient.

The software will offer detailed insights for each of your expenses, providing useful information on where you could be optimizing the way you spend on your marketing.

For instance, you may be paying for a particular software subscription that assists your marketing efforts. The spend management software can reveal any cheaper alternatives to your current software, so you can gain a similar service for a cheaper price.

This is great for helping you maintain a consistent eye on how effectively you’re spending on your marketing, and you’ll always have new avenues for more cost-efficient expenses.

Marketing expense management can be complex, but with the right spend management software in place, the way you manage your spending can evolve alongside your business start-up.

ArticlesCash Management

The Financial Challenges of Running a Hotel

Hospitality is one of the most lucrative and competitive sectors in business, but successfully running a hotel can be difficult to say the least. Many different factors from marketing (which is increasingly digital) to organisation contribute to a hotel’s success and having a general understanding of how they affect your business can help minimise any challenges.

Prospective hoteliers would be smart to keep ahead of any potential hurdles, but don’t worry if you’re not sure what to keep an eye out for. Take a look at our tips that can help your hotel stand out and run smoothly.

Responsibilities

The list of responsibilities when running a hotel is never-ending, but some stick out more than others. Keeping your customers and employees safe comes to mind immediately. Despite your best efforts, things can go wrong and that’s why it’s important that you have the right insurance for your hotel in place.

Customers are unlikely to return if they feel unsafe in your establishment. It will also have a negative impact if the property is seen to not be properly maintained. This could lead to avoidable accidents occurring and people suffering injuries on your premises.

The importance of advertisement

With COVID lockdown and restrictions being lifted, the hotel sector is busier than ever. One way to stand out from your competitors and generate interest in your brand is by investing in sophisticated advertising campaigns and developing a strong storefront.

Let potential customers know what you’re offering and how it sets you apart from competing hotels by developing an optimised website and using techniques such as marketing automation. Social media is a great tool you can take advantage of to build your reputation and encourage customer loyalty by providing personalised offers.

There are so many different ways to market your hotel that can help drive up your website traffic and create a boost in revenue from bookings. The more eyes on your hotel/brand the more bookings you can expect.

Ask what your customers think

The best way to stay on top of what needs improving and what is running well in your hotel is by asking customers about their stay. Building on any constructive criticism will only lead to higher standards of service and increased bookings.

Positive reviews are the lifeblood of the hospitality industry. The more confident customers feel in their decision to stay with you, the more likely they are to book with you again or recommend your establishment to friends and family. In fact, it was revealed in a study that 76% of hotel-goers were willing to pay more for a hotel with higher reviews.

Make sure to pass over a card with the hotel’s information for multiple review platforms and encourage customers to provide feedback when they check out.

Having said that, feedback is only half of the whole point of getting it in the first place. You will need to take action to the best of your capability in order to turn any criticism into more positive reviews.

ArticlesCash Management

Pros and Cons of VoIP – A Comprehensive Cost Comparison

The financial side of VoIP telephony is one of the major selling points. But if you’re primarily concerned with the cost implications of moving away from old-school calling solutions, you need to know the full story to make the right decision.

To that end, let’s talk about the upsides and issues with VoIP packages and products, focusing on the expense involved in adopting and perpetuating such a system.

Why VoIP is a good investment

There’s no denying that, as the uptake of VoIP increases worldwide, it makes more and more sense to take the leap and do away with traditional phone infrastructures. The positive aspects include:

Significant savings on voice calls

Whether you’re making calls to local, national or international numbers, the cost of your conversation will be significantly lower if you’re using a VoIP service.

Lower hardware costs

Knowing your startup costs is necessary if you want your business to thrive, and the prospect of having to install and maintain a complex on-site telephone system might unbalance your budget and derail your plans altogether.

VoIP is far more frugal, since all you need is an internet connection and a modern computer or mobile device. Software can handle the rest, and the entire infrastructure which would normally make up an in-house exchange can be hosted remotely on the cloud.

Impressive scalability

The thing that makes VoIP the best phone solution for your small business is that it won’t just serve you well today, but will represent good value as your company grows and prospers.

Because everything is hosted remotely and overseen by a provider with far more resources than you could muster for the purpose of keeping your phone system up and running, when you need to add support for more agents and devices, this can be done at the drop of a hat.

And of course with scalability comes financial viability; you won’t need to calculate future needs and over-provision today in the expectation that this will serve you better in the future. Instead your costs will correlate with your needs, and your budget can be kept lean and mean as a result.

Innate flexibility

As with any cloud-powered product, VoIP isn’t affixed to just one location, but can be accessed from anywhere.

If you need to take voice calls on the move, or you want to support a workforce for whom remote working is now the norm, a good VoIP package will have you covered.

Where VoIP isn’t perfect

If you’re creating a budget and you don’t know if VoIP will fit into this, you need to know about the downsides as well, such as:

The potential for outages

Because VoIP services are all based on having always-on internet access, network downtime becomes a single point of failure that you might not be able to tolerate.

Since the costs of downtime quickly spiral upwards, you need to be confident that your particular connection is robust and resilient enough to minimize these risks. You may also benefit from having a backup plan for if the main connection is taken out of action unexpectedly, so that your operations don’t grind to a halt.

The relevance of security

Another concern relates to how secure any calls you make over a VoIP service will be, and this is down to the reputation of individual providers.

The cost of recovering from a breach is steep, so it’s better to only put your trust in brands that have proven themselves in the face of cyber threats.

Wrapping up

On balance, VoIP is definitely a good investment for businesses, and will justify itself through cost savings and scalability, regardless of any perceived flaws it might have.

ArticlesCash Management

Will Self-Driving Vehicles Eliminate The Need For Auto Insurance?

Auto insurance is a large industry, with millions of policyholders, and new people buying car insurance policies every day. The traditional market for auto insurance policies has remained the same for decades. But a change is coming, and it is being brought by machines.

There has been a rise in the number of cars that can drive themselves with little or no human input. “Driving itself” is very liberal use of the words, as these cars are not completely self-driving. But what they can do is very impressive and promising.

For example, cars from Tesla are capable of driving at a constant speed, detecting incoming cars, cars in front, and any things that come in between. It can stop, slow down and even change lanes depending on the challenge ahead.

While the company says that a human needs to be active while the auto-driving feature is on, the day is not that far ahead when cars with complete autonomous driving will be available. It will make driving more productive, but what about auto insurance?

What would happen to the auto insurance market when self-driving cars are as common as a Honda or a Toyota? Will self-driving vehicles eliminate the need for auto insurance? Let’s find out.

The State of Self-Driving Vehicles

Not many cars today come with self-driving capabilities. One can only think of a Tesla when thinking about self-driving cars. But some other features are very basic, yet come under the self-driving category. ADAS, for example, is one such feature that offers some self-driving capabilities, albeit very basic.

When it comes to a car being completely driven by itself, the most advanced mass-produced car is from Tesla. But it is very far behind from becoming truly autonomous. Tesla is considered to make level 2 autonomous cars.

Five levels define the capabilities of self-driving cars. Level 0 is not autonomous at all level 5 is completely autonomous. A level 5 car will not require any human interaction and will drive itself just like humans drive. Tesla is at level 2, so there’s a long way to go.

Risks of Accidents

The safest way of transportation is air travel. With millions of flights around the globe every year, only a handful of accidents are reported. The most unsafe way to travel is by road. Now if we try to correlate something, we get to know that when machines drive, travel becomes much safer.

Since planes are almost always self-drivers with a high level of autonomy, they are quite safe. This is not the only reason why planes are safe, but a big contributing factor.

There is no doubt that cars with better artificial intelligence and self-driving capabilities will reduce the number of accidents and make the roads safer. With the reduced risk of accidents, the number of cars would also increase. But would you still need to buy auto insurance?

Need for Auto Insurance

The entire auto insurance industry works because of the high risk of road accidents. You buy liability insurance to ensure that you do not have to pay for the other driver’s medical treatments and repairs.

Similarly, collision and comprehensive policies are bought just because cars are very likely to get damaged in a road accident and the cost of repairs is always very high. But what happens if the rate of accidents plummets? Since there are hardly any accidents, the price of repairs will also go down.

In this case, would anyone buy car insurance policies? Today, the most advanced autonomous car regularly seen on the roads is Tesla. But Tesla does not eliminate the need for auto insurance. You still need to get all the important auto insurance policies like liability insurance, personal injury protection plan, etc to legally drive a car.

Tesla cars also get in accidents, even in autonomous modes. But a level 5 self-driving car will be smart enough to drive itself while avoiding any car accidents. And if all the other cars come with the same capabilities, with better roads and intelligent monitoring systems, road accidents will truly become rare.

But auto insurance would still be around, but not as expensive as it is today. Perhaps you would be able to pay all the different policies (liability insurance, collision, comprehensive coverage, personal injury protection plan, etc) at just $200-$300 per year. How do we extrapolate this data?

Take a look at comprehensive coverage. While it covers theft and other human-induced damages, many people buy comprehensive coverage to cover the cost of damages due to earthquakes, fires, floods, hurricanes, etc.

The chances of your car getting damaged in a natural disaster are very low, yet people get this policy to be on the safe side. Comprehensive coverage is also quite cheap, so it doesn’t hurt the wallet too much. This will be the condition of all car insurance policies when self-driving cars are everywhere.

But that utopia is far ahead, at least 10-15 years from now. Today, you need to get multiple policies and pay a hefty price for them. Avoid paying too much for car insurance policies by comparing multiple vehicle insurance companies and getting quotes from them.

Be specific about the search as well. For example, if you live in Wisconsin, look for cheap car insurance companies in Wisconsin and select the company that offers the best coverage at the most affordable price. Remember to not put too much weight on just the affordability. The insurance policy must also provide great coverage.


ArticlesCash ManagementCorporate Finance and M&A/Deals

Breaking Down & Overcoming The Stock Market Anxiety Syndrome

The stock market is a major source of anxiety for many new investors. That’s primarily because of how easy it is to lose money while trading stocks.

That being said, while stock market losses are pretty common, the vast majority of losses traders suffer are actually caused by having anxiety in the first place.

That’s because, when you’re anxious, you tend to second guess yourself and make irrational decisions which can lead to devastating losses in the stock market.

So if you’re looking to start investing in the market, you need to understand that you’re entering uncharted territory – and the only way to succeed is to curb your anxiety and fear of the market.

With that said, here are some tips on how to get rid of your fear of the stock market.

Learn And Educate Yourself

Having a wealth of knowledge about various aspects of stock market trading can help you avoid the anxiety that comes with putting your money on the line.

Learning more about the market’s impacts on the economy, shareholders, companies, and the government might also help you feel less anxious during your forays into the market.

Set Financial Objectives

A great way to overcome stock market anxiety is by establishing financial objectives and designing safe investment strategies that can help you reach those goals within a reasonable enough time frame.

Setting these objectives doesn’t have to be difficult – a great example of a financial goal is planning to have an estate worth $1 million by the time you are 65 – which is not particularly hard to do with the right strategy.

By establishing these objectives, you can face your fear head-on and overcome your investment anxiety with a precise plan designed to grow your wealth. 

Never Invest More Than You’re Willing To Lose

A major reason why many investors are fearful is because they invest more than they’re willing to lose.

Many investors go as far as putting their entire life’s savings into the market hoping to secure a huge profit.

It’s important to note that while betting the farm can yield incredible gains in the market, it comes at the cost of your peace of mind, as you’re likely to find yourself constantly worrying about how your investment is going.

If you invest money that you can afford to lose, odds are you won’t constantly stress about your investment positions. 

You’ll be able to remain stoic regardless of how your trades pan out, allowing you to approach the stock market with an anxiety-free mind. 

After overcoming your anxiety, you can start trading with a trusted platform like SoFi invest

Have A Plan For Your Investment And Trades

The process of investing is much simpler with a strategy. 

While some strategies can be perplexing and ineffective, others can help you succeed. Once you feel at ease, you should gradually change your approach until you perfect it and are satisfied with it. 

It’s worth noting that if you’re not a seasoned investor, you should only opt for simple strategies.

Complex investing methods can involve much more effort and stress than simpler ones – often without producing any additional reward. 

A straightforward strategy for investing maintains your focus and protects you from being stressed or making errors. Using a straightforward technique, you can be versatile with your funds and possessions. Simple plans make it simpler to identify problems. 

You can implement alterations if you discover an issue with any of your investments. 

You may need to make modifications such as altering the shares of the firms you trade, paying a new value per share, modifying your holding approach, as well as altering your investment selection process.

ArticlesCash ManagementTransactional and Investment Banking

Best Ways to Fund Your Retirement

After a long career, you deserve the chance to enjoy a relaxing and peaceful retirement. A retirement where you get to pursue the passions you never had time for during your career. However, funding your dream retirement can be difficult. Especially if not well planned ahead of time. But there are ways of doing this aside from using your pension. Below, we will explore the various ways in which you can fund your retirement.

Plan Your Pension

For a start, you should try and calculate how much money you’d need a year to live comfortably during your retirement. This differs from person to person depending on their financial status, home ownership and family responsibilities. Either way, you should plan your pension around it. You might increase your pension contributions or consolidate your pensions with the goal of setting yourself up with the money you need for retirement.

Investments

Investments are one way you can try and grow your savings quickly for retirement. They’re volatile – and you could easily lose money – but with some careful investments, you’ll be able to better fund your retirement. If you’re unsure about what investments to make, you could seek wealth management advice from a professional. If you are young then you have the advantage of compound interest on your side, which could drastically change the course of your financial future.

Budget

Funding your retirement is a long-term process and setting up a budget can help you begin to save for it. By working out your incomings and outgoings each month, before setting aside some surplus for a savings account, you can begin to grow your retirement fund and gain peace of mind from having organised yourself so that you don’t lose track of your spending.

Equity release

Another option for your retirement fund is an equity release mortgage to increase your cash pot. This is where you sell a portion of your property’s value in return for instant capital while retaining the right to live in your home. This can be an excellent way of funding your retirement without jeopardising your future.

Work longer

For many people, funding retirement will mean working longer. The thought of having to continue your career for another few years can seem daunting, but it can provide you with the money you need to live a comfortable retirement. Deciding to work longer should be part of a wider financial plan though if it’s to be used correctly.

The importance of financial planning

Ultimately, funding your retirement is underpinned by careful financial planning, regardless of the strategy you select. Any of the strategies above should be part of a wider plan to save for the retirement you want, rather than making a sudden decision to receive a cash injection.

Saving for retirement should be something you work on over many years. And by starting your financial planning now – with some of the strategies above – you’ll be all set to work towards securing yourself a comfortable retirement.


Business plan
ArticlesCash ManagementTransactional and Investment Banking

How To Transform Your Business In 2022

Business transformation means making changes within your company in line with current trends. A lot has changed in the way we work over the last 2 years, and with the economy taking a hit in 2022, adapting to the current economic climate is essential – from implementing a marketing strategy to drive sales or updating the way you work to increase productivity – it can all have a positive impact. Read on to find out more about how you can transform your business this year.

If you’re struggling with your finances, business or personal, and you are faced with an unprecedented expense, a payday loan can help you in an emergency.

Reflect on strengths and weaknesses

Before you can transform your business for the better, you’re going to need some idea of where you need to improve. Take the time to reflect on what you think would be advantageous for your company, and what you are doing well. Make a list that is easy to refer to, and you can use this to make various changes that could be beneficial to your business. For example, if you had a business plan pre-pandemic, the plan you had in place then, may not be able to get you where you want to be now. Various aspects of the business have changed, like what customers are expecting, as well as how they prefer business to operate, e.g., contactless payments, click and collect. If you think your business has a weakness, make time to rectify this.

Update your software

If you’re operating with out-of-date, old software, updating to a new system may be advantageous to your company. Not only does this mean you can run your business smoothly, with less downtime for IT issues, but it can also enhance your company, making it easier for you to operate and store customers’ data. Modern software can open doors for your company and make your workplace more efficient. You could decide to work with a cloud computing programme, which allows for improved collaboration and gives your workforce the option to work from anywhere if they can – this can improve employee flexibility and satisfaction.

Marketing

Every business needs some type of marketing or online presence in 2022 – if you’re not promoting what you have to offer online, you could be missing out on new customers and sales. After the pandemic, a lot of businesses have had to move their sales online to ensure they’re not missing out on profit. But marketing is also important to spread the word about your business – if your company is not online, a huge chunk of your target audience won’t be able to find you. Invest in marketing and social media this year to spread the word about your company, and your products and attract new customers.

Improve communication

Whether it’s with customers or your staff, improving communication is vital. Lack of communication is one of the main reasons customers stop using a certain product or service – and it’s one of the easiest things you can do! Communicating clearly means you can be more transparent, solve issues easily and work together to come up with solutions. You can implement improved communication throughout your company by training your staff to have a productive dialogue with customers and co-workers. As communication becomes clearer, you will see a big difference in the way your company works.

Create a positive workplace

Company culture can make or break a company and the way that it runs. You should create a set of beliefs amongst your employees at all levels, in a way that increases productivity and improves positivity. You could do this by creating a reward system for your employees to show that you value their work, keep an upbeat attitude when interacting with your colleagues, as well as try your best to resolve conflicts as soon as you can. Showing your employees that they are appreciated and that you are doing all you can to make the company a better place, will improve company culture. It will also help you to retain valuable members of your team and increase efficiency.

Business plan
ArticlesBankingCash Management

4 Benefits Of Adding Commercial Lending Software To Your Arsenal

The world is witnessing massive changes in all the major industries where AI and machine learning are replacing mundane and repetitive workflow processes with automation. After initial inertia in changing to a new norm, now financial institutions are embracing digital banking solutions.

The primary benefit of adding commercial lending is increased working hours without increasing the workforce or related costs. Studies have suggested that out of an eight-hour workday a human being is productive approximately for three hours. And in a year they work for close to 240 days.

In comparison to a human being, digital solutions that are unmanned and robotic assistants can serve customers 24/7 and 365 days. Thus digital assistants or chatbot services can aid customers eight times more than a human employee. This feature alone is enough for any financial institution to adopt a commercial lending software that can integrate their databases and automate their loan origination process. On the other hand, round-the-clock service is just one of the benefits a lending business gets from transitioning to digital lending software.

To understand the relevance of digital transformation in the banking and lending business, check these benefits that are required to scale a business:-

Unified source of data

In legacy and CRM, banking data integration with different verticals for the same task is time-consuming and is constantly at risk of data theft. The compliance cost of maintaining the data integrity increases as the information is spread out. It is also difficult to understand the reports without contacting another employee to understand reports or insights on business metrics.

The digital lending solutions for consumer software have a single genesis of truth that is accessible to every authorized personnel. With neural networks and API integration, the applicability of data is enhanced in analytics. This in turn reduces the time and increases the accuracy of strategic decisions that are business-centric.

Accurate results

Loans are complex products concerning due diligence, lengthy calculations, and spreadsheets to arrive at the decisions that will boost growth. These calculations are also highly regulated and have to meet stringent risk metrics. The likelihood of human errors when making long calculations are high.

In the digital loan origination process, the calculations are done through algorithms that have been backtested. The calculations are free from errors, computed in a few minutes, and display the results on dashboards with easy infographics.

Efficient loan portfolio management

A loan cycle does not end till it is completely paid off. Each loan has to be reviewed regularly for red flags. They have to be checked for taking adequate measures to cover the additional risk that may arise during a loan. An automated loan portfolio reviews the loan constantly and sends automatic reminders to pay in time. Any change in cash flows of the borrower is reflected on a real-time basis through neural networking and API integration. Any flag will create an alert for the banker to check and address the issue immediately. Thus a banker plays an adjunct role of a consultant who can engage the borrower to focus on paying in time.

Boosts team’s productivity

A business agile approach is achieved through digital loan solutions that deter from repetitive tasks. Automation takes care of speed, flexibility, access to information, and seamless communication between different verticals and departments. Tasks, like checking and responding to emails and importing data from spreadsheets for compilation, are discontinued or minimized. They are replaced with real-time alerts that appear on the interface.

Conclusion:

With changing times and increased awareness in short periods through constant updates from parallel media, consumers are aware of the wonders and scope of AI and machine learning. The attention span and patience levels to perform a banking task by physically walking in is no longer a preferred mode. With rising consumer demands and the ability of automation tools at disposal, if banks don’t change to adapt to a digital route, then they will not only be left out of new business growth but may lose existing customer share to the pioneers of this change.

The multiple benefits like efficiency, time and cost-saving, improved customer experience and employee productivity have a sine qua non-effect on the growth and numbers of lending and other banking business. However, for a lending business to be operational, the deal breaker or maker is the ability to be risk-agile. Any process that can increase productivity but also stresses the bank’s assets are not the right proposition.

Cash Flow
ArticlesBankingCash Management

How To Improve Your Business’ Cash Flow Through Invoice Factoring

Cash Flow


Managing business cash flow can be difficult. It involves more than looking at profits and losses. It’s also about looking at revenue streams as a whole and the factors affecting them. Sometimes, an enterprise will have to wait for a few weeks for payments, and this can negatively impact your operational expenses on a daily basis.

Luckily, invoice factoring may be an option for organizations that want to quickly ensure steady cash flow. Under this scheme, you can raise funds to cover regular expenses such as fuel, rentals, taxes, and employees’ salaries.

If you think your business can benefit from giving invoice factoring a try, read on for more information about this particular financial method. In this article, you’ll discover how invoice factoring can improve your cash flow while you’re waiting to be paid by your customers.

 

What Is Invoice Factoring?

This involves a business ‘selling’ its unpaid invoices to factoring businesses. In return, the latter pays a portion of the invoice values and returns the rest after the customer has paid. Some businesses may be discouraged from turning to invoice factoring since it can significantly reduce your profit margins. However, if you prefer to have a steady cash flow without resorting to loans—which may hurt your finances further with their exorbitant interest rates—this may be a good option to consider.

Besides, in selling your accounts receivables to a factoring company, you may still get up to 98% of your invoices’ total value. Most factoring companies take charge of the billing and collections, saving you time from chasing after customers and minimizing the risk of incurring bad debt.

 

Why Is Cash Flow Management Important For Your Business?

Without steady income, a business can’t operate smoothly. Relying solely on customers for cash inflow can cause several problems. Your employees won’t be able to work properly if they’re not paid. Government offices will run after your business for not paying taxes on time. Simply put, your business can’t grow.

Proper cash flow management is crucial in any business organization. What many don’t understand is that it isn’t limited to earnings and losses. Cash flow covers all aspects of your business income streams along with the factors influencing them: expenses, debts, payables, receivables, and inventory.

 

How Does Invoice Factoring Improve Your Business Cash Flow? 

Having a steady cash flow is crucial in business sustainability and growth. Enterprises should aim for more cash inflows and shouldn’t have to wait for customer payments to finance operations. Invoice factoring improves business cash flow in the following ways:

  • This method allows you to meet your financial obligations on time, preventing your business from incurring penalty fees and overdue charges.

  • Instead of getting loans that require collateral plus out-of-pocket application costs and come with high interest rates, your business can save cash with invoice factoring. The money you save from loan-related fees may not be substantial, but it can still help improve your cash flow.

  • Being free from chasing non-paying customers, your finance department can perform other important tasks and increase productivity.

  • Paid on time and working in great conditions, your marketing staff will be able to focus on your company’s promotional strategies and attract more customers, increasing your income potential.

  • Because your business will no longer suffer from delays and shortages due to limited cash flow, you can take in more customers and, consequently, see your profits rise.

  • With enough money on your hands, you can consider expanding your business. Consider buying new assets or pieces of equipment to make your business more efficient.

  • Having extra cash at your disposal allows you to prepare for contingency. Reliability increases your brand reputation, and more customers are inclined to transact with you as a result.

  • As your brand reputation increases, an increasing number of customers would be willing to purchase your offerings.

  • A steadier cash inflow allows your business to take on more projects, including expansions and partnerships, which in turn would allow your business to have a more stable financial standing.

Invoice factoring is an attractive prospect for businesses without a credit score or even those with poor credit scores. Banks and lending institutions look at a borrower’s credit score before deciding whether to approve or reject an application. Comparatively, factoring companies don’t look at your business’ credit scores but rather those of your customers, who now owe them money.

Additionally, some invoice factoring companies offer longer payment terms, which may work to your advantage. Check out this article if you want to learn more about invoice factoring and its benefits.

On the other hand, invoice factoring may have hidden costs, so taking this route is more costly than choosing government-backed financial programs. What’s more, your business may still be held liable if your customers default on their payments.

In choosing the best factoring company, a good rule of thumb is to carefully look into their terms and conditions. Make sure there are no hidden fees, and they should have a dispute resolution system. 

 

The Wrap-Up

Invoice factoring can be an attractive option for businesses that need immediate cash flow. If you’re struggling to collect payments, consider invoice factoring in order to finance your daily business operations. Just make sure that your customers are able to pay promptly in order to avoid headaches.

When used properly, this alternative business financing method can help enhance your business cash flow without pushing your business into a financial sinkhole.

UK Budget
ArticlesBankingCash ManagementFinance

Budget’s ‘Super-deduction’ Capital Allowance Offers Logistics Sector A Golden Opportunity

UK Budget
By Tim Wright, Managing Director of Invar Systems
Chancellor Rishi Sunak’s Budget announcement of a capital allowance ‘super-deduction’ could be a game-changer for many warehouse owners and operators.
The super-deduction, which will apply for two years, allows firms to claim 130% of their expenditure on approved plant and machinery against their tax liability. There is no list of qualifying expenditure, but just about any equipment that one might install in a warehouse or distribution centre appears to be covered and, importantly, ancillary expenditure such as building alterations and electrical system upgrades to allow equipment installation are specifically included.
The Chancellor’s aim, beyond kick-starting the post-Covid recovery, is to address the UK’s chronic underperformance in productivity growth, which was less than stellar even before the 2008/9 financial crisis (2.3% per annum), and since then has essentially flatlined at 0.4% per annum. Discussing the validity and meaning of productivity data notoriously starts heated discussions amongst economists but in the warehousing sector the issues are very real and quantifiable.
The gorilla in the room is of course the inexorable rise of e-commerce, currently representing 30% or more of trade in many retail sectors, and with similar expectations for on-demand fulfilment of orders increasingly seen in business and industrial purchasing. Clearly, fulfilling two dozen orders for individual items is immensely more laborious than serving the same volume by shipping whole cases or pallets – by a factor of 15 according to one US study – inevitably driving down productivity per hour worked.
E-commerce has also driven up product variety, and, critically, the volume of returns to be handled. Yet this comes at a time when securing and deploying warehouse staff is becoming increasingly problematic: many businesses have been heavily dependent upon European labour, which is unlikely to be earning enough to qualify to work in the UK post-Brexit, while creating Covid-safe working in labour-intensive areas is a major challenge. Along with rises in the minimum wage, this is pushing labour rates up.
In addition, increasing capacity by adding more space is not an easy option – e-commerce operators, and businesses hedging against supply chain disruption are snapping up all the available space in what is generally agreed to be an ‘under-warehoused’ country.
These challenges, although increasing, are not new and nor is the obvious solution ­– automation. But apart from the ‘marquee brands’ such as Amazon and Ocado, who have been able to invest large sums in green-field developments, the warehousing sector has been slow to adopt automation, and where it has, the tendency has been to create unintegrated ‘islands of automation’ at particular pain points.
However, for real productivity improvement a warehouse or fulfilment centre needs to address all its many interdependent activities simultaneously:  KPIs in receiving, in put-away, in picking, in packing, labelling and dispatch, as well as, in health and safety.
Importantly, this means a complete rethink of how the warehouse operates. A particular focus will be a move towards ‘goods-to-person’ operations, rather than having people spending most of their time walking unproductively between locations.
It’s easy to understand why many businesses have been reluctant to commit to change. Until quite recently, warehouse automation was ‘hard engineering’ – it involved not only major investment all in one go, but installation caused disruption, even complete shutdown, and was considered inflexible. Any change in requirements could only be accommodated by further significant investment and upheaval.
Happily, these constraints no longer apply. The development of autonomous mobile robots (AMRs) in particular has been a game changer, as has been the creation of easily reconfigurable sortation systems, re-locatable or even fully mobile pick faces, smart automated packing stations, and a raft of supporting technologies such as pick-to-light, along with Warehouse Management Systems that are becoming ever more capable, yet easier to adapt and use.
Such solutions are scalable and can be introduced flexibly, as funds allow. What’s more, they can be readily reconfigured to integrate with subsequent investments, largely off-line through the software, rather than by disruptive re-engineering that requires shutdown. They are also genuinely scalable – in many cases, simply adding more AMRs to the system can accommodate future growth or extension.
Rishi Sunak’s ‘super-deduction’ capital allowance offers the logistics sector a golden opportunity to invest in performance enhancing automation, giving fulfilment operations the boost to productivity needed to cope with the surge in ecommerce orders. It’s an opportunity not to be missed.
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ArticlesBankingCash Management

How to Build Credit the Right Way

Woman credit card

People say that money makes the world go round, but the truth is that good credit provides you with the most opportunities. Building credit can be a challenge if you don’t have any previous history. However, it’s an essential part of life and can simplify many situations.

Keep reading to learn three methods of building credit the right way.

 

1. Open a Credit Card

Most people know that opening a credit card will influence their overall score and history. However, they don’t know how to maximize it for their own benefit. Here are three factors to consider.

 

Choosing a Secure Credit Card

There are many credit cards available on the market, but it’s essential to know the difference between secured and unsecured cards. Simply put, secured cards require an upfront deposit that minimizes the risk for the issuer. With a secured card, you can build your credit without risking going into debt. They’re typically much easier to obtain an unsecured card — making them a good option for anyone with limited credit history. The only downside is that your deposit creates a cap for your spending limit.

 

Getting a Co-Signer

If you’d like to have an unsecured card and don’t have a credit history, you can consider getting a co-signer. This person would agree to take on your debt if you default on paying. If they have good credit, then you’re more likely to get approved. The downside is that most major credit card companies do not allow for co-signers. You’ll need to research your options if you’d like to take this approach.

 

Making Regular Payments

To build good credit, you’ll want to make regular payments regardless of the card type. It’s always best to pay off the debt in full. Keep in mind that late payments can cause additional interest and penalty charges to accrue. Additionally, your payment timeliness influences your score.

 

2. Apply for a Loan

When the situation calls for it, loans are extremely beneficial. They typically have lower interest rates than credit cards and can allow an individual to purchase something outside of their savings range. Many loans are also known as good debt because they help a person pursue investments that improve their life. They also influence credit and can help build a long-standing history.

From this standpoint, it would be worthwhile to make a significant purchase or investment using a loan. These purchases encourage natural credit building. Keep in mind that you should only borrow as much money as your feel comfortable paying back. Defaulting on a loan will damage your score, so it’s worth setting up an automatic repayment program.

 

3. Become an Authorized User

One of the easiest ways to build safe credit is by becoming an authorized user on another’s account. When added, you gain access to their available funds and earn a credit history without liability. Unlike co-signing, if the other person stops paying, you are not responsible for covering their fees. However, it’s beneficial to choose someone who pays their bills on time and is financially stable, so their account does not negatively affect your score.

 

Be Patient

You can use these three ways to grow your credit and check the results using annual score reports. Good scores allow you to get lower interest rates on future loans and credit cards and improves your chances of getting approved. Building credit takes time, but it pays off in the long run.

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‘Normal’ Bank Lending to SMEs Down 10% Last Year As Banks Focus On CBLIS & BBLS Loan

Small business loan form .
  • £61bn of CBILS & BBLS loands handed out to SMEs

  • Alternative lender market vital for SMEs looking to grow in 2021

The outstanding value of non-emergency lending by banks to SMEs has dropped by 10% from £168bn in December 2019 to £152bn in December 2020, shows new research from ACP Altenburg Advisory, the debt advisory specialist.

ACP Altenburg Advisory says the research shows that once CBILS and BBLS loan schemes come to an end, SME businesses are likely to struggle to obtain finance from banks which is not partly or fully underwritten by the Government.

Total CBILS and BBLS lending to SMEs has ballooned from £4bn in April 2020, to a total of nearly £61bn that has been lent by December 2020*.

Once the CBILS and BBLS schemes come to an end, ACP Altenburg Advisory says banks may have limited appetite to lend and increase their exposure to the SME sector any further, given the significant increase in overall SME lending over the past 12 months when including the emergency lending.

Many banks are already reducing non-emergency lending to new to bank business customers. As CBILS and BBLS loans are underwritten by the Government, banks have been able to offer better terms for those loans than for ‘business as usual’ lends, which do not provide lenders with the same safety net.

ACP Altenburg Advisory says, therefore, alternative lenders are likely to be sought after in the coming months as SMEs find it more difficult to obtain finance from traditional lenders.

Will Senbanjo, Partner at ACP Altenburg Advisory, says: “CBILS and BBLS loans have dominated banks’ lending activities to such an extent that they have limited capacity to write normal loans to SMEs. This means that businesses looking to grow may struggle to obtain the funds they need.”

“SMEs looking to raise additional funds for growth in the months ahead may need to look at the alternative options, such as asset-based lending or alternative lender funding. Alternative lenders are open for business and are keen to deploy capital to well-managed businesses that have strong growth potential.”

Debt advisers can be crucial in helping a business to obtain the right funding package to fit their business needs. Advisers can help a business understand and explore the various funding options open to them, and then help them present their business to the most appropriate lenders in the right way.

*Based on data from the Bank of England and the British Business Bank. SMEs are defined as businesses with less than £25m turnover.

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68% of Credit Card Holders Don’t Know What An APR is and Why This Is Costing Them Money

APR

Key findings:
•69% of people, overall, could not correctly define what an APR is an what it’s used for.

•68% of credit card holders do not know what an APR is.

•66% of mortgage holders do not know what an APR is.

According to KIS Finance’s financial survey, only 31% of adults in the UK could correctly identify what an APR (Annual Percentage Rate) is, including its purpose and how it should be used.

Even more worryingly – a massive 68% of credit card holders don’t know what an APR is, bearing in mind that the APR is undoubtedly one of the most important factors when comparing unsecured financial products like credit cards and personal loans.

The two most common believed definitions of APR were:

•The interest rate alone, without any fees or costs

•The maximum amount that a lender is allowed to charge


How do the figures look when split by age group?

Percentage of people in each age group who could not correctly define what an APR is:

18 – 24: 87.5%
25 – 34: 63%
35 – 44: 77%
45 – 54: 71%
55 – 64: 60%
65+: 73%

 

Only 12.5% of those aged between 18 and 24 know what an APR is

The lack of basic financial knowledge in the 18 to 24 age group is worrying. Having a basic understanding of everyday financial terminology, plus general money and debt management, is an essential life skill.

This leads to the question of whether more financial education should be taught in schools as a key life skill.

Financial education was introduced to the UK’s National Curriculum in 2014, however, findings from The London Institute of Banking & Finance’s Young Persons’ Money Index 2019 backs up our data as it revealed that students still say they are not getting enough access to financial education and they worry about money. Only 17% of students said they had access to financial education within the last year, and just 4% are taught financial education as a separate subject.

Holly Andrews, Managing Director of KIS Finance says:

“Financial education is clearly needed based on these recent findings and financial advisors must take steps to ensure applicants do have a clear understanding of the commitment they are entering in to.

We have long been an advocate of these, and other similar matters, being covered as part of the high school curriculum to ensure everyone has this knowledge when they leave school. From the age of 18, people will be offered unsecured borrowing and it’s essential that they understand all the key points of what they are taking on.”

 

The largest group of credit card holders struggle to define what an APR is

Another main concern is that 60% of 55-64 year olds couldn’t say what an APR is. And according to KIS Finance’s survey, this is the age group with the largest percentage of people who currently have a credit card. Given the often high costs associated with credit cards, it’s worrying that so many people are not aware of the right way to make sure they’re getting the best deal.

 

So, why is it important to understand APRs?

Holly Andrews continues to describe the importance of understanding APRs and the dangers of not doing so.

“Whenever you apply for an unsecured personal loan or credit card you will be quoted the APR. This is very important to understand because the APR tells you what the lender will charge you for borrowing the money over a one year period.

The APR takes into account the interest charges plus any other fees or costs charged in setting up the loan. The APR therefore represents the ‘true price’ of your loan.

The APR is essential for you to be able to plan exactly how much you will have to repay on a loan or credit card. Credit cards are a little different however as you’re only charged interest if you don’t repay the balance in full every month.

APRs are a very useful tool for comparing financial products on a like-for-like basis and will allow you to make more informed decisions. It can be tempting to simply go for the product with the lowest interest rate, but the APR will give you a better idea of what the loan will cost overall.

Even if the interest rate is higher on one product, if the APR is lower, this will be the more cost effective option over the course of a year.

The findings of this survey are worrying because the majority of people cannot be choosing the cheapest products, and those working in the finance industry use the term ‘APR’ freely assuming it’s well understood.

 

What is a representative or typical APR?

“It’s also important to understand the difference between representative APRs and the actual APR you’ll be charged. Lenders can’t show an exact figure for what you’ll be charged on a product without knowing your individual financial circumstances, so on promotional content they will display a ‘representative’ or ‘typical’ APR.

The ‘representative’ or ‘typical’ APR is the rate that at least 51% of the company’s customers must be able to obtain for the finance facility being advertised. Companies can’t advertise APRs that barely anyone can qualify for. You may not be in this 51%, that’s why you may be charged a different rate when it comes to actually applying for the product and after the lender has looked at your credit history and your current financial situation. This could mean that the rate you actually receive may be higher or lower than the one advertised.”

 

What are the dangers of not understanding APRs?

“If you don’t understand what the APR is on the financial products you’re taking out, you could end up being charged a lot more than you were expecting or budgeting for. If this is the case and you can’t meet the required repayments on your loan or credit card, you could see yourself winding up in a lot of debt and seriously damaging your credit rating. Not to mention the stress that being in debt can cause, so making sure you understand the true cost of borrowing is really important to make sure you get the best deal possible, and you don’t wind up over committing yourself financially.”

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The Co-operative Renews Support of The Hive, As Part of Its Ongoing Commitment to the UK’s Co-operative Businesses

Co-operative bank
  • The Co-operative Bank has committed an additional £400,000 to support The Hive – a programme to help new and existing co-operatives delivered by Co-operatives UK

  • The Co-operative Bank’s customer-led Ethical Policy outlines its commitment to nurture and support the co-operative sector, having previously invested £1.3 million in this programme since 2016

  • Rose Marley, Co-operatives UK’s new CEO anticipates ‘a new wave of entrepreneurs responding to a need to do things differently’

The Co-operative Bank has announced it has renewed its partnership with The Hive, a support programme for the UK’s co-operatives, delivered by Co-operatives UK.

The Hive, which The Co-operative Bank has supported with a total investment of £1.7 million since 2016, has helped over 1,000 co-operatives and groups with support including direct business advice, workshops, training and mentoring. Part of the funding from The Co-operative Bank has also helped develop a digital registration service for co-op start-ups – a first for the sector. As part of this process, new co-ops will also be able to access free business banking from The Co-operative Bank.

Since the launch of The Hive in 2016 some of the key achievements over the last four years include:

  • Over 1,000 groups have received support worth in excess of £600,000.

  • 50 free introductory sessions facilitated across the UK, attended by more than 500 groups, looking to start a co-operative or wanting to learn more.

  • Over 80 new co-operatives have been incorporated.

  • 40 ‘Community Shares’ support packages provided, raising more than £6 million of community investment in the development of co-operatives and their communities

  • The support has impacted more than 20,000 volunteers, members and employees as well as their wider communities.

  • Supporting co-ops throughout Covid-19, helping them navigate the various business support schemes, working through business forecasting and cost saving opportunities and helping businesses ‘pivot’ to online trading.

This news follows Co-operatives UK research which suggested co-operatives may be far more resilient to economic shocks and significantly more likely to survive compared with other businesses. After their first five years, 76% of co-operatives are more likely to succeed when compared with other businesses (42%). Co-operatives contribute £38 billion to the UK economy and the UK’s 7,063 independent co-ops employ 241,714 people with over 14 million members who own and have a say in how they operate.

Nick Slape, Chief Executive Officer, The Co-operative Bank said “As a bank built on co-operative values and ethics we remain committed to supporting the co-operative sector, giving like-minded people, innovators and groups the support they need to succeed when UK businesses face unprecedented challenges during this extremely difficult time. We hope that through our ongoing support of The Hive and partnership with Co-operatives UK, we can make a real difference to people running or looking to start a co-operative.”

Rose Marley, Chief Executive, Co-operatives UK said “The pandemic has really made people think about their business and working lives. As more and more people are looking at how they might improve their future working lives for themselves, their families and the communities they are based in, we are delighted that The Co-operative Bank is supporting new and existing co-operatives to do just this.

“Our research demonstrates that co-operatives are almost twice as likely to survive the early years of business compared to traditional business models, and workers are looking for fairer and more equitable ways to do business and challenge the status quo.

“Leeds Bread Co-op is a brilliant example of how The Hive has supported businesses through the pandemic. And with continued support from The Co-operative Bank, The Hive will continue to create more robust and resilient business that will make a real difference to the communities they are rooted in.”

Leeds Bread Co-op is an independent artisan bakery and workers’ co-operative. They received support from The Hive to help them adapt in the wake of the Covid-19 pandemic.

Lizzie, a Worker Owner at Leeds Bread Co-op said “We had a massive drop in sales from our wholesale customers who had to close because of government restrictions in the spring. We decided to cease trading temporarily for the safety of our staff and local community and to give ourselves some breathing space whilst we worked with an advisor from The Hive on urgent financial modelling and collective decision-making about our priorities. This was in addition to financial support from The Co-operative Bank as part of the Bounce Back Loans Scheme (BBLS). We’re now back open, with social distancing measures in place as well as a new click and collect service and home deliveries, meaning we can still continue to trade in these challenging times. Support from the Hive was a lifeline at a critical time.”

In addition to supporting co-operatives through The Hive, The Co-operative Bank also provides tailored accounts specifically for community and co-operative businesses. The Community Directplus Current Account gives registered charities, community interest companies, co-operatives and credit unions an ethical way to bank for free. Community Directplus customers also have the opportunity to apply for up to £1,000 for project funding from the Co-operative Bank’s Customer Donation Fund which helps support special projects and fundraising opportunities.

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Are You Ready to Get a Car Loan? Here are the Signs

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Are You Ready to Get a Car Loan? Here are the Signs

Applying for a car loan can be both an exciting and scary process for those in search of the right loan, especially if you’re a first-time borrower. Buying a car can quickly become a much more complex process than the buyer originally anticipated, leading to some anxieties and stresses related to the shopping process if you go in unprepared. 

Things can be further complicated when a loan is involved, because adding financing to anything requires more work. Car loans are a relatively unique type of funding too, similar to mortgages in the sense that they get their own allocation of funds in comparison to general personal loans. 

Car loans should also be examined closely before electing to take on the repayment of one, because fine print misreading can lead to trouble down the road. Car repayments can add up quickly if you’re not careful, so be sure this isn’t overlooked.

If you’re planning to obtain financing for your next, or first, car purchase, it’s important to ensure you’re ready to undertake this responsibility. So, here are a few signs you’re ready for a car loan: 

 

You’ve Done Your Research

Buying a car is something that’s a big deal for most consumers. Unless you’re relatively wealthy or just purchasing a vehicle for novelty purposes to add to a collection, fronting the capital for a new car is not something to be scoffed at. 

When you’re making a purchase on something that exceeds thousands, and usually five figures, in value, this is a serious financial burden you’re taking on. Failing to make the payments can significantly damage your credit reputation, and also leave you without a reliable means of transportation as well.

This is why doing your research is important. On the car yes, but most importantly on the car loan. The car loan market can present a wide variety of options available to those buyers who are looking to finance. 

You can finance your car through an independent financial institution, or often times a dealer as well, with dealers sometimes offering unique caveats like “0% APR for the first 12 months” or something of the like. 

Different lenders will come with different rates, and different borrowers will get different rates based on their credit worthiness. It’s important to know your credit standing, and what type of interest rate you can expect to get on the loan because of it. 

You’ll need to do some independent research and compare the offers available to you for the vehicle you wish to buy. This way, you won’t just be walking into a dealership prepared to take whatever is placed in front of you. If you’ve taken this step and are fully aware of the best route to go, you may be ready for a car loan. 

 

The Rest of Your Finances are in Order 

This isn’t a personal finance class, but is it qualifying information in regards to whether or not you’re ready to take on a car loan. Because of that, it’s important that car buyers give themselves an honest audit on where they stand financially before proceeding. 

Taking out new loans with bad credit, a lot of outstanding balances, accounts sent to collections, insufficient income, or even sufficient income but strapped with a lot of other debt, could all easily turn your dream into a nightmare. Adding a car loan to an unstable stack of financial issues might just topple the tower, so it’s important to make sure you’re ready for this responsibility. 

Take an objective self-assessment of your financial situation before you consider purchasing a new vehicle, or taking out a car loan on one especially. This is easily accomplished by looking at your debt-to-income ratio, account balances, outstanding balances, monthly expenses, and so on. You know what you can afford and must act accordingly.

If you’ve taken it upon yourself to undergo this process and have determined that you’re financially prepared to handle it, then you are likely ready for a car loan. 

 

You Trust Yourself to Make Timely Payments

One of the worst things that can happen to an otherwise financially stable person is to forget to pay a bill on time. Imagine you’re just scrolling through social media before bed and suddenly, there’s no Wi-Fi. Oh, wait…you forgot to pay the bill this month. 

Yeah, forgetting to pay for things you can otherwise afford isn’t a financial literacy issue, but rather just something that must be remembered. The same goes with making payments on a car loan, with failure to pay eventually resulting in repossession of your car.

Now, in most cases you’ll probably be contacted by your lender if you’ve missed a payment at all, and repo not usually coming until after a couple. This isn’t always the case though, and it can depend heavily on who exactly you purchased the car from, and who you financed it with as well. 

You’re unlikely forget two or three times after being reminded, but if you purchased from a less lenient dealer or borrowed from a lender of the same cloth, one missed payment could be enough to do you in and damage your credit. 

The simplest way to avoid this ever even coming close to happening is to just authorize automatic payments each month. The money will be withdrawn from your account on a specified date each month to cover the payment. Just make sure the funds are there and it’s taken care of for you. It’s like direct deposit, but uh, in reverse. 

However, if this has never been an issue for you and you’re really on top of things, you’re definitely ready for a car loan

 

So, are You Ready for a Car Loan?

If you’ve read this far and are able to check all three of these boxes, you likely have nothing to worry about. You’re probably the kind of person who pays off the credit card balance as soon as it posts and only uses it to get cashback points anyway. You’re on top of things financially. 

If not, don’t worry. Even asking the question “am I ready for it” is a step in the right direction to financial responsibility, and eventually your dream car.

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How to Manage Your Student Budget

student budget

How to Manage Your Student Budget

What’s the age-old adage? Take care of the pennies and the pounds look after themselves. Well, this is just as important at university as it is anywhere else. 

When at university, you will be operating on a smaller budget than if you’re out of education. A student loan will only last you so long, so see how you can manage your student budget at university. 

Save up your vouchers and look for student discounts

Vouchers come in handy more than you can think! While it’s unlikely that you’ll be saving up £2,000 in vouchers over a one year period, you could still find yourself saving a fair bit on quite a few items when you go shopping. 

Tesco have a Clubcard points system which can entitle you to various discounts and perks, so signing up for a Clubcard is a good way of saving money and a good way of being able to offset potential costs against your points.

Some companies offer various student discounts and will have a lot of vouchers geared towards helping students that need to save money. Music streaming services like Spotify, Apple Music and TIDAL all have student programmes that will save you money in the long run, all you need is proof of being a student. 

Use your NUS Card

Your student NUS Card exists to help you out on the high street. Many students find themselves in need of a good deal here and there and an NUS Card is a great way of doing that. 

An NUS Card is mainly used as a form of identification for students and is essential for far more than just finding good deals in Nando’s! An NUS Card is also used for students that are looking for student council tax exemption as well. 

While you will need to pay an initial fee of £13, it’s worth it in the long run! On those rare occasions, you and your friends decide to go out for a meal, you will see 20-25% wiped off your overall bill. 

Look into transport options

Student Railcards are the best way for students to get around. 

For a lot of students, travelling to and from university or to certain campuses or even visiting home can start to tot up for you and can have a very negative impact on your student budget, so the best thing to do is to pick up some kind of subsidised travel service.

For some students, this will mean taking advantage of a travel bursary that is offered by their university, for others it will be about taking advantage of things like the aforementioned student railcard. 

Some universities also have transport systems offered as part of their campus, whether it be a coach service, integrated bus services, train systems that run through the campus itself or even a monetary scheme to help out. You can check out university rankings and see which universities are ranked best in their areas for transport. 

Use your university’s gym

Most universities will have their own gym on campus, which will help you to keep in shape. It makes sense to use your university’s gym rather than use a more expensive high street option that will likely cost an awful lot of money. 

It is unlikely that you would be charged for using a university gym and on the off-chance you are charged, it is likely to cost less than a regular high street gym would cost. 

A university gym will also have the added benefit of having a wider array of equipment for you to use as they will likely receive more people at the gym than a regular gym would, who said you couldn’t get ripped when saving money?

Avoid the meal deal

We’ve all been there, a long day and you fancy something quick to eat, so you quickly pick up the Tesco meal deal and drop £3 on a sandwich, a packet of crisps and a drink. Though it can be helpful sometimes and a good way of keeping yourself well-fed and hydrated, the deals do add up!

Five days-a-week of meal deals leads to £15-a-week being spent on lunch alone, factored over the course of a month and you’ll see yourself spending a whopping £60 on lunch alone! 

With this in mind, we recommend picking up the ingredients you need for lunch and preparing your own meal at home. This will mean that you will have food left over for dinner or for later lunches and the ingredients together will cost less or about the same as a whole meal deal does, while offering more possibilities. 

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Britain’s Stark Gender Savings Gap: Women Have a Third Less Money Saved Than Men

gender and savings

Britain’s Stark Gender Savings Gap: Women Have a Third Less Money Saved Than Men

New research published today reveals a stark difference in the amount of money British men and women have in savings, exposing a 32% gender savings gap.

The consumer study, by leading discount site VoucherCodes.co.uk, reveals that the average man in Britain has £24,880 in savings – 32% more (£8,038) than the average British woman. The widest gender savings gap is found amongst millennials, with female respondents in that age group reporting 60% less in savings than their male counterparts – a whopping £15.9k. This is followed by Gen Z, with a 47% gender savings gap.

 

Average men’s savings

Average women’s savings

Gender savings gap (£)

Gender savings gap (%)

Millennials

£26,553

£10,633

£15,900

60%

Gen Z

£17,552

£9,343

£8,209

47%

Gen X

£18,000

£11,265

£6,735

37%

Brits

£24,880

£16,842

£8,038

32%

Baby boomers

£29,902

£29,064

£838

3%

 

Gender pay gap making an impact

With the latest government statistics revealing that there is currently a 17.3% gender pay gap in the UK[i], the research also looks at how this directly impacts women’s savings. Just 38% of British women said that their current wage is enough to allow them to save their goal amount each month, much fewer than the 51% of men in Britain who say the same. In addition to having the widest gender savings gap of any generation, millennials also report the largest disparity between the sexes when it comes to whether their wage allows them to save. Just 36% of millennial women say that they are able to put away the cash they want to each month, compared to 55% of men. On the other end of the scale, baby boomers have the smallest disparity of any generation, as 50% of women and 53% of men said that their earnings mean they are able to save their goal amount.

 

Savings depleted by COVID-19

Just over six months after lockdown was introduced in the UK, coronavirus has widened the gender savings gap even further. Whilst, overall, British men and women have reported a similar impact upon their finances, with 24% of men and 26% of women confirming the virus has had a dramatic negative effect on their savings, the true picture is somewhat bleaker. The study reveals that more women than men are relying on previous savings to cover essential costs during the pandemic, depleting their already smaller savings pot. A third of women (35%) admit to dipping into their savings over the last six months, compared to just 15% of men. This figure jumps to more than half for furloughed women (54%), again higher than men on the scheme (40%).

The impact is even more pronounced for furloughed workers. Two thirds of those on furlough (64%) said that the scheme and resulting pay cut has meant that they have not been able to contribute their desired savings each month. Yet again, the data suggests that furloughed women have seen the biggest hit to their financial security as a result of COVID. Over three quarters of women on the scheme (78%) have not been able to save as much money as pre-pandemic, contrasting just half of furloughed men (50%).

 

A brighter outlook?

Looking ahead to a pandemic-free future, the nation remains cautiously optimistic when it comes to predicting whether coronavirus will have a long-lasting impact on their savings. Over half (55%) of British women and 57% of British men think their savings will be able to recover in the long term. Earlier in their savings journey, Gen Z-ers predict a tougher time, with just 42% of women and 50% of men predicting that their savings will make a full recovery. Unsurprisingly, those most worried about the future are women who have been furloughed, with 77% admitting they are concerned that they will never be able to replenish lost savings.

 

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, comments: “This report is really eye opening, exposing how far we as a nation need to come to achieve financial equality. It’s especially concerning to see that young women and those who have been enrolled on the furlough scheme during COVID-19 have been most affected, as this represents such a large number of women in the UK.

“To help reduce the amount you rely on your savings, budgeting is the most effective way to ensure that all essential costs are covered. Citizens Advice offer a free and easy to use budgeting tool on their website that works for any budgeting needs. When shopping, make a habit to always check for deals that could shave valuable cash off your purchase. If you shop online a lot, install a handy browser extension such as DealFinder by VoucherCodes – a free Chrome extension that automatically finds the best discounts as you shop, so that you never miss out on a deal.“

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Spending and Investments Top List of Life’s Most Difficult Decisions

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Spending and Investments Top List of Life’s Most Difficult Decisions

New research has revealed the nation’s hardest decisions, with financial quandaries and how to invest your money topping the list of the most difficult decisions that Brits struggle to make.

The study, commissioned by Barclays Plan & Invest in partnership with researchers at UCL, set out to explore the challenges faced when making decisions – from the every-day choices of what to wear or eat, to the more important, longer-term decisions.

The extensive research revealed that financial concerns consistently rank top of the list when it comes to the hardest decisions, including choosing where to buy a house (32 per cent), how to invest your money (25 per cent) and how to spend your hard earned savings (25 per cent). The only non-financial decision to make the top five was choosing a partner, with nearly one quarter struggling to make up their minds when picking their other half.

 

The top 5 toughest decisions Brits face:
  1. Where to buy a house
  2. Whether or not to change jobs
  3. How to invest your money
  4. Choosing to spend some of your savings for a major purchase (house, car etc)
  5. Choosing a partner

Dr Bastien Blain, Research Associate at UCL, who co-authored the study, comments: “Our research has revealed that we are consistently bombarded with choice, often creating a sense of decision fatigue. This cognitive fatigue makes us more impulsive and therefore prone to choosing small, immediate rewards over larger, delayed ones. This may well explain why financial decisions are consistently ranked the hardest, as they require the most attention.” 

 

Nature or nurture?

The research also revealed a gender-divide when it comes to decision making. According to the study, women appear to be better decision makers when it comes to monetary matters, as nearly one third of men struggle to decide how to invest their money compared to just 21 per cent of women. This might be down to the power of female intuition, as the majority of women (43 per cent) reported that they base their decisions on gut instinct.

These findings are somewhat surprising, as women are often considered to be less confident when it comes to investing, with men taking up the lion’s share of the investment market. However, it does at least align with a historical difference in stocks and shares performance, with the average women’s investment portfolio on the Barclays Smart Investor platform beating that of their male counterparts over a three year period (April 2012-June 2016)*. The annual return on investments for men was, on average, a marginal 0.14 per cent above the performance of the FTSE 100, while for women it was 1.94 per cent higher.

 

Relieving the pressure

With one in four Brits struggling to make investment decisions, these findings highlight the need to give people the right tools and advice to plan for their financial future.

Plan & Invest, a new digital advice service from Barclays, has been designed to support people who don’t have the confidence or time to invest on their own. Customers will complete an in-depth questionnaire on their goals, timeline and risk appetite and Barclays will then use the latest technology to combine these findings with their expert team’s pick of investments, to create a personalised plan that can follow over 10,000 potential investment paths.

Robert Smith, Head of Behavioural Finance at Barclays Wealth Management and Investments, offers some insight into the research findings: “It comes as no surprise that financial, and particularly investment, decisions rank so highly as some of life’s tougher choices. It’s easy to be overwhelmed by the sheer number of investments on offer or be put off by the amount of  jargon – particularly if you’re new to investing. When deciding where to invest, some may instinctively choose to invest in the market closest to them, or may be swayed by what is trending in the news. However, creating a diversified portfolio, focused on an individual’s personal goals and attitudes is the most advisable strategy when investing.

“But for those who don’t have the confidence to make their own investment decisions, it’s worth considering a digital advice service, such as Barclays Plan & Invest, where you can get experts to create a personalised investment plan and make all of the difficult investment decisions on your behalf.”

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Are You Financially Prepared For A Baby?

Are You Financially Prepared For A Baby?

Any parent will tell you that the moment you hold your little one in your arms, your priorities change. Having a baby is one of life’s most beautiful and joyous occasions, but it is also one of the most life-changing events with a substantial price-tag attached. Research shows that your little bundle of joy will cost, on average, £231,843 – a frightening figure for many soon-to-be parents. And with the spiralling costs of childcare and education, this figure is expected to rise.

Life with a newborn is a world away from a child-free life. The first month alone can put a strain on your finances; from nappies and clothing to feeding equipment, toys and furniture. Many parents say that they weren’t prepared for the initial costs, and when paired with tiredness and fatigue, this can put a lot of pressure on the relationships around you. That’s why it is important to budget well and manage your assets before the pitter-patter of tiny feet.

 

Take Control

To help ease this financial pressure, you should consider setting up a regular bank account with easy access to savings as soon as possible. We recommend choosing an account with no minimum balance to give you maximum control and flexibility over your finances. It is also a good idea to choose an account with the ability to set up standing orders and direct debits, so you can manage your money well without the fear ‘baby brain’ forcing you to forget a payment.

And while your baby may be a long way off adulthood, it’s always good to plan for the future. As such, you should consider setting up a trust fund once your baby arrives. This legal arrangement will ensure your assets are held safely for the beneficiary until they are of an age to manage their money responsibly. A trust fund can be of great support to your child; it can help ease the burden of university fees or help them get on the housing ladder when the time comes.

 

Make a Will

We recommend making a Will as soon as possible after your baby is born. Not only does this ensure that your assets are passed down to your offspring, but more importantly, a valid Will means you have full control over who cares for your child (if they are below the age of 18) in the event of your passing. It also allows you to decide who should look after your child’s inheritance until they are old enough to manage their money themselves.

It is also possible to make a Will even before your baby is born. Without knowing their name, you can leave your estate to your child. And if you have more than one, you can stipulate that you divide your estate equally between children.

At Turner Little, we have years of experience in delivering professional and specialist advice to those who need it most. We work closely with you to put a bespoke plan in place so you can to manage your money well. This includes helping you to financially prepare for your baby’s arrival, as well as managing your child’s finances as they grow, giving them the best possible start in life. To find out more about how we can help you prepare for the future, get in touch with us today.

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18-24’s Owe £225 to Buy Now Pay Later Schemes

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18-24’s Owe £225 to Buy Now Pay Later Schemes

Under-25s are increasingly likely to seek help for debt, according to debt charity StepChange with Buy Now Pay Later schemes cited as problematic for young shoppers.  

The Shop Now Stress Later Study from money.co.uk reveals that 18-24-year-olds owe a third more (£225 each) to Klarna-like buy now pay later schemes (BNPL) than the average UK shopper (£176).

How big is the fast fashion debt problem for 18-24-year-olds? 

The study found that 18-24-year-old shoppers owe £225.44 to BNPL on average, which is 28% more than the average UK shopper, who owes £176.   

The amount owed to popular BNPL schemes by 18-24-year-olds:

  1. Openpay – £360.50
  2. Zilch: £356.00
  3. Laybuy – £318.32
  4. Payl8r – £282.54
  5. Zip – £200.29
  6. Clearpay: £188.26
  7. PayPal Credit – £137.92
  8. Klarna: £122.16

The report also analysed 10 fast fashion brands based on how many times BNPL is mentioned throughout the shopping process, with Nasty Gal, Boohoo, and Pretty Little Thing the worst offenders when it comes to promoting them.  

Fashion Retailers Ranked by BNPL Promotion Mentions

  1. Nasty Gal – 46*
  2. Boohoo – 42
  3. Pretty Little Thing – 41
  4. Next – 40
  5. Nike – 40
  6. JD Sports – 38
  7. Clarks – 32
  8. Levi’s – 32
  9. Adidas – 31
  10. ASOS – 26

*Each brands BNPL score for mentions and how prominent BNPL is on their websites 

Over the past few years, Klarna, alongside other schemes such as Clearpay or Laybuy, has become a popular way for millennials and Generation Zs to buy clothes. The schemes offer the option to delay a payment or to split payments into installments. 

But debt advice charities are increasingly worried that BNPL is encouraging young consumers to spend more than they can afford.

These stores are all fostering a smash-and-grab mentality among young shoppers today. Many of them are buying their clothes purely online, often speculatively, and end up returning items that don’t fit or suit them later.

Shoppers aged 18-24 are more than twice as likely to use a payment platform (52%) than going into their overdraft (20%), but 25-34 are the biggest BNPL users. Over two-thirds have used a BNPL payment scheme like Klarna, Clearpay, or Laybuy. 

Almost a third of UK shoppers cite social media as a contributing factor (29%) in their decision to use BNPL and two thirds (55%) of shoppers aged between 18 and 34 admit to buying with the intention of returning, making millennials the most prolific returners. 

There are concerns young people might be encouraged to take on debt just to afford some new make-up or a dress for a night out.

Fast fashion is based on fleeting trends that may last no longer than a few months. Trying to keep up with such a quick turnover can be difficult, so young people turn to payment schemes to be able to afford them. 

Social media platforms, such as Instagram, exacerbate this as influencers post daily pictures in different outfits, never being seen twice in the same one, which puts pressure on young people to keep up. 

Under-25s made up 14% of those seeking help from the charity Stepchange in 2018, with an average outstanding debt of more than £6,000.

Retailers sign up with Klarna or similar BNPL schemes as it encourages more people to buy and some shoppers that use the service probably shouldn’t be. 

Impulse buying and online shopping can be very addictive. If you are thinking of using a BNPL scheme to purchase your items, think about whether you would purchase the items if you didn’t have the option to spread the cost. 

The full Shop Now, Stress Later study can be found here: https://www.money.co.uk/guides/generation-debt-trap 

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September Revealed as The Best Time to Buy A House

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September Revealed as The Best Time to Buy A House

New research suggests the stamp duty payment holiday isn’t the only reason Brits can make a saving on a property this month.

Watch and sunglasses specialist, Tic Watches, has conducted research and worked with experts to reveal the best time of year to find a bargain for high value products including homes, cars and holidays. The experts have compared prices to the peak time of year shoppers are searching for and buying products most frequently, to highlight how much people could really save with the right timing.

Here are the best times of year to find a deal:

January – Watches and sunglasses
  • Peak search time: 22nd-28th December
  • Potential savings: 70%

The January sales are a great time to pick up bargains on fashion items such as watches and sunglasses. Danny Richmond, Managing Director of Tic Watches, said: “For watches, the cheapest times of year to buy are generally Black Friday and January. This is when we run our biggest sales with discounts of up to 70%.

“For sunglasses, January sees the biggest discounts, of up to 40%. This is because it’s the period of lowest demand for summer products, so it’s a great time to get a bargain!”

February – A wedding
  • Peak search time: 28th July-3rd August
  • Potential savings: 50%

February sits in the middle of the wedding low season, which runs from November to April. This is generally seen as an undesirable time to get married, so as a result there are huge discounts available. In some cases, you can have a Saturday wedding in winter for half the price of the same in high season.

March – New cars
  • Peak search time: 10th-16th March
  • Potential savings: 25%

For new cars, the best time to buy is usually March and September because of bi-annual targets, although deals are to be had at the end of each quarter, depending on individual targets and stock availability.

April – Mattresses
  • Peak search time: 29th September-5th October
  • Potential savings: 53%

Dale Gillespie, Marketing Director for bed and mattress retailer, Bed SOS, said: “Retailers  tend to release their new lineups in April, so early spring is the best time to find the biggest discounts. Buying in early April, you’ll find some great value deals as retailers clear old stock to make way for the new ranges.”

May – Winter shoes
  • Peak search time: 24th-30th November
  • Potential savings: 70%

Buying shoes out of season will allow you to find the best value deals. May is a great time for this as there will be discounts on winter footwear such as boots, wellies and walking shoes, allowing you to buy good quality products for a fraction of the price. Similarly, the best deals for summer footwear can be found in autumn and winter.

June – A gym membership
  • Peak search time: 29th December-4th January
  • Potential savings: 20%

The start of summer tends to offer some of the best deals on gym membership, with January being another good month for discounts. 

There are often plenty of deals available through voucher websites such as Hot UK Deals, but if you’re signing up in person, a handy tip is to go at the end of the month. Sales staff likely have targets to hit and could be open to negotiating if they want to get their bonus.

July – An engagement ring
  • Peak search time: 29th December-4th January
  • Potential savings: 50%

July to August is the peak of the wedding season, and with all the focus on weddings, sometimes you can find big discounts on engagement rings. Also, as it is not close to any big holidays, jewellers use this time to lure in consumers with discounts.

August – Holiday clothes
  • Peak search time: 30th June-6th July
  • Potential savings: 75%

With summer drawing to a close, retailers look to clear as much seasonal clothing stock as they can. 

This is a great time to snap up bargains on items such as swimwear and shorts, which can see discounts of up to 75% for bikinis and 43% for shorts, although it’s worth saying that stocks go quickly, and there will be less choice than earlier in the summer.

September – A house
  • Peak search time: 2nd-8th February
  • Potential savings: Subject to negotiation 

Ross Counsell, Director at property firm, Good Move, said: “The best time to buy is August or September. The majority of buyers start searching at the beginning of the year, waiting until the end of summer, when there are fewer looking, you’ll have less competition.

“You’re also more likely to get a better deal, as with fewer offers on the table, sellers may well be more likely to accept a lower price.” 

October – Home appliances
  • Peak search time: 15th-21st December
  • Potential savings: 44%

Many manufacturers unveil new models in October, so older products will often be discounted. For products such as fridges, buyers can save as much as 44% at this time. 

November – Technology
  • Peak search time: 24th-30th November
  • Potential savings: 50%

Claire Roach at Money Saving Central, said: “Without a doubt, November is the best month to get deals, particularly on tech. A lot of people make the mistake of waiting for Black Friday – when the better deals are likely to be earlier on in November because retailers try to compete with Black Friday giant, Amazon.

“eBay, in particular, was 2019’s best place for tech deals, and the people who waited until further on in the month were left disappointed. Prices weren’t any better and stock was limited on highly sought after items such as the Nintendo Switch.”

December – Used cars
  • Peak search time: 17th-23rd November
  • Potential savings: Subject to negotiation 

Tim Barnes-Clay, Motoring Expert for Euro Car Parts, said: “Nobody thinks about buying a car at this time of year, as most people will feel the pinch over the festive season. With some forward-planning though, December can be a great time to get a good deal on a used car. 

“This is purely because dealers will be more inclined to get sales under their belts and therefore may be more willing to offer you a deal or negotiate.” 

Danny Richmond, Managing Director of Tic Watches, said: “It’s clear from the research that bargains can be found all year round, with the best deals coming at periods of low demand.

“It’s always best to plan your purchases ahead of time to maximise your savings. Don’t wait until winter to buy your winter coat and consider buying a new phone at the start of November, rather than waiting until Black Friday. Doing so could mean huge savings!”

For more information on when the best savings can be found, visit: https://www.ticwatches.co.uk/blog/2020/03/when-youll-get-the-biggest-savings/

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Forward Planning: 7 Easy Tips for Managing Your Retirement Savings

Retirement

Forward Planning: 7 Easy Tips for Managing Your Retirement Savings

We’ve all dreamed about a blissful retirement, spending more time with the people we love, in places we love and doing things we love. But is it just a pipe dream, or are you financially prepared for the life you wish to lead?

The good news is, it’s never too early to start preparing for retirement. Whilst most of us spend our twenties paying off student debt, as we approach our thirties, our financial priorities change somewhat as we’ve technically been there, done that, got the house, mortgage and family. It’s a time when we experience career progression, leading to promotions, bigger salaries and more funds that can be stashed away for later years.

To help you begin forward planning for the future, Alex MacEwen, expert at The Wealth Consultant has come up with 7 easy tips to get you on your way to achieving the retirement you imagine.

 

Before we begin, you might be thinking just how much stashing away should we do? According to research commissioned by finder.com:

– 55% of UK adults estimate that they will need £100,000 to live comfortably in retirement.

– Only 28% of people believe they are on target to meet this.

– The recommended amount for a comfortable retirement is between £260,000 – £445,000.

 

Shocked? Maybe it’s time to start planning the life you deserve.

 

1. Get independent financial advice

The future is an unknown – How should I save for retirement? Am I saving enough? How much will I need to live on? By enlisting the help of a professional, independent advisor, you will find the answers to all these vital questions. Your independent financial advisor will help you plan and make decisions based on your lifetime goals. They will advise on the various products that most suit your needs instead of pushing a product to boost their sales.

 

2. Create a realistic spending plan

Determine a budget by assessing your income, salary, interest, dividends, any rental income or child support. Define your outgoings, housing bills, utilities, transport, food, perhaps you are still paying off student loans. Decide on the things you really could sacrifice in the name of saving – do you need so many European city breaks? Are you still paying membership fees for facilities you never use because you keep forgetting to cancel the membership? Scrutinise your balance sheet and commit to saving as much as you can. Your future self will thank you, trust me.

 

3. Monitor old and new workplace pensions

It’s easy to get caught up in the excitement of landing a new job and just as easy to lose track of your old workplace pension! But it is important to keep track to know the value of your pension pot as this will help you decide whether it’s worth merging the old pension with the new one, and will give you an idea of how much you have saved for the future. It’s important to check the pension management fees as your previous employer will stop making contributions to old funds once you change jobs, the fees keep rolling, depleting your pension pot in the process. If you have a defined contribution pension, it is always worth checking where your pension funds have been invested, both from a risk level perspective and to ensure it aligns with your values.

 

4. Review investment performance

Keep track of your investments to ensure your portfolio is flourishing. If something isn’t working, figure out why. Perhaps it’s just a case of sitting tight and keeping your cool, or maybe time to diversify into a different sector or explore international opportunities to minimise losses. Remember, even if you have a few disappointing investments in your portfolio, a portfolio that is steadily increasing in value is always a sign that conditions are good.

 

5. Minimise retirement tax

After spending a lifetime working and sensibly putting money away for retirement, it’s important to ensure you keep as much as that money as possible. How? By ensuring your savings are as tax efficient as possible. This will mean working with an experienced financial advisor to ensure you are making use of all the tax allowances and pension tax relief.

 

6. Estate planning

Your inheritance and estate plan should set out your values and your intentions for how you wish your estate to be divided up and managed when the time comes. By focusing on your estate planning now, you can manage your tax obligations and safeguard the financial stability of those you hold dear. Inheritance matters can be challenging emotionally and financially, so it’s important to get professional advice and protect your wealth for future generations.

 

7. Save as much as you can

Save as much as you can, while you can. Achieving your dream retirement means making small short-term sacrifices in favour of saving for the future life you want. Remember, topping up your pension now means you will benefit from tax relief up to the annual limit of £40,000.

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Martin Lewis Financial Education Textbook Rolled Out to 700 Schools Across the UK

Martin Lewis
Photo credit: The Money Saving Expert 

Martin Lewis Financial Education Textbook Rolled Out to 700 Schools Across the UK

The first ever financial education textbook to hit Northern Ireland, Scotland and Wales will be rolled out over the next 15 months.

This week, Young Money announced the launch of the first ever financial education textbook to hit schools in Northern Ireland, Scotland and Wales. Over 45,000 books will be sent free to schools over the next 14 months, as well as an accompanying teacher’s guide (available digitally). The textbook will also be available as a free PDF download to anyone who wants it.

This launch follows the successful roll-out of the textbook in England. In November 2018 340,000 copies of the very first financial education textbook in the UK, ‘Your Money Matters’, were delivered into English secondary schools. This was funded by Martin Lewis, the Money Saving Expert, with a personal donation of £325,000 to the financial education charity Young Money to develop and distribute this milestone resource and accompanying teacher’s guide.

Aimed at supporting the financial capability of those aged 15 to 16, the reality is that the textbook has been used across multiple year groups and within a wide range of subject areas.

Since being delivered into every state-funded secondary school in England, the Money and Pensions Service funded an evaluation of the impact that Your Money Matters has had:

• 89% of teachers said that Your Money Matters would improve the quality of financial education in their schools.

• 88% of teachers said the textbook would increase their confidence to deliver financial education.

Subject Head at a Community school, said:

‘Excellent resource! Much needed for youngsters. We are very grateful to have received the textbooks and received excellent feedback from students. One student told me that our Financial Capability lessons changed the way her parents look at finances and motivated them to change the way they deal with money as a family.’

A Year 12 student, commented:

‘It’s so broad as well – if you want a general outline it is perfect for that. I actually brought one home so I could look through the university stuff. My older brother wanted to know about a work pension… I said ‘I have this textbook’ so he looked at that. He found it useful – it had the general information that he needed.’

Following the success that Your Money Matters has received in England, the Money and Pensions Service and Martin Lewis are splitting the cost of the £368,000 project, funding Young Money to develop versions of the textbook for Northern Ireland, Scotland and Wales. State-funded secondary schools in each nation will receive both printed and digital copies of their textbook over the next 14 months:

Northern Ireland – January 2021 (12,000 copies in total)

Scotland – March 2021 (21,500 copies in total)

Wales – September 2021 (12,500 copies in total)

What is in the textbook?

The educational textbook contains facts and information as well as interactive activities and questions for the students to apply their knowledge. The chapters are as follows:

1. Savings – ways to save, interest, money and mental health
2. Making the most of your money – budgeting, keeping track of your budget, ways to pay, value for money, spending
3. Borrowing – debt, APR, borrowing products, unmanageable debt
4. After school, the world of work  student finance, apprenticeships, earnings, tax, pensions, benefits
5. Risk and reward – investments, gambling, insurance
6. Security and fraud – identify theft, online fraud, money mules

Whilst the key financial topics will remain largely the same, a review in each nation, consisting of focus groups with teachers and devolved government representatives for education, is being conducted to identify the amendments required. This will ensure that the textbook in each nation maps to the respective education curriculum as well as taking into account the specific needs and financial legislation in each country.

Once complete, up to 75 copies will be delivered for free into every secondary school in each nation.

Why do we need the textbook?

Financial education is part of the national curriculum for every nation in the UK. Whilst integrated into each curriculum in different ways, it is an important part of secondary school education. Various pieces of research have identified that teachers’ confidence in delivering financial education is relatively low – there is little training provided to support this – and the degree to which young people receive financial education in school is hugely variable.

The textbook addresses this by covering key financial information in a relevant and engaging way for students. To accompany the textbook there will be an online teacher’s guide which will support teachers in each nation to use the textbook to enrich their own financial education provision in a variety of ways.

There is a strong need to help young people understand financial matters. For example, fewer than three in ten 14 to 17-year-olds plan ahead for how they’ll buy things they need, and one in ten 16 to 17-year-olds have no bank account at all. Gaining knowledge and confidence in financial issues is crucial to leading to better decisions now and in later life.


Martin Lewis, founder of MoneySavingExpert (though donating in a personal capacity) comments
:

“The pandemic has shown the lack of personal financial resilience and preparedness of the UK as a whole. Not all of that can be fixed by improving financial education, but a chunk of it can. Of course, we need to educate people of all ages, yet young people are professionals at learning, so if you want to break the cycle of debt and bad decisions, they’re the best place to start.

I was one of those at the forefront of the campaign to get financial education on the national curriculum in 2014, and we celebrated then thinking the job was done. We were wrong. Schools have struggled with resources and there’s been little teacher training. Something else was needed to make it easy for schools and teachers. So even though I questioned whether it’s right that a private individual should fund a textbook, no one else would do it, so I put pragmatics over politics and did it in 2018.

I’m delighted that now we’ve proved the success of that book in England. The Money and Pensions Service has agreed to team up to provide this much-needed resource for the rest of the UK’s nations – adding a rightful sense of officialdom to the whole project.”


Sharon Davies, CEO at Young Money and Young Enterprise comments
:

“We are thrilled that Young Money is able to develop the Your Money Matters textbook for every UK nation. Financial education is critically important for all young people, and it is fantastic that the difference this has already made within England can now be extended to Northern Ireland, Scotland and Wales. We look forward to working with our partners in each of these nations over the next year.”

Sarah Porretta, Strategy and Insights Director at the Money and Pensions Service comments:

“We know that learning about money when we’re young can have a direct impact on the ability to manage money later in life. However, too many young people are entering adulthood without being prepared for the money-related challenges that lie ahead.

The launch of the Your Money Matters textbook in Northern Ireland, Wales and Scotland is a vital step towards more teachers having the confidence, skills and knowledge to teach financial education. As part of our UK Strategy for Financial Wellbeing, we want to see a further 2 million children and young people getting a meaningful financial education so that they become adults able to make the most of their money and pensions.”

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How Millennials Can Get Ahead With Their Money

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How Millennials Can Get Ahead With Their Money

Millennials are often painted as globe-trotting creatures that spend more money on avocadoes than their future. But that can’t be further from the truth. Millennials tend to be good savers, at least compared to other generations. Industry data shows that more than 70% of millennials have started putting money away for retirement and beyond.

“Millennials still struggle with investing. Often because they feel they don’t know enough about the market, but it’s never too late to invest in your understanding. It’s a great way to make your finances work harder for you,” says Granville Turner, Director at company formation specialists, Turner Little.

Here are some things you can start doing now, or preparing for, to set yourself up for a future of learning and investing:

 

Start early

The most apparent advantage millennials have over older generations is the luxury of time. Whilst everyone can weigh up the risks and rewards of investing, you’re particularly well-placed to see a solid return on your investments.

 

Challenge risk

When you invest money for longer, you can become less phased by the ups and downs and be able to view inevitable declines as opportunity instead. It’s better to look at yearly or even longer figures for a more accurate reflection of performance.

 

Put your money to work

Money that sits in a savings account, uninvested, is almost certain to lose value over time due to inflation, or a creeping higher cost of goods and services. If your money is growing or earning you a return, it’s going to help you reach your financial goals faster.

 

Start small

Many millennials believe you need to have a serious amount of money to start investing. But in reality, even small contributions can build over time. The important thing is to start early, and make it a habit.

If you’re ready to start having the right conversations about the future of your finances, get in touch with us today. With years of knowledge and expertise, we’ll be able to assist with any enquiries, no matter how complex.

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Mapped: The UK’s Highest and Lowest Credit Score Hotspots

UK credit score

Mapped: The UK’s Highest and Lowest Credit Score Hotspots

The south is home to eight of the top ten areas with the highest credit scores in the country according to new analysis by Share to Buy.

Using the latest data from two major credit agencies, Share to Buy have mapped out the UK’s average credit scores by county showing where the country’s best scorers live, and who currently tops the national average of 570.

According to Google search data, interest around loans peaked between March and June 2020, with the phrase ‘can I get a loan’ rose by 11% compared to the same period last year, while the phrase ‘how to improve credit score’ was up by almost 27% since 2019.

UK credit score

The above image shows the England’s highest and lowest credit score hotspots rated out of 1699. 

Oxfordshire comes in at the top with a score of 1258, whilst Lancashire is bottom with 1132.

Top Five: Highest Credit Scores in the Country

Oxfordshire has the highest average credit score in the country, over two and a half times the national average of 570 and 154 points higher than Nottinghamshire, the area with the lowest credit scores in the UK.

 

Highest Credit Score Areas

Total Score out of a possible 1699

1

Oxfordshire

1258

2

Surrey

1255

3

Dorset

1239

4

Hampshire

1236

5

Berkshire

1236

Bottom Five: Lowest Credit Scores in the UK

All counties analysed have higher credit scores than the national average, but some areas in the UK lag behind their neighbours.

 

Lowest Credit Score Areas

Total Score out of a possible 1699

1

Nottinghamshire

1104

2

County Durham

1112

3

Leicestershire

1117

4

Yorkshire

1119

5

Lancashire

1132

What Impacts a Credit Score Positively

Several factors can impact credit scores throughout our lives. Registering to vote is an excellent place to start, as most credit scoring companies use this to help confirm your identity and address. Three ways to impact your Score positively include:

1. Set up direct debits where possible: Consistent, regular payments look good on your profile, so try to set up direct debits for as many payments as you can to ensure you pay on time and in full regularly. 

2. Maintain older accounts: The average age of your bank account is taken into consideration by credit scorers, so try to stick to one account that can be well managed over the long-term.

3. Don’t borrow more than you can afford: Always ensure you can meet minimum repayments easily, and pay off accounts sooner if you can. This shows you can manage within your set limits.

 

What Impacts a Credit Score Negatively

Credit scorers look for certain red flags when assessing your eligibility. Here are a few things you should try to avoid:

1. Missing payments: If this happens regularly, you could have a potential default flagged on your profile, and this can stick around for up to six years.

2. Lending beyond your means: Borrowing more than you can afford means sticking with repayments will be tricky, and when debt piles up, it can quickly become unmanageable. If you get a debt relief order or apply for bankruptcy, your credit score will be significantly impacted.

3. Regularly applying for credit: Each time you apply for credit, lenders will perform a ‘hard’ search on your credit history, and this is logged on your profile. If too many of these are logged, it could become a possible red flag.

 

Commenting on their average credit score analysis, Nick Lieb, Head of Operations at Share to Buy says:

“Many people have been asking us what constitutes a good credit score when trying to buy a home. The topic is more relevant than ever right now as we navigate our way through the uncertainty of the last few months, but with so many variables, and credit score companies all calculating scores differently, it’s not an easy question to answer.

We have combined data from two of the biggest agencies for our credit score review, and while it’s interesting to see the variation in numbers, average credit score is just one of several factors that play a part in your ability to get a mortgage. Therefore, even if your credit score is not where you want it to be, this shouldn’t be a deterrent in your search for a home”.

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BankingCash ManagementPrivate BankingPrivate Funds

10 Minute Money Challenges to Get Your Finances in Order

order finances

10 Minute Money Challenges to Get Your Finances in Order

Auditing finances can sometimes feel like a huge chore, and things may have been forgotten about or pushed to the bottom of the to-do list during the pandemic. This guide by KIS Finance has listed some very easy and quick 10-minute money challenges that people can do in order to get their finances back on track if things have started to get out of control.

Check your direct debits and standing orders

A great place to start is by checking through all of your direct debits and standing orders to make sure there’s nothing you’re paying for which you shouldn’t be. You’ll be surprised at how easy it is to miss some payments coming out of your account, especially if they’re small and you’ve got a lot of them, but it’s so important to make sure you’re aware of every single one.

Go to your mobile banking app and go through the lists of direct debits and standing orders. Look at every payment and ask yourself three questions: do you need it?, can you afford it?, and is it worth it?
Bills are obvious; you must pay them. But do you have a gym membership which you only use a couple of times a month? In which case, it may be worth researching into whether you can buy a day pass or pay for gym classes as you go – this could work out much cheaper if you don’t go very often.

Subscription services is another category to look at. Are you paying for three streaming services that all do the same thing? If so, can you live with just one or two of them?

This task shouldn’t take you very long at all, and you’ll be surprised at how much money you can save.

Check for any recurring payments

Another important thing to check for are any recurring payments – otherwise known as Continuous Payment Authorities (CPAs). They work essentially like a direct debit, but they’re different in the fact that they use the long card number instead of your account number and sort code and the company can take money whenever they think they’re owed.

The reason you need to do this separately is because they won’t appear in the lists of direct debits or standing orders, they will appear on your bank statement as if they’re a debit card payment. Most will be taken on a monthly basis, so just have a look through the last few months of bank statements and see what’s coming out regularly.

You may have purposefully set some of these up, Amazon Prime and Spotify are examples. In which case, apply the same three questions as mentioned in the point above and cancel any that you can live without.
However, you may have set some up by mistake and these are important to get rid of. This may have been a free trial that you forgot to cancel, or some retail websites have in the small print that you will be signed up to a monthly CPA after making your first purchase and you didn’t realise. You do have the right to cancel any CPAs that you no longer wish to pay.

Compare your bills

If you’re not somebody who compares suppliers and just let your bills roll over every year, then this task is a must.

In some cases, the difference between the cheapest and most expensive tariffs for products like gas, electricity, and insurances can be hundreds of pounds a year. So, a quick check through a comparison website could make a big difference to your finances.
This should be done just before each of your current tariffs/policies come to an end, so you don’t end up paying any early exit fees. You’ll normally just have to fill out some personal details and any information required for the specific product, then you’ll be given a list of all the providers where the cheapest one is normally at the top. With most comparison websites, they will do a lot of the work for you when it comes to switching, so you just have to select which product you want and make any relevant payments.

This won’t necessarily have any immediate effects on your finances, but it will definitely benefit you in the long run.

Switch bank accounts

Switching bank accounts sounds like a massive job, but most of the major banks now offer an online 7-day switching service where they do everything for you, so actually it doesn’t take much time at all and it’s definitely worth the effort.

All you have to do is go to a comparison website which lists all of the available current accounts and compare who’s offering the best interest rates, perks, and functions. It’s important to do this every once and a while and especially when you have a change in financial situation, for example, an increase in income or a big change in the amount you have saved.

Once you’ve decided on the best current account for you, simply go to their website and say you’d like to open an account with them and then they’ll do the rest. They’ll swap over all of your regular payments like direct debits and standing orders and the only thing you’ll have to do is give your new account details to your employer.

Remove your card details from websites

Most online retail stores give you the option to save your card details after you’ve purchased something in order to make the payment process faster next time. Whilst it’s convenient that you don’t have to fill out the details manually every time, it can actually make you spend more when all the effort is taken out of the process.

If you struggle with spending too much and you’re a bit of an impulse shopper, take some time to go through the websites where your card details are saved and remove them. Then, next time you come to purchase something from that website, having to get your card and fill out the details will just give you a little extra thinking time as to whether it’s something you really need.
This isn’t something that will dramatically change your financial situation, but it is something that will help towards curbing the spending if that’s something you struggle with.

investgrowth
Cash ManagementFinance

Why financial planning tools should be at the forefront of every modern wealth management firm

There has been a radical shift in client’s behaviour towards portfolio construction. No longer is there a requirement for costly active portfolios and instead, many would rather opt for passive low-cost investment products. With a range of advisors providing this offering, the market has become fiercely competitive. Wealth & Finance International sits down with InvestCloud’s Chief Growth Officer (CGO) Mark Trousdale, who gives his views on why modern financial planning tools should be at the forefront of every wealth management firm.

What is behind the trend of moving away from active portfolios towards passive investment products?

Both active and passive investment products have had their days in the sun. If you look at large-cap blended funds from 1985 to 2019, active and passive are nearly neck and neck on the number of years in which those portfolios performed better. In bull markets, many passive portfolios are rising, so active portfolios risk missing the wave. In bear markets, contrarian active portfolios sometimes avoid the pitfalls of the broader market. The rising popularity of passive portfolios is not a judgment of performance in a vacuum – it’s a judgment of performance against fees. Active portfolios simply cost more to invest in than passive portfolios; and given that active portfolios have not consistently outperformed passive ones, it’s becoming increasingly difficult to justify those higher fees.

 

Why is financial planning now more important to financial advisors (and clients)?

Fund fees are not the only ones under the microscope. Transaction fees have fallen significantly, and in some cases to zero – such as Charles Schwab’s move to eliminate fees in October 2019. Advisory fees are also under threat. The market has been taking a critical look at value for money in all areas of financial services. The lower the value of a service – or the more commoditised it is – the harder it is to justify high fees. One area that cannot be commoditised is financial planning, and investors really rate it. After all, what is the point of wealth management if not to ensure financial wellness and help families achieve their goals? Advisers are increasingly emphasising their financial planning offerings to stay at the forefront of investor value creation.

 

How is fee compression affecting firms? Will it get better or worse? How does this affect competitive dynamics in the market?

As noted above, fee compression is having a big impact on several areas of financial services, and it’s only going to get more intense for traditional offerings. But as we’re seeing with financial planning, service innovation and value focus are keys to success. I’m a big believer that price is only an issue in the absence of value. The imperative must be to innovate, focusing on value as the north star. This will spur further competitive dynamics in our market.

 

What do wealth managers and financial advisers need to do with regards to their business models and operations to support this?

In order to innovate and focus on value, advisers should focus on enhanced client communication. This involves empowering clients to interact with their advisers, view account information, track their private assets and held-away accounts, store life’s important documents, consume curated content, build goals and make confident decisions alongside their advisers. At the same time, advisers and other wealth managers need to focus on building in automation to improve operational efficiency. Across the middle and back office, advisers can automate account opening, simplified account funding, scalable model creation and distribution, automated rebalancing, personal balance sheet aggregation, one-click proposal creation and other digital advice apps. This list goes on. The aim is to reduce the number of manual, repetitive and laborious tasks so advisers can instead focus entirely on value creation.


From a technology perspective, what do firms need to implement? Should they build or buy?

Many firms focus on answering the build versus buy question. For advisers and wealth managers, delivering technology effectively is rarely a core competency. That’s not to say that these firms don’t have great tech talent – many do. But their track records are atrocious when it comes to delivering technology solutions on time or on budget. Most in-house technology projects ultimately fail for this reason. Besides considering explicit (vendor) vs. sunk (internal team) costs, firms should also look at risk costs – ‘can do’ is not the same as ‘have done’, and failing clients in this market is not an option. The value proposition to build simply doesn’t exist.

At the same time, buying technology off the shelf can seem like it will save money, but most financial technology is monolithic and cannot be customised at scale.  Logo-swapping is not customisation and clients will notice the lack of flexibility or functionality open to them.

By themselves, build and buy both lead to unsatisfactory results. Advisers and wealth managers should not approach this as one or the other and instead focus on how to take control of technology in a cost-effective, fast-to-deliver way.

The answer to this is via subscriptions to digital platforms that are flexible and modular – build and buy. With a truly modular platform, you can add functionality as your business evolves, versus an all-or-nothing proposition. This also controls recurring costs, because you pay for only what you need. The best type of platform is one that also supports mass customisation – a framework to flexibly configure and customise the look and feel as well as the workflow, integration points and data scope. From a risk and cost perspective, this should be able to be delivered in no more than six months at a price that beats your internal measures. These are all the benefits of a build and buy – the best of both, with none of the downsides.


Should wealth managers/financial advisors look to patch process with different technologies, or should they be focused on digital transformation?

Whether it’s the right answer to complement or replace existing processes and technologies depends on the process and technology in question. A firm should not throw the baby out with the bathwater. Instead, they should leverage existing investments if they are of value. But equally, firms have loads of technical debt, and can spend a significant portion of their budgets servicing bad tech. So, it’s about reviewing the technical tapestry critically and being strategic about enhancements. This is where hyper-modular apps and functions come into their own, as it means firms use only what they need, complementing their valued investments.


What other considerations do wealth managers and financial advisers need to take into account, e.g. from a digital/engagement perspective?

Investors simply expect more for their money these days, and the norms of consumer digital offerings have crept into many of their psyches. Wealth managers and financial advisers need to be extremely forward-thinking about how they automate workflows, and how they communicate with and manage their clients. Not only is a website no longer anywhere near enough, but also a basic client portal is no longer enough. Advisers and wealth managers should focus on truly enhancing client communication through things like enabling multi-channel adviser interactions and dynamic, holistic digital advice financial planning. These are the things that will matter most to them.


What other trends will affect how wealth managers and financial advisers conduct their business in 2020?

Wealth managers and advisers can expect further fee compression as well as even greater investor emphasis on financial planning. Depending on the demographic, ESG is coming much more into the mainstream. So, expect investors to be demanding more intuitive and engaging tools to compare financial products at a glance in order to help them achieve their goals. It would also not be surprising to see firms outside the US start to offer Turnkey Asset Management Programs (TAMPs) or TAMP-like platforms, which may fundamentally alter how wealth managers and advisers deliver services.

Mark Trousdale, EVP, serves as InvestCloud's Chief Growth Officer (CGO)

Mark Trousdale, EVP, serves as InvestCloud’s Chief Growth Officer (CGO). In this role, Mark is responsible for growing InvestCloud’s adoption and revenue in a consistent fashion, currently focused on the UK and broader EMEA, and headquartered in London. Mark’s responsibilities include business development, regional P&L and executive committee participation. As part of InvestCloud’s founding team, Mark has served in a number of different roles at InvestCloud throughout the years, building upon nearly 20 years of experience in financial and professional services. Prior to joining InvestCloud, Mark led the western region Asset Management Advisory practice of Deloitte. Mark holds a BA with Honors and an MA with Distinction from Stanford University.

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.”

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

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.”

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”.

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%).

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.

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

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.”