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The Harrington Brooks Blog

News, comment and views from the team at Harrington Brooks.

Interest rate rise potentially on the cards for 2016

Posted by Kalpesh Bhandari on

The Bank of England have potentially earmarked January 2016 when interest rates could be set to rise.

The current rate of 0.5% has been in effect since March 2009, meaning the standard variable rate (SVR) for most mortgage providers is around the 4.99 mark based on a report last October.

As a standard variable or tracker rate is usually a set percentage higher than the base rate, then an increase is likely to be reflected in your mortgage payment.

When is the interest rate going to rise?

The Bank of England normally doesn’t increase rates during the festive season. Analysis over the last 20 years has seen interest rate decreases during December, but no increases.

So as the interest rate during December wouldn’t change from the previous month (i.e. November), the earliest we could expect to see this is in either November 2015 or January/ February 2016.

“ In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year.”

Mark Carney, Bank of England governor

How much are interest rates going to increase?

As recovery continues it seems likely that rates will increase by 0.25% to begin with. Any further increases are likely to be based on how the economy performs .

“It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historical averages.”

Mark Carney, Bank of England governor

Over the last 20 years the average interest rate would be in the region of 4%. If we work on this figure then we could be looking at an increase of up to 2% in the years to come.

What will an interest rate increase cost on my mortgage?

Let’s assume that the next rise, discussed as needing to ‘proceed slowly’, will be a rise of 0.25%. So the interest rate will be 0.75%. Here’s what it will do to your mortgage payment:

Based on an average SVR being 4.5% increasing to 4.75.

Value 4.5% 4.75% 5%
100,000 £556 £570 £585
150,000 £833 £855 £877
200,000 1,111 £1,140 £1,170
250,000 £1,389 £1,425 £1,462

 

While some lenders may absorb the increase others may only increase a small amount whilst selected lenders may increase your payment by the full rate change.

While the rate rise might be good for savers you should remember to save and make provisions for an increase later in the year. If you’re renting then your Landlord may also be faced with these costs which could ultimately be passed on to you.

If you’re currently worried about your finances, have unsecured debts from personal borrowing and would like to speak confidentially to an advisor who can talk to you about the benefits and considerations of a range of debt solutions and personal insolvency solutions, then please get in touch by calling 0800 048 1764. You can also visit harringtonbrooks.co.uk to request a call back at a time to suit you. By requesting a call, you are under no obligation to use our services. Harrington Brooks provide solutions to customers living in England, Scotland, Northern Ireland and Wales.

Should you choose to undertake a plan or arrangement, there may be consequences to consider, including restrictions on future expenditure, lending and on your ability to obtain further or future credit. Fees, terms and conditions apply. For further information and advice please visit www.harringtonbrooks.co.uk.

The services that we provide may be available at no cost from other government and charity based providers. Further information can be obtained from the Money Advice Service at https://www.moneyadviceservice.org.uk/en/articles/where-to-go-to-get-free-debt-advice

 

Martin Wheatley to stand down as FCA Chief Executive

Posted by Kalpesh Bhandari on

The Financial Conduct Authority (FCA) has today announced that Martin Wheatley is to stand down as Chief Executive with effect from September 2015.

Mr Wheatley will continue to act as an adviser to the FCA Board until January 2016 with a particular emphasis on the implementation of the Fair and Effective Markets Review, which he co-chaired.

John Griffith-Jones, Chairman of the FCA said:

“Martin has done an outstanding job as Chief Executive setting up and leading the FCA over the last four years. We owe him a lot and I and my Board would like to thank him for his great efforts in setting up the organisation and for the contribution he has made to putting conduct so firmly at the top of the financial services agenda.

“We all wish Martin well and I am pleased that we will continue to benefit from his wisdom and expertise over the next few months.”

Martin Wheatley said:

“I am incredibly proud of all we have achieved together in building the FCA over the last four years. I know that the organisation will build on that strong start and work so that the financial services industry continues to thrive.”

Mr Griffith-Jones also announced that Tracey McDermott will be taking over as Acting Chief Executive from September 12 while the search for a permanent Chief Executive takes place.

“I am pleased that we are able to call on someone of Tracey’s ability and stature to take up the post of Acting Chief Executive. I am grateful to her for taking on this role and I know she will do a great job.”

Wheatley has previously held roles at the Securities and Futures Commission and the London Stock Exchange before becoming Managing Director of the Financial Services Authority before it was split in to the The Financial Conduct Authority and the Prudential Regulation Authority in 2012.

 

Summer days out on a budget

Posted by Kalpesh Bhandari on

You don’t need to have a mountain of cash to have a great day out. The summer holiday season can be great for a day out and everyone can enjoy the sun when it decides to shine. We’ve got a couple of handy tips and ways to find somewhere, or do something, when you’re trying to save cash.

beach_family_shutterstock_274913207

 

Rent university halls of residence

During the summer university students have to go home. Leaving a few hundred rooms spare, and available, to rent. If you’re looking at a city break on a budget it’s worth seeing if you could save. Visiting the relevant university website in your chosen city should point you in the right direction to find somewhere. You’ll expect to pay upwards of about £60 per night for a single room.

Rent a spare room

Alternatively take a trip to spareroom.co.uk where you can enquire about renting a spare room for a few days. Again this may be cheaper than a hotel but you’ve got the added ‘mystery’ of staying in a random stranger’s house. If that’s a bit off-putting hunt through your facebook friends in another city and see if they’re willing to let you stay. When we’ve had an initial look there are rooms which can be rented for as little as £100 per week – but this will differ by location and distance from the relevant city centre.

Camping

If you’re looking at places to go then try pitchup.com. The site covers most of the UK and finds campsites where you can take your own tent or helps you look for caravan sites. Some of the headline offers feature £16 per night to pitch up your own tent on the Welsh coast and from £18 on a farm in Somerset. If you’d rather not travel then you could always pitch up in the back garden.

National Trust venues

There are plenty of places you could go within the National Trust stable of venues. The beauty is that they can be enjoyed on a budget depending on where you go. At most venues you’ll be required to pay for parking but thereafter you can enjoy some of  the wildlife, open grounds and more. The prices will differ from each venue. Expect to pay between three to £10 pounds for all day parking. For entry in to other areas such as exotic gardens, stables or any indoor grounds you may need to pay more.

Let’s go to the beach

Whilst there are many beaches in the UK you could visit it can be hard getting all the detail you need about where to park, the policy on dogs and when the tide is due in. As there are loads we could mention a handy place to start is the Good Beach Guide. All you need to remember is your sun cream.

Visit England

As we’re always recommending our customers to be smarter with their money it can be hard – especially if you’re thinking about having a break or taking a holiday. If you’re thinking about a break or a day out on a budget take a look at the Visit England website.

There’s a section dedicated to free and low cost attractions which include some real gems that the kids will also enjoy.

A couple of things to remember that might help…

 241 theme park offers – you’ll save, but you’ll also need to spend

Whilst 241 offers for places like Alton Towers and Thorpe Park are great, just remember that you’ll have additional costs to pay for on top of the ticket such as petrol, food, parking and any fast track tickets if you don’t want to queue up for an hour for the big rides. Whilst taking your own food in to these places is normally allowed it can be hard to carry all day – and prices for food once you’re in can be expensive.  So what may look to be a headline saving offer could cost more overall.

Picnics

It’s pretty straightforward. Find a local park, pick a sunny day, grab some books or something to keep you entertained and do it. A trip to your local pound shop is a decent source of games and stuff you might need for a game of rounders or cricket as well.

Use Ebay to find cheap tickets

While there are plenty of places on the web to find 241 tickets for venues it may be worth taking a trip to Ebay or other auction/ swap sites to find cheaper tickets. They may be date restricted but it’s always worth having a peek.

 

Harrington Brooks helps local young people with another Financial Education Day

Posted by Kalpesh Bhandari on

As one of the UK’s leaders in our field we’re passionate about helping people with their finances.

L2E booklets

So as part of our commitment to the community we’re helping our local school kids and young job seekers get to grips with managing money as part of our next Financial Education for Future Generations day.

Today we’ll be welcoming 30 young people from different schools and youth clubs to take part in the Young Enterprise ‘Learn to Earn’ programme.

As well as giving some pointers on finances we’ll also be helping them understand what it’s like to work in the real world. They’ll have the chance to ask our staff about day to day working life while we give them tips on setting and helping to achieve career goals.

The programme is run by financial education charity Young Enterprise and we’ve enlisted help from our local partners at Thrive Trafford to set up the day. Thrive specialise in making relationships with key partners for the benefit of the local area.

“Our Learn to Earn programme enables students to consider their future aspirations and expectations, whilst learning about the real cost of living and possible career paths. Working with the Group means students can hear directly from industry experts and understand the importance of financial management.”

Suzanne Lockwood, Young Enterprise Area Manager for the North West.

 

“We’re really excited to be involved in this programme and seeing the benefits that the students involved will gain from it.”

Mark Cottam, CSR Advisor, Community Investment, Thrive Trafford.

If you want a quick flavour of what some of the kids will be doing whilst they’re at our office take a look at the Young Enterprise ‘Learn to Earn’ video.

Harrington Brooks invest further in systems to secure service levels for customers

Posted by Kalpesh Bhandari on

Managing our risks – and what it means to you

Harrington Brooks, part of the One Advice Group, have chosen Xactium Risk Manager software to support and manage the way we deal with business and operational risk.

This includes a wide range of aspects including how we plan and ensure that customers receive consistent and efficient service levels, that advisors receive the right training and support, that we invest in the right areas of the business such as  IT and that we minimise and control any potential impact to the business. It’s complicated but all really important stuff.

Why does it matter to me?

From a consumer perspective this helps to manage and identify risks that could pose a threat to how we manage our relationships and the service we supply to customers. Our customers are at the heart of what we do, so we need to make sure that our dealings with you are  fair, transparent and have your interests at heart. These are just some of the reasons why managing our risk matters to you.

Who else does it matter to?

Regulators within the industry want to make sure that any company working under their authority is managed correctly, with the chance of customer dissatisfaction occurring being reduced. Shareholders who take an interest in the company also want to know that the business is being run adequately and that the solutions provided to customers meet their needs and are suitably managed.

Will anything change?

As a new or existing customer your day to day dealings with us will remain unaffected. This investment is about Harrington Brooks continuing to improve the behind the scenes operations and infrastructure.

Changes within the regulation of the debt management and consumer credit industry have required firms within our sector to review operational processes including how they manage business risks. This is something we welcome and embrace.

The software we have invested in is used by other leading companies including Jardine Lloyd Thompson and HomeServe as well as the Financial Conduct Authority.

Creative and cheap ways to entertain your kids this summer

Posted by Kalpesh Bhandari on

In this technological age, it’s easy to think that children will get bored without an iPad, games console or TV. But as you’ll probably know, a child’s imagination is limitless. By letting them loose on some craft activities you can keep them entertained all day.

kids craft activity

Make and fly a kite

Paper, sticks and string are all you need to make a kite with your kids. There are hundreds of how-to guides online and plenty of different styles to keep the family amused. Let your kids get even more creative and decorate their kites and its tail with crayons or paints. Simply search the web for ‘how to make a kite’ and you’ll be flying in no time!

Get crafty with papier mache

You’ll need newspaper or kitchen roll, glue and water. Papier mache can keep kids amused for hours once they get the hang of making an object. Let them papier mache over balloons to make hats or masks, and let them decorate the handmade items using paint, glitter or feathers etc. This can get messy so make sure you have enough room to work and clean up in. A quick trip to your local pound store will make it easy to find everything you need.

On a roll with your drawing?

A cheap roll of wrapping paper or the rear of some unused wallpaper and coloured pencils is all you need to get your kids’ imaginations running wild. Roll out the paper down your hallway or other long space and let them create a huge piece of art. If time is precious, do a bit today and more tomorrow. You could use this to create a skyline, train or a massive drawing of friends and family. And when you’re finished, or even halfway through, it’s easy to store as you can carefully roll it up.   

Make stained glass designs

You can use regular paper and cheap crayons to make “stained glass” drawings. Here’s how. Draw the outline of a stained glass design (maybe a butterfly, a smiley face or a flower) in black pen. Then put the paper on a baking tray and place in the oven until it’s nice and warm.

Take it out, and your little one can then carefully colour in the warm paper – the crayon should melt and create a really nice effect. Once it’s finished and dried, hang it up in the window (some blu tack may be required here) and watch the light shine through. Brighter colours like yellow let in light the best.

Make a den

No school holiday is complete until you’ve made a den. Bed sheets, old curtains and blankets are perfect for making a den while using furniture and clothes pegs to secure everything in place. It’s an activity that’s fun inside and outside. For a real sense of adventure, let them bring their duvets or a sleeping bag and go “camping” in it overnight. You could even download and play some wildlife or nature sounds to add to the experience.

Decorate with nature

Visiting a nearby park, beach or woodland is always a great trip out. As a bonus activity, take carrier bags and encourage your children to collect things to decorate later – pine cones, acorns, shells or interestingly shaped stones. When you get home wash and dry what you’ve collected and let your kids decorate them with paint and glitter. When you’ve finished you can arrange them as a table decoration for your dining or coffee table.

You can also create lovely pictures by placing leaves under paper and shading over them with coloured pencils, so encourage your little ones to pick up leaves they like the shape and look of. As leaves change colour over the seasons you could try a number of shades and have some fun.

Play fashion designer

Challenge your kids to make outfits out of newspaper and bin bags using masking tape and scissors. Put on some music and let them show off their designs with a fashion show when they’re finished. An easy piece of clothing to start with could be a skirt, tie or a poncho. As your child grows in confidence see if you can encourage them to make something harder!

Sink or swim tub boats

You can use plastic dishes from microwave meals or Tupperware that’s getting worn to make mini-sized boats. Use straws or kitchen roll holders as masts, paper for sails and everything can be customized to your child’s content. Make a range and test them in the bath to see which ones float most successfully. You could even have a race with the boats using straws to blow them along.

Keeping a journal for the summer

Summer journals not only keep your children entertained at the end of the day as they write about what they’ve done, they make fantastic keepsakes of all the memories you make. Encourage them to collect things during the day to stick in like leaves, ticket stubs and photographs. They can also draw their favourite parts of the day. You could even have fun making the journal from folded paper and lovingly decorating or personalising the front.

Free DIY Class with B&Q

Kids aged 7-11 can go to free DIY classes at selected B&Q stores across the country – you’ll need to call them or ask in store to confirm availability.

Female insolvencies overtake male during 2014

Posted by Kalpesh Bhandari on

The number of women facing insolvency proceedings has overtaken men for the first time ever.

male_female_flat_shutterstock_226607047

Figures released by the Insolvency Service for 2014, which covered location, age and gender revealed that combined bankrupt, IVA and DRO numbers for women overtook total male insolvencies last year.

Some other key findings that were published include:

  • In 9 out of the 10 regions the female insolvency rate was higher than the male insolvency rate, the exception being the South East where the male insolvency rate was higher than the female insolvency rate
  • The insolvency rate was higher among females than males in most of the age groups: 18-24, 25-34, 35-44 and 45-54. The insolvency rate was higher for males than females in the age groups: 55-64 and 65+
  • Areas with the highest insolvency rates were concentrated in seaside resort areas, parts of the North East, South West and Merseyside.

“These statistics show that in 2014, for the first time, more women than men entered a formal insolvency process.  Looking into the statistics in more detail they show that the insolvency rate was higher amongst females than males below the age of 55 but above that age it is higher amongst men.  There will inevitably be many reasons for this but it may be that women are less likely to stick their head in the sand about debt problems or it could be that low value or consumer debts have a bigger impact on women’s finances than men. It is probably also a reflection of women’s increasing economic activity which is closing the historic gap with their male counterparts.”

David Rankin, Insolvency Practitioner, Harrington Brooks

The total insolvency rate decreased in most regions – this continues the decreasing trend since 2009. In terms of age range people facing bankruptcy, IVA or DRO proceedings were highest in the 35-44 age category for both men and women.

APPLE PAY – a quick guide

Posted by Kalpesh Bhandari on

A change to the way customers can make payments in store and online is introduced this week with the introduction of Apple Pay.

apple pay

Apple Pay is a “breakthrough contactless payment technology with unique security features built into the devices”. It means that you can use your iPhone, Apple Watch or iPad to pay in a simple, secure and private way.

Why should I care about Apple Pay?

Whilst we’re not trying to endorse a product or brand here, we do want to outline the changes and potential benefits of using such a system as it may change how you handle your money.  It’s also appropriate and timely because in May The Guardian reported that card and automated payments overtook cash transactions for the first time.

If you only spend what you need to – this can help you save money

One of the biggest ways in which you could save money is by spending only what you need to – and paying by card can help to achieve this. Paying by cash does have a tangible, or real, feeling about it but paying by card for everyday purchases takes the exact amount of money from your account. You don’t have the option to spend the change.

Secure payments, secure spending

With Apple Pay, there’s an extra layer of security in that payments are validated by the fingerprint scanner. With regular card payments that use contactless technology, no pin number is required. If your card was stolen it could still be used to make contactless purchases. However by using Apple Pay this couldn’t happen as each payment requires your fingerprint to do this. Plus if you lose the phone it can be remotely wiped through your iCloud account. It’s just as easy to cancel your cards with a phone call to your bank – but if you have many banks then you may need to make a number of calls.

Use it with the watch or phone

The introduction of Apple Pay does change the way you can make transactions. If you have the watch, provided it’s paired with your phone, you can use it to make a purchase.

All the major banks are on board so you’ll be able to use it

Most major banks in the UK have signed up to using the service – so you’ll be able to use it with a compatible device.

UK retailers are accepting Apple Pay

A number of major retailers have already signed up to accepting the service. As it uses existing NFC (Near Field Communication) it doesn’t require any additional hardware upgrades to payment terminals in store.

Whilst we’re not saying you should go out and get an Apple device to use Apple Pay, what we’re saying is that such a service may make you think differently about how you handle cash and money in your account. By spending only what you need means you won’t have the option to spend any change which wasn’t earmarked for anything in particular. If you save this cash instead your wallet may feel better in the long run.

Budget 2015 – the key points for you

Posted by Kalpesh Bhandari on

Following the election George Osborne had some points to address in a summer Budget speech. Here’s a quick breakdown on what you may need to know.

budget 2015

Car Tax

From 2017, there will be a flat rate of £140 per year for most cars, except in the first year when tax will be based on the emissions that cars produce. Electric cars won’t pay any road tax. Existing cars won’t be affected – no one will pay more for a car they already own.

ALSO – The first MoT for a new car will be required when a car is four years old, rather than three.

Insurance Premium Tax

This applies to your home and car insurance. The tax you pay on these insurance policies is currently set at 6%. This will rise to 9.5%.

The Minimum Wage will change to the National Living Wage

The National Living wage replaces the Minimum Wage. This is set to be £7.20 per hour from April next year for people aged 25 and over. By 2020 this is planned to be £9.

Personal Tax Allowance

The limit at which people start paying tax, is to rise to £11,000 next year – this was already announced in a previous budget. The Government plans to increase this to £12,500 by 2020.

Changes to Benefits and Tax credits

Tax credits and Universal Credit will be limited to two children, affecting children born after the 1st April 2017. So if you have a third child there will be no financial support for it through benefits. It’s unclear yet if this applies should your first pregnancy produce triplets.

The annual household benefit cap will be reduced from £26,000 to £23,000 in London and £20,000 in the rest of Britain. Meaning a household can’t claim more than these limits in a year.

Tax relief for landlords

Individual landlords can deduct any costs from their profits before they pay tax – this provides financial benefits over other home buyers. Wealthier landlords get tax relief at 40 and 45%. This will be restricted to 20% for all individuals by April 2020. This could potentially mean that landlords have to increase rental costs to cover this loss in income.

For a full rundown on what’s what have a look at the gov.uk website.

 

Citizens Advice Impact Analysis on the Budget 2015 Benefits Cap

Posted by Kalpesh Bhandari on

Whist the Chancellor announces new limits to the amount of benefits a family can claim the Citizens Advice Bureau (CAB) have produced an impact assessment on what could happen once it was capped to £23,000.

The benefits cap, which was previously set at £26,000 in 2013, is to be cut to £23,000 for households in London and £20,000 for those living outside the capital.

Whilst the Government will undertake its own impact analysis the CAB report highlights a number of stats as a potential result of the current and incoming changes:

  • The current cap disproportionately affects households in high rent areas, women, and ethnic minorities.
  • The overall trend will be of smaller families being capped all over the country, and very small families in high-rent areas being capped.
  • Families who need four bedrooms to house themselves adequately will find that their housing benefit will no longer cover the cost of private sector rent in any part of the country.

The report also referenced that of the estimated 87,000 households immediately affected by the lower cap, at least 35,000, or two in every five households, will be in rent arrears a year after the introduction of the cap.

It also predicted that 30,000 households will struggle with essential living costs such as food, fuel bills and other priority debts.

CAB also point to the need for local authorities to have access to Discretionary Housing Payments, where tenants get additional payments to cover housing costs, in order to help with the change in circumstances and adapt to reduced income.

It goes on to state that an estimated 150,000 adults and 395,000 children will be affected by the £23,000 cap, including those who are already capped at £26,000.

Anyone who wants to see the report can do so on the Citizens Advice website.