This week’s Personal Column – 01 July 2016

By 30th Jun 2016 Apr 26th, 2017 Communications, Personal Column

This week’s Personal Column features includes, the average income in the UK moved above it’s 2009-10 peak in 2014-15, official figures show, owing to a rise in the number of people in work.

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Average income ‘hits new peak’
Skipton launches 1.69% exclusive with Personal Touch
Simple offset for your clients
Improvements to Santander’s mortgage range
Flood Re’s take-up doubles since launch
AIG webinars on whole of life insurance
UK workers’ savings would last ‘just four months’ if they lost their income
Government to warn 100,000 failing to qualify for state pension
Protection and Mortgage Sales Workshops
North West Regional
50 years on: How credit cards changed our relationship with money

Finance News

Average income ‘hits new peak’

The average income in the UK moved above its 2009-10 peak in 2014-15, official figures show, owing to a rise in the number of people in work.

The mid-point net income of all households in the UK was up 3% after inflation.

That meant average income before housing costs reached £473 per week – around £24,600 a year, the Department for Work and Pensions (DWP) said.

This income had fallen during the financial

There was little change in the gap between rich and poor, which has been the case since 2011-12, the figures showed.

However, the data revealed that on one measure child poverty had increased, and in two other measures it was unchanged in 2014-15 compared with the previous year.

“Child poverty isn’t inevitable, the government needs to invest in our children so we can all share the rewards of a stronger economy and a fairer society,” said Alison Garnham, chief executive of Child Poverty Action Group.

Work and Pensions Secretary Stephen Crabb said: “There is of course, still more to do and that’s why our life chances strategy will look at the root causes of poverty, whether that’s worklessness, debt or addiction, family breakdown or educational attainment. It’s only by doing this that we can truly tackle poverty and ensure everyone succeeds in life.”

Source: BBC News (published 28 June)

Average income ‘hits new peak’: 

Mortgage News

Skipton launches 1.69% exclusive with Personal Touch

Skipton Building Society has launched an exclusive two year fixed mortgage with Personal Touch, available for purchase and remortgage at 1.69% up to 75% LTV.

The product provides a free valuation and incudes £250 cash back on completion.

Skipton has also reduced rates by up to 0.20% across selected two and five year residential fixed rate mortgages.

The range includes a two year fix at 1.79% to 80% LTV with £995 fee for house purchases and a two year fix at 1.49% to 60% LTV for remortgages.

The five year fixed range now includes rates at 2.45% to 70% LTV with £995 fee for purchases and 2.12% to 60% LTV for remortgages with a £1995 fee.

Kris Brewster, Skipton’s head of products, said: “We believe our two and five year products offer very attractive rates and will help first time buyers, and those looking to move up the housing ladder to realise their dream of moving into a new property. We’re also delighted to offer an exclusive product with Personal Touch, demonstrating Skipton’s continued commitment to supporting the needs of our customers and brokers.

“This new reduced rate range from Skipton offers great value for purchasers and for those wishing to remortgage their existing new home.”

Source: Financial Reporter (published 23 June)

Simple offset for your clientsCov for intermediaries Land Logo 2 col

With the Coventry for intermediaries launching their ten year fixed offset recently, now’s a good time to remind you of how simple their offset is for your clients.

Those who save regularly throughout their mortgage term could benefit from an offset mortgage.

Their growing savings can reduce the amount of mortgage interest they pay, which will reduce their regular monthly payments or mortgage term, and they still have access to their money if they need it.

The Coventry’s offset offers:

  • One linked savings account.
  • Easy access to savings.
  • Further borrowing at the same rate.

Source: The Coventry (e-mail received 27 June)

Improvements to Santander’s mortgage range


Santander recently made selected rate reductions of up to 0.20%.

Highlights include new rates of:

  • 75% LTV two year fixed 1.64% £995 product fee, purchase and remortgage.
  • 85% LTV two year fixed 1.74% £995 product fee, purchase and remortgage.

They’re also launching a new ten year fixed mortgage at 60% LTV and a five year fixed mortgage at 80% LTV.

Additionally, they’re making a slight increase to their two year tracker at 75% LTV and making selected product withdrawals to simplify their range.

For full details of Santander’s new range, please see their rate bulletin (issue 13) which is now available on their website.

Source: Santander (e-mail communication received 28 June)


General Insurance News

Flood Re’s take-up doubles since launch

The number of insurance firms who’ve signed up to Flood Re has more than doubled since going out live on 4 April this year.

The reinsurance programme now has 36 participating firms, which covers 85% of the overall market.

The figure represents an increase of 125% from 16 providers.

The scheme is designed to enable insurers to offer lower premiums and excesses to high-risk flood homes across the UK.

General Insurance news

Flood Re’s chief executive Brendan McCafferty said: “We’re talking to more insurers and expect this number to rise from the present level of 36 over the remainder of 2016.”

McCafferty said consumers could check the Flood Re website for participating companies and should be prepared to shop around as the market is becoming “increasingly competitive”. 

“When buying a policy, people in flood-prone areas should make sure it’s the best one for them and not just the cheapest,” he added.

Meanwhile, the Association of British Insurers (ABI) has revealed 90% of the 15,000 property claims settled after a series of storms and floods took place in December.

A breakdown of the figures shows 94% of domestic policyholders and 83% of commercial customers have had their claims either fully or partly settled.

Commercial cases can take longer to work on due to the large values involved, said the ABI.

In addition, claims for business interruption cover can often only be dealt with once accounts have been provided, so that the impact on loss of profits can be accurately calculated.

Mark Shepherd, manager of general insurance policy at the ABI, said: “For everyone affected by December’s storms, we know the repairs to their homes and businesses can’t happen soon enough.

“These latest numbers show insurers continue to make good progress with the important work of getting everyone’s lives back to normal.”

Source: The Actuary (published 16 June)

Flood Re’s take-up doubles since launch:

Protection News

AIG webinars on whole of life insurance

Aig logo

AIG are hosting a free webinar, which will provide you with an overview of the whole of life market and their proposition.

To book a place, please select the preferred date and time below:

5 July at 10:00 6 July at 10:00
5 July at 15:00 6 July at 15:00

By the end of the webinar, you’ll:

  • Understand what the AIG whole of life proposition offers.
  • Get an overview of their online signature free process.
  • Receive tips and ideas on how to add value, with extra support services and benefits to your advice driven protection sales process.
  • Have had the opportunity to ask any questions you may have regarding the AIG whole of life proposition and any other AIG protection product.

Source: AIG (e-mail received 09 June)


UK workers’ savings would last ‘just four months’ if they lost their income

UK workers’ savings would last just four months if they lost their income according to research from Canada Life Group Insurance.

The survey carried out by the group risk insurer found that:

  • 19 million UK employees don’t have any form of income protection.
  • Over two in five (44%) of these would rely on savings if they were unable to work.
  • One in ten (9%) workers don’t worry about losing income, as they believe they could live off state benefits.
  • More than half (53%) couldn’t survive on work-related employment and support allowance.

Six in ten (61%) UK workers don’t have any form of protection to replace lost income if they developed a serious illness or injury, equivalent to 19.3 million people.

For those without income protection, surviving off savings for as long as possible is a common strategy if they were unable to work. However, with UK households spending an average of £531.30 per week, the typical savings pot of less than £9,000 would last just 16 weeks.Protection News

Even if weekly expenditure was cut back to the bare essentials (housing, food and transport at £291.90 per week), UK employees’ savings would last barely more than half a year (30 weeks).

Over half of UK workers couldn’t survive on work-related employment and support allowance. A similar proportion (43%) of employees without income protection would apply for state benefits if they found themselves unable to work.

However, one in ten (9%) respondents don’t worry about losing their income because they believe they can live off state benefits if needed. However, many are overestimating the amount they’d receive and could struggle to survive on a typical state benefit payment.

UK employees estimate the average amount provided by the government if you’re ill or disabled and unable to work is £172 per week. A third (34%) believe this amount is over £200 per week. However, people who qualify for the work-related activity (for those who could be assisted back to work) Employment and Support Allowance (ESA) group can in fact receive a maximum of £102.15 per week.

Over half (53%) of UK workers couldn’t live off this ESA payment if this was their only form of income. In addition, 46% of UK employees wouldn’t be able to meet their mortgage or rental payments if they lost their income and had to rely on ESA.

Paul Avis, marketing director of Canada Life Group, comments: “When it comes to serious illness or injury, many people assume it either won’t happen to them or they can rely on state benefits when their savings eventually run out. But being unable to work is more common than people think and our research underlines the fact that depending on savings, or state benefits is a flawed plan for most employees.

“A savings pot will only last so long, and being accepted for state benefits is by no means a certainty.

Source: Cover Magazine (published 17 June)

 UK workers’ savings would last ‘just four months’ if they lost their income:


Wealth News

Government to warn 100,000 failing to qualify for state pension

The Government has agreed to write directly to people who don’t meet the minimum qualifying period for the new state pension.

In a report, the Work and Pensions Committee (WPC) recommended that “as a matter of urgency” the department write to people it projects will reach pension age with fewer than ten qualifying years.

WPC said: “These letters should clearly explain the person’s circumstances and set out both projected entitlements and means of improving them. Though some letters will go astray, the benefits of this approach exceed any risks.

“We further recommend the department work with pension providers to write similarly to individuals who built up a guaranteed minimum pension during the period 1978 to 1988.”

The WPC also calls for the introduction of a new state pension telephone hotline service for the recipients of these letters. The service, it says, should enable claimants to discuss with an expert a strategy for increasing their state pension entitlement, and could be provided by an existing pensions guidance service.

Aegon says it welcomes the Government’s decision, but calls for it to go further and send everyone a personalised projection.

Steven Cameron, pensions director at Aegon, said: “We warmly welcome the Government having agreed to write individually to the estimated 100,000 individuals, who don’t have sufficient national insurance contributions to qualify for the new state pension. It’s vital that this groWealth Newsup understands this as early as possible, rather than facing a shock at state pension age. Some may be able to take steps to improve their retirement prospects, either through paying extra voluntary national insurance contributions, or by contributing to a workplace or private pension.

“But this is just a first step and we urge the Government to go much further, and write directly to every individual to provide them with an estimate of what state pension they’re on target to receive. This should then be updated periodically. Our research shows that millions of individuals have no clear understanding of how much, or how little they may receive as a state pension. While people can now request a projection, the majority won’t think of doing so. Sending out individual personalised state pension forecasts would mean individuals could look at these alongside their private pension forecasts, take stock of whether they’re doing enough for the retirement they aspire to, and if not take early action.”

Source: Financial Reporter (published 22 June)

Government to warn 100,000 failing to qualify for state pension:



Protection and Mortgage Sales WorkshopsEvent News

New dates announced

Due to the fantastic feedback and popularity of the Protection and Mortgage Sales Workshops, we’ve added new dates!
Don’t miss out, reserve your space at one of our workshops through Focus.


The events will run from 09:30 – 13:15 and include:

  • Protection sales focused session.
  • SolutionBuilder demonstration and sales tips.
  • Lunch.
  • Mortgage sales focused session.
  • MortgageSource demonstration.

Dates and Locations

Please click here to see the full list of dates and locations.


North West Regional MeetingEvent News 1

Our next regional meeting will take place at Cottons Hotel and Spa, Knutsford on Thursday 10 November.
The North West Regional Meeting is packed with hints, tips and support in continuing to drive good customer outcomes.


Here’s a preview of what the events will bring:

  • Presentations by subject matter experts.
  • Buzz sessions giving insight into various hot topics.
  • An opportunity to ask questions about the latest technology advances.
  • An exclusive strategy update from a member of the executive team.
  • Networking opportunities with the board and other key Personal Touch staff, as well as other successful advisers.

Book your place

Registration is still open for you to book your place.


And finally…

50 years on: How credit cards changed our relationship with money

Fifty years ago this week, Barclaycard issued the first credit cards in the UK.

Half a century on, consumers are used to a range of convenient ways to pay, but back in 1966 there was a feeling of change when people tried to brandish their exciting new plastic cards.

The company sent out some 1.25 million plastic cards to Barclays customers from 29 June 1966, and while some sent them back or never used them, many embraced the new way of paying.

And finallyAt the time, the bank said: “Barclaycard’s purpose is to reduce the use of cash in shopping and other transactions and the scheme is designed to appeal not only to those who must travel and spend a good deal of money in restaurants, but also to the everyday shopper throughout the country.”

It also stressed the benefits to retailers and businesses by pointing out that the card would help in “reducing or eliminating the book-keeping now needed to maintain customers’ credit accounts.”

By the time a group comprising Lloyds, NatWest and Midland (now HSBC) launched the now-scrapped Access card in 1972, there were 1.7 million Barclaycard holders.

Today the company says it has 10.5 million consumer customers, as well as many more business customers.

In 1966 Barclaycard charged an annual interest rate of 1.5% but expected payment by the end of the month.

The idea of revolving credit, where a card can be used to maintain a longer borrowing, only started in 1967 when Barclaycard offered up to three months’ credit. Now, of course, it’s possible to be in debt to a credit card for a lifetime and the average interest charged on outstanding balances is 18.9%.

The borrowing limits in 1966 were much more modest, too. Cardholders were offered up to £100 worth of credit. Now the average is around £4,000, the company says.

Looking ahead, plastic cards will take over from cash to become the UK’s most frequently used payment method by 2021, reckons Payment UK.

The growth will be driven by “the next generation of account holders”, says the UK Cards Association as “younger people are more likely to embrace new technologies such as contactless cards and mobile payments.”

While the introduction of plastic in 1966 may have given cardholders a feeling of confidence, the evolution of the credit card also meant the danger of getting into debt very much became a reality.

Today, many people happily use credit cards for convenience – often earning rewards or cashback – while paying the balance off every month to ensure there are no charges.

But overspending and building up long-term debt remain big problems.

Mike O’Connor, chief executive of the debt charity Step Change, says: “The average credit card debt we see is £8,403 and last year we dealt with more than 200,000 people with £1.7 billion of credit card debts.”

He says the Financial Conduct Authority should reform the market to ensure that credit cards work better for consumers, especially those in financial difficulty.

“Small changes to existing rules, such as increasing minimum payments from 1% to 2% of the balance or fixing minimum repayments so that they don’t fall as the balance declines, could save people thousands of pound and cut years off repayment periods,” says Mr O’Connor.

Source: BBC News (published 27 June)

50 years on: How credit cards changed our relationship with money: