This week’s Personal Column features:
Get the full picture: tip #002 | Consumer spending falls for third month | £35 billion product maturity blitz due in next two months | Beat the Queues This Summer | Magellan Homeloans offer mortgages for up to four applicants | Magellan launches new mortgage portal | Improved Criteria: Buy-to-Let Mortgages First Time Buyers | Entertain your kids with our art competition | The lucky ones | Buy-to-let Opportunities | Pension jackpot for many baby boomers | September Workshops: which venue will you choose? | “Generation debt” vulnerable to financial shocks
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Personal Touch News
Get the full picture: tip #002
Every week for the next 10 weeks, we’ll be bringing you tips on making sure you get the full picture with Insight.
Promoting that the feedback is an independent review can provide you with significant competitive advantage. If your services are level on price and capability, having evidence that you’re better at service will make you the obvious choice because the customer will not feel like they’re taking a risk.
Source: Personal Touch Update
Consumer spending falls for third month
UK consumer spending fell for the third month in a row in July, according to research from credit card firm Visa.
Compared with the same month a year ago, spending fell by 0.8%, slightly faster than the 0.2% decline in June.
Spending has now dropped for the past three months, marking the longest falling streak in over four years.
Food and drink spending was down by 0.5% annually, while spending on household goods fell by 4%.
Household goods spending has either fallen or stagnated each month since last December, Visa said.
Bucking the downward trend, spending in hotels, restaurants and bars rose 6% year-on-year.
Visa UK & Ireland managing director Kevin Jenkins said the increase suggested “an early surge in summer staycations, as the weak pound made holidaying at home more attractive.”
But overall, he said the June figures were further evidence that households are feeling the squeeze from rising prices and stagnant wage growth.
“The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit,” he added.
As well as hotels, restaurants and bars category, recreation and culture also saw a return to growth (+1.3%) after a slight fall in June.
The figures are compiled for Visa by IHS Markit.
Source: BBC News (published 07 August)
The article is now available to share with your clients! Here’s the link for you to share on social media:
Consumer spending falls for third month. https://buff.ly/2wwWl1Z
£35 billion product maturity blitz due in next two months
More than £35 billion worth of mortgages are due to mature in the next two months – the biggest two-month maturity period since 2012.
According to data from market analyst CACI, £17 billion of mortgages will mature in September and a further £18 billion will mature in October.
The two-month period is part of a hectic 18 months which is expected to see a total of £350 billion of product maturities.
Lender Accord urged brokers to contact their clients as the current competition in the remortgage market meant they could potentially save hundreds of pounds a month.
Accord national intermediary sales manager David Robinson said: “Brokers have an important role to play in advising and helping their clients understand whether now could be the best time to remortgage.
“It’s a good opportunity for brokers to start a conversation with anyone who is coming to the end of the fixed rate on their mortgage, to examine whether they would benefit by fixing now while market conditions are still extremely favourable to borrowers.”
Source: Mortgage Solutions (published 03 August)
Beat the Queues This Summer
As the holiday period is upon us once again, and thoughts turn to taking a well-earned break, it is worth remembering that it’s not just airport security and theme park rides where we can experience those dreaded long waits. Life goes on for those of us back in the office, and the frustration of unfortunate lender backlogs can make us get even hotter under the collar as the mercury rises. Well an unexpected cooling breeze may be available with Complete FS, in the form of one of our dedicated, in-house lender underwriters. With lenders such as: Kent Reliance, Interbay, Foundation Homeloans, and Family Building Society already providing in-house underwriters, and more lenders offering dedicated contacts, you may find that using Complete is like having one of those wonderful things, a fast pass.
For more information www.complete-fs.co.uk.
Source: Complete FS e-newsletter (received 04 August)
Magellan Homeloans offer mortgages for up to four applicants
Magellan Homeloans, the specialist first charge mortgage lender, has further improved its lending criteria by announcing it will now lend to up to four applicants. The enhancements apply to their Complex Prime and Credit Repair ranges and will serve to ease affordability issues on mortgage applications.
With the cost of buying property continuing to rise and many people unable to afford to buy without pooling their incomes with friends and family, Magellan see this new initiative as being able to help more borrowers get on the housing ladder or move home.
With mainstream lenders still restricting their lending to prime customers with excellent credit records and able to afford a sizeable deposit, Magellan see their more specialist criteria as able to help an often underserved sector of the market in the house buying process.
Jason Neale, Sales Director at Magellan Homeloans, said: “As a specialist lender with flexible underwriting, we are often approached to find solutions for borrowers who are struggling to qualify for the strict affordability rules of high street lenders.
“Quite often there is scope to include multiple applicants and the overall household income when assessing affordability, so we are delighted to now include up to 4 applicants and their respective incomes on all applications. This coupled with our other innovative criteria and new mortgage portal – the Magellan Hub, will ensure Magellan remains first choice for flexible, affordability solutions.”
Source: Magellan Homeloans e-newsletter (received 01 August)
Magellan launches new mortgage portal
Magellan Homeloans, the specialist mortgage lender, has today launched a new mortgage portal named the Magellan Hub, which enables mortgage intermediaries to submit DIPs and full mortgage applications, in addition to tracking client cases online. The new portal, which is accessible at www.magellanhomeloans.co.uk, is a comprehensive end-to-end solution offering the following benefits:
- Online DIP’s
- Submission of full mortgage applications
- Electronic submission of supporting documentation
- Case tracking and status updates.
Simon Read, Managing Director Lending at Magellan Homeloans, said: “Whilst we pride ourselves on offering mortgage intermediaries and their clients a flexible approach to credit decisions it’s clear that an online submission process is a must in today’s mortgage market. Our new portal offers mortgage intermediaries the efficiency benefits that online technology can offer, whilst not replacing the human touch that intermediaries tell us is invaluable.”
“All applications will still be assessed by skilled underwriters and we won’t be using credit scoring. The portal will simply make the process of submitting an application and tracking its progress a lot quicker and easier.”
Sam Wright, Mortgage Adviser at Finance Advice Centre said:
“The launch of the Magellan Hub a modern broker portal, compliments Magellan’s competitive product range of specialist mortgages. As a busy firm of mortgage advisers, we welcome the opportunity to access these products more quickly and efficiently. Having used the Hub, there’s no doubt it greatly enhanced my user experience of dealing with Magellan.”
Mortgage intermediaries can obtain further information at: www.magellanhomeloans.co.uk/intermediaries
Source: Magellan Homeloans e-newsletter (received 27 July)
Improved Criteria: Buy-to-Let Mortgages First Time Buyers
We’re pleased to confirm that we’ve enhanced our buy-to-let mortgages criteria to accept first time buyers who want to invest in the property market. This change is live with immediate effect.
To complement this launch we have updated our criteria guide and created a new ‘What you need to know about’ document that provides an overview of the criteria associated to this change (both are attached for you reference). In summary:
- Up to 75% LTV available (dependent on specific product limits)
- Same rates available as those in our core Buy to Let Mortgage range (from 3.19%)
- Customers with a less that perfect credit profile accepted
Source: Precise Mortgages e-newsletter (received 09 August)
Entertain your kids with our art competition
The summer holidays are now upon us and your children will be looking for fun things to do. We have the perfect solution.
AIG Life is calling on budding young artists to help create a Care4Kidz calendar celebrating birthday milestones for us and Winston’s Wish, the UK children’s bereavement charity that we partner with.
Each winner will receive a Daler-Rowney Complete Art Set with Easel, a framed print of their winning image and a copy of our limited edition Care4kidz desk calendar.
In 2018, AIG Life celebrates its 10th birthday as well as five years of working with Winston’s Wish, while the children’s bereavement charity also turns 25 years old this year.
To help us celebrate our birthdays, we’re inviting children aged 5 -12 years old – whose parents are financial advisers, intermediaries or partners working with AIG Life Limited, or children who are supported by Winston’s Wish – to draw or paint a picture of the best birthday party they’ve ever had or been to with their family and friends. A public vote will decide the 12 best pictures and we’ll turn these into our Care4Kidz desk calendar.
To find out more about the Care4kidz art competition, visit our Care4Kidz page.
If you have any questions at all, just give us a call on 0345 600 6829.
Source: AIG e-newsletter (received 04 August)
The lucky ones
We’ve heard a great deal about generation rent in recent years but what does it actually mean for consumers and advisers and has the face of the typical renter changed? The picture is certainly more diverse than it used to be. With change comes opportunity and renters do present a protection opportunity. How would they be placed in the event of an interruption to income? Denise investigates.
Source: Royal London e-newsletter (received 28 July)
General Insurance News
The withdrawal of Let Alliance from the intermediary market brings a fantastic opportunity. You can re-broke any buy-to-let cases at renewal that are currently sat with them.
Following the introduction of our client-facing template renewal e-mails, through Virtual PA, this couldn’t be easier. Let Virtual PA do the initial work for you.
The e-mails are automatically generated and encourage your clients to get in touch, so you can do the shopping around for them. This saves you and your clients’ time, while supporting in client retention and ensuring your clients’ have the correct cover in place for their needs.
Providers available through our fully integrated buy-to-let quote engine in Toolbox are:
- Legal & General
For further guidance on Virtual PA, view a full demonstration or download the user guide below.
Source: Personal Touch Update
Pension jackpot for many baby boomers
Older people’s income has received a massive boost from private and workplace pensions in the last 40 years, official statistics show.
In 1977, only 45% of retired households received income from a private pension, compared with 80% last year, the Office for National Statistics (ONS) said.
As a result, the income gap between those only getting the state pension and other pensioners had grown.
Overall, incomes have grown faster for older people than for the young.
The disposable income of retired households grew at 2.8% a year since 1977 after accounting for the rising cost of living and changes to household composition, compared with growth of 2.1% in non-retired households.
Much of the recent debate over a generational divide has centred on the future of the state pension and the fairness of its “triple-lock” guarantee of annual rises. This ensures an increase in line with earnings, inflation, or 2.5%.
Excluding the state pension, it shows that those with a private pension had average pre-tax income (also including wages and investment returns) of £19,000, which is 14 times higher than those who did not receive any private or workplace pension income.
Adding the state pension and the effect of taxation cuts the gap. However, the disposable income of retired households with a private pension in 2016 was still £27,800 – higher than the £17,200 of those without a private pension.
Pension poverty was rife in the 1970s. The ONS said that four-fifths of retired households had an income that was the equivalent of less than £10,000 now. Only 4% of retired households now have an income of less than £10,000.
Workplace and private pensions have been key to that shift, but so have pensioner benefits including the state pension.
Anna Dixon, chief executive at the Centre for Ageing Better, said: “We have seen a dramatic and necessary reduction in pensioner poverty since the 1970s. Being financially secure is a key part of a good later life.
“However, these averages mask inequalities. In particular, the growing disparity between those who have been able to save into a private pension and those who have not.”
So, incomes in the last 40 years have grown thanks to final-salary pensions, yet the next generations of pensioners are unlikely to have access to this type of pension. Separate figures published on Tuesday show that final-salary pension funds were in a collective deficit of £180bn by the end of July.
Instead of being linked to their salary, their pension is much more likely to depend on the success of how savings are invested.
Automatic enrolment means that workers aged 22 and over and earning at least £10,000 are signed up to a workplace pension. By the end of March, nearly 7.7 million people had been automatically enrolled into a pension scheme.
Patrick Bloomfield, of Hymans Robertson, said that this was a good platform for pensioners of the future, but it currently ensured “thoroughly inadequate levels of saving”.
He said politicians’ eyes were open to the need to increase this saving, but he argued that the state pension age needed to go up, and working lives extended, as we were all living for longer.
A Department for Work and Pensions spokesman said: “It’s welcome news that the disposable income of retired households is increasing, but there is still more to do to ensure that tomorrow’s pensioners have the income they want in later life.
“We have reformed the state pension to make it simpler and fairer and thanks to the introduction of automatic enrolment, over eight million people are saving or putting away more into a workplace pension.”
Source: BBC News (published 08 August)
The article is now available to share with your clients! Here’s the link for you to share on social media:
Pension jackpot for baby boomers. https://buff.ly/2wwWl1Z
September Workshops: which venue will you choose?
11 locations | 15 providers and lenders | 1 easy way to register
This September, we’ll be returning to some of your favourite venues. Plus, we’ve also added some brand new ones, so we can visit more of you than ever before.
These events will ensure you know all about the buy-to-let changes, so you can maximise the opportunities in the market.
Join us to find out more about the:
+ Recent changes and how they’re being dealt with by lenders
+ Impact on you and your clients
+ Protection opportunities in the buy-to-let market
+ General insurance opportunities in the buy-to-let market
Dates, Locations and Venues
|Tuesday 12 September 2017||Scotland||Macdonald Houstoun House, Near Livingston|
|Wednesday 13 September 2017||Nottingham||Nottingham Racecourse, Nottingham|
|Thursday 14 September 2017||Coventry||Windmill Village Hotel, Coventry|
|Friday 15 September 2017||Bristol||Holiday Inn, City Centre, Bristol|
|Tuesday 19 September 2017||Knutsford||The Mere Golf Resort & Spa, Knutsford|
|Wednesday 20 September 2017||Luton||Hampton by Hilton, Luton|
|Thursday 21 September 2017||Wetherby||Wetherby Racecourse, Wetherby|
|Friday 22 September 2017||Essex||Best Western Ivy Hill Hotel, Chelmsford|
|Wednesday 27 September 2017||London||Victory Services Club, London|
|Thursday 28 September 2017||Newcastle||Copthorne Hotel, Newcastle|
Providers and Lenders
A mixture of the following providers and lenders will be attending each event:
We look forward to seeing you there!
Source: Personal Touch Update
“Generation debt” vulnerable to financial shocks
It can be difficult to save at the best of times, but there are some generations that find it even tougher – so much so that concerns have been raised over the financial resilience of the late-millennial generation (those aged 25-34), with research from LV= highlighting a lack of savings and rising debt.
The figures show that 55% of this age group fall short of having the recommended 90 days’ worth of savings to be financially resilient, well above the national average of 37%, with 34% admitting that they’d be able to survive for just one month or less if they lost their income.
These figures are even more pronounced among renters in this age group, with 65% admitting that they don’t have the recommended savings, and 45% only able to cope for a month without an income. Some 44% aren’t confident in their ability to handle a personal financial crisis, either, again higher than the UK average (33%).
Furthermore, 43% say they can’t save at all, with student debt being the biggest obstacle (40%), followed by credit card bills (32%). Half (51%) have some form of unsecured debt, and one in five (20%) owe more than £5,000 on things like personal loans, credit cards and overdrafts. Indeed, double the national average are in their authorised overdraft – 21% versus 11% – which could be adding further pressure to an already stretched budget.
Despite these difficulties, just 7% of renting 25-34 year-olds have some form of income protection insurance to fall back on should they lose their income, which means many could be seriously struggling should the worst happen.
“It’s worrying that so many 25-34 year olds have no idea how they would cope in a personal financial crisis, but those who rent are suffering even more,” said Justin Harper at LV=. “It’s clear that people in ‘Generation Debt’ are at risk of finding themselves struggling to make ends meet if they lost their income.
“It’s vital this generation isn’t overlooked, and industry and Government works together to ensure more people are able to increase their resilience to financial shocks both in the short and long term.”
One way the industry is tackling this is by reforming overdraft rules, which will hopefully mean that those falling unexpectedly into their overdraft won’t find it quite so difficult to get back out again. It’s also thought that lending rules could soon be tightened to discourage excessive borrowing, with the growth of unsecured debt now rising at its fastest level in years.
Source: Moneyfacts.co.uk (published 02 August)