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Protection insurance is severely undervalued by thousands of people across the UK. Often  seen as an unnecessary expense – there are a vast number of people living in this country  who are yet to take out a protection plan and therefore remain unprepared should they lose  their income or worse – their life. With a cost-of-living crisis currently causing panic for many,  it’s so important to stay covered even when you’re looking to cut costs elsewhere. Despite  common misconceptions surrounding how often providers pay out, tougher times make  protecting your family should anything happen to you even more vital 

The necessity of protecting  your income in particular has  never been more apparent.  The pandemic offered millions  of people a scary insight into  just how quickly circumstances  can change for anyone by  forcing a huge proportion of  the population out of work.  Now, imagine how dire that  would have been without the  safety net that the furlough  scheme provided for so many  households nationwide. Illness  can stop you working at any  time and without warning and  being in the midst of a cost-ofliving crisis, protecting yourself  against such an outcome has  never been more valuable.  Well, that is the harsh reality that faces those who are yet  to take out a protection policy.  Despite the evidence, there are  still some common myths that  dissuade people from turning to  protection.  

Do providers actually pay out?  So, do providers actually pay  out – or is it all too good to be  true? Well, contrary to what  some sceptics might say, 98.3%  of all claims made in 2019  on protection policies were  accepted. This figure is enough  on its own to display just how  common a successful claim is –  and how unlikely it is that a claim  is rejected. There are of course  a few occasions when providers  don’t pay out – most commonly due to underlying issues not  being disclosed when the policy  is initially taken out.  

Can everyone get cover?  Another common  misconception surrounding  the protection industry is that  more complicated cases get  turned down. There are plenty  of insurance providers that  specialise in the more complex  of cases – and the figures  suggest that the vast majority  of those cases pay out too. The  Exeter reported that 93% of  claims were paid in 2021 with a  total pay-out of over £10 million.  Out of the 1,318 claims made  throughout 2021, only 92 were  turned down.  

It’s so important for everyone  to protect their income, and if  the past couple of years have  taught us anything, it is that no  one can predict what the future  holds. Being protected against  any eventuality is a safety net that  could prove to be invaluable to  any of us. 

 If you’d like to discuss the options available to you, contact an adviser today. 

With affordability tests being revised in the wake of the cost-of-living crisis currently  happening in the UK, many prospective buyers are looking for ways to improve their chances  at securing the best possible mortgage for them. With house prices still at a high, improving  your affordability can be a great way of increasing your chances of securing a mortgage –  especially for first time buyers looking to raise a deposit for their first home. In this article, we  take a look at the most effective ways you can improve your affordability. 

 The affordability test that comes  with a mortgage application is  designed to protect consumers  against being sold loans that they  are unable to pay – obviously  something that is an essential  part of the process, but also an  added obstacle for some that  are perhaps right on the cusp of  affording the home they want.  With the criteria now set to be  tightened, it may well be time  to look at improving your own  affordability wherever you can.  

Cutting costs

One of the more obvious  solutions is to cut unnecessary  costs. The lower your monthly  outgoings, the more you’ll be  able to afford. Although this  may appear to be stating the  obvious, the impact that making  cutbacks can have may be more  significant than you’d think.  Reducing your outgoings by  just £100 a month by cutting  down on eating out and the  odd takeaway could add up  to £10,000 to your maximum  loan. Obviously cutting down  on monthly outgoings isn’t  a possibility for everyone –  but if you are in a position to  make some sacrifices, it could  really help to improve your  affordability. For those who  may find cutting costs a little  harder, perhaps trying to switch  providers for various services  such as TV packages could result  in you being offered special deals  that can help you save.  

Prepare in advance

Different lenders may require  different types of evidence when  calculating affordability. Some  could ask to see three months’  worth of statements whereas  others could ask for six or more.  It’s a good idea to prepare for the  longer period before applying to  make sure each statement you  provide will be beneficial to your  affordability.  

Reduce your debts

 If you are someone with  outstanding loans, not repaying  them before applying for a  mortgage could affect your  affordability. It may be advisable  to reduce debts where you can  before any mortgage application  in order to have a better chance  at passing an affordability test.  Student loans are often treated  differently by lenders, and you  may not have to worry about  reducing them before getting on  the ladder.  

If you are worried about how  changes to affordability criteria  could affect your mortgage  application, it’s important to  speak to your adviser so they can  help to put your mind at ease. 

 If you’d like to discuss the options available to you, contact your adviser today. 

You have more than likely heard the term ‘base rate’ banded around in the news over the last  few months, but what does it actually mean? Why does one rate have such an impact on so  many mortgage products nationwide and why has the base rate risen? We take a look at all  you need to know about the base rate and how it can affect you.

 The Bank of England base rate is  the interest rate set by the UK’s  central bank, meaning that it is  the interest rate that high street  banks and other lenders are  charged to borrow money. This  subsequently has a direct impact  on how much consumers and  businesses pay for taking out  loans or receive for depositing  cash into savings accounts. 

 The bank base rate is often  determined by the state of the  economy. The Bank of England’s  Monetary Policy Committee  (MPC) meets on a regular basis  to agree on what rate to set  roughly every 6 weeks. The  MPC decide on the base rate in  order to help maintain affordable  prices, keep companies afloat  and maintain a good level of job  retention. Following the pandemic, many  industries have experienced  shortages in materials and goods.  This causes businesses to raise  their prices – meaning everyday  items increase in price. This is  called inflation – and the MPC’s  job is to try and keep inflation  at around 2%. With the current  rate of inflation above 5%, the  base rate is now being risen in a  bid to slow inflation as it offers  more benefits when it comes  to saving money and therefore  discourages consumers to  spend as much – slowly helping  to remedy supply issues by  reducing demand.  

How does it impact you?

The base rate is the main factor  behind what high street lenders  charge their customers for most  loans such as credit cards and  mortgages, so you can expect  any non-fixed repayments to  rise with the base rate. However,  nearly three quarters of the  UK’s population have fixed rate  mortgages – so repayments  will remain the same until the  end of the current term. It does  however mean that you can  expect to receive better interest  rates on your savings and  everyday items could start to  come down in price.  After more than a decade of  low interest rates, it’s hard to  say exactly how an increased  base rate will impact people  specifically – especially given all  the uncertainty surrounding the  situation in Ukraine. The rise in  the base rate is to try and combat  the increased supply issue of  oil given the sanctions against  Russia as well as an attempt to  ease the cost-of-living crisis we  were already facing. With the  base rate still currently below  1%, it may be advisable to assess  your mortgage situation soon –  before it potentially rises further. 

 If you’d like to discuss the options available to you, contact your adviser today. 

Critical illness cover (or CIC) is a type of insurance that is often sold alongside life insurance.  It is designed to provide you and your family with financial stability if one of you were to fall  seriously ill. It’s of course not a nice thing to think about but preparing for the worst is  always a good way to ensure you have a safety net to fall back on if a critical illness were to  prevent you from going to work. 

 If you are diagnosed with a  critical illness, it can obviously  impact your ability to work and  therefore dramatically impact  your annual income. People  are so quick to insure their  belongings like phones and  laptops but often overlook their  income – a fact that makes  little sense given the just how  important your income can be.  Critical Illness Insurance is designed to help you. If  you do fall critically ill, this type of  insurance will pay out as a lump  sum as long as the illness you  are diagnosed with is covered by  your policy. 

How does it work? 

When it comes to taking out  critical illness cover, how much  cover you need and how long  you need the policy to be active for are two of the main considerations to make. For example, you may decide that you want to be covered for the next 30 years for a £100,000 pay out – two factors that will play a big part in determining the cost of your policy. It is always a good idea to take some time to properly work out what you’ll need from your policy to ensure you get the perfect policy for you and your family 

 Most people buying critical illness cover aim to use the lump some  to pay off their mortgage. With all  the stress that comes with having  a critical illness, the last thing you  and your family would need in that situation is the obligation of monthly mortgage payments. However, this doesn’t mean the lump sum can’t be used for other things, such as treatment or tuition fees for children. It is also worth setting aside the equivalent of a few years salary in order to live comfortably while being unable to work. You can also choose if you want the cover to increase over time to keep up with inflation or decrease if  you only intend to pay off the  mortgage. 

When does it pay out?

This will often depend on your provider, but it is usually a matter of weeks for a successful claim to be processed. It’s good practice to contact your insurer as soon after your diagnosis as possible to make sure you don’t encounter any financial issues before your lump sum is paid. The good news is the pay-out is not classed as income and therefore isn’t taxable. If you’d like to learn more about critical illness cover and perhaps take out a policy yourself, our advisers are on hand to answer any questions you may have. 

 If you’d like to discuss the options available to you, contact your adviser today 

Recent analysis has unearthed that remortgages have risen by more than a quarter between  the months of March and April. This is largely down to the multiple base rate rises announced  by The Bank of England throughout 2022 and the response from lenders to raise rates  accordingly. Many consumers are now looking to ‘lock-in’ the current available rates in a  long-term fixed mortgage ahead of any more potential rate increases – but is this the right  thing to do? We look at how base rate rises and the cost-of-living crisis could persuade you to  follow suit. 

 The number of remortgages have increased by more than a  quarter between March and  April. Over 50% of borrowers  took out a five-year fixed rate  product. With rates on the rise, it’s essential you take the time to review your current mortgage. If you’re currently on a variable rate plan or your fixed rate term is coming to an end in the next year or two, now could be the perfect time for you to lock in a new long term fixed rate mortgage before rates potentially get significantly higher in the coming months. As the economy tries to recover from the pandemic and combat inflation, rates are predicted to rise further – so acting quickly could save you money on your monthly repayments. 

 Remortgaging has other positives at this moment in time as well.  Along with locking in your repayment rate, remortgaging now offers a unique opportunity for those worried about making money stretch amid the cost-of-living crisis that the UK currently faces. Releasing equity in your property can be the perfect solution to being a little more comfortable as energy prices and inflation both continue to rise.  So, if you find yourself struggling to cover the cost of your bills over the coming weeks and months, perhaps remortgaging is worth looking at – it could save you thousands. 

 There are some, of course,  who won’t need to worry  about a higher cost of living  and are in a slightly more  comfortable position financially.  Well, remortgaging can still  offer benefits to you too! As  summer approaches, maybe  you’re considering some home  improvements? A conservatory?  Maybe a home office? Whatever  you may be considering,  home improvements can be  expensive – but not to worry.  Remortgaging can make lump  sums available to you to finance  such projects so that you don’t  have to save and could get the  work done while the summer  weather is (hopefully) warm and  dry. 

 Remortgaging isn’t for everyone,  but it does currently offer unique  opportunities to take advantage  of. If you just want to secure  lower mortgage rates for the  coming years, want some spare  cash to help you through the  cost-of-living crisis or maybe  you want to add value to your  property by doing some home  improvements – whatever the  reason, remortgaging could be  the answer.  Contact us to find out the best remortgage deals.

 If you’d like to discuss the options available to you, contact your adviser today. 

 Between 1996 and 2016, the percentage of 25 to 34-year-olds who own their own homes  has fallen 19% from 55% to 34%. In a bid to combat this, prime minister Boris Johnson has  set out plans that include proposals for housing benefit being able to be counted towards  a mortgage. The prime minister vowed to “turn benefits to bricks”, saying it is unfair that  homeownership is dominated by over 65-year-olds. 

 Speaking in Lancashire, prime  minister Boris Johnson promised  a “comprehensive review” of the  mortgage market. One of the  biggest changes announced  in his speech was a pledge to  include housing benefits in the  mortgage application process:   “When (home) ownership  remains beyond the reach of a  great many hard-working people,  it’s neither right nor fair to put  ever vaster sums of taxpayers’  money straight into the pocket of  landlords”  

 The aim to make the property  ladder more accessible to the  younger generations is clear.  The prime minister announced  plans to allow the use of  welfare payments for paying  a mortgage – stating that the  £30 billion in housing benefit  spent on rent would be better  spent helping people on lower  incomes to own their own  homes. A spokesperson for the  government later confirmed that the rules would be changed to allow people on universal credit who save money through the use of a Lifetime ISA or Help to  Buy ISA would no longer have to worry about their benefit payments being cut when their savings hit a certain level. 

 A key focus of Johnson’s speech  was expanding the Right to Buy  scheme to enable tenants of  housing association properties to  get on the property ladder. The  new initiative is expected to be  limited to a few pilot schemes at  first, before a full implementation  can potentially help 17% of all  current households. 

 Johnson said: “We are going  to look to change the rules on  welfare so that the 1.5 million  working people who are in  receipt of housing benefits – I  stress working people – and  who want to buy their first home  will be given a new choice: to  spend their benefit on rent, as  now, or put it towards a first-ever  mortgage”. 

 As well as this, the prime minister  said that the Right to Buy  scheme will be extended and  “responsibly capped” and the  cost will be covered by existing  spending plans. This scheme  allows most council tenants  to buy their council homes at a  discounted rate.  Access to low-interest mortgages will also be expanded in an attempt to “unbolt the door to ownership” and combat the cost of home ownership. 

 If you’d like to discuss the options available to you, contact your adviser today. 

 It’s safe to say that there is a fair amount of confusion currently surrounding the mortgage market.  Rates have been on the rise as inflation soars, but what does this mean for you? Perhaps you’re looking  to secure your first mortgage or looking to renew? Either way, it’s certainly a confusing time and it  can be so difficult to know what type of mortgage best suits your situation. Do you go with a fixed  rate mortgage to avoid further rises or a variable rate in the hope that mortgage rates fall again? We’ve  outlined the pros and cons to help you make the best decision.  

Fixed rate mortgages

Fixed rate mortgages do exactly what  the name suggests. The interest rate  on a fixed rate mortgage remains  the same throughout the fixed term  of your mortgage product – usually  between two and five years. With  a fixed interest rate, your monthly  payments will remain the same for  the duration of your product term.  Once the product expires, you’ll  automatically revert to the lender’s  standard variable rate (SVR).  The biggest positive of a fixed rate  mortgage is of course your payment  remaining the same. This means  that it is much easier for you to  budget on a monthly basis as you  will always know exactly how much  money you’ll be paying every month.  If you were to take out a fixed rate  mortgage today, you would lock in  your monthly payments based on  today’s rates and would not pay any  more even if rates rise within your  fixed-rate product term – protecting  you against your mortgage  becoming unaffordable.  The downsides come into  consideration when interest  rates start to fall. You would then  potentially be paying more than  the standard variable rate until your  product term expires. On top of this,  fixed rate mortgages are also less  flexible, involving Early Repayment  Charges (ERC) during the fixed  product term.  

Variable rate mortgage 

A variable rate mortgage is the exact  opposite of a fixed rate. Both the  interest rate and monthly payments  are dependent on current mortgage  rates and can fluctuate at any  point throughout the term of your  mortgage. The two different types of variable rate mortgages are SVRs (Standard Variable Rate) that is fixed by your lender and a tracker rate that follows the movements of the Bank of England’s Base Rate – although the tracker rate will usually be higher than the base rate (e.g., base rate plus 2%). The main advantage of a variable rate mortgage is felt when rates go down as you could end up paying less as a monthly repayment than you did at the start of your term, (however it could also be more if rates go up). You’ll also be able to get a lower rate on a variable rate mortgage than on a fixed as you’re taking the risk that rates could increase throughout your term. For those whom flexibility is key, a variable rate or tracker rate mortgage would be preferable than being locked into a product with Early Repayment Charges (ERC) should your circumstances change,  and you need to exit your fixed rate  mortgage product early. There is no right answer to this question. It is entirely down to personal preference and your own financial situation. Given the current volatility in the market, it’s so important to get in touch with your adviser to discuss your options. 

 If you’d like to discuss the options available to you, contact me today

 It’s no secret that this winter is shaping up to be a struggle for so many households in the UK.  With rising energy bills on the minds of millions – the cold weather has the potential to ask some difficult questions of us all. When do you put the heating on? When can you afford to?  Obviously, there are challenges ahead – but there are also ways to save energy here and there that can add up over the course of a few months. Below are a few tips to help you feel a bit better about the prospect of turning up that thermostat. 

Keep out the cold 

Although it may be an obvious  solution, taking care of the  draughty areas in your home can  be one of the best ways to save  energy. Draughts not only let in  the cold, but also allow heat to escape – so it’s no surprise that draught proofing could save you  up to £25 per year. A chimney draught excluder could save you an additional £17 per year while also reducing your carbon footprint. 

Upgrade your heating controls 

Over 50% of your energy bill will go towards providing heating and hot water. Updating your  heating controls can be the best way to manage your bills by  reducing how frequently you use your heating. Room thermostats,  programmers and thermostatic  radiator valves can all help to  reduce your costs when used  efficiently. Maybe you only ever  shower in the morning? If that’s  the case – you can turn off the  hot water for the rest of the day!  Heating controls can save you  roughly £75 per year. 

Insulate your pipes 

Pipe insulation can help to  prevent heat from being lost  from the pipes in your home.  This helps to keep your water  hotter for longer and therefore  reducing how much energy is  required to heat it. They’re really  easy to install too! You simply  place foam tubes around the  exposed pipes between your hot  water cylinder and your boiler  – and doing so can save you  around £10 per year. 

Radiator Reflection

Radiator reflector panels are a  cheap and easy way of saving  energy. Instead of letting heat  escape through an external wall,  the panels reflect heat back into  your home – reducing your  overall energy consumption.  Installing these panels could save  you £19 per year. 

But wait, there’s more…  Maybe it’s time to consider the bigger decisions available to you. Have your kids left home?  Do you need all the space you  currently have? If not, downsizing  to a smaller property to suit your  needs could be one of the most  effective ways to reduce your  energy consumption. Not only  that, but downsizing could also  see your council tax decrease  significantly. If you think downsizing could be  on your radar, or you’d just like  to discuss the options available  to you, get in touch with your  adviser to talk through any  queries you may have. 

If you’d like to discuss the options available to you, contact me today.