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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.