If you are already receiving your pension or you are keen to keep on track of your pension plan options then you might be wondering what the triple lock system means.
This is the system which maintains the rising pension payments so they stay in line with the rise of inflation and cost of living. The triple lock pension ensures that the state pension pot rises with the average earnings growth, inflation or 2.5%, whichever one is highest.
This systems allows pensioners who are relying on the state pension to be able to afford rising prices without worrying.
The BBC reports that Jeremy Hunt has promised that the triple lock system will remain apart of the conservative manifesto if they win the next election.
This promise is no surprise as pensioners are a large portion of the conservative voting demographic.
The state pension cost £110.5bn in 2022-23 which is just under half of the total government spending's on benefits.
The Office for Budget Responsibility estimates this will grow to £124bn this year.
If you are currently receiving state pension or are going to start in the near future you can feel secure knowing you state pension allowance will continue to rise in line with the cost of living prices.
This also mean that the cost of paying for these benefits is going to increase each year as more people reach retirement age than the young working population.
The new triple lock system could mean paying income tax for many pensioners.
If you are thinking about taking out a loan make sure you are considering it carefully and know what you are getting into. With any type of loan there are serious implications if you miss any repayments and find out you cannot afford to pay back to loan you agreed to.
To take out either of these loans you will have to have a good credit score so start by improving that if necessary.
These are sometimes called Homeowner loans, second-charge mortgages or home loans.
If you take out a secured loan you will have to place a valuable asset as collateral, this is often property such as your house or a car depending on the value. This gives the lender security if you fault on your repayments.
If you cannot keep up with the repayments then the lender can sell you house or other valuable asset you placed as security.
When you apply for a secured loan you will receive the money quickly directly into your bank account. You will often have lower interest rates on a secured loan as you have given the lender security in the form of assets.
You can choose how long you have to pay back this loan and often giving yourself longer will be best as the monthly payments will be lower however the overall interest is then higher.
For this loan you will not have to name any valuable assets however, you will be able to borrow less with a personal loan, usually up to £25,000.
If you miss a repayment or find out you cannot pay the lender back over time then you will face legal consequences.
If you do manage to meet the agreements then this could improve your credit score.
You can choose how long you have to pay back this loan and often giving yourself longer will be best as the monthly payments will be lower however the overall interest is then higher.
Taking out a loan is a serious financial decision and should not be made lightly, make sure you have all the information and are confident you will be able to pay back your loan in full.
So you have found your dream property and have had your offer accepted, now you are ready to handle the nitty gritty mortgage details.
You will have to find the best mortgage deal that works for you and then you can apply online or over the phone. You may choose to go with a broker to help you get the best deals.
A broker is a qualified and regulated mortgage advisor. They should remain unbiased and be there to help you wade through all the offers and find you the best deal for your situation.
Having a broker will save you time and effort trying to find the best deal, they will also be able to handle the negotiations with the lender for you. A broker will help you understand the mortgage rates and know what you will need.
Make sure to be upfront with the broker about your finances and credit so they can do their job properly.
You either pay them a broker fee which is usually around £500-1000 or they will receive a procuration fee from the lender, which won’t affect your total.
If you are confident you can find the best deals yourself then you can skip this step and move on.
You will need original copies of all the forms listed below, make sure you have these ready before starting the process, this will help you speed things up.
This is a conditional offer from a lender with no guarantees this will go through to completion. This helps buyers to have a sense of confidence during the process whilst the lender continues with their checks
The lender will complete credit checks, these could damage your score so make sure not to have too many in short space of time.
‘Soft’ credit checks leave a less visible sign to the next lender so check which type they are using.
Don’t rely on your existing bank or building society as this vastly limits your options and cuts the market short.
On top of all the big payments you’re making to buy a house it is important to factor in all the other fees you have to think about too.
Arrangement fee
You will pay this to the lender and it can go up to around £2000 which you can pay upfront or add on to the price of your mortgage. If you pay upfront be aware that this is a non-refundable sum even if your offer falls through.
Booking/reservation fee
Some lenders will charge this fee to secure a fixed-rate, tracker or discount deal. This will be around £100-200 and is again non-refundable which you can pay upfront. Sometimes this will be rolled into the arrangement fee and won’t be a separate charge.
Valuation fee
The lender will carry out checks on your chosen property to determine the value in case you miss payments and the property is repossessed. The cost of this will depend on the property value. You can also ask for a survey at an extra cost which will check for any hidden damages and structural problems which is especially important if you are buying an old house.
Legal fees
This is paid to your solicitor and covers all the legal work needed when buying a house including, conveyancing which searches local authorities data for hidden damage on the property. This will cost roughly £500-1500.
Stamp duty
This is a tax paid to the government which some developers will offer to pay if you are buying a brand new home.
The price depends on the property value.
If the property price is between £300,001 to £925,000 then you will pay 5% in stamp duty.
The application process in total can take months to reach completion which is why before you start, it can be helpful to make sure you have all the information, are sure you can cover all costs and have all the correct documents.
Happy Mortgage hunting!
If you have decided that your child is ready for their first bank account and ready to learn about financial responsibility then below are some great options for junior bank accounts.
Most junior bank accounts are accessible for children between 11-17 and will need a parent or guardian to be a joint account holder. Your child won’t be able to open a bank account on their own until they are at least 18.
We are living in a cashless world and so if you give them pocket money this would be most beneficial being sent into a bank account, as well as being a secure way for your child to spend.
If your child is asking for more financial freedom and you think they are ready to learn then a junior account is a great option for them.
A study done by Cambridge University found that children’s financial habits are formed by 7.
This is why it is so important to teach financial responsibility from a young age.
At 18 the account will automatically become an adult account and your child will have full freedom. It is best that they have learnt how to correctly handle their money with your help before this transition happens.
Whether you are going to University this year or you are already there, the financial side of things can be difficult to manage.
Find some helpful tips you can use if you are trying to save or just make your money go further as a student.
When starting at University or as a college student you can take advantage of the student discounts on offer and spend less for more.
As of March 2024 below are the best 2 year and 5 year fixed term mortgage rates.
With a fixed term mortgage you will not be affected by changing interest rates and you will often pay lower rates than if you were on a variable rate mortgage.
If your fixed term is coming to an end this year and you are worried about the rise in mortgage rates then make sure you are comparing the best deals.
Barclays
Natwest
Halifax
Natwest
HSBC
As seen above, currently 5 year fixed term mortgages offer lower interest rates meaning you will have to pay back less over time.
A 5 year fixed term is a long term commitment so you have to make sure you will be able to make your repayment for the whole duration.
Pros of a 2 year fixed term
Cons of a 2 year fixed term
Pros of a 5 year fixed term
Cons of a 5 year fixed term
Stay on top of your Credit card payments and avoid debt.
The Office for National Statistics released their unemployment report for the quarter containing December 2023 to February 2024.
The Unemployment rate has risen to 3.9% whereas last quarter it was at 3.5% leaving many people without a job and a source of income.
The amount of job vacancies and advertising is decreasing by 4.5%, as the number of vacancies in December 2023 to February 2024 was 908,000, a decrease of 43,000 from September to November 2023.
The industry with the most dramatic fall in vacancies was human health and social workers sectors.
The most recent figures show a mixed picture for the cost of living.
People reporting, they left a job due to redundancy has increased by 2.5 per thousand employees.
The number of working hours has increased since lockdown measures were relaxed in the UK. However, they are still lower than pre-pandemic levels. From November 2023 to January 2024 there was an average of 1.06 billion hours works across the UK.
In 2024 UK employers should receive a pay rise of 4.4% which should boost the economy and boost morale within workplaces.
The average weekly earnings were estimated at £666 for total earnings and £623 for regular earnings in November 2023. This has been a steady increase over time.
They have also revealed that the monthly update on wage growth, the increase in average employee wages including bonuses was at 5.6% November 2023- January 2024. This shows wages are growing higher than the rate of inflation which is currently at 4%
Annual inflation is slowly falling meaning pay levels can ease.
Forbes reported that there are roughly 3 million workers on the National Living Wage of £10.42 which is set to rise in April 2024.
The Office of National Statistics (ONS) states that the high unemployment rates are due to employers cutting back on hiring new staff. They have stuck to internal staff cutting down the number of vacancies.
They argue that employers are waiting until the economy picks up before hiring new talent as they believe it would be difficult to recruit.
As well as this the cost-of-living crisis is making it difficult to afford to hire new staff.
The ONS have also found a high number of people reporting long term illness deeming them unable to work full time.
Budgeting can be difficult to set up and stick to especially if your monthly income is small. If you are trying to save, have noticed the rising prices or just need to cut down to decrease your monthly outgoings then these tips could help you to budget.
When trying to save it is important to first find the right savings account for your needs, there are many ways to make saving simple.
There are many options for savings accounts, below you can find out how each type of account can help you save.
You will be able to draw your money out whenever you like, this type of account allows you the freedom to know your money is there whenever you need it.
A great choice for those beginning their saving journey as man accounts offer the highest interest rate on balances of under £5000.
Find the right easy access account for you.
You will decide a term length, either 2 or more years and you will not be able to withdraw your money until the term is over. This is a great option if you are saving for something big and know when you will need the money. A fixed term account also means you will not be able to give in to temptation and spend any of this money.
Find the right Fixed term account for you.
You will have access to you money but only when you give a notice to the provider of when you will need the money. You will need to prepare in advance and tell them in 6 months you will need to withdraw X amount of money from your account. This is a great option if you want to keep your money from being spent regularly and if you know when you will need money.
Find the right Notice day account for you.
Setting up a regular savings account means you could earn a higher interest rate however you may need to set up a current account with the provider before you are able to have a savings account. Regular savings account often have a maximum monthly deposit meaning you can only put small amount in at a time. These are a great way to save smaller amounts and will work well if you are just starting your savings journey. This is also a good option if you are thinking of setting up a junior account for your child.
