Online current accounts offer flexibility

With the flexibility offered by online bank specialists, many consumers have access to excellent benefits from online current accounts. There are some nice general purpose current accounts that provide the basic ability to save funds, protect cards, have cash card access, and safeguard your money. However, leading online current accounts providers typically offer a wide array of specialized account options as well.

The benefits of current accounts are set up based on the unique situations of given consumers. Some of the more popular types of advanced current accounts include: Life insurance benefits, international bank accounts, student bank accounts, graduate bank accounts, children’s accounts, extended warranty opportunities, and identity theft advice and protection. Each type of niche account offers product provisions tailored to the unique needs of the consumer. Protections and special benefits are more valuable to users when directed toward their specific situations.

Finding your best product option is quite simple thanks to the access to online current accounts. Leading providers now allow consumers to complete questionnaire or online assessment forms which help in the selection of the best products. Top providers also allow for a 14 day cooling off period, or longer. This allows the customer to decide whether the account is right in order to get a refund of any account fees if a change is requested. The flexibility to make changes for a more appropriate account should be considered when exploring providers.

One important consideration in selecting the best account is to compare the benefits of various accounts. Interest rates on savings or funds held in the account are an obvious factor. The more the consumer can earn on funds held in deposit, the better opportunity there is for financial gain. Account fees and other costs for maintaining accounts are also important. Additionally, the added benefits and perks provided to specific customers by the niche accounts gives direction to the right account for a customer. Some people need better benefits for international or travel use. Students need low costs for account use. Others with more savings need to earn the most they can from held funds.

Be sure when exploring account options that the provider is included in the Financial Services Compensation Scheme (FSCS). The FSCS protects up to 50,000 Pounds in deposits. This protection should give the consumer confidence that funds held in deposit are safe even if the bank goes under. Any reputable provider of current accounts should be covered under the FSCS. This security is obviously important to avoid the loss of moneys held in deposit.

When shopping online current accounts, remember to keep the following important suggestions in mind:

• Use quote comparison tools from the online provider to find the best niche product for your given situation
• Explore extra benefits offered by niche accounts that give the account better value
• Expect the account provider to offer a cooling off period so you can be sure the account is the right fit
• Watch for the FSCS protection to be sure your cash is safe

Covering Your Best Friends: A Basic Overview of Pet Insurance

When we consider all the joy that our four legged friends bring into our lives, investing in their health and well being is a small price to pay. The reality is however that the price of keeping an animal safe and healthy is rarely small, especially if emergency veterinary treatment is required. This is why investing in pet insurance is such a great idea as it allows you to spread the cost of caring for your pets over a longer time period and in this way cushions you against the impact of huge vet bills.

There is a vast array of pet insurance products on the market. At a basic level most will offer cover against illness (non pre-existing) and injury.

Depending on your level of cover around 80% of the bills associated with the treatment of an animal will be paid out by basic pet insurance policies. More and more comprehensive pet insurance products are being launched with the express purpose of going beyond this basic level of cover. Some of the things that will most likely be covered by a comprehensive policy include:

• Full Treatment Costs
• Medication
• Extended stays in veterinary centres or ‘pet hospitals’
• Cancer Therapies
• X-ray and laboratory fees

Some policies even go beyond offering the possibility of top level care for pets, to offering ‘pet related care’ in the form of ‘pet life insurance’ to owners. Such policies will pay out a sum of money upon the death of a pet and will also often pay for ‘pet bereavement counselling’ for pet owners.

The rise of comprehensive pet insurance does not mean that you can now insure your pet against just about any eventuality, there are still some things that are excluded from most policies. These include:

• Pre-existing medical problems
• Pregnancy
• Dental problems
• Congenital defects

These general exclusions mean that it will often be necessary to submit your dog or cat (the vast majority of policies cover these two animals) to a medical examination before cover can commence.

In addition to medical emergencies you can also elect to insure your animals on other levels. The most common options are:

• Liability Insurance: Pet owners are legally liable for the actions of their animals. It is therefore increasingly common for dog owners to take out insurance against the possibility of an attack by their dogs in which someone is injured.
• Theft/Loss Insurance: This kind of cover will pay out upon the loss of an animal to help with recovery costs and/or the posting of a reward. In the case of particularly valuable pedigree animals it is also possible to arrange for cover against possible financial loss.

It should be clear from the above that the available options in the field of pet insurance and range from simple emergency cover to complex comprehensive policies. It would therefore be worth your while to carefully determine the level of cover you need and then to shop around for the product, and the price that will best meet your needs.

Summary:

• Basic Pet Insurance Policies offer partial cover against illness and injury
• More comprehensive policies, offering better levels of cover, are increasingly popular
• More and more non-medical policies (e.g. liability and theft/loss insurance are entering the market)
• It pays to shop around for the best level of cover for your circumstances

A Way to End the Downward Debt Spiral: Debt Consolidation Loans

People who are heavily in debt often describe their situation as akin to ‘drowning’. This does not only have to do with sinking under the actual sums involved but also with trying to keep track of what they owe to whom and when! The fact is that that ‘loans breed loans’ as people try to use new lines of credit in order to pay off existing ones. One way to break free from this vicious circle is to take out a Debt Consolidation Loan.

A debt consolidation loan is simply a loan that allows you to pay off all of your existing debts, leaving you with a single monthly repayment. For example, if John holds three credit cards, 2 two store cards and an overdraft he can use a debt consolidation loan to turn his six repayments into one. There are many advantages to this approach. Some of them include:

• A possible reduction in the total monthly amount spent on debt servicing
• Better interest rates, especially if the debt being consolidated is held on credit cards.
• The convenience of having one monthly repayment instead of many.
• The ability to reduce your monthly repayments without damaging your credit rating.
• The ability to budget with more accuracy as loans are issued for a fixed term with fixed (depending on the interest rate) repayment amounts.

Although debt consolidation loans can be a very important tool in reducing overall indebtedness it should be noted that it is not a totally risk free option. Some of the things to keep in mind are:

• Debt consolidation loans are often secured against the homes of borrowers. Defaulting on a debt consolidation loan could therefore have a serious negative impact on the security and wellbeing of your family.
• If your debt is already totally out of control it is unlikely that use of a debt consolidation loan on its own will be sufficient to get you away from the brink. In such cases it might be a better option to negotiate an Individual Voluntary Arrangement (IVA)
• The fact that debt consolidation loans are measures of early intervention rather than ‘solutions of last resort’ is further underlined by the fact that a damaged credit rating could make obtaining such a loan very difficult and expensive.
• It is often the case that your existing lenders will charge you early repayment penalties and various other fees if you pay off your debts with them before the loan terms have run their courses. It would be worth your while to find out what these fees will be (if applicable).

The great value of debt consolidation loans lie in the fact that they can be very effective in preventing an escalating problem from spinning out of control. As such they are the perfect products for people determined to make a fresh financial start before things get out of hand.

Summary:

• Debt Consolidation Loans is a way to combine all existing debts into one loan
• The benefits of debt consolidation loans include: possible lower monthly repayments, lower interest rate and simpler financial management
• It could sometimes be unwise to take up such a loan. This is especially true in cases where debt levels have reached a ‘point of no return’.
• Debt consolidation loans work best when they are used for early intervention

A Brief Guide to Dog Insurance

Ownership of a dog brings with it many joys and special moments. It can however also bring the unforeseen costs and the resultant anxiety that comes with having to deal with veterinary emergencies. It is because of this that dog insurance is so highly appreciated by many dog owners.

There are many dog insurance products on the market ranging from very basic emergency cover to comprehensive insurance policies. The following types of cover are often included in dog insurance policies:

• Medical Emergency Cover: This will cover you against vet bills arising from illness or injury. Basic policies will only cover a certain percentage of the actual treatment cost while more comprehensive policies will cover the full treatment amount, related testing costs (e.g. x-rays) and medicine. It is important to note that pre existing conditions, pregnancy and congenital conditions will normally be excluded from policies. Your dog may also have to undergo a medical examination before cover can commence.
• ‘Life Cover’: More and more companies are offering insurance products that can only be described as ‘life cover for dogs’. Under the terms of such polices an amount will be paid out when a dog dies. Some policies even offer access to bereavement counselling at the loss of your dog.
• Liability Cover: It should always be remembered that the owner of a pet can be held liable for its actions. Many dog owners find it prudent therefore to take out liability insurance to cover against injuries or damage caused by their dogs.
• ‘Theft/Loss Cover: The costs associated with the loss or theft of a beloved family dog can be immense. A great deal of peace of mind can therefore be gained by taking out a policy that will make the best possible search for your pet possible. This kind of cover will provide resources to fund the search for a missing dog (e.g. through placing ads in local newspaper, or through providing the money for a reward to be posted). In some cover can also be arranged for the ‘cash value’ of very valuable dogs (e.g. pedigreed dogs, breeding males or members of very rare breeds).

The sheer variety of what is available can make choosing the right dog insurance policy rather difficult. It would be prudent to shop around and do a bit of research before making your final decision about which policy, and level of cover, to go with. Some of the things that you may want to consider are:

• Track Record: There are unfortunately many ‘fly by night’ operators in the dog insurance industry. Going with an established player with a positive reputation can help protect you against unpaid bills.
• Recommendations: Recommendations from friends or animal welfare charities can be a significant factor in helping you to decide on the right provider.
• Clarity and simplicity in communication: Do your best to find a company that clearly spells out cover levels and premiums in plain English.

After all that were said it is important to remember that having a good dog insurance policy in place is not an optional extra since it can mean the difference between giving your dog the best and having to make some heart wrenching decisions because you are struggling to afford the cost of treatment.

Summary:

• Dog Insurance will cover you against some of the most common contingencies related to owning a dog.
• Medical cover forms a key component of many dog insurance policies
• ‘Life cover’, theft/loss cover and liability cover can also be arranged
• Dog owners would do well to shop around for the best possible policy, from the best possible provider at the best possible rate

Saving Money on Home Insurance

The old truth that ‘every little bit helps’ is especially true when it comes to personal finance. Saving just a little bit of money every month can eventually make a significant difference to your overall financial position. One place where such a saving can be made is in the area of home insurance. Many people are paying way too much for home insurance without realising it. This article is intended as a brief guide to making sure that you are not one of them.

The main ways in which you can reduce your home insurance premiums are the following:

• Shop Around: This is probably the number one way in which people can reduce their premiums. It is unfortunately also the one that is often the least used. Many people erroneously think that researching alternatives would not be worth the hassle or that they are tied to their current insurer by their mortgage provider. Misconceptions like these can cost a great deal of money since it is often possible for consumers to substantially reduce their premium. The reasons for this being the case are varied. It often has to do with new provider bringing innovative products to the market or with the fact that some insurers do not bother to adjust the risk profile of their current clients. Be that as it may – The very first step towards lower insurance premiums for many would simply be to get some quotes from other insurers.
• Combine Policies: It can sometimes (although not necessarily always) be worth your while to combine your contents and buildings insurance (if you are a homeowner) into a single policy. This might create a kind of ‘economy of scale’ in the eyes of the insurer, possibly leading to a lower premium.
• ‘Reconfigure’ your current policy: An easy way to reduce your insurance premiums is to offer to pay a larger excess (the amount that you pay when making a claim). This means that the insurers cost per claim will be reduced in your case, leading to lower premiums. It goes without saying that you should do a proper risk analysis before taking this option since it could cost you dearly should you have occasion to actually make a claim.
• Reduce Risks: Risks assessments are one of the main ways with which insurers determine the level or premiums. If you can reduce risk, you are therefore likely to pay lower premiums. Some of the ways in which you can do this are:
• Improve Security: Fitting extra locks or an alarm system will almost always be look upon favourably by insurers.
• Flood proof your house: If you live in an area prone to flooding you can reduce your premium by installing water resilient doors, waxed floors and one way valves on drain pipes
• Improve Fire Security: You can do this by installing a sprinkler system or another fire extinguishing system.

Not everyone would be in position to do everything described in this article. However doing just some of them already qualifies as some of the ‘little bits’ that can make such a huge difference!

Summary

The four main ways in which you can reduce home insurance premiums are:

• Shopping around for the best deal
• Combining buildings and contents insurance
• Offering to pay a higher excess
• Reducing risks as far as possible

Women’s Only Car Insurance: A Novel Way to Save Money

Motor insurance premiums have steadily increased over the past few years and cost savings have therefore also increased in importance. One of the best ways to save on your insurance is obviously to make sure that your risk profile is as favourable as possible since insurers use risk analysis as one of the main methods with which to calculate your premium. This is why drivers with long no-claims bonuses pay less for their insurance than drivers who had accidents in the last few years; or why you will pay more if you park your car in the street in central London as opposed to parking it in a garage in a quiet country village.

As a woman you can make use of an automatic positive on your risk profile: The very fact that you are a woman! It is interesting to note how conventional wisdom can sometimes get things totally backwards. The reputation of woman drivers is such a case.

Contrary to popular perceptions woman drivers are actually much less likely to be involved in dangerous driving or speeding, which means that they are involved in far less accidents (per capita) than men. This phenomenon is backed by solid research. A Home Office report, published in 2002, found that 88% of all driving offences and 82% of all speeding offences are committed by men!* This means that, as a group, women are a much safer bet, in terms of risk, for insurance companies.

The favourable risk profile of women has long been reflected in insurance premiums charged by mainstream insurance companies. The past few years have seen the progression of the trend towards lower premiums for women to what some would call its logical conclusion: The creation of insurance companies and products targeted exclusively at women. Companies created in this way are able to use the collective purchasing power and lower general risk profile of their client base to create low-premium insurance products.

One of the ways in which women-only insurance companies are differentiating their offering and serving their constituency is by following value-added products that can enhance the motoring experience of women. These include:

• Ladies’ Breakdown Services
• Educational Services
• Handbag Insurance
• 24 Hour help lines

It would be wrong to assume however that a women-only insurance product would automatically lead to a better premium or to the best solution in your circumstances. It could be that you will be better off with a more traditional insurance policy. It is however very likely that it could be well worth your while to investigate women-only car insurance as this investigation will in many cases lead to the discovery of some major savings and also of levels of service and products that will significantly enhance your motoring experience.

Summary:

• Contrary to popular opinion women are much safer drivers
• This fact is reflected in the lower premiums that are on offer in the women-only insurance sector
• Many women-only insurers offer a number value added services
• It is prudent to shop around for the best deal. Both in the ‘women-only’ field and in the general open market.

* A more detailed analysis of the relationship between gender and driving, including a discussion of the Home Office Report, can be found at: http://www.sirc.org/publik/driving.pdf

Tips for saving money in a recession

All of us need to tighten our belts in a recession, but sometimes it’s difficult to make crucial spending decisions.
Here’s a list of some sensible tips for saving cash without making your life too austere:

1. Stop spending – keep your cash together and set yourself a ‘cooling off’ period before you spend on that bargain in the sales. Consider whether you really do need more shoes or that computer game.

2. Check out the comparison sites on the web for insurance, utilities and credit card rates. Make sure you are not paying over the odds and switch to a cheaper product if you can.

3. Check out your bank statement and look at all the outgoing expenses – cancel what you can. Most have us are paying a few pounds every month for a service we don’t really use, like gym membership when we could take up more running or walking.

4. Declutter – all those old clothes and unwanted gifts that are taking up space in loft, cupboards and under the bed can be cleaned up, photographed and auctioned off on websites like eBay. Or do a boot fair.

5. Look at your shopping bill. If you are mostly buying ready meals or living off takeaways, cut them out and start buying the ingredients and cooking your own meals. Maybe having your main meal at the canteen at work and a sandwich when you come home could work out cheaper.

6. If you do eat your main meal at home, then take a packed lunch to work instead of buying food.

7. Look at life’s luxuries – your mobile phone and Sky TV – do you really need a prepaid plan with all those texts and minutes? And how much TV do you actually watch to justify extra money on all those packages?

8. Cut your coat according to your cloth - put your credit cards safely in a drawer and live off your income rather than borrowing.

9. Change your brands – switch essentials like cleaning products, tissues and cooking basics to cheaper supermarket own brands rather than pay extra for a ‘brand’ name.

10. Buy a bread maker and a slow cooker in the sales. They are both relatively cheap kitchen appliances. A bread maker will soon pay for itself and keep you with a constant supply of crusty, homemade loaves while you can set a slow cooker before you go to work and come home to a piping hot meal.

11. If you have children and live within walking distance of the school, then keep the car on the drive and give you and family a breath of fresh air and some exercise.

12. If you have a spare bedroom and are struggling with the mortgage and bills, consider letting a room. Currently, you can charge a total of £4,250 a year to a lodger without paying any tax – that’s an extra £82 a week in your pocket.

If you are unlucky enough to have lost your job, taking in a lodger won’t affect any benefits you are claiming.

13. Put a little bit of money aside every week for a family treat, even if it’s something simple like renting a DVD and buying some sweets. Times might be tough but you need something to look forward to as well.

Summary

• Stop spending and review your financial circumstances by listing all your income and outgoings and considering what, if anything, you can cut.

• Declutter and be ruthless with your stuff and see what you can sell to on eBay

• Save money with cheaper brands, more home cooking and walking rather than driving where you can

• Don’t take things too far – save a few pounds a week for a treat and something to look forward to

Top tips for buying hot property in the sun

Holiday romances rarely last – and that includes any love affair you might have with a dream property in the sun.

Buying a property can be fraught with problems in the UK – let alone at long distance in a country where you may be unfamiliar with the language, legal system and financial processes.

Many holidaymakers fall in love with the sun, sea and lifestyle in another country and decide to buy a property on the spur of the moment – but if you are considering a second home abroad or even relocating, here are some top tips you should bear in mind:

• Don’t make a decision blinded by sun – enjoying your holiday is one thing, investing in a property and returning to the same place time and again is another.

Collect all the information you need to make a decision then come home, take the sunglasses off and look at your plans in the clear light of day.

Take advice from your family, friends and independent professional advisors who don’t have any interest in your purchase – and preferably advisors who are well versed with buying and selling property in the place you are looking.

• Keep it simple – never sign anything you don’t fully understand

• Keep your cheque book in your pocket until you are absolutely sure you want to proceed and that every protection of you money and interests are in place.

Just like in the UK, if you are financing the purchase with a mortgage, don’t hand over a penny until you have an offer in writing from your lender.

• If you’re buying a second home abroad and still working in the UK then arrange a mortgage in sterling to avoid losing out on exchange rate fluctuations. If you’re moving abroad and earning in a foreign currency, then try to arrange your mortgage in that currency.

• Don’t settle for second best. If you’re not absolutely sure about a property, think with your head and not your heart.

• Check out the tax implications of buying and possibly renting out your property with a tax professional in that country. Few UK accountants are qualified to advise you on overseas tax affairs.

If you are continuing to live in the UK, you need to include details of any rental income and property expenses to HM Revenue and Customs. You will pay income tax on any rental profits and capital gains tax if you make a profit selling the property as some stage in the future.

• Make sure you are completely briefed on the full cost of buying your dream property – in many countries fees and taxes are added to the purchase price that can dramatically increase the cost of the deal.

You need to make provision for all these extra costs in your budget.

• In many countries, developers structure a finance deal with banks that may include putting each plot on the development up as security. Ensure your solicitor checks this out so you do not take on the developer’s debt when you take over the property.

• Set up a bank account in the country where your property is located – pay in all the rents and pay out all the bills.

Summary

• Don’t make any instant decisions
• Don’t sign any papers you don’t understand
• Make sure you have your finances sorted out before proceeding with a deal
• Get a team of independent experts to give you advice
• Don’t forget to find out all the cost and tax implications before you proceed

The Benefits of Payment Protection Insurance

In 2008 it was reported in The Telegraph that the average Briton now has £33,000 worth of debt under their belt, compared to £17,000 in the year 2000 . While this figure includes mortgages, it’s still a large amount of money every month that is taken up in the form of repayments to various banks, building societies, credit cards and personal loan firms. However, few people stop to consider what would happen to their ability to meet these payments should they be unable to work due to injury or illness, or find themselves made involuntarily redundant.

Loan payment protection insurance is designed to help you in case you find it difficult to honour your monthly debts as a result of being unemployed. For what is often a small fee with regards to the amount of cover obtained in return – usually just a couple of pounds per hundred pounds of cover required per month – you can have your repayments protected for a period of between 12 and 24 months, according to most policies. Loan payment protection will help make sure that your debts don’t get out of hand even while you don’t have a steady income, protecting you against receiving bad credit ratings, CCJs, or even – in extreme cases – repossession or foreclosure of your property.

One of the main problems of finding yourself out of work when you have loan repayments looming (aside from the obvious financial difficulties) is the worry that it can cause. The stress of not knowing if you’re able to make the next payment to your bank or credit card company can have a severe impact on your health, making the problem worse. If you were to know that your debts were protected for a period of up to two years, it would be an enormous weight off your mind, and would allow you to focus your attentions more completely on getting back to full health. If the reason you’re off work is redundancy and not illness, payment protection insurance can still help – making sure your debts are under control would help improve your morale, as well as granting you a little bit of financial leeway; instead of taking the first (possibly unsuitable) job that comes along just to pay your bills, you have a little more time to find a job that really works for you. Depending on government-funded financial aid packages often will not cover all of your needs, and so a little extra provided by an independent, specialist mortgage service can really make a difference if times get tough.

It’s as a result of all of this – the security and peace of mind that come from knowing you’re safeguarded for the future, as well as the firm financial benefits of keeping your repayments protected – that so many people are choosing loan payment protection policies as a means to invest in their future, and avoid any unexpected disaster knocking them off-balance financially. While you can’t predict or even avoid many medical or employment-based upsets, insuring your loans can be a great way to offset a lot of the stress they can cause.

Self-certification mortgages

Self-certification mortgages are loans where the lender doesn’t want to see any proof of income.

Borrowers who seek self-certification mortgages generally have income from several sources, earn variable amount of commission or are self-employed and do not have accounts to prove their income.

‘Self-certification’ means the borrower signs a declaration confirming they have income at a certain level in return for the lender agreeing not seeking proof of income.

Often, lenders will offer a mortgage at a smaller ‘loan-to-value’ than they would to a borrower who can prove their income with a reference from an employer or accountant.

‘Loan-to-value’ is the amount of mortgage the lender is prepared to advance against the market value of a property. For instance, where an employed person might be offered 90% loan-to-value against a £200,000 property, a self-certification borrower may be offered 75% - 80% loan-to-value against the same property.

So self-certification borrowers should expect to put a larger deposit down on buying a house than an employed borrower.

It’s also likely that a self-certification borrower will also have to pay a slightly higher interest rate than other borrowers because the lender considers more risk is associated with the loan.

In all other respects, a self-certification mortgage is the same as any other mortgage.

Self-certification mortgages are sometimes available through brokers to borrowers with poor credit histories. The rule of thumb is the worse the credit record; the borrower will receive a lower loan-to-value and pay a higher the interest rate. Some lenders will advance about 60% loan-to-value to people with particularly poor credit histories.

Self-certification borrowers must not inflate their income when applying for a loan. If you tell the lender that you earn more than you really do, this is a fraud offence called obtaining a pecuniary advantage.

In the past, self-certification mortgages have sparked controversy. The BBC alleged that self-certification mortgages were being abused with borrowers encouraged to lie about their income in order to get a bigger mortgage.

An inquiry by the Financial Services Authority, the industry watchdog, found that in some cases this was true but was not a widespread problem.

Many buy-to-let mortgages for landlords buying investment properties are self-certification mortgages.

Instead of basing the loan amount on the landlord’s income, the lender has a formula for working out maximum borrowing against the rent received for a property. Different lenders have different formulas but they are generally based around ‘rent cover’

‘Rent cover’ means the rent received each month should be 125% or more of the mortgage repayment at the lenders standard rate.

For example, if the mortgage payment is £400 a month, the rent received should be at least £500 per month.

Summary

• Self certification mortgages are designed for people who can’t prove their income, especially self employed
• Don’t overstate your income to obtain a self-certification mortgage.
• Self-certification borrowers generally have to put down a bigger deposit and pay a higher interest rate than employed borrowers
• Most buy-to-let mortgages are self-certification mortgages worked out on the property’s monthly rental income rather than the landlord’s income

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