News

Time is running out for consumers to take advantage of the Royal Bank of Scotland’s Switch and Stay offer, which ends on the 28 June 2019.

Royal Bank of Scotland is currently offering consumers a total of £175 to switch their current account to the bank and then stay for 12 months or longer. Those who switch to Royal Bank of Scotland get £125 upfront and then a further £50 after 12 months of staying with the bank. There are a number of current accounts available within this offer, which include its Select, Reward, Reward Silver and Reward Platinum current accounts. Customers must be 18 or over and a UK resident to apply for these accounts.

In order to receive the £175, consumers need to use the Current Account Switch Service to close their existing account held with another provider and switch to the bank by the 28 June 2019. Consumers also need to pay in a minimum of £1,500 into their new current account and log into digital or mobile banking by 2 August 2019. Furthermore, by the 1 June 2020, the debit card linked to the new account must have been used at least once a month.

For many younger people they are the lender of first choice for a range of needs, but new research by Legal & General and Cebr has highlighted just how much we depend on the bank of mum and dad – particularly when it comes to getting on the property ladder. New figures have revealed that bank of mum and dad is on course to contribute an average of £24,100 to help their children into their first house – some £6,000 more than the 2018 figure of £18,000.

The jump in loan sizes has increased total lending for the bank of mum and dad by 10% this year – up to £6.3bn from £5.7bn in 2018 – making bank of mum and dad the 11th largest mortgage lender in the UK.

Money from parents will continue to support thousands of buyers across the country in 2019 – being involved in more than a quarter of a million property purchases. This amounts to nearly one in five transactions in the UK mortgage market. In total, the bank of mum and dad will help buyers to purchase property worth nearly £70bn this year. In some parts of the UK, there has been an even bigger rise in contributions from family or friends. In the North West, the average bank of mum and dad ‘loan’ has nearly doubled from £12,900 to more than £24,000, while the South West saw the average contribution rise by over £10,000 to £29,700.

This shift in loan size could be because parent lenders are supporting family and friends to purchase larger properties. Three-bedroom houses or flats were the most commonly purchased properties in 2019 (44%), and well over a third (38%) have helped family or friends to buy a two-bedroom property. In fact, 15% of lenders were even helping loved ones to purchase properties with four or more bedrooms.

This year’s findings also suggest that the bank of mum and dad is playing a more complex role in the housing market than previously thought. Millennials (those aged 35 and under) continue to rely on mum and dad the most, with 62% needing financial support from their parents or other family members and friends. However, loans from mum and dad are helping more than just young first-time buyers. Findings show that more than a fifth of people aged 45-54 have received financial assistance from elderly parents to purchase their latest property, while around 7% of over-55s have also received help from family or friends to buy their most recent home. This support for older buyers is expected to double, with 14% of Britain’s over-55s expecting assistance from their parents for a future house purchase.

Of course, not everyone has parents who are able to assist with a house purchase for one reason or another. For those people, the Government’s various Help to Buy schemes have been established across the UK. The help on offer takes the form of an equity loan guaranteed to be interest-free for the first five years. However, buyers in these schemes are restricted to the purchase of new build houses. Indeed, some recent news stories have suggested that many people who used the Help to Buy schemes could have bought a house without the assistance of this scheme – drawing the question of who these schemes are helping in reality.

Find out more with our Help to Buy equity loan guide and see our comparison chart for the best first-time buyer mortgages.

Consumers who believe that they may qualify for compensation after being wrongly sold payment protection insurance (PPI) are being urged to act before the hard deadline for claims on 29 August 2019. With just 10 weeks remaining, the Financial Conduct Authority (FCA) has launched a new series of multimedia adverts designed to motivate those who may still be eligible to make a claim before it’s too late.

It is thought that millions of UK consumers were mis-sold PPI when taking out a range of financial products, including loans, credit cards and mortgages. The point of PPI was that if you had taken out the cover and then couldn’t work – through illness or redundancy – then some or all of your credit repayments would be covered. However, problems arose due to mis-selling this product to people who:

• Indicated they did not want to take out PPI, but this was still included in their repayment costs
• Had no need of PPI
• Were wrongly advised that if they didn’t take PPI then their credit application would be refused
• Took out PPI that had been incorrectly explained to them or where the product was not suitable for them.

The campaign comes as FCA figures released this week, show the regulator has had more than 3.9m users access the PPI website and 44,000 calls to its dedicated contact centre. On top of that, a total of £334.3m was paid in April 2019 to customers who complained about the way they were sold PPI. This takes the amount paid since January 2011 to £35.3bn.

As part of this final leg of the campaign, the FCA has recruited its own ‘Pressure’s on Panel’ of ambassadors. The panel features 90s-icon, Mr Motivator, partners such as the Money and Pensions Service, personal finance expert Sarah Pennells, and expert bloggers like Skint Dad.

Emma Stranack, FCA’s PPI Deadline Campaign Lead, said: “With just over 10 weeks to go, time is running out to claim back money for PPI. Simply put, if you haven’t complained to your provider by 29 August 2019, you won’t be able to claim money back for PPI – so you should make your decision as soon as possible. Checking if you had PPI is simple and free. Don’t worry about paperwork, you only need your date of birth and relevant previous addresses. Search FCA PPI or call 0800 101 88 00 to find out how.”

Personal finance expert and consumer champion, Sarah Pennells, echoed this, adding: “Now is the time to contact your bank, loan or card company as soon as possible. You can complain to them directly for free and you can use the FCA’s website for more information. You don’t have to use a claims management company as providers are supposed to make sure that complaining about PPI is straightforward.”

Consumers who haven’t complained to their provider by 29 August 2019 won’t be able to claim money back for PPI.

Over the past twelve months the average interest-free period available on 0% balance transfer credit cards has reduced by 63 days, while their equivalent purchase cards have seen a reduction of 29 days, according to data from the Moneyfacts UK Credit Card Trends Treasury Report.

According to the report, which is due to be released later this week, although interest-free terms continue to be reduced, the rate of these reductions has slowed between April and June 2019 compared to previous months.