Top Other Money News

Derin Clark

Derin Clark

Online Reporter
Published: 22/01/2020

The Government has unveiled a 10-year plan that aims to help millions of consumers struggling financially.

The Money & Pensions Service (MaPS), a Government agency, has stated that over the next decade it plans to create a nation of savers, while also reducing the number of consumers who are regularly using credit to pay for food and bills. Data released by MaPS found that a worrying 11.5 million consumers currently have less than £100 in savings to fall back on if they found themselves in financial difficulties and that nine million often use credit to pay for food or essential bills.

In addition to tackling a lack of savings and the reliance of credit to pay for everyday essentials, MaPS is also aiming to increase the number of children and young people getting a meaningful financial education, to ensure that more people are getting the debt advice they need and to raise awareness about the need to save for retirement.

Commenting on the 10-year plan MaPS has set out, Caroline Siarkiewicz, acting chief executive at MaPS, said: “Financial wellbeing underpins personal health and happiness but it doesn’t happen by chance. We’re launching a strategy for entire lifetimes, aiming to expand financial education for children while ensuring everyone is equipped to plan for and enjoy their retirement. Key initiatives include increasing the availability of affordable credit, more payroll savings products and an expansion of free debt advice for when people are in crisis.

“The Money and Pensions Service will be the catalyst for a financial wellbeing movement, transforming how people engage with their money and pensions. We have a decade to make a difference and we cannot achieve change alone, so we will be connecting companies, charities and other organisations which share our vision, to make this happen.”

Moneyfacts is delighted to announce that the results from our 2020 Star Ratings for Self-Invested Pension Plans (SIPP) and Small Self-Administered Schemes (SSAS) are in!

Consumers who value an impartial, expert opinion can now see for themselves which products and providers have achieved Five or Four Star Rated status. The Moneyfacts Star Ratings are well-respected by those looking for the best performers in the UK marketplace.

As part of our 2020 Moneyfacts Annual Star Ratings, thousands of products across 16 categories, from business and personal finance products to insurance and investment products, are carefully assessed.

The latest Moneyfacts Annual Star Ratings derives from the analysis of SIPPs and SSASs from over 50 fields of information per individual product.

Numerous features are considered when assessing the ratings, and some of this information includes:

Self-Invested Personal Pensions (SIPP)
• Minimum contributions and transfers in
• Investment options
• Number of segments allowed
• Set-up and admin fees
• Dealing fees
• Property purchase fees
• In-specie fees
• Cash transfer fees • Lifetime annuity availability and charges
• Capped drawdown charges
• UFPLS availability and charges
• Flexi access charges
• Transfer out charges
• Online valuation availability
• Deposit account choice
• Product closure charges.

Small Self-Administered Schemes (SSAS)
• Types of service offered
• Minimum contributions and transfers in
• Number of SSAS
• Investment options
• Funds under administration
• Set-up and admin fees
• Property and admin fees
• VAT registration and administration charges • Capped drawdown charges
• Lifetime annuity availability and charges
• Flexi access charges
• UFPLS availability and charges
• Scheme pension availability and charges
• Product closure charges
• Transfer out charges.

Richard Eagling, editor of Investment Life and Pensions Moneyfacts, said: “The need for individuals to take more control of their own retirement planning has encouraged a greater demand for self-invested pensions such as SIPPs and SSASs. There is a diverse range of SIPP and SSAS products that individuals can select from, making comparisons potentially complex. The Moneyfacts Annual SIPP and SSAS Star Ratings highlight the companies that offer the schemes with the most extensive range of features and competitive charges, helping consumers to direct their focus when considering their options.

“The Moneyfacts Annual SIPP and SSAS Star Ratings concentrate on the individual features of a product that consumers will come across when going through the decision-making process. The ratings therefore provide consumers with an extra seal of approval, which should give them the added assurance that they have found a high-quality product for their retirement needs.”

See the 2020 Moneyfacts Annual Star Ratings Four and Five Star products and providers here.

Following the news yesterday that low-income households are facing the fastest rise in consumer debt since the financial crisis, we have taken a look at how consumers can become debt-free in 2020.

When looking at clearing debts, we are looking at unsecured, personal debt such as credit card and loans. This does not cover secure debt or mortgages, but our guide How to pay off your mortgage early does offer some tips on clearing mortgage debt.

These tips are also aimed at those with manageable debt. Consumers who are struggling to repay debts, meet minimum repayments or who are missing bill payments, should seek debt advice from Citizen Advice or a free debt charity.

The Moneyfacts Weekly Product News is a round-up of the latest products or rate changes to hit the consumer finance market this week. The deals are available right now, but may be subject to change. Find the best product for you.

Consumer debt is being used by low-income households at the fastest rate since the financial crisis over a decade ago, research published by the Resolution Foundation reveals.

The research, which was published today, found that while overall consumer debt levels had remained below pre-financial crisis levels (15% of total income in 2019 compared to 19% in 2008), the proportion of low-income households using some form of consumer debt rose by 9%, from 53% to 62%, between 2016 and 2019 (the same rise that was seen between 2006 and 2008). This compares to just a 1% increase, to 64%, in consumer debt among high-income households.

While the overall debt among high-income households is higher, this debt often includes mortgage debt, which those on low incomes are much less likely to have taken on. Those with mortgage debt will have benefited from high competition among mortgage lenders, which, despite some average mortgage rates having increased since 2017, have remained low. Research from Moneyfacts.co.uk found that the average two year fixed mortgage rate on a 75% loan-to-value (LTV) has risen from 2.12% in December 2017 to just 2.30% in December 2019, while the average five year fixed mortgage rate on a 75% LTV has actually fallen from 2.65% in December 2017 to 2.58% in December 2019.

While mortgage rates have remained low, rates on other forms of debt have increased in recent years. For example, research from Moneyfacts.co.uk found that within two years, the credit card purchase APR has increased by 2.1%, from 22.9% December 2017 to 22% December 2019.

Resolution Foundation has also found that there has been a 15% rise in the share of low-to-middle households who have no savings, leaving many low-income households far too exposed to future financial shocks.

Commenting on the report, Kathleen Henehan, a policy analyst at the Resolution Foundation, said: “Britain is a long way from the levels of debt that drove the financial crisis, despite repeated claims to the contrary. Falling mortgage costs have also reduced the costs of debt for many, mainly higher-income families. However, the use of often high-cost consumer credit has risen over the past decade, particularly among low-income households.

“Access to new credit can be hugely beneficial for low-income families, but with many also reporting that they have no savings to fall back on, these high debt repayment pressures are a sign of stretched living standards.

“The risk is that this leaves them far too exposed to future financial shocks, reinforcing the need for policymakers to focus on the living standards of those on low and middle incomes.”

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