Managing debt can often be overwhelming and sometimes scary, especially if you haven’t been in this situation before. Thankfully, there's plenty of good advice available to help make things a little more manageable if you are struggling financially. 

Here are some top tips on how you can better manage your debt and take back control of your financial situation: 

Take stock of your outgoings

First you’ll need to make a list of all of your monthly outgoings plus any outstanding debt along with the interest rates on each borrowing. Once you have a list of everything that you pay out for each month, you can then see whether there are any outgoings you don’t really need in order to reduce unnecessary spending. It’s important to be honest about your spending habits and ask yourself if you are paying for any non-essential items that could be cut? 

In addition, look at your utility bills like your phone, TV or broadband accounts. If you’re out of contract, you may be overpaying versus finding a new provider with an introductory offer. Comparison sites, like ours, can be used to find the best deals by comparing prices from dozens of providers at once.

Once you’ve examined your outgoings, you can then look at the list of outstanding debts and use this to determine what borrowing is causing the most financial pain. Start off with the debt with the highest interest rate and work out which will take priority along with a strategy for paying them off. As you’ve already outlined your outgoings, you’ll be able to see how much you have left to pay off outstanding debts.   

Negotiate lower monthly repayments

If you’re struggling to keep up with payments to your creditors, you could try to negotiate reduced monthly repayments or ask to be put on a payment plan. To do this, you’ll need to show them why you can’t afford the current repayments . They’ll usually want to look at your total income, monthly outgoings and essential living costs to see what you’re able to realistically afford. However, this could affect your credit rating, and it may be harder to get credit in future. You also run the risk of paying more back in the long-run due to increased interest rates.

Consider debt consolidation

If you have multiple debts with high-interest rates, it may be worth consolidating your debts. This means that instead of having to make multiple payments each month, you could get one large loan to pay everything off leaving you with just one payment to make each month. Debt consolidation makes managing multiple finances easier. It can help you pay off debts quicker, lowers your monthly payments and means you’ll have fewer bills to manage. 

However, it’s not always the best option. Some come with added costs like origination fees, balance transfer fees on credit cards, closing costs and annual fees. If you have a poor credit score, you may only get loans with high interest rates too, so it could end up costing you more in the long run. When shopping for a lender, it’s important to make sure you understand the contract before you sign up. 

A debt management company will be able to show you what types of consolidation loans are available to you, along with the interest rates. You should seek expert advice before doing this as it may not be the right path for you. Citizens Advice Bureau are on hand if you want impartial, free advice about whether you should choose a debt consolidation loan. 

As long as you keep up repayments, your credit score won’t be affected by having a debt consolidation loan. However, if the overall cost of the new loan makes it more difficult to keep up with all of your repayments, and any are missed, these missed payments will have a negative impact on your credit score. 

Other options to consider include: 

0% interest balance transfer credit cards - These types of credit cards can offer 0% interest repayments for long periods of time, usually between 12 and 24 months. Depending on whether you meet the criteria set by the credit card company, a 0% balance transfer credit card could be a good solution for someone who wants to transfer their existing balance from one card to another to eliminate high interest rates on repayments. The money saved from interest repayments on the previous card can then go towards paying the lump sum off instead. However, you should remember to pay this off before the 0% interest period runs out to ensure you don’t end up in further debt. 

Personal loan - You could obtain a personal loan to pay off debts. This could save you money in the long run as the overall interest rate will be lower and it can help streamline your finances into one lump sum. 

Seek expert help and advice

If you’re finding that managing your debts is becoming overwhelming and you really don’t know where to start, then it might be worth seeking professional support and advice. There are many organisations and charities, including Step Change, National Debtline, Debt Support Trust or Citizens Advice, that can discuss what options are available to help you start tackling your debt. Debt advisors are always available to offer free expert advice over the phone, and can provide a range of budgeting tools and fact sheets on how to deal with debt. Money Helper can point you in the direction of various online, telephone or face-to-face support in your area too. 

Money and your mental health

Mental health problems can make earning and managing money more difficult, while debt can trigger or worsen existing mental health conditions such as anxiety and depression. If your financial issues are having an impact on your mental health, then you may want to consider seeking professional help. Sometimes just highlighting issues with a friend or family member can help as this may make you feel less alone as the other person might be able to offer some advice you hadn’t thought of yourself, (or just help you make an appointment with a debt advisor if necessary). 

Remember: How you tackle your debt is ultimately up to you, but it's always best to address the problem as soon as possible to ensure you don’t fall into further arrears and further financial difficulty. Once you start opening up about your debt, it will become easier to manage and understand. You’ll also start to feel a lot better and more in control of your life and finances.

The post How to take control of your debts during the cost of living crisis appeared first on Money Expert.

While it’s important to plan for the future, we understand it can be hard, financially, to put these plans into place, especially with the cost of living on the continual rise.

We’ve pulled together five simple tips on how you can plan for the future and get a life insurance policy, without breaking the bank: 

1. Be aware of additional extras

You should double-check your quote for any additional extras. Some insurance companies attempt to sell add-ons and can hide them quite well. Many of these add-ons can be useful but it’s worth looking into first before you opt in, as it may make your life insurance plan a lot more expensive than you really need. 

2. Check any workplace benefits 

You may not even need to purchase life insurance as some employers will offer a ‘death in service’ benefit. This means that a nominated family member receives a lump sum, in the event of your death while working for said company. If you are entitled to this, it won’t be as much as you’d get from a life insurance pay out, so do be aware of this. However, it may be enough to cover everything you need, so it’s worth double checking with your employer before taking any policies out.  

3. It’s all about your lifestyle 

Lots of insurance companies base premiums on how healthy your lifestyle is. This can include everything from whether you smoke and drink to how much exercise you do. These questions will be asked when looking for a quote. 

If you’re a smoker and drink more units of alcohol than you should, then it’s likely your policy will be more expensive than someone who doesn’t drink or smoke, for example. If you want to save on your life insurance, it would be worth quitting smoking, cutting down on your alcohol intake and increasing the amount of exercise you do. 

4. When should you take out life insurance?

Death is a very difficult topic to talk about too, and many of us leave decisions on life insurance plans until it’s too late, or too expensive to take out. The sooner you take out a life insurance plan, the cheaper it will be in the long run and the larger the payout will be. 

This is because the longer your insurance company expects you to live, the lower the chances of them paying out. By putting it off, you could be costing yourself and your family lots of money. To save on your plan, you should start thinking about buying one in your 20s and 30s. It can be as simple as putting away ten pounds a month or giving up a takeaway coffee or two each month to put money aside for your future.

5. Be savvy when looking for a plan

The first thing you need to do when looking for a life insurance policy is shop around and see if you can find any deals to help save some money. It may be worth using a price comparison website, like ours, to compare a range of quotes so you can quickly see all the premiums available, and make an informed decision on what’s best for you. 

Life insurance isn’t subject to income tax but it can be affected by inheritance tax. You can sidestep this by having your insurance policy ‘in trust’. This is really simple to do and can be done by anyone who wants to make sure their life insurance isn’t costing more than it needs to. 

By choosing the right policy, you’ll guarantee financial stability for your family in the future. 

For more information and more ways to save on your life insurance policy please read our guide on life insurance here which includes lots of great tips.

*1 Life Insurance survey statistics 

The post Top five ways to save money on your Life Insurance policy appeared first on Money Expert.

Factors such as rampant inflation, supply chain problems, and the aftermath of a global pandemic have all contributed to the current crisis. Essential items such as food, energy, and clothing have become more expensive, putting severe pressure on UK household budgets. However, whilst it’s clear that the entire country is having to cope with these financial pressures, are some parts of the UK struggling to cope more than others? To find this out, we conducted a study to determine the towns and cities across the country where residents are likely to be struggling the most.

In order to get the answer to the above conundrum, we explored three key research points for each major UK town and city. This included trend data from the following data sets: 

• Decreases/Increases in average salary

• Changes in rental payments

• Online searches relating to food banks

The data we gathered helped us to determine the UK towns and cities that have been struggling to cope the most with the ongoing cost of living crisis. Below you can see illustrated on a map the areas that, according to the data, have been hardest hit as each location appeared in more than one top 20 list from the data sets.

Has Lincoln been hit the hardest by the cost of living crisis? 

Lincoln, the historic cathedral city known for its rich history and which often scores highly in ‘happiest places to live’ indexes, is perhaps not the first place you would think would be struggling the most with the cost of living. However, our research identified Lincoln as the only location to feature in the top 20 of all three of our data sets, which focused on rental values, average salaries and demand for food banks. 

Lincoln experienced the most significant surge in average rental costs, which soared by 53.37% between January 2022 and January 2023 (based on two-bed properties). This suggests that like the rest of the UK, demand for housing is far outstripping supply, exacerbated by higher interest rates which is making owning a property more expensive for landlords. 

The city also featured among the areas with the lowest average annual salary increase. just 3.44%. This is of course well below the headline rate of inflation which is still over 10%.

Our research also revealed a worrying 143% increase in the number of people searching for food bank related queries in Lincoln, according to search volume data collected from Google’s keyword planner. This trend demonstrates a growing demand for food banks in the area, potentially indicating that many more people are now experiencing food insecurity or struggling to afford food.

Lincoln wasn’t alone, so how did other towns and cities perform? 

Whilst Lincoln came in at number one in the top 20 list of the hardest places to live during the cost of living crisis, other towns and cities throughout the UK also performed poorly as outlined in our research. 

Sharp Rises in Rental Costs

Average rental costs for a two bedroom property also increased in other areas around the UK too. Whilst York didn’t feature in every top 20 list of our study, the city did see average rents rise by a whopping 52.89% between January 2022 and January 2023. Other locations that saw rental costs increase over the same period include Edinburgh at 43.58% and Slough at 40.95%. 

Money Expert Says: Five ways that could help you reduce your rental payments

The UK’s private rental sector is experiencing high demand for properties in many areas of the country, resulting in higher rental costs and a more competitive market due to the lack of homes available. Whilst this may make it difficult for tenants to negotiate a reduction in rent payments, there are a number of ways that could persuade landlords to reduce any proposed increase. 

Here’s five ways that could help you negotiate a reduction in the proposed increase in your rental repayments with your landlord or property management company: 

1. Research current market rates: Before negotiating, it always pays to do your research of the current market rents for similar properties in your local area. This will give you an idea of what you should be paying for your rental property.

2. Highlight your positive renting history: If you have been a reliable and responsible tenant, highlight this to your landlord or property management company. This shows that you’re trustworthy, reliable and worth keeping on as a long term tenant. 

3. Look at property improvements: If the property you currently rent has any flaws that are cosmetic, or poor insulation that might bump up your energy bills, consider bringing these up with your landlord or property management company. They could be used to make your case for a reduction in the proposed rental increase. 

4. Negotiate additional perks: If the landlord is unwilling to reduce the proposed rental increase, try to negotiate additional perks such as free parking or utilities. These perks can help to offset the cost of the rental.

5. Be prepared to walk away: If the landlord is unwilling to negotiate or if you feel that the rental rise is unfair, be prepared to walk away. Make sure you have a new property lined up BEFORE you make the decision to walk away, as you may find it difficult to find a property to rent in a highly competitive rental market. 

Average Salaries Decreasing

Whilst UK salaries overall have increased over the past 12 months (albeit at a below inflationary level) the city of Gloucester actually saw the largest downturn, decreasing by 6.63% compared to 12 months ago. In addition the West Sussex town of Crawley also fared poorly, with a 5.19% decrease in the average salary during the same period. Perhaps even more remarkably London, which is often associated with big business, high salaries and exorbitant bonuses actually saw average salaries decrease by 3.15% over the last 12 months.

Money Expert Says: How to Negotiate a Pay Rise 

1. It’s your right to ask: You’re well within your rights to ask for a pay rise from your employer, particularly if you’ve been with the company for a while or you feel like you’re underpaid in relation to your current job role. Being transparent with your employer helps open up the conversation and helps you explain why you feel you deserve a salary review. 

2. Show your value to your employer: Provide evidence on everything that you’ve accomplished during your time at the company, focusing on achievements and targets, but also things such as taking on more responsibility and training. Take your line manager or boss through your examples and explain how they’ve impacted the business in a positive way. 

3. Timing is everything: Performance reviews, annual reviews or towards the end of the financial year are usually the best times for employees to ask and negotiate a pay rise. This is because many businesses will be assessing performance, results and making budgetary forecasts for the coming year.

4. Has your work added value?: When negotiating, it’s important you demonstrate how you’re an asset to the company, and why they should recognise and reward your efforts. Provide specific examples of your work or strategies that you’ve implemented, and how this has provided a return on investment. Key examples could be whether your work has encouraged repeat business, directly resulted in an increase in sales or if you’ve saved the company money.

5. Do your research: It’s worth looking into the average salary that your particular job title attracts, which can be found on job sites such as LinkedIn and Glassdoor. Having this knowledge at hand will give you leverage to negotiate a pay rise, but also shows that you’re tuned into the current state of the UK job market. 

Demand for Food Banks Spikes

The impact from the cost of living crisis has meant that an increasing number of UK households have been forced to rely on local food banks in order to feed themselves and their families. This was reflected in our research, which found that Ipswich topped the top list of major UK cities and towns with a staggering year on year increase in searches for food bank related queries of 333%. This was followed by Cardiff, which saw a sharp rise of 256%, and High Wycombe and Barnsley, which both saw food bank related searches increase by 200% each. 

The northern and southern regions of the UK tallied eight towns and cities each in the top 20 list for food bank searches, with Wales seeing only one and the Midlands having just three entries in the list. 

Money Expert Says: How can you obtain help and support from a food bank? 

If you or anyone you know is struggling to pay for food, a food bank could be a short term solution. Here’s how to sign up to a local food bank for help and support: 

1. Referrals: UK residents can access food banks by obtaining a referral from a professional such as a doctor, social worker, or job centre advisor. Referrals may also be obtained from charities, community organisations, or faith groups.

2. Visiting a Food Bank: Once a referral has been obtained, residents can collect a food parcel from the food bank's distribution centre or through a delivery service, depending on the specific arrangements of the food bank.

3. What’s in a Food Parcel?: Food parcels typically contain a selection of non-perishable items such as tinned food, pasta, rice, and cereal, as well as fresh items such as bread, fruit, and vegetables, where possible.

4. Additional Support: Some food banks may also offer additional support, such as advice on managing finances, access to debt counselling, or signposting to other relevant services.
   
   

5. Independent Food Banks: There’s at least 1172 independent food banks operating throughout the UK and are run by local churches, charities or volunteers from the local area. You can find your nearest independent food bank online, on social media or in the local paper, and you can usually visit them to get a food parcel for free without a referral. Taking away the need for a referral has meant that these food banks are often busier than food banks funded by local authorities, so be mindful of this if you need to use one. 

Expert Analysis

When analysing the research conducted for our cost of living study, a spokesperson from Money Expert said: 

"The cost of living crisis continues to be a major concern for many UK households. Higher rents are forcing people to spend a larger proportion of their income towards housing, leaving them with less to spend on other necessities. Lower salaries in certain areas make it difficult to save money for emergencies, which is when we start seeing households having to rely on food banks.” 

“Without significant changes, this cycle will continue to perpetuate, leaving many families struggling to make ends meet. Whether we see positive changes ultimately depends on the actions taken by governments to help address the root causes of the cost of living crisis - an acute housing shortage, low pay and soaring inflation.” 

“Whilst there is some support already in place to help with household bills such as the Energy Bills Support Scheme, which is set to end on the 31st March. There are a number of useful ways of managing money that homeowners can look at to provide themselves with temporary financial relief, but also help to save more in the long run.” 

“Using a comparison site is essential for homeowners to find the best deal for expenses such as utility bills, insurance and mortgages, as it scours the best deals for your requirements. When it comes to renewals for products like insurance, never accept the offer until you’ve done your research on a comparison site, as you’re likely to find a cheaper deal elsewhere. If you find that you’re struggling to pay for your energy bills, it’s worth speaking to your supplier to find out what help is available or whether the tariff you’re on is the right one for your needs.” 

“However, while there may be short-term solutions, long-term systemic change is necessary to truly improve the situation for those affected, such as more energy efficient homes and fairer salaries in line with inflation.”

The post The Cost of Living Crisis: Which UK Towns and Cities have been most affected? appeared first on Money Expert.

By combining search volume data for a variety of health-focused terms and survey results from the UK general public, Money Expert’s life insurance team can reveal where and who is most interested in becoming the picture of health. 

Where in the UK has the healthiest habits?

Despite recent news of Durham being below average when it comes to health, the city is certainly inquisitive when it comes to health-focused routines, scoring top for total number of searches related to healthy habits.

The people of Durham were most interested in daily water consumption and how effective drinking two litres of water a day is, alongside other positive passions such as meditation, yoga and pilates. 

Officially the second smallest city in England and also second in the rankings, Ely residents are keen to learn more about a selection of healthy routines, coming top for searches surrounding journaling and eating a balanced diet. 

Third spot goes to the idyllic cathedral city of Truro, where the trending “10k steps a day” is hot on the search bar, together with searches for restorative habits like “mindfulness”. 

What do the people of the UK think about their habits? 

There are a wide range of sources offering health advice to the public, from news features and articles, to social media, and daytime TV. But, with this wide scope of information, people can often feel bombarded by different messaging and confused by what advice is actually true.

In fact, 47% of people say they feel overwhelmed by conflicting health advice and 44% even said they felt depressed when looking at health and wellness-related news. Due to these overpowering feelings, it can be hard for people in the UK to get started on their positive health journey.

One in three people in the UK simply don’t know where to start when it comes to living a healthier lifestyle but out of everyone, the most confused residents are those based in Cardiff, where 64% of people say they don’t know how to get going. 

As a whole, almost two-fifths of the UK public say that greater access to services or amenities would help them live a healthier lifestyle. This figure rises to 60% for those living in Aberystwyth where they felt they needed greater access to wellness focused services or amenities. The Welsh town is closely followed by Brighton and Hove (59%), Aberdeen (55%), Cardiff (52%) and Wolverhampton (50%).

How are people's habits influenced by social media?

Habits, whether they are good or bad, are discussed on social media in both positive and negative ways, from tutorials on how to journal to the aftermath of a big night out including mentions of the typical “vices” such as vapes and alcohol. The question is, how much influence does consuming this type of content have on people?

Respondents in Coventry are the most positively impacted by content on social media with 64% saying they have been inspired to be healthier due to content they have consumed online. At the opposite end of the scale, 50% of Swansea residents say they have been influenced to pick up bad habits like smoking and drinking after seeing them online.  

Future generations 

For the generations of the future, the impact of online content can be significant when it comes to forming habits and in fact, six in ten young adults in the UK say that content on social media has influenced them to pick up habits such as smoking, vaping or drinking. 

Although, socials are not all bad when it comes to forming habits, with 80% of young adults saying they were inspired to be healthier due to content on social media.

Gen Z is actually pretty focused on living healthily with 62% saying they have felt guilt about their own habits when they saw others being healthy and 64% even admitting to getting jealous of those with healthier lifestyles.

Breaking bad habits is hard and with the many sources of conflicting advice, a lack of amenities, and time spent consuming negative content, it really can be hard to pinpoint exactly what will help you make a change. If you feel as though you want to ditch your bad habits, then you can seek advice from your local NHS service. 

When thinking about your long-term plans, it could be worth taking out a life insurance policy as a way to protect yourself in the future. Money Expert can help you compare life insurance quotes to find the best deal for you. 

Frequently Asked Questions 

What are habits?

Habits are behaviours and actions we perform every day. A habit can also be anything that is repeated often enough to develop into an automatic behaviour. For example, hitting the gym after work, brushing your teeth before going to bed, staying up late, cracking your knuckles, etc.

How to form good habits?

Having more good habits can help you to improve your overall health and be more successful. One of the most crucial aspects of forming good habits is staying consistent. Here are some tips to help you develop better habits that will last:

• Identify your motivation
• Identify your obstacles
• Be positive
• Stay consistent
• Know the benefits of the good habit
• Get support from family and friends
• Give yourself some time
• Focus on one good habit at a time
• Reward your progress

What are healthy habits?

Healthy habits are habits that enhance one’s physical or mental health. Some examples of healthy lifestyle habits include eating healthier, exercising regularly, taking care of your mental health and staying hydrated. Adopting healthy habits in your everyday life may help you combat diseases, boost your energy, live longer and much more.

How to maintain healthy habits?

It may be difficult to start and form healthy habits and even more challenging to maintain them. While there is no magic solution for maintaining your healthy habits, here are three tips that may help you keep up your new healthy routine:

• Set a realistic goal and ensure your new healthy habit fits around your other commitments.
• Break down your main goal into smaller goals to help you easily see your progress when building your new healthy habit.
• Find a “buddy” with the same goals to help you stick to your new healthy routine.

How to break bad habits?

Bad habits can not only put your physical and emotional well-being in danger, but also keep you from reaching your goals. They also squander your time and energy. While it may take time and effort to break bad habits, persistence is key. Most people who eventually succeed in quitting bad habits make several failed attempts before they finally succeed. Therefore, even if you don't experience success immediately, it’s important to keep going. Here are some tips on how you can get rid of your bad habits.

• Choose a replacement for your bad habit: For example, if you decided to quit smoking, you could add a new exercise routine to your daily schedule.
• Eliminate any triggers: If you eat sweets before going to bed, make sure you throw them all away.
• Find a friend for support: Being aware of other people's expectations of you can be really motivating and may hold you accountable for your goals.
• Reward yourself for accomplishments to keep you motivated: Be sure to recognise your progress and find ways of rewarding yourself along the road.

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Heightened demand across Europe almost caused the outage, forcing the Electricity System Operator (ESO) to purchase emergency electricity from Belgium. This was paid for at a significantly inflated price. At its most, 5,000% over the usual rate, costing £9,724 per megawatt hour. This is the highest rate that the UK has paid. 

It’s important to note that the amount of electricity purchased at this record rate was minimal, being just enough to power eight homes for a year. However, it highlights the UK’s reliance on other nations for power, and the cost it can come at.

“We were bidding in a tight market and market prices were high that day because Europe also wanted the energy,” said a spokesperson for the National Grid ESO

“We managed the system and kept the electricity flowing to the South East.”

As well as the freakish heat, storms in Europe, as well as maintenance and outages of electrical infrastructure in the UK cause further supply issues, resulting in the last-minute power grab. The high price paid is likely to trickle down to energy customers as suppliers look to pass on costs. 

Unfortunately for households, this is the last of their concerns when it comes to energy bills. April’s record-breaking price cap increase saw gas and electricity costs rise by 54%, which was a record at the time. While there had been hopes the turmoil in the market would slow down, Russia’s invasion of Ukraine at the start of the year means that come October, another hike is almost certain. Current predictions for the Autumn price cap adjustment sit at £3,200, courtesy of industry experts Cornwall Insights. If Russia continues shutting off power supplies to Europe, this could rise as high as £3,850 at the start of next year.

While the government has laid out a series of financial support measures, it will not cover the next expected increase in energy bills. A recent report from the business and energy select committee warned that millions are being pushed into fuel poverty this winter. Among other suggestions, they urged the government to introduce a lower price cap threshold for vulnerable households.

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According to the business and energy select committee, millions risk being forced into ‘unimaginable debt’. The statement comes just weeks after predictions for October's price cap increase rose to £3,244.

The report highlighted that the government's £15bn package was made when the price cap was only projected to hit £2,800. With a higher rate almost certain, the committee insists that additional support be made available. 

One of the suggestions included was the introduction of a “social tariff” for vulnerable households. This would in effect create a separate, lower price cap for certain low-income customers. 

“Once again, the energy crisis is racing ahead of the government,” said Committee Chair and Labour MP, Darren Jones. “We were told by a number of witnesses, ‘If you think things are bad now, you’ve not seen anything yet.

“To prevent millions from dropping into unmanageable debt it's imperative that the support package is updated and implemented before October, when the squeeze will become a full-on throttling of household finances and further tip the economy towards recession."

Since late 2020, global energy prices have been climbing. Initially, this was due to increased demand in Asia and muted output in Europe. The UK suffered worse than most, in part because of its low storage capacity, which made it highly vulnerable to unfavourable market conditions. As the price cap prevented suppliers from passing costs onto consumers, many energy companies found themselves operating at significant losses. This led to 29 suppliers going under in 2021 alone. 

Ofgem was heavily criticised as a result. Many believed that the regulator allowed too many unsuitable entrants to the market in the name of increasing competition. The result was a catalogue of failed energy suppliers, which have created a multi-billion pound price tag for the taxpayer.

These perceived failings were included in the committee’s report, which said that: “Ofgem’s incompetence over many years enabled inadequately resourced and inexperienced founders to start energy companies.

“It failed to supervise regulated companies, which in turn took high-risk decisions including not hedging properly and using customers’ money to offer unsustainable prices that undercut well-run energy companies.” 

As well as trying to reduce bills in the short term, the report also stressed the need for long-term investment to improve the UK’s energy efficiency. One area requiring immediate attention was a nationwide insulation programme. 

Earlier this year, the UK was revealed to have the worst insulated homes in all of Europe. Improving this is therefore viewed both as a route to cheaper household bills but also a way of achieving the UK’s net-zero aspirations.

The post Millions could be pushed into debt due to energy bills, MPs warn appeared first on Money Expert.

Lloyds chief executive Charlie Nunn said around a fifth of the bank’s 26 million customers had “significantly” altered their spending in response to rising prices. That included putting off purchases of white goods and computers and cancelling entertainment subscriptions.

Since the summer of 2021, Lloyds customers cancelled or blocked 2.2 million subscription services such as Netflix. The rash of cancellations reflects the thawing of pandemic restrictions, which has reopened entertainment opportunities beyond streaming but also reflects strained finances that are barely covering the basics.

Families are spending an average of £89 per month more on those basics - energy, food, and fuel - than before the pandemic, Lloyds said. 

Gas and electricity bills currently stand at just £2,000/year for the typical household, and recent forecasts suggest they could climb to a staggering £3,850 in January. Meanwhile, inflation stood at 9.4% in June, driven by rising food prices.

The pressures have left around 1% of Lloyds customers “really struggling to make ends meet,” Nunn said.

Against that background, Lloyds' economic outlook was cautious. Its pre-tax profits in the second quarter stood at £2 billion, exceeding analyst projections of £1.6 billion and largely in line with the same period in 2021.

The banking group benefited from a rise in interest rates following the base rate hike, bringing in more income from mortgages and loans. 

Trying to curb inflation, the Bank of England has raised the base rate five times since December, taking it to 1.25%. Lloyds anticipates that the base rate will peak at 2.25%.

However, Lloyds' rising income from loans was offset by the £200 million it set aside to cover potential defaults should rising prices make it harder for homeowners to keep up with mortgage and loan payments.

Nunn said hundreds of Lloyds staff members are being trained to help struggling customers manage their finances. He said the customers in the worst financial positions wouldn’t have borrowed from the bank so wouldn’t be at risk of default, and the number of customers currently in arrears remains at “low levels.”

But the country’s largest mortgage lender is anticipating that the cost of living crisis will slow mortgage lending and house price growth in the coming months.

Meanwhile, Lloyds announced this week that it will shutter 66 Lloyds and Halifax branches from the autumn, meaning it will have axed more than 200 branches since the start of 2022.

The post Households Spending £89/Month More on Energy, Food, and Fuel, Lloyds Reveals appeared first on Money Expert.

Virgin Money current accounts - the high-interest M Plus account, the premium Club M account, and the basic M account - come with linked easy-access savings accounts.

Since June the accounts have paid a 1.56% interest. That rate is very competitive, but just this week was eclipsed by Islamic bank Al Rayan, paying 1.6% on its easy-access Direct Saver. It was also challenged by Yorkshire Building Society (1.55% on its easy-access account) and Chase (1.5%).

Virgin Money has once again upped the ante, pushing the rate on its savers to 1.71% from Wednesday, 27 July. That puts Virgin Money at the top of the league table for easy-access savings accounts.

The headline rate is paid on balances of up to £25,000. You’ll earn 1% interest on savings above that level, up from 0.75%. The rate is available to both new and existing customers.

Hugh Chater, Chief Commercial Officer at Virgin Money, says the improved rate means “gives consumers more reasons to bank with Virgin Money and rewards our existing customers.”

Giving customers “even better value for their savings… is so important in these challenging times,” he added.

If you stash the full £25,000 into the account, you’ll earn £431 in interest over the year, unless Virgin increases the rate even further in the meantime.

You need to hold a Virgin Money current account to access the savings account but it doesn’t need to become your main bank account. Virgin Money’s main current account, the free M Plus account, also pays 2.02% interest on balances of up to £1,000. Customers can also earn cashback on spending.

The premium current account, Club M, costs £14.50 per month but offers travel and mobile insurance and breakdown down cover. It also pays 2.02% interest on balances up to £1,000.

Virgin Money says the rate hike comes in response to the Bank of England’s latest adjustment in the base rate, which took it to 1.25% in June.

Some other challenger banks and building societies are passing the increased base rate onto savers. The Treasury-backed NS&I recently raised the interest rate on its easy-access saver to 1.2%.

However, savings rates from many high street banks haven’t budged, with many remaining at a paltry 0.01% or 0.25%.

Of course, even the savviest shoppers won’t be able to find a savings rate that offsets inflation, which climbed to a fresh high of 9.4% in June, the steepest rate in 40 years.

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48 Lloyds Bank branches and 18 Halifax outlets will permanently shut between October 2022 and January 2023. The branches slated for closure have seen average visits drop by at least 60% - and sometimes as much as 85% - since 2016, Lloyds said. 

Additionally, each of the locations is situated within one mile of a free-to-use ATM and a Post Office, where customers can perform basic banking tasks.

With 19 million online banking customers and 15 million mobile app users, Lloyds wants to ensure its branches are “in the right places, where they're well-used,” said Russell Galley, director of consumer relationships at Lloyds Banking Group.

“Our customers have more choice than ever in how they bank with us. As our customers do more online, visits to some branches have fallen by as much as 85% over the last five years," he added. 

Lloyds already shuttered 48 branches between January and April of this year and has previously announced plans to shut a further 60 branches between June and September and another 28 between August and November.

With all the announcements totalled up, consumers will lose access to a total of 202 Lloyds branches between January 2022 and January 2023. That includes 133 Lloyds Bank Branches, 50 Halifax locations, and 19 Bank of Scotland outlets.

But Lloyds isn’t alone in shuttering branches. With big waves of closures from rivals Barclays, HSBC, NatWest, TSB, and Virgin Money, more than 400 banking outlets will disappear this year.

Derek French, a former NatWest executive and founder of the Campaign for Community Banking Services, said banks are scrambling to shutter branches before new legislation to protect consumers’ access to cash takes effect.

The Financial Services and Markets Bill will give the Financial Conduct Authority (FCA) new powers to compel banks to maintain cash withdrawal and deposit facilities. The regulator has said that banks must produce impact assessments before they axe a branch or even close its counter service or slash its opening hours.

The 66 Lloyds and Halifax branches to close

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