This month, we share how to ‘stay safe and stay smart’ when dealing with your finances. Plus, how to safeguard your future.
First, we’ve compiled an in-depth resource to avoid scams when buying and selling your home. Scammers will often manipulate the information found online to deceive you of your money. Grab a coffee and a quiet spot for this one. So you don’t miss anything to help you stay safe and smart online.
Then, we’ve looked at how to get your will in order. Top five insurance policies to take out. How to overcome the risks associated with equity release. The different types of income protection. And finally, we ask, what is Spear Phishing?
Always remember this important advice from Action Fraud:
STOP: Taking a moment to stop and think before parting with your money or information could keep you safe.
CHALLENGE: Could it be fake? It’s okay to reject, refuse or ignore any requests for your financial or personal details. Only criminals will try to rush or panic you.
PROTECT: Contact your bank immediately if you think you’ve fallen for a scam. Don’t feel ashamed or embarrassed — you are not alone.
Report it to Action Fraud online at www.actionfraud.police.uk/reporting-fraud-and-cyber-crime or by calling 0300 123 2040.
Your first step of protection? Avoid scams by always using a trusted mortgage broker.
Even with increased online security and tight rules and regulations, so many scams are going around. We live in a world where buying or selling a property is possible without meeting face-to-face with your conveyancer, mortgage broker, estate agent, surveyor, or even buyer/seller.
We look at some of the top ways scammers will try to steal your information and money. Remember, we are always available for a phone call if you are nervous and going through us means we can screen for scams for you.
- Pretending to be buyers and/or sellers. They will gather information about the property and transfer it to themselves with fraudulent documents. They may try to offload the property quickly when they act as sellers using information freely available on the Land Registry website. Probably at a reduced rate to sell quickly. Remember: even if a person has access to a property to show you around. They may just be house-sitting or renting (with the intent to commit fraud).
- Pretending to be a landlord or rental agent. Many people renting in the UK are used to an online process. So, fraudsters may present properties online — often with fake photographs. They then pressure interested parties to sign into a deposit before they disappear. They may even have access to the property. But this doesn’t mean they have the legal right to rent it!
- Pretending to be a lender. They pretend to be lenders who claim they can renegotiate their current debt or mortgage if they are sent payments.
- Mortgage fraud. Mortgage fraud is used by people who borrowed too much money to mislead lenders or house buyers. Inflating their income to secure loans. However, it can also happen when groups of criminals mislead lenders. Can contain corrupt solicitors, brokers and valuers.
- Inflated sale price. Fraudsters will sell properties (sometimes holiday homes) with exaggerated projections of its rental potential. Often an attempt to scam prospective landlords.
- Fraudsters pretending to be conveyancers. Through hacking or careful manipulation of email addresses or genuine-looking letterheads. Then, ask their clients to transfer money to them. This request often happens just before the weekend. Putting pressure on clients to pay without proper verification. This allows fraudsters to stay under the radar until the next week. And get away with the money before they are discovered.
It’s thought that this ‘home hijacking’ (also known as ‘Friday afternoon fraud’) is the most common legal-related cybercrime.
What you can do to avoid being a fraud victim
Buyers
- Avoid properties that you see online where you are not allowed to see the property in person. Or if appointments are constantly being changed or delayed.
- Don’t give in to demanding phone calls, emails or letters that pressure you into quick decisions. Especially when they are related to paying money. Or ask you for personal details.
- Don’t transfer money without calling and verifying bank details with your conveyancer. And be especially suspicious of such requests on a Friday afternoon.
- Be wary of property investment seminars and training programmes that are ‘invite only’ and make hefty promises.
- Familiarise yourself with the property’s tenure via the Land Registry.
- Don’t be afraid to ask your seller plenty of questions – they will have no problem answering.
- If you have concerns, confirm what checks your conveyancer or property solicitor has made on the property and the seller.
- Don’t engage with any lenders or mortgage brokers that haven’t been approved by the Financial Conduct Authority (FCA).
Sellers
- Be wary of buyers who come in with excellent offers. Especially if you have been struggling to sell. They may be scamming you to get personal and property details.
- Use a trusted letting agent if you are a landlord looking to rent.
- You can sign up for a ‘Property Alert’ from the Land Registry’s website. It will notify you of any applications or searches they receive regarding your property (or one of your properties). It can help you stay alert to any possible fraud. Especially if you don’t know the source of these searches or why they were made.
Tenants
- Only pay a deposit into a government-sanctioned deposit scheme. This is currently the Tenancy Deposit Scheme, Deposit Protection Service and MyDeposits in England and Wales.
- Don’t offer valuable items to a landlord as a deposit. They will not be protected. Landlords should not accept this. But a fraudulent landlord will likely have no problem accepting the item before vanishing with it.
- A tenant’s holding deposit is not protected until they become a tenant. You shouldn’t pay a holding deposit to anyone other than a trusted letting agent or landlord.
If you believe you’ve fallen for a scam. Contact your bank immediately at a number you know to be correct. Such as the one on your statement, their website, or the back of your debit or credit card.
Report it to Action Fraud on 0300 123 2040 or via actionfraud.police.uk. If you are in Scotland, please report to Police Scotland directly by calling 101 or Advice Direct Scotland on 0808 164 6000.
Making a will is the only way to ensure your money, property, possessions, and investments (known as your estate) go to the people and causes you care about.
Let’s look at some top questions…
Q: How do I value my estate?
Your will should cover your whole estate, so it's a good idea to draw up a list of your assets and debts. Then, you have a clear idea of how much it's worth, which can help you decide how to distribute it.
Assets may include property, savings, investments, jewellery, or antiques. While debts are often mortgages, credit card balances, or loans.
It's a good idea to get assets valued regularly. For example, your house's price might have changed since you last checked.
Q: How do I divide my estate?
Your will needs to state clearly how you want your estate distributed and who should be responsible for distributing it. Think about who you want to benefit from your will. Or any specific gifts.
Executors are legally responsible for dealing with someone's estate after their death. It can involve a lot of work and responsibility, so choosing your executor (or executors) is important. When choosing who to appoint, you should talk to them to ensure they understand what's involved and that they're happy to do it.
If you want to leave a gift to a charity in your will, include the charity’s full name, address, and registered charity number so they can receive it.
Q: How do I write my will?
It’s usually best to get advice from a lawyer (check they're licensed with the relevant professional body, such as the Solicitors Regulation Authority.) Some charities and campaigns offer free will-writing services to encourage people to make wills and leave charitable legacies. Like Will Aid or Free Wills Month – Age UK. Banks offer will-writing services and advice about estate planning. But they might charge high fees for these services.
You can write your own will. But it's easy to make mistakes or miss out important details. So, we advise you to seek professional advice.
Q: How do I make sure my will is valid?
You must sign your will in the presence of two witnesses. And they must be present when you sign. Also, they must sign to say they’ve seen you sign your will. They cannot be the executor of your will. Or any partners who will benefit from it..
If your will isn't signed and witnessed correctly, it isn't valid. The rules are very strict and can be confusing. So, we advise you to get legal advice.
Part of our ‘stay safe and stay smart’ campaign naturally includes insurance. With the cost of living skyrocketing, we look at which insurance you really need, plus how to save money without facing expensive premiums.
1. Income Protection Unfortunately, many people often avoid this one. The thought is very scary. Imagine losing your income due to illness or injury. However, if you get caught out, you could be in a serious position. Instead, choose a policy that provides enough coverage to maintain your current lifestyle even if you can no longer work.
While income protection insurance and employers’ liability insurance both pay for disabilities, income protection is not limited to disabilities or injuries at work.
2. Life Insurance Life insurance protects your loved ones who are financially dependent on you. If your parents, spouse, children, or other loved ones would face financial hardship if you died, consider how much you earn each year (and how many years you plan to remain employed). Then purchase a policy to replace that income in the event of your untimely demise. Factor in the cost of burial too, as unexpected costs can burden many families.
3. Private Medical Insurance Despite having the incredible NHS in the UK, health insurance should be high on your list. Often, policies can collaborate with some services available on the NHS, saving you money. This could be due to long wait times, the unavailability of specialist doctors, or the kind of hospital care you require, such as a private room. Having five-star service is particularly important when searching for a diagnosis or if you are unwell.
Don’t wait until you need it to take out a policy. Many insurances have a waiting period, and you may not be able to get insurance if you have a pre-existing condition.
4. Homeowner's Insurance or Renter’s Insurance We don’t need to tell you this twice, but imagine having to pay to replace all your furniture, appliances, or clothes. The cost would be much higher than taking out homeowner's insurance or renter’s insurance! Equally, can you afford to rebuild your house while still paying the mortgage? It’s a no-brainer.
5. Car Insurance Last but not least! Car insurance is a must in the UK. In fact, it’s illegal to drive without it. However, coverage can vary depending on your policy, so ensure you are completely protected.
How to save money when buying insurance:
- Check that the policy covers what you need and doesn’t include unnecessary items that increase the price. Check exclusions and excess amounts.
- Always answer the insurer’s questions honestly; otherwise, you may waste time buying cover.
- Before auto-renewing, check for a better, more competitive deal elsewhere.
- Renew as early as possible to get the best price.
- If possible, consider paying annually; it can be more expensive to pay your premium monthly by direct debit.
- If your needs are complex, find an insurance broker through the British Insurance Brokers’ Association or consult your financial adviser.
- Instead of buying expensive mobile or appliance cover, consider self-insuring: Save the money it would cost to replace the item in a savings account, and keep it if you don’t need to use it!
Do you have time to answer our quick poll? Do you have any of our top five insurances? a. Yes – all five! b. Some, but not all (they are…) c. No, I don’t have any, but I know I need to. Send me more information!
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice. A fee may be charged for mortgage advice. The exact amount will depend on your circumstances
So, you’ve heard of lifetime mortgages, and you are at a stage in life when your finances need a little boost. It’s ideal for adding value to your home, such as for a renovation, taking the dream trip you’ve always wanted, or accommodating new grandchildren.
Naturally, you have some questions — and potential concerns — about releasing money from your biggest asset. Who pays it back? And will your family be left in a shortfall?
We answer all these questions. But as we always say, speak to us directly if you need detailed advice. We are here to support you. Simply hit ‘reply’ to this email, and we’ll get back to you as soon as possible.
In short, equity release or a ‘lifetime mortgage’ is when you take out a loan against your property, which is repaid from the proceeds when it is sold. The amount you can borrow depends on your age and the value of your home. You need to be at least 55, but the older you are, the more you can borrow. The maximum you can borrow is around 60% of the house's value.
Let’s delve into the top risks associated with a lifetime mortgage...
Q. Isn’t the interest rate really high on lifetime mortgages? A. It depends on the type of mortgage you take out. You can opt for a lump sum, where interest is charged on the entire amount at a fixed rate, or take chunks as needed, paying interest only on the money withdrawn. By spreading out what you borrow in this way (known as ‘drawdown’), you reduce the impact of compound interest.
Q. What will my family be left with if I release equity? If house price growth remains strong throughout the lifetime of your mortgage, you may still have a significant amount of equity in your property even after repaying the outstanding debt.
However, the opposite scenario is possible too. Although you will never have to repay more than the value of the property, members of the Equity Release Council must comply with its 'no negative equity guarantee'. This ensures that your family will not have to cover any shortfall if the property's value is less than the outstanding loan when it is sold.
Q. Do I end up out of pocket if I repay the loan early? Repaying your loan early often incurs an early repayment charge, which can be as high as 25% in some cases, depending on how long you've held the loan. If you want to make partial repayments, some lifetime mortgages meeting the Equity Release Council's standards allow this penalty-free, typically up to 10% of the loan per year.
However, you can often switch your lifetime mortgage to another provider offering a lower interest rate and save money.
Q. Is a lifetime mortgage expensive? Additional fees are likely to be charged in addition to the interest you pay, which can range from £1,500 to £3,000 depending on the plan. These may include application fees, legal/solicitor fees, valuation fees, or adviser fees, though they may be included in the process. Be sure to check with your adviser.
Q. Can I move house if I have taken out a lifetime mortgage? A lifetime mortgage can be transferred to a new property if the lender agrees that the new property is suitable. Homes within retirement complexes may be harder to sell. However, even though your loan is secured against the property, it remains your property, and you cannot be evicted.
The good news is that you don’t have to weigh up the pros and cons yourself. To get regulated advice, you must seek advice from a qualified equity release adviser as required by the Financial Conduct Authority. Chat with us today if you are considering a lifetime mortgage.
This is a lifetime mortgage. To understand the features and risks, request a personalised illustration. Make sure this mortgage meets your needs if you want to move or sell your home or want your family to inherit it. If in doubt, seek independent advice. Mortgage advice may incur a fee depending on your circumstances.
Did you know that recent research from Beagle Street suggests that 10 million young UK adults don’t have life insurance? Are you one of those 10 million?
Among the 2,000 young adults surveyed (aged 18-40), 28% admitted they hadn't considered life insurance. 27% cited affordability as a barrier, while 20% blamed the current cost-of-living crisis.
However, the consequences of lacking life cover or income protection can be significant. What would happen without your primary earner? Your family could face substantial vulnerability.
We aim to demystify this process. We've explored key policies you can consider, from income protection and life insurance to critical illness cover and mortgage protection insurance. If you have questions, we're here to help and alleviate some of the stress.
- Life Cover: Also known as 'term life insurance' or 'death cover', this policy pays a lump sum when you die. The money goes to your nominated beneficiaries, providing financial support in the event of your death.
- Income Protection Insurance: Think of this as 'disability income insurance' or 'income replacement insurance'. It offers a regular income stream if you're unable to work due to illness, injury, or disability. Your policy will replace a portion of your lost income, typically through monthly payments.
- Short-term income protection insurance: Designed for temporary coverage, lasting from a few months to a couple of years. It features shorter waiting periods and is more cost-effective. Ideal if you have substantial emergency funds or work in a profession with higher short-term disability risks.
- Long-term income protection insurance: Provides extended coverage suitable for individuals facing prolonged periods out of work. Benefit periods can extend until retirement age, offering long-term financial security despite higher premiums.
- Guaranteed Income Protection Insurance: Offers a guaranteed income stream, beneficial for those without substantial safety nets or with large families reliant on your income.
- Own-Occupation Income Protection Insurance: Specifically for careers where returning to work might be challenging due to specialised skills or conditions.
- Any-Occupation Income Protection Insurance: Provides coverage if you cannot perform any job matching your education, training, or experience, though it may offer less comprehensive coverage compared to own-occupation policies.
- Renewable Income Protection Insurance: Allows policy review, typically annually, aligning with your changing financial circumstances for added security.
- Personal Accident Insurance: Provides financial protection against accidental injuries or death, offering lump sums or benefits covering accidents at home, during travel, or at work.
- Redundancy Insurance: Also known as 'unemployment insurance', this policy offers financial security if you lose your job due to redundancy. It covers a percentage of your previous income for a set period.
- Mortgage Protection Insurance: Specifically designed to cover mortgage payments in cases of disability or involuntary unemployment, ensuring financial stability during challenging times.
Navigating these options can be overwhelming. Let us assist you in finding the perfect plan for your budget and lifestyle. Contact us today for detailed guidance on premiums, eligibility, waiting periods, and more.
Though it may sound like a thrilling way to catch fish, Spear Phishing is far from exciting—and definitely not fun.
Spear phishing occurs when scammers use personal information to impersonate a legitimate business, often one you've interacted with before. Armed with details such as your name, address, date of birth, workplace, or alma mater, they craft messages to deceive you. How many of these details are on your social media profiles, like Facebook or LinkedIn, ready for scammers to exploit?
We've compiled a guide to keep you and your finances safe!
Which? revealed from their recent social media survey:
- 68% of respondents share their names.
- 46% disclose their ages.
- 35% reveal their locations.
Such information enables fraudsters to personalise scam messages with your name and location.
- 21% of respondents divulge their workplaces.
- 32% disclose their birthdays.
- 12% provide their phone numbers and email addresses.
With this data, a fraudster can impersonate a colleague or offer a job in your field.
- 18% of respondents share places they've visited.
- 9% disclose their real-time locations via public Facebook profiles.
Such information allows fraudsters to track your movements.
Even with tightened privacy settings on social media, this data may still reside on numerous vulnerable websites—like restaurant or ticket booking platforms—that could be hacked.
The intention isn't to dissuade you from using these websites but to remind you to be cautious when receiving calls, texts, or emails requesting additional information or money.
Ways to protect yourself include using a 'dummy' email solely for logging into websites and social media, enabling you to spot scams by the email used. Check if your data has been compromised at haveibeenpwned.com or, for Google users, at passwords.google.com/checkup.
Additionally, install antivirus software to safeguard your data and consider making social media profiles private while assessing what you share online. (A WhatsApp group with close friends and family can keep them informed while evading prying eyes!)
Uncertain whether a message or website is authentic? Visit www.scamadviser.com and trust your instincts. When rushed, especially under pressure, scams often occur. Seek advice from friends, family, or call your bank on a trusted line.
Report incidents to Action Fraud at www.actionfraud.police.uk/reporting-fraud-and-cyber-crime or by calling 0300 123 2040.
References:
https://www.foys.co.uk/news/property/property-fraud-what-you-need-to-know/
https://www.takefive-stopfraud.org.uk/conveyancing-scams/
https://www.ageuk.org.uk/information-advice/money-legal/legal-issues/making-a-will/
https://www.which.co.uk/news/article/5-common-equity-release-myths-aihPd9U41ZRT
https://www.which.co.uk/money/pensions-and-retirement/you-re-retired/what-is-equity-release-aWHbh3k7xmWk
https://www.covermagazine.co.uk/news/4209920/10m-adults-life-insurance
https://www.bestinsurance.co.uk/income-protection-insurance/types-of-income-protection-insurance/
https://www.which.co.uk/news/article/spear-phishing-are-scammers-targeting-you-aniez8I9I22s?utm_source=ExactTarget&utm_medium=Email&utm_campaign=4447208-M_MW_EM__20240617&mi_u=223161466&mi_ecmp=M_MW_EM__20240617
