With Halloween approaching, is this month to tackle some 'scary' things — budgets, debt, or insurance fears? But we prove these don’t have to be scary with the right help. Advisers bring value, they offer more than just policies; they provide guidance tailored to your needs. And guess what? Often at no extra charge!
This month we’ve put together a fact sheet on 'Accident, Sickness and Unemployment policy (ASU)'. And with the cooler months approaching, we discuss how to use equity release to stay warm this winter. We also have some healthy trick or treats and dental insurance information. Plus, why using an insurance broker takes away the hassle, movement in the base rate, and getting your debt under control.
With everyone feeling the pinch due to the cost-of-living crisis, it can be tempting to rely on credit cards and loans to make ends meet. But has the situation spiralled, with debts now outpacing your income? In this article, we discuss ways to get help with managing debt. Our first recommendation is to speak with a broker who can provide professional advice tailored to your situation. Feel free to email us directly by replying to this message.
To start, consider these four steps:
Step 1: Assess your situation — do you need professional help, or can you manage your way out of this?
Step 2: Identify easy savings — review your budget, check your benefits, and look for discounts.
Step 3: Explore tougher savings — could you downsize your car, cancel subscriptions, or switch to more affordable alternatives?
Step 4: If you're still struggling, consider reaching out to a non-profit debt charity for further assistance.
Refinancing to Consolidate Debt
Like many in the UK, you might have multiple debts, such as a home loan, credit cards, or personal loans. Managing several repayments can be stressful and overwhelming.
How Can We Help?
A broker or financial adviser can recommend the best debt consolidation strategy for your needs. If you're a homeowner, consolidating your debts into a second charge loan could simplify things by giving you just one monthly payment to manage. This can reduce stress and make your finances easier to handle.
Balancing Manageable Payments with Long-Term Costs
Opting for a loan with a competitive rate can help make your monthly payments more manageable. However, in general, this type of debt consolidation may result in paying more over time and extending the repayment period. While this spreads out the debt, it can provide immediate relief by reducing the strain of monthly payments.
Understanding the Bigger Picture
While debt consolidation can offer immediate relief by simplifying your repayments, it’s important to address the underlying causes of debt. A broker can provide valuable advice to help you budget, manage your money more effectively, and work towards long-term financial goals.
Remember, this is general guidance. Chatting with us directly will allow us to provide advice tailored to your specific situation. While additional borrowing through a second charge loan can be a useful solution, please be aware that your home could be at risk if payments are not maintained.
In August, The Bank of England cut interest rates to 5% from 5.25%. The first drop in rates since the first Covid lockdown in March 2020. September announced a hold at 5% too. This will affect millions of people's mortgage, credit card, and savings rates. But borrowing costs are still high.
Have you ever thought about why interest rates change?
Bank of England's base rate is what it charges other lenders to borrow money. Hence, customers' loans can be influenced by this number for loans and mortgages. The percentage changes to control UK inflation (the increase in the price of something over time).
Interest rates are used to influence what people can borrow. A high rate reduces the demand for borrowing. So, the higher rates are designed to discourage people from borrowing, and to incentivise saving.
Will the rates drop again?
"Inflationary pressures have eased enough that we've been able to cut interest rates today,” said the Bank of England governor Andrew Bailey following August's rates decision. But, he warned, "We need to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much."
The Bank also considers other measures of inflation when deciding on rates, some of these are higher than liked, such as increasing price rises in the service sector, from restaurants to hairdressers.
So, there must be a balance to slow price rises against the risk of damaging the economy. The banks don’t want to cut rates only to raise them again.
How much could interest rates fall?
Though the UK inflation briefly hit the Bank's 2% target in May and June. It is expected to rise slightly before settling back in early 2025. But with interest rates, it’s hard to predict!
In May, the International Monetary Fund (IMF) recommended that UK interest rates should fall to 3.5% by the end of 2025. They advised the Bank to prioritise controlling inflation before adjusting rates.
But in its latest forecast. The IMF warned that persistent inflation in countries including the UK and the US might mean interest rates have to stay "higher for even longer".
Does this affect you?
According to the government's English Housing Survey, about a third of the population have a mortgage. With over half a million homeowners on a rate that "tracks" the Bank of England's rate. The 0.25 percentage point cut will take monthly repayments down by about £28 on average. Or if you are on a standard variable rate mortgage, about £15.
However, around eight in 10 mortgages are on fixed-rate deals. So, repayments won’t change, but future deals may. According to banking trade body UK Finance, in 2024, about 1.6 million deals are expiring.
Is your fixed-rate mortgage up for review? Contact us today to see how we can help find the best rate for you.
With winter approaching, are you asking whether your home needs a toasty update? If you are over 55, using equity in your home could be an option. Using our tips, you could keep your house warmer. And save on energy bills! It’s a win-win.
We go through some simple changes you can make to your home to keep it warmer. And equity release plans you might be able to use. Hit ‘reply-to’ this email to chat with us directly about releasing equity or a ‘lifetime mortgage’.
First: identify home improvements
Let’s think about ways to make your home more energy-efficient and warmer. (As a bonus, it will also help keep your house cool in summer!)
- Add or upgrade loft, wall, or floor insulation to reduce heat loss. Make sure to check which type of installation you use is compatible with a mortgage. Some insulation (like certain foams) can void some mortgages and insurance.
- If you haven’t already — install energy-efficient windows to prevent drafts and heat escape. It’s one of the simplest upgrades that makes the biggest difference.
- And so is this! Seal gaps around doors, windows, and other openings to stop heat from leaking out and cool air coming in. You’ll be able to feel the draft by walking around. A DIY solution might be all you need to stop drafts.
- Have you checked your boiler? It could be time to replace an old, inefficient boiler with a modern, energy-efficient model.
- Now to start looking at some high-tech ideas! Have you heard of smart heating controls? Install smart thermostats or heating controls to manage your heating more efficiently.
- Equally, are there renewable energy solutions you could look at? Consider installing solar panels or a heat pump. You may save a lot on gas or electricity in the long run!
Once you’ve worked out what you’d like to do. It’s time to calculate potential costs.
Assess the cost of these home improvements to help you determine how much equity you may need to release. It is important to consider other funding options first as equity release may not always be suitable, but don’t panic, we can help you look at what options are available.
Then, it’s time to contact us to help choose the right equity release plan.
A lifetime mortgage allows you to borrow money against your home's value. The interest is rolled up and repaid when you die or move into long-term care. You keep your home with no monthly repayments. And it provides immediate funds. Meaning upgrades like insulation, new windows, or heating systems can be installed before the harshest winter conditions hit early in the new year!
Last things to check
Look out for government grants or incentives for energy-efficient home updates. For example, schemes like the Green Homes Grant. They may offer additional financial support to help cover costs. And finally, remember to keep your home in good condition. Such as maintaining equipment, checking insulation, servicing the boiler regularly, and repairing drafts. Regular maintenance ensures that your home remains energy efficient. And keeps heating costs low!
We can help you understand the options, costs, and implications of a lifetime mortgage. So you can safely select the best plan for you. Would you like more information on specific equity release products? Or a deeper dive into any of the energy-saving measures?
Let Halloween be the only scary thing this month. Take the stress out of insurance by using a broker. We can help you decide on the best policy for you with our years of knowledge and experience. Don’t forget — we help families every day!
An insurance broker is a professional ‘middle-person’ working independently. The benefits are almost endless. The main one is that you no longer have to deal with insurance companies! Think about the time savings and risk management advice. Plus, personalised service you'll receive…
What does an insurance broker do?
We bridge the gap between clients and insurers. With expert advice, we find the best coverage for budget and requirements.
The benefits of using an insurance broker
- Expertise and guidance. We are well-versed in the language of insurance policies. Industry trends. And various coverage options.
- Time and effort savings to streamline the process. AKA, we do the work for you. We know the ins and outs. With access to a wide array of insurance products. Efficiently comparing all your options.
- Personalised service to understand your specific needs. Plus, individual circumstances and preferences. We can find an insurance solution that fits you. So you're not paying for coverage you don't need. Or miss out on anything vital!
- A broker can access a wide range of options. Finding the most competitive rates and complete coverage.
- Brokers will help you find cost-effective solutions. Negotiating competitive rates. And uncovering discounts not available to the public. Saving you money!
- Risk assessment and mitigation to avoid unforeseen financial pitfalls. And identifies comprehensive coverage.
- With regular policy reviews and updates. For ongoing support to ensure that your coverage remains aligned.
- Plus! Insurance can be a complex topic. We can offer a free education. Taking the time to support and inform you. Explaining policy terms, conditions, and potential risks.
With our guidance, you’ll gain access to a wide range of options. And make sure you are on the best policy for your needs. Chat with us today to find out more.
It’s worth taking out an Accident, Sickness and Unemployment policy (ASU) for ultimate peace of mind.
What is Accident, Sickness & Unemployment insurance?
This cover protects your monthly income if you fall sick, have an accident that forces you out of work or are made redundant. It is a policy that provides a monthly tax-free payment. Paid directly to you, replacing your income. It can cover your earnings for up to 12 months or you return to work.
Why would I need this?
Consider your monthly costs: mortgages, rent, bills, cars, mobile phones, groceries, pets, and clothing. Do you have enough savings to cover these costs if you can’t work? Would you even want to drain your savings? When a small cost each month could provide peace of mind instead?
Everyone is entitled to government-paid Statutory Sick Pay (SSP). Around £116.75 per week. Or if you are made redundant, Job Seekers Allowance (JSA) is available at £71.70 for under 24, £90.50 for over 24. Would these payments cover your weekly outgoings?
We hear all the time — “it won’t happen to me”. But unfortunately, anyone is vulnerable to the hardships of life. Think about it. Do you know anyone who has taken time off work because of illness or redundancy? I’m sure you are nodding right now. Maybe it’s even been you?
Sadly, you may not recover as well as you should due to the stress of losing your salary.
What do I need to think about when taking out a policy?
There can be initial waiting periods, so the sooner you secure your policy, the sooner you will be protected against loss of income. For unemployment policies, there is always an initial exclusion period. If you become aware that your job is at risk during this period, it is usually best to cancel the policy. This exclusion period could range from 60, 90, or even 120 days. Additionally, it’s important to note that Accident, Sickness, and Unemployment (ASU) insurance is typically a short-term solution, providing cover for 1 or 2 years.
Alternatively, you may want to consider Income Protection, which offers longer-term cover and could be a more comprehensive option to mention when exploring protection policies.
You’ll also have to consider the best policy for you and your family. You can research this yourself or contact us and we’ll go through them with you. Policies contain a list of eligibility or criteria. It’s important to understand the details. You will be asked a list of ‘eligibility’ questions to confirm.
How much does Accident, Sickness and Unemployment insurance cost?
The cost of your policy really depends on your situation. While individual benefits and extra features can raise the price, the most significant influence on the cost will be the level of cover you choose. The higher the cover, the more you'll pay in premiums. In addition, these five factors will also mostly influence your policy:
- Your Age: Unfortunately, the older you are, the higher the cost. Every five years, the price will slightly increase.
- Initial Exclusion Period: The shorter the initial exclusion period, the more expensive the cost.
- Excess Period: The quicker you want the claim to be paid, the higher the cost of your premium.
- Benefit Amount: Naturally, the more money you would like to have paid out to you, the higher the cost.
- Additional Factors: Finer details such as your postcode, industry or occupation, travel habits, medical conditions, or hobbies may also impact the cost of your policy.
Ultimately, the level of cover and benefit amount you choose will be the primary driver of the cost, with these additional factors playing supporting roles.
So remember…
How would you or your loved one be affected if you lost your regular income? Would you be able to keep up with your mortgage or rent payments? On top of this financial stress, would you be able to fully recover from your accident or sickness? Or find a new career, knowing your situation could affect your loved ones?
Accident, Sickness and Unemployment protection can be here to help. Speak to one of our trained advisors, who will be more than happy to guide you through the process.
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it
Hopefully now you are feeling a bit more confident with some scary topics! So we can delve into a healthier Halloween and a positive upcoming festive season.
Halloween usually brings lots of sweets. And Christmas is just around the corner. Coming into the winter months, it’s easy to head to the pub for a mulled wine by the fire. But with all these treats in mind, looking after your health is still important. Especially your teeth.
Have you thought about adding dental insurance to your Private Medical Insurance policy?
Dental insurance policies can cover routine check-ups. As well as the costs of dental work—including dental injuries and accidents. Discover dental cover you can smile about… with your choice of cover levels. Cover for routine and restorative treatments. Preventative treatments like routine exams, x-rays, and scale and polish by dentists or hygienists. And even cover dental emergencies abroad.
Choose between enhancing your NHS cover. Or going fully private. Chat with us today to hear your options.
References:
https://www.moneysavingexpert.com/loans/debt-help-plan/
https://www.bbc.com/news/business-57764601
https://www.bestinsurance.co.uk/accident-sickness-unemployment-insurance/
