Author: Dot Piper

September 2006 will see the introduction of new laws regarding child restraints in cars.

Current laws state:-

· Children aged three to 11 (inclusive) and less than 150cm tall are permitted to travel in an adult seat belt if no child restraint is fitted.

New legislation says:-

· Children aged three to 11 and under 135cm have to be seated in child seat or booster (designed to be used with an adult belt), suitable for their age and weight.

Children taller than 135cm (4ft 5ins) or aged 12 or over must wear an adult seat belt where one is fitted.

The driver is responsible for ensuring these rules are complied with until the child reaches the age of 14, when they must take responsibility for their own safety.

The Department of Transport believes that, by making sure that children are securely restrained and not allowed to use adult seatbelts until they are sufficiently tall for them to work in the proper manner, 2,000 child injuries and deaths will be prevented.

The penalty for failing to comply with these regulations will be a fixed penalty fine of £30 or, if the case proceeds to court, a fine of up to a maximum of £500.

Exceptions will be allowed in emergencies, cars without seatbelts, and when children are passengers in taxis.

Information on child-seat safety can be obtained from the Child Accident Prevention Trust, www.capt.org.uk or from the government’s website www.thinkroadsafety.gov.uk there’s a question and answer section on government website which is very comprehensive and seems to answer every question you could think of.

There’s a good choice of car seats available, and you should always ensure that they are made to conform to the European Union safety standards. For a young child it’s probably worth investing in a seat that can be adjusted as your child grows.

For an idea of what you’d have to pay for a seat which would take your child from 9 months to 12 years, the Recaro Start seat can be bought for around £200.

There’s the Evolva 23 seat, from Britax, which is adjustable and suitable for children weighing from15kg to 36kg and up to 135cm (4ft 5ins). The back of the seat can be extended as the child grows, so that the head is always supported. This costs around £65.

For a baby of up to 9 months, or around 13kg, a rear facing approved car seat is acceptable, fitted on either the front passenger seat or in the back of the car. It must no be used in the front if an airbag is fitted.

It’s extremely important that the seat is fitted properly, and many suppliers offer a fitting service. Do remember that it’s important that before you have the seat fitted; make sure it fits your child.

The 18 September is the date that the Department of Transport is aiming for, so remember, after this date you need to comply with the new rules.

These laws are to be taken seriously. Parents and regular carers are not the only ones who need to be “car seat ready”. You may occasionally take your, say 9 year old, grandchild out with you. The big difference there is that, prior to September 18; no special steps had to be taken. After this date you’ll need to equip yourself with a seat or booster.

If you are in the unfortunate position of being involved in an accident, and if your child or children are not travelling in an approved car seat or booster, your insurance may not be willing to pay out, resulting in what could be a considerable personal claim against the driver, whose responsibility it is.

Parents and (even occasional) carers please take note.

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Author: Emma Mayo

It might be predicted that it would be hard to get life or private medical insurance once diagnosed with cancer – but travel insurance? Well that is exactly what has been happening, as the charity Cancerbackup has revealed.

Its survey found that 9 out of 10 people suffering from cancer found it either difficult or impossible to get travel insurance, and 7 out of 10 people found the experience of trying to get travel insurance distressing. This didn’t just apply to people suffering from cancer at the time of application, but also people that had been diagnosed in the past and were now cancer-free.

7 out of the 10 people surveyed were completely fit to travel, but they were still quoted very high premiums if they were not rejected at the offset. As a consequence, one in 20 of the people surveyed decided to travel without getting insured first – not a recommended action. However, the other option is not ideal either, as one in 10 people cancelled a trip because they were not able to get travel insurance.

Some travel insurance companies will not even consider people that have suffered from cancer, basically putting a blanket ban on the whole matter. Other will insure, but at vastly inflated prices. Considering that travel insurance covers a whole host of potential situations such as lost or stolen items and flight cancellations, it seems very unfair to force cancer sufferers into this difficult position.

The Association of British Insurers (ABI) has pointed out that travel insurance is available for cancer sufferers, although perhaps not with the mainstream, cheaper companies. The Cancer Research website directs people towards insurers that specialise in these areas, companies like A and B. They may specialise, but they’re not cheap, as this example shows: a 48 year old woman who has suffered from breast cancer within the 5 years previous to making the application would be charged £248.70 with Company B for 17 days worldwide cover. Compare that to a woman of the same age with no medical issues and the premiums fall to just £20 for a cheap policy.

The cost of the travel insurance for the cancer sufferer could potentially be more than the cost of the flight – so of course anyone diagnosed with cancer has to wonder if it really is worth buying, and taking a gamble instead.

The ABI does not recommend this course of action, and suggests that people that have been diagnosed with cancer try out the specialist insurers. Company A agree – saying that in a time of difficulty when morale is low, a holiday is often just what is needed. As a spokesperson for the company said, “Being refused insurance can have a terrible impact on their morale.”

A spokesperson for a charity has also added to the discussion, pointing out that with over one million people that have been diagnosed with cancer at some point, the issue is only going to get worse. They also said: “The insurance industry needs to recognise that not all cancers are the same and treat people accordingly.”

The ABI has offered to discuss the issue with the charity. Perhaps they will look into the issue to see if cancer sufferers are being treated unfairly. They will also be wanting to make sure that cancer sufferers are not diverted from getting insured as a result of Cancerbackup’s survey results.

In the meantime, we advise cancer sufferers not to give up, and to look on the Internet for specialist companies that can help. The Cancerbackup website (www.cancerbackup.org.uk) and Cancer Research website (www.cancerresearchuk.org/) both contain lots of useful information.

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Author: Dot Piper

When it comes to home contents insurance, it’s so easy to get left behind in your valuations. It’s simple enough to go through the rooms, in your mind. Lounge – carpet, sofas, display cabinet and contents. Bedrooms, carpets again, beds, furniture ……. And so on. All things moveable in your home should be covered by your contents insurance. It’s also simple enough to overlook things. For example, don’t the above rooms also have curtains, framed pictures, the odd painting or two? The pictures may mean a lot to you but their frames will be very tempting to a thief. Then there are the garden and outbuildings contents. Garden furniture and tools, the children’s bicycles, outdoor toys and even the plants in the garden. All of these need to be taken into consideration.

The range of expensive electrical goods is even more tempting to the thief. Not easily identifiable and easily sold on in the case of theft, also expensive to replace in the case of accidental damage. Include all the television sets, CD and DVD recorders and players, computers (don’t forget the lap top/s), CD’s, DVD’s (Norwich Union tell us they allow £10 per CD, so your collection can easily add up to a fair sum.) Then there are the iPods, Game Boys, mobile phones and accessories. The average family home contents are typically valued at around £45,000.

If you’re under insured, any claim that you make on your policy will be down rated accordingly. Some insurers, Norwich Union Direct for example, will simply pay out up to the limit of the sum initially insured and then you have to make up the shortfall. Other companies will simply reduce the payment in proportion to the amount understated. If they consider your contents to be worth £30,000 and your cover stands at £20,000, then whatever your claim, it will be reduced by one third.

More Than are one of the companies using the second example shown above. Furthermore they have taken action to solve the problem and have recently decided to enforce increased cover for their clients, to the tune of 25% as their cover comes up for renewal. This will apply to all of their 470,000 clients.

You would be well advised to re-assess the value of your home’s contents. There’s a helpful website run by the Association of British Insurers. There you will find advice and a handy checklist to download and use. Their address is www.abi.org.uk

Our advice so far has referred to home contents insurance, but it may be as well to consider values on Buildings cover too. The sale value of your home can easily be calculated by whatever price similar properties in your area are achieving. The insurance value differs in that you don’t have to cover the value of the site. The cost of demolition, clearing of the site and rebuilding the property will be the key factors. The easiest way to find this out is to contact your insurer and ask them to recalculate the value of the property. The way they carry this out is to take the number of rooms and their use. They then come to a value, based on your post code. In this way they will arrive at the estimated rebuilding costs of your property.

So, it may be time to assess your home and contents insurance generally. Then relax and enjoy the benefits.

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Author: Dot Piper

Private medical insurance policies are becoming increasingly used tools. NHS waiting lists just don’t fit in with many people’s busy lifestyles and a convenient appointment and treatment may be top on your priority list, should you or your family fall ill.

As with all insurance products, private medical policies vary in their terms and are specific about what they do and don’t cover. For instance, one of the most well-known insurers, Bupa, will only cover you for “experimental” medical treatment where that procedure is part of a valid medical trial or study. Another well known insurer, Norwich Union Healthcare is only happy to cover treatment that is classed as standard practice in the UK.

It could be that your private care doctor feels that the best treatment for you would be one of the newer ones, as opposed to an older, standard, procedure. Obviously you’d probably be happy to accept the doctor’s recommendations. You could then be in the situation where your insurance company would not cover the cost of this treatment.

Where these problems have occurred, patients have submitted complaints to the Financial Ombudsman Service, otherwise known as the FOS. As a result of this, the FOS has, in some cases, ruled against the insurers and it has been possible to include some of the newer treatments in practice. Laser treatment has replaced larynx surgery in some cases, and key-hole, rather than open-wound, bladder treatment can now also be covered.

Although used in the USA for five years as standard practice, there was a new form of varicose vein surgery which insurers in the UK were declining to pay out on, until the FOS decision was made to accept the treatment.

It appears that the FOS can only overturn the decision of the insurer regarding experimental treatments where such treatments are not specifically excluded in the policy. If the policy is specific about exclusion of these treatments, the ombudsman will not be able to help.

The FOS says “If the policyholder has been advised by his or her treating physician that, in their particular circumstances, they should have a newer treatment instead of an established procedure, our general view would be that it could be unfair for the firm to turn down the claim entirely.” However, they also point out that, by ruling against the insurers, it doesn’t follow that they endorse specific treatments.

The response of the insurers to these rulings seems to be that they may well be re-considering their position in regard to experimental treatments and how they deal with them. Norwich Union have stated that a review of their policies is in the pipeline in view of the rulings of the FOS. Bupa are concerned that their clients may be claiming for treatments not yet tested in the UK.

WPA, another medical insurance provider, have stated that if a doctor has recommended a specific course of experimental treatment, for which there are grounds to prove why that treatment is better than any other, then they will cover this.

It appears that things are falling into place and necessary changes are taking place regarding the experimental treatment scenario. If you’re about to take out this valuable insurance, it’s as well to keep all these issues in mind. By logging on to the internet and finding a broker who will compare what’s on offer from the many policies available in the medical insurance market, you’ll be able to find the right policy for you and your family. At the right price too.

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By Dot Piper

According to the consumer watchdog, Which, about 5 million of the 28 million of us who have been targeted by fraudsters, have lost money as a result. Someone is clearly finding fraud highly profitable.

So what are the most common scams and how do you avoid them? Here are five to be thinking about.

The “Money locked up in an account” scam.

This is a really common fraud. It normally starts with an e mail giving a long and involved sob story about someone or some business, which has a very large amount of money tied up in an account and, through the most unfortunate of circumstances, they cannot get the money out. To do so, they need a UK bank account to have the money paid into. Of course, if you help them they will give you a big slice of the money. And the money is always held in a some obscure country, often in Africa.

Once you have replied and taken the bait, they come up with a story that for the money to be transferred to your account, they need you to send a payment, often thousands, to cover the administration or legal costs of enabling the money transfer. The actual details always change but the essence of the story remains remarkably consistent.

Will the payment arrive and will you ever get your money back? Of course not! In fact after you’ve made a first payment, they’ll ask for more! The up front payment needs to be increased and unless the extra is sent, the money you’ve already sent will be lost. You think you’re now in a catch 22 situation. But if you send more money, we can guarantee you’ll never see it again.

Millions of these emails go out each month, so if you get one delete it.

Boiler Room scams
This is a hard-selling technique to persuade you to buy investments on the promise of great returns that turn out to be worthless. Others sell shares in companies that don’t even exist. There are also related scams which involve investment currency or futures or options.

More often than not the initial contact is by telephone and a typical target will be a middle aged professional man ho has some investment experience. They often trace their targets by examining the share registers of UK quoted companies.

If you receive a cold call from a company trying to sell you investments, ask for their registration number with the Financial Services Authority. If they won’t supply the number, put the phone down. If they give you a number call the FSA’s helpline and check out that the firm is indeed registered (0845 606 1234). Never commit yourself until you are absolutely sure that the company selling the investments is reputable. 9 times out of 10 it will not be – so you have been warned!

Credit Card Fraud
The requirement to use PIN numbers will greatly reduce card fraud. But purchases through the Internet use the “card holder not present”, not PIN numbers.

That means that if a fraudster gets your card details he can happily buy on the Internet and fade into the mist with the goods he has purchased and sell them for cash.

To reduce your chances of being caught by this sort of fraud, you should sign up with Verified by Visa or Mastercard Secure Code. You’ll find further advice on www.getsafeonline.org and www.cardwatch.org.uk.

Phishing
Fraudsters are also very active on the Internet trying to persuade you to divulge details of your bank accounts, PIN numbers and security codes.

The fraud starts with a bogus e mail supposedly from your Bank. The e-mail normally asks to you confirm your account details for security purposes. Sometimes it says that unless you complete the confirmation, your account will be frozen. But security is the least of their aims – once they have your details, they’ll simple empty your account!

Be aware that Banks will never ask you to send details of your accounts etc to them by e-mail. If for any obscure reason they did need some confidential information, they would ask you to visit a Branch.

Identity Theft
It has been estimated that an identity theft takes place in the UK every four minutes.

If fraudsters can pretend to be you, they can apply for credit and open bank accounts in your name. This inevitably leaves a trail of debt and criminal activity all conducted in your name.

All they need is a credit card statement and a utility bill in your name. Watch out for the bin men! Better still, buy a shredding machine and shred any personal letters, bills and documents you want to dispose of.

By: Catriona Singfield

Vets’ fees are set to rise, and over the next three years will increase by up to 20%. Given the expense as well as the stress and worry of an unwell pet, are pet owners underestimating the need for adequate pet cover?

When you keep an adult dog as a pet, you can expect to pay around 40% of your pet care budget on unexpected visits to the vet. Yet only about 12% of Britain’s 13 million dog owners take out specialised insurance.

Financial research company Defaqto know that choosing the right pet insurance can seem daunting. According to their research, pet owners are often confused as to what cover offers, and which policy is the right one for their needs. They may even be put off buying pet insurance altogether. Because some policies pay out on claims on a yearly basis, and others pay per condition, it can be hard to compare them for the best deal. In addition, some cover has built-in limits that place cut-off points on payouts when a claim is made.

High premiums can also put owners off. By way of example, a cat has a typical lifespan of 14 to 15 years, and can run up a total cost in medical care of up to £9,500 during that time. The family dog doesn’t do much better at an average yearly cost of £500 to £1,000 over a typical canine lifespan of 13 years. And a caring cat owner can pay up to £200 a year for insurance in London.

Pet insurance can help enormously towards costs if a pet should become ill, but what a policy covers can be very limited and it pays to check the details.

Good pet cover should include veterinary fees, long term treatment, money for rewards if a pet is lost or stolen, and dental care, as well as benefits if a pet should die of illness or as a result of an accident.

Many policies fall short of this, however. Some will not cover repeat claims for the same condition; some will allow this, but cap the amount you can claim per year. Yet others have a limit of £5,000 on any one claim.

As with all insurance cover, there are many variations. In the same way that car or contents insurance policies have an excess charge – the amount it will cost you before a claim pays out – pet insurance will also impose this fee. Defaqto warn that the cheapest cover can carry an excess of up to 35%, underlining the fact that the lowest premium may not represent the best value for money.

So what should you look for in a policy? Choose one that will last the whole lifetime of your pet. Make sure that it does not exclude any conditions already experienced – some will not pay out on any conditions dating from a year before the cover was taken. Others exclude older pets, or refuse to cover pets younger than six to eight weeks old.

However, there are benefits to having pet insurance that are often overlooked. For example, if a car driver should swerve into a wall while avoiding your dog, a good policy will cover you for damage to the car – and even the wall if necessary! You may not know it, but you are legally liable under the Dangerous Dogs Act for damage to people or property caused by your dog. If Fido goes for the postman, you may well be taken to court, but at least you can arrange cover for your legal fees.

If your pet is well but you have to go into hospital, some insurance will include a kennel stay. This might be especially useful for an elderly person, or someone living alone. Some plans also include cancellation fees if your holiday plans are upset by a sick or injured pet.

It is usual for a policy to cover costs for advertising if an animal goes missing, including a reward. Some will pay for a replacement pet should your own be stolen or even die. But because insurance is designed to cover unexpected problems, it won’t include vaccinations, booster shots, worming treatments, nail clipping, spaying or neutering.

It is common for dogs to cost more to insure than cats, with extra charges for pedigree breeds or big animals. There may even be an extra charge for the smaller, more delicate varieties of dog. Premiums may also be affected by the vets’ bills in the district where you live, being higher in cities, especially London.

As always, there are a wide range of insurance policies for pets just as there are for people. The best course of action is to decide what level of cover suits you best and shop around. Watch out for that excess though – it can be between £25 and £65. Be aware too that many companies set a maximum payment, either per year, or per illness or accident.

Look at your needs carefully, and make sure that what you require for your pet is actually covered by your policy. You may find a better combination online, so do your research and don’t neglect this resource – a good policy can save both your wallet and your peace of mind.

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Author: Catriona Singfield

25% of us have suffered theft from our gardens and outbuildings. That’s up to 5,000 people a day. And to make matters worse, this number is set to rise as the garden and landscape business takes off. As a nation of plant lovers, Britons spend nearly £4 billion annually on products for the garden, according to statistics gathered by the Horticultural Trades Association. It’s no wonder thieves see golden opportunities among the flowers!

And yet, according to a survey conducted by top insurers Churchill, 38% of us don’t take what’s on the outside of our homes into account. Garden security is not a priority, despite the high cost of the equipment we often leave outside – lawnmowers, patio heaters, gas barbecues – all rather obvious and tempting targets. But what of the plants themselves? Thieves have not been slow to take advantage, as Mrs J P from Glamorgan was shocked to find out. She glanced out of her window to see a man “dashing up the street clutching one of our plants”. Sadly this is not an isolated incident: 18,000 similar thefts were reported last year, with the most common item on the thieves’ list being the household favourite, the hanging basket.

The average shed contains £1,300 in tools, toys and sports gear, with only a padlock between it and the opportunist with a break-in on the mind. It isn’t much to guard all that gear – imagine leaving the TV or your DVD collection outside. Would you expect it to be there in the morning?

But you may think that you can relax; after all, your insurance covers your garden and shed – or does it? Not all policies include items left outside, and Home and Contents usually only includes things secured in a locked outbuilding or shed.

To illustrate this by example, consider the policy offered by Norwich Union Direct. They allow £250 worth of cover for objects left outside unsecured, and £1,500 for items under lock and key. Unfortunately if you have invested in a new patio heater and a stylish gas-powered barbecue for those heady summer evenings, this may not be enough. Other high street insurers such as the AA, the Prudential and Abbey provide up to £500 for items left in the open, and Lloyds TSB, Direct Line and Esure offer up to £1,000. More Than come out on top with the highest limit of £2,000.

This is fine for hard goods, but what about the growing plants that make up your garden? They are an increasingly popular target for theft, but only a few insurers provide cover for them. Skipton and Saga both offer special provision for plants, as well as the members’ insurance of up to £10,000 from the Royal Horticultural Society. So far, the idea of plant insurance just has not been taken up by most mainstream insurance providers.

So what can you do to protect yourself? In addition to making sure your garden is a thief-proof as it can be, try our tips below for security and peace of mind on the patio:

§ Lock up as much as possible. Make good use of a shed or garage for storage – out of sight is out of mind for many chance thefts. Buy the best quality padlock you can afford.
§ Include your shed or garage in your burglar alarm circuit. That way you will know instantly if anyone tries to break in.
§ Mark your expensive garden items as you would those from inside your home – you can use a special permanent marker that glows under UV light. Keep an account of your purchases, and how much they cost.
§ Secure any valuable pots or ornaments if you can.
§ If you have an entrance to the rear of the house, fit a gate and make sure you keep it locked.
§ Fit sensor lights for the outside of your home.
§ If you lay a gravel path, you will hear any intruders approaching, and the prospect of a noisy path will also put them off.
§ Plant a prickly hedge or other spiky plants to dissuade thieves.
§ Check the small print to make sure that your insurance covers the items you keep outside – as we’ve said here, they may not be included.

Check the Internet for Home and Contents Insurance policies – not only can you find the best deals, but most insurers offer discounts for buying

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Blogg entry Fri 14th July

Author: Emma Mayo

It looks like some life insurance policies are forever – because people have been forgetting to tell their next of kin just exactly what they did with their policy documents. It’s not that quite simple, there are many reasons why a life insurance policy may sit unclaimed – but as a result it is estimated that at least £2 billion in life insurance claims have been left unclaimed. Surely that’s more than careless!

There are a myriad of reasons why life insurance policies get forgotten:

People forget that they took them out in the first place.
People often don’t leave a Will; as a result relatives have no evidence to show there was a policy, unless they come across some paperwork.
One in 16 people move house and forget to inform financial companies that they have moved, and lose touch completely.

It can get even more complicated. There were a lot of life assurance policies sold in the later half of the 20th Century which doubled as savings vehicles, and were very popular at the time. As times have changed and companies have been bought by larger companies, they have disappeared off the radar, but the money will still be there – waiting to be claimed one day.

If you have a life policy and the company no longer exists, the Internet is the best place to look. Search on the company name in Google then you should be able to get some information relating to the company that now owns the policy. If that fails, then try the Association of Friendly Societies on 020 7216 7436 (www.afs.org.uk) - a trade body that has old records relating to friendlies and mutuals from the past.

If that doesn’t work – call the Mutual Societies Registration on 020 7066 4916. The old Register of Friendly Societies, they are a government body that has now been swallowed up by the Financial Services Authority, but they will be able to tell you what happened to the company that used to hold your policy, and who you should now contact.

If you don’t even have the name of the company, but you know that you have a life policy out there somewhere – then even then all is not lost. There is a service called the Unclaimed Assets Register (www.uar.co.uk, 0870 241 1713) that can help you. They have a huge database containing details of financial products across the board, from dividends and unit trusts to pensions and life policies. If it’s a basic enquiry, then the service may be free of charge; otherwise they charge a one-off, fixed charge of £18.50 to find an answer to your query. 10% of that fee goes to charity. You can make the enquiry either over the Internet or by post, and you will need to provide a certain amount of detail such as date of birth and previous addresses.

In making any of these enquiries incidentally, you must either be the policyholder or have power of attorney over another’s finances.

In an ideal world, everyone would keep all their financial documentation in one place. But the very nature of a life policy means that they sit around for years and often get forgotten. Our advice is, whether you are the policyholder or if you have power of attorney, find as much information as you can before starting your search. And don’t give up – the information is accessible, it may cost you just a bit of time and effort, and possibly £18.50, to find it.

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Author: Anna Mayo

The mortgage lenders have been playing a dirty, but totally legal, game on exit fees. In reaction to the amount of people that now choose to switch mortgages to make the most of competitive interest rates, they have been responding by raising exit fees by as much as 450% in the last 3-5 years – what’s worse is, they haven’t bothered to tell the borrowers.

An exit fee is a charge that the mortgage lender enforces if a borrower leaves their mortgage before the end of the term. It’s also known as a redemption penalty. Now the Financial Services Authority (FSA) has seen what they’re up to, it’s making a move to end these practices.

When people sign up for a mortgage in the first place, the lender has to stipulate exactly how much it will cost to leave the mortgage early. That’s a legal requirement. However a loophole leaves the way open for lenders to increase that charge without informing the borrower, so they can decide to remortgage after five years and find they have to pay a lot more than they thought.

The Cheltenham & Gloucester are one of the culprits – their exit fee has risen from £50 to £225 over the last few years, and the Woolwich have done something similar, increasing the fee from £95 to £275. It’s the lenders’ way of cashing in on the activities of the ‘rate tarts’ i.e. people that switch mortgages regularly to make savings on their mortgages. They don’t charge enough to stop the rate tarts, but they do at least get a small portion of the proceeds.

The FSA is currently talking to the lenders to reach an agreement on this issue, which will hopefully be enforced and become practice by June 2006. The ideal outcome will be for exit fees quoted at the beginning to be fixed for the mortgage term, so whether you stay in the same mortgage for two or ten years, the exit fee will be the same as you were quoted.

This is a good opportunity to remind you that when you get a mortgage, you need to look at all the costs, charges and sometimes incentives relating to the deal, not just the interest rate. We have compared two similar looking deals from Northern Rock and Halifax to show you that the interest rate does not tell the whole story.

We have compared the two companies based on a 2-year fixed rate repayment mortgage for 25 years, exiting the mortgage at the end of the 2 year fixed period.

Northern Rock charges interest at 4.19%, has a 1.5% arrangement fee, £250 exit fee and no incentives.

Halifax charges interest at 4.39%, has a £499 arrangement fee, £175 exit fee and the incentive of free valuation and solicitors fees.

Ignoring the incentives available on the Halifax mortgage, it still works out a lot cheaper over the two years. Northern Rock costs a total of £14,671 and Halifax costs £13,864, so you will pay £807 less over two years with Halifax. This case shows that the interest rate is not the only thing you need to consider, you must calculate all the costs to get a true comparison.

You also need to consider how the interest works because that will also affect how much you pay. Mortgages that charge their interest on an annual basis cost more because you are paying interest, for 11 months of the year, on a balance that has already been reduced by your monthly payments over the year. If your interest is calculated daily then you are always seeing the benefit of these payments, and will pay a lot less.

When choosing a mortgage, it is essential that you look at the bigger picture, and a specialist mortgage broker can be invaluable to help you sort through the many variables you will come across. Read the small print and all the information they provide, charges are hidden within complicated terms and are usually associated with the following words: completion, reservation, application, booking, arrangement and early redemption – so make sure you take a proper look at the charges especially when you see these terms mentioned.

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Author: Bridget Carter

One of the more popular options for investors these days is to purchase larger properties that can be let out as multi-occupancy units. These properties can be lucrative, particularly in university towns, where they are especially suitable for students.

And a new rule introduced on 6th January could make it easier to invest in these properties. The new rule will mean that landlords have to get a building licence if they want to rent one out to at least three unrelated people who all chose to live there, and if the building is on at least three floors.

The reason the rule will help you? Because it will help to convince finance companies that these properties can be divided up to rent out and thus become a viable option for a mortgage.

The Licence for Multiple Occupation was brought into force as part of an attempt to up the housing standards in the United Kingdom. The cost of the licences is understood to be almost £100 for each occupant and the licence lasts five years. Before this, however, you need to get a property inspection conducted to check the situation of the property. For example, things such as the fire regulations and the facilities and room size etc. You, as the landlord, might also be asked questions about your plans for the premises. Dodge these rules and you may have to fork out fines worth up to £20,000.

Other rules came in at the same time as this one – and if you are considering investing for a buy-to-let situation, you might need to know them.

The Housing Health and Safety Rating System means your tenants can call in the inspectors if they feel that repairs are not being conducted. As a consequence, you as the landlord are liable for a £5000 fine if you do not carry out the work that is needed to keep the building up to scratch.

You might also want to think about the Tenancy Deposit Scheme – a rule that swings into force in October that will deal with the handling of a deposit on a property.

What it basically means is this. A tenant’s deposit on a house gets kept with an official Tenancy Deposit Scheme, administered by a person who is seen to be neutral. There can no longer be a situation where you can fail to hand over a deposit, as some landlords have done in the past, for petty reasons. When the tenant moves out, the scheme administrator gets told and the deposit is given back to either the tenant, or if they feel it is just to do so, the landlord. In a situation where there is a dispute, the matter might wind up in court.

But the important part of this is that when the deposit gets returned, it gets returned with interested added and just what that interest rate will be is something yet to be decided on by the government.

You think these new rules sound expensive? Maybe they are, but what is expected is that rents will go up to counteract all the new charges. And the up side is maybe this will play favour with the banks. More rent, and more paper work to prove that you are able to rent out your property to various people…it really might just play in your favour.

Landlords will find more information about this at: www.propertylicensing.gov.uk

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Author: Catriona Singfield

With such a wide range of mortgage choices out there, it comes as no surprise that there are a whole raft of ways to make up the payments on each of them, too. And although a low percentage is often the most obvious feature, there’s much more to your mortgage than the interest rate – how it is calculated could be crucial for determining exactly how much you will pay.

For example, if your mortgage is an interest-only one with no payments on your capital, the date your interest is calculated makes no real difference. For other methods, however, that timing could be very important.

On some loans, the building society works out the figure on which repayments are based annually. This means that even when you pay money back over the course of the year, thus reducing the amount you owe, you are still charged as if the total had not changed – until the end of the repayment year. The net result is that you end up paying interest for money you have already paid back!

Because of their attractively low headline rates, the building societies using this annual method are often the ones at the top of the mortgage tables. High street firms such as the Bristol and West, Leeds, Portman, and Alliance and Leicester Building Society offer mortgages at 4.19%. But when you consider that they also calculate interest on these loans annually, the real rate you pay becomes higher. Over the year, the amount you pay works out at 0.13% more, so the total charge is actually 4.32%. Not quite so attractive!

Just to add to the mix, not all companies use the same methods on all of their mortgages. The Portman use a different method entirely, whereas the Alliance and Leicester use the per annum charge for some products, depending on whether you deal with them directly or through a broker. The Bank of Ireland uses another system on their own direct loans, but returns to the annual interest calculation for the Bristol and West, a building society owned by the bank. And to further complicate the situation, many of the smaller building societies – like the Nottingham, Dunfermline and West Bromwich - use an annual rate too, although they are likely to be updating in the future as systems and equipment change.

So what other way can these companies use? The other method of interest calculation is a daily rate. Every time you make a payment, the interest is updated on the same day, and your final balance is updated too.

Here’s an example to illustrate the difference this could make. Take a mortgage of £100,000 with the Portman, with a two-year discount and a headline rate of 4.19%. With annual interest rate calculation, the money you repay is effectively at a cost of 4.32%. Your monthly repayment would be £544.20.

Now take a look at a mortgage offered for the same requirements from the Natwest. This time the rate is worked out daily, and is slightly higher at first glance – 4.29%. But your monthly repayments with this option would only be £538.98.

So which is the best for you? As always, it depends on your individual needs: for an interest only mortgage, the Portman’s annually-calculated scheme would be the most economical.

So why don’t all lenders use the daily system? Some think that existing users on the yearly rate would feel unfairly discriminated against. And being charged interest every day can look daunting at first sight.

There are so many variations of mortgage, with new ones being offered daily. It can be hard to keep up with all the choices available. So we suggest consulting a mortgage broker, who will be able to find a tailor-made deal that fits what you need in all respects, including of course price.

After all, it’s your mortgage, and it’s that final monthly figure you pay that counts!

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Author: Bridget Carter

They are all the things that people enjoy using in their homes after hours or at the weekends – DVD players, computers, cameras and televisions with plasma screens.

But have you ever considered how much these items have pushed up the value of your home contents insurance?
It is these electronic luxuries which has made the cost of one’s contents insurance a third higher than it was ten years ago.

If you have small children, it is unlikely there is much of high value in their bedrooms. But several years on, your children’s rooms are likely to be littered with game boys, computers, expensive DVDs, sports gear and the list goes on. Even jewellery is something that often gets forgotten or over looked when it comes to contents insurance.

So having said this, perhaps it is worthwhile reassessing the value of your home contents. The reason why it is important to make this assessment is that if you are under-insured the firm with which you have taken out the insurance policy may not be prepared to pay out what is owed to you. These firms are legally within their rights to do this. Most of the time, however, the approach they will take is to just pay out less than your contents is worth.

The good news is that insurance companies are fiercely competitive when it comes to contents insurance and so many offer discounts for more than one policy. They also slash premiums just to secure extra clients. For example, the company Direct Line will discount your insurance if you buy with them on-line and also if you take out cover for both contents and buildings. Remember that things such as burglar alarms can drive down your premium costs.

The other thing that is useful to know is that if you have an item that is worth over £1500, you might have to insure that separately. Most of the time a typical house contents policy has a £75,000 limit. Some specialist insurers offer high net worth policies. These are policies where your possessions are covered but you do not need to state individually what they are. For those with an overseas house or belongings that they move between various properties, these sort of policies are idea.

It might be useful to know that Norwich Union, HSBC, Axa, Barclays, Chubb and Hiscox all include identity fraud in their insurance cover, but this is normally covered by your bank anyway. Also, Chubb and Zurich will cover the risk of attack in your own home.

If you are a first time home buyer, it can be the case that the company that offers you a mortgage also requires you to take out the lender’s in-house buildings and contents insurance, despite the fact that there are cheaper options elsewhere.
Regardless of where you take out your contents insurance or the deal you opt for, it is important you keep record of the true value of your goods in your home. If you are under insured, you might find it to be the case that you are not insured at all.

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Author: Andrew Tuthill

The government predicts an increase of more than 2 million UK households over the next 10 years, due mainly to an increase in EU immigrants and a trend of smaller households. This obviously leaves a good opportunity for would be buy to let landlords, especially with the better buy to let rates we are currently experiencing and the extra tenants wanting accommodation.

So, what are the requirements of buying to let? Well, the main requirement of a buy to let mortgage is that the rent value of the property can cover costs of purchasing and maintaining the household. This can include mortgage payments, letting agency fees, building maintenance, building insurance, advertising, accountancy fees, management charges and any other associated costs. For example, licenses will be required for houses with more than 3 stories and more than 5 occupants. In fact, a general requirement is that rent covers 130% of the mortgage payments.

For example, a £100,000 mortgage will require potential rent of £520 per month. This is calculated from an £80,000 mortgage (after a £20,000 deposit payment) with an assumed rate of 6%. This example would command mortgage payments of £400 per month, so add your 30% to this and you come to the previously stated £520 rent. This appears to be a fair assessment when you consider the possible periods of time without tenants on top of all the previously mentioned house costs.

Fortunately for you, Council Tax is the responsibility of the tenants once they are occupying the house. However, you will be responsible for a percentage of the area rate if the house is unoccupied for more than 6 months. This will be a smaller percentage if the house is unfurnished.

Once paying tenants are in place, you will need to inform HM Customs and Excise of your new source of income. Expect a fine of £100 if you’ve not spoken to them within a month. Once you are making money from the house then taxes of 22 to 40% will be charged on any profit. Remember this is profit and not rent received so be sure to subtract mortgage payments that don’t cover the part paying the principle (this does incur tax unfortunately), and other related outgoings from this amount.

So, with all this information at hand you have decided to go ahead and purchase your buy to let household. The next question is where to buy this house. Obviously, if you want to manage repairs and any other issues with the house yourself, it makes sense to purchase close to your home town. However, if you are using an agent then this isn’t so important and you can buy in one of the more profitable areas.

According to UCB home loans (these are the buy to let division of the Nationwide building society), the better performing areas for property investment are Colchester, Rugby, Peterborough, Swansea, Belfast and Glasgow. Also worth noting is that East London, having been less desirable of late, is now making a comeback due to the current regeneration of the area (London having secured the 2012 Olympic games).

If you decide to sell the property, then capital gains tax (CGT) will be payable, assuming the value of your household has increased. You do have an annual allowance of £8,800 (couples can both claim this amount) and Taper relief which allows for inflation. Taper relief is a discount of 5% after the 1st 2 years and continues to be applicable up to year 10.

With buy to let mortgages on the market for as little as 5% and more specialist buy to let lenders around, this really is a good time to consider this investment. I would suggest you search the internet to find yourself a good broker and get all the information to hand if you decide to go ahead.

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