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We know how difficult it is to be on top of your money all the time, that’s why we created the ‘advice’ section in the OpenMoney app. The advice section is there to help you make the most of your money in your current situation, whether that’s by reducing your debt, making the most out of your savings or curbing some of your expensive habits. Below you’ll discover the kind of advice we give and how we do it!

Our Advice

In the OpenMoney app, we have a range of different advice we give to users to help them manage their money better. Here are a few of our tips:

‘Build a cash safety net’

We always recommend having at least three months of cash savings in case of an emergency. Our app will pick up whether you have these savings and if you don’t, we can help you get there by setting a savings goal and giving you tips on how to save.

‘Earn interest on your spare cash’

The app can spot if you have spare cash leftover at the end of each month. If you do, we’ll recommend you start saving your money in a savings account to earn interest and make your money work harder.

‘Avoid fees by clearing your credit card debt’

If you have persistent credit card debt, our app will tell you how much it’s costing you in fees. We’ll also give you some handy tips on how to clear it.

There’s plenty more advice we give including how to save money on your energy by switching providers and how to reduce spending on expensive shopping habits! If you want to see what advice we give first-hand, download our app on iOS or Android.

The science behind the advice

Our app is constantly analysing your finances to see where you can make savings and manage your money better. If the app spots a potential saving or a certain habit, it will surface a piece of advice written by one of our financial advisers.

Where to find the advice section in the app

Once you have connected your current accounts, savings accounts and credit cards to the app, we do some clever calculations in the background to see where you could be managing your money better. The advice we have for you will then be shown in the ‘advice’ section of the app.

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In the advice section you’ll be able to see the advice we think is relevant to you as well as where you biggest spends are over the past few months – you may want to approach this with caution!

We’re always trying to improve the advice section of our app, so if you have an idea for a piece of advice, why not let us know over on Twitter?

If you haven't already downloaded our app, you can do so here on both iOS and Android.

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I’m ashamed to admit that a television programme was the cure to my environmental apathy.

In 2017, ‘Blue Planet’ switched something in my brain, or rather, it opened my eyes. I was suddenly appalled by the amount of single use plastic in supermarkets. I became obsessed with researching locations where I could recycle everything from a packet of crisps to a pair of trainers. I loaded up on jam jars and clink-clunked my way to the (now several) plastic-free shops in my neighbourhood, loading up on loose pasta, sunscreen in a tin and bamboo toothbrushes. 

But as I discovered over the past year, being eco-friendly can involve a lot of time and money, lending a ‘green’ sheen to capitalism. In some ways, we are not being encouraged to buy less, but to buy more, even if it’s to replace something we already have. No wonder the discussions around living in an eco-friendlier way often increasingly revolve around class and privilege! 

But whatever our budget, we can all do more to stop the albatrosses choking on our rice packets and support local businesses. Here are a few of the tips I’ve stacked up.

Laundry love

I’m an Eco Egg convert – it’s a reusable, plastic egg filled with pellets that you stick in the drum of your washing machine. It costs about 14p per wash and uses far less harmful chemicals than traditional detergents and fabric conditioners.

Following in the footsteps of Mrs Hinch can often involve exposing yourself to bleach and other expensive and harmful chemicals. But kitchen staples like cider vinegar often do the job. To unblock your drain for example, pour a cup of boiling water, followed by a scoop of baking soda and a splash of cider vinegar down the sink and watch it fizz and bubble away.

Make your own mask

We’ve all seen the heartbreaking footage of disposable masks littering our streets and oceans. Yet you can rip up and old t-shirt and make your own, or buy an eco version – check out Spice Kitchen’s range of 100% cotton, reusable masks that can be washed. They were even hand sewn in the UK.  

Plastic-free shopping

I don’t want to rehash the ‘M&S cauliflower steak’ debate but really, why are most things wrapped in plastic and overpriced? 

Head to your local market or fruit and veg shop, which often sell products loose. No packaging at all.  

Food wise, I also heartily recommend Abel & Cole, which delivers seasonal, local meals and veg boxes that you can cook at home, and they drive electric vans and use returnable packaging. It’s not cheap – but then you will never buy something that you don’t use. It’s much less wasteful and more eco-friendly than Uber Eats or Deliveroo.  

Switch search engines

One of the most carbon intensive things we do is being constantly on the internet and checking emails. Ecosia is a search engine that plants trees to offset its carbon footprint so you can feel a little less guilt every time you want to check J Lo’s birthday or find the 10 best brunch places in your area.  

Check your wardrobe

This one may be a tad controversial but I’m trying my best. I have been experimenting with clothes rental services (sending the clothes back every month in re-usable packaging) as well as clothes swaps websites, vintage and charity shopping. I no longer want to buy from the high street, but I also can’t afford to blow £350 on a coat. This is a slightly better and cheaper option for a woman who still wants new and shiny things.

Get the train

Diesel trains are still not ideal, but they emit far less carbon than planes or single person car journeys. If you can’t get a young person’s or two together or student railcard, have a look at an app like TrainSplit which splits the fare and can save you up to 40%.

Keep your cup

The thing I buy every day is coffee. You can judge me if you want but it’s my small luxury and it gets me out of the house. However, my trusty Keep Cup has lasted more than three years and saved me literally hundreds (?!) of pounds as coffee shops either give you a stamp or a discount of around 20-40p off when you bring your own.

Buying a reusable water bottle is also a good idea. The most popular ones from Chilly’s are ridiculously expensive at £20. You can buy an equivalent for a fiver at a shop like Wilko.

Get a smart meter

Investigate installing a smart meter and thereafter avoid falling over the vacuum cleaner to get a reading. We all have to do more to change the way we use energy, as well as pay for it. Read more about it and how you can get free installation here.

Recycle your phone

I now use Envirofone when it’s time for a new handset. They also recycle and repair old phones and what you get is as good as new. It’s free postage, and no contracts!

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Rachael Revesz is a freelance journalist and host of An Honest Account, a podcast about how money affects our lives. You can follow Rachael on Twitter, here.

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Heading off to university is both nerve-wracking and exciting at the same time. For most, it’s the first big step into independence and the ‘big bad world’. There are a lot of stereotypes attached to the life of a student, but with a little bit of planning, it doesn’t need to be a life of packet noodles and microwavable meals. Here are our top tips for managing your money as a student and getting the most out of your university experience with as little difficulty as possible.

Find the right student bank account for you

Student accounts are just like regular bank accounts, but come with incentives or freebies, as well as offering an interest free overdraft that is unique to this kind of account. When looking at the right one for you, it’s useful to look at the offering from each bank. Whilst free gifts are great, they don’t beat a generous 0% interest overdraft, so make sure the right bank for you has a good balance.

Once you’re all set up, it’s so important to remember that this isn’t free money. Using your overdraft is a good way of working on your credit score (you can read more on what affects your score here), but the key thing to remember is that this isn’t free money. Whatever is borrowed will have to be repaid, and the interest free offer is only applicable whilst you’re at university. Three or four years may seem like an eternity, but you would be surprised how quickly it comes round.

Pay attention to your student loan

If you have been granted a student maintenance loan, it will be split into almost equal amounts and deposited into your account in three installments, at the start of every semester (this differs in Scotland, where student loans are paid monthly). The arrival of your first installment can feel like you’ve won the lottery! Just bear in mind it is there to support your living expenses whilst you’re at university; it can really help with rent and bills.

It’s worth making a note of the date that each installment is due to be paid to, how much you will be receiving, and all of the necessary outgoings that you will be paying in between each ‘student loan day’. You can then see how much you have left to play with for the fun stuff. It’s a great habit to get into and one that’ll really pay off throughout your adult life too.

Think about a part-time job

As you will know from the student loan application process, the amount received varies from person to person, depending on personal circumstances. Although the maintenance loan is there to support you, you may find when looking at your budget, that you don’t have quite enough to cover everything you want to do. Don’t panic, this is pretty normal.

Once you’ve settled into university life and have gotten to grips with balancing your lecture schedule and your social life, have a look into whether a part-time job could be beneficial for you. It might not be your go-to solution, but it’s more common than you would think. Restaurants, bars and shops are always looking for staff during term time and they can generally be quite flexible with your schedule. It’s a great way of building up a bit of a cash buffer to cover anything that your student loan doesn’t. 

Look for student offers

Being a student has a whole host of perks to take advantage of. Whether you’re shopping for bits and pieces to make your new bedroom feel like home, a new laptop for those all important lecture notes, or if you want to organise a takeaway night with your flat mates, there are discounts specifically for students everywhere. There are even handy sites such as StudentBeans that group them all together to make it even easier for you.

That's our round up of top money management tips for students! If you're heading to university this year or you're a recent graduate, let us know your top tips over on twitter.

The lone wolf, single pringle, the consciously uncoupled. Those of us out there without a significant other and/or living alone are well aware of the benefits – total monopoly over the television, no queue for the bathroom, only your own snoring to battle etc etc, but there are a few downsides that are seldom discussed, mostly when it comes to money. Who knew that being on your own could actually cost you more in hidden charges?

There has been a notable decrease in the number of people choosing to get married for a number of reasons, and the divorce rate in the UK is also on a steady increase, meaning that more and more people are discovering the true cost of living on your own. BBC Radio 4’s Money Box [1] states that a single person spends up to £2000 more on living costs per year. This is shocking when you’re half the number of people in a couple, so let’s take a look at where to be mindful of costs creeping in and how to combat them.

Single supplements

Unless you’re in the industry or have found yourself on the receiving end of an extra charge, you would never know the single supplement existed. Some hotels or travel operators will often charge solo travellers a fee for solo occupancy of a room. They claim this is to cover the costs of preparing a room (laundry, housekeeping, heating etc) which would remain the same regardless of fewer guests occupying the room.

Tip: Plan your holiday with supplement free companies.

You’re not the only one unhappy with this extra charge, and so there are companies who specialise in offering trips for solo travellers without the extra ‘baggage’. Cox & Kings Travel for example, offer many trips and benefits to those off on adventures alone.

Rent & utilities

When renting, you’re paying for the property as a whole, regardless of how many people are living there. The cost won’t decrease just because you have decided to live on your own, so when you’re paying the full whack on your own for both rent and bills, you could easily be paying close to £1000 per month (London exceeds this by far). Again, it’s one of those costs where you’d think you would be saving by being one person, but it’s just not the case.

Tip: Apply for the discounts you’re entitled to and shop around for deals on your utilities.

A little hidden fact is that you can alert your local authorities that you are living on your own (or if all other people at the property are under 18 year sold) and receive a 25% discount on your monthly council tax bill. Arguably,this should really be 50%, but hey every little counts!

If you’re living on your own it’s worth noting that a lot of utility and broadband companies will take into consideration your circumstances when offering a tariff. Be sure to state that you live on your own – even fixed fee tariffs with companies such as Octopus or Bulb will reassess your bills if you seem to be consistently overpaying.

Food shopping

You’d imagine costs of food shopping halving when you shop for one, when really there’s very little that’s sold in single servings. Fine, we all know the ‘serves two’ suggestion on share bags of crisps is a lie, but on the whole you end up doing a big shop suited to a small family which can be costly. A lot goes to waste too, particularly perishables.

Tip: Try to buy loose fruit and veg.

If you know that you’re not likely to get through a pack of three peppers or a bag of potatoes, buy them singularly – not as fun at the self-scanner but will undoubtedly save you a bit of money. Freeze what you can. If you do end up with that family shop, it needn’t be a weekly occurrence and what you do have can last longer. As cliché as it sounds, batch cooking is your best friend!

One thing we will say is that household products (washing up liquid, toilet roll etc) may cost the same, but they last forever!*

*Nothing lasts forever, but they do last a very long time.

Gym memberships

Couple gym memberships exist and work out cheaper than an individual membership. Great for those who want to lift together and stay together, but hardly fair on the individual member looking to join and use the same facilities in the same way. The difference can be up to £10, which is a huge amount when nice gyms don’t come cheap.

Tip: Shop around for a gym that doesn’t hold this policy, or failing that, where the difference is at least minimal.

Living on your own is a big deal. It’s independent and a pat on the back to yourself when you’re ready to move on from your house-sharing days. We’re not trying to dampen that, more so arm you with the facts before you start spending all the money you’ve ‘saved’ in your imagination. It’s also a good reminder to others that the lone rangers aren’t as flush due to the ‘half couple’ status as you may think!

We’ve also got you covered if you’re looking to move in with someone. You can read about what costs to take into consideration, here.

 [1] Money Box

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Few of us have escaped a financial hit from the outbreak of Covid-19. You may face an income reduction, a slump in your investments, or concerns about whether your business will survive.

Yet whatever your financial woes, there are simple ways to reshape your financial future and manage your money amid uncertain times. Our guest blogger and personal finance expert, Harriet Meyer explains how.

Think ahead

Now is the ideal time to reconsider your long-term goals, and what you’re trying to achieve with your finances.

You may care less about that promotion, starting a business, or travelling the world, for example – and more about making your home life as comfortable as possible. Or perhaps you simply have more time to check whether your finances are likely to support your goals, if these haven’t changed.

If you can envisage what you want to achieve in the years ahead, you can do the financial groundwork to make things happen.  

Track your spending

You may have dipped into savings to make ends meet during the pandemic. So it could be that you need to rebuild your cash buffer, as a priority.

Drawing up a budget is a good start, and the best way to track your spending. Even if you think you have no money to spare, you may find you can free up cash that could be put to better use for your future.

Make a list of all income and outgoings. Then, go through your spending to see where this may be cut to boost your savings potential.Ideally, you want to slot away enough to cover around three months’ worth of living expenses.  

Protect Yourself 

Protecting yourself from financial difficulties by investing in insurance can be a future lifeline.

For example, income protection insurance will provide you with a tax-free income if you’re unable to work because of an accident or illness. You choose when cover kicks in – after, say, three or six months. This will depend on any savings and cover from your employer. This can be particularly valuable insurance for the self-employed who do not have any sick pay or insurance through work.

Alternatively, critical illness insurance will pay a lump sum if you are diagnosed with one of the illnesses covered by the policy,but these policies are typically more expensive. A broker or financial planner can help you work out the right cover for your particular situation.

Keep calm and carry on

If you have money in the stock market, the value of your investments may have plummeted during the market slump. But history shows that, given enough time, markets typically recover. So hold your nerve and,ideally, avoid selling out of the market during dips, as this will only turn paper losses into real losses.

Of course, you can’t be certain there won’t be further falls, but if you have a long-term time frame of at least five years and,ideally, longer, this should give your investments a chance to recover.  

Start an investment habit

You should only invest if you can afford it, and have many years until you’re likely to need the money – for retirement, for example. Investing may not be for you if you have expensive debts to service.

If you're thinking of investing, you could take OpenMoney’s financial health check, which considers your circumstances and whether or not investing is right for you, or if there are other steps you should take first.

While markets have been volatile, this could be an opportunity for those who haven’t yet invested to start doing so. That’s because you benefit from so-called pound cost averaging. This means you buy more shares when their price is lower and fewer when their price is higher.Over time, this helps to potentially smooth returns.

Get a financial boost from the taxman 

Tax-efficiency is key to long-term financial returns,and both pensions and ISAs offer generous tax breaks. You can slot up to£20,000 into an ISA in the 2020/21 tax year, with all investment growth and interest free from tax. Even if you cannot afford to save into an ISA this tax year, it’s one to bear in mind for future savings.

You get tax relief at your personal rate when you save into a pension. So if you’re a basic-rate taxpayer, £80 will amount to a £100 contribution, with 20% tax relief added. A higher-rate taxpayer only needs to save £60 to make a £100 contribution. Over time, this can add up to a substantial boost for your retirement pot.

Talk about financial concerns

Money can be a taboo subject among friends and family.Yet by openly discussing any concerns or needs that may have arisen during the pandemic, you may gain a fresh perspective and support for the future.

Find someone you trust to talk to about any stresses you may have. A unified effort to boost your finances is often the best way forward. If and when the time comes, you may want to seek professional advice to help achieve your financial goals.

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Harriet has specialised in personal finance journalism for over 15 years. She writes for a wide range of newspapers,magazines and websites as a freelance journalist. These include Moneywise,Investors Chronicle, Saga, The Sunday Times, The Observer, MoneySavingExpert, Zoopla, House Beautiful, and many others. 

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Coronavirus has prompted a consumer rights conundrum. With everything from concerts to holidays cancelled, thousands of people are left having paid for something that isn’t going to happen.

Here our guest blogger, Emma Lunn takes a look at your rights to a refund during the Covid-19 pandemic.

Holidays

Travel has been a big victim of the virus. The Foreign and Commonwealth Office advised against all foreign travel on 17 March, with the restrictions now in place for an indefinite time period.

In theory, holidaymakers should be well protected against cancellations. ABTA rules state entitlement to a full refund for cancelled package holidays, while EU laws mean airlines must refund cancelled flights.

But, unfortunately, would-be travellers are struggling to get their money back from travel companies. According to Which [1] 20 of the UK’s largest operators are illegally with holding refunds that should be paid within 14 days.

Many holidaymakers are finding they are being fobbed off with vouchers or a credit note, or are being pressured to re-book their trip.

Frustrating as this is, industry bodies have warned that travel firms could go bankrupt if they paid out refunds straight away. As a result, various travel industry bodies are urging the Government to step in a support the travel industry.

Sporting events and concerts

The UK’s big summer of sporting events, gigs and festivals is another victim of Covid-19. Generally, if you bought your ticket for a cancelled event from an official seller, you should be entitled to a refund.

Ticketmaster, for example, says its refunding tickets automatically, with the refund including the ticket’s face value plus the service charge.

But most concerts are being rescheduled rather than cancelled altogether. Original tickets remain valid for postponed events – but you can get your money back if the new date doesn’t suit you.

The same goes for sporting events. For example, the London Marathon was rescheduled for 4 October – but you can get a refund if you can’t make the new date.

Tennis fans who got the option to buy Wimbledon tickets in the public ballot and paid for them will get a refund plus the opportunity to purchase tickets for the same day and court for next year’s championships. Football fans with tickets to Premier League matches are likely to be refunded too.

Train tickets

The cheapest Advance train tickets are normally non-refundable but, with people being advised not to travel, you can get a refund on Advance tickets purchased before 23 March.

Refunds can be processed remotely (you normally have to go to a station ticket office) via the website of the rail company or third party that sold you the ticket.

If you are a commuter with a season ticket you are no longer using due to being furloughed, working from home, or because the trains aren’t running, you can get a partial refund if there are at least seven days left on a monthly ticket,or more than seven weeks left on an annual ticket.

There’s normally an admin fee of £10 for season ticket refunds but train companies are waiving it at the moment.

Pausing premium sports channels

With live sport on hold for now, Sky Sports and BT Sport customers are faced with only being able to watch re-runs and repeats.

But you can save a bit of cash by pausing your sports subscription. If you’re with Sky,you can arrange for your Sky Sports subscription (and BT Sport if you have it) to be paused online and you’ll automatically start paying for the full package again when the action resumes.

If you pay for BT Sport directly with BT, you have two options: you can get a two-month bill credit for the service, or donate the cash equivalent to the NHS. If you pay for Sky Sports via BT you’ll have to call to request a bill credit.

If you’re a Virgin Media customer and subscribe to Sky Sports or BT Sport , you'll be able to pause your subscription online. The same goes if you pay for Sky Sports as part of a TalkTalk broadband bundle.

Gyms

Gyms,fitness studios and sports clubs have all been forced to close due to the pandemic. All the main chains, including Pure Gym, Better, David Lloyd, Third Space, Fitness First and Anytime Fitness, have automatically frozen memberships.

Some smaller studios, as well as outdoor bootcamp operators such as Be Military Fit, are running online classes via Facebook Live or Zoom for a reduced monthly fee. However, if you can afford to keep paying your normal membership subs, it might increase the chances of these small businesses being able to re-open when the pandemic is over.  

Cinemas and theatres

The entertainment industry has been one of the hardest hit with the pandemic bringing down the curtain on both cinema and theatre trips.

Film fans with monthly or annual cinema memberships can normally pause or extend their memberships. For example, Cineworld will be extending the membership of all My Cineworld Plus accounts retrospectively once it re-opens, equivalent to the total duration the cinemas closed. Meanwhile Odeon has paused Limitless membership payments until its cinemas reopen. 

The Society of Ticket Agents and Retailers says anyone with tickets for cancelled theatre performances will be contacted by the company they bought the tickets from regarding exchanges and refunds.

Car insurance

There’s good news for anyone who has car insurance with Admiral – the insurer is giving each customer a refund of £25. The pay-out is being made because the number of car insurance claims has dropped as drivers stay off the roads.

The owners of 4.4 million vehicles will automatically receive the payment by the end of May.

Admiral is the only UK insurer to announce an automatic refund policy so far – drivers with other insurers should continue to pay their car insurance, even if they are driving significantly fewer miles than usual.

If you’re not using your car at all, you could apply for a Statutory Off Road Notification (SORN). If approved, this means you no longer need insurance for your car (so you could cancel your policy and get a partial refund), but it also means you won't be able to legally drive it.

 [1] Which?

Emma Lunn is an award-winning freelance journalist who specialises in personal finance. She has more than 15 years’ experience writing for national newspapers, trade and consumer magazines, and specialist websites

Despite the low costs that are often advertised online and on television, a lot of people end up paying more for their internet connections than they originally expected.

What’s more, if you end up sticking with the same broadband supplier after your initial contract ends, there’s a good chance that you’re dealing with the high rates of a “standard deal.” This means that you’re not getting any of the discounts or offers that may have attracted you to a specific provider in the first place.

According to Ofcom, at the end of 2019, 40% of broadband customers in the UK (8.8million) aren’t in a contract [1]. Switching to an alternative provider could be the quickest way for these individuals to save hundreds on their connectivity bills.

So, where do you get started? Our guest blogger, Rebekah Carter, a Contributor at Broadband Genie [2] will get you on the right track to lowering your broadband bill.

Check your contract details

The first thing you need to do before you start looking for a better deal is to check whether you’re still in contract. While switching to another provider can save you money, you may put yourself at risk of some hefty bills if you try to move when you’re still in the minimum contract term.

Fortunately, it’s usually quite easy to find out what your situation is.

Consider logging onto your customer account if your broadband provider has an online portal. You’ll usually be able to find information about your current package in the “Billing” section.

If you can’t find the insights that you need online, call customer services. Ask what your current package is, and when it ends.

Consider the switch or stay debate

Once you know whether you’re free to leave your supplier or not, you can begin to think about what you want to do.

After all, you may like the service that you currently get from your provider. If that’s the case, then you don’t necessarily need to switch to get the best deal. Instead, you can contact customer services and ask your provider what kind of deals they can offer.

If your customer service rep says that you’re not eligible for any discounts, don’t be afraid to haggle. According to a Which? Independent study, 45% of customers have haggled with their broadband provider to get a better deal [3].

The key to successfully getting a discount from your broadband provider is often showing them that you’re willing to leave if you don’t get what you want. Sales reps will usually have the option to give customers certain discounts and offers if it means keeping their custom.

Telling your company that you’re willing to switch will often push them to give you something valuable – like a discount or a new deal.

If you’re not a fan of your current service provider, or you’re happy to try something new, then you may decide to simply switch immediately, without haggling.

Usually, switching can get you a better deal. It means that you can take advantage of the discounted pricing that is only available to new customers.

What’s more, a lot of broadband providers also offer introductory gifts for new clients too, such as vouchers and other freebies.

Finding your broadband deal

Provided that you choose to seek out a brand-new deal, you’ll need to do some research. Comparing your options will help to ensure that you don’t just get the best offer on your broadband, you also get the service that you expect too.

Start by checking what you can reasonably get in your area. A postcode search will tell you what kind of broadband options are available, and what sort of speed you can expect too.

Remember, just because you can get extremely high fibre speeds in your area, doesn’t mean you need them. As a rough guide, it’s often a good idea to allow for around 10Mbps per person. However, you should consider excessive usage. For instance, if you or your family does a lot of online gaming, streams videos from Netflix, and so on, then you’ll need more bandwidth.

Once you know exactly how much speed you need, look at ways that you can keep your monthly costs to a minimum. For instance:

Bundles:

Bundling television and phone costs in with your broadband can be a money-saving option [4]. However, it’s only worth considering these packages if you already use those services. Don’t upgrade to a bundle if you never use your home phone anyway.

Special offers:

As mentioned above, most companies will have special offers to attract new customers. See whether you can take advantage of things like 6 months at a discount price, or free gifts to improve the value of your package.

Bonus savings:

Some companies may even offer extra bonuses with broadband packages, like free mobile internet when you sign up for a broadband and phone package at the same time.‍

Always Read the Fine Print

It’s easy to get excited by the promise of fantastic deals when you’re signing up for broadband.

Just make sure that you’re not agreeing to something blindly. Read the fine print on all the deals that you consider, and make sure that you know what you need to do to claim your offers.

Additionally, it’s worth making sure that you’re not going to be locked into a new contract for too long if you want the flexibility to switch providers again in the future.

Information about Rebekah Carter:

Rebekah is a freelance writer and content creator specialising in technology, marketing, and business growth. She has years of experience writing highly-researched and well-informed pieces for the digital landscape.

[1] Ofcom

[2] Broadband Genie

[3] Which?

[4] Broadband Genie (ii)

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Now that we have found ourselves confined to the comforts of our own homes for the next few weeks, it’s a normal reaction to try and sooth one’s soul through the medium of online shopping. No judgement here, we’re all in this together (but did I really need that cactus?). Whilst we’re likely to save a bit of money by not going out, buying coffee, ordering takeaway etc, it wouldn’t be realistic to advise you to not spend a penny, we can offer a nudge in the direction of mindful spending. Below is a roundup of the apps, services and activities that are perking us up at the moment – most of them are free, but any costs involved, we believe contribute to feeling a bit brighter and we have detailed all information.

Top 5 free trials

Now is the perfect time to ‘try before you buy’, and these are our favourite free trials at the moment. Top tip: set a reminder on your phone to cancel your subscription, as most companies will sign you up and charge you automatically.

1.    Amazon Prime[1]

Terms: 30 days. £7.99p/m or £79p/a

This is the perfect option for those who has already exhausted all that Netflix has to offer. This streaming service has a whole host of original TV series and films available that you may not be able to find elsewhere. Here are a few TV recommendations from the team to get you started:

The Boys
Outlander
The Marvelous Mrs Maisel
This is Us
Vikings

2.    Spotify Premium[2]

Terms: 30 days free (for new Spotify members only) and then £9.99p/m.

To quote Plato, music gives a soul to the universe, wings to the mind, flight to the imagination, and life to everything. If ever there was a time that our minds needed wings it’s now! Your premium membership will give you endless hours of uninterrupted tunes to help you concentrate, chill you out or cheer you up.

3.    Audible[3]

Terms: 30 days free plus one free audio book (If you're an Amazon Prime member, they'll bump this up to two books). Plans start at £7.99 p/m.

If a busy social calendar has gotten in the way of reading, now’s a good time to get stuck in. Audio books are a great step back into the world of books and they’re great company for your walk of the day! You get one free audio book with this trial, so choose wisely. May we suggest one of the Harry Potter books? Even if you’ve read them several times over, there’s something comforting about Stephen Fry reading these well-loved tales in such tricky times!

4.    Duolingo Plus[4]

Terms: 7 days free. £80 p/a for continued premium use

If you’retaking time to learn a new skill, maybe a new language is the way to go. The free version of Duolingo is pretty good, but you might as well enjoy seven days of no ads and unlimited attempts at words and phrases as you progress.  

5.    My Heritage[5]

Terms: 14 days free. Packages starting at £79 p/a (£59 for the first year).

A good bit of research to get your teeth into could be just the thing to keep you busy and interested over the coming weeks. Maybe you’ve binge watched all episodes of Who do you think you are and want to know how find out if you’re distantly related to royalty. This 14 day trial can send you down a rabbit hole of history and is bound to bring up new things to chat about!

Top 5 ‘feel good’ services

No one really likes change, but we’re all having to adapt to a new way of living, and pretty quickly. Below are a few things that we’re finding useful to get us through mentally as well as physically. 

1.    Hello Fresh[6]

Whilst the tendency might be to pop a pizza in the oven for comfort, spending (a lot) more time at home could offer the opportunity to experiment in the kitchen. Recipe boxes such as Hello Fresh (meals starting at around £3.50 pp) can be a good way of trying new things and being relatively healthy at the same time. When some form of normality does resume, you will have learned new recipes and be able to recreate them at any time.

2.    Free full body workouts from Barry’s Bootcamp[7]

Now that gyms are closed, the normal treadmill and floor schedule of a Barry’s class has been stripped back and adapted to 30 minute hardcore sessions that can be done from the comfort of your own home. These are broadcast on the Barry’s Instagram page and the schedule is released daily on their Instagram stories.

3.    Free yoga and Barre with FLY LDN[8]

To bring a spot of zen into your lives, FLY LDN are holding 45 minute yoga and barre sessions live on their Instagram page. Unlike many others, they are also posting each session on their Youtube[9]channel so that you needn’t worry about missing any part of the live broadcast.

4.    Calm app[10]

With stress and anxiety being at an all time high, having a toolkit to practice mindfulness and set yourself up for a restful night’s sleep is a great thing to have. This app offers everything from breathing exercises to bedtime stories. It’s free to download with an optional subscription so you can see how you get on with the basic package to begin with.

5.    Let’s Day Out App[11]

This popular app that focuses on bringing people together through experiences, is thoughtfully re-branding to ‘Let’s Day In’. They will be hosting lots of virtual group activities from cooking demonstrations to art classes. All the sessions are free, but there is the option to donate £1 to the World Health Organisation’s COVID-19 Solidarity Response Fund.

5 things to jazz up home schooling

For many parents, the thought of having to home school their children is daunting and stressful. We’ve listed a few things below to bring some educational fun to your new school days.

1.    Joe Wicks PE lessons[12]

Joe Wicks aka The Body Coach, is hosting daily 30-minute PE sessions live on his Youtube channel at 9am. They’re great for waking everyone up, engaging the brain and getting into some form of routine when everything is so out of sorts. Although aimed at children, it’s a great way for the whole family to spend some time together being active, and if we’re honest it’s left some of us adults out of puff too.

2.    The Maths Factor[13]

Carol Voderman has announced that she is removing the paywall on her tutorial website for children, The Maths Factor. This is aimed at children of primary school age and will be freely available for as long as children are having to stay away from schools.

3.    Printable Pages

Many illustrators such as Matt Richards[14] and Jacqueline Coley[15] have started producing artwork that parents can print off for their children to colour in. It’s the perfect down time activity to break up a curriculum based timetable.

4.    David Walliams Audio Stories[16]

Just as audio books are great for adults, children can really benefit too. A huge part of school life is shared reading and being read to. David Walliams, author of Gangster Granny and Mr Stink (to name but a few) has announced that he will be releasing an audio story for school children every day at 11am for the next 30 days for free. These can be found on his website, under ‘Elevenses’.

5.    Family Baking

Studying at home needn’t purely revolve around times tables and literacy, there’s a lot to be gained from fun activities at home such as baking. Getting the family involved teaches measurements, elements of time keeping, the science behind baking, the importance of a clean kitchen…and patience from all involved! Little Cooks Co’s Instagram[17] has many recipes that little hands can get involved with, but there’s no reason they can’t get stuck in with your day to day cooking routine!

[1] Amazon

[2] Spotify

[3] Audible

[4] Duolingo

[5] My Heritage

[6] Hello Fresh

[7] Barry’s Bootcamp Instagram

[8] FLY LDN Instagram

[9] FLY LDN Youtube

[10] Calm

[11] Let’s Day Out

[12] PE With Joe

[13] The Maths Factor

[14] Matt Richards

[15] Jacqueline Coley

[16] David Walliams Audio Stories

[17] Little Cooks Co Instagram

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According to the Bank of England, the average UK household spends around £2000[1] per month, however in the run up to Christmas we end up spending at least £500 more on festive activities and purchasing gifts. It sounds like an exaggeration, but we’ve all fallen victim to the odd £8 Christmas Market mulled wine… Haven’t we? The costs surrounding the festive season can often take away the joy and cause a lot of stress, with 1 in 10 Britons[2] saying that they ‘regularly worry’ about money leading up to Christmas. The months of buildup to the big day can really take its toll, but celebrating in a cost-effective way may be easier than you think. Here are our top tips for enjoying Christmas on a budget.

Plan ahead

Sometimes it helps to have everything laid out in front of you. Write down your estimated festive spending alongside your day to day outgoings and adjust your budget accordingly. Seeing what you have and need to spend make sit much easier to create a Christmas savings plan.

Remember that it’s never too late to start squirrelling away a few pounds here and there when possible. This could just be a matter of collecting loose change in a jar, only to be dipped into for stocking fillers, or you could take the step to open a saving account for Christmas (just be sure to check on the terms of the account regarding any restrictions on withdrawal). Regardless of how you go about it, every little really does help and just having a pocket of cash put aside can put your mind at ease.

Research is key

Panic buying can lead to us overspending when there was most likely a saving to be made elsewhere. It’s so easy to give into the hype and get swept along the high street with the masses. It’s common to be told to simply do it all online which certainly has its perks, but for some, a touch of the mad rush is all part of the fun. If you are venturing out, have a quick scan of the internet for deals available in store (think, the annual 3 for 2 sale in Boots), this will help you target the shops with the best offers and not buy the first thing you see.

Popular voucher sites such as Groupon often have great offers on a wide variety of gifts, and experience sites such as Virgin Experiences tend to have great offers, often up to 40% off, on their festive excursions and adventures, shopping smart really can help you save for Christmas!

Be prepared to say no

Being a time for eating, drinking and being merry, spending can add up really quickly without you really noticing. It just takes one diary clash for a pre-Christmas dinner and drinks with friends to descend into four or five smaller (bust just as costly) outings to ensure you’ve celebrated with everyone. The old ‘never mind, it’s Christmas’ chestnut becomes the most used sentence in conversations. Drinks on a Monday? Sure…it is Christmas after all. We’re not suggesting a ‘bah humbug’ approach but it’s worth having a think about whether gatherings can be consolidated or whether you’re up for everything you’re invited to.

The same principle can be applied to gift-giving. Knowing where to draw the line is key. It’s the best feeling being able to treat those close to us, but it’s certainly not the main point of Christmas. If you find yourself struggling to gather gifts for friends of friends and extended family members that you rarely see or speak to, take a minute to think about whether it really is necessary. Could a thoughtful Christmas card do instead? Sometimes you have to say no to yourself as well as others for your own peace of mind.

With the build up to the big event seemingly starting earlier and earlier, it’s totally understandable for the natural concerns about money to creep in simultaneously. However, with a head on approach, you can keep things under your control without feeling like you’re missing out. For even more ideas on how to save within the colder months, take a look at our blog on how to save money in winter.

[1] - Bank of England [2] - Money Advice Trust

Saving money can be difficult and is often easier said than done. If you’re on a low income or stuck in a cycle of living paycheck-to-paycheck, saving every month may feel even further out of your reach.

A recent study by the Independent shows that a quarter of UK adults don’t have any savings, with one third blaming too much debt and high monthly outgoings as the issue. One in ten also admitted they spend more than they earn each month.

Whether you need to save money fast for a holiday next month or you are trying to save as much as possible each month for a wedding or house deposit, there are several ways you can cut costs and increase savings.

At OpenMoney, we understand the importance of having enough cash savings put away, so we’ve put together some tips of how you can save money on a low income.

Budget, budget, budget

The first step you should take in trying to figure out how much you can save is figuring out how much you spend. To do this, take a look at your bank statements and try to categorise payments into things like rent, bills, travel, food, subscriptions and anything else that works for you.

Writing all of this down can help you understand where most of your money goes. You may quickly realise that you spend £100 on work lunches every month or that you’re still subscribing to a service you don’t use!

Once you have all this information, split your spending into ‘committed spending’ and ‘disposable income’. Everything you need to pay for, such as bills or essentials, is committed spending and the rest is disposable income.

Now it’s time to start setting a budget for your disposable income. If you have £600 of disposable income a month, try to set yourself a budget of £400 – roughly £100 a week. Stick to your budget and you’ll save £200 a month which is £2,400 a year!

You can go even further and set budgets for each category you created like eating out, weekly food shops and entertainment to make sure you stick to your overall budget.

Switch and save

Another great way to save money quickly is to look at your committed spending to see if you can save by switching your current providers for services like gas, electricity and the internet.

Companies are always battling for your hard-earned cash and there’s probably someone out there who can offer you a cheaper deal than your current one. If your energy bills cost £100 a month and you’re offered a new contract for £80, that’s a saving of £240 a year!

Do this across all of your household bills and it’ll soon start to add up and fast.

Later this year we’ll be partnering with uSwitch to make it really easy for our app users to find out if they could save by switching their energy bills. Keep an eye out for more updates from us on that one.

Round it up

Look after the pennies and the pounds will look after themselves.

Most transactions are now paid with our debit cards, meaning we never see the money pass through our hands. An old-fashioned way of saving used to be putting your spare change in a piggy bank and watching it grow over time.

If you take that principle and apply it to your debit card transactions, the pennies will soon add up. For example, if you spend £2.70 on a coffee, simply deposit 30p into a savings account to round up the transaction.

Many banks offer this as a service that directly deposits your ‘change’ into your savings account. Get in touch with your bank to see if this is something they can offer.

If not, simply add up your transactions on a daily or weekly basis and deposit it in your savings account manually.

Be open to change

One of the most difficult things we face when trying to save is changing your usual habits.

If you’re used to buying a coffee on the way to work every day, starting to take your own coffee may be a difficult change to make.

When making these decisions you need to weigh up why you’re doing it and whether it's worth it to you. 1 month of bringing in your own coffee could save you £90 (if you spend £3 a day). A good quality bag of coffee can cost as little as £5 and you still get to have your morning coffee.

There is a limit to how far you should take this. Don’t stop doing everything you enjoy as you may start to lose the willingness to save. Finding the right balance of sacrifice and saving is key to reaching your goals.

Find out what you’re entitled to

Not everyone is aware of the benefits - such as tax credits - that are available to them from the UK government. This may mean they’re missing out on extra cash.

A full list of UK tax benefits can be found on the Gov.uk website and there’s a handy benefits calculator to help you understand if there are any benefits available to you.

Try to take make use of all of the benefits that you can - they’re there for a reason!

Just like saving on your bills and rounding up your cash, these small wins can make a big difference over the course of a few months.

Remember why

One final tip is to always remember why you’re saving in the first place. It’s often easy to make an impulse purchase that you didn’t need or get your favourite takeaway after a stressful day. If in these moments you remember why you’re saving, you can avoid plenty of unnecessary spending and watch those savings grow!

If you’d like to learn about how to budget better in 2019 and money saving tips for your summer holidays read our other blogs on money management.

The thought of living on a budget or actively saving can be daunting. Sacrificing a couple of non-essentials is off putting and enough reason to put the idea to bed. We’re not suggesting that you shouldn’t be enjoying your hard-earned money, but when you see how far the money saved from simple swaps and stops can go over the course of a year, you might think a little differently about that last minute trip to the pub.

Alcohol

From after work drinks to sharing a bottle of wine in front of the TV, it all adds up. So why wait for Dry January to have a break. According to the Office of National Statistics, the average cost of a pint is £3.67 so it’s no surprise that the average UK household spends at least £17 per week on alcohol. It doesn’t sound like a ground-breaking amount, but when this rolls into £64 for the month, saving it can seem more appealing - particularly when you look at it as:

• Eight months subscription to Netflix • Two tickets to Alton Towers

High Street Coffee

Caffeine makes the world go round, but it can also run rings around us financially without us really noticing. That ‘essential’ high street coffee that you grab on the way into work may be waking you up, but it’s also eating away at your funds. Coffee giants are charging as much as £3 for a medium latte and assuming a Monday to Friday coffee shop routine, you could end up spending £60 a month on twenty coffees. Your twenty coffees could look like:

• A pair of return national flights • Two tickets to a West End show

Cigarettes

Research shows that giving up smoking for 28 days is long enough to break the habit entirely. The health benefits are endless, but what could this mean for your wallet?

The cost of a premium pack of 20 cigarettes averages around £11 and it’s set to rise. If we follow in the footsteps of the Australian Government – they’ve been implementing a steady increase in tobacco costs - that will see cigarettes costing the equivalent of around £20 a pack in 2020!

Based on current prices and a smoking habit of 40 a week, stopping for just a month could end up saving around £100. If the science works and you go forward and stop altogether, you’d be looking at a saving of over £1000 a year. Here’s what £1000 looks like:

• 90 trips to the cinema • Two season tickets for a Premier League club • An all-inclusive holiday to Cancun

As far-fetched as some of these alternatives may seem, the saving possibilities are very real. Put it away for a rainy day or kick start your pot of savings, the smallest of changes really could make a world of difference to your financial situation. It’s worth a try, good luck!

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When I started thinking about wedding planning, the first thing I did was try and understand how much it was going to cost us - typing ‘average cost of a wedding’ into Google was a big mistake!

There are so many articles, each giving different figures ranging from £17,674 to £32,273, but don’t let this fool you.

Not wanting to splurge too much on the big day, we managed to spend a fraction of that cost, without making any scarifies on what we really wanted.

Whether you’re planning a wedding and it’s coming in overbudget, or you’ve just started planning and know you want to keep it low-cost – these tips could help you plan a wedding without the price tag!

Decide what’s important to you

Start the process by deciding what’s important to you. Straight away we knew having a great band and photographer for the day was something we were willing to spend money on.

However, when it came to wedding favours, invitations or having a big countryside manor for a venue – we knew we didn’t want to splash the cash.

Everyone will have different priorities and there’s no right or wrong, but it will help to be clear on this from the outset so you're both in agreement on the areas that are most important to you and the areas you’re happy to spend less.

Cut costs where you can

There are lots of ways you can reduce costs on the big-ticket items for a wedding.

Guestlist: Your guestlist will be one of the biggest contributors to the cost of your wedding. The larger the guestlist, the bigger the venue needs to be and the more food and drink you need to buy.

If you’d prefer to keep costs down by having a smaller wedding, stick to your guns – you may well feel pressured into inviting more people than you’d like. Try to explain to others the impact these additions will make to the cost of your wedding.

You could also cut costs by keeping the ceremony and wedding breakfast smaller, then inviting everyone you want to the evening. Without the need for arrival drinks and a full wedding breakfast meal – the cost per head for evening guests is so much cheaper.

Music: If you aren’t bothered about having a band or even a DJ for entertainment, load up a Spotify playlist and put it on shuffle. You can even ask for song requests from guests on your RSVP cards!

Suits and dresses: Don’t be afraid to go to high street retailers for your wedding outfits, whether that be suits, bridesmaids’ dresses or even the wedding dress! ASOS have some lovely wedding dresses for £100 - £500, all with free returns. And remember to shop the sales – especially online.

When it comes to bridesmaids’ dresses, I saw many for £70 - £150 each but if you don’t want to spend that much, you really don’t have to.

You might feel comfortable enough to ask the bridesmaids or groomsmen to buy their own dresses and suits - particularly if you’re flexible on the outfit itself. You can stick to one colour and let them get their own mix and match styles – they’ll be happier paying for something if they choose it and are likely to wear it again.

Venue: Venue prices vary wildly. They can charge anything from a few thousand pounds upwards – one we contacted was £18,000 just for one day because they offered exclusivity over the whole complex!

With finding a venue, you will need to research to find the right place with the right price tag. There are websites like Hitched and GuidesForBrides which have long lists of venues you can search through. Make sure you take advantage of wedding fairs and showcases so you can get a look inside venues you might be interested in.

One option is to save by choosing a non-registered venue. If you’re happy to get officially married and go through the paperwork the day before or after, you could hold a symbolic ceremony and party anywhere you like.

Also, don’t forgot to take into account decoration. If you opt for a plainer venue, you will have to consider the additional cost of décor and a venue dresser to put it up for you (unless you want to do that yourself on the morning of the wedding). If you choose a venue with enough character, you won’t need any additional décor!

Your wedding date: If you’re flexible on your wedding date, you might find you can make huge savings. Many venues offer discounts on their last few available dates for the year or for Autumn and Winter weddings. You can also save by getting married on a weekday.

Flowers: Fresh flowers can be very expensive, but often you can save if you choose to rent from an artificial flower supplier. If flowers aren’t important to you then perhaps you should decide not to have them at all – all weddings don’t need to look the same!

Food and drinks: The timing of your ceremony can impact the amount you need to spend on food and drinks at your wedding. If you opt for an early ceremony, the longer people will be in your care and you will need to keep them fed. If you choose a ceremony time 1pm or later, you can often forget the canapes and only the wedding breakfast and evening food are needed.

A ceremony even later than that can mean only one meal in the evening is necessary, cutting costs even more!

An open bar might be on the top of your list but if that’s not the case and you’d rather use the money elsewhere, don’t feel the pressure to keep a drink in everyone’s hands all night. An arrival drink or toast drink will go down a treat – but we found that most wedding guests are happy to pay for their own drinks.

Watch out for creeping costs

It’s really important to be clear with your suppliers from day one what the prices will be for the date of your wedding.

Most suppliers will raise their charges year on year. With weddings often being organised years in advance, you need to be sure whether the price you’re quoted is the price locked-in for your wedding date, or whether the suppliers expect the price to go up when it comes around to payment for your big day.

For example, our venue locked in the meal prices for us when we booked so we knew what we’d be paying. Whereas our florist waits until January on the year of the wedding to raise her prices and give final costs. This is when they know more about the cost of flowers for that season. You can ask for previous years price increases to give you an idea of what to expect.

When considering your wedding budget, ultimately, it’s about whether getting that extra drink for everyone, ordering the gold foil invites rather than plain or having a bouquet in your hand for the day will make a difference to your enjoyment of the day.

It’s so easy to get wrapped up in what you think you should have but it’s your wedding, so make sure you stay focused on what will make a difference to you both and not everyone else – even if that may be easier said than done!

Good luck!

Whether you’re in your 20’s, 30’s or even 60’s. Moving in with another human is a big thing. It can open doors to new possibilities in that relationship. But it can also get very messy if you’re not careful with your finances.

We put together our top tips for managing money when moving in with someone else.

Be honest from the start

Money isn’t the easiest topic to approach in a relationship but it’s important to get a clear picture from the start.

The best way to make sure that things go smoothly when it comes to managing your money, and making sure you have enough for bills, rent and food is to be honest with each other.

Be honest about your income and what you can and can’t afford so that you’re both on the same page.

This might mean you need to think more realistically about the standard of living you’re able to afford.

Make sure you’re on the same wave length

Moving in together is a big step in any relationship so it’s important to make sure that you both know each other’s goals going forward.

If you’re looking to save for a mortgage, then make sure that the other person is invested in this as well. The same goes for if you want to save up for a holiday together.

Make sure you talk about what your financial goals are so you can work towards them together. You don’t want to book a holiday if the other person can’t afford to pay their half.

Budget before you buy

Whether you’re renting or buying a property make sure that you work out your budget before you commit to anything.

Although you might like the idea of living in a city centre it could increase your outgoings as rent in the centre of a city may be higher. Plus, it can be even more tempting to go out if you leave nearer to bars, restaurants and cafes – which can add to your overall outgoings.

It might be cheaper to live further away from the city center and commute in every day if you work in the city. The added travel costs are outweighed by the lower rent.

Factors like the council tax band you’re in, travel costs and rent can determine how high or low your monthly bills are. Make sure you take these into account when budgeting.

Have an account for rent and bills

When you live with other people who are contributing to bills and rent your bank statements can start to get confusing with all the different transactions and transfers flying around.

You might find it easier to set up a joint account just for the household direct debits. That way you can transfer a set amount over each when you get paid to cover the cost of the shared outgoings.

You could even use this account to add extra money to cover food and other services you both use such as broadband and TV subscription packages.

Seems like a good idea but, it’s important to remember that you’ll both be responsible for any debts or overdrafts – and opening a joint bank account may affect your credit rating, so don’t rush into it.

The Money Advice Service has a great article on things to consider when splitting your finances.

If you decide a joint account isn’t right for you, you could consider opening another account for bills, for yourself. It will be easier to keep your own spending money separate from money you need for bills and rent - and it will make sure you always have enough to cover the bills without having to think about it.

Try and build up a cash buffer

Although when you first move in with someone it might take time to get your ducks in a row, it’s always good to make sure you can put a bit of money aside every month and start to build up a cash buffer.

We recommend people to have at least 3 months’ worth of outgoings saved up in a cash buffer.

This can be used to help pay for any unexpected bills that may come up should you or your partner fall on hard times.

Work out what’s fair for your situation

When moving in with someone it’s important to make sure that you‘re realistic about both of your incomes and what you can both afford to pay.

If you or your partner is on a much higher income, splitting everything right down the middle might not be the fairest option.

Instead maybe consider working out a ratio or percentage you each should pay towards household items and outgoings in relation to the amount of money coming in.

We’ve seen some great examples of how couples, including some of our team, split their finances:

One of our team members lives in Sheffield, she commutes via train everyday which takes a fair chunk out of her salary! As her boyfriend owns their flat, works in Sheffield and doesn’t want to move, he pays the mortgage and she pays her commuting costs.

Some people pay different amounts into joint accounts, for example if someone earns £1,500 and their partner earns £2,500 per month, he pays £750 and she pays £1,250 into their joint account for bills and savings.

Moving in with someone is a big commitment and it can take time to adjust, especially when money is involved. But as long as you’re able to talk about things and work together you will be able to get through it.

Managing your money in your 20’s can be hard, usually due to moving out, university, car insurance and those weekly nights out. But according to research by ClearScore, 31 is the most expensive age for Brits.

The average Brit spends £43,000 during their 31st year because of major life events like getting married, having kids and buying a house. Some of which can add to your yearly bill throughout your 30’s and beyond.

We think it’s just as important to manage your money efficiently in your 30’s as it is in your 20’s. So here are some of our tips on keeping costs low and spending your money wisely.

Split up your savings

Dipping into your savings to pay for unexpected bills is something we’ve all done at some point. But 60% of people rely on their savings to pay for those big milestones too.

Your savings can be a good option when it comes to paying for expensive events but with so many milestones usually occurring in your 30’s you can be left with next to nothing by the end of it.

Splitting up your savings or having multiple pots for your wedding, mortgage deposit and holiday can help you budget for these events. It can also help you to visualise where you are in relation to any saving goals you set yourself.

Prioritise

It can be very easy to get wrapped up in the moment by planning multiple events in the same year and investing in your future. The next thing you know you’re paying out for a new car, mortgage, wedding, honeymoon, 30th birthday and a summer holiday.

Sometime though we need to remember to take a step back and rethink our spending and our priorities.

If you can go without a big birthday bash or a summer holiday then you can focus your saving and budgeting on the bigger things that take priority in your life.

It’s not just big purchases but small ones as well. Cutting back on those non-essentials or switching them for cheaper alternatives will help you in the long run.

Don’t give into debt

When you have a lot of things to pay for it can be tempting to turn to other finance options such as taking on debt, dipping into your overdraft or taking on credit.

In fact, 1 in 5 under 34 year old’s turn to credit to fund big purchases.

Being able to pay something off in instalments or not have to pay anything at all for several months sounds like a great idea.

But when you’ve bought a TV, games console, laptop and coffee machine on finance it all soon starts to add up each month.

Saving up the money for 6 months to pay for these items can be very different to paying for the items over the course of 6 months on a finance option.

Although taking on credit options means that you will have the item straight away, it also means that your income is tied up in paying off that debt every month. You may also have to pay interest which can make a big difference to the total amount you pay!

Where as if you are saving up for the item and you get an unexpected bill you can use the money you’re saving to pay for it.

You can also reduce your savings if you have an expensive month, where as there’s rarely any wiggle room with credit.

Try not to give into debt. If you don’t need it then don’t buy it.

If you have to use credit options, then make sure you’re able to pay back the instalments every month.

Think of the bigger picture

Prioritising your finances for the next 5 years is great, but don’t forget about the bigger picture.

There are things you need to start thinking about now, even though they might not be happening for another 10 or 20 years from now.

Retirement is something you should definitely be thinking about in your 30’s. If you haven’t already done so in your 20’s make sure you’re putting money aside each month to go towards your pension.

If you want to help your children finance their education, first car and first home then you need to think about this as well. Lump sum payments are easier to finance when you’ve planned for them in advance.

Life insurance

Nobody likes to think about the possibility of getting sick but getting life insurance in your 30’s is something worth thinking about.

Getting life insurance whilst your young and healthy is most likely going to be the easiest time to get approved for a life insurance plan.

Although you might not think you need life insurance it’s always worth looking into, especially if you have dependents. Whether it’s children, a partner or if you care for someone. You’ve now got to think about other people as well as yourself.

Increase your cash buffer

Everyone should try and have a cash buffer.

Then if you ever get an unexpected bill you have a 3 months worth of rent and outgoings saved up to help you out.

But as you get older your outgoings may increase so it’s important to make sure that your cash buffer increases to cover any additional costs.

It might be particularly difficult to keep this sum aside in your 30s as you are likely to have more outgoings, but it can be even more important. You might have a mortgage, finance or credit payments and dependants that rely on your income.

Work out what you’d need to live on for three months and then you might decide to put some extra away to cover any upcoming purchases you might have.

Your 30’s don’t have to be a financial burden. Just make sure you’re prepared for the future and the major life events you have coming up.

• Learning about money from a young age is an important part of growing up.
• Teaching your child good habits early on can help them become a money-savvy adult.
• But the way we use money is changing, so your advice needs to keep pace.

“Money doesn’t grow on trees, you know!” I think that was the main piece of financial advice my parents gave me in my earliest years.

But learning how to manage money is an important life lesson, and it’s not something that’s widely covered in the primary school curriculum.

That’s led to some pretty bizarre misconceptions about the cost of living, according to some research from Halifax. It found that most boys and girls aged between eight and 15 believe a loaf of bread costs £15 and a pint of milk £17!

The summer break can be a great opportunity to help them get to grips with the topic, which got me thinking about how best to first introduce money to younger children in an accessible, engaging and fun way.

Every child is an individual, and they all mature at different ages, but here are five tips to help start your little one off when you think they are ready to start learning about money.

1. Getting hands on

Debit and credit can be a tricky concept, so start with ‘real’ money. Let them get hands on with your notes and coins. Let them hold them and play with them. Show them the values of the different coins and notes.

2. How it works

Let them watch you spend your money. Explain that you have to exchange it for things you want. They can even hand over the money to the shopkeeper themselves, or put it in the self-service checkout, and collect the change.

3. The value of money

Show them the prices of the products on the shelves when you’re shopping and explain how they equate to the value of the notes and coins. Explain how things have different prices. A pint of milk costs less than a pair of shoes, for example. Get them to guess the prices of different products.

4. Being responsible

Give them a few coins of their own as a reward for good behaviour and a piggy bank or money box to keep it in. Explain that they must keep their money safe and secure. Children love responsibility and having their own money like mummy and daddy – it helps them to feel grown up.

5. Starting spending

Young children don’t tend to be terribly materialistic, but if there’s something they enjoy, whether its food, drink, a book or a toy, you can let them buy it with their own money. This helps them think about how they’re going to use money, and learn that when they’ve spent it, it’s gone for good.

Next steps

As children get older, it’s a parent’s responsibility to help them understand more complex concepts, as in today’s modern world, people use money very differently. It’s predicted that this year debit cards will overtake cash as the most popular way to pay for things in the UK1, for example. This can also present an opportunity to hand more responsibility to your growing children.

Cards for Kids

Increasingly, parents are using pre-paid debit cards to pay their child’s allowance, which are now available for children as young as eight. Some of the more popular cards include goHenry, Osper and nimbl.

The appeal is easy to understand. You can pay their pocket money digitally with a few taps on your phone’s banking app, set spending limits for your child and monitor what they are spending their money on, and it helps them learn about banking, saving and budgeting.

Your child gets a degree of independence, but you retain ultimate control.

The cards come with an app that your child can use to manage their money, so they can watch their savings grow and learn the basics of budgeting – they can’t go overdrawn, so once their money is gone, it’s gone.

The cards can be used in shops, online and for cash withdrawals, and you can even set up alerts so you are notified whenever they make a transaction.

Lessons for life

It’s a great next step to them having their first bank account, but beware, most cards come with charges.

There’s usually a monthly or annual fee, and some also charge for cash withdrawals, so shop around to get the best value.

As a parent, the lessons you teach your children about money can stay with them for life. Helping them understand and respect money from an early age can help them become confident, responsible adults. Keep an eye out for the next blog in this series for some top tips on supporting your children through their teenage years - and when they finally fly the nest.

A summer holiday abroad can be expensive, and it may take time to save the money to pay for it. It’s easy to see how it might be difficult for a family to find the money for a summer break when the average cost per person for a holiday is £855

Some expenses like buying a new passport aren’t avoidable, but there are a few ways you might be able to reduce the costs and save money on your holiday.

Shop around

Going for the first deal you see may not always be the best option. Instead looking around different websites for deals on hotels or flights could save you money.

Comparison websites like Skyscanner, Trivago or Expedia will compile deals from multiple websites for you, so you can see everything all in one place.

It’s also a good idea to check these prices on the hotel or airline’s own website as it may be cheaper to go through them directly.

Go last minute

If you have the luxury of taking a week off work without much notice, then you can sometimes get some cheap deals by going last minute.

If you’re flexible when it comes to your destination, then you can go for the break that works for your budget.

If you’ve got time off booked already and no plans it’s always worth checking to see if there are any holiday deals for a super last minute break.

Stay for a shorter time

Most holiday packages last for either 7, 10 or 14 nights. But these don’t have to be your only options.

Depending on how you book your holiday you could go away for the time that suits your budget. This could be a few nights or a little short of two weeks.

If you book your flights and hotel separately then you could look for a period that works out cheaper or within your budget.

Pack light

Whether or not you have to pay for your baggage will depend on your flight package details.

Some airlines may charge you more for each extra bag you bring, and some may charge per kilogram.

If you’re able to take a reasonable sized hand luggage bag for free then this may be enough if you’re going on a short break.

Make sure you only pack the essentials and it could save you from having to pay for the extra weight.

Use up your toiletries

Depending on how long you’re going away for will depend on what toiletries you’ll be taking and how many of them.

You may want to buy things like toothpaste and deodorant at the airport once you go through security, or once you reach you destination. Both options will help to reduce your baggage weight.

If you’re looking to save money though you might be better off using up what you already have.

Buying new toiletries just for a week-long holiday can be expensive. But taking what you already have in the cupboard or even half open ones won’t cost you a penny.

Take advantage of free entertainment

Entertainment, along with food and drink is what costs the most when on holiday. If you’re traveling with children try and take advantage of any free entertainment for them at the hotel you’re visiting.

If you’re going on a city break why not research some of the free events and activities to do before you go. Most cities will have iconic landmarks and sites to see.

Keep your currency

Or exchange it back. Almost £1 billion is spent at airports every year by UK holidaymakers looking to ‘get rid’ of their foreign currency.

This might sound like a good way to get last minute gifts for friends and family, or even to treat yourself.

But saving your currency for another break could save you money. Especially if the exchange rate changes and isn’t in your favour.

If the exchange rate does change in your favour then you can always change it back into pounds and use it towards your next trip away.

You might spend up to two weeks on holiday every year. But this doesn’t have to be something you spend the whole year financing.

*On average the UK spends over £11,000 on their newborn baby a year, according to the Money Advice Service. If it's your first child then you might end up spending money on items you think you need, but you might not actually use.

We asked Ruth from Mouthy Money to share a list of her essential buys when it comes to having a baby. *

Finding out you are pregnant brings with it a whole gamut of advice about what you should buy and how much you need for your baby. But, with so many products to choose from, it’s hard to narrow it down, and very easy to go overboard.

When I became pregnant with my second baby, I knew what I would never use. By the time number three was born I’d got rid of the things I knew I wouldn’t need or use and only stuck to the essentials – saving me good money and time (which is so precious when you have a little one). Here are some of the things I could not have done without.

Muslin cloths

I was rarely without a muslin cloth during the first six months of my children’s lives. But, by the time I’d given birth to number three, I had realised that the bigger the muslin, the better.

A large muslin cloth is not just something used to mop up milk, it can be used to create shade, as a lightweight blanket for baby, or coverage for when you need to feed in public.

I found large muslin cloths invaluable. My youngest two children still use them as comforters, aged three and 21 months. You can pick muslin cloths up from many places, but I particularly liked the cloths from Aden and Anais.

Baby Sling

There are a lot out there to choose from so it can be difficult to know what to buy. It’s a good idea to wait until your baby is born so you can see what is comfortable for you both, and definitely try before you buy, if you can!

Many towns and cities have NCT run sling libraries where volunteers can give you advice and help you to decide which is the best fit for you and your baby.

Bouncy chair

The bouncy chair was an absolute life saver when my children were little. I could put them in it and transport them from room to room while I showered, washed up, got dressed.

When you spend most of your time holding your baby, the bouncer can make all the difference. Being able to put them down, even just for two minutes to brush my teeth when my husband wasn’t there, would make a huge difference to my day.

I would recommend a bouncer or rocker which can be adapted from newborn, through to when they start to sit independently. We had a simple bouncer from Chicco but there are plenty out there to choose from.

Baby monitor

Video, movement, breathing – there is a baby monitor out there for absolutely everything. Some monitors can be connected to apps on your phone, others use separate video monitoring units, and you can buy ones with pads that go under the mattress to monitor movement, too.

Choosing a monitor is a very personal thing, but elements to really consider are its reliability, its range and its quality. Read independent reviews from trusted sources such as Which? and consider what particular things you will need help with.
These are just some items I could not have done without, but the list is by no means exhaustive.

It can be easy to go overboard with your first child, but by speaking to other parents you can find out what essentials they would recommend so you feel more prepared for when your baby arrives.

• As you become financially independent, money can become more daunting than before.
• Laying the foundations now will help you balance the present and still achieve your goals.
• We’ll look at the importance of planning for your future.

It can be a nerve-racking time to be responsible for your money as you become an adult. Managing bills, a car and striving to get onto the property ladder all whilst trying to keep an active social life can be tricky to juggle, but it’s not impossible!

Already in this blog series, we’ve set the foundations that you’ll need in earlier life by advising parents on how to teach their kids and teenagers about money. Now, alas, as you gain more independence as an adult, you’ll also take on more responsibility too.

Get it right, and this is where you could set yourself up for a great financial future…

Cut costs where you can

You’re probably already aware of the many ways you can cut down on living costs each month.

Countless articles (and probably your Mum and Dad) tell you to skip your morning coffee or your avocado-on-toast to achieve your financial goals - but cutting costs doesn’t have to mean missing out on those weekly pick-me-ups.

What’s important, is that you’re aware of where and how you spend your money now, so you can make informed decisions on where and how you choose to spend it in the future.

There are a lot of great apps on the market that will help you with saving, planning and budgeting. Some, including our free app allow you to link all your bank and savings accounts in one app to get a full picture of your finances.

After seeing how much you spend on that morning coffee once or twice a week, you might decide that that’s actually a luxury worth keeping and to save elsewhere instead by switching to non-branded products, testing out a weekly shop at a cheaper supermarket like Aldi or Lidl or to start dyeing your own hair rather than going to the salon!

Cut down the costs you decide are unnecessary by keeping yourself in control and informed – just don’t bury you’re head in the sand!

Saving for a rainy day

You’ll have heard the adage “take care of the pennies and the pounds will take care of themselves”, and this certainly rings true when talking about your financial future. It’s not necessarily about how much you’re putting aside, but it’s more the fact that you are putting something aside each payday, even if it’s a small amount.

As you become financially independent, it becomes your responsibility to safeguard yourself against life’s emergencies. It’s important to build what we call a ‘cash buffer’ or ‘rainy day savings’ to protect yourself in these situations.

You never know when an unexpected expense will come knocking on your door. Whether it’s your car breaking down, a broken boiler or an unexpected bill, it’s better to have a cash buffer to fall back on rather than struggling until your next payday.

There’s a surprising amount of people who don’t have funds readily available for emergencies. A study in 2017 found that less than 40% [1] of the working age population have less than £100 in their bank.

Navigating the world of credit

Now the likes of credit cards and overdrafts are available to you, it’s important to learn about how they can be used and what to watch out for. You may have heard that credit is bad, but that may not always be the case.

In a perfect world, no one would need a credit card, however, having a credit card or overdraft can help you build up your credit score.

A credit score is a tool that lenders use to help them decide whether you qualify for a loan or finance agreement like a mortgage or car finance.

Your credit score, which is essentially a number, is based on factors such as how many finance or credit agreements you’ve had in the past, how much of your available credit you’re using, how many credit applications you’ve made and even public records like the electoral roll.

The key to successfully managing credit is to always make sure you stay responsible and in control. A credit card shouldn’t be something you rely on each month to make ends meet.

Here’s some basic tips if you’re considering getting a credit card:

Only borrow what you need. Don’t be tempted to borrow more just because it’s available, companies will often offer you more than you’ve asked for.

Stick to 0%, where possible. In some cases, and depending on your credit score, you may be able to get an offer in which you pay 0% interest on the amount you borrow for a limited time. Once this timeframe is up, either pay off your credit card balance, or transfer to another 0% offer with a different provider

Pay it off. Always aim to pay off the balance of your credit card in full, at the end of each month.

Leave it at home. If you think you will struggle to avoid the temptation of spending on your credit card, don’t take it out with you.

We’ve heard stories of people leaving cards with their family members or even freezing them in a block of ice to make sure usage is kept to a minimum and only when necessary.

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It’s never too early to start planning for your retirement

“I’ve only just started working, why should I think about my retirement?!”

It’s always better to start saving early than to leave it until the last minute, so why should saving for your retirement be any different? It might not be in the forefront of your mind, but it will come around sooner than you think, so you don’t want to be leaving yourself short.

When you pay into a pension like our Self-Invested Personal Pension (SIPP), you get money back from the Government in recognition of the tax you’ve already paid on those earnings.

That’s free money, straight into your pension pot, and you don’t have to make any special arrangements - depending on how much tax you pay and the type of pension you have, your pension company will automatically claim the basic level tax relief of 20%, back from the government for you. However, if you are a higher or additional rate tax payer, you will need to claim your additional tax back from the government yourself.

The sooner you pay into a personal pension the more time your contributions (plus the tax relief) have to build up!

If you’re not sure whether a SIPP is right for you, you can get free financial advice from us. We’ll tell you whether it’s in your best interests to start investing for your retirement or to save cash or pay off debts first!

It’s not only your personal pension savings that will help you plan for your retirement.

As of 6th April 2018, all UK employees are automatically enrolled in the Workplace Pension scheme as long as they are aged between 22 and the State Pension age and earn more than £10,000 a year.

Currently, the compulsory minimum matched pension contribution for employers is 2%, this goes up to 3% in April 2019. This means if you contribute 2% of your salary to your pension your employer will match your contribution – it’s essentially free money for your retirement pot!

Some employers will even match above the compulsory level, so make sure you’re aware of the workplace pension contributions your employer offers and make the most of it if you can.

We've answered the most common pension questions for you here.

Don’t panic!

If you find yourself scraping the barrel at the end of the month, don’t panic, and try not to turn to a quick-fix like a payday loan.

This is one of the biggest traps to fall into when you’re down on your luck, but in most cases, a pay-day loan will only make things worse and lead to a cycle of lending and penalty fees, no matter how easy and attractive the adverts may make them look!

Managing your money in your early 20s can be a minefield, but if you equip yourself with the right knowledge and stay in control, you should be able to plan for your future without compromising on too much in the present!

If you spend a little too much or end up struggling until payday, don’t beat yourself up, just be sure to get back on track next month.

• Consumer debt is a growing worry.
• Don’t ignore it – it won’t go away!
• There are five simple ways you can take control.

Statistics about consumer debt are always popping up in the media and with over £1.5 trillion owed by individuals in the UK as of last year there’s no wonder it’s a talking point.[1a]

Cconsumer credit is up to £207 billion as of December 2017, with research suggesting per household this is £2,567 of credit card debt. [1b]

But the easy availability of products like credit cards, with low minimum repayments but high credit limits, make it all too easy to become trapped in cycle of debt.

A shocking 276 people are declared insolvent or bankrupt every day. [1c] So it’s never too early to reassess our attitude towards debt.

Borrowing money isn’t necessarily a bad thing, but if you find yourself borrowing to pay your monthly bills – and that includes using your credit card or dipping in to your overdraft – that’s not going to be sustainable in the long run.

So how can you burst out of the debt bubble?

Don’t be complacent or bury your head in the sand - persistent debt can be hard to move on from, but the earlier you address the situation, the less painful it will be.

Here are five rules to live by that can help you take control of your debt:

1. Borrowing and bills.

We believe you shouldn’t borrow money to buy something that doesn’t last as long as it takes to pay for. So, borrowing to buy a new kitchen could work well, but try not to take on debt to pay this month’s gas bill, which should usually be covered by your income.

2. More than the minimum

If you really are serious about getting out of debt, you should really try to pay more than just the minimum amount needed on your credit or store card every month, even if it’s just by small amount. Pay as much as you can realistically afford.

3. It’s best to budget

Set yourself a budget by analysing all your outgoings to make sure you are living within your means. If you are getting into debt because you’re spending more than you’re earning, it’s time to reduce your costs.

Maybe take a packed lunch to work, or make your own coffee? Our free OpenMoney app can really help you stick to your budget.

4. Don’t act on impulse

If you have money in your pocket, it can be all too easy to give in to temptation and overspend, but you should always try to plan your purchases and compare prices online to make sure you get the best deal, especially on big ticket items like appliances or furniture.

5. No excuses

If you’re going to get serious about getting out of debt, it’s going to take discipline. A few months of denying yourself some small pleasures will all seem worth it when you can enjoy the peace of mind of being debt free.

Good luck!

• During what can be the most expensive time of the year, it’s important to save money where you can.
• Cutting back on the little things can add up before the sunshine comes back.
• In this blog are some of our top tips about how you can save money this winter.

The winter months can be costly for anybody – Christmas presents, work parties, New Year’s Eve - the list can go on and on. People tend to spend more time in the house in the cold weather, so add on increased heating, electric and other household bills and it can become an expensive time of year.

That’s why we’ve put together a few handy tips on how you can save money during one of the most extravagant periods of the calendar year.

Saving on your utility bills

A great way to cut down your spending over the winter months is to try and keep the cost of utility bills low.

You may have heard these tips over the years when the cold sets in - but it really is as simple as sticking on an extra jumper, closing the curtains to keep the heat in or being careful and turning the heating off when you’re not in the house or when you’re asleep.

Could you turn off the radiators in the rooms you’re not using like a spare bedroom or second lounge to avoid heating up empty rooms?

We’re not suggesting you freeze at home, but just being conscious of your usage can avoid being landed with a huge bill! Every penny can count going into the New Year, so cutting back with some small changes can go a long way.

Don’t go out on New Years

Because who really wants to pay 3 times the price for a taxi home and not being able to hear yourself think? Bars and clubs can hike up their prices for entry and drinks, taxi companies can make you pay double, or even TRIPLE the price as it’s the busiest night of the year. There’s no difference between New Year’s Eve or a random night out in March, aside from the added expense and counting down from 10 just before midnight!

Take someone up on that house party invite, invite a few friends for a night of charades and prosecco or just stay in with a bottle of wine and a takeaway. You’ll have just as good (if not better) a time with no regrets when looking at your bank account the next morning!

Batch cooking

Hearty soups, warming stews and casseroles – just some of the great winter meals that you can start cooking in bulk now the frost is back on our doorsteps! Making meals in bulk and freezing them until you need them can help you cut back on costly last-minute trips to the local shop and takeaways.

Taking a portion into work can help you cut down the amount you spend on lunch everyday whilst in the office.

Believe it or not, but a supermarket meal deal isn’t always the cheapest option!

Use the décor you already have at Christmas

Hands up, who has it at home? That cupboard or loft space with; a broken Christmas tree box, piles and piles of tangled up fairy lights that you can’t see ever being unravelled, 7 different types of tinsel that were passed down to you by your parents? It’s might be easier (and more fun!) to go and buy a fresh set of everything but it’s certainly not as financially savvy.

On average, us Brits spent around £31 per household [1] on new Christmas decorations in 2017 – a whopping £764 MILLION nationwide!

£31 might not seem like much, but avoiding that cost and putting the money towards a more necessary expenditure would be better – throw on your favourite Christmas album and just spend an hour unravelling the lights you may already have (as annoying as it may be!). Once your tree is up in all it’s glory – you’ll wonder why you ever thought you needed new décor!

Plan your spending

Looking ahead to Christmas, we all know that it’s going to be here sooner than you think – so that’s why you should start planning your spending early.

From buying the turkey and trimmings for the Christmas dinner, to presents for friends and family, budgeting and getting it done early can save you from a stressful few weeks. Make a list of all the people you need to buy gifts for and write price caps and ideas early on to avoid an expensive, panic-stricken, last-minute trip to the local shopping centre on Christmas eve.

Last of all, throughout 2019, do ‘future you’ a favour and put a little aside throughout the year ready for next Christmas!

Buy Now Pay Later; that enticing checkout service that allows you to have your stuff ASAP but pay for it later. For those who “wanna cop some new gear but can’t wait until payday”, as JD Sports puts it. It's the financial equivalent of having your cake and eating it, right? Well not quite. Whilst these increasingly popular services can be useful for some, they can also be an unhelpful gateway into over-spending and problem debt. Not so good. So, if you've found yourself thinking it's time for a change, here's how to exit that toxic relationship and start fresh:

Acceptance    

First off, recognise that the spending wasn't healthy. Be honest with yourself: are you spending more than you would if BNPL wasn't available? Are you feeling stressed about money? Are you unsure of how much you've spent? If the answer to any of these questions is yes, now's the time for a new beginning.

Go cold turkey

‍Yes, it'll suck for a while, especially if you're used to those late night shopping mood boosts. But the pay off is freedom from financial stress, which will feel way better than that new bikini ever could.

Block and delete

‍You know the drill: to resist temptation, cut off communication. Unsubscribe from promo emails and unfollow the most tempting accounts on social. If there's a website you find particularly hard to stay away from, install a plug-in like Icebox to stop you in your tracks. Just like with a real ex, if you don't have their number, you can't text them.‍

Recognise your emotions

‍Now it's time to figure out why you were spending more than you wanted to in the first place. Shopping can be emotional, so try to figure out what those online purchases were really about. Were you bored? Longing for a change? Dealing with an actual break up? When you identify what's really going on for you, it'll be easier to replace the shopping with something more meaningful.

Find a rebound

‍But in a healthy way. It might be Ben and Jerry’s for a bit but there are lots of ways to do self-care that are totally free. When you're feeling tempted, put your phone down and take a minute. Maybe it's as simple as FaceTiming your mum or going for a run. Figure out what gives you a similar boost. 

Get closure

Alright, now that you've done all that work, make a plan to put unhealthy habits in the past. If you've recently purchased stuff that you can still return, do that. Then make a realistic plan to pay off your remaining balance ASAP. Make a note of when payments are due by putting a reminder in your calendar, so you don’t accidentally miss any.

Set boundaries

‍Remember, Boohoo doesn't give a **** about your budget. You're the only one who can give your money purpose and decide how to spend it. Try making a budget. It's a great way to feel confident about what you do with your money, while still allowing you to buy the nice things you want.

A caveat

Credit products aren't all bad as long as they're used responsibly. For bigger ticket items that are a necessity for your work or life (think: laptop, car) it can be a good option as it allows you to split the cost into manageable amounts. It's always preferable to pay outright than take on debt, so do that if you can. If you do decide to go for BNPL, make sure you can keep up with the payments and that you make them on time. Also, check the fine print for hidden fees and interest that might get you in trouble down the road.

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Alice Tapper is a financial campaigner. She launched the #regulateBuyNowPayLater in June which has since led to investigations by both the FCA and ASA. 

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As a business, we can see the effects that the cultural climate and global events are having on people's financial situations and spending habits.  

When we conducted research for our Advice Gap Report earlier this year, we learned the nation’s finances were in a precarious position before the prolonged effects of COVID. With the change in millions of people's financial situations, an increase in online shopping habits due to lockdown, and Christmas just around the corner, there’s a serious worry that more people than ever will be turning to Buy Now Pay Later (BNPL) services like Klarna, Clearpay and Afterpay.

We believe consumers are being continuously lured into gift-wrapped debt traps as a result of a lack of regulation around these increasingly popular services, that are celebrated by brands online, and irresponsibly encouraged by influencers on social media.

Our co-founder, Anthony Morrow, launched OpenMoney to change the financial service industry for the better by offering the accessible, affordable advice and direction consumers need to move forward with their finances, and to empower consumers to make more informed decisions about services just like BNPL.

As a result of always putting the consumer first and being pretty vocal about his views, Anthony was awarded the Consumer Champion of the Year Award at the 2020 MoneyAge Awards. We caught up with him for a virtual chat about his views on consumer debt and Buy Now Pay Later schemes, his personal mission, and how he sees us here at OpenMoney making a difference.

OpenMoney: Congratulations on your big win, we’re all really proud of you! What does winning this award mean to you?
‍Anthony Morrow: I think, as with most awards, it’s always great to have your work or efforts recognised but they aren’t the reason that we do what we do at OpenMoney. There are so many great businesses and people out there trying to improve outcomes for customers, it’s simply flattering to be considered one of them.

OM: Our research has shown that 40% of people asked, are worried about how they’ll afford Christmas this year, and over 50% feel pressured to spend more because it’s been a tough year. Do you think schemes such as BNPL are taking advantage of the situation?
AM: I’m not a fan of BNPL because I think they are focused on the worst parts of customer manipulation – material aspiration and fear of missing out. These are powerful devices to use when convincing people to spend money they don’t have. As we’ve seen over last couple of decades, and the rise in short-term debt, it causes lots of problems for people. These schemes were bad news before the pandemic and now they just feel dangerously inappropriate.  

‍OM:  How important is education when it comes to avoiding these services and money issues in general?
AM: Whilst greater understanding and education would be brilliant, sadly we are at a place where financial literacy is at really low levels. Solving this is not going to happen overnight and will take generations to put right. There are always plenty of words saying that personal finance should feature on the school curriculum. What would be much better, and far more easily achieved, is if those industries could behave in a way that reflected their concerns around literacy levels!

There are too many examples where products and services are developed where the customer takes full responsibility for making informed choices which, everyone knows, is a nonsense state of affairs. This is just companies passing risk to the customer, who they acknowledge have low levels of financial understanding, whilst retaining the profit.

Remember that the debt industry will spend billions of pounds a year advertising their products in very sophisticated ways, with increasingly granular data; it is no contest really.

OM: How do you see OpenMoney making a difference?
AM: OpenMoney was set up specifically to address this problem, and that people with little money have few options on where to go if they want advice on what to do with their money. We think financial advice can not only provide better future outcomes for customers but more importantly, prevent bad decisions being made. These bad decisions can lead to terrible outcomes that can affect a person's life for years. If we can help more people avoid these problems, that would be a big success for us.

OM: What would be your one key piece of advice to the 75% of people we asked, who will be using credit cards, store cards and BNPL schemes to pay for Christmas?
AM: It’s so important to be very clear how any debt you take on is going to be paid, no matter how tempting it is to get that item you really want after what has been a shocking year. Understand how much you’re really paying for the item as well, because interest can mean spending far more than you think especially on short-term loans and credit cards.

Our advice would always be to save up and buy that item without using debt. Not only will it save you money that you can put towards something else, but you will feel much better having actually done it. Set yourself goals – small or large – and stick to them. Bask in that smug feeling that you’ve achieved your goals and that you did so without the worry of owing someone money. ‍

OM: And finally… do you have a few words for BNPL schemes? (Words that we can publish please!)
AM: Don’t follow the paths of credit card companies, peer-to-peer or payday lenders, and chase inappropriate customers for the sake of growth targets. All of these industries had genuine positive use cases for the few, but ended up targeting the many which has not got themselves into trouble, but millions of customers as well. We have record levels of personal debt in this country heading into an unprecedented period of uncertainty – don’t make people's lives worse by tempting them with expensive and targeted campaigns.

We're launching our #YouOnlyPayOnce (#YOPO) campaign to tackle Buy Now Pay Later schemes. We want to help protect consumers and empower them to make more informed decisions about what's being described as ‘gateway debt'.

You can read more on our #YOPO campaign here. Keep your eyes peeled for us taking on the services that we feel play an instrumental part in the consumer debt problem in the UK.

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Heading off to university is both nerve-wracking and exciting at the same time. For most, it’s the first big step into independence and the ‘big bad world’. There are a lot of stereotypes attached to the life of a student, but with a little bit of planning, it doesn’t need to be a life of packet noodles and microwavable meals. Here are our top tips for managing your money as a student and getting the most out of your university experience with as little difficulty as possible.

Find the right student bank account for you

Student accounts are just like regular bank accounts, but come with incentives or freebies, as well as offering an interest free overdraft that is unique to this kind of account. When looking at the right one for you, it’s useful to look at the offering from each bank. Whilst free gifts are great, they don’t beat a generous 0% interest overdraft, so make sure the right bank for you has a good balance.

Once you’re all set up, it’s so important to remember that this isn’t free money. Using your overdraft is a good way of working on your credit score (you can read more on what affects your score here), but the key thing to remember is that this isn’t free money. Whatever is borrowed will have to be repaid, and the interest free offer is only applicable whilst you’re at university. Three or four years may seem like an eternity, but you would be surprised how quickly it comes round.

Pay attention to your student loan

If you have been granted a student maintenance loan, it will be split into almost equal amounts and deposited into your account in three installments, at the start of every semester (this differs in Scotland, where student loans are paid monthly). The arrival of your first installment can feel like you’ve won the lottery! Just bear in mind it is there to support your living expenses whilst you’re at university; it can really help with rent and bills.

It’s worth making a note of the date that each installment is due to be paid to, how much you will be receiving, and all of the necessary outgoings that you will be paying in between each ‘student loan day’. You can then see how much you have left to play with for the fun stuff. It’s a great habit to get into and one that’ll really pay off throughout your adult life too.

Think about a part-time job

As you will know from the student loan application process, the amount received varies from person to person, depending on personal circumstances. Although the maintenance loan is there to support you, you may find when looking at your budget, that you don’t have quite enough to cover everything you want to do. Don’t panic, this is pretty normal.

Once you’ve settled into university life and have gotten to grips with balancing your lecture schedule and your social life, have a look into whether a part-time job could be beneficial for you. It might not be your go-to solution, but it’s more common than you would think. Restaurants, bars and shops are always looking for staff during term time and they can generally be quite flexible with your schedule. It’s a great way of building up a bit of a cash buffer to cover anything that your student loan doesn’t. 

Look for student offers

Being a student has a whole host of perks to take advantage of. Whether you’re shopping for bits and pieces to make your new bedroom feel like home, a new laptop for those all important lecture notes, or if you want to organise a takeaway night with your flat mates, there are discounts specifically for students everywhere. There are even handy sites such as StudentBeans that group them all together to make it even easier for you.

That's our round up of top money management tips for students! If you're heading to university this year or you're a recent graduate, let us know your top tips over on twitter.

If there’s one thing lockdown has achieved, that’s my children’s elevated interest in money.

Both my husband and I are financial journalists, so in one way another, we are always talking about finances - conversations around investing, saving, budgeting, pensions, debt and so are pretty normal.

Naturally, my boys, age 10 and seven, often catch a glimpse of articles on my laptop or invite themselves onto Zoom calls, and want know about money matters. But with home schooling and both parents working, trying to squeeze in financial education is tough if not impossible. As far as I’m concerned, learning about money is just as important as the school exercises on adverbs, pronouns, conjunctions, or the correct use of prepositions.

 Turning to their favourite games is one way. My eldest son, 10, loves a game of chess, so, we took the opportunity to use the chessboard to give him a lesson in compound interest. Albert Einstein once described compound interest as the eighth wonder of the world, so I consider it one of the most valuable money lessons he will have.

Starting with a grain of rice

Ever heard of the story about a grain of rice and the chessboards? Don’t worry, I’m about to share it with you.

It’s a story how a man of great wisdom became the wealthiest person in the world when challenged to a game a chess by a king.

The sage was asked name a reward, at which the sage asked for a grain of rice; he wanted one grain on the first square, two on the second, four on the next, and so on, doubling the number of grains on each square for all 64 squares.

Not much of a reward you may think, but as we move along the squares, the number of grains add up to an outstanding amount - the king would have to put down 18,000,000,000,000,000,000 grains of rice at square 64. Not such a small reward after all!

And that’s how, kids, compound interest works! By the way, I didn’t go the full way with the grains of rice…the lesson was achieved by the time I got to square eight!

Compound interest

Compound interest works in a similar way, it’s interest on interest. So, now when I ask my son to put some money away, we talk about interest and how his money can achieve extreme growth over time by allowing interest to grow in interest. And when he argues a pound isn’t much, I usually remind of the grain if rice. It’s also an important lesson in delayed gratification.  

He has an investment ISA, and although the stock market hasn’t been quite as rewarding in the last few months, he knows it's money left to grow and hope that when he has access to it at 18, he will make some sensible moves. Ok, I know there’s no guarantee of that, but I’m prepping him.

Money from movies

My younger son, who is seven, isn’t interested in chess, so I haven’t been able to use chess board to teach him about money.

But, he loves movies and has a box of his favourite DVDs in his room. We occasionally open up shop where we can ‘rent’ his DVDs, and parents have to pay to borrow them. The money goes into his savings and as long as he doesn’t spend it, I will double it. It’s just a game and I know he is winning big time here, but I hope he is learning the concept of saving here.

Before lockdown, we sometimes went to the bank to put the money into savings. Most children haven’t stepped foot in bank, but I believe it’s important to show children what a bank is and explain how it works.

Why teach it

You may be asking why I bother teaching my children about money and not just leave it to the teachers? Well, sadly, financially education is scarce in schools, and I want my children to have confidence with money, be able to ask the right questions and make the right moves. I certainly never want them to say ‘I’m bad with money’ or that ‘money confuses me.’

But children also learn from their parents and it’s a lesson that MUST start at home. Research from Cambridge University[1]shows children’s money habits are set by age seven, so parents should not underestimate just how important it is and install good habits as young as possible.

It’s been a tough environment for parents, especially with most children off school, but my advice would be not to overthink it– make money lessons part of their favourite game or hobbies, and be open about it. Just talking about it, anything from coin recognition for younger ones to showing them how you pay bills, is a good start.

Kalpana is a financial journalist and money expert. She is the personal finance editor of Hearst Magazines, money expert on the BBC Sounds Money 101 podcast and a TV/radio pundit.

Follow Kalpana on twitter @KalpanaFitz

[1] Money Advice Service

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You may have heard in the news that the UK is now officially in recession as a result of the coronavirus outbreak and how it has impacted our economy since earlier this year. 

Back in May, Chancellor Rishi Sunak said the country is facing “a severe recession, the likes of which we haven't seen”[1], but admitted the “jury is out” on how much long term impact coronavirus will have in on our economy. As those of us who experienced the 2008 financial crisis and recession might remember, the economy took 5 years to recover.[2] 

I wanted to help to demystify what we really mean by a recession and how you can help to protect yourself against the possible effects. ‍

What is a recession?  

A recession is commonly described as a significant decline in an economy, continuing for at least six months.  For an economy to be considered ‘in decline’, there needs to be a drop in 5 key areas:  

• Employment, 
•  Retail sales, 
•  Manufacturing, 
•  Income 
•  GDP. This stands for Gross Domestic Product and is the value of all goods and services made by a country within a specific period. GDP is usually calculated annually but can be calculated quarterly too.  

Recessions are a difficult time for both businesses and the public. With sales dropping and manufacturing slowing, businesses be forced to close or downsize which causes unemployment. Unemployment means less consumer spending and, along with a potential for the public to reduce spending due to the worry of how a recession will impact their finances, this can then fuel the recession further. 

An economic decline also has an impact on the investment markets, which can be worrying for investors. Some will withdraw their funds out of fear, and this causes a further decline in the markets. 

However, there can also be positive impacts of a recession. Prices of goods and services can lower and some businesses closing can mean more opportunity for the surviving businesses to grow sales and strengthen their position. 

For consumers, a recession can spark a change in mindset. A sudden awareness or concern over your individual financial situation can mean people spend less, save more and learn to live within their means, as opposed to relying on credit or overdrafts to get by month-to-month. ‍

How can you protect yourself against a recession? 

There are ways you can lessen the impact of a recession on your personal financial situation.  

‍Review your incomings and outgoings  

Reviewing your spending is a great first step to understanding and streamlining your finances. Some of you may already have reviewed your budget since the coronavirus outbreak due to a redundancy or changes in income. 

We’d recommend:  

• Reviewing the past few months expenditure and create a monthly budget including mortgage/rent, bills, groceries, transport costs, spending money and savings. Understanding where every penny goes can help you identify where you’re overspending. 
• Money management apps (like ours) can help you to understand where you’re spending your money without the hard work. Our app will continually analyse your finances and give you advice on where you can cut costs and save too! 
• Review your bills and subscriptions to see if you can cut costs – perhaps by cancelling a streaming service you don’t use or switching energy provider. 

‍Avoiding using credit 
If you’re planning on taking out an overdraft or credit card for a large purchase, it might be best to hold off these plans or save up instead to avoid tying yourself into a monthly payment moving forwards. 

‍Save a cash buffer  

We often talk about the importance of a cash buffer for your financial security. Think of it as a cushion to fall back on should you lose your job or be put on a scheme similar to what we have seen with the furlough schemes the government have offered during coronavirus.  

As a rough guide, we recommend a cash buffer of 3 months outgoings kept in accessible savings. 

‍Make yourself more valuable at work  

As we know, recessions can mean redundancies and job losses. If you feel your employer would be impacted by a recession, it’s a good idea to try and protect yourself from redundancy by aiming to make yourself as valuable as possible at work. 

Taking on extra responsibilities, working overtime shifts or picking up knowledge in other specialist or business areas could make you more valuable to your employer, depending on your role and industry. 

‍Review your investments  

If you’re an investor, it might be a good time to review your investment portfolio. While you should be cautious of making any investment withdrawals, you may want to ensure you’re comfortable with the level of risk you’re currently taking. 

If you have a financial adviser, reach out and discuss any concerns or explore any questions you have. We think it’s really important to be able to speak to someone when you have worries, this is why we offer unlimited appointments with our financial advisers (at no extra cost) to all of our investors. 

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Capital at risk

[1] telegraph.co.uk

[2] ons.gov.uk

Few of us have escaped a financial hit from the outbreak of Covid-19. You may face an income reduction, a slump in your investments, or concerns about whether your business will survive.

Yet whatever your financial woes, there are simple ways to reshape your financial future and manage your money amid uncertain times. Our guest blogger and personal finance expert, Harriet Meyer explains how.

Think ahead

Now is the ideal time to reconsider your long-term goals, and what you’re trying to achieve with your finances.

You may care less about that promotion, starting a business, or travelling the world, for example – and more about making your home life as comfortable as possible. Or perhaps you simply have more time to check whether your finances are likely to support your goals, if these haven’t changed.

If you can envisage what you want to achieve in the years ahead, you can do the financial groundwork to make things happen.  

Track your spending

You may have dipped into savings to make ends meet during the pandemic. So it could be that you need to rebuild your cash buffer, as a priority.

Drawing up a budget is a good start, and the best way to track your spending. Even if you think you have no money to spare, you may find you can free up cash that could be put to better use for your future.

Make a list of all income and outgoings. Then, go through your spending to see where this may be cut to boost your savings potential.Ideally, you want to slot away enough to cover around three months’ worth of living expenses.  

Protect Yourself 

Protecting yourself from financial difficulties by investing in insurance can be a future lifeline.

For example, income protection insurance will provide you with a tax-free income if you’re unable to work because of an accident or illness. You choose when cover kicks in – after, say, three or six months. This will depend on any savings and cover from your employer. This can be particularly valuable insurance for the self-employed who do not have any sick pay or insurance through work.

Alternatively, critical illness insurance will pay a lump sum if you are diagnosed with one of the illnesses covered by the policy,but these policies are typically more expensive. A broker or financial planner can help you work out the right cover for your particular situation.

Keep calm and carry on

If you have money in the stock market, the value of your investments may have plummeted during the market slump. But history shows that, given enough time, markets typically recover. So hold your nerve and,ideally, avoid selling out of the market during dips, as this will only turn paper losses into real losses.

Of course, you can’t be certain there won’t be further falls, but if you have a long-term time frame of at least five years and,ideally, longer, this should give your investments a chance to recover.  

Start an investment habit

You should only invest if you can afford it, and have many years until you’re likely to need the money – for retirement, for example. Investing may not be for you if you have expensive debts to service.

If you're thinking of investing, you could take OpenMoney’s financial health check, which considers your circumstances and whether or not investing is right for you, or if there are other steps you should take first.

While markets have been volatile, this could be an opportunity for those who haven’t yet invested to start doing so. That’s because you benefit from so-called pound cost averaging. This means you buy more shares when their price is lower and fewer when their price is higher.Over time, this helps to potentially smooth returns.

Get a financial boost from the taxman 

Tax-efficiency is key to long-term financial returns,and both pensions and ISAs offer generous tax breaks. You can slot up to£20,000 into an ISA in the 2020/21 tax year, with all investment growth and interest free from tax. Even if you cannot afford to save into an ISA this tax year, it’s one to bear in mind for future savings.

You get tax relief at your personal rate when you save into a pension. So if you’re a basic-rate taxpayer, £80 will amount to a £100 contribution, with 20% tax relief added. A higher-rate taxpayer only needs to save £60 to make a £100 contribution. Over time, this can add up to a substantial boost for your retirement pot.

Talk about financial concerns

Money can be a taboo subject among friends and family.Yet by openly discussing any concerns or needs that may have arisen during the pandemic, you may gain a fresh perspective and support for the future.

Find someone you trust to talk to about any stresses you may have. A unified effort to boost your finances is often the best way forward. If and when the time comes, you may want to seek professional advice to help achieve your financial goals.

‍

Harriet has specialised in personal finance journalism for over 15 years. She writes for a wide range of newspapers,magazines and websites as a freelance journalist. These include Moneywise,Investors Chronicle, Saga, The Sunday Times, The Observer, MoneySavingExpert, Zoopla, House Beautiful, and many others. 

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A lot of scaremongering takes place surrounding your credit history, what it means for your day-to-day life and your future financial decisions. Our guest blogger and Personal Finance Expert, Andrew Hagger, is on hand to take you through what matters, the common credit myths, and tips on how to boost your score.

 Checking your credit report

 The first step is to sign up for a copy of your own personal credit report. You can do this online and for free direct via credit reference agencies such as Experian and Equifax or through third party providers including Clearscore and TotallyMoney.

Once you’re set up, you’ll get an updated report and score emailed to your inbox every month, making it easy for you to keep a close eye on your important financial information.

The first time you get hold of a copy of your credit report, take a little time to read through of all your personal and financial information. These reports are not always 100% correct, so make sure you’re happy with all the details held on your file.

These are the sort of things you’ll find in your report:

•                 Personal information: your name, date of birth and address – including previous addresses going back 6 years.

•                 Financial associations with another person, such as a joint mortgage or borrowing.

•                 Whether you’re on the Electoral Roll,meaning you are registered to vote at your current address.

•                 Your borrowing: how much you owe and whether you have paid on time, and how long you’ve had each account. This will include mortgages, credit cards, store cards, personal loans and overdrafts.

•                 Any County Court Judgements (CCJs),bankruptcies and Individual Voluntary Arrangements (IVAs).

•                 Searches carried out on your account by financial providers – including date and purpose of search.

 These are a few things that do not appear on your credit record:

•                 Savings account information

•                 Your salary details

•                 Criminal record(s)

•                 Medical history

•                 Parking or driving fines

•                 Council tax arrears

•                 If you have an agreed mortgage holiday or payment freeze due to Covid-19, this will not appear on your record and will not have a negative impact on your score.

Much of the information shown on your credit report is confidential, and that’s why it’s managed by Credit Reference Agencies such as those mentioned. It’s important to remember that these agencies may manage your report, but it is the lender who makes a decision to offer credit of any kind.

What affects your credit score?

 The factors that have the biggest negative impact on your score are:

•             Late or missed payments

•             Defaults on debt

•             County Court Judgments (CCJs)

•             Bankruptcy

These are not the only things to consider, other factors that can have a negative impact on your score include:

•  A large amount of borrowed money or using a high proportion of your credit card limit(s).
These can be a warning sign for lenders that you may be struggling with your finances

• Too many searches
Each time you apply for credit the lender will review your credit report. This is known as a ‘search’ and will stay on your report for 12 months. If you accumulate a lot of searches in a short period of time, lenders may feel that you may be having financial difficulties.

• Frequent changes of address.
This can be viewed as a lack of stability and therefore make you appear more high risk.

• Mistakes on your report
These can be factual errors, such as the wrong address listed under one of your accounts, closed accounts still showing as open, or an unknown account is linked to your record either by mistake, or in extreme cases as a result of fraudulent activity.  It’s important to check your report regularly, otherwise you may be turned down for finance through no fault of your own.

• Financial association or connection
The credit history of anyone you are financially associated with, such as a joint mortgage or bank account with a spouse, can affect your credit rating. If you are divorced or separated, cut all financial ties and make sure your former partner’s details are eliminated from any joint accounts.

Even if you turn your finances around, be aware that the items on your report stay there for 6 years and will be taken into consideration by lenders when deciding to grant credit.

 Credit record myths

There are many other misunderstandings when it comes to credit reports and scores. Here are some of the most common examples:

• There’s a credit blacklist
There is no blacklist used by credit companies or Credit Reference Agencies. But every finance company or lender has its own criteria, so there are circumstances when it won’t agree a credit application.

• Where you live impacts your credit rating
Your address doesn’t influence your credit rating.Lenders ask for this information purely to help them find an individual’s credit file and confirm their identity.

• Unpaid student loans can damage your credit rating
Students loans aren’t visible on your credit report, so don’t impact your credit score. This is because they’re paid back through salary deductions. However, any credit cards or additional bank loans you take out as a student will show on your credit report.

Top tips to help your credit score 

• Make sure you’re on the electoral register - Lenders use the electoral register to confirm an individual’s address.

• Try not to regularly keep a high balance on your credit card - Lenders may view this as excessive debt and that there’s a risk that you may be unable to repay.

• Make sure you pay your bills on time, every month – this shows you are financially disciplined and can manage your finances.

• Only apply for credit which is necessary – applying for more than three times in a year can lower your score.

• Cancel old credit card agreements and out of date credit cards, such as store cards you no longer use, as these will still show on your file.

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Andrew is a respected personal finance writer and commentator from Moneycomms.co.uk. He has many years experience of helping consumers manage their money, enabling them find the best deals on anything from savings and current accounts to loans, mortgages, travel money and credit cards. Andrew can be found tweeting here.

Coronavirus has prompted a consumer rights conundrum. With everything from concerts to holidays cancelled, thousands of people are left having paid for something that isn’t going to happen.

Here our guest blogger, Emma Lunn takes a look at your rights to a refund during the Covid-19 pandemic.

Holidays

Travel has been a big victim of the virus. The Foreign and Commonwealth Office advised against all foreign travel on 17 March, with the restrictions now in place for an indefinite time period.

In theory, holidaymakers should be well protected against cancellations. ABTA rules state entitlement to a full refund for cancelled package holidays, while EU laws mean airlines must refund cancelled flights.

But, unfortunately, would-be travellers are struggling to get their money back from travel companies. According to Which [1] 20 of the UK’s largest operators are illegally with holding refunds that should be paid within 14 days.

Many holidaymakers are finding they are being fobbed off with vouchers or a credit note, or are being pressured to re-book their trip.

Frustrating as this is, industry bodies have warned that travel firms could go bankrupt if they paid out refunds straight away. As a result, various travel industry bodies are urging the Government to step in a support the travel industry.

Sporting events and concerts

The UK’s big summer of sporting events, gigs and festivals is another victim of Covid-19. Generally, if you bought your ticket for a cancelled event from an official seller, you should be entitled to a refund.

Ticketmaster, for example, says its refunding tickets automatically, with the refund including the ticket’s face value plus the service charge.

But most concerts are being rescheduled rather than cancelled altogether. Original tickets remain valid for postponed events – but you can get your money back if the new date doesn’t suit you.

The same goes for sporting events. For example, the London Marathon was rescheduled for 4 October – but you can get a refund if you can’t make the new date.

Tennis fans who got the option to buy Wimbledon tickets in the public ballot and paid for them will get a refund plus the opportunity to purchase tickets for the same day and court for next year’s championships. Football fans with tickets to Premier League matches are likely to be refunded too.

Train tickets

The cheapest Advance train tickets are normally non-refundable but, with people being advised not to travel, you can get a refund on Advance tickets purchased before 23 March.

Refunds can be processed remotely (you normally have to go to a station ticket office) via the website of the rail company or third party that sold you the ticket.

If you are a commuter with a season ticket you are no longer using due to being furloughed, working from home, or because the trains aren’t running, you can get a partial refund if there are at least seven days left on a monthly ticket,or more than seven weeks left on an annual ticket.

There’s normally an admin fee of £10 for season ticket refunds but train companies are waiving it at the moment.

Pausing premium sports channels

With live sport on hold for now, Sky Sports and BT Sport customers are faced with only being able to watch re-runs and repeats.

But you can save a bit of cash by pausing your sports subscription. If you’re with Sky,you can arrange for your Sky Sports subscription (and BT Sport if you have it) to be paused online and you’ll automatically start paying for the full package again when the action resumes.

If you pay for BT Sport directly with BT, you have two options: you can get a two-month bill credit for the service, or donate the cash equivalent to the NHS. If you pay for Sky Sports via BT you’ll have to call to request a bill credit.

If you’re a Virgin Media customer and subscribe to Sky Sports or BT Sport , you'll be able to pause your subscription online. The same goes if you pay for Sky Sports as part of a TalkTalk broadband bundle.

Gyms

Gyms,fitness studios and sports clubs have all been forced to close due to the pandemic. All the main chains, including Pure Gym, Better, David Lloyd, Third Space, Fitness First and Anytime Fitness, have automatically frozen memberships.

Some smaller studios, as well as outdoor bootcamp operators such as Be Military Fit, are running online classes via Facebook Live or Zoom for a reduced monthly fee. However, if you can afford to keep paying your normal membership subs, it might increase the chances of these small businesses being able to re-open when the pandemic is over.  

Cinemas and theatres

The entertainment industry has been one of the hardest hit with the pandemic bringing down the curtain on both cinema and theatre trips.

Film fans with monthly or annual cinema memberships can normally pause or extend their memberships. For example, Cineworld will be extending the membership of all My Cineworld Plus accounts retrospectively once it re-opens, equivalent to the total duration the cinemas closed. Meanwhile Odeon has paused Limitless membership payments until its cinemas reopen. 

The Society of Ticket Agents and Retailers says anyone with tickets for cancelled theatre performances will be contacted by the company they bought the tickets from regarding exchanges and refunds.

Car insurance

There’s good news for anyone who has car insurance with Admiral – the insurer is giving each customer a refund of £25. The pay-out is being made because the number of car insurance claims has dropped as drivers stay off the roads.

The owners of 4.4 million vehicles will automatically receive the payment by the end of May.

Admiral is the only UK insurer to announce an automatic refund policy so far – drivers with other insurers should continue to pay their car insurance, even if they are driving significantly fewer miles than usual.

If you’re not using your car at all, you could apply for a Statutory Off Road Notification (SORN). If approved, this means you no longer need insurance for your car (so you could cancel your policy and get a partial refund), but it also means you won't be able to legally drive it.

 [1] Which?

Emma Lunn is an award-winning freelance journalist who specialises in personal finance. She has more than 15 years’ experience writing for national newspapers, trade and consumer magazines, and specialist websites

Now that we have found ourselves confined to the comforts of our own homes for the next few weeks, it’s a normal reaction to try and sooth one’s soul through the medium of online shopping. No judgement here, we’re all in this together (but did I really need that cactus?). Whilst we’re likely to save a bit of money by not going out, buying coffee, ordering takeaway etc, it wouldn’t be realistic to advise you to not spend a penny, we can offer a nudge in the direction of mindful spending. Below is a roundup of the apps, services and activities that are perking us up at the moment – most of them are free, but any costs involved, we believe contribute to feeling a bit brighter and we have detailed all information.

Top 5 free trials

Now is the perfect time to ‘try before you buy’, and these are our favourite free trials at the moment. Top tip: set a reminder on your phone to cancel your subscription, as most companies will sign you up and charge you automatically.

1.    Amazon Prime[1]

Terms: 30 days. £7.99p/m or £79p/a

This is the perfect option for those who has already exhausted all that Netflix has to offer. This streaming service has a whole host of original TV series and films available that you may not be able to find elsewhere. Here are a few TV recommendations from the team to get you started:

The Boys
Outlander
The Marvelous Mrs Maisel
This is Us
Vikings

2.    Spotify Premium[2]

Terms: 30 days free (for new Spotify members only) and then £9.99p/m.

To quote Plato, music gives a soul to the universe, wings to the mind, flight to the imagination, and life to everything. If ever there was a time that our minds needed wings it’s now! Your premium membership will give you endless hours of uninterrupted tunes to help you concentrate, chill you out or cheer you up.

3.    Audible[3]

Terms: 30 days free plus one free audio book (If you're an Amazon Prime member, they'll bump this up to two books). Plans start at £7.99 p/m.

If a busy social calendar has gotten in the way of reading, now’s a good time to get stuck in. Audio books are a great step back into the world of books and they’re great company for your walk of the day! You get one free audio book with this trial, so choose wisely. May we suggest one of the Harry Potter books? Even if you’ve read them several times over, there’s something comforting about Stephen Fry reading these well-loved tales in such tricky times!

4.    Duolingo Plus[4]

Terms: 7 days free. £80 p/a for continued premium use

If you’retaking time to learn a new skill, maybe a new language is the way to go. The free version of Duolingo is pretty good, but you might as well enjoy seven days of no ads and unlimited attempts at words and phrases as you progress.  

5.    My Heritage[5]

Terms: 14 days free. Packages starting at £79 p/a (£59 for the first year).

A good bit of research to get your teeth into could be just the thing to keep you busy and interested over the coming weeks. Maybe you’ve binge watched all episodes of Who do you think you are and want to know how find out if you’re distantly related to royalty. This 14 day trial can send you down a rabbit hole of history and is bound to bring up new things to chat about!

Top 5 ‘feel good’ services

No one really likes change, but we’re all having to adapt to a new way of living, and pretty quickly. Below are a few things that we’re finding useful to get us through mentally as well as physically. 

1.    Hello Fresh[6]

Whilst the tendency might be to pop a pizza in the oven for comfort, spending (a lot) more time at home could offer the opportunity to experiment in the kitchen. Recipe boxes such as Hello Fresh (meals starting at around £3.50 pp) can be a good way of trying new things and being relatively healthy at the same time. When some form of normality does resume, you will have learned new recipes and be able to recreate them at any time.

2.    Free full body workouts from Barry’s Bootcamp[7]

Now that gyms are closed, the normal treadmill and floor schedule of a Barry’s class has been stripped back and adapted to 30 minute hardcore sessions that can be done from the comfort of your own home. These are broadcast on the Barry’s Instagram page and the schedule is released daily on their Instagram stories.

3.    Free yoga and Barre with FLY LDN[8]

To bring a spot of zen into your lives, FLY LDN are holding 45 minute yoga and barre sessions live on their Instagram page. Unlike many others, they are also posting each session on their Youtube[9]channel so that you needn’t worry about missing any part of the live broadcast.

4.    Calm app[10]

With stress and anxiety being at an all time high, having a toolkit to practice mindfulness and set yourself up for a restful night’s sleep is a great thing to have. This app offers everything from breathing exercises to bedtime stories. It’s free to download with an optional subscription so you can see how you get on with the basic package to begin with.

5.    Let’s Day Out App[11]

This popular app that focuses on bringing people together through experiences, is thoughtfully re-branding to ‘Let’s Day In’. They will be hosting lots of virtual group activities from cooking demonstrations to art classes. All the sessions are free, but there is the option to donate £1 to the World Health Organisation’s COVID-19 Solidarity Response Fund.

5 things to jazz up home schooling

For many parents, the thought of having to home school their children is daunting and stressful. We’ve listed a few things below to bring some educational fun to your new school days.

1.    Joe Wicks PE lessons[12]

Joe Wicks aka The Body Coach, is hosting daily 30-minute PE sessions live on his Youtube channel at 9am. They’re great for waking everyone up, engaging the brain and getting into some form of routine when everything is so out of sorts. Although aimed at children, it’s a great way for the whole family to spend some time together being active, and if we’re honest it’s left some of us adults out of puff too.

2.    The Maths Factor[13]

Carol Voderman has announced that she is removing the paywall on her tutorial website for children, The Maths Factor. This is aimed at children of primary school age and will be freely available for as long as children are having to stay away from schools.

3.    Printable Pages

Many illustrators such as Matt Richards[14] and Jacqueline Coley[15] have started producing artwork that parents can print off for their children to colour in. It’s the perfect down time activity to break up a curriculum based timetable.

4.    David Walliams Audio Stories[16]

Just as audio books are great for adults, children can really benefit too. A huge part of school life is shared reading and being read to. David Walliams, author of Gangster Granny and Mr Stink (to name but a few) has announced that he will be releasing an audio story for school children every day at 11am for the next 30 days for free. These can be found on his website, under ‘Elevenses’.

5.    Family Baking

Studying at home needn’t purely revolve around times tables and literacy, there’s a lot to be gained from fun activities at home such as baking. Getting the family involved teaches measurements, elements of time keeping, the science behind baking, the importance of a clean kitchen…and patience from all involved! Little Cooks Co’s Instagram[17] has many recipes that little hands can get involved with, but there’s no reason they can’t get stuck in with your day to day cooking routine!

[1] Amazon

[2] Spotify

[3] Audible

[4] Duolingo

[5] My Heritage

[6] Hello Fresh

[7] Barry’s Bootcamp Instagram

[8] FLY LDN Instagram

[9] FLY LDN Youtube

[10] Calm

[11] Let’s Day Out

[12] PE With Joe

[13] The Maths Factor

[14] Matt Richards

[15] Jacqueline Coley

[16] David Walliams Audio Stories

[17] Little Cooks Co Instagram

‍

The 2019/20 tax year ends on April 5th 2020.

The end of the financial tax year is a great reason to review your finances and make sure that you’ve taken advantage of all of the tax efficiencies available to you. We’ve listed the top things to consider before the end of the tax year.

Top up your ISA

The 2019/20 personal ISA allowance is £20,000. Any returns made within an ISA are tax efficient and are free of UK income tax and capital gains tax.

If you do not use your allowance, you can’t carry it over to a new tax year. So, if you’ve got savings lying around in your current accounts, it may be worthwhile putting as much savings as you can in a tax efficient ISA.

Don’t have an ISA? Take our financial health check and get personalised Financial Advice from OpenMoney.

Contribute towards your retirement

As with your ISA, it may be worthwhile considering topping up your pension to increase your savings for retirement. When saving in a pension you receive income tax relief, depending on your personal circumstances.

The annual allowance for 2019/20 for pension contributions is £40,000. It’s also worth noting that you can bring forward unused allowances from previous three tax years, as long as you were a member of the pension scheme within those years.

Save for your children

If you have children, it may be a good idea to start saving for when the reach the age of 18. Children who are not yet 18 can open a Junior ISA (JISA) in their name and they can only access when they reach the age of 18.

As with an adult ISA, returns on money made within a Junior ISA are free of UK income tax and capital gains tax. The annual allowance for a JISA in 2019/20 is £4,368.

Use your capital gains tax allowance

Everybody has an annual capital gains tax allowance of £12,000 in the 2019/20 tax year. This means that if you dispose or sell any assets such as property and stocks are shares, you won’t be taxed on the profits if they're below £12,000.

You cannot carry over any unused capital gains tax allowance to the next tax year, so if you are planning to sell your assets, it may be worth considering staggering them over two tax years to take advantage of your allowance.

Reduce your inheritance tax

When gifting money to your family or loved ones after you pass, it’s important to remember that any estate (that includes your home) worth over £325,000 will be taxed at 40% for everything above that amount. So if your estate was worth £400,000, £75,000 of that would be taxed at 40% - that's a staggering £30,000.

One way to combat this is to use your annual exemption allowance of £3,000. This allows you to gift that amount without being liable for inheritance tax in the future.

You can carry over your gifting allowance from a previous tax year if unused, making the maximum amount £6,000. There are other exemptions too, such as no tax on wedding or civil partnership gifts up to £5,000 to your children and £2,500 to your grandchildren.

‍

That completes our list of things you need to consider before the tax year ends in order to benefit from the tax efficiencies available to you.

Read more about financial wellbeing and money management over on the OpenMoney blog.

‍

Many people are confident about researching and making decisions about their finances without professional help, but that’s not the case for everyone. We carried out research with YouGov in 2019 and found that 19.8 million people feel they would benefit from free financial advice.

Managing money can be daunting, especially dealing with more complex financial matters like mortgages, investments and pensions. It’s hardly surprising some of us would like a bit of help. But how do you decide when you need guidance and when you need financial advice? And what’s the difference anyway?

Free guidance

There are several organisations offering free financial guidance including the government’s own Money and Pensions Service. They provide free specialist financial information but are not allowed to give a personal recommendation of where to save or invest your money. You are solely responsible for making sure any products you buy based on their information are appropriate for your needs.

Regulated financial advice

Alternatively, a regulated financial adviser will give specific advice around whether investing is right for you now, how much you should invest, and which investments best match your goals. They will manage your investments, meaning you don’t have to worry about them. You also have greater protection as advisers should be authorised and regulated by the Financial Conduct Authority (FCA), however you usually have to pay for regulated advice.

Our research with YouGov found that less than one in ten people had paid for advice in the last two years. Of those who hadn’t, three quarters were unlikely to do so in the future and when asked what would encourage them to do so, the top five changes were “I would need to be convinced it would save me money”, “I would need to be sure I could trust the advice”, “I would need to earn more money”, “I would need to be sure how to pick the right adviser” and “it would need to cost less”.

Adding value

Measuring how much value advice can add is difficult, but for complex products like investments and pensions, which can make a major impact on your future financial position, it can make sense to get help from a qualified adviser. A 2017 study by Royal London found that over the long-term, taking financial advice can add nearly £40,000 to the wealth of those on modest incomes.

While it’s true that some traditional financial advisers will not take on clients with small sums to invest, it’s not always the case. Some can also be pricey,charging an initial fee of anything from £75 to £350 an hour, or up to 5% of the value of the money being invested

At OpenMoney we provide personalised advice, no matter the size of your investment. You can start investing with us from as little as a £1 and our management fee is less than 0.50% of whatever you decide to invest.

We use the right mix of smart technology and qualified human advisers to give our customers personalised advice that’s always in their best interests.

Finding the right advice

Here’s our five-point checklist to choosing the right advice:

1.     Workout what you need: A free financial guidance organisation or comparison site could help you choose home insurance or a new current account and provide useful information about more complex financial products. But you may be better going to a regulated financial adviser for investment and pension planning or a mortgage as these are big decisions which can have a major impact on your future finances.

2.     Decide whether meeting face-to-face is important, or if an adviser who holds meetings by phone or online would work – the latter might be more cost effective and offer greater flexibility outside normal working hours.

3.     Check the adviser’s specialism and qualifications: not all advisers cover all products, so make sure they deal with everything you need, and have at least the minimum qualifications required for the products you want to discuss.

4.     Understand the costs: some advisers don’t display their fees on their website, but even if they do, it’s worth clarifying up front all the fees you’d pay for initial and ongoing advice.

5.     Ask for a free initial consultation: many firms offer meetings to help you decide if you trust their advice and whether they will add value to your finances.

All figures are sourced from The UK Advice Gap: Are consumer needs for advice and guidance being met?

‍

Millennials are generally classed as those born between the early 1980’s to the mid 1990’s.

Stereotyping any generation is misguided, and while all generations face their fair share of negative press, millennials seem to bear the brunt of the media’s negative headlines, especially around money matters.

They have been accused of wasting their money and spending too much on coffee and avocados[1], while simultaneously getting heat for not spending enough, and killing the napkin, cereal and golf industries to name a few![2] However, the topic of millennials investment habits is not talked about often.

Why should millennials be investing?

Almost half (47%) of those aged 18-24 prefer to put their money into a current account,with only 5% of this age group opting to invest.[3]

With interest rates at record lows for the past few years, current and savings accounts may not be the best option for millennials wanting to grow their cash over the medium to long term.

Investing is a great way to prepare for retirement as products like our Self-Invested Personal Pension offer tax relief (which you can find out more about here) as well as tax protection benefits. Many millennials are wanting to retire sooner, creating movements such as FIRE (financial independence retire early) which originated in the US. Millennials are also being expected to live longer than boomers or gen x-ers, so millennials should be investing at a younger age than previous generations.  ‍

When should millennials invest?

As with all investment the sooner you can invest the better. This is because your investments can generate interest and returns, reinvesting that means you start to make interest on your interest, this is called ‘compound interest’ and can make a huge difference to your investment pot over the long term.  

Where are millennials investing?

Millennials are conscious about where their invested money is going and what it will be supporting. Ethical investing is more popular among millennials than any other generation. If you want to find out more about ethical investments and OpenMoney’s stance on it, you can read this blog here.

For those investing in their property, Help to Buy ISAs are a government initiative investment product, available to first time buyers who are saving to get onto the property ladder. The Help to Buy Scheme has supported over 230,000 property completions since December 2015 and of those using the Help To Buy ISA, 29.9%were aged 19-24 while 69.4% were aged 25-34.[4]

How is millennial investing different?

Millennials grew up in a time where family members may have suffered as a result of the famous market crash in 2008. This means that millennials can be more cautious with their money, it is also clear that education about investment is lacking.

In a piece of research conducted by Barclays[3], 40% of those surveyed claimed that not knowing enough about investing is one of the biggest barriers to investing. This is something we at OpenMoney are addressing, we want to close the advice gap and make financial advice accessible to all.  

1. twentytwowords.com
2. independent.co.uk
3. barclays.co.uk
4. HM Treasury

When it comes to investing, it makes sense to shop around for the most competitive rates so that you can keep more of your potential returns, but it can be tricky to do so when not all providers are upfront with the costs involved in the management of your portfolio. A recent study by The Lang Cat[1] states that only 54% of investors are aware of what they are being charged for their Stocks and Shares ISA.

According to The Telegraph[2], investors could be paying fees up to six times higher than advertised rates, so are you aware of what are you paying for?

Exit Fees

We’re seeing an increase in investment platforms abolishing their exit fees which is shaking up the way the industry has operated for many years. As things stand, when looking to transfer your investment to another platform, your current provider can charge an (often sizeable) exit fee. This can often deter from a switch regardless of how competitive rates are and ultimately causes investors to miss out on the best rates available. As we offer financial advice here at OpenMoney, we have found ourselves in situations where we have advised customers against transferring to our products purely because the exit fees charged by their current provider would make transferring a more costly option, which is the last thing we want!

The OCF

The standard charge that comes with investing is the Ongoing Charge Figure(OCF) - here at OpenMoney we combine the OCF and Transaction Fees to give you our ‘Overall Portfolio Charge’. You should be made aware of from the offset. The OCF is made up of the fund manager’s fees for running your portfolio as well as admin and marketing costs. This fee will usually be presented in percentage format to represent how much of your investment is taken by running costs. It’s worth noting that although this fee is transparent as standard, it does not include others that could really ramp up the cost of your portfolio.

Transaction Costs

No two funds are the same and so you can expect that some providers will charge more in what’s called ‘transaction costs’ since they are buying and selling stocks more frequently than others, in order to make the most of the market in all states. It’s not necessarily a bad thing as long as you know what you’re paying for and why, and as long as you’re happy with the level of risk being taken with your investment.

Trading fees, commissions & stamp duty

You will need to pay Stamp Duty Reserve Tax (SDRT) on any electronic, paperless share transactions. The amount of SDRT you pay is worked out at a flat rate of 0.5%[3]based on what you give for the shares, rather than what the shares are worth.

So, if it’s a cash transaction, the amount of SDRT is based on the amount of cash you pay. For example, if you buy shares for £1000, you’ll pay £5 SDRT whatever the value of the shares themselves. If you give something else of value, the SDRT is based on the value of what you give.

[1] The Lang Cat – Can’t get there from here

[2] The Telegraph

[3] Gov.co.uk

Love, respect and kindness are just a few of the values I hope we have instilled in our children. Despite spending most of our time feeling like we are winging it, my husband and I like to think we are bringing up well-rounded individuals who know right from wrong, and treat others the way they would like to be treated.

Value is a word with many connotations which has morphed, in our household, from emotional, to practical, to tangible, and everything in between, over the past six years.

While we have tried to teach our children about value, whether that be looking after their favourite toy or cherishing kind words or acts bestowed upon them, teaching them the value of money is a whole different ball game.

My eldest son is now six and is becoming aware that in order for us as a family to have the things we need, or would like, money has to be earned.

The phrase pocket money has been bandied about over the past few weeks so a discussion about how he will earn it has taken place more than once.

But how does our view on teaching children about the importance of value and money tally with the rest of the UK?

According to a report from AXA Investment Managers, British children under the age of 16 are becoming increasingly savvy when it comes to finances.

Kids, aged between eight and 15, claimed they were actively tracking how much they saved a year, but less than half of those interviewed said they had learned how to manage money at school. More than half of the people involved in the study said they received pocket money regularly, giving an average weekly income of £12.76, or £663.52 a year.

Moves have also been made to arm thousands of schoolchildren with essential money skills. Last year, 16 of Britain’s leading savings and investment firms, brought together by TISA (the Tax Incentivised Savings Association), launched Kickstart Money, a collaborative project which aims to take financial education to nearly 18,000 primary school children in a bid to build a national savings culture for the future.

The project received £80,000 funding from the Money Advice Service (MAS) whose research found that behavioural attitudes to money are formed by the age of seven, and that a lot of teachers and parents lacked the confidence to equip young people with money managing skills.

For us, consistency and fairness when dishing out pocket money to our children will be key. We will give them the choice of doing extra chores to earn a bit more, allow them to make mistakes if they decide to splurge their cash, and show them ways to invest their money and watch it grow. The money will be theirs to save or spend as they see fit, but we hope that giving them autonomy over their own cash will teach them a valuable lesson.

Following our press briefing in London, we’re excited to be releasing our report with YouGov on the UK financial advice gap.

We found that 19.8 million people* across the UK would appreciate a bit of financial advice. But not everyone knows how to get it or that it’s even an option for them.

We speak to customers every day about their financial situations, and we’re all too aware of the financial advice gap across the UK.

When we launched OpenMoney we made it our missions to make financial advice available for everyone. Which is why we wanted to undergo this research to get a better understanding of the advice gap issue in our country.

Our advisers talk to people aged 18 to 75 and it’s usually the first time they’ve tried to get advice.

There are a few reasons for this.

Some people thought it was too expensive, whilst others felt they would be overlooked by advisers as they had a relatively small amount to invest.

There’s a belief that traditional face-to-face financial advice is only accessible to those who have already got a large amount to invest, typically those who are approaching or at retirement.

In 2015, Citizens Advice conducted some research around the advice gap and identified four different types.

1. The affordable advice gap affects consumers who are willing to pay for advice but think it is too expensive.
2. The free advice gap affects people who want advice but are unable to pay for it and are unaware of, or unable to access, free services.
3. The awareness and referral gap affects people who do not know where to get advice.
4. The preventative advice gap affects those for whom non-money issues can impact their financial position.

We decided to build on this research to understand to what extend these gaps still exist and if the availability of advice services has improved in the past four years.

Download the report

You can download the report here.

*Where figures like this are shown, OpenMoney has extrapolated the YouGov findings from our sample to represent GB population estimate of 50,644,094 (source ONS, June 2018).

• What is a financial adviser?
• What are they really doing for you?
• What do they charge?
• Are they worth the money?
• And do you really need one anyway?

A financial adviser is someone who can help you achieve your financial goals.

They can create a financial plan for you, based on your circumstances; taking into account what you want to achieve and how much risk you’re willing to take.

Their plan will lay out what you could do to help achieve your financial goals, whatever they may be. An adviser should let you know if your goals are realistic for how much risk you’re willing to take.

They should then monitor your savings and investments to make sure they are still suitable for you, and regularly review your goals and progress.

But for that they will typically charge you 2.5% (according to a study by Grant Thornton, Aug 2016) of all the money you have invested - every year.

What are you paying them for?

2.5% annually might not sound like much, but it can quickly add up. For this fee someone putting away £200 a month for 20 years could pay charges of more than £15,000 during the life of their investment.

So, if you’re thinking of investing, the big question you need to ask yourself is, ‘are traditional financial advisers really worth the money’?

A traditional financial adviser may tell you that their expertise and experience will help to ensure you don’t end up investing in an unsuitable product or one that gives poor returns. And it’s true that some advisers can help you access investment opportunities that aren’t readily available to the general public.

It’s also true that investing with a financial adviser means that you could be protected if things go wrong – as long as your adviser is approved by the Financial Conduct Authority (FCA), the body that regulates financial services firms in the UK.

But the reality is that consumers are paying fees of at least £1bn a year to financial advisers for investments that don't perform any better than far cheaper alternatives.

Some of the time, advisers just put an investor’s cash into passive investment funds, which simply benefit from the natural growth of the stock market and require absolutely no effort or active management on their part!

That said, investing with no advice means you run the risk of making the wrong investments, which could cost you a lot of money in the long run.

Thankfully, there is a third way.

Best of both worlds

At OpenMoney, our team of qualified financial advisers have designed an advice platform which uses algorithms to create personal recommendations for our customers.

By supplying some straightforward facts about yourself, including things like your goals, your earnings, your assets and your attitude to risk, we can build an accurate profile of you and provide you with a personal recommendation, which will let you know which of our products and funds are suitable for you.

We’ll always be honest with you – if we think you could be better off paying off your credit card or loans, we’ll tell you.

Even if that means you don’t invest with us.

Our use of algorithms helps keep our costs down, so you will never be charged more than 0.5% every year – which could save you many thousands of pounds over the lifetime of an investment.

But, crucially, we always have human expertise on hand to answer your questions and guide you along your investment journey.

With a traditional financial adviser you’ll be lucky to see them once or twice a year, but at OpenMoney you can book as many phone or Skype appointments as you like with our advisers at no extra cost and at a time convenient for you.

And we are authorised and regulated by the FCA too, so you can feel confident that we are treating our customers fairly.

To see if investing is right for you just answer a few questions on our website.

It can be easy to assume that the older we get the better we get at managing our finances.

There may be some truth to this as research we conducted with YouGov earlier this year found that 44% of 25-34 year olds are more likely to have a short-term outlook on their finances, compared to 24% over 55.

In fact, 30% of over 55’s say that they plan a year or more in advance.

Confidence in managing money also seems to improve with age, with 92% over 55s agreeing they know what they’re doing, but only 68% of 18-24 year old’s.

Is it just a millennial issue?

It could be easy to say that the reason younger generations are ‘bad with money’ is because they spend too much on brunch, coffee and frivolous things as they follow trends – at least that’s what the media would have you believe.

In reality, there are many reasons why younger generations are finding it tough to stay on top of their money.

36% of 25-34 year old’s blame unexpected bills or one-off costs for their financial difficulties, and 24% say that their income didn’t meet the essential costs of living.

While we would like to imagine that our income will go up as we get older, and our household debt will reduce, this is not always the case.

Those aged 35 to 44 are more likely (56%) than any other age group to struggle to keep up with their household bills and credit commitments, compared to 39% of all ages.

Three quarters (76%) of 35-44 year olds also had outstanding debt, compared to an average of 56%, with the most common being mortgages (46%), credit cards (40%), authorised overdrafts (19%), student loans (16%) and unsecured personal loans (15%).

You could put this down to the extra responsibilities often associated with this age group, such as buying a house and managing a young family.

Our CEO, Anthony Morrow said, “those in the middle age group are more likely to be facing the financial pressures of creating their own home and starting a family, while still paying off outstanding student loans.

“While providing financial education in schools is an important objective, offering support and advice around good financial management and planning to adults seems just as crucial to improving the wealth of the nation as a whole.”

Let’s break the cycle

You’ve probably heard the saying ‘money makes the world go round,’ and although this isn’t true scientifically of course, money undoubtedly has a huge influence over our lives.

Money management and planning is a skill that everyone would find useful, no matter age, gender or income. And it shouldn’t be something we only think about when the going gets tough, or major life events take place.

There are financial cycles we fall into. These are cycles that need to be broken to improve the nation’s wealth.

There is help out there, but 25-34 year old’s are more likely to use money from savings to resolve financial difficulties, lean on family and friends (40%) or take out a loan (21%), than seek financial advice from a specialist (4%).

But why are UK adults less inclined to reach out to financial experts?

The answer may be within what the industry calls the ‘advice gap’. Many people across the UK fall into this advice gap, people who are unable to or unaware they can access help with their money.

In fact, 19.8 million (39% of our sample) want advice but are unable to pay for it and/or are unaware of or unable to access affordable services.

That’s why our co-founders Anthony and Duncan created OpenMoney. To make financial advice accessible and affordable to those who need it.

You can download our report on the advice gap to get the full picture.

Deciding to get any pet is a big commitment, even if they’re small. With this commitment can come a lot of added weekly costs and monthly bills, which can catch you by surprise if you’re not prepared.

The UK is full of pet lovers with 49% of UK adults owning one and 24% of the population having a dog. So we asked the dog owners of OpenMoney to share what the real cost of having a dog is.

Vet bills and vaccinations

What medication, vaccination and medical procedures your dog needs will depend on a multiple of things including their age, breed and what they’ve already had done.

There is no way of knowing what medical issues your dog may have as it gets older so it’s important to factor in for this.

Some vets may offer a monthly subscription fee and in return you may get worming, vaccination top ups and other services as part of the package. This could save you money in the long run and it also gives you peace of mind when it comes to taking care of your dog’s wellbeing.

Microchipping

It is now a legal requirement to have your dog microchipped. It can cost between £15 to £20. But if you don’t do this you could be fined up to £500!

Food

How much you spend on food and treats for your dog will completely depend on how big your dog is and what type of food you want to buy.

Pet food can be tinned or fresh and wet or dry, and there are a variety of options on the market. You can pick up a basic 1KG bag of dry food for just under £3 at Pet’s at Home, or a 4KG bag of luxury dry food for nearly £60!

What type of treats you give your dog is up to you but this is another added cost you will need to think about.

Insurance

It’s always important to get insurance for any pet you get. It might not seem like a priority when your dog is a puppy but you never know what is going to happen.

Insurance could help you cover costs if your dog is involved in an accident, needs intensive medical care or ends up developing a chronic illness when it gets older.

When it comes to picking your pet insurance make sure you think about your dog’s needs, the cheapest option may not be the best. There are so many factors that can affect the price of your pet's insurance, the coronavirus pandemic being one of the most recent to play a part, so it's important to do your research and get the right insurance for you. This recent report by GoCompare shows the affects that the pandemic has had on the cost of insurance and the breeds that are affected the most.

Toys

Some dogs love to play whilst others prefer to sleep. It might not seem like an important expense but buying your dog toys will hopefully keep them busy and away from your furniture.

But be warned, some dogs can go through toys very quickly, whether that be breaking a ball or squeaky toy.

Even the toughest of toys are no match for some dogs, so expensive high-quality toys aren’t always best. Some dogs might just want a cheap tennis ball to keep them entertained.

Obedience and daycare

Sadly not all dogs are quick to learn tricks or to be house trained so you might want to enroll them into obedience school.

The Dog’s Trust offer courses for £55 but prices can vary.

If you work during the day you might not want to leave your dog at home alone, so daycare or paying for a dog walker may be something you need to think about.

Luxuries

It is completely up to you how much you spend on luxury items for your dog. You might decide to keep it simple with a new bed or dog house every few years. Or you might go all out and treat them to new collars, grooming and pamper sessions. No matter what you treat your dog to, it will add to your extra monthly and yearly outgoings.

Whether you’re wanting to pamper your dog daily or just treat them every now and again there are a lot of costs to think about before getting any pet!

If you’re not sure if you can afford a dog right now, then it might be best to hold off and wait till you can give them everything they need for a happy, healthy life.

There is no shortage of investment companies willing to look after your money (my social media and weekend papers are full of adverts promoting the different services) and reviewing all financial affairs is always good sense.

What is worrying is the growing use of incentives by these companies to get you to choose them and transfer your money for them to look after. I have seen everything from cashback offers, a heap of airmiles to even cases of wine!

Everyone loves something for free but when it comes to money and investments then I believe that these offers are really irresponsible. The decisions you make with your money have long-reaching effect and the wrong decision today could lead to problems in the future.

Here are a few of things to think about when you’re looking to switch your investment company.

What’s the true cost of that ‘free’ gift?

The phrase “there is no such thing as a free lunch” is absolutely spot on here. Any gift you receive is paid from the fees you will pay.

Not only that, but it could end up costing you a lot more if the new providers fees are higher than what you’re currently paying – is that case of wine really worth thousands of pounds in fees over the life of your investment?

Is it the right thing for your financial goals?

Whilst cost is a really important point when considering these offers, it is absolutely essential that you consider whether it is the right thing to do for your personal situation.

You could easily end up transferring your money into a product that’s not suitable for you.

Most of these firms make their money by investing yours, but they won’t tell you whether transferring your hard-earned money is the right thing to do for your financial circumstances. The risk involved in this decision still lies with the customer.

It’s not always easy to say if transferring is the right thing for your investments in the long run, but it is definitely easier to say that making those decisions based on the free gifts on offer isn’t sensible.

Unfortunately, there are too many examples in financial services where poor decisions, often as a result of unscrupulous investments promoting false hope, have led people to lose money or even their life savings. Not only can they ruin your finances but by their nature, these circumstances are incredibly emotional.

We offer free transfer reviews, which means we will tell you whether or not it’s in your best interest to transfer your investments to us. And if it isn’t, we’ll tell you honestly.

Financial advice doesn’t have to be expensive and having someone else look over your situation could give you piece of mind when it comes to your money. No gimmicks. No bribes. Just financial advice.

• Learning about money from a young age is an important part of growing up.
• Teaching your child good habits early on can help them become a money-savvy adult.
• But the way we use money is changing, so your advice needs to keep pace.

“Money doesn’t grow on trees, you know!” I think that was the main piece of financial advice my parents gave me in my earliest years.

But learning how to manage money is an important life lesson, and it’s not something that’s widely covered in the primary school curriculum.

That’s led to some pretty bizarre misconceptions about the cost of living, according to some research from Halifax. It found that most boys and girls aged between eight and 15 believe a loaf of bread costs £15 and a pint of milk £17!

The summer break can be a great opportunity to help them get to grips with the topic, which got me thinking about how best to first introduce money to younger children in an accessible, engaging and fun way.

Every child is an individual, and they all mature at different ages, but here are five tips to help start your little one off when you think they are ready to start learning about money.

1. Getting hands on

Debit and credit can be a tricky concept, so start with ‘real’ money. Let them get hands on with your notes and coins. Let them hold them and play with them. Show them the values of the different coins and notes.

2. How it works

Let them watch you spend your money. Explain that you have to exchange it for things you want. They can even hand over the money to the shopkeeper themselves, or put it in the self-service checkout, and collect the change.

3. The value of money

Show them the prices of the products on the shelves when you’re shopping and explain how they equate to the value of the notes and coins. Explain how things have different prices. A pint of milk costs less than a pair of shoes, for example. Get them to guess the prices of different products.

4. Being responsible

Give them a few coins of their own as a reward for good behaviour and a piggy bank or money box to keep it in. Explain that they must keep their money safe and secure. Children love responsibility and having their own money like mummy and daddy – it helps them to feel grown up.

5. Starting spending

Young children don’t tend to be terribly materialistic, but if there’s something they enjoy, whether its food, drink, a book or a toy, you can let them buy it with their own money. This helps them think about how they’re going to use money, and learn that when they’ve spent it, it’s gone for good.

Next steps

As children get older, it’s a parent’s responsibility to help them understand more complex concepts, as in today’s modern world, people use money very differently. It’s predicted that this year debit cards will overtake cash as the most popular way to pay for things in the UK1, for example. This can also present an opportunity to hand more responsibility to your growing children.

Cards for Kids

Increasingly, parents are using pre-paid debit cards to pay their child’s allowance, which are now available for children as young as eight. Some of the more popular cards include goHenry, Osper and nimbl.

The appeal is easy to understand. You can pay their pocket money digitally with a few taps on your phone’s banking app, set spending limits for your child and monitor what they are spending their money on, and it helps them learn about banking, saving and budgeting.

Your child gets a degree of independence, but you retain ultimate control.

The cards come with an app that your child can use to manage their money, so they can watch their savings grow and learn the basics of budgeting – they can’t go overdrawn, so once their money is gone, it’s gone.

The cards can be used in shops, online and for cash withdrawals, and you can even set up alerts so you are notified whenever they make a transaction.

Lessons for life

It’s a great next step to them having their first bank account, but beware, most cards come with charges.

There’s usually a monthly or annual fee, and some also charge for cash withdrawals, so shop around to get the best value.

As a parent, the lessons you teach your children about money can stay with them for life. Helping them understand and respect money from an early age can help them become confident, responsible adults. Keep an eye out for the next blog in this series for some top tips on supporting your children through their teenage years - and when they finally fly the nest.

We know how difficult it is to be on top of your money all the time, that’s why we created the ‘advice’ section in the OpenMoney app. The advice section is there to help you make the most of your money in your current situation, whether that’s by reducing your debt, making the most out of your savings or curbing some of your expensive habits. Below you’ll discover the kind of advice we give and how we do it!

Our Advice

In the OpenMoney app, we have a range of different advice we give to users to help them manage their money better. Here are a few of our tips:

‘Build a cash safety net’

We always recommend having at least three months of cash savings in case of an emergency. Our app will pick up whether you have these savings and if you don’t, we can help you get there by setting a savings goal and giving you tips on how to save.

‘Earn interest on your spare cash’

The app can spot if you have spare cash leftover at the end of each month. If you do, we’ll recommend you start saving your money in a savings account to earn interest and make your money work harder.

‘Avoid fees by clearing your credit card debt’

If you have persistent credit card debt, our app will tell you how much it’s costing you in fees. We’ll also give you some handy tips on how to clear it.

There’s plenty more advice we give including how to save money on your energy by switching providers and how to reduce spending on expensive shopping habits! If you want to see what advice we give first-hand, download our app on iOS or Android.

The science behind the advice

Our app is constantly analysing your finances to see where you can make savings and manage your money better. If the app spots a potential saving or a certain habit, it will surface a piece of advice written by one of our financial advisers.

Where to find the advice section in the app

Once you have connected your current accounts, savings accounts and credit cards to the app, we do some clever calculations in the background to see where you could be managing your money better. The advice we have for you will then be shown in the ‘advice’ section of the app.

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In the advice section you’ll be able to see the advice we think is relevant to you as well as where you biggest spends are over the past few months – you may want to approach this with caution!

We’re always trying to improve the advice section of our app, so if you have an idea for a piece of advice, why not let us know over on Twitter?

If you haven't already downloaded our app, you can do so here on both iOS and Android.

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The OpenMoney app was launched in April 2019 and ever since then, we have been constantly trying to improve the user experience as well as add new features. This blog series will showcase the different money management tools available in the OpenMoney app and how you can use them to take back control of your money.

Our app has plenty of money management tools to help you keep track of your finances, and our budgeting tool is one of the most popular. Here’s how you can use it to get to grips with where you’re spending your money.  

Budgeting

Budgeting can be tedious and stressful, especially if you haven’t got the correct tools to help you out. Our tool makes budgeting fun (as fun as budgeting can be!) and easy to do. You can track your spending across 10 categories including rent, bills, transport, savings, dining/pub and more. Our app automatically categorises your transactions, so that you don’t have to, and shows you have how much you’ve spent each month per category, making budgeting a doddle!

How to set a budget in the app

• Log in to the OpenMoney app
• Head to the planning section (you’ll find this on the bottom of the home screen)
• Select ‘Budgets’ from the top of the screen
• Click ‘Set a budget’
• Adjust each budget section of your choice using the plus and minus signs

The fun doesn’t stop there! You can choose when your summary resets by heading back to the budgets page and clicking on the date in the top left corner. You also have full control over when your summary period starts depending on what’s better for you - it couls be the first of every month, or your payday - It’s totally up to you!

Once that’s all done, head to the main budget page to see whether you’re on the right track or not. The app will tell you how much money you have spent and how much money you have remaining out of your total budget for each a specific category.

Want to start using our handy budgeting feature? You can download the OpenMoney app on both iOS and Android  to test out our new features!

Stay on the lookout for more features we'll be adding to our app in the coming months.

We first launched the OpenMoney app in April 2019 and we’ve spent the past 18 months listening to user feedback on how we can improve the app and make managing your money a doddle.

We’re excited to announce that we recently released the newest version (v3.2.0) of the OpenMoney app that has some cool new features and improvements to your experience! We’ve introduced a new feature called the ‘To-do list’ that helps you create an accurate and complete financial picture and we’ve streamlined our onboarding and account linking process to give users access to our money management tools quicker. Read more about the new features below.

To-do list

We know that having all your accounts in one place makes it easier to organise your money and see what’s what. Now all of the OpenMoney app features are easy to see in our new to-do list tool! Here’s how it works.

Once you’ve linked a current account and logged-in to the OpenMoney app, the first thing you will see is a ‘To do list’ feature in the Home tab. The to do list introduces some of the useful functionality within the app such as budgeting, categorising transactions and setting up your regular payments whilst also prompting you to add additional accounts such as savings accounts, credit cards and pensions and investments.

By completing the to do list you are creating a complete financial picture of all of your accounts whilst also practicing good money management by setting budgets and organising your spend. Completing the to do list also allows us to get to work on analysing your accounts and seeing where you can be making your money work harder!

Download the OpenMoney app on iOS and Android and try out our new feature!

Linking accounts

In February we announced our partnership with Moneyhub who provide us with an Open Banking functionality to allow you to securely connect your financial accounts. We‘ve further refined the user journey to make it even easier to connect your accounts and we also now can link digital banks such as Monzo and Starling.

Open Banking allows us to safely and securely connect to your bank accounts without you needing to remember your details. So no more faffing with codes and numbers you can’t remember – but still completely safe and secure. The OpenMoney app prompts you to open your banking app and creates a connection between them both, all in the touch of a few buttons.

The streamlined onboarding allows you to connect your account quicker and get access to some of the brilliant in-app features.

Keep your eyes peeled for more feature announcements on the OpenMoney app.

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Our mission is to make financial advice accessible and affordable to all. But not everybody knows what financial advice is or what to expect when receiving financial advice. As part of our advised transfers service, we advise customers on their current pensions and ISAs to tell them whether transferring them to us would be in your best interests.

As with a lot of things in life like home improvements and fixing your car, you wouldn’t do them without expert help. Why should consolidating your pensions and investments be one of them?  We thought we’d break down what exactly is included in the report to give you an idea of the expert advice you’re getting from an OpenMoney transfer review.

Your information

Our advisers will recap some of the financial details you provided to us when you first went through the review journey. We’ll review your objectives for getting your current investments reviewed, confirm that you have the right financial foundations in place such as an emergency savings fund and give you an overview of the risk profile we have categorised you in. All of this information will determine what portfolio we recommend you invest in if you do decide to transfer.

Your current plan 

We will give you an overview of your current policy including current valuation, charges associated with the account, whether you would incur any penalties for transferring out and information on any guarantees that are applicable. Depending on the guarantees and/or penalties, this could influence the advice we provided you with, which might be to stay with your current provider, if this is in your best interest.

Our recommendation

This is the advice we will provide you with which will be whether transferring your policy to OpenMoney is the right thing for you, and if so, an overview of the benefits you will get by transferring to OpenMoney.

Investment objective & strategy

In this section, we’ll provide you with an overview of the portfolio that you will be invested in and we’ll analyse your current investment to see whether it is suitable for the risk profile we have categorised you as, specifically looking at diversification, management style and risk. 

Our fees & charges comparison

We’ll do a direct comparison of charges on your current policy vs the charges you would pay with OpenMoney to show you how much money you could save each year in fees, or how much more expensive OpenMoney would be.

Impact of charges analysis

To show you how fees can impact the performance of your investments, we’ll provide you with a projection up to your desired timeframe (eg. retirement age) after fees for both your current policy and the recommended OpenMoney portfolio, using specific growth rates. This allows you to see the impact that charges can have on your pension policy. 

Investment Analysis

Last but not least, you will find a performance comparison of your current policy against how the recommended OpenMoney portfolio would’ve performed over the last 3yrs, 2yrs and 1yr. We will also provide some commentary on why your current policy has either underperformed or overperformed our recommended portfolio.

 That’s everything that’s included in our personalised transfer reports. You can get a free transfer review on your current Stocks & Shares ISA or Pension today - you only pay our annual fee of less than 0.5% if you decide to switch to us.

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Do you know what type of pension you have? You’re not alone if not! Our 2020 Advice Gap Report revealed that almost a quarter (23%) of British adults are unaware of the type of pension that their employers are contributing to on their behalf [1]. It’s never too early (or late!) to take stock of your current pensions and plans for retirement.  A good place to start would be to track down the pensions you have in your name, which you can read all about in our blog, here.

Once you have the full picture of where your money is, you may be thinking about consolidating your various pension pots into one, you can read more about the benefits of consolidation here. When you get to this point, it is so important to seek regulated financial advice. There are lots of things you wouldn’t do without the guidance of an expert, for example fixing your car, so why should transferring your pension be any different?

Although it might be a good idea to consolidate your different pots into one place in order to keep track of them, provide better investment options, and potentially save on fees, it can be a complex and often irreversible decision. By taking advice, you can ensure you understand the implications of all the choices available and be confident that you’re making the right decision for you.

Transferring to another provider without advice could leave you at risk of losing potentially lucrative pension benefits with a current provider or switching to a product with higher fees. We take all of these factors into consideration when advising customers on their next steps for their pension. We actually advise a quarter of our customers going through our review process not to transfer! This is usually due to their existing pension offering valuable benefits, or that their current provider is already meeting their needs and providing good value for money.

Our Advice Gap Report also found that one in five people have more than one type of pension, which could include all types of pension such as a personal pension, final salary pension, a defined contribution work pension etc. This is totally normal as people can have a number of jobs through their working life, and may build up several pension pots from different employers. The current upheaval in the jobs market is likely to fuel this trend, so taking control of your retirement planning, to ensure you have enough money later in life, is more important than ever.

At OpenMoney, we offer a free pension transfer review, where we will check whether transferring is the best choice for you. We have been able to save customers over £30,000 in fees over the remaining life of their pensions by switching, and they also benefitted from the option to link all of their other finances via our app to get a complete picture of their financial situation. This shows just how important it is to get advice! There’s no obligation to act on  our advice, it is your pension, your decision and you are in control.

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Do you know where all of your pension is being held? If you’ve had multiple jobs, there’s a good chance you have a few pension pots with various providers so don’t worry if you’re not quite sure where they all are. According to The Guardian, as of 2019 there was £19bn sat in lost pensions, so you’re not alone!  

Knowing where your money is means you can keep track of how much you have put away for the future as well as keeping on top of the fees set by the providers of your workplace pensions. There are two main options when tracing your missing pensions:

Contact your providers

If you know who the pension providers were at each of your previous places of work, you can contact them directly and request all information linked to your account. If not, contacting your previous employers is a great place to start. Reach out to the HR department, prepared with your dates of employment and your National Insurance number, and ask for the provider’s details.

Contact the Pension Tracing Service

If you’d rather not reach out to your previous employers, you can use the Pension Tracing Service. This is a free Government service with which you can check which pension provider is used by your previous employer. All you need to know is the type of pension you’re looking for (personal or workplace), and the name of the company. This information will bring up the name and contact information for your provider.

Congratulations, you’ve found all of your pension pots! What comes next?

Once you’ve tracked down all of your pension pots, you’ll have a well-rounded picture of the money you have put away in preparation for your retirement as well as all of the fees that you’re paying. Armed with this information, you’ll be in the perfect position to assess whether you’re happy to have various pension products, or if you would be better off consolidating them into one pension.

Consolidating (or combining) your old pension pots could have lots of benefits. You could save money on fees and keeping all your pension funds with one provider can help you to better understand what’s in your current retirement fund, but it’s not without some risk. You could lose benefits from older pensions by transferring, and fees in financial services are notoriously complicated – it's hard to understand what’s best for you.

There are many things that you wouldn’t do without a professional. For example, we wouldn’t expect you to fix a car without the help of a mechanic, and so we certainly don’t expect you to decide what to do with your pension without the help and advice from our qualified team of advisers. Our advisers will review your current pensions for free and tell you if it’s in your best interest to transfer to us.  

All you need to do is answer a few simple questions about your current financial situation, your long-term goals, and your current pension products. We’ll take this information, contact your current providers, and offer you personalised advice. There’s no pressure to take our advice, it’s your pension and your decision, and the team will be on hand if you want to talk anything through. If you have any questions, feel free to contact the team via our contact us page.

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The word “pension” refers to an age that many people consider light years away. Why bother saving for a pension when it’s so far down the road? But the importance of a pension is really simple – it’s designed to provide you with an income once you’ve stopped working. (I’m personall ydreaming about a luxury cruise.) Plus, pension money is protected and has great tax advantages. Read on…

How much pension do I need?

This answer varies for everyone and it depends how much you earn, how much you can afford to save, what age you want to retire, how much your employer contributes to your pension etc.

This government online calculator does a fabulous job of estimating what age you can retire and how much you would need to save in the meantime.The general advice from experts is always the same, however: save as much as you possibly can, and it’s never too early to start.

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Think you can survive on a state pension?

If you do not save, and instead rely on the government’s state pension, you will have to wait until you hit retirement age which is 66 as o fOctober 2020 (and projected to rise). You will get a maximum of £175.20 a week – that’s if your national insurance record shows that you’ve worked for 35 years. The state pension amount is certainly not to be sniffed at, and we’re lucky in this country to have state support at all, but it may not be enough to maintain a lifestyle you’ve enjoyed during your working life.So the more we save beforehand, the better.

Free money from your boss!

Second, if you are fortunate enough to have a workplace pension,it’s a great idea to make the most of it. A scheme called auto-enrollment kicked in eight years ago, gradually requiring employers of all sizes to open a workplace pension and contribute to it on behalf of their employees. You, as an employee, are automatically opted in but you can opt out if you want to.

In 2020, your employer contributes a minimum of 3% of your salary,and you pay 5%. But that 3% from your employer does not come out of your salary, it’s equivalent to 3% of your salary. It’s essentially free money from your employer.

Tax-free savings

They say taxes are one of the very few certainties in life, but pension holders get a great deal. You can save up to £40,000 a year, tax-free, in a pension product – this is called your “pension annual allowance”. And that amount is double what you can save in one or more ISAs per year. (Granted, not that many people have £40,000 to put aside every year – but it’s good to know the option is there.)

What if I’m self-employed and don’t have a workplace pension?

You can open a pension yourself! You won’t get the contributions from an employer, but you will receive the tax benefits.

It’s important to do your research before opening a pension (Citizens Advice has useful information on that). How much does it charge? How easy is it to contact the provider? What kind of funds will your money be invested in? You may also want to contact a financial adviser.

As a freelancer, I also know the difficulty of knowing how much I can afford to put in my pension as I don’t always know my income in advance – I just save as much as I can throughout the year, pay my tax bill and put the rest into my pension and ISA.

Your money is protected

I’ve heard plenty people say, “Pensions are doomed. Look at the economy! I’m going to invest in property instead.”

Unlike owning a home, a pension is actually protected by the government, similar to your savings in a bank account, your ISA, or your money in Premium Bonds. This is because the Financial Services Compensation Scheme protects 100% of your pension money if your pension provider fails, and up to 85% protection if your Self-Invested Personal Pension operator fails.

Can I take my money before I retire?

Compared to a savings account or an ISA, it’s much more difficult to get your cash back early from your pension pot – without being landed with a massive tax bill.

The earliest you are able to take out money is age 55, if you have a company or private pension, where a quarter of the pot can be taken tax-free, and the rest used as an income on which you pay income tax.

But generally speaking, just like any money you invest, your pension is supposed to be invested over the long term.  

Tip: Don’t ignore your pension documents

Most pension providers will send you quite a hefty pack of documents once a year, including your annual statement. It will show your projected income at retirement age, which depends on you continuing to earn and save the same amount consistently until retirement age – it is not based on what you have contributed so far!

The documents should also tell you what you’re invested in, the annual costs and any changes in the investments – as well as how they’ve performed recently. (I would generally not get too tied up on the performance side of things, as it’s designed for the very, very long term.)

Thankfully, a lot more pensions now allow you to check up on your account online, and it may be easier to do that than plough through the paper.

‍Can I switch pensions?

If you’re in a workplace scheme you may be able to switch providers and keep your benefits from your employer – this will usually depend on the size of the company you work for and what alternatives are available.

It’s easier to change if you’re self-employed. You will need to a) choose a new pension product and b) tell your old provider where you’re switching to, so that the two companies can work together to do the transfer. Some providers take their sweet time, others are quicker. Just make sure before switching that you will not be charged any exit fees, and will not lose any benefits, especially if the pension is more than 10 years old.

In all scenarios, think carefully about why you want to switch, and get financial advice if you’re unsure.

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Rachael Revesz is a freelance journalist and host of An Honest Account, a podcast about how money affects our lives. You can follow Rachael on Twitter, here.

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What is tax relief?

Tax relief is a government scheme designed to help you plan and save for your retirement.

Depending on the type of pension, tax relief can be a reimbursement of the tax already paid on a pension contribution or it can be the ability to put away for your pension straight out of your wage, before paying any tax.

Tax relief is one of the key benefits of investing in a private Pension such as our Self-Invested Personal Pension (SIPP) but often it can be confusing. I’ve answered some of the key questions we get asked about tax relief and how it works…

How does tax relief work?

Tax relief on employer pensions

For most employer pensions, you will receive a form of tax relief known as tax relief ‘at source’.

The government allows your Pension contributions into an employee Pension to be made before any tax is deducted from your pay packet. Given employer Pension contributions are a percentage of your wage, the amount you contribute is larger than it would be had you already been taxed!

Tax relief on private pensions

Tax relief on a private Pension acts as a top-up to your Pension pot – it essentially reimburses the tax you have already paid on the contributions you make. How much you’ll receive depends on your tax bracket.

Basic-rate tax payers, and those who don’t pay tax, will earn 20% tax relief. Higher-rate tax payers earn 40%.

So, for example, a basic-rate tax payer will have been taxed £20 on every £100 they earn, leaving them with £80 after tax. If they then contribute this £80 to a pension, they will receive £20 tax relief, giving them back the tax they paid on that £100.

Higher-rate tax payers paid 40% tax on their £100, and so receive £40 back for every £60 they contribute to a pension.

For additional-rate income tax payers, who earn more than £150,000 a year, tax relief is 45%, so they get £88.81 for every £100 they pay into their Pension. There are other rules that apply for additional-rate payers depending on specific circumstances.

How can I claim tax relief?

For tax relief at source into an employee pension, you don’t need to do anything to claim tax relief regardless of your tax rate.

Similarly, if you’re contributing to a private Pension such as a Self-Invested Personal Pension (SIPP) and you’re a basic-rate tax payer, you shouldn’t need to do anything to receive your top-up of tax relief – it gets automatically added to your Pension pot.

However, if you’re a higher or additional-rate tax payer, you may have to fill out a tax return to receive tax relief on a private Pension.

What about claiming back tax relief on Pension contributions from previous years?

If you’re a higher or additional rate tax payer and you didn’t claim tax relief on past contributions, there may be something you can do.

The government allows you to claim back tax relief you missed within four years of the end of the tax year you are claiming for. This can be done through a tax return.

Is there a limit to how much I can claim tax relief on?

There is an annual limit on the amount of money that you can pay into a pension and earn tax relief on.

The limit is currently 100% of your earnings up to a maximum of £40,000 a year, and a lifetime limit of £1 million.

If you earn £3,600 or less, the limit is £2,880 (excluding the tax relief you receive).

You will have to pay income tax on any payments into your pension that are over these limits.

Tax relief can make a huge difference to your retirement income and it’s important to be aware of what relief you can claim, so you make the most of what’s available to you for free!

If you’re considering investing into a private Pension and you want to know how and what’s best for you, you can try out our online journey and we’ll give you a personalised recommendation to suit your goals.

• The UK tax system includes breaks for savers and investors.
• This tax relief amounts to free money.
• Make the most of all the savings available.

There’s no such thing as a free lunch, or so they say, but there are ways that savers and investors can enjoy government tax breaks that amount to free money.

We aren’t talking about shady tax avoidance deals, these are incentives that the government has included in the tax system to encourage people to save and invest for the future.

These incentives are known as tax relief.

Paying money into a pension

You can make the most of tax relief when planning for your retirement.

Every time you pay into a personal pension, you get money back from the government in recognition of the tax you’ve already paid on those earnings. How much tax relief you get depends on how much you earn. Think of it as a reward for planning ahead and saving for your future.

For basic-rate income tax payers – that’s anyone who earns between £11,501 and £45,000 every year - the level of tax relief is 20%.

That means that if you put £100 into a pension, the government will give you £25 back as tax relief.

Higher-rate income tax payers, who earn between £45,001 and £150,000 a year, get tax relief at 40%, so get £66.66 from the government for every £100 they pay into their pension.

And additional-rate income tax payers, who earn more than £150,000 a year, get tax relief at 45%, so get £88.81 for every £100 they pay into their pension. There are other rules that apply here depending on specific circumstances.

That’s free money, straight into your pension pot, and you don’t have to make any special arrangements – depending on how much tax you pay and the type of pension you have, your pension company will automatically claim the basic level tax relief of 20%, back from the government for you. However, if you are a higher or additional rate tax payer, you will need to claim your additional tax back from the government yourself.

Either way, it’s free money in your pocket, so it makes sense to take full advantage.

There is an annual limit on the amount of money that you can pay into a pension and earn tax relief on, which is currently 100% of your earnings up to a maximum of £40,000 a year, and a lifetime limit of £1 million. You will have to pay income tax on any payments into your pension that are over these limits.

Before you contribute to a personal pension, it’s important to check whether you can get free money through your workplace pension!

The minimum employer contribution to a workplace pension is currently 3%, however, some employers may offer to match more than the minimum. It could be worth your while to check whether your employer will match additional workplace pension contributions you make.

Getting money out of a pension

Once you retire, you will have to pay tax when getting money out of your pension.

Your state pension, workplace pension, personal pension and any other money you have coming in during your retirement, (for example from investments or a property you own) all count as income, so you have to pay 20% income tax on any payments you get that are over your £11,500 personal allowance. However, there are still ways you can take advantage of tax relief on this money.

If you have a personal or workplace pension, when you retire you can take 25% of your pension pot as a one-off lump sum without paying any tax on it – and it doesn’t count towards your £11,500 personal allowance.

So, for example, if you are a basic rate taxpayer who has contributed £100,000 into your pension pot, you will have received £25,000 tax relief, leaving you with a £125,000 pot.

Once you retire, you can then take £31,250 of that pension pot as a tax free lump sum!

As a basic rate tax payer, the remainders of the pot would be taxed at 20% as and when you take it out. So, if you are thinking of taking any portion of your pension as a lump sum, or a few big payments, it’s always worth taking advice to make sure that you are doing it in the most tax efficient way as you could end up paying more tax than you have to.

Saving with an ISA

An ISA or ‘Individual Savings Account’, is a way to save or invest that is tax free. There are two main types of ISA: Cash ISAs and Stocks and Shares ISAs.

A Cash ISA is essentially the same as putting your money in a bank or building society account, except that any interest earned is protected from the taxman.

A Stocks and Shares ISA, like the one offered by OpenMoney, means your money is invested in assets such as shares in companies and investment funds. Any income or capital gains from investments, including dividends, is sheltered from the taxman. The potential returns from a Stocks and Shares ISA can be much higher than with cash ISAs – research by Moneyfacts found that the average return during 2017 was 11.75%, compared to the 2.15% that the best cash ISA currently pays.

You can pay money into one of each kind of ISA each tax year, up to a total £20,000. The tax year runs from 6th April to 5th April the following year. So, if you haven’t already, you could still use this year’s ISA allowance.

A big benefit of ISAs is that they offer tax breaks but are still very flexible and usually don’t tie your money up for long periods of time. You can switch providers at any time and you can transfer your money from one type of ISA to another, all without losing any tax benefits.

But bear in mind that often, when trying to achieve higher returns you may end up taking more risk, and the value of a stocks and shares ISA could go down as well as up.

If you’re thinking about using this year’s ISA allowance before it’s too late, our online financial advice platform assesses your appetite for risk and capacity for loss to help work out what kind of investment will suit your circumstances best.

You can also book a free appointment with one of our Financial Advisers who are always on hand to help.

Whether you’re making the most of free money through saving or investing, planning for the future shouldn’t be too taxing!

Some interesting research was released recently, which found almost two thirds (64%) of Brits now have more than one pension pot.[1]

And the introduction of automatic enrollment on workplace pensions means this figure is likely to grow.

Whether you have pensions worth £1,000 or £100,000, we can review your current pensions and tell you honestly whether you’re better off consolidating and transferring to us, or staying where you are.

That’s a service that a traditional financial adviser could charge hundreds or even thousands of pounds for, but which we offer for free.

Here, OpenMoney financial advisors Hayley and Will explain why you might want to consolidate your pensions, and what the process is.

Advantages

There are a few strong reasons why consolidating could be right for you.

Hayley Millhouse, our Head of Adviser Services, said: “Probably the biggest advantage is that some pensions have better investment options than others, so your pot can grow bigger and you can have more money when you retire.

“Every pension provider also charges fees, so consolidation can be cheaper - because you only have one pension pot, you only pay one set of fees.

“The amount of fees you pay can be one of the biggest factors affecting the long-term growth of your pension.

“With modern pension providers, you can also track the value of your pot online and see how it is performing at any time.

“And pensions taken out many years ago may no longer be suitable for your circumstances now, so consolidation is an opportunity to get advice and make sure yours suits your current goals and the level of risk you want to take.”

Disadvantages

It’s worth mentioning that consolidation might not always be in your best interest.

Will Lenehan, one of OpenMoney's financial advisers, said: “If you’re lucky enough to have a pension that will pay you a guaranteed income, you may be worse off if you move your money elsewhere, so we wouldn’t recommend that.

“We’d also always advise you to stick with your current workplace pension, as your employer pays in to that too, and you’d miss out on their contribution if you opt out.

“High exit fees might also be a reason not to move money out of a pension scheme, and it could be that your current arrangements are already well suited to your retirement ambitions and provide good value for money, so there’s no great advantage in switching.”

But, if you do decide to look into consolidating your pensions, what happens next?

How it works

Hayley said: “First you need to go through your drawers and find your most recent pension statements.

“HMRC has a really useful free service that can help you track down any pensions you may have forgotten.”

With your permission, we can then contact all your pension providers to get the details of your current schemes.

Will said: “We use that information to write you a personal report that clearly explains if we think consolidating your pensions with us would be in your best interests, as well as any potential drawbacks you should be aware of.

“It gives an overview of your current arrangements, and the investments we’d recommend instead, based on the information you’ve given us about your personal circumstances and your appetite for risk."

“We’ll include a like-for-like comparison of the fees charged by your current plans versus OpenMoney, so you can see which is the cheapest option.”

The report also considers any extra services your current pension providers may offer, like advice. With OpenMoney you get free advice, but most pensions just offer guidance, which means they lay out your options, but don’t make a recommendation.

The next step

Hayley said: “There’s a lot of work involved, so once we have all the information from your current providers, it takes us about a week to create every report. Our review service is free and we’ll only recommend a transfer if we’re absolutely confident it’s in your best interest.

“Then it’s completely up to you what you choose to do next.”

We know that consolidating your pensions can appear complicated and intimidating, which is why we’re trying to make the process as simple as we can.

And the benefits can ultimately mean that you have a pension that gives you peace of mind and the retirement you’ve always saved for.

• Statistics show a worrying gender pension gap that could leave women struggling in retirement.
• Women have significantly less pensions savings than men - £32,950 on average compared with £54,409 for men*.
• Women leave it a lot later in life to begin saving – 21 is the median age for men but it’s 29 for women.

The pay gap is a hot political issue, one which is often in the headlines following releases of pay information from organisations like the BBC and the Bank of England.

While there is still a long way to go before men and women are paid equally, the long-term trend seems to be heading in the right direction. The median UK gender pay gap has almost halved since the government began collecting data on it in 1997 and it now stands at 9.1%*.

But there is another important area where women are less well off than their male counterparts - saving for their retirement.

According to YouGov figures from August last year, men have a lot more money held in pensions, with the average male pension pot reaching £53,409 compared with just £32,950 for women.

That’s the mean average, at least. The median (imagine everyone lined up in order of how much they have saved and looking at the person right in the middle) reveals a much more startling difference. Half of men have more than £37,000 invested in a pension, while half of women have less than £17,000.

While much of this disparity can be explained by men’s higher earnings, the statistics reveal another worrying difference – women tend to leave it significantly later in life to begin paying into a pension.

Again, according to YouGov, the median age at which men start saving for retirement is 21, while for women it is 29. That means that millions of women are leaving it very late in life to begin putting away any pension savings at all, risking significant financial challenges as they grow older.

Never too soon

When it comes to building up a pension, the sooner you start, the better. This is just as true and arguably even more important for those with more modest incomes, as it is much easier to build a large saving by putting away smaller amounts over a long period of time.

Of course, it’s vital to choose an investment strategy that is right for your circumstances, and pensions are a long-term saving that must be balanced against short and medium-term financial goals. At OpenMoney, we always take your specific circumstances into account before making any recommendations.

It’s also important to regularly review your contributions to ensure they reflect your circumstances as they change. For many people, income tends to increase as they progress in their career, and it’s important that pension contributions grow alongside this. Checking in every 12 months will ensure you don’t neglect your fund and that it keeps growing at the right rate for you.

There is clearly an awareness-raising job to do in encouraging young people, and especially young women, to think carefully about saving for their future. If the gender pension gap doesn’t begin to close, we risk a generation of women reaching retirement age without the financial support they need.

*According to a YouGov poll of 2207 adults conducted in August 2007. The results figures have been weighted and are representative of all GB adults (aged 18+).

• It’s never too early to start saving for your retirement – the sooner the better.
• How much you need in retirement depends on the lifestyle you want to live.
• We explore how much you might need for your golden years.

Long story short - there is no set amount of money you need to retire. Many factors contribute towards how much you’ll need to live comfortably in later life but having a plan from early on can help reduce stress and money worries later down the line.

In this blog, we’re going to look at what you might need to do to prepare for the life you want to lead after you retire and explore how every situation is different.

When do you want to retire?

Data published by the DWP (Department for Work and Pensions)[1] tells us that the average retirement age in the UK for men and women is 65 and 63 respectively. However, the age you decide retire is down to personal choice.

If you have enough money to tide you over until you can access your SIPP at 55 or State Pension at 65 (increasing to 68 years old by 2039), then you can technically retire at whatever age you decide to. Although, just because you can, doesn’t mean that you should.

Planning when to retire is a balancing act between when you want to retire and how much you can comfortably afford to save for your retirement. If you want to give yourself extra time to save or reduce your monthly contribution to take the pressure off, you could choose to move back your retirement date.

How much will I need for my retirement?

How much you need in retirement depends on the lifestyle you want to live.

Keeping up the same lifestyle as you have when you’re fully employed might seem a little farfetched, but it may be achievable if you plan ahead. Your outgoings are likely to go down quite a bit. You may have paid off your mortgage, have no dependants and cut down on work-related costs like commuting, lunches or your morning coffee.

According to consumer group Which?[2], a couple who are retired would need a household income of £26,000 per year to cover basic living expenses, such as groceries, utility costs, European travel and more. However, if you plan to live a more luxurious lifestyle with comforts like a new car every 5 years or an annual long-haul holiday, you’d be looking at a yearly household income of £39,000.

How much are you able to save before retirement age?

You can decide when you want to retire and how much money you’d like to save for your retirement, but ultimately, how much you have comes down to how much you’re able to save.

It’s a good idea to think about how much you can save each month now and think about how much you may be able to save in the future. It won’t be concrete, but you to give yourself an idea of what could be achievable for you – rather than bury your head in the sand!

Calculated by research company CLSA [3], people who put £2500 per year into a pension from the age of 21 and 30 years of age (10 years) and then leave their pension pot untouched until they reach 70 will have a bigger pension pot than those who begin saving £2500 into their pension each year at 31 and carry on contributing the same amount until 70 years old (40 years) – all because of compound interest. No wonder Albert Einstein called it “the 8th wonder of the world”!

It’s not just how much you can save, it’s more about how soon you start saving into a pension.

How to get more from your pension

That’s what we all want to do – make our pension go further. There are couple of ways you can do this.

1. Get free money from the tax man Every time you pay into a personal pension like our Self-Invested Personal Pension (SIPP), you get money back from the government in recognition of the tax you’ve already paid on those earnings. How much tax relief you get depends on how much you earn. That’s free money, straight into your pension pot!
2. Combine and conquer If you've worked for various employers over the course of your career, you’ve probably have several different pension pots. Consolidating them all into one place could help you better manage monitor and manage your money, and it could also help to reduce the charges you pay.
   Rather than paying various fees for different pots, your whole pension pot can be managed by one low cost provider, like us – a win-win! If you’re not sure whether you’d benefit from consolidating your pensions, we can also review your pots for free and tell you whether it’s in your best interest to transfer them to us.

• Consumer debt is a growing worry.
• Don’t ignore it – it won’t go away!
• There are five simple ways you can take control.

Statistics about consumer debt are always popping up in the media and with over £1.5 trillion owed by individuals in the UK as of last year there’s no wonder it’s a talking point.[1a]

Cconsumer credit is up to £207 billion as of December 2017, with research suggesting per household this is £2,567 of credit card debt. [1b]

But the easy availability of products like credit cards, with low minimum repayments but high credit limits, make it all too easy to become trapped in cycle of debt.

A shocking 276 people are declared insolvent or bankrupt every day. [1c] So it’s never too early to reassess our attitude towards debt.

Borrowing money isn’t necessarily a bad thing, but if you find yourself borrowing to pay your monthly bills – and that includes using your credit card or dipping in to your overdraft – that’s not going to be sustainable in the long run.

So how can you burst out of the debt bubble?

Don’t be complacent or bury your head in the sand - persistent debt can be hard to move on from, but the earlier you address the situation, the less painful it will be.

Here are five rules to live by that can help you take control of your debt:

1. Borrowing and bills.

We believe you shouldn’t borrow money to buy something that doesn’t last as long as it takes to pay for. So, borrowing to buy a new kitchen could work well, but try not to take on debt to pay this month’s gas bill, which should usually be covered by your income.

2. More than the minimum

If you really are serious about getting out of debt, you should really try to pay more than just the minimum amount needed on your credit or store card every month, even if it’s just by small amount. Pay as much as you can realistically afford.

3. It’s best to budget

Set yourself a budget by analysing all your outgoings to make sure you are living within your means. If you are getting into debt because you’re spending more than you’re earning, it’s time to reduce your costs.

Maybe take a packed lunch to work, or make your own coffee? Our free OpenMoney app can really help you stick to your budget.

4. Don’t act on impulse

If you have money in your pocket, it can be all too easy to give in to temptation and overspend, but you should always try to plan your purchases and compare prices online to make sure you get the best deal, especially on big ticket items like appliances or furniture.

5. No excuses

If you’re going to get serious about getting out of debt, it’s going to take discipline. A few months of denying yourself some small pleasures will all seem worth it when you can enjoy the peace of mind of being debt free.

Good luck!

The new tax year begins today, 6th April 2020, which also marks the day your personal Individual Saving Account (ISA) allowance resets.

We know that the investment world can be a confusing place for potential investors, particularly with the current turbulence in the markets, so we’re answering the most common questions about ISAs for those people who are looking to begin or continue investing to achieve their medium to long-term financial goals,  

If you want to learn more about how the recent market changes could impact decisions around investing, head to our Q&A blog here

What is my 2020/21 ISA allowance?

Your personal ISA allowance for 2020/21 is £20,000, which has remained unchanged from the previous year.

‍
What types of ISA are available to me?

There are several types of ISAs available to adults. However, the four most common types of ISAs are;

• Cash ISA,
• Stocks & Shares ISA
• Innovative Finance ISA
• Lifetime ISA (LISA)

All these ISAs will count towards your yearly personal allowance, so it’s important to know how allowances work.  

Parents can also contribute to a Junior ISA (JISA) for their children, but this doesn’t affect their own personal ISA allowance.

Is my ISA allowance split across all types of ISAs? Or is it £20,000 per ISA?

Your ISA allowance can be split across the other different types of ISAs and the total amount that you can contribute into your ISAs collectively is £20,000.

To explain this a little better, read our examples below.  

Method 1 – Go all in
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Use up to the full £20,000 ISA allowance in one type of ISA - This can be within a Cash ISA, Stocks & Shares ISA or an Innovative Finance ISA. You cannot invest your full allowance towards a LISA as they have a maximum allowance of £4,000 per tax year due to the 25% government bonus you receive on contributions. ‍

Method 2 - Mix and match your ISAs
‍

Split your allowance between different types of ISAs. You can invest a maximum of £4,000 towards a LISA and the remaining £16,000 can be split between the other types of ISAs. For example, that could look like - £10,000 in a Stock & Shares ISA, £6,000 in a Cash ISA and £4,000 in a LISA.

Here at OpenMoney, we know that the majority of people don’t have £20,000 to invest each year! So, you can invest in a Stocks & Shares ISA with us from as little as £1! You can find out more about our investments here.

Can I contribute more than one ISA of the same type within the same tax year?

Unfortunately, you can’t. If you invest in a cash ISA in the 2020/2021 tax year, you will then not be able to contribute into another cash ISA in the same tax year. The same rule applies for other types of ISAs also.

You can contribute to several different types of ISAs in the same year. ‍

What are the tax benefits of a Stocks & Shares ISA?

When investing into a Stocks & Shares ISA there are several tax benefits that come with it:

• Any interest or returns (sometimes referred to as ‘capital gains’) you make on an ISA are always tax free
  
• The money in your ISA won’t be subject to any tax when it’s withdrawn
  

Can I transfer my ISA to another provider?  

Yes, although there are some restrictions when it comes to transferring ISAs. If you’ve already contributed towards an ISA during the current tax year and you wanted to transfer to a different provider, you must transfer all the contributions made in that current tax year.

For the money you invested in previous tax years, you can make a choice on whether you wish to transfer all or part of these savings.

To switch your providers, contact the ISA provider you want to move to and fill out an ISA transfer form.  

Remember, some providers may charge you a fee when transferring.  

Here at OpenMoney we offer a free transfer review and we will only tell you to transfer to us if it’s in your best interests - then we’ll manage the whole process for you.

When does your allowance restart?

An ISA allowance resets on a yearly basis at the start of a new tax year, which is always the 6th April. For the 2021/22 tax year the maximum ISA allowance will remain at £20,000.

If I don’t use my allowance, can I carry it forward to next year?

When your ISA allowance resets on the 6th April, you can’t carry over any unused allowance from the previous tax year, so it’s important to make the most out of your annual allowance before the deadline.  

That’s our round-up of the most asked ISA questions for the 2020/21 tax year. If you want to read more about ISAs, you can check out our ISAs explained blog series!  

If you’ve ever considered saving your money for the future - whether that be for a house, wedding or a car - you’ve probably heard the term ‘ISA’. ISA stands for ‘Individual Savings Account’ and is exactly what it says on the tin – a financial product designed to help individuals save.

Before opening an ISA, it’s important to understand what they are and how they can affect your financial situation. Continue reading our blog to find out the answers to questions like; how many ISAs you can have, what are the benefits of an ISA are, and what types of ISA there are.

How do ISAs work?

 ISAs are like savings accounts but come with additional benefits like tax allowances and bonuses, depending on the type of ISA you open. For example, Lifetime ISAs (LISAs) give individuals a 25% bonus on contributions made up to the value of £1,000, but they can only be used towards a first house or retirement.

The main benefit of an ISA product is the annual tax allowance you receive when saving. Any interest or gains made in an ISA is not subject to taxation, meaning you get to keep any money you make as long as you stay within your allowance.

ISA Allowances

 Each individual has an ISA allowance of £20,000 in the 2019/20 tax year. This means between your ISAs, you can’t deposit more than £20,000 in a tax year. However, you are able to split your allowance between different types of ISA. This means you could deposit half in a Cash ISA and half in a Stocks & Shares ISA, but you couldn’t split the money between two Stocks & Shares ISAs.

For a Junior ISA (JISA), the allowance is lower at £4,368. This does not affect your personal ISA allowance of £20,000 as the product is held against a child’s name.

How many ISAs can you have?

You can open and contribute to more than one type of ISA in each tax year, but you’re not able to contribute to another ISA of the same type (confusing, we know). So, if you contributed to a cash ISA in 2019/20, you couldn’t contribute to another until 2020/21 tax year, but you could contribute to a stocks & shares ISA in 2019/20.

JISAs are held against a child’s name which means you can also contribute to that without affecting your allowance, but that money is only accessible by the child once they reach 18.

What are the different types of ISA?

Cash ISA

Cash ISAs are often offered by bank and building societies. They are similar to normal savings accounts and offer a fixed rate of return on your contributions.

Cash ISAs can be good for short-term savings as they come at no risk. However, be careful of which type of Cash ISA you choose as some may have charges for withdrawing. For Instant Access ISAs, there should be no penalty, however for Fixed Rate ISAs you may face some penalty if you withdraw before the set period.

Stocks & Shares ISA

With a Stocks & Shares ISA your money is invested in company shares, investment funds and sometimes cash. They are riskier than Cash ISAs as you could get back less than you invested, but they do have the potential to have higher returns.

Stocks & Shares ISA are more suited to long term goals as you’re able to balance out the ups and downs of the stock market over time.

If you invest with OpenMoney, you’d be investing in a Stocks & Shares ISA. Find out more here.

Lifetime ISA (LISA)

Lifetime ISAs were introduced in April 2017 so are relatively new in the world of ISAs. Lifetime ISAs are a little different to cash and stocks ISAs as they’re designed to help first time home buyers and those wishing to save for retirement.

A LISA can be either a cash or stocks and shares ISA and can be opened by people ages 18 to 40. The limit for a LISA is lower at £4,000 but the government add a 25% bonus to any contributions up to the value of £1,000.

The bonus must be used against your first home or can only be accessed when you’re 60. If you use the money for anything else, you will be charged and are likely to get less money back than you put in.

Junior ISA (JISA)

Junior ISAs are designed to let parents invest for a child below the age of 18. The limit is £4,368 per child for the current tax year.

As with a LISA, a JISA can be cash or stocks and shares, with any interest paid tax-free.

JISAs are a great way to save long-term for your children, but parents and adults should be aware that the account belongs to the child and can only be accessed by them at the age of 18.

OpenMoney ISA

It’s important that you understand the impact an ISA will have on your financial situation before you open one.

If you’re interested in opening a Stocks & Shares ISA, you can take the OpenMoney financial questionnaire to find out if you’re currently in a healthy position to invest.To take the quiz, click Get Started.

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• The UK tax system includes breaks for savers and investors.
• This tax relief amounts to free money.
• Make the most of all the savings available.

There’s no such thing as a free lunch, or so they say, but there are ways that savers and investors can enjoy government tax breaks that amount to free money.

We aren’t talking about shady tax avoidance deals, these are incentives that the government has included in the tax system to encourage people to save and invest for the future.

These incentives are known as tax relief.

Paying money into a pension

You can make the most of tax relief when planning for your retirement.

Every time you pay into a personal pension, you get money back from the government in recognition of the tax you’ve already paid on those earnings. How much tax relief you get depends on how much you earn. Think of it as a reward for planning ahead and saving for your future.

For basic-rate income tax payers – that’s anyone who earns between £11,501 and £45,000 every year - the level of tax relief is 20%.

That means that if you put £100 into a pension, the government will give you £25 back as tax relief.

Higher-rate income tax payers, who earn between £45,001 and £150,000 a year, get tax relief at 40%, so get £66.66 from the government for every £100 they pay into their pension.

And additional-rate income tax payers, who earn more than £150,000 a year, get tax relief at 45%, so get £88.81 for every £100 they pay into their pension. There are other rules that apply here depending on specific circumstances.

That’s free money, straight into your pension pot, and you don’t have to make any special arrangements – depending on how much tax you pay and the type of pension you have, your pension company will automatically claim the basic level tax relief of 20%, back from the government for you. However, if you are a higher or additional rate tax payer, you will need to claim your additional tax back from the government yourself.

Either way, it’s free money in your pocket, so it makes sense to take full advantage.

There is an annual limit on the amount of money that you can pay into a pension and earn tax relief on, which is currently 100% of your earnings up to a maximum of £40,000 a year, and a lifetime limit of £1 million. You will have to pay income tax on any payments into your pension that are over these limits.

Before you contribute to a personal pension, it’s important to check whether you can get free money through your workplace pension!

The minimum employer contribution to a workplace pension is currently 3%, however, some employers may offer to match more than the minimum. It could be worth your while to check whether your employer will match additional workplace pension contributions you make.

Getting money out of a pension

Once you retire, you will have to pay tax when getting money out of your pension.

Your state pension, workplace pension, personal pension and any other money you have coming in during your retirement, (for example from investments or a property you own) all count as income, so you have to pay 20% income tax on any payments you get that are over your £11,500 personal allowance. However, there are still ways you can take advantage of tax relief on this money.

If you have a personal or workplace pension, when you retire you can take 25% of your pension pot as a one-off lump sum without paying any tax on it – and it doesn’t count towards your £11,500 personal allowance.

So, for example, if you are a basic rate taxpayer who has contributed £100,000 into your pension pot, you will have received £25,000 tax relief, leaving you with a £125,000 pot.

Once you retire, you can then take £31,250 of that pension pot as a tax free lump sum!

As a basic rate tax payer, the remainders of the pot would be taxed at 20% as and when you take it out. So, if you are thinking of taking any portion of your pension as a lump sum, or a few big payments, it’s always worth taking advice to make sure that you are doing it in the most tax efficient way as you could end up paying more tax than you have to.

Saving with an ISA

An ISA or ‘Individual Savings Account’, is a way to save or invest that is tax free. There are two main types of ISA: Cash ISAs and Stocks and Shares ISAs.

A Cash ISA is essentially the same as putting your money in a bank or building society account, except that any interest earned is protected from the taxman.

A Stocks and Shares ISA, like the one offered by OpenMoney, means your money is invested in assets such as shares in companies and investment funds. Any income or capital gains from investments, including dividends, is sheltered from the taxman. The potential returns from a Stocks and Shares ISA can be much higher than with cash ISAs – research by Moneyfacts found that the average return during 2017 was 11.75%, compared to the 2.15% that the best cash ISA currently pays.

You can pay money into one of each kind of ISA each tax year, up to a total £20,000. The tax year runs from 6th April to 5th April the following year. So, if you haven’t already, you could still use this year’s ISA allowance.

A big benefit of ISAs is that they offer tax breaks but are still very flexible and usually don’t tie your money up for long periods of time. You can switch providers at any time and you can transfer your money from one type of ISA to another, all without losing any tax benefits.

But bear in mind that often, when trying to achieve higher returns you may end up taking more risk, and the value of a stocks and shares ISA could go down as well as up.

If you’re thinking about using this year’s ISA allowance before it’s too late, our online financial advice platform assesses your appetite for risk and capacity for loss to help work out what kind of investment will suit your circumstances best.

You can also book a free appointment with one of our Financial Advisers who are always on hand to help.

Whether you’re making the most of free money through saving or investing, planning for the future shouldn’t be too taxing!

• It’s always good to know what your investments consist of.
• Busting the jargon can help you get your head around the world of investing.
• We delve into what you need to know about your portfolio with OpenMoney.

Our investors often ask what their investments are made up of or what they’re actually investing in. The short answer for this is that your money is invested into different ‘asset classes’ - but what actually are ‘asset classes’?

Investing and the world of financial advice can be confusing, especially for first time investors. Many companies try to overcomplicate things even further by using lots of unnecessary jargon and complex fee structures.

Here at OpenMoney, we want our investors to feel confident and comfortable with their investments.

In this blog, we’ll break down your investment portfolio with us.

Let’s start with our funds

When you invest with OpenMoney, your money is put into something called an “index fund”.

Essentially, an index fund is one big pot of different investors’ money all pooled together that tracks a certain index. Depending on the type of fund, the money is then used to invest in the 4 main different asset classes; cash, properties, bonds and equities.

What is an “asset class”?

The official definition [1] of an asset class is “a broad group of securities or investments that have similar financial characteristics”.

As simply as we can put it, it’s a type of investment. With OpenMoney, there are 4 asset classes your money will be invested into:

1. Cash The “safest” of all the asset classes. Holding your money in cash is almost risk free, but it has limited returns. We use cash as part of our investors portfolio to control the risk level of the portfolio. A higher risk portfolio will have less cash investment, and a low risk portfolio will have more.

2. Properties A misconception here is that you are investing in the brick and mortar of an actual house. Instead, the property fund invests in equities of leading property companies listed on exchanges all over the world.

3. Bonds Bonds can be quite a confusing asset class until you break it down.

A bond is a loan or a debt issued by governments and companies. When an investor buys a bond they are essentially loaning money to a company or government for a fixed period.

In exchange, the company or government may pay interest payments called coupons or give the investor more money than they paid for the bond when the fixed period is over.

4. Equities Equities are considered to be one of the highest risk assets our portfolios invest in. Owning an equity, stock or share (which are all the same thing) means you own a small part of a company.

Equities can go up and down in value, depending on how well the company is doing (or is expected to do) and some of them pay their investors dividends which is like interest, but not always guaranteed. Some of the companies that you’ll be investing in with OpenMoney could include; Amazon, Facebook, Vodafone and many more household brands from around the world.

How does risk level impact my investment?

At OpenMoney, we have 3 different investment portfolios, going from lowest risk, medium risk and then highest risk.

With each portfolio, the investment is split across different funds which in turn invest in different asset classes.

With the lowest risk portfolio, we keep 22% of your investment in cash, which does have the lowest potential for returns but it also lowers the overall investment risk. Equities take 24% of the investment and fixed interest bonds take 54%. Our lowest risk portfolio doesn’t invest in property.

You start to see changes when you look at our medium risk portfolio. Cash is lowered to 6%, as this can free up more of the investment for the higher risk asset classes. We start to invest in property with it taking 5% of the money. The amount invested in fixed interest bonds almost halves to 28%, and we push the remaining 61% into equities. That’s almost triple of what we would invest with our lowest risk portfolio. This gives our investors a more balanced investment of low and higher risk assets.

Our final portfolio is the highest risk. It invests the lion’s share of the money at 89% into equities. The remaining 11% is shared between property (5%), cash (3%) and fixed interest bonds (also 3%).

What is diversification?

“Diversification” is another piece of jargon that is quite simple when you break it down.

In the simplest form, it’s spreading your money into different investments so you’re not putting all your eggs in one basket. With shares for example, it can mean spreading the investment between companies in different industries or investing in businesses in different markets across the globe.

Diversification within investment helps to minimise and control risk. For example, if you invest £1000 into one company and then it dips, your total funds take a dip. However, if you split that in 2 and have £500 in two different companies, one may dip but the other could prosper, meaning that your total fund may not suffer as much from the loss.

If you think you might be ready to start investing, we can tell you whether investing is right for you. You cna also check out our blog where we answer more common questions about investing.

ISAs (Individual Savings Accounts) have proved incredibly popular with savers since they were first launched in 1999, with hundreds of billions of pounds now squirrelled away in these tax-exempt accounts.

There are many different types of ISA, including Help to Buy, Lifetime and innovative finance ISAs. But the two main types are Cash ISAs and Stocks and Shares ISAs.

A Cash ISA is just like putting your money in a bank or building society account, except you don’t pay tax on any interest earned.

With a Stocks and Shares ISA, like those we offer at OpenMoney, your money is invested in companies and investment funds, and again you pay no tax on any profits.

Whichever kind of ISA you choose, you can only pay in up to £20,000 a year.

ISAs are a fantastic resource for savers, but, more recently, the economic climate has shifted and Cash ISA holders have seen their appeal start to fade. There is one big reason for this.

Interest rates were at a record low for a long time, so Cash ISAs weren’t earning very much money. 2017 was the worst year on record for Cash ISAs since they launched, with some accounts paying just a few pennies interest on savings of £1,000.[1]

However, Stocks and Shares ISAs have bucked that trend. According to industry data from Lipper, the average Stocks and Shares ISA generated a return of 11.75% in 2017 - more than 10 times what the average Cash ISA earned.[2]

It’s important to point out that last year’s strong performance is no guarantee of more growth in the future, and that a Stocks and Shares ISA could even lose money in any given year if the stock market performs particularly badly.

But, for those saving for the long term, a Stocks and Shares ISA can be a flexible and profitable option.

So, with so many people looking for alternatives to Cash ISAs that may offer a better return, we look to answer some of the burning questions they are asking about Stocks and Shares ISAs.

Is a Stocks and Shares ISA worth it?

Looking back on 2017, it’s hard not to conclude that a Stocks and Shares ISA represents good value for money, especially when compared with a Cash ISA or bank savings account, but it’s important to look at what charges are attached.

The costs of investing into a Stocks and Shares ISA varies from provider to provider, and most will either charge you a flat annual fee or a percentage of the total value of your investment.

At OpenMoney our charges are less than 0.50%, with no upfront fee, which could mean you keep more of your money than with other investments. Better still, this 0.50% fee covers everything, so there’s no hidden charges in the small print for you to worry about.

Is a Stocks and Shares ISA tax free?

In short – yes! You don't pay capital gains tax on gains made within a Stocks and Shares ISA, dividend income from stocks and shares held in this type of ISA is tax free and interest paid on corporate bonds or bond funds held in a Stocks and Shares ISA is tax free too.

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Is a Stocks and Shares ISA safe?

Any investment in stocks and shares comes with risk. The value of stocks and shares can go up and down every day.

But, looking at the last 20 years, the value of the UK stock market has grown by 68%, or 3.4% a year on average. [3]

And, with an OpenMoney Stocks and Shares ISA, your money is invested in companies around the world, as well as other assets like property, so the risk of any one investment performing badly and pushing you into a loss is reduced.

Here at OpenMoney we offer three portfolios with different levels of risk, so you can find one that’s right for you.

Can you withdraw money from a Stocks and Shares ISA?

One of the most useful features of a Stocks and Shares ISA is their flexibility. You're not locked in and you can withdraw your money whenever you need it.

However, a commonly quoted rule of thumb is that you shouldn’t put any money into a Stocks and Shares ISA that you think you will need to withdraw within five years.

That gives you enough time to ride out any peaks or troughs in the market that could see you make a loss on your investment.

Can I transfer from one ISA to another?

Yes, with some restrictions. If you already have a Stocks and Shares ISA or a Cash ISA with someone else, you can transfer it to OpenMoney – or any other provider – at any time.

You can also transfer your money between a Cash ISA and a Stocks and Shares ISA at any time, and vice versa.

But if you want to transfer money you’ve invested in an ISA during the current year, you must transfer all of it.

For money you’ve invested in an ISA during previous years, you can choose to transfer all or part of your savings.

To find out if investing your money into an ISA is right for you, just answer some quick questions.

• It’s never too soon to think about investing.
• But it’s worth thinking about what you want to achieve.
• We’ll ask about your goals to help create an investment strategy that’s right for you.

So, you’re thinking about investing?

It’s never too soon to start, but it’s helpful to consider why you want to invest first.

You might just want to build up your savings in an investment that’s suitable for you or you might have financial goals for yourself or for your loved ones in mind, such as buying a house, getting married or just having a comfortable retirement.

If your recommendation from us is that you could be investing your money then we will be able to guide you through the process. This includes asking you about these goals and when you might want to achieve them buy. This helps us to create an investment strategy that’s right for you.

Do the right thing

One of our core values is to always do what’s best for our customers and one of the ways we stick to that principle is by only recommending investing if it's right for your circumstances and you can afford it.

If you have expensive debts we might tell you investing with us isn't right for you right now, as we think you’d be better off paying what you owe first.

We might recommend that you hold a "rainy-day" fund of at least three months’ wages, just in case of any unsuspected events, like illness or unemployment.

We also won’t recommend that you invest with us if your goal is within the next 5 years. Whilst you can withdraw your investment at any time, we consider investing with us to be a medium to long term solution (at least 5 – 10 years).

How it works

When you register as an investor with us, we’ll ask you a few questions about your financial situation and attitude such as your income, outgoings, debts and attitude to risk. This information helps ensure we recommend an investment portfolio that’s right for you, by balancing your appetite for risk with your desire for returns.

If you register as an investor with OpenMoney, we’ll ask you about these goals and when you might want to achieve them to help us create an investment strategy that’s right for you.

Foresight with flexibility

Before you commit any cash, we’ll show you how your investments could perform by calculating the projected annual return, after fees and inflation, so you can imagine what your investment could be worth for years to come.

As all of our funds are tracker funds, we’ll monitor how they perform against the relevant benchmark and, if we need to, we’ll buy or sell some of the investments to maintain your original allocation – which is known as ‘rebalancing’. This will help ensure that your investment remains suitable for you.

We want to make sure we’re doing the best we can for you. So, if your situation or investment goals change, or if you just want to check your investment is still working for you, you can book an appointment with one of our qualified financial advisers for free.

You’ll also pay less than 0.50% in fees annually; a fee which includes as many adviser appointments as you need, at no extra cost.

As with most investments, we can’t guarantee your returns and your capital is at risk, however by continuing to make sure your investments are suitable for you and the amount of risk you’re willing to take, we will try our best to help you achieve your financial goals.

We've answered the most common questions when it comes to investing in our blog.

• Consumer debt is a growing worry.
• Don’t ignore it – it won’t go away!
• There are five simple ways you can take control.

Statistics about consumer debt are always popping up in the media and with over £1.5 trillion owed by individuals in the UK as of last year there’s no wonder it’s a talking point.[1a]

Cconsumer credit is up to £207 billion as of December 2017, with research suggesting per household this is £2,567 of credit card debt. [1b]

But the easy availability of products like credit cards, with low minimum repayments but high credit limits, make it all too easy to become trapped in cycle of debt.

A shocking 276 people are declared insolvent or bankrupt every day. [1c] So it’s never too early to reassess our attitude towards debt.

Borrowing money isn’t necessarily a bad thing, but if you find yourself borrowing to pay your monthly bills – and that includes using your credit card or dipping in to your overdraft – that’s not going to be sustainable in the long run.

So how can you burst out of the debt bubble?

Don’t be complacent or bury your head in the sand - persistent debt can be hard to move on from, but the earlier you address the situation, the less painful it will be.

Here are five rules to live by that can help you take control of your debt:

1. Borrowing and bills.

We believe you shouldn’t borrow money to buy something that doesn’t last as long as it takes to pay for. So, borrowing to buy a new kitchen could work well, but try not to take on debt to pay this month’s gas bill, which should usually be covered by your income.

2. More than the minimum

If you really are serious about getting out of debt, you should really try to pay more than just the minimum amount needed on your credit or store card every month, even if it’s just by small amount. Pay as much as you can realistically afford.

3. It’s best to budget

Set yourself a budget by analysing all your outgoings to make sure you are living within your means. If you are getting into debt because you’re spending more than you’re earning, it’s time to reduce your costs.

Maybe take a packed lunch to work, or make your own coffee? Our free OpenMoney app can really help you stick to your budget.

4. Don’t act on impulse

If you have money in your pocket, it can be all too easy to give in to temptation and overspend, but you should always try to plan your purchases and compare prices online to make sure you get the best deal, especially on big ticket items like appliances or furniture.

5. No excuses

If you’re going to get serious about getting out of debt, it’s going to take discipline. A few months of denying yourself some small pleasures will all seem worth it when you can enjoy the peace of mind of being debt free.

Good luck!

• Investing should be open to all, and we believe everyone should be able to do it with confidence.
• But we understand that the investment world can be intimidating.
• We’re answering some questions that you might be afraid to ask.

For a long time, it may have seemed that investing was only easily accessible to wealthier people with more disposable cash than the average household.

It’s still estimated that only around 20 per cent of UK households invest in shares [1], but at OpenMoney, we want to make investing accessible and affordable, giving everyone the power to make the most of their money.

We recognise that committing your cash to something new requires confidence, so we’ve gone back to basics to answer some of the not-so-stupid questions that first-time investors might be embarrassed to ask.

How much money should I invest?

How much money you decide to invest depends on what your investment goals are and what your current financial situation is. With some online investment platforms such as ours, you can invest anything from £1 so there really is no amount too small.

When you join OpenMoney, our dedicated financial advisers are on hand to help you make the right choices on your investment journey.

We can advise you on how to best manage and grow your money to achieve your goals, and we won’t recommend investing unless it’s right for your current circumstances.

How long should I invest for?

There’s no right or wrong answer here, but broadly speaking, investing your money should be a medium to long term commitment. We recommend that you invest for at least 5 years without dipping into or withdrawing your funds.

Any shorter than that, and you may be better off leaving your funds in cash savings where they will be easily accessible and won’t be subject to short term market fluctuations.

Don’t worry though, if something unexpected happens and you need access to your funds, here at OpenMoney we don’t have a minimum term, so you’re never locked-in.

Of course, the longer you can invest for the better. Your funds will have more potential to grow, benefit from the magic of compound interest and will have a better chance at riding out any market fluctuations that might occur.

What am I investing in?

At OpenMoney we invest your cash into funds (if you’re not sure what a fund is, or find financial terminology generally confusing, take a look at our handy jargon buster).

These funds own shares in various companies across the globe. They spread your investment across a large number of businesses to reduce the risk to you - think of the phrase ‘don’t put all your eggs in one basket’.

If those companies grow and become more valuable, so does your investment. When you exit your investment, the shares may be sold for more than you originally paid for them and you would make a profit.

We work with three of the five biggest asset management companies in the world: Vanguard, Fidelity and Blackrock. -they manage assets worth nearly £8 trillion!

To give you peace of mind OpenMoney is covered by the Financial Services Compensation Scheme which may provide protection to consumers up to a certain limit.

How much profit will I make?

That is impossible to tell.

No one can predict how the stock market will perform in the future, but we know that you can maximise your profits by minimising the cost of investing.

Why do I pay fees?

All investments come with costs. They are usually in the form of annual fees, calculated as a percentage of the total amount you have invested.

Some investments are far more expensive than others, and can include management charges, administration charges, platform fees, entry and exit fees, and advice fees. These charges can really stack up.

We have no up-front costs, so you keep more of the money you invest from day one. Furthermore, our charges are capped at no more than 0.5% a year, whereas a traditional financial adviser might charge more like 2.5%. [2]

This means, if you had £10,000 to invest, after 10 years you would have saved almost £2,000 in fees with OpenMoney, compared to traditional adviser.

Can I lose money?

With any investment, although you may stand to make a healthy return, there’s always the chance that you may get back less than you put in.

For example, if you had £1,000 in 1997, you could have put it in a bank savings account, where it would have earned interest every year. By now it would be worth £2,088. Not a bad return at all. [3]

However, if you had invested that £1,000 in shares on the UK stock market, and reinvested your profits every year, after 20 years it would return over twice as much - £3,172! [4]

Should I get financial advice before investing?

Decisions about your long-term financial future are important, so it’s a good idea to get advice.

When you join OpenMoney, we’ll ask you questions about your financial situation, your attitude to risk and investment experience to help us work out the best financial plan to achieve your investment goals.

We offer restricted advice, so depending on your answers, we might suggest you open a pension, put money in an investment fund or we might advise you not to invest, and to pay off any debts first.

You can then book an appointment with one of our financial advisers to talk through our personalised advice and answer any questions you might have - at no added cost.

Did you know, your child could have a long-forgotten trust fund set up by the government?

According to This is Money there are currently over one million missing Child Trust Funds (CTFs) that need claiming! It’s important to check if your child has a trust fund, otherwise they could be missing out on hundreds of pounds when they turn 18.

These government funded CTF accounts were set up with an initial amount of up to £500 - with £250 being the average. That’s a sizeable chunk of money that could make a difference to your children’s lives, so it’s worth tracking the accounts down to see what is available to your child.

How to track down your lost CTF –

If you’re unsure if your child had a CTF or where it was held, you will be able to find out by following the steps that HMRC have set out:

- Log in with your government gateway user ID and password. If you do not have one, then you will need to sign up.

- You’ll be asked a few personal questions to determine if you are the trustee of your child’s trust fund.

- HMRC will send you details of who your child’s trust fund provider is via post within 3 weeks of them receiving your request.

- HMRC will contact you for more information if you’ve adopted a child or if a court has given you parental responsibility for them.

It’s a very simple and straightforward process that could give your child’s savings a boost when they turn 18! If you would like to know more about CTFs, you can read our blog on Child Trust Funds and what they are here. If your child does have a CTF, you can read more about what to do with it once it has matured, here.

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If you became a parent between 2002 and 2011 you could claim your child’s lost Child Trust Fund. Over 6 million CTF accounts were opened by the government in a bid to encourage saving for a child’s future (source: Halifax - https://www.investments.halifax.co.uk/get-inspired/news/article/198869), but what are they?

What is a Child Trust Fund (CTF)?

CTF accounts were created by the government in 2002 to kickstart and encourage parents to save for when their children turn 18. The government initially deposited money into the account and then the parents or guardians of the child were able to add to it on the child’s behalf, up until they turn 18. There is a limit as to how much you could deposit each tax year which has increased from £1200 in 2002, to £9000 in 2020.

A CTF is also tax-free. Yes, you heard right, tax-free! This means that whatever money you deposit won’t be taxed when it’s withdrawn in the future.  Once the child has turned 18, they  will have access to the money to use they wish. This is when the product ‘matures’.

When will my Child’s CTF mature?

CTFs begin maturing in September 2020 when the first child reaches 18 years of age.

When a child turns 16, they can take control of the CTF if they wanted to. They can change how their money is invested and change provider by transferring their account and signing up to a new provider. If the child decides not to manage their fund, it remains with their parent or guardian until their 18th birthday.

Who was eligible for a Child Trust Fund?

CTFs were set up by the government for children who were born in the UK between the 1st of September 2002 and the 2nd of January 2011.

Types of CTF accounts

There are three different types of Child Trust Fund accounts that parents could choose for their children. These were Stakeholder, Shareholder and Cash accounts.

• Stakeholder account - This allows you to own a percentage of shares within a company. With a Stakeholder CTF, any money which is still invested in shares when the CTF matures will be sold automatically and the cash will be passed on to the child.

• Shareholder – This account allows you to leave a contribution of the money invested into the stock market. By investing into the stock market, your money could potentially grow or fall depending on the outcome of your shares.

• Cash account - The Cash CTF account is where you can leave any contributions, providing they don’t go above the yearly maximum allowance and earn interest on it. This tends to be the safest and most popular option.

Can I still get a Child Trust Fund?

The government stopped offering Child Trust Fund accounts after 2011 and they replaced them with the Junior Individual Savings Account (JISA). However, anyone who still has a CTF can carry on depositing money into their account until their child turns 18.  

JISAs are also a tax-free savings account for children and many of the same rules apply. However, if you were to open a JISA today, the government does not contribute and the only money that goes into the JISA is the money which you deposit.

What can my child do with a matured CTF?

Once a child turns 18 and the CTF matures, they have a decision to make about what to do with the money. But what are their options?

• Celebrate and spend - As the money is now theirs, they can spend it however they like!

• Become a savvy saver - Some children may choose to carry on saving their money in a cash savings account or cash ISA. Both will offer interest on the money and they are often easily accessible, so the money can be withdrawn at any time.

• Invest it - Although most 18-year-olds won’t be familiar with investing, they could invest their savings in a Stocks & Shares ISA to potentially grow their money further. We would always recommend that if they were to invest their money, they do so for at least 5 years. It’s also worth remembering that when investing your money is at risk and you may get back less than you put in.

That’s our round-up on Child Trust Funds. Did you know that it’s been estimated that more than one million child trust funds are ‘lost’ and haven’t been claimed? In most cases, this is due to HMRC opening the account because the child’s parent or guardian failed to do so. If you think your child may have been eligible, it's worth checking. More details on how to find a lost CTF can be found on the HMRC website.

We are delighted to partner with Bury AFC as their new front of shirt sponsor for the 20/21 and 21/22 seasons.

Sharing a set of similar values between ourselves and the club, we’re just as excited as the fans that football is coming back to Bury.

Bury AFC are putting the fans at the heart of everything they do with the ambition of changing the way football clubs are ran, in the same way we are disrupting the financial services industry to make financial advice affordable and accessible to everyone.

Anthony Morrow, OpenMoney Co-founder, said “We are delighted to be supporting Bury AFC for the next two seasons. I’m sure that with a fresh start for the club it will win round not just Bury fans of old but hopefully some new ones.

There are a lot of shared values between OpenMoney and Bury AFC and as a business committed to long term, safe investing we hope that we offer a stark contrast to football’s unhealthy association with predatory gambling and Forex trading advertising. We are democratising access to financial advice, making it available to everyone and not just the affluent few, and are committed to transparency, simplicity and affordability. These are all values we saw in Bury AFC, and we hope we can work together over the next couple of years for the benefit of all Bury fans.”

Chris Murray, Bury AFC Chairman said “We’ve had a lot of interest from sponsors but it was apparent that OpenMoney was a perfect fit for us. We wanted a sponsor that was inclusive and embraced the same ideals as ourselves, and I feel that we have found this in OpenMoney. A two-year deal not only offers certainty, it allows us to deliver on our promise to fans to change the kit every two years rather than one. We are keen to reward their loyalty rather than exploit it. With a number of our key sponsors in the bag we can now focus on getting a squad ready to challenge for promotion in this forthcoming season.”

You can follow Bury AFC on twitter @OfficialBuryAFC

We look forward to working with Bury AFC and wish the club success both on and off the pitch for the upcoming season.

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We recently celebrated the OpenMoney family’s third birthday! As well as sharing a toast (via video call), we took the chance to reflect on the last three years and what we have learned along the way.

Customer service is key

Since we launched back in 2017 we’ve seen how much our customers value the ability to speak to us about any financial issue, at no extra cost. As a result we will be introducing all of our customers, current and new, to their own personal support specialist and financial adviser here at OpenMoney. We know that a friendly face and expert voice can give reassurance as and when needed. Your dedicated adviser will be on hand to answer any questions that you may have and help with any issues, as well as keeping you up to speed regarding any new services or features that we’re launching. To make sure you can make the most of this,we’re extending our support and advice hours to include weekends!

Your Feedback makes a difference

Earlier this year we launched our new app and whilst we were happy with it, we’re firm believers that there is always room for improvement. So, we turned to your reviews to find the gaps and make a few tweaks. Since then we have joined forces with Moneyhub which means that our customers will benefit from a wider range of provider integrations, faster transaction refresh times and accurate spending categorisation while continuing to receive our expert advice on their finances. As well as this, we are also making further improvements to the app including savings and budgeting tips, and our partnership with Uswitch will be expanding later in the year. When our customers speak, we listen. We’ve also invested in user research and we will keep using the feedback we receive to make ours the very best possible service for you.

The financial advice gap still exists

Back in August of last year we released a report that we complied with YouGov on the financial advice gap in the UK. We found that 19.8 million people* across the UK would appreciate a bit of financial advice, but not everyone knows how to get it or that it’s even an option for them. This report, which you can download for free here, was put together off the back of a 2015 study by Citizens Advice[1].They identified the four types of advice gap: the affordable advice gap, the free advice gap, the awareness and referral advice gap and the preventative advice gap, and we were interested to see if much had changed in four years.

Our findings showed that a great deal had changed in that time, such as an increase of over 5 million people* who would benefit from financial advice but are not aware of public financial guidance. As we are trying to bridge the advice gap in the UK, we didn’t want to wait another four years to re-evaluate and so we have decided to make this an annual report with the help of YouGov. Our 2020 report will be released later this year, so watch this space!

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*Where figures like this are shown, OpenMoney has extrapolated the YouGov findings from our sample to represent GB population estimate of 50,644,094 (source ONS, June 2018).

[1] Citizens Advice

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We’re really excited to announce our new partnership with the Open Banking platform Moneyhub.

Moneyhub were one of the first services to offer secure Open Banking integrations globally, and this accessibility aligns perfectly with our mission of making financial advice accessible and affordable to everyone.

When you come to OpenMoney, whether that’s online, through our app or chatting to one of our financial advisers, we know it’s really important that you have a great experience with us.

The relaunch of our app back in January led to some exciting new features, but it also highlighted some ways in which we can improve the experience for customers downloading and registering on our app.

In partnering with Moneyhub to offer our account aggregation service, our app should become faster and more reliable as well offering new features.

This partnership will bring full Open Banking capability to our app, helping customers to get a complete view of their finances.

Users will be able to connect their bank accounts, saving accounts, investments, loans and other financial products at the touch of a button, now including full integration with Monzo and Starling.

Users can also look forward to instant balance and transaction information, as well as intelligent categorisation on items they buy.

Anthony Morrow, our CEO and co-founder, said: “We want to ensure that our customers can make the most of the new Open Banking rules by having a complete picture of their financial circumstances through the OpenMoney app. Customers will benefit from a wider range of provider integrations, faster transaction refresh times and accurate spending categorisation while continuing to receive our expert advice on their finances.”

Samantha Seaton, CEO of Moneyhub said: “The advice and engagement gap remains a significant challenge. In combining Moneyhub's Open Finance platform and OpenMoney’s technology, we can provide an innovative solution that is both intuitive, impactful, and cost effective for all. Open Banking changed the rules of the game, but Open Finance which in addition to current accounts also covers pensions, mortgages, investments and loans, will truly transform how everyone thinks about money. I'm inspired by what the OpenMoney team has achieved, so the opportunity to collaborate with them and develop our shared goal of promoting greater financial awareness and insight is exciting. OpenMoney firmly believe in making financial advice accessible to all - and I couldn't agree more. What an absolute treat to partner with such a like-minded team.”

We’ll be rolling out more new exciting features in the future through our partnership with Moneyhub.

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We have some exciting news to share!

We have reduced the total cost of our investment portfolios, and this reduction will be passed directly to our customers, and the investments they hold with us. This change sees our fees drop from between 0.50% and 0.52% to between 0.46% and 0.49% depending on which investment portfolio is chosen. You can see a breakdown of these changes by portfolio in the table below.

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Almost three years after launching our service to bring affordable and accessible financial advice to all, we’re pleased to be able to reduce our fees even further. We’re committed to ensuring that our investment fees are as low as possible, while still offering a spread of investments across different assets, markets and geographical locations to try and minimise risk for our customers where possible.

We worked closely with Finalytiq to review our portfolios prior to the impact of Covid-19 and whilst it has caused turbulence in the markets, our investment strategy hasn’t changed. We do not try and time the markets and therefore our reasons still stand for making the changes to the portfolios.

We understand that with the impact of Covid-19, people will naturally have questions about their investments. We offer ongoing advice and appointments with our financial advisers at no extra cost, so people can continue to get the support they need during these unsettling times.

You can contact our team with any questions you have using our Contact Us page.

The recent Apple advert plays on the notion that our phones hold a lot of data about us, even seemingly irrelevant information like your heart rate. ‘Privacy. That’s iPhone’. The fact that Apple are using privacy asan emotive subject to promote their product as opposed to its flashy new camera shows the importance that we put on keeping our data safe.

It’s hard to know what data about you is out there and it’s increasingly important to know it’s in safe hands. Here at OpenMoney, keeping your data safe and secure is our priority. Here’s the steps we take to make sure your data and investments are safe with us.

SSL Certification

Our websites have SSL certificates. Like many, I didn’t know what that meant apart from the website has a green padlock in the URL bar – for most of us, this visual cue is enough. But what does it actually mean?

SSL stands for ‘Secure Socket Layer’. An SSL is a small data file that establishes a secure connection between the browser and the website. Any communication or data passed is encrypted.

Still sound confusing? Encryption looks something like this… 

As the image shows, the output of encryption is a load of gobbledygook that humans can’t read or understand!

Bank level encryption

Now that we’re all encryption boffins, it’s useful to explain the level of encryption we use.

Our data is encrypted using 256 bit SSL encryption, which is the same level as most banks. If it’s good enough to protect your money, it’s good enough to protect your information too!

A 256-bit key can have 2256 possible combinations, that’s 2 x 2, x 2, x 2… up to 256 times.

It is one of the most secure methods of encryption available and according to this article, it would even take the fastest supercomputer inthe world thousands of years to crack.

Data Protection Training

As well of all of this fancy technology to keep your data safe from external threat, we also make sure that our staff are trained and educated in the world of GDPR (General DataProtection Regulations) to keep your data safe internally. GDPR practices are regulateand enforced by the Information Commissioner’s Office (ICO) and any breach in the legislation means we as a business - and sometimes as individuals - are held accountable for the misuse of data.

We’ve all had training from our Data Protection Officer - he doesn’t wear a police uniform if you were wondering – and we have strict procedures in place when it comes to accessing customer data.

There are other things we do to ensure your data is safe too. We’re very selective as a business over the technology we use and we don’t access public with our work computers WIFI in case of any threats posed by the network.

FCA regulated & FSCS protection

As well as your data, it’s important to know that your money is safe with us too.

We’re regulated by the Financial Conduct Authority who set the rules and regulations for financial providers in the UK. If we breach any of these rules, we’ll be held accountable and will potentially face fines from the FCA. This also means that we’re not a scam and we won’t be transferring your money into our private pension pots!

If you do invest with us, you’re also protected by the Financial Services Compensation Scheme (FSCS).This means that your money is protected up to £85,000 if anything does go wrong. The FSCS is an independent fund set up by the government to help protect people’s money. If we go bust, it means you won’t be left out ofpocket.

There’s more things we do to protect your data but unfortunately some are too technical for me to write about! If you do have any questions or queries about our processes, you can contact our support team on live chat Monday – Friday, 9am – 5pm or via email at hello@open-money.co.uk.

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New and improved for 2020

Our brand new app has just gone live on the app store, we are really proud of it and believe it’s  a great tool to help you get more from your money. Product Analyst Adam Briggs-Dawson talks you through what’s new and the thinking behind the new features!

Here at Open Money we have been working on a new and improved app to make managing your money work better  for you.

As a product team we have spent a lot of time putting ourselves into our customers’ shoes to figure out what the most important and helpful features in a money management app should be.

We’ve been working really hard on making an app that goes one step further than money management. We’re excited to also offer financial recommendations within our app.  

We believe that financial advice should be accessible for all, that’s why our app is designed to guide you towards your financial goals. Whether you have £10 or £10,000 - our app could help you make your money work harder for you.

The new app is a real progression from our pioneer app and we are really proud of the result. We’ve improved the on-boarding process, making it very simple to link your accounts and there are lots of new features we didn’t have before.

Better Budgeting

First of all, we feel that visibility is key. The OpenMoney app allows you to see all of your money in one place. This sounds like a basic concept, but with many people having accounts with different banks, alongside loans, credit cards and investments,  it ’s a simple, but sometimes overlooked element, we didn’t want to miss out.

Secondly, saving money should be simple, easy, even fun! We wanted to create a way for you to set up savings goals for yourself and track your progress – and we have done just that!

Our app also gives you the option to set your own budgeting period, specific to your schedule. We know not everyone gets paid on the same day of the month, so set your custom budgeting period and get rid of second guessing.

If you are looking to work down debt, the app has a feature to allow you to set this up as a goal and allows you to track your progress.

You can also see a predicted forecast for the month based on your current spending, allowing you to plan ahead and adjust your spending if needed - so you’re not caught short at the end of the month.

You can also group your transactions together into categories such as dining out, bills etc. This allows you to see what you are spending your money on each month.

Ongoing Advice

The app is more than just money management, it also offers advice based on your spending activity. For example, if you’ve told us that you want to save money, the app will notify you of areas you could be saving. Such as letting you know you’ve spent £20 on takeaway coffees this month.  

We also have a new and exclusive partnership with uSwitch, where we are able to proactively tell you if you could be saving money on your bills – starting with energy. This way, we are constantly analyzing your finances for you and you can have the peace of mind knowing it is being taken care of, without you having to lift a finger.

There are lots of great features on this app and we believe it is going to make managing your money, easier, simpler and more efficient than ever.

I am really proud of what our team has created and hope that it will make managing your money easier for you. Let us know on our social media channels what you think of the new app if you’ve tried it, we love to get feedback and new ideas!

You can download the app on the App Store or Google Play now.

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We’re really excited to announce our acquisition of respected employee benefits platform Jargonfree Benefits.

Our mission at OpenMoney is simple: To make financial advice accessible and affordable to everyone, and the work Jargonfree Benefits does complements this perfectly.

Jargonfree Benefits was set up in 2013 with the aim of helping the estimated 16.3 million workers[1] employed at UK small or medium-sized companies (SMEs), gain access to the same standard of workplace benefits as those enjoyed by workers at larger firms.

It currently provides services to almost 40,000 employees and over 500 employers. We want to enhance these services and build on this platform. Whilst there is a lot of work to closing the advice gap, we believe it is absolutely possible and are excited to play our role in doing that. Steve Bee, founder of Jargonfree Benefits, said: “This is a hugely exciting moment for the business, our existing clients and the millions of employers up and down the country who care deeply about the people who work for them.

“It makes sense to me that the tools people need to both understand and control their own finances should be readily available in the workplace. “We’ve got a long way to go, but I’m confident that as part of OpenMoney we can make huge strides in building the benefits market for SMEs and in doing so ensure high quality affordable financial advice might one day become accessible to every worker in the UK.”

This is just the first of many exciting announcements we have planned over the next few weeks and months.

[1] House of Commons Business Statistics Briefing Paper, 12 December 2018

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Buying a house is likely to be the biggest financial decision most of us will make, but many people are struggling to get onto the property ladder at all. For those who do, the process is often confusing, expensive and time consuming, with multiple parties to contact and chase.

As part of the continuing work we do to make your financial life easier, we have taken the first step to expand our offering into the mortgage space and we are really pleased to announce that we have recently hired James Brocklebank as our Head of Mortgages.

James’ experience as a mortgage broker and developing fintech mortgage solutions will be so valuable as we begin to shape our mortgage advice process over the next few months. We can’t wait to get started, and we’ll be sure to keep you updated along the way.

We aim to make the entire home-buying journey easier and less stressful with clear, continuous, communication and at a low cost. From setting deposit goals and providing mortgage, insurances and mortgage protection advice, to linking to conveyancing, we want to support customers all the way through to their final repayment.

We have always strived to help people make the most of their money, and by adding mortgage advice to our growing list of services is the next step in our ambition to become a one-stop-shop for people’s financial affairs.

• New partnership announced with uSwitch.com.
• Giving customers more ways to make the most of their money.
• Offering comparison services on utilities, broadband and more.

We’re really excited to announce our new partnership with price comparison and switching service uSwitch.com!

Our ambition is simple: To help people make the most of their money, and this will allow us to do just that.

Our new service will launch this year and we will be the first company to partner with uSwitch on this unique offering.

You will be able to see your finances in one place using our app, and we will offer recommendations on how you can make the most of your money.

Rather than the traditional comparison services where you have to input the information and make the decision on which is the best option, we will recommend personalised deals when it is in your best interest.

This will include the comparisons of utilities, broadband and mobile, with credit cards and insurance products coming early 2019.

Kushal Ghuwalewala, Head of Partnerships at uSwitch, said: “At uSwitch, we're passionate about helping as many people as possible save on their household bills. We're excited to be working with OpenMoney and look forward to helping more households pay less for their everyday bills.”

We’ll be sharing more details on our partnership with uSwitch as we add more features to the app and service.

Figuring out the best ways to use your money isn’t always easy, so it makes sense to seek advice from professionals. But that advice usually comes at a price and can be time consuming.

At OpenMoney we want to help you make the right decisions with your money, and make sure that these services are accessible to everyone!

We will give anyone who comes to us honest and expert advice, and because of our extensive use of technology we’re able to keep costs very low.

How it works

We’ve tried to make our advice process as quick and simple for you. Firstly, we’ll ask you a few questions on our website to determine how we can help you.

These are all simple questions such as your age, how much you earn each month, what your monthly outgoings are and how much you might pay towards short-term debt every month, plus what you have in savings.

This step should only take a few moments and we will use this information to guide you towards the next best step for you.

Depending on your situation we may be able to help you to start managing your money better – such as cutting down your spending and working down any debt you might have.

Or we could help you to start saving and building up a cash buffer.

Your answers might even mean we’re able to help open you up to the world of investing or get more from the investments you might already have.

But we will never recommend something that isn't right for you!

How we can help you will depend on your answers to the above. But whatever we recommend the next step is for you to provide us with more information so we can understand your situation and figure out what's best for you.

In some cases, this includes requesting access to your bank details. This can scare some people (and we totally understand) but be assured that your privacy and security are our number one priority.

We have all the legally required and rigorous data privacy and security provisions in place to protect your data.

Our app will be able to use this information to analyse your finances and to help us to provide you with advice advice on how to manage, save or invest your money.

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Helping you to manage your money

Our new OpenMoney app will be able to help you see your income and outgoings clear as well as help you manage them better.

Due to our app’s technology we will be able to analyse your financial situation, including your spending and debts. We will help you reduce them so you cna save to meet your goals.

Saving your money

We always recommend that you have at least 3 months’ worth of outgoings saved. If you haven’t already got this cash buffer saved up, we will point you towards our OpenMoney app.

One of our key features on the app is a service we have developed in partnership with uSwitch.

It will allow you to look at your outgoings for utilities and household bills and provide you with ideas on where you can save money.

In the past you’d have to actively search for cheaper deals on your utilities but now you’ll be able to receive information on potentially cheaper alternatives though our app.

Investing your money

After answering the questions at the start of the process it might be clear that investing your money could be an option for you.

If investing is right for you then we can guide you through your investment choices on our website and recommend a diverse portfolio to suit you.

In order to shape our recommendations to you we will ask you further questions about your existing assets, how much you want to invest and your appetite for risk

One of the biggest barriers to investing for some people is the cost involved. But our charge for your investment is a market-leading 0.50%*.

Personal advice

As well as offering you advice through our website and app our team of qualified financial advisers are available to speak to if you have any questions.

We offer a web and app chat option for any general queries. If you need a more detailed conversation about your recommendation you can book a free phone appointment with them.

Our team are on hand between 9am and 8pm and you can make as many appointments with them as you like – even on weekends and evenings!

*based on the maximum charge payable across all evestor/openmoney portfolios as at 16/08/2018. Fees may vary and may be higher than this stated amount.

You may have heard in the news that the UK is now officially in recession as a result of the coronavirus outbreak and how it has impacted our economy since earlier this year. 

Back in May, Chancellor Rishi Sunak said the country is facing “a severe recession, the likes of which we haven't seen”[1], but admitted the “jury is out” on how much long term impact coronavirus will have in on our economy. As those of us who experienced the 2008 financial crisis and recession might remember, the economy took 5 years to recover.[2] 

I wanted to help to demystify what we really mean by a recession and how you can help to protect yourself against the possible effects. ‍

What is a recession?  

A recession is commonly described as a significant decline in an economy, continuing for at least six months.  For an economy to be considered ‘in decline’, there needs to be a drop in 5 key areas:  

• Employment, 
•  Retail sales, 
•  Manufacturing, 
•  Income 
•  GDP. This stands for Gross Domestic Product and is the value of all goods and services made by a country within a specific period. GDP is usually calculated annually but can be calculated quarterly too.  

Recessions are a difficult time for both businesses and the public. With sales dropping and manufacturing slowing, businesses be forced to close or downsize which causes unemployment. Unemployment means less consumer spending and, along with a potential for the public to reduce spending due to the worry of how a recession will impact their finances, this can then fuel the recession further. 

An economic decline also has an impact on the investment markets, which can be worrying for investors. Some will withdraw their funds out of fear, and this causes a further decline in the markets. 

However, there can also be positive impacts of a recession. Prices of goods and services can lower and some businesses closing can mean more opportunity for the surviving businesses to grow sales and strengthen their position. 

For consumers, a recession can spark a change in mindset. A sudden awareness or concern over your individual financial situation can mean people spend less, save more and learn to live within their means, as opposed to relying on credit or overdrafts to get by month-to-month. ‍

How can you protect yourself against a recession? 

There are ways you can lessen the impact of a recession on your personal financial situation.  

‍Review your incomings and outgoings  

Reviewing your spending is a great first step to understanding and streamlining your finances. Some of you may already have reviewed your budget since the coronavirus outbreak due to a redundancy or changes in income. 

We’d recommend:  

• Reviewing the past few months expenditure and create a monthly budget including mortgage/rent, bills, groceries, transport costs, spending money and savings. Understanding where every penny goes can help you identify where you’re overspending. 
• Money management apps (like ours) can help you to understand where you’re spending your money without the hard work. Our app will continually analyse your finances and give you advice on where you can cut costs and save too! 
• Review your bills and subscriptions to see if you can cut costs – perhaps by cancelling a streaming service you don’t use or switching energy provider. 

‍Avoiding using credit 
If you’re planning on taking out an overdraft or credit card for a large purchase, it might be best to hold off these plans or save up instead to avoid tying yourself into a monthly payment moving forwards. 

‍Save a cash buffer  

We often talk about the importance of a cash buffer for your financial security. Think of it as a cushion to fall back on should you lose your job or be put on a scheme similar to what we have seen with the furlough schemes the government have offered during coronavirus.  

As a rough guide, we recommend a cash buffer of 3 months outgoings kept in accessible savings. 

‍Make yourself more valuable at work  

As we know, recessions can mean redundancies and job losses. If you feel your employer would be impacted by a recession, it’s a good idea to try and protect yourself from redundancy by aiming to make yourself as valuable as possible at work. 

Taking on extra responsibilities, working overtime shifts or picking up knowledge in other specialist or business areas could make you more valuable to your employer, depending on your role and industry. 

‍Review your investments  

If you’re an investor, it might be a good time to review your investment portfolio. While you should be cautious of making any investment withdrawals, you may want to ensure you’re comfortable with the level of risk you’re currently taking. 

If you have a financial adviser, reach out and discuss any concerns or explore any questions you have. We think it’s really important to be able to speak to someone when you have worries, this is why we offer unlimited appointments with our financial advisers (at no extra cost) to all of our investors. 

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Capital at risk

[1] telegraph.co.uk

[2] ons.gov.uk

We have some exciting news to share!

We have reduced the total cost of our investment portfolios, and this reduction will be passed directly to our customers, and the investments they hold with us. This change sees our fees drop from between 0.50% and 0.52% to between 0.46% and 0.49% depending on which investment portfolio is chosen. You can see a breakdown of these changes by portfolio in the table below.

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Almost three years after launching our service to bring affordable and accessible financial advice to all, we’re pleased to be able to reduce our fees even further. We’re committed to ensuring that our investment fees are as low as possible, while still offering a spread of investments across different assets, markets and geographical locations to try and minimise risk for our customers where possible.

We worked closely with Finalytiq to review our portfolios prior to the impact of Covid-19 and whilst it has caused turbulence in the markets, our investment strategy hasn’t changed. We do not try and time the markets and therefore our reasons still stand for making the changes to the portfolios.

We understand that with the impact of Covid-19, people will naturally have questions about their investments. We offer ongoing advice and appointments with our financial advisers at no extra cost, so people can continue to get the support they need during these unsettling times.

You can contact our team with any questions you have using our Contact Us page.

The coronavirus is impacting all of our lives, whether that is physically, mentally or financially. Things are changing every single day, and that is the same with mortgages. Whether it is the Bank of England reducing the base rate to 0.1%, lenders announcing mortgage payment holidays or lenders announcing they won’t lend anymore money. There are changes every single day.

Whilst there are some great things coming out of this from mortgage lenders, there are also several pitfalls which we'll explore below.

Payment holidays

Let’s start with the big news: lenders allowing you to take payment holidays. Almost all mortgage lenders have risen to the challenge. They have agreed to allow you to take up to three months off from paying your mortgage and have also said this may be extended depending upon external circumstances. This is a great step by lenders, but there are a couple of things to consider.

·       Do you need it? Whilst we appreciate this is a great boost to thousands of people, only apply for this Mortgage holiday if you need it. Don’t take it for the sake of having three months off your payments. Despite your payments being paused, you will continue to be charged interest. This interest is then added to your mortgage meaning you will pay more over the term of your mortgage. If you do need it, please speak to your lender.

·       How will it affect your credit file? Lenders have said they will try to stop it impacting your credit file, but that doesn’t mean it won’t. When you come to re-mortgage in two years’ time and there are three missed mortgage payments on your file, you may find that it could stop you moving lender, moving to a new house or getting a better rate.

If you are struggling, we wholeheartedly recommend speaking to your lender and seeing if you can have a break from your mortgage payments. Please consider all the risks of this, as your payments are going to increase after the holiday, and there are a lot of unknowns.

There are also other alternatives to having a break from your payments. Why not consider extending your term? The impact of this virus is likely to be far longer than three months, which could allow you to make this more affordable for the future. Why not convert to interest only temporarily? This will mean the interest isn’t building up on your mortgage. Or even paying some of the mortgage.

Whatever you are considering doing, please speak to your lender first. Don’t stop paying your mortgage!  

Interest rates

Don’t worry, it’s not all doom and gloom, there are some positives too. We are seeing the Bank of England base rate at an all-time low and as a result of this, mortgage rates are low, with some below 1%. If you are currently on the Standard Variable Rate, or on a tracker deal it might be worth considering re-mortgaging. We understand now might not be a great time to review your finances with everything going on, but it is worth getting some impartial advice to make sure you are on the best deal for your circumstances.

Purchasing a home

I have had a lot of people get in touch with me asking whether they should continue with their House purchase. Here at OpenMoney, we know how much goes into buying a home - the planning, the finances and most importantly the emotional impact on you. With these factors in mind, the answer is different for everybody.

The government is urging people not to move house during the outbreak to avoid breaking social distancing protocol, but this does not mean you should stop buying your dream home. It means you need to consider your options, such as delaying the purchase.

When deciding to buy a home, you will have put months of planning in place, and spoken to mortgage advisers, estate agents, solicitors, and family about the process. You will have saved for months and months to put your deposit down. You shouldn’t therefore stop buying your house without taking some time to thoroughly consider key factors such as the below:  

·       What does your financial situation look like? A lot of businesses are under enormous financial pressure with thousands at risk of losing their jobs, what is the chance of you losing yours? Are you self-employed, will your income be affected by everything going on? Whilst the government is doing its best, their help won’t last forever. Once that stops will you be able to afford those monthly mortgage payments for the next 40 years?

·       How could you be affected if you already have a mortgage offer? If you have lost your job and you have a mortgage offer, you must tell your mortgage lender. It is vital you do so. If they find out after you purchase the property, they can repossess it, and you could find yourself in a lot of trouble. If you have any potential issues, please speak to your mortgage provider or adviser.  

·       Will your options be limited? Some providers have stopped lending to help people purchase homes, and others have reduced what they offer. This may mean your choice is limited. However, it doesn’t mean there aren’t still thousands of mortgage products out there, it simply highlights the huge benefit of getting independent advice.  

The reasons for you buying a home aren’t going to disappear overnight. Whether it is buying your first home, your family needs more space, or you want to move to a nicer area. These reasons will still be there in two months or two years’ time, so don’t give up your dream of a new home. Take time to assess your situation and make an informed decision.  

One thing that this has reinforced for me, is the need for our country to have the right insurance and protection. Everyone in the office is sick of me saying this, but as a country we do not have enough protection in place if the worst is to happen. If you do one thing once we have recovered from this, and we will, please speak to someone and get the right insurance. Naturally, we don’t like talking about people passing away, or not being able to work for months at a time due to ill health, but it does happen and you need to have insurance in place to protect both you and your family.

I hope this has shown you a few of the options available to you, and has also given you few things to consider. Most importantly speak to your lender if you are in trouble, they are on your side and are there to help you.

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Now that we have found ourselves confined to the comforts of our own homes for the next few weeks, it’s a normal reaction to try and sooth one’s soul through the medium of online shopping. No judgement here, we’re all in this together (but did I really need that cactus?). Whilst we’re likely to save a bit of money by not going out, buying coffee, ordering takeaway etc, it wouldn’t be realistic to advise you to not spend a penny, we can offer a nudge in the direction of mindful spending. Below is a roundup of the apps, services and activities that are perking us up at the moment – most of them are free, but any costs involved, we believe contribute to feeling a bit brighter and we have detailed all information.

Top 5 free trials

Now is the perfect time to ‘try before you buy’, and these are our favourite free trials at the moment. Top tip: set a reminder on your phone to cancel your subscription, as most companies will sign you up and charge you automatically.

1.    Amazon Prime[1]

Terms: 30 days. £7.99p/m or £79p/a

This is the perfect option for those who has already exhausted all that Netflix has to offer. This streaming service has a whole host of original TV series and films available that you may not be able to find elsewhere. Here are a few TV recommendations from the team to get you started:

The Boys
Outlander
The Marvelous Mrs Maisel
This is Us
Vikings

2.    Spotify Premium[2]

Terms: 30 days free (for new Spotify members only) and then £9.99p/m.

To quote Plato, music gives a soul to the universe, wings to the mind, flight to the imagination, and life to everything. If ever there was a time that our minds needed wings it’s now! Your premium membership will give you endless hours of uninterrupted tunes to help you concentrate, chill you out or cheer you up.

3.    Audible[3]

Terms: 30 days free plus one free audio book (If you're an Amazon Prime member, they'll bump this up to two books). Plans start at £7.99 p/m.

If a busy social calendar has gotten in the way of reading, now’s a good time to get stuck in. Audio books are a great step back into the world of books and they’re great company for your walk of the day! You get one free audio book with this trial, so choose wisely. May we suggest one of the Harry Potter books? Even if you’ve read them several times over, there’s something comforting about Stephen Fry reading these well-loved tales in such tricky times!

4.    Duolingo Plus[4]

Terms: 7 days free. £80 p/a for continued premium use

If you’retaking time to learn a new skill, maybe a new language is the way to go. The free version of Duolingo is pretty good, but you might as well enjoy seven days of no ads and unlimited attempts at words and phrases as you progress.  

5.    My Heritage[5]

Terms: 14 days free. Packages starting at £79 p/a (£59 for the first year).

A good bit of research to get your teeth into could be just the thing to keep you busy and interested over the coming weeks. Maybe you’ve binge watched all episodes of Who do you think you are and want to know how find out if you’re distantly related to royalty. This 14 day trial can send you down a rabbit hole of history and is bound to bring up new things to chat about!

Top 5 ‘feel good’ services

No one really likes change, but we’re all having to adapt to a new way of living, and pretty quickly. Below are a few things that we’re finding useful to get us through mentally as well as physically. 

1.    Hello Fresh[6]

Whilst the tendency might be to pop a pizza in the oven for comfort, spending (a lot) more time at home could offer the opportunity to experiment in the kitchen. Recipe boxes such as Hello Fresh (meals starting at around £3.50 pp) can be a good way of trying new things and being relatively healthy at the same time. When some form of normality does resume, you will have learned new recipes and be able to recreate them at any time.

2.    Free full body workouts from Barry’s Bootcamp[7]

Now that gyms are closed, the normal treadmill and floor schedule of a Barry’s class has been stripped back and adapted to 30 minute hardcore sessions that can be done from the comfort of your own home. These are broadcast on the Barry’s Instagram page and the schedule is released daily on their Instagram stories.

3.    Free yoga and Barre with FLY LDN[8]

To bring a spot of zen into your lives, FLY LDN are holding 45 minute yoga and barre sessions live on their Instagram page. Unlike many others, they are also posting each session on their Youtube[9]channel so that you needn’t worry about missing any part of the live broadcast.

4.    Calm app[10]

With stress and anxiety being at an all time high, having a toolkit to practice mindfulness and set yourself up for a restful night’s sleep is a great thing to have. This app offers everything from breathing exercises to bedtime stories. It’s free to download with an optional subscription so you can see how you get on with the basic package to begin with.

5.    Let’s Day Out App[11]

This popular app that focuses on bringing people together through experiences, is thoughtfully re-branding to ‘Let’s Day In’. They will be hosting lots of virtual group activities from cooking demonstrations to art classes. All the sessions are free, but there is the option to donate £1 to the World Health Organisation’s COVID-19 Solidarity Response Fund.

5 things to jazz up home schooling

For many parents, the thought of having to home school their children is daunting and stressful. We’ve listed a few things below to bring some educational fun to your new school days.

1.    Joe Wicks PE lessons[12]

Joe Wicks aka The Body Coach, is hosting daily 30-minute PE sessions live on his Youtube channel at 9am. They’re great for waking everyone up, engaging the brain and getting into some form of routine when everything is so out of sorts. Although aimed at children, it’s a great way for the whole family to spend some time together being active, and if we’re honest it’s left some of us adults out of puff too.

2.    The Maths Factor[13]

Carol Voderman has announced that she is removing the paywall on her tutorial website for children, The Maths Factor. This is aimed at children of primary school age and will be freely available for as long as children are having to stay away from schools.

3.    Printable Pages

Many illustrators such as Matt Richards[14] and Jacqueline Coley[15] have started producing artwork that parents can print off for their children to colour in. It’s the perfect down time activity to break up a curriculum based timetable.

4.    David Walliams Audio Stories[16]

Just as audio books are great for adults, children can really benefit too. A huge part of school life is shared reading and being read to. David Walliams, author of Gangster Granny and Mr Stink (to name but a few) has announced that he will be releasing an audio story for school children every day at 11am for the next 30 days for free. These can be found on his website, under ‘Elevenses’.

5.    Family Baking

Studying at home needn’t purely revolve around times tables and literacy, there’s a lot to be gained from fun activities at home such as baking. Getting the family involved teaches measurements, elements of time keeping, the science behind baking, the importance of a clean kitchen…and patience from all involved! Little Cooks Co’s Instagram[17] has many recipes that little hands can get involved with, but there’s no reason they can’t get stuck in with your day to day cooking routine!

[1] Amazon

[2] Spotify

[3] Audible

[4] Duolingo

[5] My Heritage

[6] Hello Fresh

[7] Barry’s Bootcamp Instagram

[8] FLY LDN Instagram

[9] FLY LDN Youtube

[10] Calm

[11] Let’s Day Out

[12] PE With Joe

[13] The Maths Factor

[14] Matt Richards

[15] Jacqueline Coley

[16] David Walliams Audio Stories

[17] Little Cooks Co Instagram

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The Coronavirus has been eye opening in all aspects of our lives and has made many of us take a close look out our personal situations including how we stand financially when the going gets tough. Our latest research with YouGov has highlighted the nation's precarious financial position as we entered the uncharted territory that is this global pandemic.

We found that a fifth (21%) of British adults have no immediately accessible savings; and just under a fifth (18%) only have enough to cover essential outgoings, like mortgage and rent payments, utility bills and food, for two months or less if they had no income coming in.  

The research, conducted earlier this month among 2000 British adults, shows that a huge number of households were already struggling financially and may need even more help to survive the additional economic difficulties stemming from COVID-19. Our other key findings were:

• Over the last two years, of those that have experienced financial difficulties, 12% have been behind on paying essential bills and 10% have missed a debt or loan repayment.
• In the last twelve months, over two fifths (44%) have run out of money before their next pay day at least once and over a third (34%) have relied on short-term credit to pay for something.  
• Three fifths (60%) of households have some form of debt. Credit card (32%) and mortgage debt (29%) are most common but many also have unsecured loans (20%), authorised overdrafts (14%) and car loans (9%)2.
• Only half (51%) of people are keeping up with their financial commitments without any difficulties.
• Almost a third (30%) are rarely or never able to put aside any of their income into savings.

Our research makes it clear that many households were already in a fragile financial position and the additional economic uncertainty created by Covid-19 may push people into further difficulties. The ongoing response by the Government and banks to help vulnerable customers with mortgage payment holidays and extra protection for credit card users is to be welcomed, but more may need to be done to support those in financial distress as the crisis continues and as we come out the other side.  

If you are struggling to pay essential bills, or with making debt repayments, contact your provider as soon as possible to discuss delaying or reducing payments. Prioritise paying off debt with the highest interest rates first and if you do need to take on more short-term credit opt for the form with the lowest paying interest. Look at your outgoings to see if there’s any services you can stop or reduce given the current circumstances. As always, if you are concerned, we’d recommend contacting the Money Advice Service for guidance.

These findings were from OpenMoney’s annual research into the UK financial advice gap and will form part of a larger report later this year. The 2019 report, The UK Advice Gap: Are consumer needs for advice and guidance being met? can be downloaded here.

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What should I do with my Pension? Is now a good time to invest? Should I sell my investments or buy more? 

These are just some of the questions we’ve been helping our customers to answer. There is so much uncertainty at the moment, and not just for your money. We asked Hayley Millhouse, our Head of Advisory Services here at OpenMoney, to shed some light on our most frequently asked questions.  

Is now a good time to invest?  

With the markets in a dip, you might hear that it’s a good time to invest new money. While investing in a market downturn can offer the potential to make returns on your money when the market does pick back up, we don’t advise our customers to try and time the markets in this way.  

This is particularly important in the current circumstances, when the outcome and timescales for economic recovery are so unpredictable. No one can say how long the markets will take to recover. If you are considering investing, thinking about your goals is a good starting point.  Are you considering investing to help you achieve your medium to long-term goals, such as retirement, or because of what you’ve seen or heard in the press? 

Investing money is a way to help you achieve your long-term financial goals and shouldn’t be thought of as a quick way to try and make some extra money and capitalise on what’s going on in the markets. 

Here are three things we advise our customers to consider first before making a decision to invest: 

• Are your debts manageable? We only recommend investing if you’re paying less than 15% of your salary each month to manage unsecured debts. 
• Do you have a cash buffer to cover you in emergencies? We recommend you have at least 3 months outgoings to keep in accessible cash savings for an emergency. This is more important than ever, as many people’s incomes might be uncertain over the next few months.  
• Are you happy to leave your money invested for at least 5 years? We only recommend investing if you’re happy to leave your money invested for at least 5 years. This helps you to ride out any short-term market fluctuations. This is particularly important now, as the next few years for the market are so hard to predict. 

If you want to know whether investing is right for you, you can take our financial health check to find out and we’ll advise you on what’s best for you. 

Should I sell my current investments? 

We know that changes in the market can be unsettling at any time and particularly now, with the wider impact Coronavirus is having on our day-to-day lives. However, it’s important to remember that volatility is all part of the investing journey. It’s really important not to panic and make decisions led by emotion - although we know that’s easier said than done.  

We all have an emotional attachments to our hard-earned money, and it can be worrying to see the value of our investments fall, but investing is for the medium to long-term, and we tell our investors to stay focused on their long-term goals throughout these periods of uncertainty.  

If you have access to a financial adviser, we’d recommended speaking to them about your concerns before you sell down any investments you hold.  

If you’re an OpenMoney customer, you can book an appointment with one of our advisers at no extra cost, through your OpenMoney online portal. 

I am close to retiring – should I be worried about my Pension? 

If you’re close to retiring, it could be a particularly scary time for your Pension. If you have a plan for retirement it’s a good time to review it – we always recommend reviewing your retirement plan on an annual basis, or when there have been any specific changes for your circumstances.  

If turbulence in the markets have impacted your Pension and retirement plan, you might need to look at your options on how and when you take your retirement income. For example, is it necessary to take your tax-free cash right now? Do you have other savings you can take income from? Is there an opportunity to delay or phase retirement or take a part-time job for extra income?  All of these options could give the markets opportunity and time to recover. 

If you don’t have a plan yet, there is help out there for you: 

• The government’s Pension Advisory Services offer a range of guidance and planning tools and they’re free to use 
• Pension Wise offer free and impartial government guidance for over 50s on retirement options 
• You can also speak to a financial adviser, although there may be additional cost associated with this 
• We’ve partnered with GUIIDE [1], who offer a free tool to help you build a plan for your retirement and save money too 

If you’re an investor with OpenMoney and you have any questions or just want to chat to our support or advice team for some support and reassurance, please reach out to us. Our team are ready to help: 

• Email hello@open-money.co.uk 
• Reach out through our webchat between 9am – 8pm on weekdays  
• Call us on 0161 204 3200 
• Book an appointment with one of our qualified financial advisers through your OpenMoney portal  

We’re all in this for the long term and we’ll get through these challenging times together! 

[1] Guiide

There are lots of different political and global events that can cause uncertainty and have an impact on markets – Brexit, elections and the recent breakout of Coronavirus are some of the more recent examples. 

We understand that people have an incredibly emotive attachment to their hard-earned money, and rightly so! We understand it can be very unsettling when markets dip, especially in times like this where we are hearing headlines about the ‘worst day since 2008’ [1] for the stock market.

So, we wanted to explore how our core principles of investment strategy and getting your financial foundations in place before investing can help to minimise the impact of these changing markets and support our investors in achieving their long-term investment goals. 

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Diversification  

When we talk about diversification, we often refer to the phrase ‘don’t put all your eggs in one basket’.  

When you diversify your investments, you’re spreading your money across several different types of assets, and we also diversify across geographical locations and industries too. This helps to minimise the risk involved.  

Different assets, like equities, bonds and property, do not react in the same way to a market event – often when some investments fall in value others will rise. It’s often the same with markets across the globe or different industries such as technology or retail.  

Diversification can’t protect you from losing money entirely, but it does help to manage and balance risk. 

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Regular investing  

Although making a big lump sum upfront could boost returns as your money is in the market longer, ‘pound cost averaging’ highlights the benefits of making regular monthly contributions to your investment.  

Regular contributions mean that some fund purchases will be made when the markets are up, and some when the markets are down, averaging out over time. This reduces the risk of trying to ‘time the market’ if you’re making a big one-off deposit.  

There can be emotional benefits to investing on a monthly basis too.  

The natural rise and fall you will see in the value of your investment returns will not be as harsh as when investing a large one off, lump sum. This may help reduce the emotional bias that can get in the way of effective and sensible investment decisions.[2]  

Emotions and investing is something we often talk about. Money is incredibly emotive, but it’s important to stick to your plan and try and avoid making decisions due to fear, panic or excitement – we know it’s easier said than done! 
 

Cash buffer

We recommend that our investors keep three months outgoings in accessible savings, to act as a cash buffer for life’s emergencies. Investing is for the medium to long term (at least 5 years), and so having a cash buffer to draw on will take some of the worry out of seeing your investments rise and fall in the short term. 
 

Ongoing advice and support

 
We know that seeing the value of your investments fall can be worrying – especially for new investors. That’s why we think it’s so important to have access to help and support from real people! 

We offer ongoing advice and appointments with our financial advisers at no extra cost. 

If your circumstances change, or even if you just want to have a chat with one of our advisers for a bit of comfort, we’re here to tell you what’s best for you and your investments and answer any questions or worries you might have about your money.  

You’re not alone – we’re here if you need us!  

[1] independent.co.uk

[2] barclays.co.uk

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You may have heard the media or popular social media influencers discussing terms such as ethical investments, ESG (Environment and Social Governance) portfolios or SRIs (Socially Responsible Investments). They differ very slightly in the areas that they cover, however a running theme throughout them is the premise of using your money to invest in industries that are not damaging to the environment or members of society. Naturally the growing popularity of this type of investment has brought questions to the surface regarding the products that we offer and the impact that these are having on the planet. Ethical portfolios are not currently something that we actively promote or provide for our customers, so let’s take a look at why.

On trend investing

The world of investing is slowly becoming more accessible and therefore possibly less daunting for the masses. Conversations about money are beginning to take place on platforms that were once reserved for aspirational lifestyle content as well as within mainstream press. Breaking down the barriers surrounding the topic of money and how we choose to manage it is a huge step forward, so we are glad that our customers are interested in progressing with their portfolios.

According to the 2018 Ethical Consumer Markets Report, the UK spends roughly 80 billion pounds on ethical goods (green energy, fashion, ethical food choices) every year[1]. This is no surprise given the spotlight that has been shone on our ethical conscience throughout traditional, digital and social media. With this move towards a more sustainable and responsible way of life, we are seeing an increase in customers wishing to invest in a more ethical manner.

Our stance on ethical investment portfolios

Hannah Cole, our Support Team Lead & Financial Adviser is often first on hand to look after queries such as this from our customers.

“We are often asked to look into ways that our customers can make their portfolios more ethical such as avoiding certain industries (American tobacco, Oil and Gas etc), or even how they can withdraw their money altogether to place it into an ethical portfolio...

... At OpenMoney and our investment site, evestor, we operate by offering model investment portfolios comprised of Mutual Index Funds as opposed to Exchange Traded Funds which is where you will mostly find ethical portfolios. The mutual funds that we use, aim to track specific market indexes such as the FTSE All Share and the S&P 500.”

This means that the only way our portfolios will exclude companies deemed to be unethical is if they are removed completely from the indices. As we don’t actively manage our own funds, we don’t pick the individual companies that they are made up of. Instead, we favour a passive investment approach, which you can read more about on our Jargon Buster page.

What are the ethical boundaries?

As well as being a functional decision, it is also worth taking a look at how far other providers go in terms of being ethical and are we really a lesser option because of our seemingly limited products? When looking to invest, it’s common to be averse to harsher industries that could have a negative reputation such as weaponry, alcohol, gambling etc and support a more sustainable, environmentally friendly portfolio.

However, Hannah raises a strong point in that we need to look at where the boundaries lie. “Where do we draw the line? There are respected companies that we know of, who boldly offer ethical investment opportunities despite having faced fines due to various misdemeanors.” Would investors be happy to invest in an ethical fund, but with a provider who has a somewhat tarnished track record?

Moving forwards

Our current opinion on how we operate within the realms of the ethics is not set in stone. We are constantly researching ways in which we can keep up with political and cultural climates at the same time as maintaining our extremely competitive costs and levels of service. However, if we are going to involve ourselves in the world of ethical investments, it needs to be for the right reasons rather than as a reaction to the media. If we cannot offer a justified rate of costs and returns, then we would be doing our valued customers a disservice which is not an option for us. As the market develops over time, ethical investment is of course something we would like to incorporate within our proposition, and our Investment Committee continue to assess the benefits and risks involved for those choosing to invest with us. As these conversations progress, we will keep our customers updated with developments.

[1] UK Ethical Consumer Markets Report

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You might have heard in the media about Neil Woodford’s investment fund ‘Woodford Equity Income’ and the plans to close it down after months of hardship.

This is obviously a stressful and confusing time for investors and it’s important to learn from what has happened to Woodford Equity Income.

Difficulty for Neil Woodford’s fund (which is essentially a pool of lots of different investors’ money) began after a period of underperformance caused investors to withdraw their money in big numbers back in June of this year. This flood of withdrawals caused Woodford to ‘suspend’ his fund. This means that to avoid the fund from falling further in value and investors losing out, Woodford stopped investors from removing their money.

News has now come that Woodford will soon be ‘winding down’ his fund – meaning that he will begin the process of selling off the investments, returning investors’ money and closing his fund for good. We explore some of the learnings we can take from what’s happened with Woodford Equity Income...

Active and passive investment – what does it all mean?

Neil Woodford is an active fund manager. Active managers use their own research, judgement and experience to make investment decisions on what assets to buy and sell. This differs from a passive investment.

A passive investment strategy, like ours, is one where investments are bought and sold to mimic something called a market index. An example of a market index is the ‘Financial Times Stock Exchange (FTSE) 100’.

The FTSE 100 tracks the top 100 companies with the highest share values publicly trading on the London Stock Exchange (LSE). The FTSE 100 represents roughly 80% of the value of all the companies on the LSE!

A passive fund could track which companies fall within the FTSE 100 and buy and sell the stocks of those companies.

There are lots of assumptions made about active management bringing in higher returns for investors than passive, but research has shown that more often than not, active management does not outperform passive management. The charges however are certainly higher and this difference in fees can mean thousands of pounds over the life of your investment.

As an active manager like Woodford enjoys early successes, the media can fuel their growing ego - often heralding them as having some kind of stock-picking superpower! But, just as easily as this media hype builds, it can quickly fall apart.

Active managers will naturally experience losses in their investment funds, much as any investment goes up and down in the short term – they can’t get it right all the time. When this happens for any extended period, the industry and media will pounce, and the sentiment can begin to turn on these managers, picking at their reputation. The media will then find someone else to build up as the new Woodford.

When you invest in an actively managed fund, you should be fully aware that you’re trusting these managers and relying on their experience and research to look after your money. You need to understand the risks associated with active management so you can make a sound decision that you feel comfortable with – don’t fall for the hype around active managers.

Diversification

No matter whether you’re invested in active or passive funds or a mixture of both, you should always make sure your investments are diversified. This means investing across funds in different markets and industries so you can spread your risk across all your investments – think of the old phrase ‘don’t put all of your eggs in one basket’.

If you’re making your own investment decisions and choosing your own funds, you should always make sure you diversify. If you get advice, your adviser should diversify your investments for you.

While it’ll be a worrying time for those invested in Woodford’s fund, hopefully they’ll have diversified portfolios and will be invested in a selection of other funds which have performed better, off-setting any loss.

Get advice

If you’re not sure, the best way to make sure you’re making the right decisions with your money is to get honest financial advice. As an online advice company, we talk a lot about the importance of asking an expert what the best thing for your money is.

It’s also really important to know the difference between ‘best buy’ tables and regulated financial advice. Lists and tables in articles online, telling people which investment funds are ‘the best’ can be dangerous. People may not fully understand the investment decisions they’re making when they follow these tables and have no protection if these decisions are wrong for them.

We really hope that what’s happened doesn’t put investors off completely. There are ways you can manage the risk you take with your investments and feel comfortable and confident even if you’re not a seasoned investor – diversify your investments, keep costs low, understand where you’re investing and, above all, get advice from a person or company regulated by the Financial Conduct Authority (FCA).

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Depending on where you live in the UK, your relationship with money may be different. Every one of our interactions with money will help form our understanding and confidence in dealing with financial situations.

In our recent Advice Gap report, we discovered some interesting statistics on each region’s relationship with money and financial decisions. Here’s what we found…

Londoners lack confidence

People living in London often face higher living costs in comparison to those living elsewhere in Britain[1] , which could leave them feeling less confident in making financial decisions. This was backed up by our research as we found that people living in London have the lowest confidence when it comes to selecting financial products.

54% were confident in choosing an appropriate mortgage in London, against the UK average of 60%. Scotland were the most confident, with 65% being able to confidently select a mortgage.

This lack of confidence also spread to more essential financial decisions such as choosing an appropriate current account. 81% of Londoners felt confident enough to do this against the UK average of 87%.

Our CEO, Anthony Morrow commented “Our research shows that the picture in terms of people’s confidence in choosing financial products is mixed across Britain, but those in London consistently come out as least confident. This may be due to the lower average age of Londoners compared to Britain as a whole[2]. Many Londoners have yet to deal with mortgages, energy tariffs and insurance and taking income from a pension is not yet on their radar.

“However, having an appropriate current account and savings product should be essential for all adults and it is concerning that those in the capital feel particularly ill-equipped to deal with these important financial decisions. We need to make sure that information around financial products is simple and easy to understand to make sure these crucial products are accessible to everyone that needs them.”

The East is struggling

Adults living the East of England were found to be struggling with their finances more than the rest of the UK. Although the East Of England is not a generally poor area of the UK, some of the most deprived neighbourhoods are located there[3].

In our Advice Gap research we discovered that 53% of the Eastern population ran out of money before payday at least once in the last year, with the average 46% across Britain.

Less than half (45%) said they were keeping up with their financial commitments without difficulty, less the UK average of 51%.

Finally, less than a third (32%) of those living in the East said they never experienced financial difficulties with the UK average at 36%.

It’s clear that these results show the East of England is struggling to stay on top of their finances and manage their financial situations confidently which can have a wider impact on their wellbeing.

Our CEO, Anthony Morrow commented on the issue saying “Our research shows that the picture in terms of people’s financial security is mixed across Britain, with those in the South of England generally faring better than their neighbours in the East of the country.

Financial services companies need to improve the financial confidence of the nation by ensuring that information is simple and easy to understand. Plugging the adult advice gap by making support and advice around good financial management and planning accessible to all areas of the UK is crucial to improving the wealth of the nation as a whole.”

What can we do to change this?

Education is very important when giving people the right tools to make the correct financial decisions for their personal situation.

There are plenty of websites available that have information on everything from current accounts, to mortgages. Check out Money Saving Expert or the Money Advice Service if you want more information on a specific financial product or issue.

We recommend researching as much as possible before making a financial decision as it can have a long-lasting effect on both your financial and mental wellbeing.

If you’re not sure of your next step, get some advice. OpenMoney was created to help people who aren’t sure what the next step is for their finances – after all, our research revealed that 19.8 million people would appreciate a bit of advice on their finances! So, if you want clear and honest advice, we’re here for you.

If you would like to read more about the Advice Gap report we produced in partnership with YouGov, you can head to our blog here and download the report at the bottom.

[1] - https://www.investopedia.com/articles/personal-finance/091415/how-much-money-do-you-need-live-london.asp

[2] - http://bit.ly/37F7jof

[3] - https://www.eadt.co.uk/ea-life/four-maps-show-some-of-suffolk-and-essex-s-poorest-and-richest-neighbourhoods-sit-side-by-side-1-5100441

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