Blog: Nottingham Credit Union’s Ella Ferris on why the importance of responsible lending has been highlighted by BrightHouse’s £14.8million fine.

“Last month, rent-to-own retailer BrightHouse was told to pay £14.8m to 249,000 of its customers by financial regulator, the Financial Conduct Authority (FCA). There were two reasons for this – the first was to compensate customers who had cancelled agreements after one down payment, but who hadn’t received a refund. The second was for not making a proper financial assessment of customers who had signed up to make sure that payments were affordable – therefore not acting as a responsible lender.

“A report by the Financial Inclusion Centre in March 2016 found that the cheapest washing machine at BrightHouse cost £471 – but with the three-year weekly repayments at 69.9% APR, it actually cost £1056 with product insurance in total. This is over £500 more – whereas the cheapest similar product on the high street was £250. Four times cheaper.

“High-cost lenders like BrightHouse (and payday lenders which have even higher interest rates) make it really easy for customers to access credit for household goods and they then may end up paying back twice as much or not being able to afford to repay at all. It is pure and simply charging people on a low level of income and who have limited choices in terms of credit (and who may be desperate) a higher price when they are less able to afford it. While £10 a week for a washing machine seems OK in the grand scheme of things, customers need to realise that they are paying for it over three years, as opposed to six months. Goods can also be overpriced to start with and all these things are setting customers up for a fall.

 

“When you’re living on a low income and spending more than you need to on household goods with high cost lenders, this affects how much you can put towards vital things like food, rent, heating and bills. There are affordable and ethical alternatives out there including credit unions which don’t sell washing machines, but can provide loans to people who need them. We work in partnership with local registered social landlords who help promote us to avoid tenants using high-cost or payday lender and get trapped into the cycle of debt.

“The key thing is to work out how much a product is going to cost you overall over the duration of the loan. Most loans specify APRs, but these baffle people and it is much more important to consider the total amount to pay back because this will help you to make a decision as to if you can afford it.

“At Nottingham Credit Union, we are an affordable, responsible lender and have a lot of customers who have come to us after having difficulties with high cost and payday lenders. It’s very easy to get into these situations – easy access to finance for products, very quick turnaround and with great customer service so people go back for more. It’s sometimes not quite so easy to get out of the debt created.

“We try to help educate people into looking at all the options and whether they can afford repayments. We try to look at where we can help reduce costs for our members by properly assessing paperwork and bank statements. £10 a week for a washing machine doesn’t sound like much, but when you add up the total cost it could cover an annual family holiday.”

If you would like to speak to Nottingham Credit Union about cheaper loans, contact us on 0115 828 3121 or info@nottinghamcu.co.uk

Categories: BLOG.

5 Top Money Saving Tips for Christmas

Although we are heading towards the end of October, now is definitely the time to start thinking about Christmas and planning ahead. We’ve got 5 top money saving tips for Christmas that we think might help as you start the gallop towards the festive season.

In the summer we talked about saving for Christmas. If you have, that’s great, you’ll have a pot to fall back on when you reach December and if you’ve not, don’t panic, there is still time!

Save Regularly

Whether you get money coming in each week or month, transfer it out of your current account into an another account. A Nottingham Credit Union share (savings) account works very well for this purpose and because you are a payroll member, you can have the deduction taken straight from your salary, taking away the hassle of having to transfer it yourself. We also know that having the savings separate to your usual bank account means you are less likely to dip into them.

Although we only have November and December remaining, set this up as regular savings going forward – that way you’ll have started a good savings pot for next year.

Budget

It’s an obvious one but when you are under pressure from your kids to buy the latest gadgets, budgets can often go out of the window. Most people know what they have coming in between now and Christmas. Don’t forget you will also need to factor in food and entertaining over the Christmas period. From statistics published last year a family will spend an average of £800 on Christmas.

You can come up with a budget by working out what you will spend on food, entertaining and presents and then looking at what income you have coming in. Be realistic. There is no point in budgeting to spend £500 and blowing that by spending £1,000. Additionally, planning the perfect Christmas might not be what you can afford either! Unfortunately bills don’t stop because Christmas is coming and so be sure to cover all your usual expenses before buying presents.  

Borrow Responsibly

Although the message this time of year is usually one of drinking responsibly, we encourage you to borrow responsibly. Although there is a temptation to put Christmas on a credit card and indeed statistics show that almost a third of shoppers last year did this, there is an inevitable price to pay in doing this.

It takes minutes to buy with a credit card but months and years to pay it back. Is the expensive priced gadget worth that to you? We all want to please our loved ones with the perfect presents, but debt takes away people’s happiness as well as their spare income.

Last year there was an increase of 60% on the number of people who called the National Debtline after Christmas with worries about overspending.

We aren’t trying to burst the festive bubble, but we don’t want you to become another debt statistic – borrow responsibly.

As you know, Nottingham Credit Union offer affordable loans for payroll members where the repayments are deducted directly from your salary. There is something to suit everyone’s budget and so if you do need to borrow, you can do so sensibly.

Share!

Christmas is all about family and friends so why not share the load! When you have friends or family over, rather than being responsible for all the food and entertainment, ask others to contribute. People are more than happy to bring dessert or go halves on the food and drink bill.

Giving isn’t always expensive

Be creative. Your kids may not thank you for home-made gifts but others will. Bake Christmas cakes and other goodies or if you are creative, put together gift baskets. You can also find plenty of festive gifts for £5-£10 that don’t cost the earth but that people would appreciate. Shop around and don’t be afraid to spend less. The gift is in the giving remember

 

 

Categories: BLOG.

How to pick up the best last minute holidays for half term

It’s always good to try and get away when the kids have a break from school. We’ve done some research and found some great tips on how to pick up the best last minute holidays for half term.

Here’s what we found:

Holiday in the UK

If your budget won’t stretch to a holiday overseas, you could always opt for a holiday at home. Lots of people dash abroad for half term holidays and so there are lots of deals to be had at home. It might be a bit chillier in the UK this time of year but it can be just as much fun and all that lovely fresh sea air. Haven Holidays for example collect all the late deals in one long list, making booking much easier. Here’s the link to the Haven late holiday deals for 2017.

 

Plan the Trip Yourself

Although travel sites often have some brilliant last minute deals, you can sometimes get a cheaper option by booking each element yourself. This means booking the flights, accommodation and transfers separately. It requires a little more planning but it can work out cheaper. It is best to cross check that you can get accommodation on the same dates as flights but there are so many budget airlines offering different flight times and dates that it is usually pretty easy to get what you want. Booking.com offer some great deals on accommodation and you can search for shuttle transfers in the location you are visiting to find the best deals.

 

Last Minute Travel Agents

Although there are lots of last minute sites out there, if you are able to wait until the very last minute, like just 1-3 days before, you can grab a bargain at your local travel agents. You see the signs in the window or the rows of cards telling you what the last minute holiday deals are. This can sometimes mean you won’t know which hotel you are going to until the day, but if you are laid back and easy going this might be the option for you. You can simply provide dates and go with what comes up. You can specify location and even the star rating of your accommodation too. Definitely worth considering and one of the best tips for how to pick up the best last minute holidays for half term.

 

Newspapers

The press are always publishing the latest information on how to grab a last minute holiday deal. Try these for starters as they have recently published articles on how to pick up the best last minute holidays for half term.

Birmingham Mail – Cheap Last Minute October Half Term Holidays 2017

Telegraph – The 25 Best Last Minute Family Holidays for October Half Term

Telegraph – The 40 Best Last Minute Family Holiday Destinations for October Half Term

Independent – The 10 Best Last Minute Travel Websites

Mirror – Best Hacks to Find Cheap Last Minute Holiday Deals from the UK and how to Save on Trips Abroad

 

Airlines

Many airlines offer complete holiday packages. The airfares are often much cheaper than if you buy elsewhere. Try British Airways, Virgin, Thomson or Easyjet.

 

Travel & Comparison Sites

Finally, there are always great deals to be had by looking online at places like Travel Republic, Travel Supermarket and On the Beach. Do some searching on how to pick up the best last minute holidays for half term.

Have fun!

 

Categories: BLOG.

Benefits of Payroll Membership

BENEFITS OF PAYROLL MEMBERSHIP

Saving doesn’t come naturally to everyone. Indeed, many people live financially from month to month. This can become difficult at times, especially if you need money in an emergency. This could be anything from an appliance breaking down, home or car maintenance or needing to travel somewhere. Having regular savings isn’t just about paying for the things you want, but more linked to security and knowing that if you need something urgently, you have the money to pay for it.

Saving Basics

If you have ever read anything about wealth building or managing your finances better, you’ll know that the general rule of thumb is to save 10% of everything you earn. We know that this isn’t always going to be possible, but as a starting point, it’s a good guideline. Let’s keep it simple – if you earn £1,000 a month the savings plan would be to save £100 of that. If that isn’t feasible work from the 10% figure until you reach a number that is. Even saving 1%, just £10 a month, is better than saving none at all.

How does Payroll Membership Work?

If you are already a member you will know that the best way to think about payroll membership is in the same way that a pension payment is made; directly from wages or salary. A link is set up between us, the credit union and your payroll department. You, as the member of staff, sign up and open a credit union account and then specify a savings amount to be deducted each month or week. The amount is deducted from the net salary (after tax) and transferred directly to your credit union account. 

Why is it easier to Save this Way?

One of the biggest mistakes people make when saving is that they wait until they have been paid or bought everything else before deciding what to save. Returning to savings basics, you should always pay yourself first i.e. save. We are not suggesting you avoid important bills or payments, but by considering a regular savings amount that you can afford, and paying that first, you are more likely to succeed with your savings than if you consider it an afterthought.

Savings then becomes an important payment you make each week or month. The beauty of course is that you are paying yourself! We all deserve to have the security of savings and this is a tried and tested way of doing it. Just like any other banking organization, we are protected by the Financial Services Compensation Scheme up to £85,000.

What about borrowing. Can I apply for a loan with payroll membership?

Yes! Part of managing your money better is being able to access affordable loans when you need to. If we dipped into our savings every time we needed something we would have nothing left. So you may wish to borrow from time to time too.

As a credit union we can often give a preferential loan rate to payroll members.  

In the same way that you make regular payments from your salary to save, you can apply for a loan and have the repayments deducted directly from your salary. For peace of mind and confidentiality, payroll departments do not have any information on what the payment you are making to the credit union is for (i.e. it could be for savings or loan repayments). You only have to specify the amount and frequency. The payment is simply sent to your loan account for repayment.

How can I join a Payroll Deduction Scheme?

As an employee of a partnered organisation, if you aren’t yet a member, you can become a member of Nottingham Credit Union at any time. If you are already a member and are not yet saving, why not set up a payment now. You can also apply for a loan at any time.

Please visit our dedicated Payroll Pro website to find out more www.payroll-pro.org.uk

HALF TERM HOLIDAYSbenefits of payroll membership

It does feel like we skipped the last half of summer and with such brisk weather, heading off to somewhere warm and sunny for October half term is tempting. Despite the fact that some holiday companies do hike up their prices during this time, there are lots of great deals to be had.

If you need a little extra to make it happen, we can help. As an example you could borrow £1000 for 12 months with a repayment of just £91 a month*. Remember this repayment can be made directly from your salary.

Visit our Payroll Pro website today and apply online

www.payroll-pro.org.uk/loans

 

 

* Terms & Conditions apply. Loans are subject to status. Over 18’s only. Example based on loan amount of £1000 at APR of 17.5%. repayable over 12 months with total interest of £89.74. Total amount repayable £1089.74. Nottingham Credit Union encourages responsible lending.

Categories: BLOG.

How to be a better spender

FOCUS:  HOW TO BE A BETTER SPENDER

 

The most familiar saying we use is, how to be a better saver, but we all spend and spending is good when you are savvy about it, so we want this month to focus on how to be a better spender.

 

Money

 

Money makes the world go around! It literally does. Although money definitely does not buy you happiness, it puts a roof over your head, food in your fridge, clothes on your back, a car to drive and holidays to enjoy. Money is a value exchange – you receive something, whether that be goods or services and you give money in exchange.

 

Spending

 

When you think of money simply as a value exchange, spending is a necessity. There are of course those items we need and those we want. We often grumble about paying bills but if you think about the value exchange again, we could perhaps feel grateful for that spending – paying your gas bill for example means you are warm in winter and you can cook for yourself and your family. Paying your rent or mortgage gives you a lovely place to live and paying your TV or phone bill keeps you connected and entertained.

 

One of the best ways to become better at spending is to feel more grateful for the things you DO pay for now out of necessity. Those things mentioned above.

 

In the same way feel grateful for the money you can save too – although it feels like this is not spending, truly you are spending it on yourself. Saving it for a rainy day, a holiday or just for an emergency should you need it.

 

Emotional Spending

 

Call if what you will, but some spending comes from a desire to make us feel better – for want of a better word, let’s call this emotional spending. We buy something we might not be able to afford but we do it anyway because we think it will make us feel better. If we can’t afford it we then feel bad because we needed the money for something else or we had to borrow it which means paying it back.

 

One of the best ways to become better at spending is to think about whether the item you are buying will make you happy. That includes whether you can really afford it.

 

Sometimes if you ask yourself that question and leave it for a day or two, you will often come to the conclusion that the money could be better spent.

We are surrounded by consumerism – constantly encouraged to buy more and convinced we need more things. Truly a happy life is more about the journey in between which is of course experiences, rather than things.

 

Mindful Spending

 

Mindful spending is really the opposite of emotional spending. We are not suggesting you give up things (although you could reduce them if you wanted to and see the difference) but we are suggesting before you buy more things, you consider whether you really do want them and whether they will in fact add to your happiness or take away from it.

 

Being savvy about your spending in this way over time helps you become a better spender. You are more mindful about what you do spend your money on. You might even realise that you don’t need to spend as much as you do on ‘things’ which then allows you to save more towards ‘experiences’.

 

 

Categories: BLOG.

Summer on a budget

When you only enjoy a few months of warmer weather, it makes you want to go out and do as much as you can when the sun is shining! That can get expensive and so here are our top tips for planning your summer on a budget:

Top Tip #1

Make sure you have a budget to start with! If you don’t have any kind of plan as to how much you can actually spend you will find yourself getting into debt or not actually doing anything. Give yourself a budget for each month and try to stick to it!

Top Tip # 2Shop around! These days you can get online deals for just about everything and that includes days out, all kinds of travel and hotel stays here and abroad.

Top Tip #2

Join forces with friends or family. Sometimes going in a group on holiday or a trip out can make the whole thing much cheaper.

Top Tip #3

Be creative. Having fun during summer isn’t just about going on holidays or day trips. It might just be a picnic in the park, walking in the woods or having a BBQ with friends. Talk to your family about what they want to and come up with ideas that will keep you all entertained.

Top Tip #4

Car boot! Not to attend as a visitor but to do one to give yourself spare cash. Most people have a shed and attic full of things they no longer want or use. Clear out your clutter and have a car boot. These take place all over during the warmer and drier summer months, so make the most of it. You can usually get yourself set up early and be done by lunchtime. You could end up with a couple of hundred pounds just for clearing out! Obviously avoid then spending this at the car boot yourself!!

Top Tip #5

Start to relax. Balance your life with doing and just being. You could tidy and spruce up your garden and simply enjoy being at home relaxing!

Most of all have fun! Please share your tips for summer on a budget with us by visiting our Facebook page.

Categories: BLOG.

How to give your garden a makeover on a budget

If you would love to spruce up your garden but are a bit short on cash we thought knowing how to give your garden a makeover on a budget might help. You don’t have to rush out and buy expensive furniture or imported trees to have a good looking garden that you can enjoy in the sunshine. Here’s our top tips to get you started:

Start with your Grass

According to House Beautiful, one of the easiest ways to transform your garden is to cut the grass into a shape. That may be round, rectangle or square. Mark out the shape with string and cut the excess grass using a spade. It will be a really well spent afternoon!

Plant some Perennials

Now your first thought is going to be what are perennials! They are actually just plants that last a couple of years. Hardy border plants. You know the kind you see in rows and rows of little pots. They only cost a couple of pounds each and you can often get great deals on them at garden centres or in the supermarket. You will probably only need about 5 or 6 for an average sized garden. Just plant in a border and they will last you a couple of years! Examples of well known perennials are geraniums and lavender. They look really pretty and will attract bees and butterflies!

Pave the Way

Depending on your budget you might want to think about putting in a path. Surprisingly you could do this for around £40. You just need to mark the area you want your path to be. Then, scrape away the loose soil or cut out the grass and lay down a membrane. You can get these from any garden centre and this will stop the weeds coming through. Again you can buy the gravel from the garden centre. Another idea is to try eBay, Homebase, B & Q or a local builders yard. Next, spread the gravel over the membrane. You want to make sure the gravel is about 2.5 cm deep to get a good coverage. A big bag will cover about 20 square metres. The lighter gravel you pick the nicer the contrast will be with your grass or borders.

Add some Sparkle

You can get some really great garden lights that work on LED and are battery powered. This means no need for wiring or fiddly plugs! Simply string along the fence, trees or hedges for a really lovely twilight. Look online for better deals or try  one of the bigger supermarket chains which usually have some good deals on outdoor lights.

The Extras

If you’ve given yourself a budget and have spare, you can always buy some pots and plants to put along the patio. Choose pretty colours and different heights and types to give a real interesting outlook.

In terms of furniture you could always look in second hand stores or online auction sites like eBay. Larger supermarkets usually have summer deals running too where you can get a decent garden furniture set for much less. Facebook also have selling ads now as well as Gumtree, so do shop around.

Have fun in the sun!

Categories: BLOG.

The Importance of Teaching our Kids about Money

FOCUS: THE IMPORTANCE OF TEACHING OUR KIDS ABOUT MONEY

This month we shift our focus to our children and the importance of teaching them about money

Regardless of our own financial circumstances, if we are to bring up kids who are able to live a full and happy life, it’s important we give them the tools to manage and understand money.  The saying that money doesn’t buy happiness carries some truth, but considering our entire planet revolves around its exchange, what money does or does not buy us most definitely impacts on our happiness.

The Benefits of Teaching our Kids about Money

There are many benefits to teaching our kids about money, for us and them!

In making a commitment to do this, it makes us look at the way we ourselves behave around money. If we constantly spend without saving or pay little attention to what is coming in and out of our bank account, we aren’t going to be in a position to set a good example. That isn’t to say we can’t, it just means our children learn by watching us.

If we can get to grips with some basic information to pass over to our kids it enables us to look at the way we manage money ourselves and work to improve that, thus providing a better example for our kids to follow.

As with anything, our kids learn their behaviour by what goes on around them. As parents we impact heavily on this. School, friends, family and other environments they are open to will affect the way they learn about money too.

If we are consistently giving them positive messages about money, this will become their normal. To give you an example of this, most of us can probably relate to being told certain things about money when growing up. As a child you take things literally and so these things take root and become your beliefs around money. For example, imagine you are told every day that there is not enough money, money doesn’t grow on trees, money is the root of all evil and money is hard to come by. As children, the messages we are given around money will most often shape our beliefs and behaviours around money as we grow into adults.

This highlights the real benefits of relaying very positive messages to our kids about money!

Where to Start

The most obvious place to start is with ourselves. By being conscious of what we say to our kids about money will help them create healthy beliefs around money. Money is after all just paper – it is the meaning we apply to it that really makes it what it is (or is not) in our lives!

Start with the basics:

  • Give your kids an amount of money each week and explain that it is a good idea to save at least 10% of this (working out the percentages will also help with maths too). If your children are too young to understand percentages, explain it in a way that they can understand or show them with the money itself i.e. suppose you give them £5 each a week, have them work out the 10% to save or give them the money in change and show them what to save, taking out the 50p.
  • Talk to them about money in a positive way. Explain that money is used as a value exchange – kids obviously aren’t going to understand the word value in the way that we do, so talk to them on their level in a way they can understand. Perhaps around toys – for example, the value of a football or sweets etc.
  • Teach them about spending. Give them positive messages about paying bills on time, the reasons we work and have money so that we can pay for things.
  • Help them to understand spending within limits and why that’s important. Talk to them about debt and how that impacts on their quality of life.

Most importantly make money fun. Spending money should be fun but not so that you leave yourself with nothing. Help them to see that money is meant to be used for good and to benefit our lives and that ultimately paying yourself first by saving is the best thing you can learn to do for yourself!

Resources

Fortunately we have the power of Google and you’ll find some great articles, tips and advice about teaching your kids about money. You’ll also find you become better at managing your own money through doing it too!

ENJOY!

 

Categories: BLOG.

Going out on a budget

Going out on a budget doesn’t mean you can’t have fun.

Tips to Going out on a Budget

Here’s a few tips to get the most of your night out.

  • Have pre drinks. You are going to be dressed up to go out, but just make the first part of your night, pre drinks at home or at a friends house. This will save you so much money and means you have more for your night out.
  • If you are going out in a group and can’t afford to buy rounds, don’t be afraid to say. Better to be honest!
  • Set yourself a budget for your night out and stick to it. Take cash rather than your card to avoid taking more money out that you haven’t budgeted for.
  • If you are dining out, why not include a voucher. Places like Prezzo are always sending offers for evenings out. Sign up to a few of your local restaurants and go out when you received the vouchers they often send.
  • Always alternate your drinks with water. Not only does this save you money but it will also save you the headache in the morning!
  • Share dessert – always a winner!
  • Share a taxi home if you are going out with friends. It is surprising how much money you save when you split the cost of a taxi fare.

Plan your Nights Out

Although sometimes it can be fun to do something spontaneous, planning in advance gives you time to save the money needed. Whether that’s going on a shopping trip with friends, dinner out or going to party the night away in a club. Schedule in regular nights out with friends. Going out in a group saves you money on a lot of things and is often more fun too.

Host a Party

Although you will often need to buy some essentials, have a BBQ or other party at home can be more fun than going out. Ask everyone to bring something and make a real event of it.

Be Creative

Nights out don’t always have to be about drinking and dinner, get creative and look around on what’s available. You might find concert tickets at the last minute or an offer on an activity day or night somewhere.

Set a Budget Aside

Fun and entertainment is just a part of life as work or exercise for example. See the value in having fun and going out with your family and friends. Set yourself a budget to do this. Over time you might find that you can cut back in some areas to give yourself more time out.

Categories: BLOG.

The Impact of Pay Day Lending on your Credit Score

FOCUS: PAY DAY LENDERS

This month we are focusing on the impact of pay day lending on your credit score and future borrowing. Pay day lenders are a tempting option for some with the lure of fast cash and an easy repayment option. However, the reality is very different.

Lynn’s Story

Here’s Lynn’s story:

“I turned to pay day lenders when my husband’s income changed. He works as an estate agent and when he moved to a new job he found that some month’s his commission didn’t reach the income that it had before. The first month it happened, we just managed to cover all our bills but then had nothing left for the rest of the month.

We have 4 children and so as well as food shopping and petrol to get us both to work, there were lunch monies to pay for, swimming lessons and all the things that come every month with having a busy family life. We simply couldn’t make ends meet and because we had a loan from our bank already and needed the money fast, we didn’t know where else to turn. I found the pay day lender online and literally completed my application and got the money in my bank that same day. It was so easy and I felt like it was a life saver. 

The Problem

The problem was that the next month because we had to take that chunk out of our income again it meant we were short. We borrowed again. This continued and I even had the pay day lender app on my phone which made things a whole lot easier.

Not only were we borrowing every month but a few times, when my husband’s income was down, we weren’t able to pay the full amount back. The interest was like having another loan. I just couldn’t believe how high it was.

Finally, I went to see our bank and ask if they could help and was shocked to find out that because we had used a pay day lender it had affected our credit score!”

Lynn’s story isn’t an isolated one. Many people turn to pay day lenders because they are in need of money fast and because it is just until the next pay day it seems that it won’t be a problem. As Lynn’s story reflects, using a pay day lender can affect your credit score.

High Risk

There is no hard and fast rule on whether using a pay day lender will or will not affect your credit score because financial organisations have different lending criteria. However, what we do know is that it can affect borrowing from banks, mortgage and other lenders.

Some organisations deem that using a pay day lender means you are a high risk borrower and so will not lend to you, whereas others may simply charge a much higher rate of interest. 

Ask James

James Jones is Experian’s Head of Consumer Affairs. Experian is the most widely used credit check agency for lenders in the UK. ‘Ask James’ is a section of Experian where members of the public can ask James pretty much anything related to credit ratings.

Recently someone asked James whether payday loans damage your credit rating. You can read James’ answer here http://www.experian.co.uk/consumer/questions/askjames246.html

Reality

We encourage anyone considering a pay day loan to consider all options available to them. Take advice from your local Money Advice Service or local Citizens Advice Bureau if you are in debt. Contact your own bank to discuss your financial problems openly to see if they can help you.

The reality is that although pay day loans are a fast and easy way to access cash the impact of pay day lending can and very much does affect future borrowing and your credit score.

Categories: BLOG.