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What are Credit Scores all about?

6th December 2019
6th December 2019

We all know that credit scores are important – but what are they and how can you influence yours?

What are Credit Scores

Whenever you apply for credit, data is collected on your past financial behaviour so the lender can see what sort of a borrower you are.  The data looks at factors such as how quickly you paid back what you borrowed before, whether you have any outstanding debt and such like. 

The application form is a key source of data for the potential lender.  Making sure this is filled in correctly, fully and honestly is important. 

There are 3 main credit reference agencies in the UK that lenders refer to in determining the degree of risk you represent:  Equifax, Experian and TransUnion (previously called Callcredit).  You can apply online to them to see your credit file but there is usually a cost for this.

Most data they hold will go back 6 years.  The key data is summarised as:

  • Electoral roll: confirming where you live
  • Court records: any court appearances concerned with debt, bankruptcies and County Court Judgements
  • Other lenders who have searched your file
  • Financial associations, where you may have had a joint credit agreement, such as a credit card with a partner
  • Fraud
  • Credit behaviour with banks and building societies, including any loans, mortgages, bank accounts and credit cards.

How to improve your credit rating

There are many ways to do this, but the main top tips are:

  • Check your credit rating files before you apply for credit as there may be errors on the files which can be corrected before you send off the application form
  • Make sure you are on the Electoral Roll by registering to vote
  • If you’re not eligible to vote, send all 3 credit reference agencies proof of residence (such as utility bills)
  • Don’t make late payments on your existing credit
  • If you separate from someone you had joint finances with, tell the credit reference agencies so your finances are no longer linked
  • Don’t make too many credit applications as many applications makes it look like you are needing the money
  • If you are rejected, check the credit files to ensure the information they hold is correct
  • For many more ideas, check online such as here

How to influence childrens attitude to money

29th November 2019
29th November 2019

Some fascinating academic research has been released about childrens attitude to money and how they gain financial skills.  Their core findings are that a child’s attitude to money is embedded by the age of 7, and this attitude will be largely maintained throughout their adult life.  The full report is detailed and can be found here.  They look at ways in which good money practise can be taught, which we summarise below.

The question they ask is: what can parents, caregivers and teachers do to encourage positive habits of self-regulation in children and support their financial understanding?

Younger children participate in practices alongside adults; when they first receive pocket money, its by the encouragement of the parent, or possibly grandparent.  It is at this early stage that influences over the child’s attitude to money need to start.    Children learn from observation, instruction and practice, so all 3 experiences will help strengthen the message.

Typically, by the age of four to five, children will understand that they need to pay for things but may not understand that coins have different values.  By five to six years, they will know that some money will not be enough to buy some items.  Only at around age 7 will they understand that money can be exchanged for goods, and that ‘change’ may be returned.

‘Saving’ can be encouraged by tangible activities such as a savings chart, where the child has a target number of coins to achieve, and fills in the coins as they are ‘saved’.  Studies have shown that children enjoy participating in adult-like behaviour, where encouraging the child to exercise conscious control over their decisions can prove to be very successful.

The key conclusion is that teaching young children explicit forms of ‘financial’ knowledge is not likely to have much impact on shaping or changing their behaviour.  What is important are the basic approaches and skills, which are modelled, discussed and demonstrated by parents and other significant adults.  These skills become the ways in which efficient habits and practices become instilled.  Self regulation is the aim, where the benefits and tools of sharing, saving and buying are understood and applied. Influencing childrens attitude to money is a key task for parents and care givers from an early age.

Fake Money

15th November 2019
15th November 2019

In the week that the Yorkshire Building Society dispensed fake £20 notes from a cash machine in Lancaster, we look further into the murky world of counterfeit money.

The notes were clearly fake, called Twenty Poonds and with “This note is play money” written on them.  But how often do we look that closely at the cash we receive from ATMs?  The Yorkshire Bank are laying responsibility on their third party supplier, not staff within the bank and are offering no-quibble exchanges for real money for anyone receiving the toy money.

How to get fake money

It is remarkably easy to get hold of this counterfeit money.  A search on Google comes up with many eBay offers of this money, all openly describing the ‘money’ as ‘prop’, ‘joke’ or ‘party’ money.  For £10 real money you can buy 10 fake £20 notes – or 100 £50 notes, helpfully described as looking “like a full stack from both sides”.

How to spot fake money

When you know what you are looking for, it becomes relatively easy to spot money that in’t real.  The physical feel is different.  Check also for the silver strip that runs all the way through the real notes – just hold up to a light to check.  Shining an ultraviolet light on the top of the real note shows a harlequin hat, not seen on fakes. 

What happens to the counterfeiters

Punishment for passing off fake money is most definitely real.  Earlier this year in Northern Ireland, a gang who had produced £1m of counterfeit money were sent to prison for up to 18 months. 

What to do if your shop is scammed

The Bank of England has issued guidance for retailers, including free training materials from their website.  The new polymer, plastic notes are much more difficult to forge – for now, at least!

What makes a Good Boss?

25th October 2019
25th October 2019

Google has been studying its own management team, and together with customer satisfaction surveys, has come up with the 10 top attributes of a good boss.  How do these compare to your notion of what makes a good manager?

  1. A good coach: one who helps employees through problems and uses them as valuable learning points.
  2. Empowers the team, rather than micromanaging, by letting you use your skills instead of trying to do everything for you, or watch over your every move.
  3. Creates an inclusive team environment, where people are encouraged to introduce new ideas, and success and well-being are encouraged.
  4. Productive and results focussed: a good boss helps out when necessary, and ensures the team know what their group and individual goals are.
  5. A good communicator – this is both sharing information to the team, and good at listening too.
  6. Supports career development, including discussing performance.  This is best achieved using feedback to help the employee work towards their goals.
  7. Has a clear strategy for the team:  so the individuals in the team know what is expected of them, and what you need to do to get there.
  8. Has technical skills needed to advise the team.  Your boss should at least have an understanding of the tasks they are asking the team to undertake. 
  9. Collaborates across the organisation, by having good relationships with other members of the organisation outside of the immediate team.
  10. Is a strong decision maker, able to take informed decisions rather than constantly prevaricating or avoiding decisions.

As an employee, how does your boss score against these factors?  And if you are a boss, can you honestly claim all 10?  And what would your employees rate you as?

We are also interested in what other attributes you think makes a good boss – tell us over on our Facebook page here. 

Coping with Colleagues

18th October 2019
18th October 2019

Colleagues – dontcha just love them!  Except, that is, when they get on your nerves.  We’ve uncovered some guidance on using the emotionally intelligent response for coping with colleagues.  How many of these do you recognise?

The Egomaniac

You will know this type, who always hogs the limelight and never gives any credit for anything to anyone else.  They basically put others down to make themselves feel better. 

Telling they are wrong won’t prevent their behaviour repeating in the future.  The psychologically smart way to handle them is to positively reward their good behaviour, rather than criticise their annoying traits.

The Gossip

When gossip develops into rumours and dramas, it creates negativity, and raises suspicions about other co-workers. 

The recommended coping strategy is to challenge the accuracy of any gossip, asking for verification – ‘how do you know that? – or just leave the conversation.

The Eternal Pessimist

Everything is doom and gloom, spreading negativity across the whole work place.  Often, the pessimist is just wanting to be heard.

Acknowledging their feelings may help them.  You don’t have to agree with them, but saying ‘if I were you, I may feel the same way’ may help – or try asking them if they have thought of a solution to the problem they are complaining about.

The Lazy Incompetent

Everyone has come across this one – we don’t need to describe this co-worker!

The emotionally intelligent response is to understand their motivations, and work on those.  Someone who values autonomy and freedom won’t respond well to being told to do something by a deadline.  They may, however, respond better to a challenge – ‘that’s a very tight deadline, I bet no-one thinks we could hit it’…

The Bully

The boss who abuses their position of power and treats their workers with disrespect; or those who seek to humiliate others, we’ve all seen this in action.

Typically the bully is looking for a reaction – so the smart response is to not give them one, making them more likely to stop.  If they don’t, collect evidence to prove your case to HR or more senior staff.

And we’d love to hear your strategies for coping with colleagues… let us know on our Facebook page here.

How is your Pension Planning?

11th October 2019
11th October 2019

In the week that saw a lottery win of £170 million, a survey also revealed that for a large part of the population, buying a lottery ticket is their only form of pension planning.  Auto-enrolment has to a large extent changed things as workers now save through company schemes, but we’ve uncovered a few statistics which make for potentially worrying reading if you’re hoping for a happy retirement.

The average amount sitting in pension pots is £61,897.  This will generate a yearly income of about £2,500.  Add this to a full state pension and it doesn’t match the minimum wage. 

One in 8 of all pension pots are over £250,000, which is the minimum most people are going to need.  On average, we are not saving enough to create this size of pot anyway.  Last year, the average amount paid into a pension was £2,700.  Over a 30 year working lifetime, this will create £81,000, nowhere near the amount required. 

Accessing your pension pot is relatively easy, and 25% can be taken out as a tax-free lump sum, which is obviously very attractive.  But is this the best option?  The rules are complex, and taking out a lump now may not always be the best option for you in the longer term.  48% of pension plans in 2018 were accessed without any financial advice.  It is a bit of a minefield, and there are many sources of help and advice – perhaps the best starting point is the Pensions Advisory Service, a free and impartial government service. 

After a lifetime of work, making sure you are able to afford a decent retirement is an important consideration – but one which we don’t tend to think about until it may be too late.   On average, a male will live another 18.6 years after hitting 65, and a female another 20.9 years.  Pension planning really should be about more than buying a lottery ticket. 

Why Business should not go Green

25th September 2019
25th September 2019

Our last blog looked at the pro’s of adopting an environmentally sensitive approach – this week, we look at why business should not go green.

Costs

It can be expensive to switch your source of energy – for example, the initial capital costs of installing solar panels or a wind turbine can be high and it may takes years to achieve overall cost savings.

Increased procurement costs

Sustainable raw materials are likely to be more expensive.  These costs will be passed onto your customers resulting in an increased price for your products, which may make them less competitive and thereby damage your profitability and sales.

Paperless Data Risks

We often discuss the risks associated with digital data.  By going completely paperless and 100% reliant on digital documents, there is an increased risk of damage to your information, either by fraud or error – back-ups become business critical.

False Claims

It’s all very well claiming to be environmentally friendly – but what happens to your reputation if something comes to light which directly impacts on your environmental credentials?  Would discovering your t-shirts are made in a sweatshop where workers are paid tiny amounts per hour damage your green claims?

The Triple Bottom Line

The arguments on why business should not go green, or should, boil down to what is essentially the corporate social responsibility question, that business is not just about profit, but people and the planet too – the triple bottom line.  Often, the interests of profit conflict with those of people and planet.

Inevitably, there is a balance to be struck between ensuring your business is financially sustainable, and that you are doing what you can to protect the environment.  Any social responsibility comes at a cost, and only you can decide what an environmentally sensitive position is worth.  At the end of the day, it’s possibly just a question of wanting to go green – which means it’s all about leadership…

Why business should go green

16th September 2019
16th September 2019

As teabags go plastic-free and bio-degradable – we look at the benefits of a business going green.  And next week we look at the disadvantages…

Making Cost Savings

Reduce your energy usage and you will not only save money but reduce the demand for fossil fuels thereby helping reduce carbon emissions.  Convert to a paperless office will save money on paper, printing and document storage.  Whilst it may not be too relevant for businesses in our area, employees who use their own cycle for business travel are entitled to 20p per mile – much less than the equivalent cost of an employee using their own car.

Tax Advantages

There are Government tax schemes to encourage your business to be more environmentally friendly.  The 3 main types of business who benefit most are:

  • Those that use a lot of energy
  • Small businesses that don’t use a lot of energy and
  • Where you purchase energy-efficient technology.

Government advice is here, but don’t hesitate to contact us for more information on how you can save money.

Building your Brand

Many customers prefer to do business with environmentally aware companies.  If you do go green (or greener), then it is important to let your customers know, through your website and social media.

Leading the Way

By taking the initiative and becoming greener, you will be putting pressure on your competitors to also demonstrate their own approaches to sustainability.  If you are perceived as a leader, then you are able to differentiate yourself from your competition.

Green Work Environment

A green workplace will be a more healthy workplace.  If this also means a reduction in days off sick, you will be able to achieve productivity gains.  A healthier staff group is more likely to be productive, energetic and innovative.

The Feel Good Factor

Hardly a day goes by now without dire warnings about the future of the environment.  It’s not just down to individuals to do their bit, small business also needs to contribute to saving the planet.

Is your business green?  Tell us about the initiatives you have introduced and we’ll happily share them…

How to keep your children cyber secure

2nd September 2019
2nd September 2019

It’s back to school – but are your children as cyber-security aware as they need to be?  We often cover issues around the risks that businesses face from cyber fraud – here we look at ways to keep your children cyber secure … 

Privacy Basics

It’s not just adults who can have their identity stolen.  Disclosing personal data is a big risk, so inadvertently showing your address should be avoided, on bits of paper lying around in photos, or even pics taken outside the house.

Playing the right games…

Do you know what games your children are playing online?  Take Fortnite as an example – some schools have written to parents warning them about this game in particular, which can make children “aggressive and violent”.  If you have no idea what Fortnite is, here are 7 things as a parent you need to know!

Reputation management

This isn’t just for businesses – and it may be too much to expect your child to manage their own online reputation themselves.  We all Google ourselves – don’t we??  But have you ever Googled your child?  This article gives some very useful tips on how to help protect your child without wrapping them in cotton wool.

Password protocols

Teaching children the correct way to use passwords is an essential part of them being safe online.  It doesn’t have to be hard work, as suggested here – the longer the password, the safer it is, so work on encouraging paraphrases as passwords.

360 degree security

Are all of your devices covered by malware software?  Cyber fraudsters don’t differentiate between businesses and individuals, and will have no compunction about whether the device is owned by a child or an adult.  If you take protecting your work devices, then you should check that any Internet of Things gadget in your household is similarly protected, in order to fully keep your children cyber secure.

The Future of Cash

9th August 2019
9th August 2019

In 2018, the Royal Mint didn’t make any new copper coins – 1p and 2p’s, as apparently there are enough in circulation.  The government announced a review into copper coins in 2018, but this was quickly withdrawn and assurances given that we’d still have copper in our purses and pockets.  It makes us ask the question – what is the future of cash?

There are an increasing number of ways that we can pay for things, with contactless payments, mobile apps and digital currencies all gaining in popularity.  Biometrics are expected to be the next new way to pay. 

This all means that we are moving towards a cashless society.  Already, 1 in 10 in the UK are effectively cashless – and its higher amongst younger people, with one in six 25-34 year olds being cashless.  7 in every 10 people now use contactless, with East Anglia topping the regions.  Being cashless means paying for only 1 thing with cash in a month, or none. 

What does this mean for business?  There are 5 main areas where this will impact on SMEs:

  • There will be less cash on the premises, so reduced risk of burglary and theft
  • Payments will be easier, not just with a swipe of a card but possibly even just the use of a fingerprint
  • Quicker payments should lead to greater efficiency, as less time is taken finding change
  • It will be more environmentally friendly
  • SMEs will need to keep up to speed with new developments as consumers keep searching for easier ways to pay

But there are downsides, with elderly and more vulnerable people most at risk, as well as people living in rural areas such as our own.  Banks are already talking of closing free to use ATM cash machines, and nearly 3,000 bank branches have closed in the past 4 years. 

We won’t see the withdrawal of real money for some time, but the trend is clear – the future of cash is not looking that rosy. 

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