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Identity theft happens when fraudsters access enough information about someone’s identity (such as their name, date of birth, current or previous addresses) to enable them to commit identity fraud. Identity theft can take place whether the fraud victim is alive, or deceased.
If you’re a victim of identity theft, it can lead to fraud that can have a direct impact on your personal finances and could also make it difficult for you to obtain loans, credit cards or a mortgage until the matter is resolved.
What is identity fraud?
Identity fraud is the use of a stolen identity for criminal activity, such as to obtain goods or services by deception. Fraudsters could use your identity details to:
You may not become aware that you have been a victim of identity fraud until you receive bills or invoices for things you haven’t ordered, or if you receive letters from debt collectors for debts that aren’t yours.
What is phishing
Fraudsters may try to trick you into revealing personal information by pretending to be from a legitimate source – this is known as ‘phishing’. A phishing scam usually begins with an email (perhaps with a link to a fake website, or with a form attached), a text, or an unexpected call which looks or sounds like it’s from a genuine business. The email or website might even have all the right logos or fonts on it. The scam might ask for personal details like usernames, passwords, PINs, or even ask directly for your bank account details. Alternatively, you may be encouraged to open a document attached to an email, which could in fact infect your computer with a virus.
Often, the approach is made under the premise of conducting routine maintenance, or to update your security details. A more dramatic approach (designed to frighten you into taking action) can be to tell you that you have already been the victim of fraud, and that the details are required to confirm that you are who you say you are, and to stop any further fraud taking place.
How can I spot a possible phishing scam?
Phishing isn’t always easy to identify, but there are a number of clues to look out for, for example:
What should I do if I suspect a scam?
If you have any reason to suspect whether the contact is genuine – even if it just doesn’t ‘feel’ right – proceed with caution.
What should I do next?
If the contact claims to be from an organisation that you already have a financial relationship with, check previous correspondence you have received from them (a bank or credit card statement, for example), or look up their website address via a search engine such as Google or Yahoo, to find a genuine Helpline telephone number. Call their Helpline, explain the contact you have received and ask them if it is genuine or not; they may be able to help you immediately, or may need to put you through to their fraud department to confirm whether the contact was genuine or not.
If you do not have a financial relationship with the organisation that has contacted you, there is more reason to be suspicious. Search for their website via a search engine such as Google or Yahoo, and contact their Helpline number.
You can download this information in our Protect Yourself Against Fraud guide.
On September 27, Citizens Advice (CA) raised a super-complaint with the Competition and Markets Authority (CMA) about long-term customers overpaying for key services in five ‘essential markets’, including mortgages, household insurance, mobile, broadband and savings accounts.
Whilst all individuals have the right to complain, designated consumer organisations can make a super-complaint on behalf of thousands, or potentially millions of people. A super-complaint requires regulators to investigate the markets or market practices that the consumer organisation thinks are significantly harming the interests of consumers.
This complaint calls on the CMA to tackle the ‘loyalty penalty’ in essential markets to “protect people from being ripped off”.
CA estimates that people who are loyal to their service providers are losing out on more than £4bn a year, when compared to the deals available to new customers, or customers who switch providers. Within its complaint the consumer group claimed “It is, in effect, a systematic scam”, adding that nobody would choose to pay these extortionate sums and that companies charge these prices solely in the hope that people won’t notice.
Citizens Advice doesn’t use its power to make a super-complaint frequently. The last time it raised one was seven years ago, regarding the mis-selling of Payment Protection Insurance (PPI) – which has since led to £32.2bn being returned to customers in refunds and compensation.
Savings accounts headlines
The headline observations from the super-complaint relating to savings account are:
Recent research from Legal & General has found that whilst parents continue to lend or give money to children or grandchildren to get on the property ladder, they are feeling the pinch themselves with the average contribution going down by 17% this year to £18,000. A significant number of people are now finding themselves worse off financially as a result of making the gift. Nevertheless, more than one in four buyers still expect to receive help from family or friends.
Despite the amount being lent or given dropping to £5.7bn this year compared to £6.5bn last year, the so-called Bank of Mum and Dad was still a ‘prime mover’ in the housing market.
Key findings from the research were:
You may have already helped a family member with a property purchase, or be considering doing so in the future. If that’s the case, it’s important that you give any money you put aside the opportunity to grow at least at the rate of house-price inflation – but with house price inflation varying across the country, it is difficult to know just how much these savings have to grow by to hold their value.
Investment Marketing Team
If you’ve already saved your ISA allowance for this year, you probably shopped around to find a competitive rate first. The ISA rules allow you to choose a different ISA manager for your contribution each year if you want to; you don’t have to save with the same ISA manager each year.
Whilst this flexibility gives you the freedom to find the best rate for the current year’s allowance, it can also leave your finances fragmented, with your ISAs spread across several providers – and that could mean that you’re losing out overall. The rate you managed to find a few years ago may have been competitive at the time, but that might not be the case now.
This is where the ISA Transfer option can prove to be beneficial. ISAs accumulated in previous tax years can be moved about independently of the ISA manager that you’ve chosen for this year’s allowance – allowing you to shop around for the best interest rates for the contributions you’ve made in previous years, as well as this year.
The transfer of a cash ISA is normally very simple – you instruct the new manager to request the transfer from the old one (via the application form, usually), and the cash value is then applied for, and moved across on your behalf.
Stocks & Shares ISAs are a little different. Whilst the process for requesting the transfer is the same, the actual ISA value can be transferred in one of two ways. The first is as per a cash ISA; any assets held within the stocks and shares ISA are encashed, and the cash value is then transferred to the new ISA manager.
The second is known as an in-specie transfer and here the actual assets, rather than their cash value, are transferred to the new ISA manager. These types of transfer can only be arranged if the new ISA manager is able to accept and hold the assets, and there may be charges involved in facilitating the transfer. The main benefit of an in-specie transfer is that the assets will remain invested throughout the process and will therefore avoid the risk of the re-purchase price being higher than the price achieved when the assets were sold.
It is essential to remember that, for an ISA value to retain its ISA status, any transfer must be made using the formal transfer process. If you cash your ISA in and then try to forward the value to a new ISA manager, you have effectively withdrawn your money from the ISA and so any subsequent contribution paid to the new ISA manager would be counted as part of your current tax year’s ISA contribution allowance.
You can find out more about ISAs by viewing our ISAs Explained Q&A Guide article. If you’re interested in finding out more about Castle Trust’s Fortress Bond ISAs, there’s more information on our Investments Information page.
Investment Marketing Team
What is an ISA?
ISA stands for Individual Savings Account. An ISA is a way of holding savings or investments without paying personal tax on interest received, or on the growth of your investment.
What kinds of ISA are there?
How much can I save into a Cash or Stocks & Shares ISA?
There is a limit for how much new money you can place into these ISAs each year. For the 2018-2019 tax year, that amount is £20,000.
What are the tax year dates?
The tax year starts on 06 April each year, and runs to the following 05 April.
Do I have to use the same ISA provider each year?
No. Your options start afresh each tax year. If you contributed to an ISA with a company in any particular year, you’re not committed to using them again in the future – you could choose a new company for each year’s ISA contributions if you wanted to.
Can I save into more than one ISA during the same tax year?
You can contribute to one Cash ISA, one Stocks & Shares ISA, and/or one Innovative Finance ISA per tax year (so you could contribute to one, two or three types during the same tax year if you wanted to). Whilst you could choose a different company for each one of these ISAs, you can’t contribute to the same type of ISA with two different companies during the same tax year – for example, if you make a contribution to your existing Cash ISA provider during a tax year, you can’t then also make a contribution with a different Cash ISA provider in the same tax year. Your total contributions during the tax year can’t exceed the annual ISA contribution allowance.
Can I transfer any existing ISA savings to a new ISA provider?
Subject to each ISA provider’s terms, you can transfer existing ISA savings to a different ISA provider – and as the value being transferred relates to contributions made in a previous tax year, any transfer is in addition to your current annual contribution allowance. A transfer of contributions made in the current tax year must be made in full;
ISAs built up in previous years can be transferred partially or in full, but this again may be subject to the terms of the provider that currently holds the ISA.
If you are considering transferring an existing ISA, you should contact the provider to whom you wish to make the transfer first; they will then arrange for the transfer value to be requested from your existing provider. If you withdraw the existing ISA value and send it to the new provider, this would make the existing value lose its ISA status, which would then mean it would be classed as a new contribution
again – which might mean that you exceed the current year’s annual contribution allowance.
Can I transfer one type of ISA into another type of ISA?
Yes. For example, you could transfer an existing Cash ISA into a Stocks & Shares ISA with a different provider.
Can I withdraw money from an ISA?
Subject to the ISA provider’s terms allowing withdrawals to be made, you can make withdrawals from your ISA. An example of when you might not be able to make a withdrawal is if you put money into a fixed-term savings account, but not yet have reached the end of the term.
If a withdrawal is made, that money loses its ISA status; if it is then put into a new ISA, it will count towards the current year’s annual contribution allowance. The exception to this is if you make a withdrawal from a Cash ISA that you are contributing to in the current tax year; if that’s the case, you can replace the money you have withdrawn without it counting towards your annual ISA contribution allowance, providing that you do this during the current tax year.
What happens to my ISA if I die?
If you die, a surviving spouse or civil partner is eligible for a one-off additional ISA contribution allowance that is equivalent to the value of the deceased person’s ISA at their time of death; this is referred to as an ‘additional permitted subscription’, or APS allowance. This additional allowance is available even if the actual ISA value is bequeathed to someone else in your will (the benefits themselves will lose their ISA status). To allow time for the administration of more complex estates to be completed, ISAs can retain their tax-free status for up to 3 years the date of death.
You can download this information in our ISAs Explained Q&A Guide.
If you’re interested in finding out more about Castle Trust’s Fortress Bond ISAs, there’s more information on our Investments Information page.
Investment Marketing Team
This material is provided for informational purposes only and does not represent investment advice or recommendation to invest in any financial instrument or security.
Please note: the information in this article was correct at the time of publication, but is subject to change in the future.
If you're making a payment abroad using a credit or debit card, you may be asked whether you want to pay in the local currency, or in Sterling. This might seem an innocent enough question, but beware because a nasty sting in the tail awaits those who ask to pay in Sterling.
Typically you are better off opting to pay in the local currency, rather than converting to Sterling as you make the purchase. If you pay using the local currency, the transaction will then be converted into Sterling at the Mastercard, Visa or Amex own rate. This rate is set daily by Mastercard, Visa or Amex and is linked to the interbank rate, which is a wholesale price agreed between banks. Your card provider will then typically add their own profit margin – usually between 2.75% to 2.99% and the total cost will appear on your statement in Sterling.
Should you elect, however, to pay Sterling at the point of purchase, a service known as Dynamic Currency Conversion (DCC) may be employed which allows the merchant – that is the shop, bar or restaurant – to set their own exchange rate rather than using the Mastercard or Visa official rate. Surveys have shown that this can typically add around a 7% fee; Cash machines seem to be the biggest culprits, with the conversion having been shown to add up to 18% of the cost of the cash withdrawal if you choose to be billed in Sterling, and not the local currency. If you consider how much you may spend on your card during a typical holiday this huge cost can add up to a big, nasty surprise when you open your statement the following month – so beware, and if not offered the opportunity to pay in the local currency, you should ask for it.
Small differences in the interest rates you are being charged, or the interest rates your savings are earning, can add up. If you want to make the most of your money and you’re interested in fixed-term, fixed rate investments you’ll find more information about Castle Trust’s Fortress Bonds by viewing our Investments Information page.
Investment Marketing Team
When the Bank of England increases the base rate of interest, you might understandably think that the interest rate on your savings account will also go up shortly afterwards. Of course, some banks will drag their feet, but surely it’s only be a matter of time before the increase is passed on to savers as well as borrowers?
In fact, when the base rate was increased in March 2018, the interest paid on half of all savings accounts failed to rise at all. Of those that did, the average rise was below the 0.25% increase in the base rate. The Financial Conduct Authority (FCA) has estimated that savers could miss out on up to £480m in interest by waiting for the interest rate to go up on their existing savings account, instead of switching to a new provider.
With the base rate as low as it is, it’s understandable that savers might think there will be little difference in the rates offered by different providers. Unfortunately, that's not the case; the spread of interest rates paid on both fixed term and instant access accounts (including ISAs) continues to be significant, hence the FCA’s startling estimate of how much interest is being missed out on.
It pays to shop around for the best rates for your savings. If you’re interested in fixed-term, fixed rate investments you’ll find more information about Castle Trust’s Fortress Bonds here.
Investment Marketing Team
Often when reading about interest rates, many adverts will tell you to act quickly and or you’ll suffer the ‘cost of delay’. But if you choose where to put your money now or in 6 months’ time, your starting balance is the same, so what is the rush for consumers? Is it just a ploy for financial service providers trying to increase their customer numbers?
The focus of this post is to understand why it is in your interest to act sooner rather than later. There is, of course, a benefit to the financial service provider; the sooner they get your money, the better it is for them. However, the cost of delay is certainly something worth considering from your own point of view as well, especially when thinking about making your money work as hard as possible for you. Essentially, the cost of delay comes about from the loss of compounded interest. None other than Albert Einstein called compound interest the “eighth wonder of the world”, stating “He who understands it earns it, he who doesn’t pays it.”
Compounding is, essentially, interest earned (or charged) on interest, which creates a snowball effect. The power and impact of compounding is easiest seen over longer periods of time; whilst you won’t feel significant effects immediately, the longer you give your money to grow, the more you’ll see the beneficial impact of compounding. The cost of delay refers to the fact that the benefits of compounding can’t start to be felt until interest starts to be earned.
The compounding effect is boosted by higher interest rates. Big banks make much of their money by relying on customer lethargy, from those who delay choosing better options for their savings; you can read more about this here. By leaving sums of money in low interest accounts to think about again 6 months down the line, you are missing out 6 months’ worth of higher interest that could have been compounding the whole time; whilst the benefit may not be significant over 6 months, the benefit will grow the longer those savings are held. In a low interest environment, compound interest can also help to combat the effects of inflation. By taking ownership of your finances now and making active choices, you’ll personally start to feel the positive effects of the snowball effect that others might be missing out on. And Albert Einstein would be proud of you.
Investment Marketing Team
It’s not an unreasonable starting point to think that in business and finance, bigger is generally better. The sheer size of some companies enables them to drive economies of scale, which then enables them to price their product or service competitively, whilst continuing to provide acceptable levels of returns to shareholders. You might consider Tesco, Primark, Amazon or Superdrug in this category, for instance.
These economies of scale are not always used to drive the best deal for all customers though. Some industries rely on the lethargy of their huge customer bases to enable them to charge higher prices, and then give better deals to customers who query this; Insurance companies often offer better rates to new customers than to existing ones, and magically find the ability to reduce a quoted rate when a customer threatens to move to a competitor. Gas and electric suppliers are also often criticised for allowing some of their longest-serving customers to remain on expensive (and more profitable) tariffs, without making sufficient effort to advise those customer that cheaper tariffs are available if only they were to ask.
Surely the big banks do the best for their customers? And if not, do customers vote with their feet (and their business)? Whilst banks often offer up to £200 to switch banks, and this has never been easier to do thanks to the ‘current account switching service’ , take-up is still disappointingly low. Indeed, research in 2015 showed that people were more likely to get divorced than to change their bank account.
The big banks often offer some of the lowest savings rates as well - meaning that they can harness the lethargy of their customer base to help maximise their profits. The big advantage banking customers have, however, is that they can move some of their business elsewhere; if moving a current account sounds like too much hassle, there’s no reason why savings or ISAs can’t be moved elsewhere to get a better rate. There are plenty of websites that will provide information on the best savings rates available such as MoneyFacts, MoneySuperMarket, and CompareTheMarket – and a few minutes spent on these websites will show just how much more interest your hard-earned savings could be earning for you.
You can find out more about Castle Trust’s Fortress Bonds, and the rates available, by viewing our Investments Information page.
Investment Marketing Team
Castle Trust announces two further management changes.
Barry Searle, the company’s current Chief Operating Officer will become the company’s new Managing Director (Mortgages). Barry has been with Castle Trust since 2014, he has been instrumental in the growth of the company, especially within the mortgage division. He held the largest underwriting mandate and had overall responsibility for operations. During Barry’s financial services career he has held senior roles at various institutions including Legal and General’s mortgage division and GMAC RFC.
Stuart Sykes will be joining the company as Operations Director from MyJar, where he has been Group Customer Operations Director for the last four years. He has previously held roles at ICICI Bank, RBS and Lloyds Banking Group.
Speaking of the appointments, Martin Bischoff, Chief Executive Officer said:
“As the company’s COO, Barry is already very familiar with both the industry and the aims of the business and was a natural choice to fill the role. He has contributed enormously to the success of the business so far and will be a pivotal part of our transition to become a bank.
“Stuart has extensive experience in the lending environment, particularly in consumer finance. We are delighted that he has chosen to join us as we move into Castle Trust’s next phase.”
Following continued success, Castle Trust has entered discussions with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to pursue a banking licence application.
This represents the next phase of growth for Castle Trust, which was originally authorised by the FSA in September 2012. Since then, Castle Trust has offered investment products alongside its mortgage range and now has approximately £750m of assets under management and £660m of bonds outstanding. In 2017, Castle Trust further expanded the offering with the acquisition of Omni Capital Retail Finance.
As a result of this growth, the company has applied for the licence to support the continued evolution of the business and enable it to further expand the product offering across both the mortgage, savings and consumer finance arms.
Speaking of the application, Sean Oldfield, Group Chief Executive said:
“We are delighted with the progress of the business to date and today marks a significant moment in the evolution of the company. Making the application for a banking licence will allow us to continue our innovative approach to both investments and mortgages as the business continues to grow.”
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