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Expat Investor : December 2008
STATISTICS AND ANALYSES Cash in the attic? From art and antiques to comics and collectables, many people hoard away their prized possessions in their homes, often giving little thought to their total value. But, warns Halifax, many may need to get their collections valued, certified and insured to make sure they are protected against future loss or damage. Senior Claims Manager Martyn Foulds says, “Although in many cases collectables are irreplaceable, most people would at least want to recover any financial loss in the event of them being stolen or damaged.We’d recommend anyone who has a potentially valuable collection to get it valued by an expert regularly and ensure they obtain a dated copy of the valuation certificate.” Collectors with sum insured home insurance policies need to be aware that their insurers may apply averaging to any claim made, which means that if they have underestimated the value of their home contents, they may only receive a percentage of the value of their valuables equal to that which they have insured should they try to claim. For example, if a home’s contents are insured for £30,000 but are really worth £40,000, when a person claims they may find the value of the claim is reduced in line with the amount that they are underinsured by – in this case 25%. Therefore, if their claim was for £6,000 they would only receive £4,500. To take care of collectables, Halifax offers the following tips: ? Ensure collectables such as art, antiques and comic books are stored in a safe, secure place and away from damp or anything else that might cause damage. ? Avoid displaying valuable collections in conspicuous places such as on living-room windowsills, as this can be an advertisement to opportunist burglars. ? If possible keep valuable collections in a safe or lockable cabinet in order to deter thieves. ? Make sure you tell your insurer about any items of particularly high value, and keep any valuation certificates or receipts in case you need to make a claim in future. ? Take photographs of your collectable items, as these can also help insurers to process your claim more easily. Brits set to retire £66bn in the red More than one in three of the UK population over the age of 55 have outstanding unsecured debts and could be heading towards retirement with a whopping £66 billion in the red, averaging £11,106 per head, reveals a new report from Key Retirement Solutions, an independent equity release specialist. The analysis based on 4,507 people in the UK aged 55 and over who released equity in their home with Key Retirement Solutions in 2007, reveals the average unsecured debt across loans, credit cards and overdrafts to be broken down as follows: ? Personal loans: almost one in four have outstanding loan payments owing £8,766 on average per head. ? Credit cards: a fifth have outstanding card debts and owe £8,358 on average per head. ? Overdrafts: just 3% are in the red, but £3,667 is owed on average per head. The situation worsens when taking into account the average outstanding mortgage debt, which stands at £37,316 per head for this age group. The greatest concern is that the further people reach in retirement the deeper in debt they seemingly become. The total unsecured debt for those aged 55–59 is over £2.5 billion, and this takes on a huge increase of 747% reaching a total of over £22 billion for the over- 70s, which is on average £10,659 per head with an average monthly payment per head of £244. As voluntary pension contributions Wireless broadband open to hijackers With all major providers now providing a wireless router with their packages, wireless broadband is becoming increasingly popular, leaving users open to ‘piggybacking’, according to research from moneysupermarket.com. Piggybacking is where broadband A medley of statistics and analyses revealing much about our responses to saving, investing and spending our money. users connect to someone else’s wireless router to gain access to the internet for free, with the potential to steal bank details, identity information or even to down illegal content through the owner’s connection. The research shows over 3.5 million adults have used someone else’s wireless internet connection without permission in the past 12 months. The results also show people are doing little to protect themselves, with one in six failing to put a password on their connection. James Parker, Commercial Manager for broadband and mobiles, says, “One in nine people using another person’sWi-Fi is a staggering amount. You wouldn’t expect that many people to go into a neighbour’s house and use their shower. This is a worrying trend and shows some people have no conscience when sitting in front of their monitor behind closed doors. “The consequences can be severe. It’s bad enough your neighbours can use your internet connection freely, but this becomes far more threatening if someone uses your connection for criminal or improper activity. “This could be accessing your internet connection to download obscene material, for gathering personal information to defraud you or even for stealing your identity.” Top tips to beat the broadband pirates ? Password protect your wireless internet connection with non- dictionary words and numbers. ? Check that your router uses WPA rather than WEP encryption. ? Know your download limit and what that translates to (i.e. five music albums). ? Make sure you have appropriate security software and firewall. ? If you have children, consider using parental controls as well as password protection for the router. made by UK adults have almost halved in the past 12 months, and the costs of goods and services purchased by pensioners have rocketed by 36% since 1998 – faster than the rise in the Retail Price Inflation, which has shot up by 32% over the same period – this is a trend which looks likely to continue for generations to come if their outstanding debts continue. Dean Mirfin, Business Development Director, says, “As the cost of living is on the up, these figures, even if they are only part reflective of pensioners as a whole, are of real concern. Retirement should be a time to enjoy yourself after all those years of hard work, yet 1 in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears. “The cost of living for the elderly has surpassed inflation over the past decade; therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt.” Looking at credit card debt alone, the amount owed by those aged 55 and over reaches over £28 billion. The average debt for people over 60 has reached £8,372, an increase of £821 year on year. As Britain’s interest repayments have soared to £94.4bn in the last 12 months, and more than five million people have missed monthly payments on credit cards in the past six months, incurring an average of £12 a time in late payment fees, this is one of the most dangerous forms of debt. New research from Nationwide Building Society shows that just under a fifth (19%) of consumers think the Government encourages them to put money aside, while 41% think the Government discourages them. Similarly, 34% of consumers think the Government doesn’t take any positive or negative action when it comes to saving. The research comes to light at a time when ministers are trying to rebuild trust in the financial services industry and educate people on the importance of building a solid nest-egg. As the turbulent economic situation continues, consumers’ propensity to save has remained stagnant. Matthew Carter, Director of Savings, says, “Even though saving is incredibly important, consumers continue to fail to save enough money each month. There has never been a more important time to save which is why we urge the industry and Government to work together to help educate people about the importance of building their own nest-egg, however large or small. To help reach out to consumers about the importance of money management, we believe the roll-out of our own financial capability programme to all primary schools will make a difference and improve consumers’ savings habits in the future.” December 2008 ? EXPAT INVESTOR 5 Government does not encourage consumers to save
January February 2009