Whether or not you need business insurance depends very much on the type of work you do, where you do it and whether you employ other people.
Working from Home
If you run your business from home, it’s important to talk to your current home-insurance provider to find out if you are covered. Generally speaking, an insurer will be happy to cover business equipment in the home as long as you are working on a clerical basis (e.g. office and administration work) and don’t have client or customer visits or meetings at your home.
Types of Business Insurance
The following types of cover may or may not apply to your business:
Many insurers offer business insurance ‘packages’ that include cover for a number of these potential risk areas. Consider which areas of risk are likely to affect your business, then shop around to find a policy that meets your needs.
As of January 2020, the government has launched a new scheme that changes the way people are paid for generating renewable energy. Previously, households who had solar panels fitted benefitted from a feed-in tariff (FiT) which gave them two streams of income from the government: a ‘generation tariff’ which paid customers for all the electricity that households generated, and an ‘export tariff’, which paid customers for surplus energy exported to the National Grid.
Under the new scheme, all energy suppliers with at least 150,000 domestic customers will be required to buy surplus solar, wind or other renewable energy generated by its customers under the Smart Export Guarantee (SEG). The companies will be able to set their own price for this energy, and – unlike the old scheme – customers won’t be able to secure fixed rates with long-term contracts. Instead, short-term fixed rates will be available, or you’ll be able to choose a variable tariff that will pay the market rate for exported energy. These factors make the scheme a much less lucrative proposition than the FiT.
How Do Solar Panels Work?
Photovoltaic solar panels, which are the type usually fitted to domestic properties, work by catching the sun’s energy and converting it into electricity that can be used to power household goods and lighting. They work with daylight, not sunlight, so they can still generate energy on a grey and gloomy day.
Is It Still Worth Getting Them?
It’s still the case that generating your own electricity through solar panels will save you money on your energy bills. However, you will of course have to pay for the initial installation of the panels, which usually costs between £5000 and £8000. The move to the SEG scheme means it is likely to take decades before you get close to recouping that outlay through savings on your bills and selling your excess energy.
The maths will vary based on the size of your property, where you live, how much energy you use and how long you’re planning to stay in the property. It’s essential that you do some thorough research on the kind of savings you can expect to make, how long the solar panels will last and how much the initial outlay will be before you make your decision.
The Environmental Impact
Many people view the green credentials of solar panels as the most important factor. So, if you like the idea of a clean alternative to fossil fuels and making back your money isn’t the only reason you’re interested in solar panels then it’s certainly worth looking into.
Are There Any Other Considerations?
There are a few additional few things you should factor into your decision-making process:
A smart meter is a device installed in your home that measures your electricity and gas usage and its cost. Having one installed could reduce the cost of your energy bills by giving you access to the cheapest tariffs, as many of the best deals now require you to have a smart meter in your home. It can also help you monitor and reduce your energy usage, which is another way to save money.
Energy companies plan to fit a smart meter in every UK home by 2024, however the scheme is voluntary, so you are not obliged to accept the meter if you don’t want it. To find out more about the roll-out of smart meters and when they are being installed in your area, contact your current supplier.
How Do Smart Meters Work?
A smart meter is made up of three elements: the smart meter itself, a portable display unit for your home and a communication hub that automatically sends readings via wireless technology to your portable display and to your supplier. Meter readings will be sent to your supplier on a monthly basis (if you pay by Direct Debit).
Old-style gas and electricity meters use out-of-date technology and rely on manual readings. Smart meters are designed to give more accurate real-time readings, thereby removing the need for estimated bills.
Smart meters will usually be installed where your current meters are and can be used whether you have a prepaid meter or are a Direct Debit Customer.
What Information Will a Smart Meter Give Me?
Using your portable display unit, you’ll be able to track your electricity and gas usage for the current day, hour, week and month. It will also tell you the cost of your energy in pounds and pence, as well as whether your usage is high, medium or low. It can therefore help you identify where you can make savings.
If you have a prepaid meter your smart meter can also give you information about your balance.
How Can I Get a Smart Meter?
If you want to get a smart meter fitted sooner rather than later, contact your energy supplier to find out if they are installing in your area at this time. If they are able to, they will arrange a date for installation. You will need to be at home when the engineer visits.
Are There Any Cons to Having a Smart Meter?
There are two types of smart meter out there: SMETS1 and SMETS2. SMETS1 meters were the ‘first generation’ of smart meters and use the 3G network to send readings to your supplier. Unfortunately, these meters cease to work as smart meters if you switch to a new supplier, so they revert back to requiring manual readings. This makes it a bit of a pointless exercise if you are someone who likes to switch energy suppliers reasonably regularly (though it is planned that all existing SMETS1 meters will have their functionality upgraded remotely this year).
Most energy companies are now installing the second-generation of smart meters, SMETS2, because since March 2019 Ofgem have no longer counted installations of the older model towards the energy companies’ targets. SMETS2 meters use their own communications system and a central data network to which all suppliers have access, so it’s easy to switch suppliers as and when you want to.
If you can get a SMETS2 Meter installed, there really is no good reason not to have a smart meter in your home.
Not only could switching your bank account give you access to products and services that better suit your needs, you could actually save money and even benefit from a cash reward. Nowadays, the process of switching is easier than ever, and could take as little as seven days.
Why Should I Switch?
You might find that a different bank has an account that is better tailored to your banking habits.
For example, if you regularly use an overdraft facility, you may find a bank offering a current account with a free overdraft facility, lower fees for being overdrawn or a lower interest rate on overdraft balances.
If you’re someone who usually carries a positive balance in their current account, you may find an account that pays out a higher interest rate on your balance.
Some banks offer a cash reward for moving your current account to them. Others operate cashback schemes, or provide specific functionality like a mobile-banking app. If customer service is important to you, you may prefer a bank that makes it easy to speak to a real person on the phone.
Shop around and use comparison sites to find the best bank account for you.
How Do I Switch?
Once you have found an account you’d like to switch two, you first need to apply for it. This can usually be done online, in-branch or over the phone.
As part of the application process, you will complete the following:
These forms will provide the bank with all the details they need, including details of your existing account. They will then run a credit check and may request extra documents to confirm your identity.
Make sure the details you provide are accurate and match those on your existing bank account, to prevent any delays.
You have two options in terms of the switching process:
Which Option Should I Choose?
If you choose a full switch via CASS, you will choose a switching date, which must be in seven or more working days and should not be on a day when you have direct debits or standing orders due to come out of your existing account.
The banks then take care of the entire process, will be in touch to confirm your switch date and will let you know when everything is complete.
They will also contact your employer to let them know the new account details for your wages to be sent to, and will ensure all direct debits and standing orders move to your new account. If you incur any charges or fees as a result of the switch, you are guaranteed to get these back.
If you choose the Partial Switch Service, your old account is left open and you can choose to only move across some of your payments. With this option, there is no guarantee it will be completed within seven days, and you don’t get the same assurance that payments will be moved across. You are also not guaranteed to be refunded for any interest or charges incurred as a result of the switch.
In either case, the switching service is free. However you may still have to pay fees associated with opening your new account – check with your new bank to make sure you understand any fees you’ll be charged.
What About Joint Accounts?
Joint accounts can be switched in the same way via CASS, but everyone named on the existing account has to agree to the switch.
Giving a child a card for their spending can be a good way of teaching them about managing their money and monitoring their spending. It can also help teach them about banking in general, as it will be linked to a children’s bank account.
A card is also a safer option than carrying cash around, as if it is lost or stolen you don’t necessarily lose the money.
What Kind of Card Can My Child Have?
Most children’s bank accounts come with the option to choose either a cash card (which can only be used for withdrawing cash from an ATM) or a debit card, which works just like a debit card on an adult bank account.
If you choose the debit card option, your child will be able to use the card anywhere that accepts payment by card, as well as using it to withdraw cash from their account.
What Are the Pros?
As above, giving your child a debit card reduces the need for them to carry physical cash around, which can easily be lost, misplaced or stolen.
It also gives your child greater visibility of what they are spending their money on, and you can use their statements or online banking facility to teach them how to keep track of their spending, and the importance of doing so.
Because the debit card will be linked to a children’s bank account, there is no danger of your child being able to spend more than they have. This type of account won’t be offered with an overdraft facility, so they’ll only be able to spend money that’s physically in their account.
What Are the Cons?
Your child’s debit card won’t come with any parental controls. This means you’ll only have visibility of where they are spending their money if you’re able to see their statements.
You won’t be able to temporarily freeze the card, set spending limits or prevent them from drawing out all of their cash (up to the £300 daily cash-machine limit).
Because the card will be accepted anywhere that takes card payments, in theory your child could use their debit card at places like gambling sites, off-licences or adult stores (though of course the proprietor should be abiding by the legal age restrictions).
Are There Any Alternatives?
If you think your child isn’t ready or mature enough for a debit card, or you’d simply prefer more control, you could opt for prepaid card instead. Prepaid cards are currently available for children aged 6 and over (sometimes 8 and over) in the UK from RoosterMoney, Nimbl, Osper and GoHenry.
With this option, you open the account and receive a Visa or Mastercard debit card you can give to your child. You put cash into the account and this gives the card a balance for your child to spend – it works exactly like a debit card and is accepted by most retailers in the UK, with payments made via chip and pin or contactless payments.
Prepaid cards come with an app that can be downloaded by both the child and the parent. The app gives you, as the parent, the ability to freeze the card temporarily, set spending limits and monthly allowances, and see exactly where and when money is spent. You can even set up text alerts when the card is used.
Certain places (e.g. gambling sites, off-licences, adult stores) are blacklisted, which means the prepaid card simply won’t work at those places.
The main drawback with a prepaid card is that they have fees attached. Usually there is a monthly or annual fee (usually between £15 and £40 a year) and sometimes there is a small fee (around 50p) for drawing cash out at an ATM.
Critical illness cover (also known as critical illness insurance), is a long-term insurance policy which covers you for a number of serious illnesses specified by your policy provider. If you get one of these illnesses the policy will pay out a tax-free lump sum designed to help pay for your mortgage, rent, debts, or modifications to your home (for example if you need wheelchair access).
It is a different kind of cover to life insurance, which pays out if you die.
What Conditions Are Covered?
Each policy will differ in terms of the specific conditions that are covered, but the following illnesses are usually included:
What Conditions are NOT Covered?
Again, this will vary, but most policies won’t pay out for illnesses that were existing when you took out the policy. The policy also doesn’t pay out if you die.
Some types of cancer or early stages or cancer will not be covered, along with minor heart attacks.
Make sure you know exactly what your policy does and does not cover before you take it out.
What Does It Cost?
Your premiums will vary according to the following factors:
If you claim, the policy pays out a one-off payment and then ceases. It does not make regular ongoing payments to replace income, so is totally different from income protection insurance.
Will I Have to Have a Medical?
Some insurers will require you to undergo a medical examination before they agree to provide you with cover. All insurers will require you to fill out a detailed form specifying your medical history, including any existing medical conditions in your family history.
Do I Need Critical Illness Cover?
The main consideration is whether you or your partner could afford to cover your essential outgoings if you were unable to work due to illness or disability. If you don’t have substantial savings behind you, you could find yourself relying on state benefits, which currently range from £70 to £100 per week, depending on your circumstances. A critical-illness policy would certainly be worth considering if this won’t be sufficient for you to live on.
Some people have a benefits package through their employer that will cover long-term illness and time off work. If this is the case then you are unlikely to need an additional critical-illness policy, but make sure you check the exact details of your cover before coming to that decision.
While home insurance is an essential cost to protect your home and belongings, there are things you can to do keep your premiums as low as possible.
Don’t just assume your current insurer is offering you the best deal – with any type of car insurance, it always pays to shop around. Use multiple comparison sites to compare what different insurers are offering and go direct to insurers that don’t appear, as some of them will only sell directly to customers.
While you don’t want to be paying too much for your home insurance, you definitely don’t want to have less cover than you need. If you ever need to claim you could find yourself unable to repair or replace your belongings, unless you can do so out of your own pocket.
Choose a Combined Policy
Buying your buildings and contents insurance as one combined policy, as opposed to two separate ones, could save you money overall. That said, don’t just assume that is the cheaper option – compare the cost of a combined policy with the cost of buying them separately before you make your decision. In short, do your research.
Don’t Pay for Cover You Don’t Need
Every insurer will offer you optional add-ons when they sell you a policy. These extras can include things like legal cover, accidental damage and home emergency cover and each one will add an extra cost to your premium. If you feel you will benefit from these add-ons, then they are worth paying for. But make sure you really consider each one and its cost carefully.
Remember, unless you own your property you do not need buildings insurance: it is a landlord’s responsibility to cover the building they rent out.
Pay Your Premium Up Front
Most insurers will add interest to monthly instalments, which means that overall you will pay more for your policy. If you can afford to make a one-off annual payment instead it could be a more cost-effective option.
To help make sure you only pay for the cover you need you should aim to be as accurate as possible with the value of your home and its possessions.
The best way to get an accurate figure for your contents insurance is to do a room-by-room inventory of your belongings. Be sure to include items in the shed or garage as well as all clothes, furniture, carpets and curtains.
For your buildings insurance, you need to base the value of your home on an accurate rebuild value, that is what it would cost to rebuild your home from scratch – this is often lower than the market value of your home. Your mortgage lender or insurance provider should be able to advise you on this, or you could use an online calculator or contact a professional surveyor.
Try to match your buildings-insurance cover to your rebuild value as closely as possible, and make sure you review it regularly, especially if you renovate or extend the property.
Agree a Lower Excess
The insurance excess is the amount you have to pay towards any claim you make, and you can usually opt for a higher excess which in turn will reduce your premium. Make sure any voluntary access you agree is affordable, as you will have to find this money in the event of a claim.
Making your home as secure as possible can mean cheaper home insurance, as well as helping you to build and protect a no-claims bonus (a discount that gets bigger with every year you don’t claim).
There are several security measures you can take that an insurance company will look favourably upon:
Taking steps to reduce the risk of your home being damaged may not directly result in lower insurance premiums, but it will reduce the risk of you needing to make a claim, which will in time increase your no-claims bonus. Simple things like fitting smoke alarms, insulating water pipes and keeping it generally in good condition can all help protect your home.
A workplace pension is a scheme through which you save for your retirement – it is entirely separate from the state pension, which for the 2019-20 tax year sits at £168.60 a week.
As the name suggests, a workplace pension is arranged by your employer and any contributions you make are topped up by your employer and by the government, in the form of tax relief.
Since the introduction of Automatic Enrolment, which was phased in by the government gradually from 2012, it is now mandatory for all employers to enrol eligible employees into a workplace pension scheme. This means that more people have the opportunity to build up a pot of money for their retirement.
What Are the Criteria for Enrolment?
You will be eligible for automatic enrolment as long as you meet the following criteria, whether you work full or part time:
You will still be eligible if you’re on a short-term contract, work through an agency or you’re on maternity, adoption or carer’s leave.
How Much is Paid in?
The minimum contribution that must be paid into a workplace pension is set by law, and increased to a total of 8% of qualifying earnings in April 2019. This 8% should be made up of at least 3% from the employer, 4% from the employee and the remaining 1% via tax relief from the government.
Qualifying earnings for the 2019-20 tax year is defined as anything above the first £6136 an employee earns in a year, up to a maximum of £50,000.
Your employer may voluntarily pay on more than their minimum 3%, and you may choose to contribute more towards your pension pot, too. Keep in mind that you are likely to get a better return on your pension savings than on money in a bank-based savings account, so it’s worth paying in as much as you can afford. The more you pay in, the more ‘free money’ you will get from the government as tax relief on your pension savings.
Do I Have to Take Part?
You do have the right to opt out of your workplace pension scheme. However, doing so means you won’t benefit from your employer’s contributions, or on the tax relief from the government. Most people find that participating in a workplace pension is an extremely effective way to start building up a pot for retirement.
We all know someone who knows someone whose wedding had to be cancelled at the last minute, or who had a key supplier let them down on the big day. Horror stories they may be, but they do happen and the fact is that without wedding insurance in place that money is lost forever. When you consider that your wedding may be the most expensive thing you ever pay for, having insurance to protect that money seems like a bit of a no-brainer.
If you’re planning to take out wedding insurance, do so as soon as you start making bookings and paying deposits. Most insurers will let you take out a policy up to two years before your wedding.
What does Wedding Insurance Cover?
Most wedding insurance policies cover the cost of your wedding if it needs to be cancelled or rearranged in the following circumstances:
A wedding-insurance policy will also usually cover you for things that go wrong either before your wedding or on the day itself. This may include the following:
If you have specialist requirements, for example insurance cover for a marquee or your wedding is taking place abroad, you can add on these elements to tailor your policy to your needs.
What does Wedding Insurance NOT Cover?
Wedding insurance does not cover you if your wedding is cancelled because you or your partner have a change or heart about getting married, or if you simply decide you can’t afford your wedding.
The following elements are also not usually covered by wedding insurance:
Every policy provider will also have different exclusions, such as pre-existing medical conditions and theft due to negligence, so make sure you check the documents carefully before you buy.
How Much Will It Cost?
Generally speaking, the more expensive your wedding is, the more expensive your policy will be. Most insurers offer tiered levels of cover that vary in cost, so work out how much your wedding is going to cost and make sure you choose enough cover. It’s worth shopping around to find a policy you’re happy with at a price you can afford.
Do I Need It?
There are a number of things that could go wrong and impact your wedding – most of which are beyond your control. Unless you can afford to lose the money you are spending on your wedding, it’s at the very least worth finding out the cost of wedding insurance and giving it serious consideration.