events

July 17, 2022

Is It Worth Waiting For Black Friday to Buy Big Ticket Items?

Nick Saving Money events, shopping 4 Comments

Amazon Prime Day is over now and the next big shopping event is Black Friday, which this year takes place on Friday 22nd November. But in this time of rising inflation, is it sensible to wait until then for any big-ticket items you need?

My colleagues at Offeroftheday have been crunching the numbers, and their figures indicate that in these inflationary times, waiting for Black Friday might not be the smartest thing to do.

How Are Prices Changing?

Figure 1 (below) shows how prices from eight popular retailers on the Offeroftheday website, including clothing, home & garden and electronic retailers, have changed over the last 12 months. It reveals that during this time average prices rose by over 15%. As the chart shows, this is a significantly higher rate than the UK’s CPI inflation rate.

While the chart does show a dip in prices around the Black Friday period in late November 2021, the data suggests that when prices are rising rapidly (as now) it may still be better to buy as early as possible rather than wait months for possible Black Friday discounts.

Why Are Prices Rising So Fast?

There are various reasons for the rapid rise this year in consumer prices. One is the record increase in energy bills. This has had a knock-on effect on retailers, who are now paying substantially higher running costs for their shops and factories.

A further factor is the big increase in fuel prices, adding to distribution costs. Inevitably, some of these increased costs get passed on to the consumer. The average pump price in June 2021 was 130.73p. Compare this to June 2022 where the average price was 190.93p, a jump of 46% in just twelve months.

Other factors causing prices to rise include logistical issues (e.g. HGV driver shortages), wage rises, shortages of goods and raw materials caused by trade barriers and the war in Ukraine, the effects of extreme weather (possibly caused by climate change), the ending of support schemes for businesses introduced during the pandemic, and so on.

So Is Black Friday Worth Waiting For?

In November 2021, Offeroftheday found the mean average discount of all products on the website was 5.6% compared with the previous month. Given the current trend in pricing shown in Figure 1, by Black Friday November 2022 this discount would need to be significantly higher than that to offset the new base prices.

So does this mean you should do your shopping now? Well, yes and no. Black Friday has a focus on high-ticket items. It is one of the few days when the Apple Store has discounts, and many retailers cut their prices by 50% and more on some electronics and white goods. Even allowing for rising inflation over the next few months, those are significant savings.

While in previous years prices on Black Friday fell far below any other time of the year, Figure 1 shows that Black Friday 2021 only briefly managed to offset price rises, effectively turning the clock back a few months at best. Not surprisingly, many sources reported a decrease in total spend on Black Friday 2021 compared to the previous two years. While some of this can be attributed to lockdown measures and furlough, the data shows that Black Friday discounts simply were not as impressive compared to previous years, especially compared to the prices being charged just a few months earlier.

Black Friday 2022 and Beyond

As mentioned above, Black Friday 2022 falls on Friday 25th November. However, If cost increases continue on their current trajectory, prices could rise as much as 7% between now and November. This means that a product averaging £500 today could cost upwards of £535 in five months time.

Some products will undoubtedly see big discounts on Black Friday 2022. But with inflation currently approaching 10%, we can expect average prices from retailers to continue rising overall. If you’re on the fence about a big purchase, it may therefore be worth buying now rather than hoping for big discounts later in the year. Once we pass August/September, it might be worth holding out for a month or two to reap the benefits of Black Friday discounts. But there is, of course, no guarantee that the particular product you want will be discounted for Black Friday, or whether any discount will be enough to offset price rises caused by inflation.

Black Friday is still the largest shopping day of the year for retailers, so expect to see some big discounts and eye-catching offers. But if it is anything like last year, average discounts may not be as impressive as in years gone by, and for many items you may actually get better prices if you buy now.

Although in this post I have focused on big ticket items, it should be said that Black Friday can also be good for buying cheaper items at a discount. I am thinking here of consumables such as ink cartridges, stationery, clothing, cosmetics, food and drink, and so on. Black Friday can present opportunities for stocking up on such items at bargain prices.

Thank you to my friends at Offeroftheday for sharing their data with me. Please do check out their website for great offers from a wide range of leading online retailers.

As always, if you have any comments or questions about this post, please do leave them below.

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July 5, 2022

My Investments Update – July 2022

Nick Investing events, property 4 Comments

Here is my latest monthly update about my investments. You can read my June 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £19,357. Last month it stood at £20,512 so, after another challenging month, that is a fall of £1,155.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £2,942 compared with £3,119 last month, a fall of £177

Here is a screen capture showing performance over the last month.

There is no denying these are disappointing results. Though as I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And over the last few months there’s been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

It is, however, worth noting that since I started investing with Nutmeg in 2016, and despite everything that has happened this year, I have still made a total net return on capital of 28.79% (or 52.94% time-weighted).

While performance this year has clearly been disappointing, I have no doubt there will be an uptick at some stage, and am considering topping up now while asset values are low. I definitely don’t plan to sell up, as that would only crystallize my losses this year and leave me unable to take advantage when – as I fully expect – things turn around again.

I should also mention that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there is certainly a good case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

I talked about the performance of my Kuflink and Assetz Exchange investments in my June update and also in this recent blog post. I don’t therefore plan to provide in-depth reports about them on this occasion. I will just say that both are continuing to provide steady returns for me, with a lot less ‘excitement’ than my equity-based investments!

As I said a few weeks ago, in these turbulent times I believe P2P/crowdlending platforms such as the two mentioned are well worth considering. Not only are the rates of return higher than those on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.

To be clear, nobody should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform, but in my view (and experience) they are certainly worth considering as part of a diversified portfolio.

My investment in European crowdlending platform Nibble (as mentioned last time) continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has gone to plan so far, but I will obviously continue to report on this in the months ahead.

I recently updated my original review of Nibble, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

Also as mentioned last time, I also recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. As of today my investment has fallen to $473, which I guess in the current circumstances isn’t too bad. In any event I am looking on this as a long-term investment so obviously won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Starting Your Own Business With a Franchise. If you harbour an ambition to be your own boss, a franchise can be a great way of achieving this. My article sets out some hints and tips for choosing the right opportunity and making the most of it.

I also liked this recent article on Mouthy Money by my fellow blogger Shoestring Jane on The Best Places to Make Money From Your Old Clutter.

Finally, I enjoyed a short break in Criccieth, North Wales, at the end of June. I won’t go into detail about this here, as I plan to write a separate blog post about it soon [now published}. But I will say it was a very enjoyable, relaxing holiday, and I definitely hope to return there before too long. I stayed in a lovely sea-front apartment about five minutes’ walk from Criccieth Castle. Here is a photo taken from the castle showing the main beach…

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

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June 17, 2022

Is It Time for Investors to Look Again at P2P/Crowdlending Platforms?

Nick Investing crowdfunding, events, property 6 Comments

There isn’t much doubt this year has been a challenging one for stock market investors.

The war in Ukraine, rising inflation, and lingering fallout from the pandemic have all conspired to damage investor confidence. As a result, what we’re seeing now is a bear market, with share values falling across the board. How long this will continue I don’t know, though one thing I can say for certain is that there will be an upswing sooner or later.

I have witnessed this with my own equity investments and it hasn’t been pretty. My Nutmeg Stocks and Shares ISA has fallen by 11% in value since January 2022. My Bestinvest SIPP (personal pension) has fallen by a roughly similar amount (I’ve suspended withdrawals from it as a result, to avert the risk of pound-cost ravaging). I’m not panicking about this, as all equity investments have their ups and downs. And since I started both of these investments, I am still well up overall.

There is indeed an argument that now could be a good time to invest, while asset values are depressed. Nonetheless, I do of course understand why many people are wary of investing in stocks and shares at the moment, as markets may well have further to fall.

So today I thought I’d talk about an alternative approach that has fallen out of favour in the last year or two, but still has the potential to generate good returns for your money even when stock markets are in turmoil.

P2P/Crowdlending

I am, of course, talking about P2P/crowdlending. A few years ago these platforms were being touted as an exciting new alternative to banks, allowing individuals the opportunity to club together to buy property or lend to people/businesses. Investors could then benefit from interest paid, rentals received and/or capital gains made.

While initially everything went well, Covid in particular put a big spoke in the P2P sector’s wheel. More borrowers went into default, and platforms struggled to stay afloat as a result. Some (e.g. The House Crowd and Lendy) went bust. Others (e.g. Zopa and Ratesetter) decided to withdraw from P2P lending. Still others (e.g. Bricklane and Crowdlords) continue to operate but have closed to new investors and begun a process of winding down.

While that might sound depressingly negative, it’s not all doom and gloom. A number of P2P/crowdlending platforms are still running and indeed thriving. Three I have investments with myself are Kuflink, Assetz Exchange and Property Partner.

Interestingly, these are all property investment platforms. Kuflink offers secured loans to property developers, while the other two are more ‘conventional’ property crowdfunding platforms where investors jointly purchase a property and share pro rata in rental received and any capital gains on sales. P2P platforms that lend directly to individuals and businesses without the security of property are a lot scarcer nowadays than they used to be.

Regular PAS readers will know I have money in all three platforms mentioned above and am still actively investing in two of them (I am gradually winding down my Property Partner portfolio, though I do still recommend them). One big attraction of property platforms is that investment outcomes are not directly linked to the performance of stock markets. Yes, where the economy is rocky, this might ultimately impact on some commercial properties. Overall, though, these platforms are much less affected by market fluctuations than equity-based investments. That means they can offer an attractive alternative at times (like now) of high volatility.

In this article I’d like to highlight my two current favourite P2P/crowdlending platforms, Kuflink and Assetz Exchange. I will say a word about each and explain why I am still enthusiastic about them and continue to invest with them.

Kuflink

Kuflink offers opportunities to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage. They offer three types of investment, as follows:

Select-Invest (individual loans)
Auto-Invest
Tax-free IFISA (Innovative Finance ISA)

Auto Invest and IFISAs both automatically invest your money across a number of loans and pay a fixed interest rate, typically between 5 and 7%. You can choose a 1-year, 3-year or 5-year term, and interest is paid annually. The Auto-Invest product is basically the same as the IFISA, but without the tax-free wrapper. Self-Invest loans can also be put in an IFISA, with most (not all) loans on the platform being eligible.

I have been investing with Kuflink for nearly five years now. My experiences have been entirely positive and my investments have been generating the promised returns. I started cautiously with them, but have gradually built up the amount I have invested. Although – like all property P2P platforms – they were adversely affected by the pandemic, they appear to have come through it strongly, with new loans now being added almost daily.

There have been no defaults so far on any of my loans, and Kuflink say on their website that to date nobody has lost a penny on their platform. I have experienced short delays with loans being repaid, but in such cases you continue to earn interest, of course.

Although Kuflink don’t pay the highest rates in P2P lending, I think the returns on offer are realistic and sustainable. The steady expansion of the platform seems to testify to this, as does the fact that they have received several industry awards. .

Kuflink are also highly rated on the independent TrustPilot website, with an average 4.7 out of 5 (‘Excellent’). At the time of writing 80% of reviewers award them the maximum five-star rating, which is among the highest figures I have seen for a financial services platform.

As with all P2P lending, your money doesn’t enjoy the same level of protection as bank and building society accounts, which are covered (up to £85,000) by the Financial Services Compensation Scheme. Nonetheless, the rates of return on offer are significantly better than those from most financial institutions. And the fact that all loans are secured against bricks and mortar – and Kuflink themselves have cash invested in them – clearly offers some reassurance.

From my experience, Self-Select loans tend to fill up quickly. On the positive side, this shows investors have confidence in Kuflink and want to invest through the platform. On the minus side, it means there are typically no more than two or three new loans open for investment at any time.

You can read my full review of Kuflink in this blog post, or sign up directly here if you wish [affiliate link].

Assetz Exchange

Assetz Exchange is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £59.49 in revenue from rental and £60.93 in net capital growth, a total of £120.42. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 23 different projects and all are performing as expected, generating rental income and – in all but three cases – showing a profit on capital. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as I am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Final Thoughts

Clearly, no-one should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform. Nonetheless, in my view it’s certainly worth considering as part of a diversified portfolio. Not only are the rates of return higher than those currently on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they definitely do help spread the risk.

If you have any comments or questions about this post, as always, please do leave them below.

Disclosure: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investing carries a risk of loss.

This post (and others on PAS) includes affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or any fees you may pay.

If you enjoyed this post, please link to it on your own blog or social media:

June 1, 2022

My Investments Update – June 2022

Nick Saving Money, Investing events, property, crowdfunding 8 Comments

Here is my latest monthly update about my investments. You can read my May 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance in the year to date shows, my main portfolio is currently valued at £20,512. Last month it stood at £20,799 so, after a roller-coaster month, that is a fall of £287.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,119 compared with £3,166 last month, a fall of £47

Here is a screen capture showing performance this year.

Obviously the continuing falls are disappointing (though much smaller than last month). As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments, and certainly over the last few months there has been no shortage of volatility in world markets. And it’s also worth noting that since I started investing with Nutmeg in 2016 I have still enjoyed a total return of 36.48% (or 62.07% time-weighted).

If you also have a Nutmeg portfolio and plan to withdraw from it in the next few months, there is certainly a case for switching to a lower risk level right now.

Moving on, my Assetz Exchange investments continue to perform well. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £57.24 in revenue from rental and £92.28 in capital growth, a total of £149.52. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 22 different projects and all are performing as expected, generating rental income and – in every case but one – showing a profit on capital. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

Another property platform I have investments with is Kuflink. They have been doing well recently, with new projects launching almost every day. I currently have over £2,150 invested with them, quite a large proportion of which comes from reinvested profits. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule, though one is showing as ‘pending a status update’. I suspect this may translate to a delay in repayment. We shall see.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than around £150 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

I also recently published a blog post about another P2P property investment platform called BLEND. Like Kuflink, they offer the opportunity to invest in secured loans to experienced property developers. They offer (on average) somewhat higher rates of return than Kuflink, though arguably with a little more risk. As well as my blog post about BLEND, you can also check out what they have to offer on their website [affiliate link].

As mentioned last time, I invested some more money in European crowdlending platform Nibble last month. On this occasion I invested in their Legal Strategy. The loans in question are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euro and the minimum period is six months.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per annum. The actual yield will depend on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All is going well so far, but I will obviously continue to report on this in the months ahead.

I recently updated my original review of Nibble, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

One other thing I wanted to mention is that I have just opened an account with online share trading/investment platform eToro. I’ve been planning to do this for a while, with a view to reviewing it on PAS. I’m finding it quite different from other online investment platforms I have used such as Bestinvest.

As well as commission-free share trading, eToro offer a popular copy-trading feature, where you can copy the trades of other successful investors automatically. You can also practise with a virtual portfolio of $100,000. I put some of this into Platinum on the eToro commodities market and initially its value soared. But then it went right down again. So I am not the investment genius I thought I was at first 😀 It’s all very interesting, though. If you’d like to check out eToro for yourself, here’s an invitation link [affiliate]. And keep an eye open for my full review in due course.

Moving on, I have two more articles on the always-excellent Mouthy Money website. The first concerns Two Important State Benefits Many Older People Are Missing Out On. And the second is on the subject Could You Make Money as a Blogger? I have been blogging for over twenty years now, initially about freelance writing and now about personal finance. So I had plenty to talk about in this article!

Incidentally, Mouthy Money currently have a vacancy for a graduate-level personal finance reporter. This is a one-year paid internship working partly from home and partly from MM’s London office. If you know anyone who might be interested in this opportunity, please do draw it to their attention.

Finally, there has been a lot of talk about the cost of living crisis this month. As you may know, Chancellor Rishi Sunak announced a raft of measures to try to mitigate the worst effects of this.

Whatever your political or economic views, I do think he has been quite generous to older people in particular. Not only will those of us receiving the state pension get £400 off our household energy bills, we will also receive an extra £300 on top of our usual Winter Fuel Allowance (that means I’ll get £500 this year).

Many pensioners will also qualify for the £150 bonus for those on non-means-tested disability benefits such as Attendance Allowance. And they may also get the £650 cost of living payment going to anyone receiving various means-tested benefits (everyone getting pension credit will qualify for this, for example). Some households will receive a total of £1,500 in additional benefits through these measures, which should certainly help in these challenging times. .

If you would like to know more about the latest round of financial support from the government, Martin Lewis has a good summary on his Moneysaving Expert website. The government has also published a web page which sets out all the help that may be available for those on lower incomes.

That’s enough for today, so I’ll close by wishing you a very happy Jubilee Holiday. Whatever you are doing in the next few days – going away or staying home with family and friends – I do hope you have a relaxing and enjoyable time. As ever, if you have any comments or queries, please feel free to leave them below. I always love hearing from my readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

May 2, 2022

My Investments Update – May 2022

Nick Making Money events, travel 4 Comments

Here is my latest monthly update about my investments. You can read my April 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below shows, my main portfolio is currently valued at £20,799. Last month it stood at £21,646, so that is a fall of £847.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,166 compared with £3,286 last month, a fall of £120

Here is a screen capture showing performance over the last month.

Obviously the falls are disappointing (although they come after broadly similar rises the month before). As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments, and certainly over the last few months there has been no shortage of volatility in world markets. And it’s also worth noting that since I started investing with Nutmeg in 2016 I have still enjoyed a total return on my main portfolio of 45% (or 64.25% time-weighted).

If you also have a Nutmeg portfolio and plan to withdraw from it in the next few months, there is certainly a case for switching to a lower risk level right now.

I won’t go into detail about my Assetz Exchange investments this month. Briefly, though, regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000. Since I opened my account, my AE portfolio has generated £51.50 in revenue from rental and £82.29 in capital growth, a total of £133.79. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They have been doing well recently, with new projects launching almost every day. I currently have over £2,150 invested with them, a significant proportion of which comes from reinvested profits. To date I have never lost any money with Kuflink, although some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule, with several due to mature in the next few months.

Kuflink recently announced that they were ending their cashback incentive for new members. This used to pay up to £4,000. I know several PAS readers availed themselves of this offer. It’s obviously disappointing it’s now ended, but in a way it’s good news as well. It demonstrates that Kuflink is thriving and they don’t need to offer ‘bribes’ to bring in new investors. As they themselves said in a recent email, ‘We feel now is the right time for us to move away from these campaigns [cashback and refer-a-friend] and utilise the funds within the business to make further enhancements to our products and the platform.’

Even without the cashback incentive, I do still recommend Kuflink and will continue to invest with them. You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform being IFISA-eligible.

Another platform in which I have a modest investment is the European crowdlending platform Nibble. This has continued to perform as promised. Several of the loans I invested in have matured and each time I have reinvested the proceeds.

Nibble recently added a new loan category to their offering. This is in the debt collection market; Nibble describe it as their Legal Strategy. This involves investing in loans that are overdue and facing legal action for recovery. Nibble buy these loans at a fraction of their value and then attempt to recover as much of the outstanding debt as possible.

Nibble investors can buy portions of these loans for prices starting at 100 euro (about £84). The company say that investors will receive annual interest rates of between 8 and 14.5% according to how successful their recovery efforts prove. But in any event they offer a ‘buyback guarantee’ that even in the worst case you will receive 8% interest and return of your original investment. I will be trying this out myself soon and also updating my original review, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

Also this month I wanted to mention that the under-the-radar matched betting opportunity I have described a few times on PAS has closed. My contact there tells me the bookies have tightened up so much on their offers that it is no longer feasible to go on running a free service that makes money for both clients and the company. Final payments went out by the end of April to all existing members (which of course include a number of PAS readers). Again this is obviously disappointing, but I have seen myself that it is getting harder and harder (though not yet impossible) to generate profits from matched betting, especially once you have exhausted the welcome offers.

Anyway, the better news is that the guys behind the business have a new project in the pipeline that will make use of the clever software they developed for the matched betting service. It will work a bit differently from the original programme, but again will be free to join and entirely risk-free for members. They say they expect it to work over a three-month period and generate a one-off payout of between £500 and £1500 per person. In addition, because the new programme will work differently, it will also be open to people who do matched betting themselves (or have done in the past). I will share more details on PAS when I have them – but for now if you would like to be put on my priority list for info, just drop me a line with your email address via my Contact Me page.

Another bit of news is that I have temporarily suspended withdrawals from my Bestinvest SIPP, which is now in drawdown. This is partly in response to volatility in world markets caused by the war in Ukraine and inflation fears (among other things). But also I don’t need the money as much at the moment, as I am now receiving the full state pension. With my other income streams as well, continuing to draw an income from my SIPP would have generated a tax liability, so I thought it better to let the money grow tax-free in my pension fund until I really need it. My personal financial adviser Mike agrees and approves, incidentally 🙂

You might also enjoy reading this comprehensive guide to managing your money in retirement by my friends at Companion Stairlifts, in which I am quoted:

Lastly, I enjoyed my short break in lovely Llandudno a week ago. I was reasonably lucky with the weather, although it was quite windy. But it was great to see the resort almost back to normal after the lockdowns and other disruptions of the last two years. There were plenty of people out and about enjoying the spring sunshine, as this photo taken at the end of the pier shows 🙂

One other thing that struck me in Llandudno was how widely cash was accepted and indeed welcomed. In the Midlands town where I live most businesses don’t seem to want cash any more and insist on payment by card. I actually had to go to a cashpoint in Llandudno to draw more money. I can’t remember the last time I did that at home!

That’s enough for now, so I’ll sign off till next time. I hope you are keeping safe and well, and making the most of the better weather and lifting of Covid restrictions. If you’re planning any UK holidays yourself, don’t forget I have a list of places I have visited and recommend here 🙂

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March 21, 2022

Can I Rent Out My House With Equity Release?

Nick Everything Else events, property, retirement 0 Comments

This is the third in a series of collaborative articles on the subject of equity release. This one looks at the important question of whether you can still rent out your house (or part of it) if you take equity release.

As the equity release industry expands, UK-based older homeowners are being offered more flexible retirement mortgage solutions to combat the problem of insufficient funds in retirement.

While equity release is a fantastic product, there are some terms and conditions that may put limitations on what you do with your property.

74% of UK-based retirees own homes, and many of those live in large family properties where the kids have moved out. With the chance to make up to £7,500 tax-free a year through the government’s Rent-a-Room scheme (including qualifying Airbnb lets), renting out a room or your whole property can be a great way for retirees to generate extra income.

But if equity release is something you’re considering, the big question is, can you rent out your house after taking equity release?

Equity release expert John Lawson of SovereignBoss explores this topic in the following report to help you understand all the equity release criteria to ensure you make a sound decision.

What is Equity Release?

Equity release is a financial product designed for older homeowners to unlock the cash in their property while still living there.

What’s great about these products is that repayments are completely voluntary and there is no risk of foreclosure. Instead, the loan and any compound interest are repaid when the last homeowner passes away or enters long-term care. Money taken through equity release is tax-free and can be used for any purpose.

Finally, equity release borrowers can opt to release their money in a lump sum, place it in a drawdown facility, or receive it as a monthly income.

Lodgers v. Tenants and Equity Release

One of the key components to an equity release loan is that you need to live in your home for at least six months a year and it must be considered your primary residence. Does this mean you can welcome lodgers or tenants?

There are some key differences between the two:

A Tenant – A tenant generally has more rights than a lodger due to a Tenancy Agreement. The landlord will need to get permission to enter the rented space and must conduct regular gas safety checks (if gas is connected). Once a contract is signed, a landlord can evict the tenant after six months, providing acceptable practices are followed. A landlord will also need to return the tenant’s deposit as per The Tenancy Deposit Scheme (TDS).
A Lodger – On the other hand, a lodger can be removed from the property at any time, given ‘sufficient’ notice. This is usually 28 days but can be less. A big difference between a tenant and a lodger is that a licence is signed instead of a lease agreement. The document will set out the terms and conditions of the agreement and the rules of the property.

Very importantly, the general rule with equity release is that homeowners may have lodgers but not tenants. (1)

Can I Rent Out My Home with Equity Release While I’m on Holiday?

In short, no. As per the logic above, you may not rent out your home while you’re on holiday, even if you live in the property for only six months a year. That being said, these rules could differ from one lender to the next. Therefore, should you receive income from renting out your home for half a year while moving to your holiday home, it’s worth consulting your financial adviser to see if they can find an equity release plan that permits this.

Airbnb and the Rent-a-Room Scheme with Equity Release

The great news is that Airbnb and the Rent-a-Room scheme are both considered to be lodger agreements, so you can rent out one or more rooms in your home using one (or both) of these options. With the UK being a popular tourist destination, this is a great form of retirement income, and you have the opportunity to mingle with guests and entertain people from across the world.

Of course, some areas are more popular than others for this. But even if you don’t live in a tourist hot-spot, there may still be a demand for short-term accommodation for people attending business meetings, conferences, sporting events, concerts, and so on.

In Conclusion

Equity release is a great way to gain access to property wealth, but can limit your opportunities to make money through rentals. It’s therefore important to weigh up the pros and cons carefully.

Your best bet is to discuss your future plans and intentions with your financial adviser. In general, as stated above, you can’t rent out your home once you’ve unlocked equity. But you can usually make extra income by taking lodgers, and that can be a great way to keep you busy (and supplement your pension) during your retirement years.

This is a collaborative post.

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March 18, 2022

How Will Rising Interest Rates Affect the Short Term Future of the Equity Release Market?

Nick Making Money events, property, retirement 0 Comments

This is the second in a three-part series of collaborative posts about equity release. This article looks at the likely effect of rising interest rates on the equity release market.

The equity release industry is booming. Homeowners from across the UK may find the financial freedom they desire by unlocking one of these attractive products.

If you’re a homeowner over 55 and haven’t heard of equity release, you need to do your research. These products allow you to access cash tied up in your property for any purpose you wish. No tax is payable on this money, and you will never be obliged to move out of your home.

John Lawson from SovereignBoss has done extensive research on the future of the equity release interest rates. He has discovered that after reaching an all-time low in March 2021, equity release interest rates are rising. The big question is, how significant will the rate increase be, and will this have a short-term effect on the industry as a whole? Let’s take a look at what Mr Lawson has to say.

Interest Rate Increase

When interest rates rise, the equity release sector is inevitably impacted as well. In March 2021 interest rates hit a historic low, with some homeowners having the opportunity to unlock equity with fixed rates as low as 2.3%. This unprecedented rate drop was exciting because it wasn’t much more expensive for a homeowner to opt for an equity release than it was to have a traditional mortgage. Plus, with no repayments required in one’s lifetime, retired homeowners could save a fortune by eliminating monthly mortgage payments. (1)

Recently interest rates have increased slightly but are still quite low. Current rates range between 2.9% and 6.4%. The interest rates you achieve will be lender-dependent, but they will also be determined by your age, health condition and property value.

Experts predict that interest rates are set to rise until 2024. And with the latest announcement by the Equity Release Council (see below), now could be the cheapest opportunity to access the cash tied up in your property through an equity release mortgage.

New Compulsory Optional Repayments

In addition to interest rates rising but still being stable, on 31st March 2021, the Equity Release Council enforced guidance on lenders to offer all their lifetime mortgage clients the option for penalty-free voluntary repayments. This means that homeowners can now repay up to 40% of the amount borrowed each year.

The exact offer you receive will depend on the lender you select. But in principle, if you have the means to do so, you could pay off your equity release plan within three to 10 years, restoring your property’s value.

But that’s not all. Once you’ve released equity, there is no risk of foreclosure. You can stop and start making repayments whenever you wish. Voluntary repayments are a great idea if you can afford them, as they reduce the overall cost of your loan by preventing compound interest.

So How Badly Will the Industry Be Affected?

With interest rates still reasonable and the above announcement by the Equity Release Council, the industry is set for another record-breaking year. Eighty percent of experts agree that the industry’s value is rising, and we at Sovereign Boss are excited to see further innovation from lenders and the Equity Release Council.

In Conclusion

Whether now is the best time to opt for an equity release product is very personal. You will need to consult a financial advisor who will help you determine the best course of action for your needs. If it’s in your interest to unlock equity at this stage, however, you’re likely to find a fantastic deal, with product flexibility better than ever.

So, while interest rates are rising, they’re not too much of an issue at this stage. And there is certainly no indication that there will be any short-term impact on the equity release industry. On the contrary, we are set for another record-breaking year.

That being said, it’s too early to predict the long-term impact that interest rates increase will have on the industry. But SovereignBoss considers it their responsibility to keep you updated with the latest industry trends.

This is a collaborative post.

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March 15, 2022

Why Does the Equity Release Industry Look Set to Boom This Year?

Nick Everything Else pensions, retirement, events, property 0 Comments

Today I have the first in a series of three collaborative posts on the subject of equity release. This one examines the growing popularity of equity release and why it looks set to boom in the year ahead.

The equity release industry saw a massive expansion in 2021, with a record-breaking sum of over £4.8 billion being unlocked by retirees across the UK. This unprecedented growth has been welcomed amid a global pandemic, as the Equity Release Council helps regulate a retirement product that has given many retirees the means to a desperately needed income in these tough economic times.

Mark Patterson, the equity release expert from EveryInvestor, joins the ranks of fellow industry authorities in predicting that 2022 is set to be another record-breaking year. Let’s take a look at what’s expected and determine if unlocking equity is a good idea over the next few months.

What Is Equity Release?

Equity release is a widely popular financial product for UK-based homeowners older than 55. In a nutshell, it gives you the opportunity to use your property’s equity but still live at home. With a third of UK retirees having less than £10,000 in retirement savings, equity release offers a lifeline to many. What’s more, the money can be used for any purpose.

According to figures from the Equity Release Council (ERC), equity release clients borrowed a total of £4.8 billion last year, a 24% rise on 2020’s figure.

Why is the Equity Release Industry Growing Amid a Tough Economy?

While many industries have crumbled in the wake of Covid 19, the equity release sector has grown tremendously. This is for several reasons, including:

Equity release provides financial security in a tough economic time.
The Equity Release Council has made the industry safe and is shifting a historically bad reputation.
Interest rates hit an all-time low in March 2021, and homeowners have received the best deals yet, with fixed-for-life interest rates.
Finally, growth inspires growth. As the industry expands, lenders offer more flexible products with bonus features, such as a free valuation or no completion fee.

What’s Predicted for 2022?

The future of equity release looks bright in 2022, and 80% of experts predict growth, with some believing this will be vastly beyond regular inflation. There are some key industry features that are likely to impact the industry (1).

First, the Equity Release Council announced on 31 January 2022 that all equity release lenders must offer the opportunity for voluntary loan and interest repayments. This announcement is welcome for potential borrowers, as voluntary repayments can vastly reduce the cost of your loan, yet there’s no obligation or risk of foreclosure.

On a slightly less positive note, equity release interest rates will rise in 2022 and should continue to do so until 2024. However, this could actually mean further industry growth. Rates are set to rise only slightly, and homeowners applying now will likely begin their equity release plans before we see any further increases.

Should I Unlock Equity from My Home at This Time?

With the market as it stands, it is a good idea to unlock equity if you’ve been planning to do so. However, it’s more complicated than just looking at the state of the industry.

Whether or not you should unlock equity from your home will depend on your personal circumstances and stage of life. What’s great is that equity release is safe; it’s overseen by the Equity Release Council and regulated by the Financial Conduct Authority (FCA).

However, to determine if it’s a good idea to unlock equity from your home, you should speak to a financial adviser. After all, seeking advice is compulsory when opting for an equity release product. The team at EveryInvestor will always encourage a whole-market financial adviser as they have an overview of the whole equity release market.

In Conclusion

Between flexible plans, the opportunity for voluntary repayments, and interest rates still low, now is a great time to release your property value through equity release. With another record-breaking year ahead of us, the industry is booming, and many more retirees are set to sign up to an equity release plan. Could you be next?

This is a collaborative post.

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March 15, 2022

Guest Post: Lots of Ways to Get Free Stuff!

Nick Everything Else events, sponsored post 2 Comments

Today I have a sponsored guest post for you from my friends at Best Free Stuff. There are some great tips and ideas for getting things free, plus at the end is a link to a free competition where you can win a Lindt Chocolate Bunny just in time for Easter!

There are lots of great ways to get free stuff. For many, this is like a treasure hunt. Once people get their deal, they tend to share the good news with others. So a free deal can go viral quickly. Here are some suggestions for how you can get loads of quality, free products.

Free samples are really popular. Manufacturers like to give them out because it is a very effective way to promote a product. When a product is launched, people may not buy it right away because they don’t know if they will like it. However, if they have a chance to try it for free, then they can buy it if they like it. You may have seen vendors giving out samples at a carnival or community festival. Companies know that no-one can resist a free product. So it’s a win-win for both companies and consumers with free samples.

You can also get freestuff when you search online. There are many websites that have a special focus on gathering information on all kinds of free offers. You can get skincare samples, snacks, cleaning products, movie rentals, and just about anything consumers would want. You just have to click on a link that is connected with the product and fill out some information. Do realize that the provider of the free item will probably add your contact information to their mailing list. So, if you request a lot of free things, you should get ready to receive a lot of email advertisements. You will get the option to unsubscribe, however. So there is little risk in signing up.

Sometimes you can get free trials on full-sized products, such as a software download or a subscription. Do beware of any free trials that require you to enter your credit card information, though. Sometimes it may not be that easy to cancel after the trial.

Don’t forget about classified ads too. Ordinary people are giving away good-quality things every day for various reasons. Perhaps their children have outgrown their toys. Maybe they are moving to a new home and don’t want to take their old furniture with them. A business that is closing offices may be liquidating office furniture and equipment. Craigslist is a popular online classified platform that lists thousands of free items every day, in all major cities around the world. You never know what will be listed each day. If you are looking for something in particular, just type in a search term under the ‘free’ category and see what comes up.

These are just some common ways you can get great free stuff. Free things get snapped up quickly, so if you want the best stuff, you need to be diligent and monitor places that list these giveaways. Sign up for email alerts and keep checking back. If you are in the right place at the right time, you can score a great deal.

If you like to enter competitions, then we found this great competition where you can win 1 of 300 Lindt Bunnies (see cover picture). Click this link to enter today!

This is a sponsored post.

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March 2, 2022

My Investments Update – March 2022

Nick Investing events, reviews, property 6 Comments

Here is my latest monthly update about my investments. You can read my February 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA, as I know many of you like to hear what is happening with this.

As the screenshot below shows, my main portfolio is currently valued at £20,859. Last month it stood at £20,870, so that is a modest fall of £11.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,166 compared with £2,682 last month. However, that includes an extra £500 I deposited in February. If you deduct this from the current value that gives a figure of £2,666, a net fall of £16.

Here is a screen capture showing performance over the last month.

Obviously a big factor affecting equity prices this month has been the situation in Ukraine. The orange dot on both charts above shows the date when Russia invaded.

The war in Ukraine is above all a human tragedy, but inevitably it has serious implications for investors as well. So far, as you can see from the charts, the invasion hasn’t had a major impact on my Nutmeg investments (there was actually a bigger fall the previous month, due partly to tensions in Ukraine but also to economic factors like rising inflation). But obviously, if things go badly in the coming weeks, there could be bigger losses to come.

Even so, I intend to stay calm and avoid any panic reaction. I certainly don’t intend to crystallize my losses since the start of 2022 by selling up. I have already topped up my investment once while asset values are depressed and intend to do so again before this year’s ISA allowance ends in April.

As I have said before on PAS, all equity investments should be regarded as medium to long term. And it is worth noting that since I started investing with Nutmeg in 2016 I have still enjoyed a total return on my main portfolio of 45.72% (or 64.72% time-weighted). I should also mention that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last couple of months.

If you also have a Nutmeg portfolio and plan to withdraw from it in the next few months, there is certainly a good case for switching to a lower risk level right now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are still looking for a home for your 2021/22 ISA allowance, based on my experience over the last six years, they are certainly worth considering.

As regular readers will know, this year I am using Assetz Exchange for my IFISA. This is a P2P property investment platform that focuses on lower-risk properties (e.g. sheltered housing on long leases). I put an initial £100 into this in mid-February 2021 and another £400 in April. Everything went well, so in June 2021 I added another £500, bringing my total investment on the platform up to £1,000.

Since I opened my account, my Assetz Exchange portfolio has generated £44.26 in revenue from rental and £74.68 in capital growth, a total of £118.94. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile.

I won’t bother publishing a statement on this occasion as it’s not hugely different from last time. The bottom line is that I (still) have investments in 21 different projects with them and all are performing as expected, generating income and – in every case now – showing a profit on capital. So I am very happy with how this investment has been doing.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

As mentioned, my investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They have been doing well recently, with new projects launching almost every day. I currently have over £2,100 invested with them, quite a large proportion of which comes from reinvested profits. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule.

Another of my Kuflink investments reached maturity in the last few weeks and I reinvested the capital released. You can see a screen capture of the new project below, a loan to convert some waste ground in the Stevenage district into a car park. It was a different sort of project from those I have previously invested in, but the case set out on the website seemed convincing.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. As mentioned above, these days I invest no more than around £150 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

I’d also particularly draw your attention to Kuflink’s revised and more generous cashback offer for new investors [affiliate link]. They are now paying cashback on new investments from as little as £500 (it used to be £1,000). And if you are looking to invest larger amounts, you can earn up to a maximum of £4,000 in cashback. That is one of the best cashback offers I have seen anywhere (though admittedly you will need to invest £100,000 or more to receive that!).

I also recently published a blog post about another P2P property investment platform called BLEND. Like Kuflink, they offer the opportunity to invest in secured loans to experienced property developers. They offer (on average) somewhat higher rates of return than Kuflink, though arguably with a little more risk. As well as my blog post about BLEND, you can also check out what they have to offer on their website [affiliate link].

Moving on, I have another article on the always-excellent Mouthy Money website. This is quite a personal one in which I set out my views about the FIRE (Financial Independence, Retire Early) movement. For various reasons set out in the article I am not a fan of this. You can read my article here 🙂

I also recommend reading the article on Mouthy Money by my blogging colleague Finance Dee titled Panicked About the Stock Market? Why It Pays to Keep Calm and Carry On. Dee’s views very much reflect my own on this subject.

That’s more than enough for now, so I’ll sign off till next time. I hope you are keeping safe and well, and (if you live in England especially) are enjoying the more relaxed Covid restrictions that now apply. Here’s looking forward to a more normal spring and summer than the last two years. If you’re planning any UK short breaks, don’t forget I have a list of places I have visited and recommend here 🙂

Note also that this post includes affiliate links (disclosed). If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered.

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