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Most junior bank accounts are accessible for children between 11-17 and will need a parent or guardian to be a joint account holder. Your child won’t be able to open a bank account on their own until they are at least 18.

We are living in a cashless world and so if you give them pocket money this would be most beneficial being sent into a bank account, as well as being a secure way for your child to spend.

If your child is asking for more financial freedom and you think they are ready to learn then a junior account is a great option for them.

The benefits of Junior bank accounts

 

A study done by Cambridge University found that children’s financial habits are formed by 7.

This is why it is so important to teach financial responsibility from a young age.

Parent controls

 

At 18 the account will automatically become an adult account and your child will have full freedom. It is best that they have learnt how to correctly handle their money with your help before this transition happens.

 

As of March 2024 below are the best 2 year and 5 year fixed term mortgage rates.

With a fixed term mortgage you will not be affected by changing interest rates and you will often pay lower rates than if you were on a variable rate mortgage.

If your fixed term is coming to an end this year and you are worried about the rise in mortgage rates then make sure you are comparing the best deals.

2 year fixed term mortgages

Barclays

Natwest

Halifax

5 year Fixed term mortgages

Natwest

HSBC

Is a 2 or 5 year fixed term better?

As seen above, currently 5 year fixed term mortgages offer lower interest rates meaning you will have to pay back less over time.

A 5 year fixed term is a long term commitment so you have to make sure you will be able to make your repayment for the whole duration.

Pros of a 2 year fixed term

Cons of a 2 year fixed term

Pros of a 5 year fixed term

Cons of a 5 year fixed term

Stay on top of your Credit card payments and avoid debt.

When trying to save it is important to first find the right savings account for your needs, there are many ways to make saving simple.

There are many options for savings accounts, below you can find out how each type can help you save.

Easy Access

You will be able to draw your money out whenever you like, this type of account allows you the freedom to know your money Is there whenever you need it.

Close Brothers

Virgin Money

Fixed term

You will decide a term length, either 2 or more years and you will not be able to withdraw your money until the term is over. This is a great option if you are saving for something big and know when you will need the money. A fixed term account also means you will not be able to give in to temptation and spend any of this money.

Barclays

Smartsave bank

Notice accounts

You will have access to you money but only when you give a notice to the provider of when you will need the money. You will need to prepare in advance and tell them in 6 months you will need to withdraw X amount of money from your account. This is a great option if you want to keep your money from being spent regularly and if you know when you will need money.

The West Brom

Regular Savings accounts

Setting up a regular saving account means you could earn a higher interest rate however you may need to set up a current account with the provider before you are able to have a savings account. Regular savings account often have a maximum monthly deposit meaning you can only put small amount in at a time. These are a great way to save smaller amounts and will work well if you are just starting your savings journey.

First Direct

If you are trying to save, learn more about finances or want to take on some new techniques for your money then reading from those who have done it or are experts in the field could help you.

There is so much advise out there it can become overwhelming, when finding the book for you make sure it contains what you are looking for and won’t make it more complicated than necessary.

Below is a short list of books which could help you to invest, save, learn about finances and help you build better habits. Pick up one of these helpful reads for world book day and learn more about your finances.

As the higher cost of living has continued to stretch household budgets, the flexibility for consumers of buy now pay later (BNPL) deals has become increasingly attractive.

Recent research carried out by the Financial Conduct Authority (FCA) last October,  found that around 27% of UK adults has turned to BNPL in the six months to January last year.

This was a significant 17% higher than for the 12 month up to May 2022.

If you are looking to buy an item using BNPL there are plenty of issues to consider,  alongside potential pitfalls over failing to make  payments.

It’s also important to remember that BNPL is a way of borrowing so its best to ensure that you have a repayment plan in place.

 

The pros of BNPL deals

The one obvious benefit of BNPL services is that buying any priced item is more manageable, as payments can be spread out into smaller amounts.

Payments are allowed over the course of weeks or even months depending on the terms and conditions from a BNPL provider.

For example with Klarna you can pay for your item in three instalments, where the first payment is made at the point of purchase, with the outstanding instalments to be made every 30 days.

Typically any purchase that is made through BNPL is interest free, so zero per cent financing is a draw.

Increasingly consumers are also able to use BNPL services in store as well as online if a  retailer is signed up to a BNPL provider in the same way that you are, details such as email addresses and phone numbers would need to be provided to confirm payment.

While it is probable that a credit check will be performed when applying for BNPL, it is not likely to be a rigorous assessment of your finances and will nor be viewed by other lenders.

 

The cons of BNPL deals

Of course there are downsides to this and make sure that you do not believe that this is easy money and any debt will have to be paid back, as the credit checks are softer you may be approved for BNPL without being able to afford it.

Yet some BNPL providers do go the full distance and proceed with a full examination of your finances, this can potentially lead to your credit score being damaged if for example a deadline payment is missed if it cannot be covered.

The lack of regulation over the BNPL sector is a concern, and its important to be  aware that any agreement that lasts a shorter period than 12 months is not regulated by the FCA.

This means that if there area any disputes over unfair treatment then there is no consumer protection in place.

If you make a BNPL payment with a credit card it means that you are not covered by section 75, which allows you to ask for a refund if there is a problem with an item that costs between £100 and 330,000 where you have paid by credit card.

 

What happens if you miss payments?

A penalty fee can be charged if repayments are missed, where potentially debt collections agencies can be called in, depending on the approach from a BNPL provider.

Some providers may try and work out an alternative repayment schedule, such as rolling on a payment over to the next instalment deadline.

That is why it is so important to fully check what the penalties are from providers.

Klarna will try on two occasions to take the first payment, if it cannot be covered it will be pushed back to over to the second instalment.

If after two more attempts on the second payment that the costs still cannot be met, then it will be rolled on to the final payment.

At that point if the payments can’t be made then the debt collection agency is called in.

There is also a risk of being banned from using Klarna if payments are missed.

Clearpay say that late fees will be charged, but late payments will also be capped to help people recover and get back on track.

While Laybuy will take a considered approach where the circumstances over late payments will be taken into account, and look to find a solution by determining what payments can be made in the meantime.

If the situation continues for an unspecified period of time, then debt agencies are brought in.

More positively Paypal have a Buy now and Pay in 3 offer to consumers, and it makes it clear that there are no late fees involved if payments are missed.

 

ISA stands for Individual Savings Account and allows you to save whilst earning interest and is tax-free. You can save up to £20,000 in a tax year tax-free. Having an ISA helps people to save for things like a house deposit as this a great, money-efficient way to save large amounts.

Cash ISA

This is similar to your regular current accounts as you are paid interest on your balance in the account. This is a simple way to save tax-free in a secure account for your money.

Cash ISA’s have interest rates of 5% or more currently.

Those over 16 can set up a cash ISA.

Stocks and Shares ISA

You can save up to £20,000 tax-free each year and your money is invested into various stocks and shares. This could help your account grow however there is a chance the value can go down as well. You can either choose where you money is invested or the bank will randomly invest your money into different stocks.

Only once you are 18 can you set up a stock and shares ISA.

Lifetime ISA

These are used to help you pay for your first house or alternatively to save for retirement.

This can be in the form of a Cash ISA or a Stocks and Shares ISA where you can save up to £4000 a year tax-free. The government will then add a 25% bonus which has to be used to help you buy a house such as pay for a deposit or for a retirement fund only. If you use this account to pay for anything else then there will be a 25% penalty rather than a reward at the time of withdrawal.

Only those between 18-39 are eligible for a lifetime ISA.

Withdrawing from your ISA

Your ISA will have certain rules regarding when you can withdraw as this is an account specifically for saving.

If you have an instant access Cash ISA you will be able to withdraw money at any time without any changes to your tax-free balance as this account will be for short-term savings.

If you have a fixed rate Cash ISA this will lock the money for a certain length of time and usually the interest rate for these accounts will be higher.

Then, there is the flexible Cash ISA here you will be able to make a limited number of withdrawals without losing any benefits of the ISA.

For the Stocks and Shares ISA you will usually be able to withdraw money at any time as long as you have cash in the account. If you want to withdraw money and you have no cash then you will have to sell shares at the current market price meaning you be losing money.

Why should you have an ISA?

If you are saving for something in particular and can afford to have savings which are in effect untouchable then having an ISA will be very beneficial to you. The money in your ISA should be separate from your personal savings in order for your ISA to be saved for your first home or retirement fund and to reap all the benefits.

With an ISA you are saving more with less.

There is a lot to organise when you are moving, especially when moving across the world!

If you are permanently moving to Australia you will want an Australian bank account, this will help you avoid charges and give you a secure way to spend, save and receive payments whilst in Australia.

There are 4 main banks in Australia

ANZ – Open an everyday account with ANZ to hold money and receive your salary. There will be a $5 monthly fee to have an account with them. ANZ have wide access to ATMs across Australia so you will be able to withdraw without any fees if you use these.

Commonwealth Bank – Known as Australia's largest bank. Offering assistance with your move to Australia to help you settle in quickly. You can open an everyday account and a savings account. There will be a $4 monthly fee to have an account however they offer new customers 12 months free to set you up with ease. You will be able to avoid withdrawal fees as they have a network of ATMs and branches across the country.

Westpac – One of Australia's first banks. You will have a $4 monthly fee to have an account here, after your first 12 months which you can get for free as a new customer. They offer fast and secure banking using mobile apps and more. You will have no fees when sending money overseas, meaning you can send money back to your friends and family with no trouble.

NAB – Known as Australia’s largest business bank helping small, medium, and large businesses take care of their finances. You can enjoy no monthly fees or withdrawal fees when you have a transaction or savings account with NAB. You will have to go into a branch to set up your account when you arrive in Australia.

These banks will often waive the monthly fees if you meet these requirements;

What you will need to set up a bank account

You will be able to start the process of setting up a bank account whilst still in the UK however, you will have to complete the process once you arrive and go into a branch.

To start the process online you will need.

Once you have uploaded the correct information online you will have to verify all the documents again in person so you can withdraw, spend, and move money.

Accounts you can open before you leave

 

 

There is a new mortgage model coming to the UK soon which could make it more affordable to take out a mortgage for more people. This new mortgage model is designed to save the borrower money as well as reduce the risk to the lender. It’s a win-win for everyone!

This involves the interest rate coming down as the loan is being paid off. This means the borrower could save an estimated £5127 in interest if the LTV fell from 85% to 60% as stated on a National World report.

The Guardian offers this example, “if you buy a property for £200,000 and borrow £150,000, your LTV is 75%. If you reduce the mortgage debt to £140,000, your new LTV would be 70%. Assuming that at that point April Mortgages has a cheaper rate available at 70% LTV than at 75% LTV, it will automatically switch you on to the lower rate in which case you do not have to do anything.”

The offer

This model will be a great option for all involved as the borrower is saving money as the interest rate decreases, equally, this reduces the risk for the lender as the value decreases.

April Mortgages

The model originated in the Netherlands by April Mortgages in 2014. Since then, the firm has facilitated over 100,000 loans which has accumulated nearly £25.63 billion. They are now one of the top lenders in the country.

April Mortgages offer flexibility and reward their customers for their repayments as they fulfil their end of the deal.

In a National World report, we learn that “April Mortgages were authorised by the Financial Conduct Authority in October to offer loans for 15% deposits but is now planning to accommodate first-time buyers with 5% deposits by the end of March.”

Tim Hague is the director of the firm and speaks on the new model having been successful in the Netherlands after doubt and now the wish to bring his ideas to the UK is reality.

There are various types of mortgage models currently available in the UK which you can learn about here. 

Are you interested in a Dutch-style Mortgage?

Both banks and credit unions carry their strengths, but what suits you is heavily dependent on personal needs and preferences. So let’s dissect these institutions and empower you to make an informed choice.

Understanding the Basics: Know Your Banks and Credit Unions

It's crucial to grasp what distinguishes banks from credit unions before deliberating over which one best suits you.

In simple terms, a bank is an institution licensed under state or federal laws that gains profits by lending money at higher rates than what they pay to their depositors.

On the other hand, credit unions operate as not-for-profit organizations owned by their members (i.e., account holders) who share common characteristics like workplace or geographical area.

Peeking Under the Hood: How Banks Operate

As mentioned, banks are driven by profits obtained through interest charges on loans and financial products. Here's an inside look:

Understanding these aspects helps evaluate whether you find their operation mode appealing or otherwise.

Credit Unions Offer Similar Products to Banks, e.g. Savings Accounts

Just like banks, credit unions provide a gamut of financial offerings. This includes savings and checking accounts, consumer loans such as personal or auto loans, and mortgages just like traditional banks.

Their not-for-profit status often results in low fees and competitive interest rates compared with banks. For example, you can open up a regular savings account at most credit unions that are insured by the National Credit Union Administration (NCUA) against default risks.

They cater to individualized customer service due to their community focus. Hence they might have strict membership requirements based on common bonds among members (e.g., residing in certain regions or working for specific employers). Having access to similar products coupled with other perks gives us a firm basis for comparison.

Weighing Bank Fees Against Credit Union Dues: Down to Brass Tacks

In terms of cost-effectiveness, both banks and credit unions have their pros and cons. Yet it boils down to what provides more value for you.

Banks may charge higher fees related to overdrafts, minimum balance requirements, or withdrawal penalties which can frequently be subjectively minimized by diligent financial management. In return for a variety of wide-ranging services and conveniences such as extended banking hours, branch networks across the country, and technologically advanced online platforms.

Credit unions typically offer lower fees due simply to their non-profit nature but might come with limited coverage regarding locations or operating hours.

Knowing where your priority lies regarding these aspects will make choosing between the two an easier feat.

Making a Decision: Which Suits You Best?

In weighing both alternatives, there isn't a 'one size fits all' answer. It depends on personal preferences and needs:

The Bottom Line

The last thing to mention is that neither of these options is exclusive. You can utilize both systems for different financial aspects (e.g., auto loans from credit unions while maintaining checking accounts at traditional banks). So consider your needs prudently and choose accordingly.

 

In a digital age where cybersecurity and operational resilience are paramount, the European framework known as DORA (Digital Operational Resilience Act) has emerged as a significant touchstone for financial markets. This act illuminates the pressing need for financial institutions to bolster their digital defences and streamline operations, particularly against the backdrop of increasing cyber threats and ICT disruptions. As we delve into this intricate framework, we sit down with Junaed Kabir, Partner and Managing Director of Parva Consulting, to uncover its profound implications, specifically for Luxembourg, a notable epicentre in the global funds industry. The insights provided shed light on the challenges ahead and highlight the potential opportunities for those ready to adapt and innovate.

 

To begin, please clarify the essence of DORA and its significance to the funds industry?

DORA (Digital Operational Resilience Act) is a European framework that aims to establish a robust and resilient approach to delivering digital capabilities in Financial Markets.

The requirement to ensure that organisations can continue resilient operations in the face of significant disruptions caused by cyber-attacks and information and communication technology (ICT) concerns is at the heart of DORA. DORA fosters the convergence of standards for ICT and cyber practises by offering a unified and consistent approach.

DORA covers five major issues: ICT risk management, incident reporting on ICT-related topics, administration and oversight of critical third-party providers, digital operational resilience testing, and information and intelligence exchange.

DORA underlines the significance of financial firms proactively identifying and categorising ICT assets in order to restrict inherent risks to acceptable levels. Financial institutions must develop effective risk management policies to protect themselves from cyber-attacks and disruptions by thoroughly knowing their digital infrastructure.

 

Luxembourg is a prominent hub in the global funds industry. How do you envision DORA specifically impacting this sector in Luxembourg?

The emphasis placed by DORA on strengthening operational resilience and defending against ICT-related risks will compel Luxembourg's financial institutions to reconsider their current processes and controls.

DORA will necessitate the implementation of new and more sophisticated rules, information technology controls, and resilience testing procedures. While some businesses, such as credit unions and investment firms, may already be in compliance in some areas, many will need to create totally new frameworks to meet DORA's criteria.

As the compliance journey evolves, it becomes increasingly crucial to incorporate critical stakeholders in the process. Information Security Officers, IT Officers, Risk Officers, and others must work together and contribute to achieve total compliance.

 

Can you delve into how the implementation of DORA might affect the daily operations of firms in the funds industry?

As Luxembourg-based financial institutions begin their compliance journey, it is obvious that DORA necessitates a proactive and dynamic approach to operational resilience and risk management.

Given the prominence of Luxembourg in the global funds industry, the country's financial firms will need to embrace DORA's criteria in order to maintain their competitiveness and reputation. As the legislative process draws to a close, the Luxembourg financial sector must prepare to detect, monitor, and defend itself against an increasing variety of ICT-related threats. This includes adapting to the Act's requirements for robust ICT infrastructure, incident reporting systems, and comprehensive testing.

 

Are there particular challenges that Luxembourg-based funds might face concerning DORA that you don't foresee in other jurisdictions?

The adoption of DORA is expected to have a significant impact on the financial industry, requiring various reforms to comply with the new regulatory framework. DORA seeks to increase the operational resilience of financial institutions by pushing investment firms to make significant changes to their internal procedures, risk management systems, reporting, and transparency methods.

Many Luxembourg-based financial institutions benefit from the IT infrastructure of a parent firm that is not based in Luxembourg. Control, oversight, and incident reporting are frequently assigned to the parent corporation. This will have to change; under DORA, the Luxembourg organisation must be able to demonstrate complete ownership of the IT infrastructure.

Investment businesses will need to conduct a thorough examination of their internal procedures in order to identify flaws and potential sources of failure. To avoid disruptions caused by cyberattacks or technological failures, comprehensive operational risk management practises, such as the establishment of contingency plans and seamless communication between departments, will be essential.

DORA intends to impose higher transparency standards on investment firms, forcing them to provide more detailed and regular disclosures to regulatory agencies and investors. This will need the development of new reporting frameworks capable of capturing a greater range of operational risks and occurrences.

DORA implementation will increase compliance costs and resource allocation for investment firms. Adapting procedures and systems to satisfy the new criteria will necessitate a significant investment in both financial and human capital.

Investment firms will need to invest in advanced technology and cybersecurity measures to boost operational resilience. Cyber threats constitute a significant threat to operational continuity; therefore, enhancing cyber defences is vital.

DORA is a critical step towards enhancing the financial industry's technology and cyber risk management and resilience. DORA's goal is to offer a uniform regulatory framework that improves the industry's operational resilience across all EU member states by focusing on risk management, incident reporting, and oversight of critical third-party providers. Financial organisations must proactively embrace DORA's criteria to ensure their ability to withstand, respond to, and recover from ICT-related disruptions and threats, ultimately safeguarding the stability and security of the financial system.

 

What opportunities might the introduction of DORA bring for the funds industry, particularly in Luxembourg?

The implementation of DORA in Luxembourg opens several opportunities for the funds business, leading to increased growth, innovation, and competitiveness in the global financial market.

DORA's implementation has the potential to improve collaboration and knowledge exchange across the funds industry, resulting in a more unified and forward-thinking financial ecosystem.

 

How should fund managers prepare for the implementation of DORA? What steps can they take now to ensure a smooth transition and ensure they are ready for January 2025?

Fund managers need to plan ahead of time for the adoption of DORA to ensure a smooth transition and compliance with the new regulatory framework. Early and planned action will help them mitigate hazards, streamline processes, and improve overall resilience. They can take the following critical steps:

 

How does Parva Consulting support clients in preparing for and navigating regulatory changes like DORA?

Parva Consulting assists customers in preparing for regulatory developments like DORA, achieving compliance and improving operational resilience through professional consulting services.

 

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