It can hardly have escaped your notice that in the last week or so shares generally have plunged in value due to economic fears sparked by the coronavirus outbreak.
If you have a pension pot, stocks and shares ISA, or any other equity-based investment/s, this is obviously a worrying time. It’s very important to avoid knee-jerk reactions, though.
In particular, unless you really need the money urgently now, you should think very carefully before selling up. By doing so you will be locking in any losses. Even though it’s true that shares may have further to fall, this advice still applies. All share prices are cyclical, and rises and falls are to be expected. That is why stock market investments should always be regarded as long term.
Luckily, there are a few apps that offer you experts’ advice on safe long-term investments. You can check some of the best on the market at BestStockTradingApp.com.
A further consideration is that if you sell up now, you won’t receive any dividends due from your shares further down the line.
Should You Top Up?
With share prices currently falling, should you take the opportunity to ‘top up’? That is actually a difficult question to answer, as it’s impossible to know for sure how much further the markets will fall before they recover. Timing the market is notoriously difficult, and many investors in the past have had their fingers burned by thinking they could second guess it.
Nonetheless, if you are currently investing monthly into a stocks and shares ISA or other fund, I would say you should almost certainly continue to do so. One consequence of the fall in share prices is that you will get more shares for your money now. This will actually boost the value of your portfolio in the longer term when the markets recover. This phenomenon is called pound-cost averaging. It is one reason why making regular smaller investments rather than one-off lump sums can be such a good option for investors.
Otherwise, it is really a matter of personal judgement. If you think that a certain share or fund is good value at its current price there may be a case for investing in it. Inevitably, though, this will be a bit of a gamble. I am not personally planning to top up my equity portfolio until the present crisis appears to be well on the way to being resolved.
Beware of Pound-Cost Ravaging
If your pension is already in drawdown – especially if you are early into your retirement – pound cost ravaging is a risk you need to be aware of right now.
If the value of your pension pot is falling and you are also drawing money from it, those two things together have the potential to deplete it rapidly. You are then increasing the risk of running out of money later into your retirement.
If you have other sources of cash, therefore, it may make sense to reduce or even suspend entirely withdrawals from your pension pot during this time. This will help preserve its value. You will be able to resume withdrawals when – as will inevitably happen at some point – the markets recover. The great majority of pension providers will be happy to do this for you if you request it.
Consider P2P and Other Non-Equity Investments
If you have money to invest, in my view there is a good case right now for considering other types of investment such as P2P.
Regular readers will know that I am a fan of this type of investment (if approached sensibly and selectively) and have a fair-sized portion of my own portfolio invested in it. I won’t go through all the possibilities now as this is a subject I discuss regularly on Pounds and Sense. But if you are looking for a couple of ideas to start you off, I recommend checking out RateSetter – a relatively low risk P2P lending platform which I reviewed in this post – and Bricklane, a REIT (Real Estate Investment Trust) which offers a highly tax-efficient Property ISA (reviewed in this post).
As always, if you have any comments or questions about this post, please do leave them below.
Disclaimer: I am not a professional financial adviser and nothing in this post should be construed as individual financial advice. Everyone should do their own ‘due diligence’ before investing and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investment carries a risk of loss.
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In February 2017 I wrote this post about premium bonds explaining why I was withdrawing a large amount of the money I had invested in them.
To recap, at that time the interest rate paid on premium bonds (from which the monthly prize fund is calculated) had been cut eight months earlier in June 2016. This led me to sell the majority of my holding, as the amount I was earning in prizes had fallen considerably. The rate was cut again a few months later in May 2017, which led me to sell nearly all my remaining bonds. I now have just £5 left, to avoid closing my account completely.
So what has happened since then? The good news for bond owners was that from December 2017 the prize fund was raised by 0.25% to 1.40%. This improved the odds of an individual bond winning a prize in any monthly draw from 30,000 to 1 to 24,500 to 1 (although it still didn’t tempt me to reinvest).
The not-so-good news is that from May 2020 the rate is being cut by 0.1% to 1.3%. As a matter of interest, here is a table copied from the NS&I website showing the changes in prize rates and the odds of winning a prize over the last twelve years. The new rate from May 2020 isn’t shown on the table.
From May 2020 the chances of winning a prize with a single bond will be reduced to 26,000 to 1. Over 170,000 fewer prizes are set to be given out in May 2020 than in February as a result of this change, with less than half the number of £100 and £50 prizes expected to be awarded (source: MoneySavingExpert).
My Thoughts
A first glance you might think that an interest rate of 1.30% percent still isn’t so bad in these days of (very) low interest savings accounts. It’s much the same as the current top paying easy-access savings accounts. Premium bond prizes are tax-free and you can withdraw your capital any time if you need it within a few days. Your money is protected by the UK government and you have an outside chance of winning a life-changing sum. So what’s not to like?
Well, quite a lot in my opinion. Most importantly, although the interest rate is currently 1.40% (reducing to 1.30% in May) in practice most people won’t make this amount. The interest rate is a mean (average) figure and this is skewed by the two one-million pound prizes (which statistically you are highly unlikely to win – see below) and the small number of other other high-value prizes. For these big prizes to be paid out, a lot of people have to win nothing. The more bonds you have, the closer to the average your prize earnings are likely to be. But the reality is that most premium bond owners won’t earn the interest rate quoted (and they may make nothing at all).
A better measure of what you are likely to make over a year is the median average. The way to think about this is that if you lined up all premium bond-holders with a certain number of bonds (e.g. £50,000) in order from those earning the least in a year (probably nothing) to the most (a million pounds plus), the median is the person right in the middle of the line. Half of all holders will earn more than this person (or the same) and an equal number will earn less. The median in this context is therefore a measure of what you can expect to earn from your premium bonds in a year with ‘average luck’. The clever folks at MoneySavingExpert have built a Premium Bond probability calculator which uses this metric to indicate how much you are likely to win per year, with average luck, with any given holding.
With the £50,000 maximum, the calculator reveals that with average luck you will win just £500 of prizes a year, equivalent to an interest rate of just 1.0 percent (see screen capture below). And that is at the current (February 2020) interest rate. From May 2020 that figure will inevitably go down. Obviously you might have better than average luck, but (as stated above) around half of all bond-holders will have worse. You can read a much more detailed explanation about this on this page of the MSE website.
The calculator also reveals that with £5,000 in premium bonds you could expect to win £50 a year with average luck, and with £1,000 nothing at all. Only about one in three people with £1,000 worth of bonds will win a prize in any one year, so the median (‘average luck’) winnings are zero. Over a two-year period, however, about five out of nine holders of £1,000 will win at least one prize, so the median earnings over two years with £1,000 in bonds are £25 (the lowest and by far the most common prize). This does I guess demonstrate that the ‘average luck’ method used in the MSE calculator has its limitations as a way of estimating likely earnings (although it is still likely to be more accurate than applying the headline interest rate to your investment).
Clearly the longer you hold your bonds, the better are your chances of winning a larger prize, so over a period of years average annual earnings may edge up slightly. Even so, the large majority of bond-holders won’t ever earn the headline rate.
At one time the tax-free status of premium bond prizes would have been a significant attraction, but nowadays that doesn’t apply to nearly the same extent. All basic rate taxpayers now benefit from a Personal Savings Allowance of £1,000 worth of tax-free savings interest every year (higher rate taxpayers get £500 and top rate taxpayers nothing at all). In practice 95% of people now pay no tax on their savings interest. If you are in the 5% who do, premium bonds become a more attractive option. Even so, a typical return of 1% or less, even if it is tax free, isn’t going to set many pulses racing.
Finally, you do of course have a chance of winning a big prize, but it’s important to be realistic about what that chance is. Even with the maximum £50,000 holding, MoneySavingExpert calculate that your chances of winning the million pound top prize in any one year are 1 in 69,876. To put this into perspective, if you had held £50,000 in premium bonds since the year 68000 BC (assuming of course they existed then) with average luck at the current interest rate you could have expected to win the jackpot just once. I looked this up, and 68000 BC is the middle of the Stone Age!
Overall, then, I cannot recommend premium bonds as a home for your savings, especially with the coming rate cut in May 2020.
I can understand why premium bonds are a popular investment, as they offer a bit of excitement every month checking whether you have won and how much. But the fact remains that overall, for most people, the total prize money received is likely to average little more than 1 percent a year at current rates. It may very well be less than this, especially after May 2020 when – as already mentioned – the number of lower value prizes (£25 to £100) will be cut substantially. I look forward to checking on the MSE calculator then to see how much a person with average luck might expect to make in a year.
If you are lucky enough to have £50,000 burning a hole in your pocket, my first advice would be to put enough into an easy-access savings account such as the Post Office Online Saver (currently paying 1.30% including a fixed 0.8% bonus for the first 12 months) to cover your outgoings for up to three months in the event of emergencies. After that, you could invest the balance in a low-cost tracker fund, or a portfolio of investment funds, or a robo-advisory platform like Nutmeg. You could perhaps put a proportion of the money into P2P lending or property crowdfunding as well. Over several years, for the great majority of people, this will outperform an equivalent premium bond portfolio many times over.
As always, if you have any comments or questions about this post, please do leave them below.
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I recently booked my first ever break with Airbnb.
Of course, I’ve been aware of this person-to-person accommodation booking platform for some time, but till now I’ve avoided using it myself. In the back of my mind were stories I read years ago about people renting out sofas in their living room to make a bit of extra cash. At my age that prospect – the sofa in the living room, I mean – definitely didn’t hold any appeal!
Times change, though, and it’s important to keep up with them. In my case I wanted to book a short break in a part of North Wales that isn’t well served by hotels, the Lleyn Peninsula. Okay, I could have stayed at the Haven Holidays Park (formerly Butlins) in Pwllheli, but I was pretty sure that wouldn’t be my cup of Welsh tea either.
So after researching the relatively few hotels in the Abersoch area where I wanted to stay using Booking.com (affiliate link), I decided it might be time to give Airbnb a try. In recent years, as regular readers will know, I have become more accustomed to booking self-catering accommodation for short breaks, and have realised that in some ways I prefer this to staying in hotels.
In this blog post I thought I’d share my experience of registering with Airbnb and finding and booking accommodation. I hope this might inspire you to try it yourself if you haven’t yet taken the plunge with Airbnb.
Of course, you can also become an Airbnb host and make money that way. I haven’t tried this myself, but did cover the subject in another blog post titled Boost Your Income by Renting Out a Room.
Registering with Airbnb
Before you can make a booking with Airbnb, you have to be registered on the website. You can still browse without joining but (as I found out) if you find somewhere you like available on the dates you want, you will have to go back and register and then start the whole process again. This is a frustrating waste of time. It’s free to register and doesn’t take long, so if there is any chance you might want to book through the platform, my advice would be to do this first.
Registering with Airbnb is similar to registering on other booking websites. One thing to be aware of, though, is that as well as your personal details, as proof of ID they also ask you to upload a scan of an official document such as your passport or driving licence with your photo on it. Once you have done this, you have to wait for your ID to be approved. In my case this happened within 15 minutes and I received notification by email.
Once you’ve done all that, you can start searching for your perfect holiday retreat!
Searching Airbnb
Once you are logged in, you can start your search using the box on the Airbnb front page (see below).
As you can see, you have to enter where you wish to go and the dates you want to arrive and depart. You have to choose specific dates, even if (as I was) you are flexible about this. Once you have found somewhere you like, you will be able to see what other dates that accommodation is available. If you want to check all possible places in the area, though, you may need to do a few searches using different dates.
Anyway, once you have entered the relevant details and clicked on search, a new page will open showing you a map of the area in question. Here’s what I got when I searched just now for accommodation near Abersoch in early May (not actually when I am going).
As you may gather, each of the prices in a small oval represents an Airbnb place with availability on the dates in question. The price is the cost per night. Clicking on any of these will bring up brief info about the accommodation in question. If you like the look of this, clicking again will bring up a new page with photos and more. Here’s the top of the page for a cottage I like the sound of, though it would be too large for me alone.
Also on this page are full details about the accommodation and a reservation form – see below.
As you can see, for your money you are getting considerably more than a sofa in someone’s living room 😀 £110 a night seems very reasonable to me for a cottage that can accommodate a family of six.
As you may have noticed, there are some additional charges. Many Airbnb properties – though by no means all – charge a cleaning fee. In addition, you will always be charged a service fee. This goes to Airbnb, and is one way they make their money (they also charge a fee to the property owners).
If you scroll down you will see various other items, including visitor reviews and a calendar showing when the property is (and isn’t) available. Also towards the bottom of the screen you will find the cancellation terms. These are set by the hosts and vary considerably, so be sure to study them carefully. Often you will be able to cancel free of charge until a certain date. After that, you may have to pay the service charge and perhaps part or all of the booking fee as well.
Making Your Booking
If you want to proceed, clicking on Reserve will take you to a new page where you can confirm your booking and provide payment information. This is pretty standard, although one thing you don’t normally have to do on hotel booking sites is write a message of introduction to the property owners (your hosts).
Airbnb provide a ready-written message you can use by default. This is pretty bland, however. I think it’s best to take a few minutes to write something more personal about who you are, why you want to visit the area, and so on. This is especially important if you are new to Airbnb and don’t have any history on the site or reviews written about you (yep, Airbnb hosts review guests as well as vice versa). In theory a host can decline your booking if they don’t like the sound of you, so it’s good to reassure them that you are a normal human being and will treat their property with respect.
And that’s it, basically. When I made my booking it all went through smoothly and I received a thank-you message from the hosts within an hour. I haven’t been on the holiday yet, but will post a review on this blog after my return.
As always, if you have any comments or questions about this post, please do leave them below.
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Please be aware that this is a historical post. Bricklane is now closed to new investors and is winding down. Please see the comments below for the latest updates about it.
Today I am looking at another property investment platform, Bricklane.
Unlike Kuflink and Ratesetter, both of which I have discussed previously on this blog, Bricklane is not a platform for peer-to-peer loans. Neither does it arrange crowdfunded investments in specific properties like Crowdlords and Property Partner.
Bricklane is structured as a Real Estate Investment Trust, or REIT for short. For those who don’t know, REITs are property funds that use investors’ money to buy (and manage) property and provide returns in the form of rental income plus capital appreciation.
In order to qualify as a REIT in the UK, companies have to meet certain requirements. The most important are as follows:
At least 75% of their profits must come from property rental.
At least 75% of the company’s assets must be involved in the property rental business.
They must pay out 90% of their rental income to investors.
In exchange for operating within these rules – and to encourage investment in UK real estate – REITs are not required to pay corporation or capital gains tax on their property investments. That helps make REITs profitable for the companies running them, and is how they are able to generate attractive returns for investors.
Normally rental income from REITs is treated as taxable income and taxed at your highest marginal rate. However, if you invest through an ISA or SIPP (Self Invested Personal Pension) no tax is due. You therefore get the best of both worlds – your money isn’t subject to taxation while invested in the REIT, and when it comes back to you in the form of income distributions and profits on sales of shares, you don’t have to pay tax on these either.
Types of Investment
You can invest in Bricklane as a stocks and shares ISA or a SIPP, or failing that in a standard investment account, where you will be liable for tax.
To maximize the benefits from investing in a REIT, I highly recommend going down the SIPP or ISA route, if you haven’t already used up this year’s allowance. As a reminder, everyone has a £20,000 annual ISA allowance (for 2019/20) and you are also only allowed to invest in one cash ISA, one stocks and shares ISA and one Innovative Finance ISA (IFISA) in any one tax year. I invested in a stocks and shares ISA with Bricklane myself.
Bricklane has two property portfolios you can invest in. These are Regional Capitals, which includes properties in Birmingham, Manchester and Leeds. and London, with a portfolio of properties in the capital. The Regional Capitals portfolio has generated a return of 19.3% since it was launched in September 2016 and the London portfolio 8.9% since its launch in July 2017 (figures from the Bricklane website).
As a Bricklane investor, you can choose to invest in either or both portfolios, in any proportion you choose. I opted to put all my money into Regional Capitals, as I believe this is where the biggest growth potential lies. In addition, rental income in this portfolio is higher, and I am also concerned about the possible impact of Brexit on London. You might see this differently, of course!
Bricklane Pros and Cons
Based on my experiences so far – and some online research – here is my list of pros and cons for the Bricklane property investment platform.
Pros
1. Fast, easy sign-up.
2. Well-designed, intuitive website.
3. Low minimum investment of £100.
4. Bricklane take care of all the work involved in buying and managing properties. You just choose which portfolio/s to invest in.
7. Possibility to access your money at any time (though this does depend on another investor being willing to buy your shares).
8. Customer service (in my experience anyway) is fast, friendly and helpful.
9. Charges are reasonable, comprising an initial 2% fee (though see my comment below on how you may be able to offset this) and 0.85% annual management fee.
10. Potential to profit through both capital appreciation and rental income.
11. Rental income is paid into your account every three months. You can either withdraw it or reinvest it to compound your returns.
12. Up to £1,500 cashback is available for new investors of £5,000 or more via my referral link (see below).
Cons
1. No detailed information provided about the properties your money is invested in.
2. Can’t invest in an ISA if you have already put money into another stocks and shares ISA this year.
3. 20% tax deduction from rental income at source if you don’t invest via a SIPP or ISA (and additional liability if you are a higher rate taxpayer).
4. Minimum £10,000 investment for a SIPP.
5. Returns over the last few months have been disappointing (see below)
6. No absolute guarantee you will be able to sell your shares when the time comes.
My Experiences
I put £5,000 into a Bricklane Stocks and Shares ISA in October 2018. As mentioned above, I chose to invest in the Regional Capitals rather than the London portfolio. The graph below – taken from my member’s page – shows the earnings generated since I opened my account.
As you will see, initially my investment performed pretty well. In the first nine months I made about £150, which equates to an annual interest rate of 4% (tax-free). That’s not spectacular, but it still beats most bank and building society accounts by a considerable margin. It is similar to the top rate currently on offer with P2P platform RateSetter in their Max account, although in their case you have to pay a fee equivalent to 90 days’ interest if you wish to withdraw. There is no withdrawal fee with Bricklane.
Since July/August 2019, however, returns have diminished considerably. My earnings between August 2019 and February 2020 were only just over £7, which is clearly a very low percentage rate. Of course, a large part of this is down to the depressed state of the property market caused by uncertainty over Brexit. I am hoping that now this is definitely happening – for better or for worse – my investment will get back on an upward trajectory again. Although recent results have been disappointing, at least the overall value of my portfolio hasn’t gone down (which has happened with some of my other property-related investments).
One other thing I should mention is that in October 2019 I withdrew £1,000 from my account to help fund a new central heating boiler after the old one packed in. This has therefore also reduced my returns a little. Although even if I still had the full £5,000 invested, earnings over the last few months would still have been nothing to write home about.
I should add that the withdrawal in question proved straightforward, although it wasn’t instant. I received the money in my bank account about a fortnight after putting in my request.
Conclusion
Clearly the performance of my Bricklane portfolio since last August has been disappointing, though overall I am still better off than I would have been if I had kept my money in a bank or building society.
I am hoping that things will start to improve in the property markets now that the Brexit issue has been resolved. There are some signs of this, although it remains to be seen whether the recovery in property prices will be sustained. For the time being, then, I am sticking with what I have in Bricklane, though I am not planning to top up my investment with them currently.
More generally, my experiences with Bricklane have been good. The sign-up process was fast and simple, and my £125 referral bonus (see below) was credited to my account instantly, completely offsetting (with a bit to spare) the initial 2% charge.
I also like the fact that any investment with Bricklane is automatically diversified across a range of properties, thus reducing volatility and risk. By contrast, with many P2P loan and property crowdfunding platforms, you invest in one loan or property at a time.
It’s also reassuring that you can ask to withdraw your money at any time – this can be an issue with property crowdfunding platforms in particular. As mentioned earlier, this does depend on someone else being willing to buy your shares, but Bricklane say that to date there hasn’t been a problem for anyone wanting to sell. As I said above, I had no issues when I wanted to release £1,000 from my own investment with them.
It is important to note that this is an investment rather than a savings account, and it does not therefore enjoy the same level of protection as bank and building society savings, which are covered (up to £85,000) by the Financial Services Compensation Scheme (FSCS).
Clearly, no-one should put all their spare cash into Bricklane (or any other investment platform). Nonetheless, in my view it is worth considering as part of a diversified portfolio. Not only are the rates of return (other than the last few months) higher than those offered by most banks and building societies, they are less affected than shares by ups and downs in the stock market. Property investments aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.
In addition, the tax treatment of REITs make them a highly tax-efficient investment, especially if you can invest in the form of a SIPP or an ISA.
Welcome Offer
As an existing Bricklane investor, I can offer a special cashback deal for anyone signing up and investing on the platform via my link. If you click through this special invitation link, sign up and invest a minimum of £5,000, you will receive £125 in cashback (and I will get £100). With a £5,000 investment this bonus will cover your initial 2% charge and still leave you £25 in profit 🙂
If you invest more, you will get even more cashback, as follows:
Over £10,000 – £250
Over £20,000 – £500
Over £50,000 – £800
Over £100,000 – £1,500
Not only that, once you are an investor with Bricklane, even if you only start with £100, you will be able to offer the same cashback bonus to your friends and relatives and earn commission yourself as well. There is no limit to the number of people you can introduce through this scheme.
Obviously, this is a generous promotional offer by Bricklane and I assume it won’t be available forever. If you want to take advantage, therefore, don’t wait too long. I will remove this information if/when I hear the offer is no longer valid.
If you have any comments or questions about this Bricklane review, as always, please do leave them below.
Disclosure: this post includes affiliate links. If you click through and make an investment at the website in question, I may receive a commission for introducing you. This has no effect on the terms or benefits you will receive. Please note also that I am not a professional financial adviser. You should do your own ‘due diligence’ before making any investment, and seek professional advice from a qualified financial adviser if in any doubt how best to proceed.
Note: This is a fully revised and updated version of my original Bricklane review from October 2018
UPDATE15 March 2020: Having said that my earnings from my Bricklane ISA over the last 6-8 months were disappointing, since the start of February they have shot up by over 100% (see below).
This doesn’t exactly cancel out the recent falls in my equity-based investments due to the coronavirus, but it does demonstrate the value of having a well-diversified portfolio. And I am obviously feeling more positive about Bricklane as an investment platform now 🙂
One other thing to note is that until the end of April 2020 Bricklane are waiving all investment fees for both new and existing investors. Visit the Bricklane website for more information.
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I recently helped an elderly friend submit an application for Attendance Allowance, so in this post I thought I would set out how the application process works and share some tips and advice based on my (thankfully successful) experience of claiming it.
But first, let’s deal with the basics…
How Much Is It?
Attendance Allowance is paid at two different rates according to how much help and care you need.
The lower rate (currently £58.70 a week) is paid to people who need frequent care throughout the day OR night
The higher rate (currently £87.65 a week) is paid if you need frequent care throughout the day AND night, or if you are terminally ill.
Payments are normally made every four weeks direct to your bank account. The money is yours to spend as you wish to make your life a bit easier.
It is worth noting that you do not need to have someone currently caring for you in order to claim. Eligibility is based on your need for care rather than whether you are actually receiving it.
Another important point is that Attendance Allowance is not means-tested – eligibility is based purely on your care needs. Also, it is not taxable and will not normally affect your entitlement to other welfare benefits. Indeed, you may also be eligible for extra Pension Credit, Housing Benefit or Council Tax Reduction if you receive Attendance Allowance.
How Do You Apply?
Attendance Allowance is administered by the Department for Work and Pensions (DWP) rather than local councils. In Northern Ireland the Department for Communities (DfC) has responsibility for it.
The bad news is that there is a long (31 pages) and complicated application form. You can either download this from the government website or you can phone them on 0800 731 0122 and ask for a form to be sent to you. In Northern Ireland you can download the form from this site or phone the Disability and Carers Service on 0800 587 0912. You can apply yourself or someone else can apply on your behalf (with your permission, of course)..
Whether to download the application form or request it by phone needs careful consideration, as both methods have their pros and cons.
If you download the form it will be as an editable PDF. That is the option I used for my friend’s application. It has the advantage that you can complete it on screen rather than by hand. If is therefore easy to edit and amend your answers. Then when you are ready you can print it, sign it where required, and submit it. As a matter of interest, I used the free Foxit Reader program to complete and edit the form on my PC.
On the other hand, if you request a printed application form, as long as you return it within six weeks (a deadline date will be marked on the form) the benefit – if awarded – will be backdated to when the form was sent out. If you download the form from the website, it will only be backdated to the date they receive it from you. So you could lose out on several weeks’ money you might otherwise have had.
One compromise would be to request the form by phone and download it from the website as well. You can then use the downloaded version to create and edit your answers on screen. Once you have a finished version you are happy with, you can copy this manually on to the paper form and submit it within the six-week deadline.
Top Tips for Filling in the Form
Based on my experiences helping my friend – and some additional research online – here are my top ten tips for completing the Attendance Allowance application form.
1. Don’t rush at it like the proverbial bull in a china shop. If you do, you will almost certainly make mistakes and forget things. If you requested the form by phone you have six weeks to complete and return it without any financial penalty, so take advantage of this.
2. Read the notes that come with the form before you start to complete it. This will help you understand what the assessors are looking for to determine whether you are eligible for the benefit (and at what rate).
3. Keep a diary for a few days at least (ideally a week). Record in this all the occasions on which you need help and support. For example, if you need help getting dressed or washing, note down when this happens and how many times a day.
4. Be honest about your care needs when completing the form. Bear in mind, though, that Attendance Allowance is awarded to people who need help with their personal care. Washing, showering, eating, getting dressed and going to the toilet would all be things to mention if you need help with them. On the other hand, things like washing clothes, cooking, washing-up, dusting and hoovering may not be viewed in the same light. While these tasks clearly have to be performed by someone, they probably wouldn’t be regarded as personal care needs. Neither does the allowance cover mobility needs.
5. In the relevant section (Question 25) you should list any aids and adaptations you need/use. These might include bath or stair rails, a hoist, a shower seat, a commode, a walking stick, a wheelchair or walking frame, and so on. If you have eyesight problems, they could also include a magnifying glass or an extra-bright daylight bulb. You should also write about these things in the relevant ‘care needs’ questions. For example, if you use a grab rail to get in and out of the shower, you should also mention this in Question 29, ‘Do you usually have difficulty, or do you need help with washing, bathing, showering or looking after your appearance?’ Don’t worry if you end up mentioning the same thing twice (or more) over.
6. Bear in mind that you don’t have to require continuous support to receive the benefit. The term used on the form is frequent, although this isn’t defined precisely. One question (in Q38) asks how long you can safely be left unsupervised. My friend and I decided that the honest answer to this was two to three hours, although the latter would only apply with careful advance preparation. We answered 2-3 hours maximum and this appeared to be acceptable.
7. In addition, it doesn’t matter who is providing your care currently. My friend was concerned that because her husband was her primary carer, she would not be eligible for Attendance Allowance, as this would be expected from a spouse anyway. That is emphatically not the case. No matter who is caring for you – or even if nobody currently is – that will not affect your eligibility for the benefit.
8. The form gives you the opportunity (in Q49) to include a statement about your care needs from someone who knows you well. It is obviously good to include this if you can. As a close family friend I filled in this part of the form myself, but other options might include a doctor, a nurse, a care assistant, a family member, a priest or chaplain, or even a neighbour. Obviously it is important that whoever does this understands what the form is for and the sort of care needs the assessors are looking for.
9. You can also include a letter (or letters) from a medical professional backing up your need for care and support. In the case of my friend, we included a copy of a letter from her main (respiratory) consultant regarding her latest appointment. Fortuitously this also listed all her other health conditions and included a brief medical history. If you don’t have something like this available, ask your GP or consultant if they will provide something for you.
10. Remember that care needs can be psychological as well as physical. If you need support to combat loneliness and depression (or worse), you can and should mention this on the form.
Submitting the Form
Once you have completed the form, you will need to send it by post (email is not acceptable). As I completed my friend’s form online, I printed it out and put it in a clear plastic wallet, then sent this is a large padded envelope.
The address to send it in England, Wales or Scotland is Freepost DWP Attendance Allowance. The address for Northern Ireland will be on the form.
Don’t expect a quick response to your application. It is likely to be six to eight weeks before you hear anything, though you can if you wish phone to check that they have received it.
As mentioned, if your application is successful your benefit will be backdated to the date the form was received or (if you originally requested it by phone and are within the six-week deadline) the date the printed form was sent out to you.
Thankfully my friend’s application was approved without any further investigation and she is now receiving the allowance. In some cases applicants are required to attend for a personal assessment. Information about this will be sent by letter.
If you are unsuccessful in your application, you can submit an appeal. Information about how to do this will be included with the letter informing you that your application has been unsuccessful. You will need to appeal in writing to the address given in the letter. Normally you have to submit your appeal within a month of being turned down.
Other Resources
This has inevitably been a concise article, based on my experience of applying for Attendance Allowance on my friend’s behalf. If you need more information and guidance, there is plenty more online. Here are some useful websites to check out…
If you – or an elderly relative, friend or neighbour – may be eligible for Attendance Allowance, I hope this post has encouraged you to apply. The application form can appear daunting at first, but if you take your time and approach it in a calm and systematic way, it is perfectly do-able. The money is set aside for people in your situation, and it really can help make your life a little more comfortable.
I do, though, recommend enlisting some help with it if possible. Even if you are confident about completing the form, someone who knows you well may be able to suggest ways you need care and support that you might not have thought to mention yourself. And two heads are always better than one, of course! If you don’t have a suitable friend or relative, you can contact your local Citizens Advice Bureau and ask if they have someone who can assist you in completing the form.
As always, if you have any comments or questions (though bear in mind I make no claim to being an expert about Attendance Allowance!), please do leave them below as usual.
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Today I am pleased to bring you a guest post from Cora Harrison, a UK blogger and vlogger (video blogger) whose website is called The Mini Millionaire.
Cora says she loves to explore new ways of making money, both online and offline. She has a particular interest in online selling (and reselling) and there are many posts on this subject on her blog.
In her guest post today she reveals how anyone with an interest in creating arts and crafts can boost their profits – potentially many times over – by selling their work online.
Over to Cora, then…
If you love creating arts and crafts products, you can of course sell them at local markets or craft fairs. If you are looking to sell more and make (much) more money, however, you should definitely consider selling online as well.
There are various ways you can display and sell your work online. Here are some of the most popular.
Your Own Website
Selling arts and crafts on your own website is probably the single best way to sell your hand-made items online.
Having your own website will allow you to contact customers directly, grow your brand, and avoid the fees charged by third-party platforms like Etsy and eBay. In addition, you will not be competing directly with other craftspeople selling similar items to the same pool of customers on the platform.
For this to work, however, you will need to create an attractive, professional-looking website. You will then need to drive traffic to it, using techniques such as search engine optimization (SEO) and perhaps paid advertising. You can use online website building tools such as Wix or Shopify to create your site or hire a professional website designer.
Selling on Etsy
Etsy is an online marketplace dedicated to hand-crafted items. It is known for vintage, unique and custom-made items. It is easy to use, so you can set up your store and sell your crafts online in no time. Many would-be buyers of hand-made products look on Etsy before going anywhere else. Customers can pay by various methods, including PayPal and Google Pay.
On the minus side, many other artists and craftspeople also use the platform. This means it can be hard to sell common items. In addition Etsy charge about 5% of the sales value as a transaction fee every time you make a sale. You also pay about $0.20 for each item you sell. PayPal (the most popular payment method on the platform) also charge a fee for processing payments. All of these fees and charges will eat into your profits.
Facebook Marketplace
Facebook Marketplace is a prime location for selling hand-made crafts products locally. Given that Facebook has a massive user base, you can reach many potential buyers in your area by posting your items there. Posting items is free and you can add up to 42 images of your product in every sales post. The post will also include a description of the product, your location, and the price of the item.
While there is no limit to the number of posts you can make in a day, Facebook may limit posting to avoid spamming the page with similar ads. You have the option of sharing posts on your wall so that your friends may see the posts you have shared in local buying and selling groups. Potential customers will message you for more information and selling terms. The Marketplace is available on the web-based version of Facebook and as an app.
Selling on eBay
eBay is of course primarily an auction marketplace where sellers post items and sell them to the highest bidder. However, you can also create fixed-price listings. It is therefore a good platform to sell hand-made crafts online. The platform uses PayPal as the payment provider for all transactions. Both eBay and PayPal have various fees that you will encounter.
You will also be required to pay a final value fee. The fee is applied at the end of the transaction after making a sale. The fee is a percentage of the purchase price. There are also shipping and handling fees. Shipping fees are based on the method chosen by the buyer unless for domestic shipping, where the fee is calculated from the cheapest shipping method.
You will pay the final value fee whether or not the client pays for the item. If the sale is unpaid, you can cancel the sale or report it as unpaid. Note that eBay will give you credit for this rather than a cash refund.
Why Selling Online is Beneficial
There are several reasons you should consider selling your hand-made crafts online compared with selling in person at craft fairs and so on (though you can of course do both).
First, as stated above, online selling exposes you to a much larger audience than in the case of a market stall. You can sell your items to potential buyers across the country – and further afield – with ease.
In an online store, there are no opening time restrictions. The store runs around the clock and customers can place orders at any time of the day or night, as opposed to a local venue with set opening hours. In addition, you can operate the business from anywhere and target potential buyers who are far away from your location.
An online store also requires less time and effort. Once you have set up your online store and posted your hand-made items, they will be seen whether you are online or not. This allows you to sell your crafts even if you are otherwise engaged.
An online store also has lower running costs than an off-line one. There are no utility bills, rent or other premises costs to pay. You can run your online store from your kitchen, living room or bedroom. All you need is a laptop or desktop computer with an internet connection.
Effectively Selling Your Items Online
The Quality of Photos Matters
Just like in an off-line store, in an online store your hand-made crafts need to look good to appeal to customers. It is therefore vital that you take clear, sharp photos of your items. You can take them from different angles to give the customer an all-round view.
A modern smartphone should produce good-quality images in ambient light, but place your items on a white surface to give them a professional look. You can also use image-editing software to make the image ‘pop’.
Give Your Items a Perfect Description
Since you will not be there to explain the features of your product in person, it is important to provide a good description alongside your image. Ensure that the customer gets a mental image of the item without getting too sales-y. Most platforms have a character limit within which you can write a description. Use this opportunity to explain all the features that might be of interest to a potential buyer.
Keep Checking Your Site Regularly
Keep checking the platform where you have posted the item regularly for customer queries or orders. If the account is linked to your email address, you can have ‘push notifications’ set on your phone so that you know when there is activity relating to your item. The ability to respond quickly to queries will boost your reputation and prevent you from losing customers.
You may wish to post on more than one platform to increase your exposure. Try to estimate the return versus the cost of placing ads on multiple platforms. Having many items listed rather than just a handful will increase your overall selling rates as well, so aim to build up your inventory as quickly as possible.
Good luck, and I wish you every success selling your hand-made arts and crafts online!
Many thanks to Cora Harrison (pictured, right) for some great tips and ideas.
Selling arts and craffs (online or off-) isn’t something I have ever tried myself, but I know it will interest many of my readers, so I was delighted to receive Cora’s article.
Obviously, you need some artistic talent to do this, but you definitely don’t need to be Leonardo (da Vinci, I mean, not DiCaprio). For example, using inexpensive software you can create attractive printables, which could sell well on Etsy and similar websites. You can read my blog post on this subject here.
But if you really don’t feel that selling arts and crafts online is your thing, you can still make good money selling and reselling products of all sorts online, from DVDs and collectables to Lego bricks! Check out Cora’s Mini Millionaire site for much more information about this..
As always, if you have any questions about this article, for Cora or myself, please do post them below.
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