Win $1,500 for College By Sharing Your Plastic-Free Journey on Instagram

Did you know there’s a Texas-sized patch of garbage floating in the Pacific Ocean and that it’s mostly made up of plastic?

If this isn’t news to you and you’ve already made changes to reduce your plastic consumption, then you should probably enter to win the Pelican Water Sustainability Scholarship.

Three students who share the challenges and successes of their plastic-reduction endeavors will win money to put toward their college tuition.

The first place winner will receive $1,500, the second place winner will receive $1,000 and the third place winner will get $500.

How to Enter the Pelican Water Sustainability Scholarship

Any undergraduate or graduate with a cumulative 3.5 GPA or higher currently enrolled full time — or accepted for enrollment — at an accredited university in the U.S. can apply for the scholarship. (Please note that you must be a legal U.S. resident to apply.)

All you need to do is share your plastic-free journey in a 30- to 60-second video on Instagram.

Include how you’ve done your part and what challenges you’ve encountered along the way.

You must include the hashtag #pelicanwatersmart and tag @pelicanwatersystems in the video caption.

Submissions will be judged 30% on originality, creativity and quality; 40% on emotional impact; and 30% on relevance to the topic.

Keep spelling and grammatical errors out of your caption, as they will work against you.

There’s only one entry per person and no take-backsies once you submit, so get it right!

Once you’ve done this, send your contact information, transcripts (they can be unofficial), video link and Instagram handle to submissions@pelicanwater.com.

The deadline to enter is Oct. 15, 2018.

Check out Pelican Water Sustainability Scholarship page and the official rules for the fine print.

If you’re not passionate about reducing plastic, don’t worry. Just like our College page on Facebook to discover other scholarship opportunities.

And if you’re looking for even more scholarships to apply for, be sure to check out our list of 100 scholarships that will help you pay for college.

Stephanie Bolling is a staff writer at The Penny Hoarder. She prefers glass to plastic.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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This Hungry Howie’s BOGO Deal Gets You a Large Pizza for 45 Cents

According to my parents, my first word was “pizza.” Not “mama” or “dada”… but “pizza.”

Apparently, I read it on a sign in a grocery store parking lot, sealing my destiny to become a lifelong pizza lover with a great vocabulary — and eventually, a Penny Hoarder who finds great pizza deals.

The latest pizza deal comes from Hungry Howie’s.

Get a Large Pizza for 45 Cents With This Hungry Howie’s BOGO

Known best for its variety of flavored pizza crusts — 11 to be exact — Hungry Howie’s Pizza was born in 1973 out of a small hamburger shop in Taylor, Michigan.

Now, with more than 500 locations across 20 states, this pizza chain is celebrating its 45th anniversary with a sweet BOGO deal.

Now through Sunday, Sept. 16, you can score two large, one-topping pizzas for a little more than the price of one with this Hungry Howie’s 45th anniversary special. All you have to do is purchase any large pizza at regular price, and you’ll get the second one for just 45 cents.

You can grab the deal right from the homepage of the Hungry Howie’s website — just click “Order Online” and use the promo code 45YEARS.

Also, make sure you have a designated pizza picker-upper ready to bring home the goods, because this deal is only available for carryout orders.

Jessica Gray is an editorial assistant at The Penny Hoarder. She’s really into fitness… fitness whole pizza deal in her mouth.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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How to Protect Yourself from the (Growing) Risk of Mortgage Fraud

Everyone’s wary of mortgages with bad terms. But you may not be aware of another kind of mortgage danger: fraud.

Analysis of residential mortgage loan applications by CoreLogic revealed this week that the risk of mortgage application fraud has increased in the past year.

In the second quarter of 2017, an estimated one in every 122 mortgage applications contained fraud. In the second quarter of 2018, that estimate increased to one in every 109 mortgage applications.

The overall risk of mortgage application fraud has increased 12.4% since last year, the report notes.

One of the factors influencing this risk increase? In the years during and after the recession, the housing market was thick with refinancings rather than new mortgages. As the economy has improved, more new mortgage applications have been submitted.

“Because home prices are rising and demand for homes is strong, most mortgage fraud in this type of market is motivated by bona fide borrowers trying to qualify for a mortgage,” Bridget Berg of CoreLogic explained in a release. “Undisclosed real estate liabilities, credit repair, questionable down payment sources and income falsification are the most likely misrepresentations.”

What Is Mortgage Fraud?

The FBI categorizes mortgage fraud in two categories: fraud for profit and fraud for housing.

Fraud for profit is often committed by industry professionals who take advantage of homeowners and lenders.

Fraud for housing occurs when a borrower commits fraud in order to get or keep a home.

Within those categories, CoreLogic tracks six specific types of mortgage fraud risk:

• Income fraud: When income sources or amounts are falsified.
  
• Occupancy fraud: When mortgage applicants aren’t honest about whether a home will be a primary residence, secondary residence or investment property.
  
• Transaction fraud: When anything about the exchange of funds, such as a down payment, are falsified.
  
• Property fraud: When claims about the property or its value aren’t true.
  
• Debt fraud: When a mortgage applicant doesn’t disclose their past foreclosures or other real estate debt.
  
• Identity fraud: When an applicant’s identity or credit history are altered, or a stolen identity is used to get a mortgage.

CoreLogic found that income fraud risk increased the most since last year’s report.

How to Recognize — and Avoid — Mortgage Fraud

It’s easy to say you’re savvy enough to avoid being the victim of mortgage fraud. But the process of buying a home is stressful, and red flags can be tough to spot when you’re looking at a potential home through rose-colored glasses.

Andrea Oh, policy advisor at the Mortgage Bankers Association, said that requests from real estate and mortgage professionals deserve your close examination.

“Emails cannot always be trusted, and any exchange must be held on a secure portal,” she warned. “When preparing to wire funds, confirm recipient account information specifically on the phone with your representative, and contact your bank or financial institution if any request looks suspicious.”

In addition, don’t give in to pressure from anyone who wants you to alter information on your mortgage application. By fudging the details, you could be participating in mortgage fraud without even realizing it.

Lisa Rowan is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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How to Use Lifetime Value to Create a Facebook Audience That Actually Converts

To survive and stay relevant in the modern era, your business needs to have an active presence on social media.

When it comes to social networks, Facebook is king. As of June 2018, the platform had more than 1.47 billion daily active users and 2.23 billion monthly active users.

Over 60 million businesses have Facebook profiles.

Those companies are doing much more than just posting content to their timelines. The vast majority of these businesses are paying for ads.

In fact, 93% of marketers take advantage of Facebook advertising on a regular basis.

If you’re active on Facebook but not running ads, you might fall behind the competition.

In a perfect world, you’d be converting your social media followers into customers. That’s the reason you’re in business, right?

But some of you may have struggled with this. If you ran Facebook ads in the past and didn’t get the results you were looking for, it could be the reason why you’ve been avoiding this marketing strategy.

Don’t worry, you’re not alone: 62% of small business owners feel their paid Facebook advertisements aren’t reaching their targets.

The success of your Facebook campaigns is completely dependent on how you set up your audiences.

If you don’t want to waste money on ads that don’t reach your target audience, you need start focusing on the customer lifetime value (CLV).

If you don’t know what this is or how to get started, I’ll help you out.

I’ve been in your shoes before and wasted valuable marketing dollars on ads that didn’t convert. But after taking advantage of customer lifetime value lists, I saw different results.

I’ll show you how to create Facebook audiences that convert by leveraging lifetime value.

Learn how to calculate your CLV

Before we go any further, it’s important for you to understand the basic concepts of customer lifetime value and why it matters for your Facebook ads.

What is lifetime value?

In short, it’s a number reflecting the amount of money a customer spends at your business before they leave it.

The longer a customer stays with your business over time, the more profitable they become for the business.

If you’re not using this metric to help you make decisions, it could be an extremely costly mistake. Let me give you an example.

Let’s say your business sells watches through your ecommerce platform at bargain prices. The average retail price of your products is $30.

To drive more traffic to your website and generate leads, you start running PPC campaigns through Google AdWords.

This seems like a good strategy since the average cost per click for the retail industry is only $1.35. That’s significantly lower than for other industries.

However, the average conversion rate for retail ads is an abysmal 3.86%.

At that rate, you would need roughly 25 clicks just to get one conversion. At $1.35 per click, this single transaction would cost you $33.75.

But the average price of a watch on your website is only $30.

This is not a profitable marketing strategy, right? The truth is, you don’t know the answer to this question unless you know your CLV metrics.

That’s why you need to calculate your customer lifetime value before you begin any marketing campaign.

Let’s continue using the same watches sale example.

If the average transaction is $30 and the customer buys four times per year for the next five years, you can expect to make $600 from that customer.

That’s nearly 18 times the amount of your initial acquisition cost.

When it comes to your marketing strategy, it’s important to use customer acquisition tactics that won’t break the bank and yield a high ROI.

Once you’re able to determine your CLV, it will be easier for you to launch new campaigns while having a better understanding of how those costs will pay off over time.

Plus, if you’re able to increase revenue without acquiring new customers, you can ultimately boost your customer lifetime value.

I know what some of you are thinking. Sure, this sounds great, but how is this relevant to Facebook advertising? Allow me to explain.

Create a custom Facebook audience with CLV/LTV

Now that you understand what a customer lifetime value is, why it’s important, and how to calculate it, it’s time to use this data to improve your Facebook ads. Facebook uses the abbreviation LTV to refer to lifetime value of a customer.

As I said earlier, if you ran Facebook ads in the past but weren’t satisfied with the results, it’s probably because you weren’t able to target the right audience. You won’t get conversions if the wrong people are exposed to your ads, even if the promotion is great.

I’ll show you how to generate leads with Facebook ads by targeting an audience that actually converts.

Here’s a simple step-by-step guide that explains how to set up these ads with your customer lifetime value calculations.

Step #1: Prepare your customer data

Before you can set up your ads and do anything else, you need to prepare a spreadsheet with all your customer data.

This may be easier for some of you than others. If you’re well organized and have a way to export this data from your POS system to a spreadsheet, it shouldn’t be too much work.

However, if you don’t have a spreadsheet prepared yet, you can download a template directly from Facebook.

Take the spreadsheet template, and input your own customer information. This information will be used to help create your custom audience.

Basically, Facebook will take that data to match your customers and also find people similar to those customers.

Here are some examples of the information that will be included on the spreadsheet:

• email
• phone number
• first name
• last name
• city
• state
• country
• date of birth
• age
• zip code
• gender

It even has columns for things such as mobile advertiser ID and Facebook app user ID, which you may or may not have.

It’s important that you pay close attention to the formatting required by Facebook for this spreadsheet.

For example, they want the column for the first names abbreviated as “fn” and the column for city abbreviated as “ct.”

The more details about your customers you can include in this spreadsheet, the more accurate your custom audiences will be.

Step #2: Add a column for lifetime value

Next, you’ll add another column to this spreadsheet for your customer lifetime value data.

Make sure you use a broad range of numbers here. This will make your data more accurate as opposed to using your customers with the highest value.

Facebook will calculate the difference between a top customer and an average one.

Don’t use negative numbers to show customers with a poor value. Doing this will mess up the calculations.

If your business accepts multiple currencies, make sure it’s all converted to just one on this spreadsheet. Facebook won’t be able to make the conversion for you if your data includes more than one currency.

As you can see from the screenshot above, Facebook also doesn’t want you to use commas to separate values in the thousands.

You can use a decimal point to show a cents value, but otherwise, you can’t include any other punctuation or separators in your lifetime value column.

Step #3: Select “audiences” from your Facebook Ads Manager dashboard

Now that all your customer information and lifetime value data is organized and formatted, you can continue.

Navigate to the “audiences” menu from the Facebook Ads Manager dashboard.

Click on the “create audience” option as opposed to “create lookalike audience.”

Truthfully, either would work. But I think it’s better to set up a custom audience first before you start experimenting with lookalike audiences.

Step #4: Choose the “customer file” option from the list of audience types

As you can see from the menu above, there are several different ways for you to create a custom audience.

Each of these five options has a purpose, depending on your goals.

However, for our purposes here today, you’ll select “customer file” from the menu.

Step #5: Upload your lifetime value customer data

Now you have to decide which type of customer file you’ll use to create a custom audience.

Those of you with a MailChimp account can directly import customer email addresses as a data source.

However, that data won’t be as detailed as the spreadsheet you created in previous steps.

That’s why you’ll select the “customer file with lifetime value (LTV)” option.

Simply upload the spreadsheet, and Facebook will use the data, including the customer lifetime values, to create a custom audience.

Step #6: Run an ad with your new custom audience

Once your custom audience has been uploaded, all you have to do is run a Facebook ad the same way you normally would.

But unlike in your previous campaigns when you manually choose an audience based on age, gender, language, and location, you’ve got another option this time.

Now, you’ll select the custom audience you created with the uploaded file.

This will ensure your ads will be shown to Facebook users who are relevant to your business and primed to convert.

Set your budget and schedule

As with any marketing campaign, you need to stay within a reasonable budget. This number will be different for everyone.

Just because your new ads target a more accurate audience doesn’t mean you should dump every last marketing dollar into this campaign.

Test the waters first to see how successful you are.

Facebook makes it easy for you to stay within your budget and schedule your ads accordingly.

This feature will make sure you have weekly caps that won’t be exceeded.

I recommend starting with smaller amounts until you can be sure your ads are the most efficient for conversions. But we’ll talk more about this concept as we continue.

Choose your ad format

What type of ads are you going to run?

You’ve got lots of options to choose from. It all depends on what fits well with the promotion you’re running.

Truthfully, I don’t have a definitive answer for you here.

Some ad formats work better for certain brands compared to others. That’s why it’s in your best interest to keep your budget low when you’re first starting out.

I suggest running ads with multiple formats to see which ones have the highest conversion rates.

Now that you’re targeting a custom audience, these ads will already be better than the ones you ran in the past. But don’t stop there.

You still need to have great ads if you want your audience to convert.

Experiment with split tests to improve your efficiency as well.

For example, run two identical ads in the same format, changing only the CTA to see which one generates the most clicks.

Which ads had the most success? Make sure to use those ones moving forward when you’re ready to increase your budget.

Conclusion

Don’t be discouraged if your past Facebook ads were unsuccessful.

The ads you were running may not have been the problem. You were probably just not targeting the right audience.

One of the best ways to improve your audience is by integrating your customer lifetime value data. This is one of the most important pieces of information you need to use when it comes to running any type of marketing campaign.

Simply follow the step-by-step guide I’ve outlined above to create a custom audience with your customer lifetime values.

Once it’s uploaded to Facebook, you can continue running ads the same way you did in the past. Only this time, you’ll be much happier with the results.

How is your company creating custom audiences on Facebook to drive conversions?

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Is Being Comfortable a Positive Thing?

Sarah and I live what I would call a comfortable life. It’s far from perfect – there are lots of stresses floating around – but it’s comfortable. We aren’t in any immediate danger of any kind of financial problems. We have a house that’s plenty big and we have plenty of clothes and possessions. We never lack for the food we want to eat. On the whole, it’s comfortable.

The thing is, many people say that being comfortable is a bad thing. This article from Pick the Brain sums up some of the reasons:

You stop pushing
You stop thinking
You lose motivation
You lose sight of your goals

There’s some truth to that. I’ll be the first to admit that I pushed harder in some areas of my life when our financial foundation was less secure and our careers were less secure. I worked at a full time job in a research lab while simultaneously launching and building The Simple Dollar while also caring for a toddler and an infant at home. That’s a pretty hard push, one that I honestly probably wouldn’t take on today.

It’s not that I’m shying away from hard work, it’s just that in the area of financial security in my life, I have “enough” … or, at the very least, I’m on track to have “enough.” It does not make sense for me to “push” hard in that area of my life.

The thing to remember about this is that “pushing” a particular area of your life comes with a cost. The time and energy you devote to one area of your life has to come from some other area of your life.

I really like Michael Hyatt’s model of the ten domains of life. Here’s his list:

1. Intellectual
2. Emotional
3. Physical
4. Spiritual
5. Marital
6. Parental
7. Social
8. Financial
9. Vocational
10. Avocational

During the period in my life where we were turning our financial life around, I put a huge emphasis on 8 (financial) and 9 (vocational) in my life, with most of what remained going toward 6 (marital).

What happened to the other areas? They went into decline.

Outside of areas specifically related to my work, my intellectual curiosity went dormant. I bottled up my emotions and didn’t deal with them. I let myself get seriously out of shape. I lost touch with my spiritual/religious roots. My marriage ran into some difficulties. My social life withered into nothingness.

It wasn’t a good life. Sure, I saw a lot of professional and financial success, but because I was pushing so hard in just a few areas, all of my time and energy was being used up. I was nothing more than work, money, and parental tasks, and it left me, in the end, feeling pretty awful.

These days, I take a different approach to all of this. I still believe that “pushing” is a good thing, but it should be a sustained push in those areas of your life that you feel are out of balance and neglected. Save your extra time and energy for those things and reassess regularly.

My goal is to be “comfortable” in as many of those areas as possible at the same time. The thing is, the natural course of one’s life causes you to eventually fall out of a balanced state. You take things for granted. You devote too much effort for a while in one area and not enough in another. It simply happens, and that’s a cue to start pushing in a particular area.

Right now, I feel pretty good about some areas of my life – I’m comfortable in those areas – and I don’t feel nearly as good about other areas. My life, on the whole, is comfortable, just as I stated at the start of this article, but in specific areas, I’m not comfortable.

For me, being comfortable in all areas of life for an extended period of time is a wonderful goal, but it’s one that’s essentially impossible to obtain. Even if I manage to reach that point for a little while, life eventually gets in the way.

Here’s another way to look at it: being comfortable in one area of life usually means that I have enough time, energy, money, and focus to work to achieve comfortability in another area of life. If I’m comfortable in several areas, then I know that effort in another area that I’m not comfortable in is really going to pay off for me.

The danger isn’t in being comfortable. The danger is in not reflecting on your life and asking what areas you’re not comfortable in and what you could do to make things better.

Perhaps this is just me, but I’ve never been comfortable with all of those ten areas of my life at the same time. There’s always something that’s not where I want it to be.

The thing is, I’m not just running from fire to fire, either. Over time, my standards of what is “comfortable” in each area have slowly risen. My idea of what’s financially comfortable today would have blown my mind fifteen years ago. My expectation of what’s physically comfortable today would have rocked my world ten years ago. Things I considered completely comfortable then would make me uncomfortable now. Again, I view this as an outgrowth of self-reflection and a desire to have a better life.

The danger isn’t in feeling comfortable with some aspects of your life, or even many aspects of your life. The danger is in feeling comfortable in all aspects of your life, because you abandon all approaches of building a better life.

Look at your life. Ask yourself what makes you uncomfortable about it. Work to fix that discomfort. Repeat. To me, that’s the pattern of a healthy and successful life.

So, what’s the game plan here? Let’s break that advice down into little bits.

Look at your life. This means simply spending time looking at your life, both in terms of what’s good about it and what’s bad about it. This can take a lot of different forms. For me, journaling really works well, but for others, different approaches may work better. My wife Sarah usually spends her commute doing a lot of self-evaluation. My daughter does this practice she learned in life skills class where she lists five things she likes about herself, five things she doesn’t like, and then five ways to fix those things she doesn’t like (which I guess is a form of journaling).

Ask yourself what makes you uncomfortable about your life. What pieces of your life are not as good as they would be if everything were ideal? One good way to think about this is to move through that list of ten life domains earlier in the article. Which of those are you not as happy with as you could be?

Work to fix that discomfort. Identify things you can actually take action on that will improve those areas of your life where you’re not happy. Make a checklist out of them and strive to clean out that list. Personally, I really get value out of thirty day challenges and daily habit tracking. Am I doing this today? Am I doing that today? I like to keep tracking good habits until they become my default routine, which usually means that my life has somehow improved, or I see that they’re drawing time and energy and resources away from other things that are more important to me.

Repeat. This isn’t just a one-off thing. I cycle back to it constantly, starting at the top. I look at my life, ask myself what I’m not happy with about it, and then work to improve it. I do this casually all the time and then much more seriously every three months or so, when I do a quarterly review of my life.

So, if I were to answer the question that launched this article, I’d say that being comfortable in some aspects of life – but not all – is a good thing, as long as it’s paired with a drive to achieve comfort in areas where you’re not comfortable.

If you’re not comfortable with your finances, what can you do to change that? What about your retirement savings? Your emergency fund? Your debt load?

If you’re not comfortable with your body, what can you do to change that? Your weight? Your physical fitness?

If you’re not comfortable with your career, what can you do to change that? Your current job? Your next career step? Your skill set?

Those are among the many good questions to be asking yourself – and answering.

The post Is Being Comfortable a Positive Thing? appeared first on The Simple Dollar.

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My Debt-Free Boyfriend Nags Me 24/7 About My Student Loans From Law School

Dear E.,

If this guy can’t support your career path, can you trust him with any other part of your life? I’m trying to imagine daily life with your boyfriend. If you came home from the hair salon with bangs, would he tell you he didn’t like them every morning until you grew them out? If you go out to dinner and order a cheeseburger, is he going to comment about your cholesterol every time you take a bite?

You may think I’m being hyperbolic, but look at the situation: It sounds like you’ve been together since around the time you started law school. The entire time you worked on your law degree, this man was breathing down your neck.

I can only imagine how many ways you’ve tried to reason with him. I can only imagine the stress his judgment added to an already strenuous course of study. You even said in your letter that while he has finally “come around” to the idea that law school was right for you, he still maintains it was a bad choice.

You know what else is a bad choice? Your boyfriend. If all he can do is criticize your chosen career field and the education required to pursue it, he doesn’t deserve your time and energy.

If this were a new relationship and he was wary of getting tied up in your debt, I’d understand his reluctance. But he’s been on your back about this for years, and I’m not sure how you haven't grown tired of it far sooner.

I’m much more interested in watching your career develop than I am in watching this relationship struggle along.

Have a tricky money question? Write to Dear Penny at https://www.thepennyhoarder.com/?aff_id=178&aff_sub3=MainFeed__smart-money/debt/law-school-student-loan-debt/dear-penny?aff_id=178&aff_sub3=MainFeed__smart-money/debt/law-school-student-loan-debt//.

Lisa Rowan is a personal finance expert and senior writer at The Penny Hoarder, and the voice behind Dear Penny. For more practical money tips, visit www.thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Pensions Awareness Day: Brits dream of travel in retirement, but their savings could let them down

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pension-boost-saving-income-web.jpg

Travel and holidays remain the number one retirement aspiration for Brits, according to Vitality Invest, with half of Brits (47%) planning to see the world when they finally quit the rat race.

This was followed by 35% who want to spend more time with family and friends and 34% who want to take time out to unwind after a long working life.

However, while many Brits have great plans for their retirement a worrying 44% do not think they have saved enough for the lifestyle they want.

• Millions of workers “sleepwalking” into retirement with below-minimum-wage pensions

The research from Vitality Invest is timed to coincide with Pensions Awareness Day, a campaign launched by communications company Pension Geeks to raise awareness of the need to save for retirement.

Perhaps unsurprising millennials were the most optimistic about their retirement with only 39% concerned that they will not have saved enough, compared to 50% of 35-50 year olds.

Savers in the capital were most comfortable with their level of saving, with 61% of Londoners believing their retirement savings are on track. However, this plummets to just 33% in the North East and South West and 34% in the East of England.

• Guaranteed annuity rates: retirees rejecting £3 billion in pension guarantees

The survey also asked individuals about their attitudes to healthy living. It found that 65% of Brits think they could make healthier choices now to increase their chances of a long and healthy retirement, but 24% say they would rather enjoy a hectic lifestyle now and deal with the consequences later.

Herschel Meyers, chief executive of Vitality Invest says: “People are living longer and, as our research shows, they want to live full and active later lives. Yet many don’t start saving soon enough to fund those extra years or take the necessary steps to ensure they’re healthy enough to achieve their dreams.

“In fact, nearly half of the people in our study don’t think they’ll have enough money to enjoy their ideal retirement. Pension Awareness Day serves as a good reminder for us to start taking steps today to ensure a better outcome in later life.”

• Moneywise Pension Awards 2018

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Related stories

• Millions of workers “sleepwalking” into retirement with below-minimum-wage pensions
• Guaranteed annuity rates: retirees rejecting £3 billion in pension guarantees
• Moneywise Pension Awards 2018

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Mark Carney warns no-deal Brexit could cause massive house price falls

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Homeowners could be at significant risk of crashing house prices in the event of no deal being struck between Britain and the EU, the governor of the Bank of England has reportedly told the cabinet.

Reports from several national news outlets suggest that during a meeting with the cabinet on Thursday afternoon, Mark Carney the governor of the Bank of England cautioned that a 'worst-case scenario Brexit' would lead to a housing market price crash of up to 35%.

According to the BBC the Bank of England carried out “stress tests” in November last year that found a 33% fall in house prices would occur in a worst-case scenario – where Britain left the EU with no deal, no transition and no government preparation. 

• Property auctions: how to avoid hammer horrors

The government released a series of Brexit no deal assessments on Thursday to give more clarity to the public and businesses of its preparedness in the event no deal is struck with the European Union.

A Downing Street spokesperson told the BBC that government ministers were confident of a Brexit deal but had increased their no-deal planning.

The spokesperson said to the BBC: “As a responsible government, we need to plan for every eventuality. The cabinet agreed that no deal remains an unlikely but possible scenario in six months' time."

• These jobs face a 100-year wait to buy a home

Moneywise approached the Bank of England for comment but none was forthcoming. 

What a no-deal Brexit could mean for homeowners

The Bank of England’s worst-case scenario says that house prices could fall by up to 33% over three years in the event of a messy divorce from the EU.

This could lead to homeowners becoming trapped in negative equity if their mortgage debt is higher than the value of their property.

Retirees reliant on the value of their property to help fund their retirement could also be negatively affected as the wealth stored in their homes reduces.

Will Hale, chief executive of equity release adviser firm Key, says: “When we think about house prices, we need to bear in mind many different influencing factors. As a country, we are not building enough homes to meet our current needs so demand is likely to remain high and while we have seen house price fall in the past, over time, we have seen these offset by sustained periods of increases. 

"Until a person chooses to sell their property or refinance, any increases or falls are not actually realised."

Lower house prices could, however, prove a boon for first-time buyers hungry to snatch up cheaper property. This could also be the case for buy-to-let investors looking to expand their portfolios.

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But the warning from the governor have been met with a dose of scepticism from some commentators.

Mr Hale adds: “The simple fact is that we do not actually know what is going to happen post Brexit as no one has a crystal ball. The Bank of England is responsible for delivering monetary and financial stability so it is their responsibility to look at the implications for all extreme scenarios – both good and bad – but is seems that only the negative assumptions have been picked up in the headlines."

Henry Pryor, an independent property expert, agrees: "Don’t panic, this is highly unlikely to have been what the Governor told the cabinet, less than a year ago he explained in detail that the Bank of England had modelled the worst-case scenario of house prices falling by a third but that this is not what the Bank expects. 

"Prices may well slip in the first quarter next year regardless of a hard or soft Brexit - uncertainty just as we had over the Millennium Bug in 1999 will mean many buyers will postpone their purchase until next summer. Unless they are given a discount to reflect the perceived risk they are taking most buyers will just wait and see. 

"The main house price indices will therefore reflect these discounted prices but they will not be of the magnitude that has been reported. The Bank has planned for the worst but is not predicting that this is what will happen."

The stress tests conducted by the Bank of England also reflected a scenario where interest rates rose to 4% and unemployment jumped to 9%. However, these tests are designed to be a worst-of-the-worst type scenarios. 

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Home & mortgage Selling

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