A Guide To Annual Percentage Rate (APR)

It seems that its getting easier and easier to apply for–and receive–a credit card or a short term loan. Mailers arrive each and every day at our homes advertising special perks, airline miles, or one-time-only low fees to entice us to apply for a combination of loans or credit cards. There are ads on television and on the radio. Lending companies are even known to set up shop at colleges and universities across the globe offering free promotional t-shirts in exchange for a credit card application. As a result of these efforts, it’s not uncommon to hear heartbreaking stories of people trying to dig themselves out of massive debt. But all too often it’s not the debt alone that is the culprit.

Before taking out payday loans, an unsecured loan, short term loan, or applying for any number of credit cards it is imperative you understand what an annual percentage rate is. This is often considered a “hidden cost” that many consumers don’t fully grasp, forcing them further into debt. But as long as you do your homework, and educate yourself on how annual percentage rates work, you can avoid debt and other unnecessary charges. `

What is APR?

Annual percentage rate, often referred to as simply APR, is is the price you pay the credit card or loan company for borrowing money–essentially the percentage you can expect to pay in one year in order to borrow money tomorrow. Many financial advisors suggest that consumers think of APR as a service fee. Borrowing money is one kind of service, and you must fork over some amount for said service–just as you would for a mechanic who fixes your car’s engine or a delivery fee for a driver who drops off a big online purchase at your door.

That said, it always helps to read the fine print on any offer, as many companies allow consumers to avoid paying interest–or even an APR in full–if you make sure to pay your balance in full each month by a specified due date. For this reason, it’s important to remember that no loan or credit card works exactly the same. Do your research and be smart about how you borrow cash!

What Determines The APR You Are Charged?

Many lenders will first turn to an applicant’s credit score in order to accurately determine a loan or credit card’s annual percentage rate. Typically, the better your credit score the lower your APR. In addition to credit score, companies may also base your personal APR on details within your credit history. They may look to see if you have a tendency to pay your bills late or if you occasionally miss a payment. A good rule of thumb to keep in the back of your mind is that if you have a poor credit score–or any existing unpaid loans–you will likely have to fork over a higher APR because the lender will be worried that you l will not be able to repay the loan. This is an example of what lenders deem a “high-risk borrower.”

However, it is imperative that you always read the fine print in full. In some instances, you may actually be able to negotiate a significantly lower APR with your lender. Additionally, some credit card or loan companies simply charge a fixed annual percentage rate, which basically means that the rate remains exactly the same throughout the loan’s life span, regardless of your personal credit score. But this is not the only alternate scenario.

There are other lenders out there who elect to charge a customer a variable annual percentage rate. This can be confusing, as with a variable APR, rates can fluctuate both up and down based on a number of volatile factors, such as the health of the global stock markets. That said, don’t worry too much about these types of APR rates if you do elect to go with one. Lenders are not permitted to adjust APR rates without notifying you ahead of time.

But it doesn’t stop there. Many lenders or credit card companies may also offer a low or reduced introductory APR rate in order to initially entice you to do business with them. Again, it’s incredibly important to carefully read all the fine print, as these offers may be almost too good to start, however, after a specified amount of them of time, the lender may increase the APR.

Finally, it helps to keep in mind that payday loans, bad credit loans, and unsecured loans are notoriously expensive. Because of this it always helps to try and negotiate a lower APR.

How Do Lenders Calculate APR?

While APR sometimes sounds complicated, there is actually a pretty easy formula to calculate it. Simply follow the steps below:

  • Step one: Divide the finance charge by the amount of the loan (this will be different for each person).
  • Step two: Multiply the above result by 365 (for each day of a calendar year).
  • Step three: Divide the result by the term of the loan (again, this will likely be different for everyone).
  • Step four: Multiply the above result by 100.

SERPS (State Earnings Related Pension Schemes) | Pension Mis-selling Information

Many individuals work hard their entire lives, and one of the pay-offs of that is earning a secured pension to make life easier once retired. A pension is a type of fund into which money is paid throughout the years that an individual is employed. After the individual retires from work, periodic payments are drawn out to support that person’s retirement period. Pension plans differ from employer to employer and also vary country to country. Often government pension arrangements are created as additional supplementation to the basic state pension. In the UK, State Earnings Related Pension Scheme (SERPS) is a pension scheme where the amount an individual is paid is dependent upon the amount of years they have worked for their employer, as well as the salary they have earned within a certain period of time.

What Is A SERP? (State Earnings Related Pension Scheme?)

The UK is known as a country whose government looks after their aging population. As such, the UK government provides employees with the option of partaking in a State Earnings Related Pension Scheme (SERP), based on accrued earnings during a specific period.

Originally called the ‘state earnings-related pension supplement’, the SERP was a government pension plan that was contributed to by employers and employees in the time period between April 6th, 1978 and April 5th, 2002. In 2002, the SERP was replaced with the State Second Pension (S2P).

For employees who were paying into the Class 1 National Insurance (NI) contribution between 1978 and 2002, they earned a SERPS pension. These members could also be ‘contracted out’ by their employers. In these instances, employees and employers paid less into NI contributions, thus the employee’s earnings of serps pensions would be virtually non-existent.

What was the Purpose of SERPS?

The purpose of the SERP scheme was to supplement the basic state pension by providing individuals with a pension that was relative to their accrued earnings during that specific time period. SERPS were founded on the principle that all employees would receive a SERPS pension of 25 percent of their accrued earnings. That 25 percent would be above a ‘lower earning limit’, which would approximate the basic state pension’s amount.

The scheme was slowly brought in over 20 years with the intention that people retiring before 1998 would receive a SERPS pension relative to the number of years they were contributing to it. The ‘upper earning limit’ was approximately seven times the lower-earning limit, outside of which earnings were disqualified for NI contributions and SERPS pensions.

Social Security Act of 1986

The Social Security Act of 1986 lowered the SERPS pension from 25 to 20 percent of an individual’s accrued earnings between the lower- and upper-earning limits. Pensions earned prior to April 6th, 1988 remained the same, and the change was integrated for people who were retiring between 1999 and 2009.

The ‘Contracting Out’ Option

When the scheme was introduced, employers with established final-salary pensions could select the option to contract out of SERPS. Employers were allowed to contract out if scheme members were granted a ‘Guaranteed Minimum Pension’. Employers who opted out of the SERPS would pay less into NI contributions.

For the first time, in 1988, constituents of pension schemes were permitted to contract out. Rather than being obliged to provide a ‘guaranteed minimum pension’, the schemes were obligated to pay savings of NI contributions into the pension plan. To incentivize this arrangement, the government made an additional payment into the pension scheme of every instance where the SERP was contracted out in this fashion.

Post 2002

April of 2002 saw the termination of SERPS accrual as it was succeeded by the State Second Pension. This change was instituted with the goal of providing people of lower incomes with a larger pension.

Controversy of SERPS Mis-Selling

According to the Financial Services Authority, many policy holders who contracted out of the state pension may have been victims of pension mis selling and lost funds that deserve compensation. Hence an investigation was launched to investigate the claims that millions of employees had been led astray with the advice to contract out of SERPS.

As the government began to question the long-term affordability of the SERPS, they offered incentives to encourage people to opt out of the SERPS into an Appropriate Personal Pension (APP). The rebates offered by the government as incentives to opting out have since been cut, causing many to question whether it was misleading to encourage people to opt out, as many are now being advised to opt back in.

Ultimately, investigations have shown that mis-sold pension affected some, but not others. For some, returning to the state pension is a favorable option, but for others in different financial circumstances and with different financial needs, the APP option is also beneficial.

Positive Examples of Leaving the State System

While leaving the state caused monetary losses for some, not everyone is in the same financial situation, and for many, APP has its merits.

In terms of cash availability, individuals have the option of taking 25 percent of their pension as tax-free cash from an APP; this is not an option in the Second State Pension. With an APP, the pension is available at age 50, rather than 65 as with the state pension. The accessibility of cash in an APP can be a necessity for people who are ill or facing death in the short-term future. Death benefits also differ between the state and APP as state pensions are provided to widow and widower’s survivors, but unmarried people don’t apply. APPs can be applied to the individual’s estate. Additionally, some individuals simply prefer for their pension entitlement to be under their control, rather than the government.

Storefirst Limited

Sadly, as hard as people work to secure future pensions, there are also scam artists who will work equally hard to steal those funds away. Pension scams take place when an individual is convinced to cash in their pension pot to invest in something that promises a large return. An example of this came with the Serious Fraud Office’s warning regarding a £120m pension scam involving UK-Based self-storage units.

As storage units have recently been hailed as having great investment potential, many people are being convinced to invest their pension pots with the enticing promise of gaining an 8- to 12-percent return. While ‘pension liberation’ scams have always been around, the steady upsurge is partly understood as resultant of government-introduced reforms granting people over the age of 55 more freedom to access and invest their retirement funds.

While more traditional pension scams use the allure of investing in hotels or services in exotic locations, a local approach hailing the investment-return potential of buying individual storage units has also proven effective. Storefirst Limited storage unit pension scams toted the potential of a 14-percent annual return with the purchase of individual units. Basically, the investor was encouraged to purchase a unit from Storefirst Limited, which would then be sublet to a management company that would rent it out.

While Storefirst has denied culpability in the scam, the warning is clear: if you are contacted suddenly by someone promising a large return on a foreign or local investment, think first before cashing in your pension pot and transferring your hard-earned funds.

A Guide to Buying Premium Bonds

Premium Bonds were first introduced by a man named Harold Macmillan in 1956. A Premium Bond is a lottery bond that is issued by the United Kingdom Government’s National Savings and Investment Agency.

The Bonds are entered a regular prize drawing. If you no longer want your Bonds entered the drawing, the government will buy them back for the original price that you paid.

If you are thinking that you want to buy Premium Bonds, you should understand how they work first.

What Is the Minimum and Maximum Investment Allowed?

If you are thinking about purchasing bonds and you don’t want to invest too much money, the minimum number you can buy is £100.

 If you are looking to invest more, the maximum holding you can have is £50,000.

How Can I Buy Premium Bonds?

There was a time that bonds could be purchased at any of the post office branches. This is no longer the case. Post office branches no longer sell these bonds. Fortunately, there are a few simple ways that you can purchase them.

  • Apply Online: NS&I Premium Bonds makes buying very simple by offering an online buying option. You would simply visit the website and then follow the links.
  • Apply By Phone: If you don’t have internet access or if you don’t feel safe entering your personal and financial information online, you can apply by phone. To apply by phone, you can contact NS&I at 0500 500 000. A highly trained representative will take your order over the phone quickly and efficiently.
  • Apply By Post: If you prefer to do your ordering through the mail, this is an option. On the NS&I Premium Bonds website, there is a downloadable form. You would simply download and print the application form and then fill it out in its entirety. Once you have decided how many bonds you are going to buy, you would need to write a cheque for that amount. The application and the cheque would be mailed to: NS&I, Glasgow, G58 1SB

When Do New Premium Bonds Enter the Monthly Drawing?

When you first purchase your bonds, you would need to wait one full month before they would be entered the next drawing.

The drawing happens at the beginning of each month. Depending on when you purchased your bonds, it could be anywhere from 5 to 8 weeks from your original purchase date before you would have your first chance to win. For example, if you were to purchase your bonds in the month of September, you would need to wait until that same date in October for your bonds to become effective.

This means that you would need to wait until November 1st before your bonds would be entered the drawing. It is important that you understand how your bonds work and when they are entered the drawing. If you have any questions regarding when your bonds would go into the drawing, you can call and speak to someone. There are plenty of representatives on staff who can help you understand how the drawing dates work.

How Much Can I Win With Premium Bonds?

Currently, the lowest prize available is £25 and the highest prize amount available is £1,000,000. The amount of money that you can win depends on your initial investment and the number of bonds that you purchased.

What Are the Chances of My Premium Bonds Winning?

Every Premium bond that is entered the drawing has an equal chance of winning the prize. If one of your bonds wins a prize, your other bonds can also win a prize that same month. If one of your bonds wins a prize, you have an equal chance of winning the next month. It is important to understand that each drawing is separate and the results have no effect on any future drawings.

Where Does the Money For the Winning Draws Come From?

Premium Bond holders are required to pay monthly interest rate of 1.35 percent. The prizes that you can win comes from the combination of all the interest rates paid by buyers.

How Many Prizes Win Each Month?

Every month over 2 million of the Premium Bonds purchased will win a prize There are two prizes in the amount of £1,000,000 paid out every month. There are many other prizes awarded as well. They include:

Multiple winners for the lower amount prizes in the amounts of £25, £50, and £100

  • £500
  • £1,000
  • £5,000
  • £10,000
  • £25,000
  • £50,000
  • £100,000

How Do Higher Rate Taxpayers Benefit From Buying Premium Bonds?

If you are in a high tax bracket, you can benefit from buying bonds. A general savings account will pay out no more than 1.6 gross interest. This equals out to about 0.96 percent after taxes for people in a high tax bracket. The 1.35 percent interest rate on bonds is tax-free. Higher rate taxpayers have a potential to earn 0.04 percent from the tax-free bonds.

It is important to understand that the interest rate would be applied to the entire fund and not to your initial investment. This means that you could end up with several pounds to invest. If you are in a higher tax bracket, there is a chance that you can beat the standard savings accounts that are taxable.

How Are Premium Bonds Prizes Paid To Me If I Win?

There are many ways that you could be paid your prize.

  • Default Payment Option: If you choose the default payment option, you can have a cheque sent to your registered address.
  • Direct Deposit: If you don’t want to wait to receive a cheque, you can have the money paid directly to your bank account. This is much faster than the default payment option because you wouldn’t need to wait for the cheque to be printed and then sent to you. Also, you will have access to the funds immediately. With the default payment option, you would need to wait at least a week for the cheque to clear.
  • Reinvestment: If you don’t want the cash, you can have your winnings automatically reinvested into your bonds account. This will increase your chances of winning the next monthly drawing.
  • ** If you win and you already hold the maximum number of bonds allowed, you would receive a cheque.

Who Can Benefit From Buying Bonds?

There are a few savers who these bonds would be suitable for:

  • Anyone who wants a chance to win the £1 million jackpot and other tax-free prizes
  • Anyone who has at least £100 to invest
  • Anyone who wants 100 percent security on their investment
  • Anyone who wants to take advantage of tax-free investment opportunities

Who Will Not Benefit From Buying Bonds?

There are certain people in certain situations where bonds would not be beneficial.

  • Anyone who is hoping to earn a regular income by purchasing bonds
  • Anyone who is looking for a guaranteed return on their investment
  • Anyone who is worried that inflation will erode their savings

If you want to invest your money in something where you have a chance of winning, you should consider buying Premium Bonds. If you like taking the chance and the gamble, this is an investment that can be very enjoyable.

How To Finance Your New Art Purchases

Investing in artworks can be challenging but it is also very rewarding. When you invest in this business, you simply take calculated risks in order to make profit. It follows that if you want to make money from your investments, you should understand the art world and learn how the market operates. In addition, you should learn the vital trick of buying and selling at the right time. There is also the little matter of raising capital to finance your investments. Authentic artworks cost good money so you need capital to operate effectively in this market. However, you can start small and increase your capital base as you grow in the business. Below are some secrets of success for smart people who want to make good money in this exciting and rewarding market.

Understand the Market

In every business, knowledge is power and reliable information is vital to success. This is why you should make the effort and understand how the market operates before you even buy your first artwork. Investing in this business is not all about buying the paintings of Masters like Pablo Picasso, Vincent van Gogh and Michelangelo. You are an investor and not a connoisseur so you should take a holistic approach to investing in artworks. As a dealer, you should know all about Minimalists, Abstract Expressionists and Renaissance Masters. Your knowledge of this business should extend to Chinese porcelain, African woodcarvings, works by masters of the Impressionist era and even struggling artists who may just create masterpieces in future.

Keep Accurate Records

Accurate record keeping is one the qualities of a great investor. Buy a large diary and record details of “market behavior”.  Remember that this market is very much like the stock market. Prices go up and down in this market and some works have cycles. This means that there are specific periods in the year when prices rise and fall. Use this killer information to buy low and sell high. In addition, the market is driven by consumer sentiment sometimes. Prices can head north or south on a whim. Learn to recognize trends in the market and try to profit from these trends.

Diversify

In every business, it pays to diversify because this move protects you and increases your chances of success. Think of your collection as a stock market portfolio.  A stock market portfolio contains penny stocks, blue chip stocks, mutual funds and other money market instruments. In your case, your portfolio or collection must include works by established artists, struggling artists and others in-between. The point here is that you cannot afford to risk all your capital on just one or two artists. When you diversify, you enjoy a huge advantage because if some of your purchases do not bring you good money others will.

Think Long Term

If you are investing in this business, you should look at the big picture. It is not always possible to buy an artwork today and sell it in a week or two. Sometimes, you get more value for money if hold on to the goods for a while and sell when the price appreciates. Just think; some works that go for millions of dollars today were selling for just $200-$500 some years back. Now, you may not hit such heights with your purchases but the point is simply this. Buy your artworks for both short-term and long-term profit.

How to Finance Your new Art Purchases

Art can be an incredibly personal type of possession. Most buyers would prefer to buy works from certain artists, or they would like artwork that is in a specific style. Other individuals merely want pieces that resonate with them, or feature a subject that is of interest. No matter the style the buyer wants, he or she may not have enough money on hand for these beloved art pieces.

Therefore it is a good idea to consider options for financing. There are numerous ways in which to get acquire the funds needed for purchasing art. Enthusiasts find it important to invest in art, whether it is make their homes more customized or for some other reason. Read on to learn about more ideas on how to finance the artwork of your dreams.

Secured Loan

You can raise capital by taking a loan to get started in this business. If you have stocks in some reputable companies, you can easily get a secured loan using your share certificates as collateral. At this point, you are testing the waters so take a small loan at the start. After you repay this loan, you can apply for a bigger one. As your business grows, you may need more money to operate but this is not a problem. Your bankers will keep financing you as long as business is booming and you are repaying the loans at the right time.

Secured financing is a way to have the money for purchasing art. It can be for nearly any amount, as long as the individual has collateral that is equal to the amount they wish to receive. This type of loan often is based on a value of items that are used as security. It may be necessary to get an appraisal of said items.

Secured loans typically are an alternative to other types, when the person has rather poor credit. It gives a lender confidence with giving out a loan, in the instance that the borrower defaults on the loan. The lender will be able to take possession of collateral that is in place as security. He or she can put up jewellery, current artwork, or property as a means of loan security.

Secured loans are for more than just those individuals who have poor credit. They can be used by borrowers who have a high amount of debt, as well as on risky purchases. It is possible for borrowers to receive lower interest rates for their secured loans, since this is less risky and he or she is backing the loan with something of value. Some other items that may be used as collateral include the following: coin collections, antique firearms collections, antique cars, and historical artefacts.

Unsecured Loan

An unsecured loan is the one you get without putting up any collateral. These loans are granted based on your relationship with your bank and your financial integrity. If you want an unsecured loan to invest in artworks, your best bet is an overdraft. This is short-term loan and it is usually approved for current account holders based on turnover and financial integrity. If you maintain a salary account with a reputable commercial bank, you can get an overdraft easily. This is because your salary is paid into the account at the end of every month and this qualifies you for the overdraft. You can take this loan, invest and repay the loan after you have sold the goods.

Art financing sometimes may be made available with unsecured loans. There are numerous factors that must be considered before someone is approved. It is easier when one has a good credit score. However, this is not the only consideration in making the decision to approve someone for the unsecured loan.

If the individual has any debt, including car payments or a mortgage among other things, there may be an issue with getting an unsecured loan. Lenders will look at the debt to income ratio for the person. They want to be clear that borrowers are not going to be overextended, and that they will be able to make loan payments.

Loans Covered by Your Collection

Some financial institutions will lend you money at relatively low interest rates if you have a collection already. In this case, the amount you get will depend of the value of the goods you have. Maybe you have the opportunity to buy a great work at a decent price but you do not have the cash. With this option, you can easily raise the cash and repay the loan in installments.

Cash from Friends

Another way to raise capital is to get cash from friends and family. If your friends and relations are convinced that there are great prospects in your investments, they will lend you money to make the business grow. Repay the loan at the right time and you can always borrow some more later.

Credit Cards

Credit cards are an alternative for purchasing artwork. It all depends on the credit card limit amount. It is important to note that they can have higher interest rates, depending on the negotiation made with the credit card company. Interest will be added on to what you spend with the card if you do not pay it off within a month.

Credit card financing can be an attractive option, but other choices should be considered for the fact that there are no high interest rates or high monthly payments due. Credit card financing is ideal for people who are not interested in buying pieces that are more expensive. Anyone who simply is in search of stylish art pieces for their house or office will do well to get credit card financing.

Auction House and Dealer Financing

Auction houses and dealers can provide financing to their clients. This can be used to buy art. The amount that a dealer lends is determined on the individual’s credit rating, as well as the likelihood of the borrower being able to pay back the loan. Ownership of this artwork technically falls under the dealer until the buyer pays off the entire loan. Since auction houses and dealers know the values of the pieces already, financing typically is arranged faster.

Lease to Own

A great way to acquire art is by leasing it. Certain companies will give buyers the option to lease art for a period of between five to ten years. Once the lease term is done, the lessee is able to purchase the pieces he or she wants. This is perfect for individuals who change up their home’s interior style on a regular basis. Also, it makes it possible to learn more about what artists have to offer before making an official purchase. This lets potential buyers become aware of recent trends when deciding to lease a new piece of artwork.

There are several options for financing artwork. A viable method depends on different factors. These include the person’s current debt amount, what he or she has for collateral, and his or her credit worthiness.

Borrowing is a great means of securing art pieces, including what the borrower really wants to accentuate the style of his or her home or office. Even when he or she does not have the required money to make the purchase, there are plenty of possibilities.

Loans involve having to pay interest, so leasing may seem like the better option for some people. If the borrower does not feel the need to own the pieces of art right away, leasing gives potential borrowers the chance to determine if they would like to keep these artwork pieces or select something else to lease. The individual also may go through auction houses, dealers, or banks to get financing.

Final Word

Investing in art is the way to go. There is big money in this business and you can become one of the winners here. Start small, think big, expand carefully and you will succeed in this lucrative business. Weigh the alternatives carefully before you make your decision so that you do not end up regretting your choice for how you want to secure the financing for the artwork of your dreams. Most importantly, take great enjoyment in the artwork that you thought you would only own in your dreams.

No Claims Bonus: Save on Your Insurance

No claims bonus (NCB) is one of the best ways to save on your insurance. You can save up to 30% off your premium with just one year of no claims.

If you drive claim-free for some years, the discount could reach as much as 75%.

What Is A No Claims Bonus?

You can start accumulating NCB for every year that you have insurance without making a claim. The key here is driving defensively – what matters is whether or not you make a claim, and not whether it was your fault or not.

Example 1:

It’s a sunny day, and you are driving on a highway when suddenly an uninsured driver hit your car. Given that it is not your fault and you made a claim, because of this, you may not be earning an NCB for that year. In addition, your existing NCBs will get a step back, and in some cases, go back to zero.

Example 2:

You were sleeping in the middle of the night, and your car is parked in the streets of New York City. Upon waking up, you discovered that your car had been stolen and you made a claim, your NCB, therefore, could be lost.

How Do I Earn A No Claims Bonus?

Car, van, commercial vehicle, tractor and on all types of insurances like third-party, fully comprehensive, and third-party, fire, and theft will earn you NCB.

SEE ALSO: Van Insurance: Everything You Need to Know

Depending on your insurer, you can earn an NCB for up to nine years. Although for most insurers, they will only allow you to earn for up to five consecutive years.

How Much Can I Save From An NCB?

Insurers will reduce your premiums by a set percentage that is determined by the number of years you are driving claim-free. Discounts vary greatly from one insurer to another, but the average discount scale is usually:

YearsReduction
110%
220%
330%
440%
550%
655%

There are other ways to reduce the costs of your car insurance policy; you can read our guide, 10 Easy Ways to Reduce the Costs of Your Car Insurance for more information.

How Can I Protect My No Claims Bonus?

Some insurance companies offer opportunities to preserve your bonus. A car insurer may be able to redeem all costs from another insurer where a claim is not your mistake. In this case, you wouldn’t lose any claims discount. It is best to talk to your chosen insurer about their policy as this can vary greatly.

In most cases, if you do not have a policy in your name for two years, your No Claims Bonus will disappear.

Can I Use My NCB On Another Vehicle?

Yes, you can. In the insurance industry, they call it “Mirrored No Claims Discount,” it is used by a person who has earned a bonus on a car policy and decided to buy another vehicle. To get a discount on his insurance, that person can then “mirror” their accumulated NCB to the vehicle he just bought.

Can Named Drivers Earn A No Claims Discount?

With a standard car insurance policy, named drivers do not earn their own No Claims Discount. However, some companies will allow them to earn an NCB. This is brilliant if the named driver wants to go on with their own car insurance policy later on.

A Guide To GDPR And The New Data Protection Regulations

Approved by the European Union Parliament on 14 June 2016 after four years of preparation and debate, the GDPR will replace the current data protection directive from May 25, 2018 after a two-year transition period. The GDPR is directly applicable and binding, meaning it does not require any enabling legislation. With that in mind, here is some more information about the GDPR.

An Overview of GDPR

The GDPR will introduce stronger rights and restrictions, as well as new accountability obligations on international data flows. The GDPR will require any organization that handles data about EU citizens to establish a robust personal data security framework. Additionally, the GDPR will harmonize all the data security laws across all 28 EU member states to make it easier for non-European companies/multinationals to comply with all the applicable laws across Europe.

According to the European Commission, this regulation will make it simpler and cheaper for businesses to operate within Europe. The EU hopes to use the GDPR to encourage businesses to incorporate data security frameworks into their services and products from the development phase. Beyond the typical types of personal data, such as name, photos and address, the GDPR extends the definition of personal data to include any sensitive data, such as IP address, biometric data and even IP address.

Scope of the GDPR

One of the main elements of the GDPR is the increased territorial scope. Specifically, the GDPR will apply to any company that handles data of EU citizens, regardless of the company’s location, meaning it will come with an extended jurisdiction. As a result, it will remove the ambiguity in the current regulation, Directive 95/46/EC, which refers to data process ‘in the context of an establishment.’ Thanks to the extended jurisdiction, the GDPR will remove this ambiguity, which has arisen in several high-profile court cases.

Additionally, this regulation will also apply to the processing of personal data of EU citizens by a processor or controller not established in the EU, where the activities relate to monitoring EU residents within the EU and selling or offerings services and goods for free to EU citizens. Moreover, any non-European business processing data of EU citizens will need to have a Data Protection Officer (DPO) in the EU. The regulation also contains a separate Data Protection Directive that will govern how the criminal justice sector and the police exchange personal data at the national, European and international level.

Single Set of Rules

While a single set of rules will apply to all 28 EU member states, each national government will create an independent Supervisory Authority to investigate and hear administrative offences, sanctions and complaints. All the SAs will offer mutual assistance to each other and organize joint operations. It is important to note that a business with offices across Europe will have only one SA called the “lead authority” stationed at its main data processing centre. The lead authority will supervise all the activities of the business throughout the EU with the help of a European Data Protection Board (EDPB). It is important to note certain personal data is exempt from the regulation. This includes data processed for the purposes of national security or in an employment context. Such data may still be subject to individual country laws.

Responsibility and Accountability

Under the GDPR, notice requirements must include the retention time for personal data, as well as the contact details of both the DPO and the data controller. Like the Data Protection Directive, the automated individual decision-making, including profiling, is contestable. This means that an EU citizen can question or fight any significant decision that affects him/her that has been made on a purely algorithmic basis.

To demonstrate compliance with the regulation, the data controller should implement a data security framework that meets the principles of data protection both by design and by default as stipulated under Article 25. Specifically, privacy by design and by default requires data security measures, such as pseudonymised personal data by the controller, be incorporated into the development of business processes for services and products. This means the data controller carries the responsibility of implementing effective protection measures and more importantly, should be able to demonstrate the effectiveness of such measures even when the data processing is done by a data processor on behalf of the data controller.

Penalties

Under the GDPR, the penalties for flouting the regulation are based on a company’s annual global revenue and they vary in terms of severity depending on the nature of the infringement. For instance, a company found guilty of minor GDPR infractions such as failing to notify the relevant authority and data subject about a data breach or failing to conduct an impact assessment or failing to keep proper records can be fined up to 2% of its annual global turnover.

On the other hand, a found guilty of the most serious offenses such as violating the core of Privacy by Design concepts or lacking sufficient customer consent to process data can be charged up to 4% of its annual global revenue or €20 Million, whichever is higher. It is important to note that these penalties apply to both controllers and processors, meaning even ‘clouds’ will have to comply with the regulation.

The Benefits of the GDPR to EU Citizens

The GDPR has several inherent benefits. For starters, it will instill and promote transparency because it will compel organizations to explain to consumers in a clear way how they process and use consumer data. Secondly, it will help manage data breaches more effectively because it compels organizations to report data breaches to the relevant authorities and inform all the affected consumers. Thirdly, it will help enforce the “right to be forgotten.” This means you can ask an organization to delete your personal data from its records it there no grounds for retaining your data.

The Impact of Brexit on the GDPR

Although the United Kingdom is set to leave the EU over 10 months after the enactment of the GDPR, the UK government has said the regulation will work to the benefit of the country, so it will enforce it. In other words, Brexit will have no effect on the GDPR compliance in the UK.

Conclusion

The General Data Protection Regulations are essentially robust data protection regulations aimed at protecting the personal data of EU citizens. The regulation requires any organization that process EU residents’ data to implement a robust data protection system, deliver a breach notification in the event of a data breach, as well as provide a description of the potential consequences of the breach. The UK will also enforce the GDPR despite Brexit.

Training To Become An Electrician

Electricians play an important role in ensuring that things work and continue to run smoothly, both within our homes, in factories, and out in the field at sub-stations and pylons.

If you’re looking to change career or want to start your career as an electrician, where do you even think of starting?

What Sector Do I Want To Work In?

There are two main areas of expertise for electricians – Domestic and Commercial – both of which come with their own specific ways of working especially with regards to the environment you’ll be working in, so what does each involve?

Domestic Sector

Domestic electricians are those who attend jobs at homes and businesses, and usually work as sole traders or for small businesses. Their main roles can include the installation, testing and maintaining of electrical systems and the maintenance of appliances, lighting and security systems.

The types of job they deal with can include anything from repairing fuse boxes, rewiring light switches to PAT testing appliances and connecting network cabling for home computer systems.

Commercial Sector

Commercial electricians are usually those who have worked in the domestic field and have moved onto working with more powerful voltages and more specific equipment that could be sensitive to even small changes in resistance.

Clients and employers can include more industrial locations such as factories, warehouses, and power stations, and additional training will be required to accommodate factors such as working at height or with extremely high voltages.

Qualities And Requirements

So what qualities do you need to be able to work effectively as an electrician?

  • Good manual dexterity – some wire work can be very intricate, so being able to keep a steady hand when working with wires and tools is essential to becoming a good electrician.
  • Ability to effectively analyse technical drawings – including CAD drawings and technical manuals – and to interpret measurements of electrical charges, such as voltage and resistance.
  • Ability to problem solve – the ability to identify and solve problems is vital to the job, including when rewiring and laying cable.
  • Communication and interpersonal skills – electricians should be able to clearly explain what is required to customers and clients, as well as be friendly and approachable when dealing with enquiries.

Get Trained

The most important part of becoming an electrician is knowing your stuff, so if you want to get your foot in the door, you need to learn all you can – both in theory and through practice – and there are a number of different avenues you can go down to gain qualifications.

College courses can help you obtain the qualifications you will initially need, including City & Guilds qualifications to get you started on your journey. There are a number of qualifications available for those looking to start in the business – including NVQs – and you’ll need to have one of these at least before you can even think of getting your foot in the door.

It can be worth looking into local colleges to see if they offer these entry-level courses, and there are some which offer part-time study, allowing you to train as you work if you want to.

Apprenticeships

Apprenticeships can be handy for getting yourself started in the industry, the availability of them will depend on the jobs market at the time and they are usually quite well sought after. If you have an existing skill set you want to top up, apprenticeships can be a good way of diversifying into another area of electrical work – such as starting as a home installer and then moving into commercial.

In-Work Training

Once you’ve secured a job as an electrician, your employer may then offer you some further training as part of your employment – including the following which is essential for any electrician:

  • Periodic Inspection and Testing – a periodic inspection is used to check and ensure that electrical items are safe and in a satisfactory condition to do their job. After testing, an electrician would be required to produce an Electrical Installation Condition Report detailing any damage found.
  • 17th Edition (IET) Wiring Regulations – this is a national standard for electrical installations in the UK and ensures that electrical wiring in domestic, commercial and industrial buildings are of good quality.
  • PAT testing – PAT testers carry out basic safety checks on electrical equipment, both to check current flows safely and a resistance test, leading to either a PASS or FAIL status for that piece of equipment. Advanced PAT testers, when trained up, can also test fuses and insulation resistance, especially in industrial settings.

You’ll also need to complete a Part P certification in order to be able to check your own installations to check if they are within standard. Part P of the Building Regulations determines that some household electrical has to be approved by a certified contractor or building inspector.

Who Can Advise Me?

If you’re looking at starting out as an electrician, it can be worth looking into joining organisations such as the National Inspection Council for Electrical Installation Contracting (NICEIC) – which is privately owned and can provide useful resources for those looking to move into working as electricians.

Through NICEIC, you can gain qualifications – from City & Guilds to ELECSA – in a variety of subjects including PAT testing and data cable installation.

Variety Is The Spark Of Life

Once you’ve gained your qualifications, there are a number of different areas in which you can work as an electrician or electrical engineer, including:

  • Planning – producing plans using CAD systems to map wiring in potential build sites and for rewiring jobs in existing premises
  • Maintenance – regularly checking systems to ensure safe running
  • Installation – installation of wiring and electrical equipment in a variety of buildings
  • Electrotechnical panel builder – building, installing, and maintaining operating panels and control panels that regulate electricity or operate electrical systems
  • Repair and rewind – repairing and maintaining motors and transformers of electrical equipment to ensure safe and efficient running
  • Highways – maintaining and repairing street lighting, traffic signs, and traffic management systems

Whatever route you want to go down, ensuring that you are properly trained is essential before you start working as an electrician, and once you get started in your career, you may find more opportunities opening up for you.

Training To Become A Hairdresser

Barbers and hairdressers provide us with a chance to smarten up and try a new look by colouring or curling our hair. Located on every high street, salons these days can also include additional services such as nail bars, skin treatment or even sunbeds.

Hairdressing is a popular profession for those who like to be creative but can also be responsive to their customers’ needs and wants. And with the world of fashion and celebrity changing constantly, trends will mean that there’s always something new to try or another ‘in’ look to try and replicate, especially after events such as film premieres and awards ceremonies.

So what road do you need to go down if you want to become a hairdresser, and what sort of training will you need before you’re qualified enough to cut hair?

What Qualifications Will I Need?

To qualify as a hairdresser or beauty therapist, you need to look into courses which will help to get you prepared for life in the profession. These will usually be available as City & Guild qualifications and can help you gain NVQ level qualifications which can be a good entry point for a trainee position.

Only after they’ve completed training in college will trainees then get the opportunity to start off doing basic hair cutting, progressing to more complex styles as their training progresses.

Hairdressers can even specialise in particular cuts or types of hair, including perms, plaits, afros or even hair extensions. Some may also specialise in the colouring of hair, and be called upon to try anything from a complete bleach to more complicated layered colouring.

Where Can I Train?

NVQs and City & Guild qualifications in subjects such as Hairdressing, Barbering, and Beauty Therapy are available at colleges and adult training centres all around the UK.

Courses can range from full-time, degree-style courses, to part-time night school courses that you can fit around your everyday work which can be particularly useful if you are considering a career change but wish to keep working while you train.

Whichever timeframe you choose to study in, remember that you’ll need a good amount of practical experience of cutting hair before being allowed to cut a customers’ hair. Many courses make use of models for trainees to practice on, which in itself can be good for earning a little extra cash (and get a haircut while you’re at it).

Can I Gain Work Experience?

Gaining some experience while you are training is important, you’ll need to eventually practice on customers, but it may be some time before your employer allows you to. It can be a long process, but once you’ve gained the experience and confidence, you can start working on your technique and start dispensing advice, in which case, you will need a professional indemnity insurance.

SEE: Why Do I Need Professional Indemnity Insurance?

Apprenticeships are another option for getting your foot in the door of a salon, especially if you are combining them with studies. Apprentices will usually start off by performing tasks such as restocking supplies, greeting customers, shampooing hair, and keeping the salon clean and tidy in between cuts, eventually building up to being trusted to cut customer’s hair on a day-to-day basis.

How Far Can I Train?

Like with many professions, practice makes perfect, and as you learn along the way, you’ll find yourself improving in all aspects of the job and maybe even find a special or preferred technique and procedure that you particularly excel at.

Your course and work experience will give you the chance to train in all aspects of hairdressing, and as you get more experience, you may get the chance to diversify into other areas like barbering.

Once you become a senior hairdresser, not only will you get the chance to use more advanced techniques and take on more complicated hairstyles, but you’ll also get the opportunity to advise customers on particular styles and products that your salon may cross-sell as part of the service.

City & Guilds qualifications in hairdressing go up to Level 4, covering advanced aspects such as working with coloured hair. A large part of your experience is going to come from practical experience gained while working in a salon. So the sooner you start snipping, the sooner you can gain the skills necessary to be confident enough to cut customers’ hair unaccompanied.

What About Starting On My Own?

Once you’ve gotten some experience under your belt by working at a salon, you may want to strike out on your own and either become freelance or set up a salon of your own design.

Much like setting up any business, you’ll have costs of equipment, products, and shop rent to think about unless of course, you decide to go mobile and use a car or small van to make visits to customers’ homes.

In either case, you’ll need to make sure you have all the relevant business licences, business insurance, liability cover, and hair and beauty insurance to cover yourself and your business should something go wrong, either to your premises or to one of your customers as a result of your treatment.

SEE ALSO: What is a Business Insurance?

Whether you’re starting at a college or considering going back to school as part of a career change, hairdressing can be a good way of meeting different kinds of people with different sorts of hair, as well as a passion for delivering a good service and maybe even getting creative with style at the same time.

Why Do I Need Professional Indemnity Insurance?

Businesses need to make sure they are protected against claims brought against them by third parties. Say a customer has an accident such as a slip, trip or fall on your premises and sustains an injury, your business would be liable for compensation if it is proven that you were in some way to blame.

Public Liability insurance will help protect you in this regard, providing a level of protection in case of claims brought against you for injuries and damage to equipment sustained on your premises by third parties.

But what about those instances where damage has been done on an intellectual level?What about those pieces of advice you gave which led to a company suffering financial loss or damage to their reputation as a result?

That’s where Professional Indemnity Insurance comes in, providing a safety net for your business against any advice you may dispense, or helping to cover against any mistakes you might have made along the way which eventually led to damage to your client and their business.

What Does PI Insurance Cover?

Professional indemnity insurance helps cover your business against losses sustained by third parties – usually clients or customers – who may have suffered losses as a result of your advice, either on a financial level (loss of profits) or on a reputational level (downturn in business as a result of bad press).

Who Should Have PI Cover?

Almost all businesses should have some form of PI cover, especially if their work involves dispensing advice as a service. This can include areas such as:

  • Finance – financial advisors, solicitors, brokers, accountants
  • Property – estate agents, letting agents, mortgage advisors
  • Management – management consultants, leadership advisors
  • Technology – computer solutions, IT firms
  • Recruitment – recruitment consultants
  • Services – marketers, design consultants
  • Education – teachers, private tutors

Indeed, any professional who is in the business of dispensing advice, either on a financial level, design level or even on a physical level – in the case of a fitness instructor – is potentially liable for being sued as a result of poor advice which could hurt the reputation of their client and their business.

What Kind Of Situations Can It Cover?

Professional indemnity insurance can help cover your business against situations where your advice may have led to your client or customer suffering harm or financial loss:

Example 1:

Say you’re a florist and you have advised a customer on which flowers would look nicest in a bouquet for their partner, and the customer is pleased with the choice and makes the purchase.

Later on, your customer comes back and you find out that their partner was, in fact, allergic to the flowers you advised them on, which led to a stay in hospital as a result said allergic reaction.

Because you advised them which flowers to buy, you could find yourself liable – even if you were not to know at the time the said allergy – the customer could bring a claim against you as it harmed them on a physical level.

PI insurance would protect you against a claim like this one, where the customer may seek compensation for a stay in hospital which led to a loss of income as a result of your advice during the transaction.

Example 2:

A design agency has taken on the task of rebranding a company’s branding – everything from a new colour scheme to a new mascot and slogan – advising them on the best direction going forward and taking to social media platforms with a new design and a new voice.

All seems fine to begin with, but shortly after everything goes live, the company finds itself being ridiculed on social media, and after a bit of research, it is discovered that there has been a reaction to the slogan or mascot, leading to reputation damage and dip in sales.

Because the company’s reputation and public image took a hit, they could then sue the agency on the grounds of reputational damage. The design agency would have to have some form of PI insurance in place to help cover the costs of any compensation they may have to pay out.

How Much Should I Insure For?

PI insurance policies allow you to insure your business up to a certain amount and have two levels of cover, both of which affect any payouts:

  • ‘Any one claim’ – this would help cover any payments up to the full limit of your cover for each claim made against you. Say you insure for up to £100,000 a year, your PI insurer would cover the cost of more than one claim during that period, provided the amount didn’t exceed the limit.
  • ‘Aggregate’ – on the other side, aggregate PI insurance would only pay up to a certain amount. Say you had a cover of up to £100,000 but you get two claims of varying amounts which take you over your set limit, you’ll have to cover the remaining amount yourself. For example, your business gets 2 claims of £75,000 each on a PI insurance limit of £100,000 would take the total to £150,000, leaving your business to cover £50,000 of this out of your own pocket.

Professional indemnity insurance is an important policy to have when it comes to businesses who are in the industry of dispensing advice. Anything can happen and some advice can be bad, so it’s always best to prepare yourself for such possibilities.

Why Should I Buy An ASU Policy?

It can be a pretty tough time when you’re out of work; money worries are likely to creep in as you try and figure out how far your savings can take you in the absence of any income.

To help ease the burden when you are unemployed, it’s important to make sure you are protected against the unexpected to ensure that you and your family are covered.

And this is where Accident, Sickness and Unemployment (ASU) insurance can help, providing an extra level of protection in the event of loss of income as a result of one of those circumstances.

What Is ASU Insurance?

ASU stands for Accident, Sickness and Unemployment, and is an insurance that helps to protect you should you be affected by any of the following:

  • You become injured, and as a result are unable to work
  • You become ill, and as a result are not able to work
  • You lose your job through no fault of your own and are unable to provide

ASU insurance is essentially a ‘just in case’ insurance, providing protection if you are concerned as to whether you’d be able to cope if you were to fall ill or lose your job suddenly and be unable to provide for yourself and your family.

Who Chooses How Much I Receive?

ASU insurance essentially covers you for the sum of your monthly outgoings such as utilities and also your mortgage costs. A sum is worked out – usually about 60-65% of this total – and even though you are able to set the amount yourself, the percentage is unlikely to change.

Remember as well that, in the event of a payout, this will usually take a month to process, so don’t expect it to be an immediate payment.

How Long Can I Set A Policy For?

ASU policies are designed to be short-term solutions, so you are only able to claim for a maximum period of between 12 and 24 months.

While they can be useful to set up for the short term, there are a few rules about setting up a policy, and providers are quite strict in which circumstances they pay out, this is to avoid the risk of insurance fraud.

What Exceptions Are There?

Insurance providers may not offer you ASU insurance cover in the following circumstances:

  • You take out a policy in the knowledge that you are soon to be made redundant or sacked
  • You have existing medical afflictions such as backache or conditions such as stress
  • You are self-employed
  • You have worked at your current company for six months or less
  • You are over-65

Providers are very strict in who they cover, so those who want to take out cover in anticipation of a redundancy or loss of employment are not likely to be able to get covered.

Check with each broker about any exclusions they might apply with regards to your claim, as these can differ from company to company.

Why Should I Get A Policy?

ASU policies can help provide extra peace of mind in the event of unexpected circumstances; this could be seen as an excellent short-term policy to take if you have not much in the way of outgoings or significant debts.

Many of us will worry about what may happen as a result of ourselves or another breadwinner being out of work as a result of unexpected circumstances.

Taking out some form of policy such as ASU insurance on a short-term basis can be a good investment as it can help take a weight off your mind, much like with policies such as life insurance.

Do Your Research

There are a number of brokers who offer ASU insurance, and when searching for a policy, it’s best to get quotes from a few of them, many will allow you to cover with monthly payments.

Brokers may differ on the period between a claim being made and the payout date, it can usually take a month for such claims to clear but it’s always best to double check with multiple providers to find out if yours will vary.

Remember as well that ASU policies are very time sensitive, both at their inception and towards the end of your cover, so double-checking the details of your policy is always a good idea.