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Managed to save some extra money during lockdown? Get started in investing

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managed to save some extra money during lockdown get started in investing

Though the restrictions on movement during lockdown have left many with a case of severe cabin fever, an unexpected upside has been Britons spending less and saving more. 

The most recent data from the Office for National Statistics released this week, revealed that collectively, we have saved £157billion in just three months.

Meanwhile Bank of England figures show £11billion was poured into British easy-access accounts through March and April, compared to just £2.7billion during the same period in 2019. 

A new survey has revealed the average Briton has saved £495 during lockdown

A new survey has revealed the average Briton has saved £495 during lockdown

A new survey has revealed the average Briton has saved £495 during lockdown

A combination of working from home and the near-enough complete closure of the hospitality industry means the vast majority of people don’t have their usual daily expenses and aren’t going to the pub after work on Friday – or any other day for that matter.

Meanwhile, major spending on holidays, weddings and home renovations has also come to a halt, meaning even bigger savings for some. 

A survey by Creditfix.co.uk said 72 per cent of Britons are feeling positive about life after the pandemic with regards to their finances, with the average person saving £495 per month during lockdown. 

And while less spending doesn’t bode well for the consumer economy, a newfound propensity to save certainly isn’t a bad thing. 

But with interest rates remaining desperately unattractive, there are much better ways to make your extra cash go further – investing is one of them. 

This is Money has an extensive collection of guides on how to get started including this one on choosing the best investment platform for you and this one on different investment strategies.

But here are some specific tips on what do you with your surplus coronavirus cash.

Before you consider investing, 'spring clean' your finances and identify any issues that should take priority such as paying off debts or building a 'rainy day' fund

Before you consider investing, 'spring clean' your finances and identify any issues that should take priority such as paying off debts or building a 'rainy day' fund

Before you consider investing, ‘spring clean’ your finances and identify any issues that should take priority such as paying off debts or building a ‘rainy day’ fund

Pay off your debts 

The first thing to do if you’ve managed to save any money is to clear any debts where possible. Paying them off in one go is the best option. 

Credit card bills are usually the first that should be paid off due to high interest rates, which can be anywhere between 10 and 50 per cent. 

If you had £1,000 in debt on a credit card at 18 per cent APR, the average according to MoneySuperMarket, the interest would cost you £180. 

If you had £1,000 in a savings account earning – a rather optimistic given the current climate – 1.5 per cent, the interest earned would be £15. So it makes economic sense to pay off your debt first.

The only exception would be if you happen to have a 0 per cent deal, and you are certain you can pay it off during the interest free period.

It all adds up!

A survey by AA Financial Services has revealed the average amount of money people have saved in a range of areas by not going out during the period of home isolation. 

The biggest savings come from not spending on holidays or city breaks – with an average saving of £124 per month

Overall, the average monthly savings made on eating and drinking out was £57.49 per month.

Other areas where Britons are saving, on average per month:

  • High-street shopping – £53.46
  • Weekend trips and days out – £48
  • Car maintenance and fuel – £84.16
  • Leisure activities e.g. cinema, concerts, gigs, theatre – £36.02
  • Convenience food and ready meals – £27.45

You should also keep some ‘rainy day’ cash savings as a financial buffer for emergencies – it might be that you had to dip into yours during the current crisis, or maybe you didn’t have one at all so now would be a great time to set one up. 

Interest rates are very low across the board though, so take a look at how much cash you need readily available and make sure you are getting the best terms possible. 

Only after these steps should you consider feeding any excess cash that is highly unlikely to be needed in a hurry into investments for the longer term.   

What are you investing for? 

Once you’ve decided to start investing, think about what your goals are which would be very different depending on your age, how close to retirement you are and how much you can afford to lose.

Darius McDermott, managing director at investment research firm FundCalibre, says to imagine your ideal lifestyle.

‘This is a great way of thinking about your end goal – do you want a big wedding or a small one? 

‘Do you want to pay off your mortgage ten years early? What kind of retirement do you want?’ 

Different aims mean different time frames to work towards and risk will vary so investing might not be the best option for some of them.   

If you’re investing for a deposit on your first home which you hope to buy in 2025, knowing what you need to live on when you retire in 2050 is less relevant. 

But if you’re investing to top up your savings pot for later in life, then understanding your spending needs helps to inform what and how you save and invest today.

How much do you want to have?

You’ve thought about your goals but now you need to think what you need to get there and how long it will take you. Are you hoping to make an income or to reinvest?

If you’re just after a bit of extra cash to top up your monthly income – or your pension, depending on your age –  having the money paid out each month makes sense.  

McDermott adds: ‘Lockdown should have made how you spend your money a lot clearer and what counts as “necessities” versus “nice-to-haves”.

‘If investing for retirement, this should help us decide how much money we need and what we would like to have each month. This gives us a much clearer goal than we perhaps had a few months ago.’

But if you’re aiming for a set amount, for a deposit for a home for example, reinvesting aims to get you to your goal faster as your investment earns interest on both the initial amount invested and accumulated interest – this is called compounding.  

Set a ballpark figure as your goal and decide how much you’re going to put aside each month after your initial lump sum to help you get there and how long you’d like it to take. 

Of course investing comes with risks and nothing is ever guaranteed so think long and hard about what you’re willing to lose. 

How to invest 

There are several ways to invest and the abundance of options can sometimes be overwhelming and make things appear more complicated than they really are.

First of all, are you after tax-free investing? There are several ways to do this, with an array of different limits and benefit. 

Saving for a first home or towards retirement could mean investing into a Lifetime Isa is the best option, though there are lots of restrictions so read about the pros and cons here

A self-invested personal pension is another alternative. Read about these in our Sipp guide here.

There are fewer restrictions with an ordinary stocks and shares Isa, but limits to watch out for. Have a look at what’s on offer here.  

For funds, most people invest via a platform, such as Hargreaves Lansdown, Interactive Investor or AJ Bell.

You can also invest directly through an asset manager, where you can more easily access trading systems and monitor portfolios. 

Juliet Schooling Latter, research director at Chelsea Financial Services, says when thinking about which platform to use there are a number of things to consider. 

‘The first is the products they offer, then the service they offer and then the price,’ she said. ‘Each of us will have different needs so a platform that is right for one may not be right for another. 

‘You have to decide if they have what you want – funds, trusts, shares – what level of service you require – only online, for example, or the ability to talk to someone on the phone – and how much you are prepared to pay for that. 

‘When looking at costs also remember that the headline figure may not be truly representative – are there add-ons for certain services you may require.’ 

You should also consider how often you think you’re going to trade as some platforms charge per transaction while others offer a certain number of trades for a set monthly fee. This will affect which pricing structure you might choose. 

Interestingly, lockdown has led to an explosion in the use of digital investment platforms, many of which offer commission-free trading (though make sure to read the small print!).

A study by Finder.com revealed younger generations in particular are embracing investing following the initial coronavirus market crash. 

This includes platforms such as Moneybox, InvestEngine and Wombat, which invest largely in ETFs, or names such as Freetrade and Trading 212 which invest directly in shares. 

Read our guide for more information on how to choose a provider.   

The biggest saving people have made during lockdown has come from not spending on holidays – with an average saving of £124 per month according to AA Financial Services

The biggest saving people have made during lockdown has come from not spending on holidays – with an average saving of £124 per month according to AA Financial Services

The biggest saving people have made during lockdown has come from not spending on holidays – with an average saving of £124 per month according to AA Financial Services

What to invest in

Just like there are plenty of ways to invest, there are even more options when it comes to deciding what to invest in.

You can invest directly in stocks or shares or via a fund or investment trust from different industries across different countries across the world and of varying sizes.

Exchange-traded funds or ‘passive’ funds are one option that has been growing in popularity over recent years due to having cheaper fees versus their actively managed fund counterparts.

If you do decide to pick individual shares then make sure you research companies very carefully, learn to understand how to read their balance sheets and financial statistics and don’t just get swept along by what the hot tips of the moment are.

A good rule of thumb is, if your cab driver is recommending an investment, it’s probably peaked. Bitcoin was a great example of this. 

Similarly, keep up to date with the latest fund and trust information by reading their factsheets, usually accessible via the investment house’s website. 

This is Money’s investing page also has links to loads of tools including share prices, fund factsheets and broker views. 

If you need some guidance on which funds to invest in, there is plenty of research and help available on investment platform websites themselves or research websites such as FundCalibre and Square Mile. 

The what’s what of investing

Shares

When you buy shares you become a partial owner of the company. The value of your investment rises or falls as the value of the company rises or falls on the market. 

It also brings a share in any profits that might be distributed through dividends. Often forgotten is that being a shareholder also brings some power and responsibilities.

As a shareholder you have a right to vote on key decisions, including directors’ pay, at the annual meeting or on particular issues like takeovers when they arise.

Funds 

When investors talk about funds they are typically referring to either unit trusts, or open-ended investment companies, Oeics. 

The idea is that as the fund invests in lots of different companies’ shares or bonds, the risk of you losing all your money is less than it would be if you were in a single company’s shares. 

Most funds will have a manager who will aim to beat the market and provide the best return for investors (although, often they do not manage to do so.) 

You buy a unit in the fund. Note, if a lot of investors start to withdraw their money from an open-ended fund, the manager can ‘gate’ the fund. This is what happened with Neil Woodford’s flagship income fund last year, and many commercial property funds earlier this year. 

Investors’ money is locked in until the manager re-opens trading. 

There is no limit on how many people can buy into an open-ended fund or the number of units, the fund just gets bigger and bigger. 

Investment trusts

Investment trusts are similar to funds in that they are run by a manager and invest in shares of other companies. 

However they are listed companies themselves with shares that trade on the stock market. Investors can buy or sell these shares to join or leave the fund, but new money outside this pool cannot be raised without formally issuing new shares.

Trusts can be considered riskier than unit trusts because their shares can trade at a premium or discount to the value of the assets they hold, known as the net asset value.

They can also raise debt to invest, which open-ended funds cannot. Investment trusts also appoint a company board, which can act as a check on the investment manager. 

Corporate bonds

Corporate bonds are used as a way of raising money for businesses – it’s essentially a certificate of debt issued by major companies.

When you buy bonds you are lending money to a company in exchange for an IOU. The IOU has a term and at maturity (typically five or ten years) the sum invested is returned in full.  

The only thing that might stop this is if the company actually goes bust. 

Once you’ve decided what you’re going to invest in, consider how you’re going to make your money work.

Jason Hollands, of investment advisers Tilney, says: ‘Hurried decisions may not be the best ones and while the sharp falls in stock markets this year present buying opportunities for those with cash to invest for the longer haul, it is understandable that many people will be feeling especially nervous about investing in the current climate when the news has been so grim.

‘Stock markets are lurching all over the place as they react to the latest news about coronavirus infection rates and actions being taken by government and central banks. 

‘Investing in drips and drabs over time can help reduce the chances of ploughing a large sum in on a day prices bounce but then subsequently subside.’ 

Stick to your knitting

There is always a huge temptation to sell an investment if it suffers a fall in value, just as it’s tempting to buy a share that is doing really well and being hyped up. 

But it’s better, once you have a system in place, to stick to it and try not to make any rash decisions, especially if there’s a market sell-off as was seen in March this year.  

This doesn’t mean it’s best to rush to invest either during sell-offs. It’s impossible to tell when the market is at its bottom, so even if you invest on what you think is a low, things might fall further.

If you really want to make the most of a market dip, drip-feeding is a more sensible approach.

It’s better to slowly feed into the market, especially now, as it will still be volatile and there will be swings. Investing your entire pot in one go could be painful if markets were to fall dramatically immediately after.

There are going to be ups and downs at all times but over the longer-term, studies highlight the benefits of being invested through market cycles. 

podcast

Joe Healey, investment research analyst at The Share Centre, adds: ‘Powers such as compounding will help build your capital over time. The earlier investors start, the more time these powers can generate healthy returns in the long term.’ 

Spread your risk 

A key thing to remember to make your portfolio as ‘recession-proof’ as possible is to be diversified. Don’t hold all your eggs in one basket by investing solely in the UK or in one industry or asset class. Even worse, in one company.

And do look at other fund structures such as investment trusts. They can be particularly beneficial when it comes to down periods as many hold ‘revenue reserves’ – which is dividend income held back in the good years to help fund payouts in the bad years.  

No investment is risk-free however, and there will be bad times as well as good times. But long-term, it’s likely your coronavirus cash will grow into a nest egg you can be proud of.  

Find a financial adviser you can trust with This is Money’s help

Whether you are investing to build your wealth, want your pension to fund the retirement you hope for, or are considering passing on an inheritance, it helps to have someone on your side with an in-depth knowledge of tax, investing and how to make financial plans.

The value in good independent financial advice is that it will continue to pay off for many years to come.

Many of our readers recognise this, but one of the things they regularly ask us for is help in finding an adviser that they can trust.

This is Money has partnered with Flying Colours Life to help people find an adviser. It specialises in financial lifestyle planning and helping people to find high quality trustworthy advice. 

Flying Colours Life’s approved advisers offer a free no-obligation consultation, so you can work out if they can help you. If you don’t feel that they are right for you, there is no pressure to see them again.

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New short-term best buy fixed-rate savings deals and cash Isas

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new short term best buy fixed rate savings deals and cash isas

More green shoots have appeared in the savings market as the recent revival in fixed-term savings rates has continued over the last week.

Challenger banks have continued to increase their rates on short-term fixed-rate deals while best buy tax-free Isas have also been launched.

Experts said the presence of Treasury-backed National Savings & Investments at the top of the best buy savings tables was driving the revival, with banks forced to increase rates to attract savers away from NS&I, which has hoovered up billions of pounds over the last few months.

There have been signs of slight green shoots in the savings market in recent weeks, with challenger banks increasing the rates they pay on fixed-rate bonds and Isas

There have been signs of slight green shoots in the savings market in recent weeks, with challenger banks increasing the rates they pay on fixed-rate bonds and Isas

There have been signs of slight green shoots in the savings market in recent weeks, with challenger banks increasing the rates they pay on fixed-rate bonds and Isas

But savers must move fast if they spot an attractive deal, with savings rates having hit record lows this year and the market still fragile due to the impact of the coronavirus on the economy and bank lending.

The best rates usually come from smaller banks and may not be around for long if large numbers of savers deposit their cash with them.

Over the last week several have increased the rates they pay on one and two-year fixed-rate bonds.

Secure Trust Bank launched a one-year bond paying 0.95 per cent on £1,000 or more on Thursday, and then upped its rate to 1.16 per cent just two days later.

This is the second-best rate available on the market, after the 1.2 per cent offered by Sharia bank QIB UK, available through savings platform Raisin. Challenger bank Oaknorth increased the rate on its one-year bond from 0.74 per cent to 1.11 per cent on Monday, edging out United Trust Bank paying 1.1 per cent.

And Charter Savings Bank increased the rate it pays on its bonds, which can be opened with £5,000, with its one-year bond paying 1.05 per cent and its two-year 1.16 per cent, the fifth and fourth-best rates available on the market, respectively.

These bonds can all be opened online, while Charter Savings Bank also accepts postal applications.

While there seems very little reason for savers to fix for longer than 24 months – with longer fixes paying no better rates than shorter deals – the recent rise in short-term fixed rates is a rare bit of good news for savers in what has otherwise been a miserable year.

‘National Savings & Investments propping up the market means some of the banks which need funding are having to break out, which forces others to follow’, James Blower, founder of The Savings Guru, said.

‘Those who need it are finding they can’t raise any serious volume being priced below NS&I so are having to pay up now.’

And although rates on fixed cash Isas continue to lag regular accounts, tax-free savers have not been left out of the recent rates revival.

Coventry Building Society launched a best buy 16-month fixed-rate Isa paying 0.77 per cent, and two and three-year Isas paying 0.85 per cent and 0.9 per cent, which require customers to fix their rate until November 2022 and 2023, respectively.

All three Isas can be opened with £1 online, by phone or by post, and accept previous years’ Isa transfers.

The moves came just a day after Charter Savings Bank upped the rate on its own two-year fixed-rate Isa, from 0.85 per cent to 0.92 per cent, the best rate in our tables. It also cut its one-year rate from 0.76 per cent to 0.71 per cent, but this is still enough to leave it in second place.

Both Isas, plus its best buy three-year fixed-rate paying 0.95 per cent, can be opened with £5,000 online, accept previous years’ transfers and savers can choose to have interest paid monthly.

However, savers should be slightly warier of fixing their Isa for longer than a year because they can earn up to 0.95 per cent interest on easy-access accounts, although many may wish to hedge against easy-access Isa rates falling further.

The top tax-free Isa is offered by Skipton Building Society and pays 0.95 per cent for six months, at which point the rate falls to 0.45 per cent. Savers can open the account online and it accepts transfers.

After Skipton, the best rate is offered by NS&I and Cynergy Bank, both of which pay 0.9 per cent, although NS&I’s Isa does not accept transfers. Both can be applied for online, while NS&I’s can also be applied for by phone, although the bank recommends savers use its website wherever possible.

But despite this, the average closed easy-access Isa pays a higher rate than the average Isa available to savers on the market, meaning savers may actually be better off sticking with their current Isa provider at the moment.

Up to £20,000 can be saved tax-free each year in an Isa.

Moneyfacts’ Rachel Springall said: ‘It is vital that savers act quickly to take advantage of the top rate deals and also to switch if they find they are earning a poor return, especially if they have their cash in an easy access account with a high street bank.

‘The next 12 months look uncertain for the savings market and any positive changes now could be fleeting. Consumers would be wise to remain vigilant and consider the more unfamiliar challenger banks if they hope to secure a lucrative return on their cash during this time.’


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How these small businesses have bounced back thanks to Britain’s bike boom

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how these small businesses have bounced back thanks to britains bike boom

While many small businesses continue to suffer at the hands of the coronavirus pandemic, those in the cycling industry have never been busier. 

A fear of catching the virus on public transport has seen a big rise in the number of people cycling, while sales of new bikes have exploded. 

Meanwhile, much quieter roads and good weather at the start of lockdown, got many people out on bikes old and new to enjoy their daily dose of exercise and fresh air. 

Recently published data from the Department for Transport revealed cycling levels rose by up to 300 per cent on some days over the lockdown period.

A fear of catching the virus on public transport has seen an increase in people using bikes

A fear of catching the virus on public transport has seen an increase in people using bikes

A fear of catching the virus on public transport has seen an increase in people using bikes

And with public transport use still discouraged where possible and the UK Government’s £2billion plan to make roads more cyclist-and pedestrian-friendly, the trend is only expected to continue.      

This has been great news for bike shops, who have reported brisk business in terms of sales, maintenance and repairs, making them some of the small businesses that have thrived in lockdown. 

But it’s not just traditional bike shops who have benefitted from the uptick in the cycling economy, so too have some accessory makers and electric bike producers. 

Catherine Ellis is co-founder of Hill & Ellis, which designs and produces ‘stylish and functional’ bags for bikes. She launched the business in 2013 and has since enjoyed an annual turnover of £70,000.  

‘It was the classic gap in the market story. I was a regular cyclist – cycling to work every day and regularly going into meetings,’ she said.

‘There was nothing on the market that worked on the bike and looked good on the arm. Everything was black PVC and ugly, and to add insult to injury they were uncomfortable to carry off the bike.’ 

Catherine Ellis is co-founder of Hill & Ellis

Catherine Ellis is co-founder of Hill & Ellis

Catherine Ellis is co-founder of Hill & Ellis

Demand for her cycling accessories dropped when the UK went into lockdown earlier this year, though luckily the brand is online-only and didn’t suffer from high overhead costs. Nevertheless, profits took a hit in the first few weeks.  

Then things started to pick back up, says Ellis. The number of cyclists started to increase among key workers and she decided to offer a 50 per cent discount to NHS workers.

After just five weeks, demand shot back up again, and to more than usual. 

Ellis added: ‘Bike shops had stayed open right from the beginning of lockdown to provide maintenance services and they had seen an upsurge in sales as more and more people turned to their bikes. 

‘So they started investing in more stock, which included our products. Our wholesale orders are up by double what they were this time last year.’

Similarly, electronic bike manufacturers Ampler Bikes, based in London, saw growth slow down when the pandemic hit but was able to adjust quickly thanks to its business model.

Ampler Bikes designs and manufactures electronic bikes and sells its products across Europe

Ampler Bikes designs and manufactures electronic bikes and sells its products across Europe

Ampler Bikes designs and manufactures electronic bikes and sells its products across Europe

Chief executive Ardo Kaurit, who founded the company alongside friends Hannes Laar and Rait Udumäe, said the business was able to survive due to its international footing.

‘Ampler was founded in Tallinn, Estonia in 2016 and we opened our first flagship store in Berlin in 2018,’ he said.

‘We built and moved into a new assembly factory in November 2019, which increased our production rate and enabled us to have all bikes fully stocked not long before the pandemic.

‘We’ve had an incredibly successful year so far, with year-over-year sales increasing 88 per cent over the first five months of 2020. This year, we are on track to double our 2019 revenues of €5.7million (£5.12million).’

Rising to the challenge

Kaurit said some of Ampler’s 70-strong workforce did find their daily jobs had changed or disappeared but that they were immediately put into new positions and nobody was let go or furloughed.

Its events team took the biggest hit with around 40 events cancelled this season, while its Berlin showroom had to close temporarily. However, Ampler found new ways to work digitally, such as launching its ‘digital test ride’ concept and putting more focus on its social media channels.  

Ellis was also lucky enough to keep her and her staff working throughout the lockdown and did not need to take any grants or loans, though she is considering a bounce back loan. 

She said: ‘It looks attractive as it has low repayment charges and could be the best way to inject some needed cash.

‘This time has allowed me to really consider the company and our product line. We had a few product ranges in the pipeline from January, which did have to be put on hold as manufacturers closed down during lockdown, but we are now working on them.

‘We are also going to add more products to accommodate different cycle styles and are looking into personalisation options to make our products more attractive as gifts.’  

Like Ampler Bikes, Hill & Ellis decided to put a stronger emphasis on its customer service and engagement. 

It offered complimentary gift wrapping and gift cards in a bid to ‘send a bit more love to everyone’ during the difficult period. 

Ellis added: ‘Customers were buying our products as presents or part of “care packages” so now I am working on more options for personalisation for that extra touch.’

L to R: Ardo Kaurit, Hannes Laar and Rait Udumäe co-founded e-bike company Ampler Bikes

L to R: Ardo Kaurit, Hannes Laar and Rait Udumäe co-founded e-bike company Ampler Bikes

L to R: Ardo Kaurit, Hannes Laar and Rait Udumäe co-founded e-bike company Ampler Bikes

The percentage of daily riders has increased from 55% to 91% when switching to an e-bike

The percentage of daily riders has increased from 55% to 91% when switching to an e-bike

The percentage of daily riders has increased from 55% to 91% when switching to an e-bike

A sustainable future

Both businesses are positive about their futures.

The uptake of cycle-to-work schemes in the UK rose a whopping 200 per cent in May, while bicycle and car parts chain Halfords saw sales jump 23 per cent three months ago.  

Kaurit is particularly excited about the future of electronic bikes, as recent research has suggested the percentage of riders who ride daily or weekly has risen from 55 per cent to 91 per cent after switching from a regular bike to an e-bike. 

He said: ‘I believe e-bikes offer an alternative for people who may not have the option of cycling unassisted, for instance the elderly or those with physical disabilities. 

‘So in this respect, e-bikes could give those individuals all the health benefits of cycling without worrying about whether they’ll be able to physically do it.  

‘We believe we are still in the beginning of the electric revolution and even though the market is already big and has grown fast, there is still plenty of room for further growth. With new brands popping up and new cycle paths opened, the sea is rising for everyone.’       

Growth opportunities are not restricted by borders either. In China, Beijing’s bike-share system grew by 150 per cent as early as March, while cycling traffic in Dundee, Scotland, rose by 94 per cent in April. Paris has also subsidised e-bike purchases, reimbursed bike repairs and created more bike parking spaces.

Hill & Ellis is working on its vegan bag range

Hill & Ellis is working on its vegan bag range

Hill & Ellis is working on its vegan bag range

Kaurit said: ‘It is great to see cities and governments encouraging cycling and more and more people starting to look into it as their main means of transport and acknowledging that cycling is great for health, budget and the environment.   

‘We are happy to hear bikes are becoming more popular in the UK, and it is reassuring to hear that the UK government is encouraging cycling and healthier modes of transport by investing in more cycleways and urban cycling routes.’

Ellis added: ‘If some good can come out of the pandemic it is this. As more people enjoy the benefits of cycling, it offers many solutions to problems such as pollution, tube overcrowding, traffic congestion, personal health and it genuinely is really enjoyable.’   

She said the UK Government’s £2billion commitment to investing in cycling infrastructure would increase the attraction of cycling as it becomes, safer, easier and quicker. 

‘Investing in green economies and encouraging green alternatives such as commuting by bike will help us protect the planet and our health for the future,’ she added. ‘Hopefully, this could be one good to come out of this.’   

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My flat has got a leak, is mouldy and the shower doesn’t work. How can I fix this?

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my flat has got a leak is mouldy and the shower doesnt work how can i fix this

I’ve been renting my flat since February 2020. It has an immersion tank which is causing a lot of problems.

The hot tap on my shower barely has any pressure so when I try to get the right temperature it becomes overpowered by the cold water and unfortunately I can’t use it. Instead, I’ve been using my parents house to bathe.

I also had a leak back in June and withheld my rent. After a month, the landlady finally came round and sorted it.

Tenants who have issues with their landlord are not advised to withhold their rent at any time

Tenants who have issues with their landlord are not advised to withhold their rent at any time

Tenants who have issues with their landlord are not advised to withhold their rent at any time

As the shower still isn’t working I have refused to pay my rent this month as well. Not to mention the place is riddled with mould and after two weeks of living here my walls were covered in mould.

What rights do I have? Do I keep withholding my rent until it is sorted?

Grace Gausden, This is Money, replies: Unfortunately you have had quite a lot of bad luck after moving into a new flat in February.

If not being able to shower isn’t bad enough, you have also had to deal with a leak and mould, which can be incredibly bad for your health if left untreated.

As such, you have withheld rent as you found your landlady wasn’t taking any steps. 

However, despite the lag in action, tenants are always advised to keep paying rent as this could lead to a potential court case if left unpaid. 

Landlord disputes are always difficult as you want to keep things civil as possible but also want to ensure that all necessary works are done.

Your landlord is responsible for most major repairs to your home if you rent privately which includes any hot water or heating repairs, such as your shower. 

When contacting your landlady, ensure you send plenty of photos and emails so you have a record of complaints.

Once the landlady is notified, remedial action should be carried out as soon as possible. However, there is currently no set timeline as to when they will need to take action.

Having mould is unpleasant but it can be difficult to know who is responsible to clear it up

Having mould is unpleasant but it can be difficult to know who is responsible to clear it up

Having mould is unpleasant but it can be difficult to know who is responsible to clear it up

You have also said that the flat is ‘riddled’ with mould which could mean it could be unfit for human habitation.

However, with damp, it isn’t always easy to work out if your landlord is responsible for resolving this issue because it can be tricky to find the exact cause of damp without the help of a surveyor, unless it’s obvious, such as a leaking roof.

In most situations they will be but they could also require you to take action such as increase ventilation in the property and ensure you dry wet clothes outside when possible.  

Check your tenancy agreement and speak to your landlord before you make significant steps to tackle the damp. 

If you still think your home’s unsafe, contact the housing department at your local council.

They will do a Housing Health and Safety Rating System assessment and must take action if they think your home has serious health and safety hazards. 

Another option is to seek help from Citizens Advice who will be able to provide more tailored solutions to your problem.  

If all else fails, you can take the issue to court. Hiring a specialist solicitor who regularly deals with landlord and tenancy law will be the best course of action to take. However, this should always be the very last option as it will be costly.  

Tenants should always read through their contract when settling a dispute with their landlord

Tenants should always read through their contract when settling a dispute with their landlord

Tenants should always read through their contract when settling a dispute with their landlord

A spokesperson for the Tenants Voice replies: The most important thing is to advise is that you have no right to withhold your rent under any circumstances.

A landlord’s repairing obligation is a continuing one during the life of a tenancy and will arise at various times, however, it is never correct for a tenant to withhold rent.

If you get to two months rent arrears that is grounds for a mandatory possession.

The landlords obligation in relation to how water is to provide adequate washing and heating facilities. Adequate is a matter of interpretation on a case by case basis.

However, if the shower is the only available washing facility then it ought to be in good working order and the water ought to be capable of being heated sufficiently.

If there is an alternative washing facility such as a bath then the landlord has no obligation to fit a shower. Poor water pressure would not be actionable if there is sufficient flow to get a shower as annoying as that would be. 

In relation to mould, that is a hazard to health under the Homes Health and Safety rating System and should be reported to the Environmental Health officer at the local council.

If the landlord continues to refuse or fail to remedy any disrepair, an action could be taken against them under Sections 11 and 9A of the Landlord and Tenant Act 1985 or Sections 79 to 82 Environmental Protection Act 1990. 

Adam French, Which? Consumer Rights Expert, replies: Damp and mould can be a common problem in rented properties. Depending on the cause and the type of mould it is usually the landlord’s responsibility to fix it, so make sure you report it.

If its the landlord’s responsibility but they don’t take action, and the mould is either causing ill health or making the home unsafe, then gather evidence including a medical letter and report it to the local environmental health department to inspect the home.

If the landlord still refuses to make repairs to ensure the home is safe then the tenant can consider using an alternative dispute resolution or seek court action as a last resort.

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