Bean is being acquired by BGL Group

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Today we’re excited to announce a new chapter in Bean’s story, and a new chapter for the story of the future of personal finance.

Subject to regulatory approval, Bean is being acquired by BGL Group, a leading digital distributor of insurance and household financial services, and owner of brands including and life insurance provider Beagle Street.

We started Bean over 2 years ago with a simple vision to help people sleep safe in the confidence that they aren’t wasting their hard earned cash. More than £600 millions of pounds of tracked spending later, Bean is used by everyone from families saving a bit of extra cash for their next holiday to students trying to get a grip on their spending for the first time. We’ve ‘bean’ humbled and excited to see the number of use cases for Bean across the country, and we build the product each day proudly knowing we’re helping people save money.

What Happens Next

We’re excited about partnering with BGL Group because we both share a philosophy of empowering people to take control of their finances in a simple way, so they can enjoy their lives. As part of BGL Group, Bean will be able to leverage investments in R&D that will enhance the product in meaningful ways, as well as leverage Bean’s technology across BGL to help make life simpler for consumers in more ways.

In short: once the deal is approved, you can expect Bean to become even more awesome and useful than it is today. We’re as committed to our original vision as we were on launch day but we now have more firepower to fulfil that mission.

Thank you to all the Bean users out there who have helped make Bean what it is today. Without you, we’d all still be stuck with piles of paperwork everywhere. We hope you are as excited as we are about our journey ahead.

Everything you need to know about paying off your student loan

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Student loan interest rates have jumped to a staggering 6.1% this year, leading to students from England graduating with an average debt of £50,000. Should this make you worried? Let’s crunch the numbers and see.

Why so much, you ask?

The simple answer: Brexit. Since the referendum results in June 2016, sterling has fallen by a substantial 17%. The weakening pound has driven inflation to reach a 4 year high, with the Retail Price Index (RPI) now standing at 3.1%. This results in the increase you see in student loan interest. Brexit has caused a rippling effect throughout the economy and graduates will now start to feel the effect.

Should we be worried?

At first, this may seem like very bad news for graduates but there is more to it than meets the eye. There are four main policies that should shape the way we think about student loans:

  • You don’t have to begin paying off your loan until you earn over £21,000;
  • You only have to pay 9% of your earnings over £21,000;
  • After 30 years, your remaining loan balance is written off; and
  • Student debt does not affect your credit score.

What does that mean for us?

Let’s assume the average UK graduate will start on a salary of £25,000 with a salary growth of 2.5%. Following this progression, we expect that 30 years into the graduate’s professional career, they would be earning around £50,000.

So, given the second policy, that graduate would only have to pay around £360 in their first professional year. Their annual payment would increase to around £920 in year 10 and would continue to climb throughout their career to reach £2,700 in year 30. By contributing the mandatory 9% each year, even with the increase, a graduate would be looking at a total payment of £42,000 before their debt was written off completely.

The graph below compares the debt that the average UK graduate will accrue over 30 years, to the amount they will have to pay back. As you can see the debt increases faster than the payments, with the difference between these two lines representing the remaining balance the student still owes.

So, what should we do?

If you think these statistics are worrying, then you’re not alone. But how much can we really do about it? Well, the answer is the third student loan policy. So, do we just let debt accrue for the majority of our professional life? To the average person, the answer to that question is yes. The data shows that even if the average person earned a stable salary over those 30 years, they would still have accrued around £200,000 in debt.

Paying back more than the minimums won’t help you either. To put that into context; if you decided every year to pay 5 times as much as you have too, you will only pay your loan off in year 21. If you decided to pay 10 times as much, then you would still be paying your loan off until year 12. There is also the option of paying your whole loan off straight away, but who has £50,000 just lying around?

If you are the type of person who feels that their loan is holding them down, then feel free to pay more off. However, you must ask yourself if the added payments will result in your loan being paid off completely before year 30. If they don’t, then that money will have had no effect. In year 30 your debt will be written off, be that a £2,000 debt or a £200,000 debt. A crucial point to be made is lying in that final clause: student debt does not affect your credit score. So, while you may choose to pay it off early, you will not be penalised if you can only contribute the minimum mandatory payments each year.

If the psychological effect of debt is too much for you and if you happen to be in the fortunate situation where you can afford to pay the loan off instantly, should you? We can’t speak for every person’s situation but if you are able to and wish to rid yourself of debt early then paying it off as soon as possible is your best bet. That way you can be debt free without racking up additional debt with the yearly interest.

Whether your concern is becoming debt free as soon as possible or minimising long-term costs, the higher interest rates (as scary as they sound at first) will have a much smaller impact than many believe. Regardless of your situation and financial goals, Bean will continue to provide helpful information and resources for achieving them.

Please note that this article is based on the four student loan policies that are currently in place, with principle three and four being the main driving factors of these conclusions. Policies are subject to change and this must be noted before any student loan decisions are made.

Whether you’re looking to pay off more of your loan or are saving for something else 
Bean can help you achieve your goals. Join for free now and see every bill and subscription in one easy to manage place.  So you can save, without sacrificing the things that really matter to you. Find out more now.

Why 2017 is going to be a difficult financial year.

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The price of the things we buy in the UK is going up faster than how much we are paid for the first time since 2013. There are, however, some things you can do about it.

What is going on?
Are you feeling like your bank balance doesn’t stretch as far anymore, despite pay rises? It looks like we are all in for a tough year financially in 2017, according to the Bank of England. In the Bank’s latest inflation report, it has been forecasted that wages will increase by 2% on average across the UK. However, the average price of the things we buy is expected to increase by 2.8% over the same period. Even if you weren’t top of your maths class at school, you will recognise that this means that our wages will not go as far as they used to.

Welcome to Bean

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What is Bean, you ask?

Good question. We’re your new personal financial assistant… Hi!

We believe that there’s no reason for personal finance to be so difficult. In this day and age, no one should struggle to get enough information to effectively manage their money. Sure, if you have loads of it already then there’s a queue of people who will happily help you spend it. However, most people don’t fall into that category. We know we don’t.

So, we’re building something different, something for the rest of us, something that’s going to help keep your money in your pocket and make your life that bit easier. (more…)