This week: insurers slammed for misleading consumers; Energy suppliers are inflating direct debits; the pros and cons of 10 year mortgages; Pensioner Bonds deadline
Insurers slammed for misleading consumers on pricing
Insurance companies have been accused of not telling us about the cheapest way to pay for cover. The Financial Conduct Authority warned that car and home insurers and brokers don’t always make it clear that paying monthly costs more. That’s because you’re effectively paying interest on the amount outstanding if you don’t pay the year’s premiums upfront.
Linda Woodall, acting director of supervision at the FCA said: “Consumers should expect clear information about the payment options available to them. Regardless of whether people choose to pay upfront or in instalments, it’s important that they can see exactly what they are signing up for and how much it costs so they can decide whether they are getting a fair deal.”
Energy suppliers are inflating direct debits to take account of winter underpayments
Could you be being overcharged by your gas and electricity supplier? Check any increase in your direct debit payments to see whether they reflect your actual usage. If not, my advice is to complain.
Readers report of increases of more than 60 per cent. But as they come in at a time when the weather is getting warmer, you’re almost certainly going to end up overpaying – effectively handing cash to your energy supplier.
Should you be fixing your mortgage for the next decade?
Borrowing for a decade has hardly ever been cheaper with rates on offer below 3 per cent. But is it a good idea to lock yourself into a loan for such a sustained period? Or would you be better off switching to a shorter-term deal?
The advantage of fixed-rate mortgages is knowing how much monthly repayments will be for some time into the future. In theory, that means you will be able to rest reassured that your mortgage will be affordable for the length of your fixed deal.
In practice, it could mean paying more than you need to if the rate at which you fix remains higher than standard rates for any length of time.
Deadline to snap up Pensioner Bonds is Friday
You have just a few days to snap up one of the high-paying 65-Plus Guaranteed Growth Bonds. The government-backed savings accounts pay up to 4 per cent if you lock your cash away for three years and 2.8 per cent if you choose a one-year bond.
The deadline for buying is Friday, 15 May, and they will be available on that date until 11.59pm online at nsandi.com or over the phone at 0500 500 000.