Money News: Consumers face deluge of water price rises
Sunday 26 February 2006
Water bills are to rise by as much as 9.4 per cent in England and Wales from April, Ofwat, the industry watchdog, said last week.
Customers face different bill increases depending on their company.
The most expensive is South West Water, with prices hiked by 9.4 per cent, an average of £39 a year more. Wessex Water will go up by 7 per cent, £22 extra; and Yorkshire Water by 6.7 per cent, £18.
At the lower end, Anglian Water bills will rise by 2 per cent.
The increases come as other household utility bills feel the pinch of the big price hikes from energy companies including British Gas and EDF Energy.
Ofwat said the changes were needed to meet the rising costs of getting safe, clean drinking water to homes. "They are unwelcome but the bills are going up by no more than necessary," said Philip Fletcher, Ofwat's director-general of water services.
The increases were in line with price limits set by the regulator in December 2004, he stressed.
In contrast to other utilities, consumers can't swap one water supplier for another as the infrastructure isn't there to switch.
Those unhappy at the price hikes could consider installing a meter charging only for the water used.
Banking: Branch closures hit poor areas
Britain's most deprived communities have suffered the highest proportion of bank and building society branch closures, according to a report from Nottingham University.
Between 1995 and 2003, inner-city areas and traditional manufacturing towns lost the most branches, while affluent "Middle England" - suburbs, small towns and countryside areas - lost the least.
During this eight-year period, a total of 4,041 branches closed in Britain (1,074 opened). Poorer areas bore the brunt, said the report's author, Professor Andrew Leyshon, largely because the low incomes and savings of local customers made the branches less profitable.
With-profits: Pru policies meet their targets
The troubled with-profits industry had some rare good news last week when Prudential unveiled a boost for policyholders.
Following 20 per cent growth in its £83bn with-profits fund in 2005, it unveiled payouts on maturing policies as much as 18 per cent up on the previous year.
In particular, the firm said, all customers with Pru mortgage endowments maturing this year will hit the target for clearing their home loan - and the average surplus above the target sum assured will be £3,300.
Meanwhile, annual bonus rates on all with-profits policies are to be kept at the same level.
All this is in marked contrast to the bonus cuts and endowment shortfalls at many other providers.
The Pru's success is largely down to its decision to increase the size of the with-profits fund's weighting in equities.
The percentage invested in shares was raised last year from 48 to 59 per cent - allowing the fund to benefit from the jump in UK stock markets.
Other large life firms, such as Standard Life and Norwich Union, have kept a much higher proportion of their funds in safer assets such as bonds.
Ned Cazalet, an insurance analyst, called the Pru's with-profits performance "head and shoulders above everybody else".
Financial advice: Savers turn away from commission
Savers who use independent financial advisers increasingly prefer to pay a fee upfront rather than receive free guidance and see IFAs remunerated in commission from the finance firms whose products they recommend.
The proportion of consumers who favour a one-off fee for advice on investments, pensions and protection products has risen from 12 to 18 per cent during the past six months, reports the Association of IFAs.
The AIFA's findings are the result of a survey that set out to track consumer behaviour in the wake of changes, made last year, to the way that independent financial advice is paid for.
Anyone wishing to call themselves an IFA must now offer a choice of payment: fees or commission.
Fees that can be as high as £150 an hour have been introduced in a bid to inject choice and greater transparency into the industry.
Many consumers remain suspicious of commission payments, wondering if IFAs choose products that suit their bank account rather than their customers' needs.
When fees are paid, commission usually given by a financial services company to the IFA is rebated to the consumer and reinvested.
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