Weekly Money: round-up of the personal finance stories you may have missed 1-5 December

 

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The Independent Online

State pension rise; Overdraft charges; Phone scammers; Credit broker crackdown; Video banking; the stories we noticed this week

5 December

The basic state pension will climb 2.5 per cent in April, the government confirmed yesterday, That a single person will get an extra £2.85 a week bringing their total to £115.95 a week.

But Morten Nilsson of NOW: Pensions warned pre-retirement savers that regular rises in the state pension shouldn’t lull them into a false sense of security.

“Research we recently conducted with 100 cross-party MPs revealed nearly one in six think the state pension will be extinct in 30 years’ time or if there is one, it will be at a considerably lower level.”

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New bank Hampshire Trust has launched a range of savings deals. It has a 120-day notice account paying 1.75 per cent, an 18-month Loyalty Bond at 2 per cent and a 30-month Loyalty Bond at 2.35 per cent. To apply you’ll need to download an application form from www.htb.co.uk

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The changes to tax-free Isas announced in yesterday’s Autumn Statement could lead to a resurgence of the Isa millionaire, reckons Maike Currie of Fidelity. “It is worth remembering there is no is no cap on how large your Isa investments can grow,” she pointed out.

“In contrast, there is a lifetime limit to how much you can shelter in a pension – for the current tax year this stands at £1.25m across all your pensions,” she pointed out.

The new rules mean that the tax-free Isa allowance can now effectively be passed on when someone dies.

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Newcastle Building Society is offering fee-free fixed rate mortgages as long as you have a 20 per cent deposit. Interest charges start from 2.49 per cent for a two year deal which has no early-repayment charges.

4 December

One in 12 current account customers have been hit by unauthorised overdraft charges, reckons ThinkMoney. Charges for bounced direct debits, bounced cheques or unpaid standing orders can be up to £25 a time, so can quickly add up. Ian Williams, of ThinkMoney, said: “They may only account for a small percentage of customers, but those paying for bounced payments and unauthorised overdrafts shoulder a heavy burden of bank charges.”

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Watch out for fakes when buying Christmas presents, the Trading Standards Institute has warned.  While a cheap deal on a must-have gift may seem attractive, it can have frightening consequences, such as toxic parts or ingredients that can cause illness or worse.

Dodgy imports aimed at Christmas shoppers have already started coming in with a huge single haul of more than 170,000 fake and substandard toys and Christmas lights intercepted by Customs at Dover last month.

Phil Buckle, of Electrical Safety First, warned: “With half of all house fires caused by faulty electrical goods, buying a knock-off product can be a cost too high to pay.”

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More than two thirds of grandparents are providing childcare for their grandchildren, reckons insurer RIAS. They save Britain’s parents £17bn annually in childcare costs.

Grandparents in the North-west are the most likely to provide childcare, with three-quarters looking after their grandchildren. They also put the most hours in, averaging 12 hours per week, according to the research.

Peter Corfield, of RIAS, said: “Grandparents are not only contributing their time but often their savings too. It can be up to 18 per cent of a state pension.”

3 December

Energy companies are sitting on £1.5bn from overpaid bills, reckons Gocompare. Its research suggests three out of five households are in credit with their gas and electricity suppliers while £96 is the average amount overpaid on utility bills.

“Energy companies are obliged to refund overpayments whenever their customers request them to,” pointed out Jeremy Cryer of Gocompare.

“However, for them to consider your request you’ll need to provide an up-to-date meter reading. If the refund is withheld, the supplier must explain why and you can challenge the decision.”

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Stronger protections for up to 3.5 million leaseholders have been announced by the Competition and Markets Authority. The move follows complaints from leaseholders about poor quality service or being forced to pay high, volatile and unnecessary charges on their property.

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There was an alarming threefold rise to £23.9m in the amount of money lost to phone scammers last year. The scams centre around fraudsters tricking victims into believing they are speaking to a police officer or bank staff.

Fraudsters then try to get people to reveal passwords or hand over cash or plastic to someone they say is a courier who will hold it for safekeeping.

DCI Perry Stokes of the cheque and plastic crime unit, said: “the police will never ask you to hand over your card or cash.”

2 December

Credit brokers which charge an upfront fee for passing hard-up borrowers to payday lenders and others will face strict new rules from January. The Financial Conduct Authority announced the tough new regime yesterday bypassing its standard consultation period for the credit broking industry on fears of “further detriment” to consumers.

From next year the firms will have to stop taking fees without permission and explain to consumers that they are not lenders but just loan arrangers.

Mike O’Connor, chief executive of StepChange debt charity said: “This will help fix a serious problem with the consumer credit market. For too long unscrupulous credit brokers have subjected borrowers to poor practices, including misleading people as to whether they are a lender or a broker, taking fees that people are unaware of, and passing on their details to other firms and lenders.”

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The future looks bleak for the state pension, if the opinions of MPs matter. Research published ahead of tomorrow’s Autumn Statement when George Osborne is expected to announce further changes to the pension system, reveals that nearly one in six MPs don’t expect there to be a state pension 30 years from now. Even if there is one, it will be at a much lower level, the MPs reckon.

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Shoppers planning to buy Christmas gifts through the internet have been reminded of their rights by Citizens Advice. Distance-selling rules protect online shoppers from being stung by hidden costs, late delivery and rip-off charges. It means you can cancel an online order or return goods within 14 days to get a full refund, including on delivery costs. Check your online shopping rights at Adviceguide.org.uk

1 December

Do you see eye-to-eye with your bank? Barclays customers will be able to do just that from next Monday, 8 December, when it introduces video banking.

The service will be available 24 hours a day from smartphones, tablets or computers. It will be available just to customers of its Premier account to begin with, but then rolled out to its mortgage, business and wealth customers from early 2015.

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The government has been urged to introduce additional emergency funding for heating and insulation measures in Wednesday's Autumn Statement to help reduce the thousands of vulnerable people who will die of cold-related illnesses this winter.

The call has come from a group of charities and fuel poverty organisations including National Energy Action. Its chief executive Jenny Saunders said: “I urge the Chancellor to release some of the billions of pounds that have gone into the Treasury this year from taxes and levies imposed on energy consumers.”

Age UK last week reported that one older person will die every seven minutes from cold weather this winter.

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Hunger is rife among those struggling with crisis personal debt, according to debt charity Christians Against Poverty.

It found that before they received help, 67 per cent of people had been skipping meals – a figure that climbed to 78 per cent among lone parents.

CAP’s chief executive Matt Barlow said: “When debts spiral and stress escalates, people often end up paying the company that shouts the loudest. This can mean they leave themselves short of money for food.“

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More than four in five British adults think tax avoidance by large companies is morally wrong even if it’s legal, according to a new ComRes poll for Christian Aid and ActionAid.

The poll is published today ahead of the government’s Autumn Statement, which is expected to include new measures against tax avoidance, including a so-called ‘Google tax’.

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