Weekly Money: round-up of the personal finance stories you may have missed 10-14 November

 

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The Independent Online

Overcharging on energy bills; payday lenders charge capped; Barclays’ savers warning; new credit card deals; cheap Eurostar trips; the stories we noticed this week.

14 November

It’s time to check that you haven’t been paying over the odds for gas or electricity as a new report published today shows that more than three million of us have been overcharged in the last year by energy suppliers through billing cock-ups.

The mistakes have cost us £78 each or a total of £280m, reckons uSwitch. The company names Scottish Power as the worst of the big six providers for energy bill mistakes, with 16 per cent of their customers getting an incorrect bill in the last year.

While E.on and EDF Energy make the least number of errors, up to 8 per cent of their customers said they had been affected by errors.

Tom Lyon, energy expert at uSwitch said: “It’s unacceptable that customers are picking up the cost of suppliers’ mistakes. Households are already facing sky-high energy bills and simply can’t afford simple blunders.

“Correct bills are essential for people to stay in control of their energy and are the least customers should expect. Recent upgrades by some of the big six to billing systems have resulted in teething problems, but the industry must do more to tackle these issues and reduce errors.”

* * *

People eligible for the £140 Warm Home Discount should apply now before schemes start to close.

The discount is available from the largest energy suppliers. To qualify you must have been getting the Guarantee Credit element of pension credit on 14 July this year.

Customers who are not sure whether they are entitled to help should contact the Home Heat Helpline 0800 33 66 99 today to make sure they do not miss out on help to which they are entitled this winter.

The discount is paid on top of Winter Fuel Payment or Cold Weather Payment to vulnerable people.

13 November

Two fifths of us think money is one of our biggest stresses, yet almost half refuse to talk about it. Because of this social taboo, people are failing to plan for their financial future, and having to cope with money worries on their own, warns Legal & General.

The insurer’s chief executive John Pollock said: “Taking the time and having the confidence to talk about financial planning is hugely important – not just for financial reasons but for our wellbeing too.”

Consumer finance champion Annie Shaw, said: “Talking about money doesn’t need to be a taboo. A conversation with someone who can explain the facts in plain English can go a long way to help people understand their finances and plan for the future.”

* * *

To celebrate its 20th year anniversary Eurostar is offering return fares from just £59 return to Paris, Brussels, Lille or Calais in Standard class.

The sale of tickets for travel between 5 January and 12 February 2015 starts today and runs until 24 November.

Meanwhile passengers travelling to Paris, Brussels and Lille can take advantage of 2 for 1 entry into museums and galleries including Musée d’Orsay in Paris, Bozar in Brussels, and Le Palais des Beaux-Arts, by showing their Eurostar tickets at entry.

To book tickets visit www.eurostar.com or call 08432 186 186.

* * *

The Co-operative Bank has launched a three year fixed rate credit card that, pleasingly, has no annual or balance transfer fees.

The interest rate charged is 6.9 per cent APR on all purchases and balance transfers, That’s not the lowest on the market but it stays the same for the next three years, giving borrowers certainty of knowing the cost.

12 November

One in three older people are worried about whether they’ll be able to afford to heat their home this winter.

A new report published today by Age UK outlines the shocking human cost and suffering the fuel poverty crisis is causing.

Each winter, one older person dies every seven minutes from cold weather, and excess winter death rates and illness are highest among those living in the coldest homes.

Yet with just under one million older people living in fuel poverty, many cannot afford to heat their homes to a sufficient temperature in order to keep warm and well, the charity warns.

“No older person should worry that they could die from the cold in their own home,” said Caroline Abrahams of Age UK.

“Fuel poverty is a national scandal which has claimed the lives of too many people for far too long and left many more suffering from preventable illness. We want a permanent solution and we believe it is within our grasp, if there is the necessary imagination and political will.”

The charity is calling on authorities to launch a programme to improve Britain’s ageing housing stock. Its Campaign for Warm Homes is calling on the Government to commit to upgrading all homes to meet higher energy efficient standards.

“We realise a national infrastructure project of this scale would require major investment; but not only would it reduce illness and deaths among older people, it would also cut associated costs to the NHS, create jobs and growth and help future generations,” said Ms Abrahams.

***

High street payday lenders could disappear next year after a new price cap on the industry was set by the Financial Conduct Authority. From January interest rates will be capped at a daily rate of 0.8 per cent of the amount borrowed, while default fees will be limited to £15.

Meanwhile, the total cost of borrowing will be capped at no more than 100 per cent of the loan, ie twice the amount that was originally borrowed. The FCA’s chief executive, Martin Wheatley, suggested the caps could reduce the total number of payday lenders to as few as four, while there could be none operating on the high street by the end of 2015.

John Gathergood of the Nottingham School of Economics, pointed out that high street lenders have higher costs. “The capped price is likely to be too low to keep them profitable. It’s therefore possible some well-known names will vanish.”

But the move could open the door to a new wave of overseas firms, warned Richard Scrivener, a regulatory consultant at Bovill. “There is strong evidence to suggest that, with the new price cap established, international subprime lenders will enter the UK market.

“Larger players are already adjusting their business models and the space cleared by the demise of some of the fringe players will create an attractive market.”

The price cap plan has not changed from proposals that the regulator published in July. The FCA said someone taking out a loan for 30 days, and repaying on time, would not pay more than £24 in fees and interest for each £100 borrowed.

“For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts,” Mr Wheatley said. “For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections.”

11 November

Savers with Barclays Bank should check their accounts. The bank is scrapping 20 old accounts and moving everyone into its Everyday Savings accounts.

The move, which will take effect from February, will hit around 480,000 savers. But while some with poor paying accounts - such as the 60 Day Savings which pays 0.1 per cent - will end up better off for a while, others will end up with less interest.

For instance those with £2,500 or less in the 50 Day Notice account will see their rate fall from 1.24 per cent to 0.1 per cent, once a 12 month 0.21 per cent bonus ends.

The bank is writing to all customers about the changes but you can find out if your account is being hit at Barclays.co.uk/instantsavingschanges

* * *

Lloyds has launched a low-rate credit card, with no annual fees and no transfer balance fee for the first 90 days. The Lloyds Bank Low Interest Rate card charges 6.45 per cent or purchases and balance transfers.

Based on a balance transfer of £3,000 from a typical card charging 18.9 per cent, Lloyds reckons customers would be £296 better off with its new yeal over three years.

“It’s a change to see competition in this sector of the market rather than focussing on the zero per cent balance deals which are already saturated,” said Andrew Hagger of Moneycomms.

But he said anyone attracted by the low-rate could do better with an MBNA at 6.6 per cent but which allows transfer of personal loans and overdrafts, unlike the Lloyds card.

* * *

KFC has launched a mobile voucher campaign for the first time with Vouchercloud. The deal offers £1 off the new pulled chicken range. Details at vouchercloud.com.

10 November

Three million households living in rented accommodation believe that they will never get a foot on the property ladder, a study by Aviva published today warns.

While 15 per cent of renters say they are saving for a deposit with plans to buy a house, the research reveals their dreams may be some way off with one in five of the would-be-homeowners having been saving while in rented accommodation for more than 10 years.

However, some 28 per cent said they wouldn’t want to own their home because they were happy renting.

* * *

More than three-fifths of us now own a credit card and many claim to do so because of the benefits.

One in three chose a credit card based on the rewards it offers while 17 per cent were attracted by an introductory offer on balance transfers, the Halifax says.

* * *

Only one in 50 people knows how their income compares with the rest of the country’s, according to tonight’s Channel 4 show How Rich Are You. Two-thirds underestimated their income compared to the rest of the country by more than 10 per cent, while only 7 per cent over-estimated.

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