Weekly Money

Round-up of the personal finance stories you may have missed 23 to 27 March

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The Independent Online

Pension dangers; how to get a better bank account; BT’s new SIM-only deal: zero inflation is good for savers; Child Trust Fund warning; £100cap on stolen mobiles; the stories we noticed this week

 

27 March

The new pension freedoms will bring new pension dangers, warns a pension expert. “With the new freedoms will come an army of people looking to take advantage of you and steal your money,” says Fidelity’s Alan Higham. Some five million people will be targeted by crooks, he predicts. They are those aged 55 or over who have yet to touch their pension pots and who will be allowed to do what they want with their retirement savings from 6 April.

How will the fraudsters work? “You’ll be getting text messages, cold calls or emails offering, maybe, a pension review,” Alan explains. “But you should ignore spam texts or cold calls and go to the government’s Pension Wise service.” There’s more advice from Alan, who also explains how you can avoid losing a lot of your pension cash to the tax authorities, in a new video.

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Letting agents’ fees should be banned to protect tenants in the private rental sector. The call comes from Citizens Advice today after the charity’s evidence revealed that tenants are frequently ripped-off by fees hidden by letting agents.

It’s a sizable sum - £337 on average - and the hidden charges come on top of advertised rent prices and deposits. As such they can force some people into debt, the charity warns.

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Younger people have lower expectations of owning their own home than their parents, reckons LV. Its research suggests that people in their 20s and 30s will own half as many houses over their lifetime than their parents as renting has become the only option for a large proportion of the population.

26 March

From today you’ll be able to find out which current account is best for you. A new comparison service from GoCompare backed by the Treasury looks at your own personal banking history to work out which account will save or make you the most money.

It takes into account fees, charges, interest rates and reward schemes linked to each account and compares your statements over the past 12 months to come up with a personalised list of the best accounts available.

Economic Secretary to the Treasury Andrea Leadsom said the new service “could transform the current account market. It will help customers understand how they are spending their money and whether they can get the best deal.”

The comparison tool has been developed as part of the government’s midata initiative, which aims to give consumers greater control over the electronic data that companies hold about them.

Matt Sanders of Gocompare said: “By making use of midata we can enable our customers to use their actual current account data to help them find what’s really right for them.”

From today the service is available at Gocompare.com to customers of the big five banks – Barclays, HSBC, Lloyds, RBS and Santander – and Nationwide building society.

* * *

BT has returned to the mobile phone market with deals from as little as a fiver a month. The telecomms giant is offering SIM-only bundles of 4G data, minutes and texts from £5 a month for its existing BT Broadband homes.

The company - which is currently in the process of merging with mobile firm EE - says the new 12-month contract deals are aimed at customers who might want to keep their existing phone but add a bundle of 4G data, minutes and texts.

Ernest Doku, telecoms expert at uSwitch.com, said:  “After a long time away, BT is throwing its hat back in the mobile ring with an incredibly competitive set of SIM-only tariffs - provided you’re an existing customer. They get a deal that plants BT firmly ahead of TalkTalk and Virgin from just £5 for 500MB of 4G data.”

There’s also a large 4G data offer of 2GB, with unlimited texts and 500 minutes for £12 a month.

 

25 March

The inflation rate falling to zero is good news for savers: it means every savings account that pays interest is beating inflation, which means your money is growing in real terms.

However you would need to have £151,515 in an average easy access account, £71,429 in an average one-year bond or £41,494 in an average five-year bond to earn more than £1,000 interest per year, reckons Moneyfacts.

The top paying easy access account - at 1.5 per cent - comes from Kent Reliance, while the top-paying one-year bond is from Al Rayan Bank, at 1.9 per cent. The top paying five-year bond comes from AgriBank, with a rate of 3.53 per cent.

 

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Families who rent for life end up more than half a million pounds worse off than those who have help from family to buy a home in their twenties, reckons Shelter.

The housing charity warns that people frozen out of owning their own home can end up having less stability in their finances, careers and relationships.

Campbell Robb of Shelter said: “The failure to build the affordable homes we need means that, for the first time in over half a century, millions of young people today face worse prospects than their parents.”

 

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High-cost lender SmartPig has been slammed for an irresponsible ad targeting students. The Advertising Standards Authority has banned the ad which connected taking a short-term loan and drinking alcohol.

 

24 March

Be wary of dodgy pension scams, the City watchdog has warned. With the new pension freedoms coming in on 6 April the Financial Conduct Authority says people need to watch out for scammers trying to trick you into investing your retirement savings into questionable schemes.

Scammers tend to ring out of the blue, so don’t listen to cold callers, the FCA advises. Chief executive Martin Wheatley says: “If you get cold-called about an investment opportunity, hang up. People need to be aware of the dangers of scammers offering opportunities that are too good to be true.”

Research by Old Mutual suggests that some 15 per cent of over-55s have been targeted by cold callers offering a “pension review” in the last year. “The new pension freedoms will signal open season for scammers,” warned Adrian Walker at the firm.

 

***

Do you know any children with Child Trust Funds? These were the tax-free savings schemes set up by the Government to help give kids a start in life. Children were handed £250 at birth in the hope that parents and grandparents would then contribute to the funds to give kids a nest-egg when they reached 18.

But the current Coalition government scrapped them when they were elected in 2010, which has meant many have remained dormant and, possibly forgotten.

New research from Scottish Friendly suggests that one in four has had no other contributions since the initial government handout, which amounts to 1.5 million zombie funds.

But new rules will allow parents to transfer the cash out of a Child Trust Fund and into a Junior Isa, which should be much more flexible. “It’s never too late for parents to take back control and make a positive impact on their child’s nest egg,” says Calum Bennie of Scottish Friendly. “Taking positive action now could have a significant impact on the final sum a child will receive when they turn 18.”

Lost Child Trust Funds can be tracked down

 

23 March

The Government and the five main phone providers - EE, O2, Three, Virgin Media and Vodafone - yesterday announced caps of £100 on bills from stolen mobiles as long as the phone is reported lost or stolen within 24 hours of going missing. It’s about time, said Citizens Advice and will be “much-needed relief” to many victims of crime caught out by phone fraudsters.

The charity wants mobile phone companies to look at compensating those who have lost out since the cap was originally due to be in place in spring 2014, as well as those who may be hit by these bills before the caps take effect later this year.

Gillian Guy of Citizens Advice, said: “We will be keeping a close eye on the phone providers’ caps to see if they do really protect phone crime victims from the worst bills.”

 

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Investors shouldn’t get too excited about the Footsie passing the 7000 mark, as it did on Friday. “Nothing has changed,” pointed out Laith Khalaf of Hargreaves Lansdown. “The UK stock market still looks close to fair value when you factor in company profits, and that represents a relatively attractive proposition when you consider bonds look expensive, and cash is returning next to nothing.

“In the short term no-one knows which direction the FTSE will turn from here, and the UK election may start to make some waves in the very near future.”

 

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Car buyers expect to pay less for a new motor in the coming weeks, says Sainsbury’s Bank. Around a quarter of people are thinking of buying a new or used car before August, its survey suggests. Those buying new expect to pay an average of £14,831, some 7 per cent less than buyers expected to pay in the last six months.

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