Weekly Money: Round-up of the personal finance stories you may have missed 13-17 October

 

Simon Read
Friday 17 October 2014 10:38
Comments

Struggling millennials, soaring energy bills, stock market woes, financial education for kids, and warnings of bank scams: the stories we noticed this week.

17 October

Young adults struggling with money are more likely to turn to risky options such as a payday lender than other types of credit, warns debt charity Citizens Advice.

Its research among 17- to 24-year-olds with severe money problems revealed that more than 15 per cent of the debt woes started with young adults taking out a high-cost loan. Payday loans accounted for 62 per cent of the high-interest credit used by under-25s. Less well-known types of high-interest credit, such as guarantor loans and logbook loans, are also a cause of people falling into serious debt, the charity says.

* * *

Good news for landlords: rents have edged to a new all-time record high of £768 per month. However, that’s an increase of just 1.2 per cent over the year, according to the latest Buy-to-Let Index published today by Your Move and Reeds Rains.

But the news angered Campbell Robb, Shelter’s chief executive. He said: “Once again, England’s nine million renters are paying a steep price for our broken housing market.

“The severe shortage of affordable homes is forcing more people into expensive and unstable private renting, leaving many struggling to make ends meet and with little hope of putting down roots.”

* * *

The consumer group’s analysis shows yearly spend on energy has rocketed by 52 per cent, over and above inflation, from £790 in 2003/04 (adjusted for 2012 prices) to £1,200 in 2012. Meanwhile the energy we use has dropped by 17 per cent.

Which? executive director, Richard Lloyd, said: “It is shocking that people are paying more despite using less.”

16 October

More of us are getting into the habit of switching current accounts, according to the latest figures published by the Payments Council. Some 1.2m have moved banks in the 12 months since they introduced seven day switching, a rise of 22 per cent.

Winners to date are the Halifax and Santander which have recorded the most net gains, although all banks have won and lost customers. NatWest lost the most, closely followed by Barclays.

* * *

Stay calm and sit out the current stock market volatility, is the advice of an investment expert.

“Too many people make investment decisions based on short-term performance or sentiment, meaning they often buy at the top of the market when sentiment is positive and sell at the bottom when it is negative,” warns Patrick Connolly of Chase de Vere.

Yesterday, after a week of losses on the back of dropping oil prices, the Footsie slumped 2.8 per cent to a 15-month low, a fall of 181.04 points. “But brave investors may see the recent stock market falls as an opportunity to buy,” says Connolly.

Dominic Rossi of Fidelity Worldwide Investment, added: “In terms of the longer-term market cycle, we remain in a bull market which I think has another couple of years to run. The economy and market is mid-cycle and a mid-cycle correction offers an opportunity for investors to get into the market at reduced valuations.”

* * *

If you can haggle, you can get massive discounts on a new car, reckons What Car?. The magazine’s mystery shoppers managed to negotiate a discount of 31 per cent - a saving of £18, 650 - off the price of a BMW 7 Series.

The reason for the huge discount? It’s because the BMW 7 Series is about to be replaced by a newer model.

15 October

Great news: more than 6,000 people have had money returned to them through a nationwide crackdown on prize draw mail scams. It was launched in June by National Trading Standards and Royal Mail to return seized responses to mail scams before the money reaches the hands of scammers.

They target the elderly and other vulnerable people, who are less likely to realise that the mail is a scam. So far more than £108,000 has been returned to victims and a further 4,000 replies to suspected scam mail are currently being assessed.

* * *

When should financial education begin for kids? Maike Currie of Fidelity Personal Investing reckons it should start at seven. “By then most children have grasped the value of money and to count it out,” she told me in an interview.

Not everyone agrees that children should be taught about the value of money from an early age. Do you? You can see the video of the interview where we discuss the issues at http://ind.pn/1yyrAap.

* * *

Consumers have voted energy bills the most difficult to understand for a third year running, despite new rules designed to make them clearer.

Some 14 per cent said they do not understand energy bills, putting the companies at the bottom of a table compiled by uSwitch behind mortgage providers, credit and store cards and mobile phone networks. Ofgem told suppliers to improve the clarity of bills in April.

14 October

Rip-off extended warranties could soon be a thing of the past. Online retailer Co-operative Electrical has today cut the price of the cover and promised to sell policies at cost.

The move means a typical five year warranty – which is essentially long-term insurance for a cooker or TV – will cost just £80, rather than hundreds of pounds.

The warranties are sold through retailers and often cost as much as the item that they cover. A five-year extended warranty on a £400 washing machine, for instance, can cost £390 with a typical example costing £6.50 a month.

James Holland of Co-operative Electrical said: “We believe that this market should represent real value, particularly when you compare the price of the warranty with the actual price of the electrical product. In most cases it is just far too expensive.”

* * *

Millions are at risk from fraudsters posing as banks, worrying new research shows. The British Bankers’ Association tested what the response would be to typical fraudster activities. The results are alarming with many of us looking like easy victims.

The BBA warns that 8 million are vulnerable to “vishing” or voice phishing - when crooks claim to be calling from a bank - while 4 million might transfer money into another supposed “safe” account if instructed.

Meanwhile 3 million could be willing to carry out “test transactions” online while 1.7 million would pass their bank card to a courier on their doorstep if they carried an ID card.

“Your bank would never send someone to your home to collect cash or ask you to transfer funds to a new account,” says Anthony Browne of the BBA. To help you spot a legitimate call from a call from a fraudster it has launched a new campaign. Full details at www.knowfraud.co.uk.

13 October

Around one in ten workers worries about running out of money almost as soon as they receive their monthly pay packet according to new research published today.

The survey by Scottish Friendly shows that people find it hard to budget properly, with 17 million admitting to regularly overspending.

Calum Bennie, of Scottish Friendly, said: “Reckless spending and poor budgeting might account for some people falling slightly short of money before their pay day, but the real concern here, are the swathes of people who live frugally enough, but are still struggling to manage their outgoings. Regionally, those in the East Midlands worry the least about their pay stretching to the end of the month, with 43 per cent saying that they never worry about running out of money before pay day.

The biggest worriers live in Northern Ireland and East Anglia, where 12 per cent say they are concerned about their finances as soon as they are paid.

***

One-in-three of us ends up with a monthly household budget deficit, according to the Open University Business School’s personal finance centre.

Worse, 46 per cent of us never keep a household budget, according to the School’s research.

To help the OUBS has made its free personal finance course – Managing My Money – available to anyone, at any time, through its OpenLearn platform.

For more information on the course or to register visit www.open.ac.uk/pufin

***

The average cost of raising a child to secondary school age is almost £84,000.

Caring for a child from birth up until the age of 11 will cost parents almost half the price of an average UK house price, which stood at £187,188 in September, according to the Halifax.

Typically, parents spend £633.54 a month on their kids, which works out at £7,602.50 a year.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in