Weekly Money: the stories that we noticed 14 to 18 December

The personal finance stories you may have missed this week

Jose Mourhino has had happier days than this week when he was sacked by Chelsea

18 December

There’s a worrying growing credit card debt gap between those who can afford to put things on plastic and those who can’t, according to the YouGov Debt Tracker. It shows that over-indebted people are adding to their debt every month and heading into the festive period with an average of £6,114 on their cards, an increase of £577 on last year.

Meanwhile credit card holders who are not over-indebted have seen an average year-on-year fall of £953 on the amount of borrowing on their cards to £2,861.

Leo Brownstein of YouGov said: “The debt gap is widening with those faced with shrinking levels of benefits and on low household incomes becoming increasingly stranded on one side. The situation will only get worse in the year ahead.”

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Now here’s some cheerful seasonal news: Christmas hampers containing food and presents have been delivered to more than 3,000 people in need across the UK by the charity Christians Against Poverty.

The recipients are all on a tight budget as they work to pay off debts caused typically by low income, job loss, bereavement, relationship breakdown or ill health.

Debt coach Margaret Biddlecombe, in Witney, said: “What a joy delivering hampers! One of my clients felt totally overwhelmed and said: ‘Nobody has ever given me a present like this!’”

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Today, the Friday before Christmas, is expected to be the busiest day of the year for cash machines as revellers top up ahead of the pre-Christmas weekend. It was the busiest day in both of the last two years.

Sainsbury’s reckons there’ll be 173 million ATM withdrawals in December, 3 million higher than last year and 7 million more than in 2013.

17 December

Is there any end in sight for the housing price bubble? Not in the next decade, according to a report from the Association of Residential Letting Agents and the National Association of Estate Agents.

It predicts that house prices will increase by half their current £280,000 value by 2025 to reach an average £419,000. In London prices are expected to nearly double, rising from £515,000 to £931,000.

Rents will rise too, it predicts. They’ll increase by 27 per cent from an average £134 per room per week to £171 in 2025. London renters will end up even worse off as they’ll need to pay 34 per cent extra in rent per week by 2025, from the current average of £234, up to £314.

Mark Hayward of the NAEA said: “House prices are only going to go one way, and unfortunately that is up.”

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Just over two million adults will not celebrate or spend money this Christmas because of their woeful finances. Research by SalaryFinance suggests low-paid workers are in the worst position, with their finances reaching dangerous debt levels.

More than a third of those earning between £10,000-£15,000 owe £1,000 or more, which is equivalent to a tenth of their annual gross personal income.

“The need to reduce debt pressure on UK workers is very real and if we can reduce employees; financial worries, it will improve their health and social well-being,” pointed out Asesh Sarkar of SalaryFinance.

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Keep presents safe from sneaky thieves this Christmas by installing motion-activated security lights. That’s most likely to put off would-be burglars, according to Co-op Insurance. CCTV cameras are also a useful deterrent while barking dog would scare many away.

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The last batch of round pound coins has been produced at the Royal Mint. Round pound coins are being phased out to make way for a new 12-sided £1 coin that will enter circulation in 2017.

16 December

Pensioners will be handed new freedoms to turn their retirement income into cash the Treasury has announced, but it could lead to financial disaster according to several experts. The government said that it will allow around 5 million people to cash in their annuities from April 2017.

It will do so by scrapping tax restrictions on annuities, which currently means those wanting to sell their retirement income face a 55 per cent charge, or even up to 70 per cent in some cases.

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Half of us are worried that we will not have enough savings for a comfortable retirement, says Citizens Advice. But only one in five knows how much is in their pension put, the charity warns. Chief executive Gillian Guy, said: “People know what they want from retirement but not whether they can afford it.

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Vale of Clwyd, Stoke-on-Trent North and Torbay are the England and Wales parliamentary constituencies where the most people went bust last year. Coastal areas featured strongly among the areas with the highest personal insolvency rates, while many areas of London were among constituencies with the lowest rates, according to the Insolvency Service.

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Out of this world returns? Anyone buying a home in the UK in 1977 when the first Star Wars film was released would have seen its value soar. Back in 1977 the average house cost £13,650 – less than the price of the average car today. Now the average price is £204,552, according to the latest Halifax House Price Index. That’s an increase of 1,399 per cent.

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Yorkshire Building Society has launched a new two-year fixed rate mortgage at 3.68 per cent until 31.1.18. It’s aimed at first and second-time buyers with a 5 per cent deposit who borrow £50,000 to £500,000. “It’s likely to be an attractive to those with a modest deposit looking to keep their monthly repayments down,” said Charlotte Nelson of Moneyfacts.

15 December

Inflation returned to positive territory in November for the first time in four months. The consumer price index grew by 0.1 per cent year on year last month, up from a 0.1 per cent decline in October, according to the Office for National Statistics.

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Did you rush to take one of the government’s attractive Pensioner Bonds earlier this year? It’s time to dump it. The launch rate of 2.8 per cent on the one year bonds has been slashed to a paltry 1.45 per cent if you rollover your savings into NS&I’s Guaranteed Growth Bond.

Instead you should move your money elsewhere, advises Anna Bowes of Savings Champion. “Much better rates can be found elsewhere,” she says. “By doing nothing, the extra interest earned from the competitive rates offered earlier in the year will be eroded by the poor rates being offered on maturity.”

United Trust Bank, for instance, pays 2.15 per cent on its Fixed Deposit 1 Year Bond and your savings are still protected under the Financial Services Compensation Scheme.

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Royal Bank of Scotland has agreed to reimburse around 4,500 customers it wrongly told did not hold a dormant account with the bank.

They customers had applied to the British Bankers Association’s Lost Account Scheme, but were told by RBS that their accounts didn’t exist. The bank has now apologised for its error, and promised to contact affected customers. However, don’t expect a fortune if you’re one of them - the average amount involved is less than £50.

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There’s fresh evidence out today that people will be forced to go without heating or hot water this winter because of the cost. USwitch reckons more than half of Brits will ration their energy use this winter to tackle high energy bills, with one in 10 turning the heating off altogether.

Ann Robinson of uSwitch, says: “It’s deeply concerning that so many plan to risk their health because they cannot afford the energy they need.”

14 December

Life expectancy for new born females is set to reach 100 by 2064, according to new data published by the Office for National Statistics. Over the past 40 years, life expectancy has been increasing at a rate of 1.9 per cent a year for males and 1.5 per cent a year for females.

“Investors reaching retirement today should typically expect to have to make their retirement savings last until their late 80s, however for many people in good health, a retirement extending well into their 90s will be the norm,” pointed out Tom McPhail of Hargreaves Lansdown.

“But by the time today’s 40 year olds reach their mid 60s, living to 90 will be unremarkable and anyone in good health will stand a fair chance of reaching 100.”

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There’s been a 58 per cent leap in criminal prosecutions for tax evasion in the last year – with 1,258 individuals convicted of evasion or tax fraud. That’s climbed from 795 the previous year, says Thomson Reuters,

“The prospect of a prison sentence or a criminal record is a very real possibility for growing numbers of offenders,” warns Morag Rea of the firm.

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There’ll be a 6 per cent rise in the property prices asked by new sellers next year, predicts Rightmove. It’s today reported a seasonal dip of 1.1 per cent dip in the price of property coming to market this month, but it’s the lowest December fall since 2006.

“This is December’s best post-financial-crash performance, signalling another round of price rises in 2016,” says Miles Shipside of Rightmove. “Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up.