Weekly Money: the stories we noticed 5 to 9 October

The personal finance stories you may have missed this week

After being sacked by Liverpool Brendan Rogers now has more time to think about his personal finances (Getty Images)

9 October

Another report warns that we’re not saving enough for retirement. The Pensions Policy Institute reckons employees and workers need to contribute between 11 per cent and 14 per cent of a worker’s salary and start saving at the age of 22 to have a two in three chance of generating an adequate income in retirement. But the research commissioned by Columbia Threadneedle reveals that the average contribution to a workplace defined contribution pension scheme is just 6 per cent of gross salary.

* * *

Hargreaves Lansdown said it has had 120,000 people registering their interest in the government’s sell-off of £2bn-worth of Lloyds Bank shares just four days after the official announcement. And that’s separate from those who registered with the Government’s own site.

* * *

The Bank of England’s base rate was kept on hold at 0.5 per cent yesterday for the 56th month in a row, which was no surprise. Does it mean that rates won’t rise for another 56 months? “The markets seem increasingly convinced the first rate rise will now come in spring 2016 at the earliest,” said Russ Mould, investment director at AJ Bell.

* * *

Planning a half-term getaway? If you want a bargain avoid Spain or Portugal, advises Skyscanner, a travel search engine. It says those looking for a good deal should think about Ireland, where prices have fallen by as much as 35 per cent for flights during the October half term compared to the same time last year. Other decent deals are to be had in the Netherlands and Germany which are up to 28 per cent cheaper than a year ago.

8 October

Are consumers confused by the mortgage market? Meanwhile has regulation made it too difficult for challenger lenders to enter the market and increase borrower choice? These are two key questions the Financial Conduct Authority wants answered so yesterday it launched an investigation into competition in the mortgage market. It fears that that the latest regulatory regime could have introduced barriers to entry to new entrants entering the market. Lending rules and lender requirements were considerably tightened in the Mortgage Market Review which came into force in April 2014. It’s also investigating whether borrowers can find out information about mortgage products and services they need easily enough and looking into lending firms’ conduct and relationships.

***

Today marks another step closer to there being a seven-year anniversary of 0.5 per cent base rates. The Bank of England’s interest-rate setting committee cut the rate to 0.5 per cent in February 2009. What’s the prospect of a rate rise coming soon? Slim, reckons Nick Dixon, investment director at Aegon. “With recent ‘low-flationary’ headwinds including stagnant CPI and muted consumer confidence, the first rate hike may well be pushed back into the second half of 2016,” he says.

* * *

A quarter of young female home-buyers claim to have lied about plans to start a family in case they’re offered a worse deal or rejected. According to research from uSwitch, one in four women aged 25 to 45 has failed to tell a lender they’re pregnant or planning a family. They’re worried that under the stricter mortgage rules introduced in 2014, lenders may presume their family plans may put them in a position where they may be unable to afford to repay their mortgage. Bernard Clarke of the Council of Mortgage Lenders said the requirement for lenders to take into account future changes to income and expenditure for borrowers does not conflict with their obligations under equalities legislation. He added: “There is a whole range of life events or changes in circumstances that could affect the ability to pay, including redundancy, maternity leave, career breaks and divorce.”

* * *

One in six people will use the pension freedoms launched six months ago to make financial gifts to their family, reckons Prudential. According to the insurer’s research, people aged 55 and over who withdraw their retirement savings will use the cash to help kids buy a new home, pay for education, or simply to fund a luxury.

7 October

Argos today becomes the first UK retailer to offer same day delivery across the country. The company promises to make deliveries up to 10pm, seven days a week, 364 days a year. The store-based Fast Track service charges £3.95 for delivery of around 20,000 products within four hours as long as you order by 6pm. Bryan Roberts of Kantar Retail, said: “Delivery has emerged as one of the key battlegrounds for UK retailers, as customers increasingly look for multiple delivery slots that allow them to shop how and when they want on the same day.” Amazon Prime offers one hour delivery at £7 in London and Coventry to those who have paid the £79 annual subscription.

***

Are you a Sky subscriber? The company has hiked the cost of line rental and made changes to its packages. Rental charges are climbing £1 a month to £17.40 from 1 December while Sky voicemail will increase from 25p to £1.25 a month. Meanwhile it’s cutting its eight Sky Talk packages to four new deals on 1 December. The move is designed to simplify things for customers but Hannah Maundrell of money.co.uk said: “I will be interested to see if anyone actually sees their bill going down as a result of this”. Call rates are also changing with the connection fee for non-inclusive calls rising from 15.9p to 16.9p while rates are being levelled at 11.5 pence per minute.

* * *

Despite the many government campaigns to make switching energy supplier easier, some 2.5m homeowners have still never switched gas or electricity supplier. That means they’re missing out on savings of up to up to £291 a year on their fuel bills, reckons GoCompare. Even those who have switched could be losing out by not switching regularly. The company’s research suggests that on average, homeowners last switched their energy supplier three years ago. Since then we’ve seen new independent suppliers challenge the Big Six firms with keener pricing and better deals. “More suppliers has resulted in greater competition for customers’ business,” points out GoCompare.

* * *

You can now buy a chunky one kilo gold bar through the Royal Mint. It is offering the bars to mark the first anniversary of its bullion trading website, which was launched to open up precious metal investment to all by offering silver at prices starting at around £20. But you’ll need much deeper pockets than that to get your own gold bar stamped with the Royal Mint Refinery branding. Measuring 53mm by 118mm and 8mm thick, they’re expected to sell at around £24,000 to £25,000, depending on the prevailing gold price.

6 October

There’s £320m up for grabs to help struggling people stay warm this winter. The Warm Home Discount means those in need could save £140 but there’s free advice available to anyone worried about paying their energy bills. The Home Heat Helpline gives low-earners financial help and practical advice on managing their energy bills and energy efficiency measures. If you know someone who may be in need of support, or if you are struggling to pay your energy bills or are worried about staying warm this winter, call the Home Heat Helpline on 0800 33 66 99 or visit www.homeheathelpline.org.uk. You can also call the helpline on behalf of a friend, or family member.

* * *

More bad news for savers: the average interest rate offered on an easy access Isa has fallen to its lowest-ever level. Moneyfacts reports that it now stands at just 1.11 per cent, down from 1.18 per cent a year ago. Before the financial crisis in October 2007 the average rate paid was 5.48 per cent, but it’s steadily declined ever since. “Isa savers who have done all they can to get the best rate and shelter their returns from the taxman are wondering when they are likely to get a reprieve, but providers seem reluctant to boost rates,” warned Charlotte Nelson of Moneyfacts.

* * *

Hard-up people are still taking out expensive payday loans without knowing if they can afford it. Social lender My Home Finance warns that people have no idea of the true cost of short-term credit, leading many into unaffordable debt. “We need to raise awareness so people who access short term credit understand what they are agreeing to and what they will have to repay,” said Bob Wilson of My Home Finance.

5 October

Independent supplier Green Star Energy is launching a new Unlimited Tariff today. It allows customers to fix the cost of gas and electricity bills for a year however much energy they use. The theory is that it will help avoid bill shock – that gasp-out-loud moment when a bill arrives after winter and is much, much more than summer’s bills, when the heating was off. “We’ve removed price shock concerns for consumers, giving them the ability to better budget one of their most important household costs,” said Green Star’s Joanne Thornton. However that doesn’t mean that energy bills will be lower. The price will be based on your current average energy usage. So existing customers on Green Star’s Fixed Rate Tariff that switch to the deal will end up paying around 14 per cent more for the certainty of knowing how much their bills will be. Is it worth paying extra for that certainty? It does mean you can increase usage in the winter without incurring higher costs, which could be useful to those who cut back on heating their home in winter because of the high costs.

***

More people are renting their homes from private landlords than ever before, in fact the number of households doing so has more than doubled in the last 30 years, according to a report from think tank ResPublica. In 1985 30 per cent of households rented from public landlords, and just 9 per cent from private landlords. Today the emphasis has switch to just 9 per cent public and 22 per cent private. Meanwhile the number of people owning their own home is at 61 per cent, the same figure it stood at 30 years ago. Even though it climbed throughout the 1980s and 90s, it started to dropped off from the year 2000, the report says.