Weekly Money: the stories we noticed 7 to 11 December

The personal finance stories you may have missed this week

Storm Desmond raged creating financial problems for many (Getty Images)

11 December

The Bank of England yesterday held rates at 0.5 per cent for the 81st month in a row. As a consequence of the continuing low interest rates we’re left earning £300 less on our savings than seven years ago, reckons Charter Savings Bank.

The average interest rate on instant access accounts - where most keep their savings is just 0.39 per cent, according to the Bank of England. That gives an average saver with £8,500 in their nest egg just £33 interest a year.

Back in March 2009 when the Base Rate first fell to 0.5 per cent you could have got a one year bond paying 4 per cent, which would have earned you £343 in annual interest.

Currently you can get around 2.15 per cent on a one year bond.

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Swedish bank Ikano has launched into the UK with a three-year fixed rate bond paying 2.55 per cent. However you must lock your cash away for the whole three years and can’t make withdrawals or add to the account once opened.

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Do you keep financial secrets from your partner? Prudential reckons one in 10 people over 40 has a secret stash that their partner knows nothing about. And it’s a sizable amount - the average value of secret savings is £30,300, according to the survey.

However more people have secret debts that they’re afraid to admit to their partner. Prudential says one in seven owes an average £8,000 that they don’t own up to.

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Our spending on plastic has doubled in the last decade, mainly because we’re using credit and debit cards to pay in pubs and restaurants and when shopping online. The UK Cards Association says we spent £566bn in 2014, compared to £270bn in 2005.

10 December

Millions of people are living on the edge of problem debt, warns StepChange debt charity. It says the growth in zero-hours contracts and other less secure work has left more people susceptible to sudden falls in income which can leave them relying on costly credit to get by.

That in turn can lead to a damaging debt spiral. Mike O’Connor of StepChange said: “People have always faced ups and downs, but the changing nature of work means that income shocks are now a regular feature of more people’s lives.”

The charity reckons 14 million Brits suffered an income shock in the last year. “We need safety nets to ensure that a drop in income doesn’t precipitate a rapid fall into problem debt,” he said.

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One in five British adults has experienced financial abuse in a relationship, Victims face financial control, exploitation or sabotage to stop them making their own money decisions.

Refuge and Co-op Bank report that three-fifths of financial abuse cases are reported by women. Sandra Horley of Refuge, said: “For such women, money can be a matter of life and death, meaning the difference between being trapped with a violent and dangerous abuser, or escaping.”

The charity wants greater support for victims from banks.

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House prices in England and Wales have climbed to a new record high, according to estate agent Reeds Rains and Your Move. It says the average house price is now £290,640, 6 per cent higher than this time last year.

It means the average homeowner has made £45 a day in the last 12 months as property values climbed £16,446.

9 December

Banks and building societies are to be forced to tell customers when they slash interest rates. The Financial Conduct Authority has also begun publishing six-monthly details of the lowest interest rates offered in an attempt to boost competition.

The City watchdog hopes to force savings institutions to play fairer with consumers who have long been ripped off with pathetic returns. Typically, banks and building societies offer attractive, market-leading rates and then, once they have suckered savers in, slash the rates, leaving millions to receive almost no returns on their nest eggs.

Many will be shocked to discover how many accounts pay as little as 0.01 per cent, which means they earn just 10p a year on every £1,000 saved.The FCA’s table of shame reveals that such staggeringly poor interest is paid on accounts from Danske Bank, Progressive Building Society, Skipton Building Society and Ulster Bank.

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More than 43,000 people will go without heating this winter, a charity warns today. Christians Against Poverty warns that those in in arrears on pre-payment meters will not be able to afford to turn on the heating as the cold weather strikes.

The vast majority on such meters are disabled, physically or mentally ill or single parents who have ended up on a pay-as-you-go system which gives them the worst energy deals.

Matt Barlow of CAP said: “The system is vastly unfair. People who are ill or disabled or those with children need a warm home in winter so we need to urgently find solutions.”

The charity wants the government to ensure vulnerable people get the same tariffs as those on a monthly direct debit to save £250 a year. It also says suppliers must monitor and help families who can’t afford to top up.

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New credit cards rules come into force today putting a cap on the fee plastic card companies can charge retailers. That’s good news for shops, but bad news for consumers. More than 7 per cent of cards have removed or reduced the value of reward schemes in the last year while almost 5 per cent have increased the interest rate they charge, says Sainsbury’s.

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Almost 2 million people aged over 55 are unaware or confused about the major changes that affects their state pension entitlement from next April, warns Aviva. Half don’t know the state pension age is rising to reach at least 69 by the 2040s, while most underestimate its value.

8 December

Insurance companies are reporting that claims handlers are being kept very busy dealing with customers affected by Storm Desmond. They’ve also sent loss adjusters to affected areas such as Carlisle to deal with claims and arrange emergency help such as temporary accommodation and interim payments.

We’ve rounded up their advice for those affected by floods or still at risk on our website at www.independent.co.uk/money/floods-crisis-what-to-do-if-your-home-has-been-hit-a6763591.html

Meanwhile housing charity Shelter has set up a temporary emergency helpline number offering expert housing advice to anyone affected on 0344 515 2370.

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More are borrowing money to pay for Christmas costs than last year and one in four feels under pressure to overspend, warns National Debtline.

It says the number turning to credit to pay for food at Christmas has risen steeply to nearly a quarter to 11.5m, a rise of 1.1m. It means many households risk falling into financial difficulty in January.

Figures from the Bank of England released last week showed a significant increase in consumer credit, which the Bank’s chief economist Andy Haldane has warned is now rising “at a rate of knots”.

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Nuisance calls remain a huge issue for consumers, with three quarters of people with a landline being hit with unwanted calls in a month. Nuisance calls to mobile phones have also climbed warns Which? with seven in 10 having at least one to their mobile in a month compared.

Which? executive director, Richard Lloyd, said: “More needs to be done to put an end to this everyday menace once and for all.”

7 December

More evidence of a generation rent is published today by insurer Endsleigh. Its research reveals that two out of five recent graduates – who left university within the last four years - are currently living with their parents with little prospect of buying their own home.

Part of the problem is low wages – almost half say their salary was less than they expected after leaving university - with two-thirds earning less than £19,000 a year in their first year after graduating.

But the expense of moving is also a barrier. Many cite the high cost as the most stressful aspect of moving, with the average estimate of moving home standing at £2,242.

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If you’re over-55 and want boost your happiness, eat out and go on day trips. That’s according to Age Partnership which advises folk to go to a restaurant at least once a month and enjoy regular organised day outs.

It’s not just patronising rubbish, the firm says it’s based on comparing the average cost of lifestyle-changes with how significantly a change alters happiness.

Interestingly, going on holiday or getting a dog or cat ranks much lower on its scale even though they’re the most popular lifestyle choices among women, presumably because of the much higher costs associated with them.

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While a third of workers will be forced to dip into their nest eggs to pay for Christmas, worryingly half will turn to expensive payday loans and credit cards.

That could leave them facing a financial hangover in the New Year. Employers should help staff avoid that by providing more financial education, said Jamie Mackenzie of Sodexo Benefits and Rewards.

“With a little extra planning and support from employers, long-term financial damage could be avoided and the financial security of employees made healthier and viable.”