Cutting your bills in the New Year

This year has been something of a volatile one for most of us, with the global credit crunch, rising unemployment, rocketing inflation, soaring bills, increasing food and petrol prices, and various other factors all adding to the financial strain that most of us have had to face. For many people this year has been a real struggle, and many have not been able to put any money aside in savings. In addition, interest rates, until quite recently, were still very high, which made things increasingly difficult for homeowners. Read more

Tags: new year resolution, different services, broadband, cost cutting, insurance car, number, various existing debts, product

Brits ‘worth more than they think’

Most Britons have possessions in their home worth considerably more than they realise, a study claims.

The average 40-year-old thinks their possessions are worth about £29,000 but in actual fact the true value of their possessions is over £40,000, according to the research from More Th>n insurance.

It is 46-year-olds who were found to have the highest value possessions in their homes of any age group, with an average figure of £40,919.

More Th>n product director Dowshan Humzah suggested the findings add weight to the old adage that life begins at 40 but expressed concern at how little thought people seem to be giving to the total value of their possessions.

“Brits work hard enough to buy things but by not keeping track of what they own, they run the risk of being under-insured.”

Meanwhile, research from Sainsbury’s Bank has suggested that British consumers are to spend £7.89 billion in the summer sales this year.

Tags: average figure, product, director, old adage, Humzah

New Isa rules need to be publicised more

More should be done to publicise the changes to the rules surrounding individual savings accounts (Isas), one financial expert has claimed.

According to Moneyfacts, the introduction of changes to the rules in the new tax year from April 6th, which are anticipated to attract more customers to the product, need to be more widely publicised outside of the trade press.

Michelle Slade, spokesperson for Moneyfacts, said: “They probably should do something more to advise customers out there what is going on.”

“The fact that they can now put in an additional £600 and it’s tax free… Obviously that’s the first port of call for anybody who’s going to take out savings,” she added.

In the new tax year, beginning April 6th, the rules for Isas are changing. There will no longer be distinctions between mini- and maxi-Isas:

Now all Isas will have an overall limit of £7,200, of which £3,600 can be saved in cash (under present rules there is a £3,000 cash limit).

Tags: ISA, press, introduction, product, Rob Fisher, spokesperson, tax

Defaqto: Cash in on cash back credit cards

Consumers are advised to take advantage of the offers available on cash back credit cards, according to Defaqto.

The company explains that, although comparing the best deals is not always straight forward, there are significant “incentives” for choosing them.

Principal consultant, David Black, commented: “Despite their complexities, cash back credit cards offer a genuine return for card holders but are only appropriate for those people who always pay off their entire balance every month.

“This is another example in the credit card industry where consumers can take advantage of the offers by having more than one card and using each selectively to maximise cash back earnings.”

Some of the complexities of conditions and bonuses include tiered earning rates, introductory enhanced rates, maximum qualifying spends and enhanced earnings at specific retailers.

Defaqto is an independent financial data collection and research body, giving up-to-date product information to the financial services industry.

Tags: card, finance, consumers, advantage, Defaqto

‘Simple steps’ to save money on premiums

There are simple ways of reducing the money paid out on insurance premiums, an industry expert has explained.

According to LifeSearch, there are five principal steps in cutting back on unnecessary spending on life cover.

It lists these as, shopping around, switching existing insurer, acting early, quitting smoking and considering family income benefit.

LifeSearch suggests that now is an excellent time to buy life insurance, as premiums are at their lowest for several years, with the price of cover falling by over 40 per cent in the past five years.

“If you can decide which product you should have on the grounds of one factor, such as price, then websites which compare that factor must be a good thing…So if you know exactly what you want, and you are right, comparison sites and aggregators can be useful, ” said Tom Baigrie, managing director of LifeSearch.

One particularly useful piece of advice for those considering life cover could be to buy it as soon as possible, as the price goes up the older you are.

Tags: Financial services, economics, finance, product, life insurance, unnecessary spending, Insurance

Careful product choice can save money

Making shrewd financial decisions can still save people money, even in times of tightening credit markets, according to Moneyextra.

The company has revealed that consumers can save a total of £4,225.46 every year by replacing near-worst with near-best financial product, representing a £250 increase in savings available from last year.

Mortgages were among the areas where savings could be made, despite seeing a decrease after global credit crunch, with potential annual savings at £2,586.

Robert Amlot at Moneyextra, commented: “Choosing the right mortgage can help keep your wallet healthy and make the difference between running up other debts and remaining solvent.

“The potential savings on your mortgage account for more than 61 per cent of the total savings to be made.”

He added that while personal loan rates are competitive, lenders are increasingly strict and good deals are generally only available to people with excellent credit history.

“Shopping around for the right savings products can pay dividends,” he said.

Tags: Mortgage loan, debts, Mortgages, Robert Amlot, product, money, near-best financial product

GFA found to be ‘feasible’

The Thoresen Review of Generic Financial Advice released yesterday has concluded that it is a “feasible” project.

Appointed by the Economic Secretary to the Treasury, Otto Thoresen carried out an examination of the practicality of providing a national platform for generic financial advice.

The investigation found that the benefits of delivery such a service would “outweigh costs by 3.5 to one”.

It also set out the most important qualities for a national GFA service as found in consumer research. These stated that it should be “supportive and informative” as well as “persuasive” without being critical.

Furthermore, it should be “available to all” and “not linked to a product sale” while also be “jargon busting”, advising on debt management, taxation and benefits.

Mr Thoresen said: “Complete impartiality and effective marketing will be critical. But it’s also essential to design a system which will be of genuine benefit to people and which can be sustained over the longer term.

“We are currently running pilot schemes to test out elements of a national system and the findings will enable us to develop the proposals further in the months ahead.”

The review’s final report will be published early next year.

Tags: debt, important qualities, year, Pension, Otto Thoresen, consumer, product, economic secretary

Debt “now outweighs GDP” in UK

The debt mountain in the UK has now grown so high that it is now bigger than the country’s entire gross domestic product (GDP).

This is the shocking new claim from consultants Grant Morgan, whose research on debt, published today, lays bare the true scale of the problem in Britain.

The figures show a total debt – made up of mortgages and unsecured loans, among other debts – of £1,345 billion, which slightly outweighs a national GDP of £1,330 billion.

Stephen Gifford, chief economist at Grant Thornton, said: “Britain’s huge level of consumer debt is symptomatic of the country’s well established ‘buy now, pay later’ culture.”

He added: “Fortunately, most consumer debt is secured and can be repaid over several years otherwise we would be technically bankrupt.”

The implications of the research is stark. Extrapolating from national consumer debt as it currently stands, 2007 debt levels would now take until January 5th next year to be covered by GDP.

By contrast, just ten years ago, debt would already have been swallowed up by August.

Tags: level, research, Grant Morgan, consultants grant morgan, Gross domestic product