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Weekly Money: the stories that we noticed 11 to 15 January

The personal finance stories you may have missed this week

Simon Read
Personal Finance Editor
Friday 15 January 2016 10:58 GMT
Comments
David Bowie's death cast a huge shadow over the week
David Bowie's death cast a huge shadow over the week

15 January

The deadline for sending 2014-15 tax returns to HM Revenue & Customs is just two weeks away, Sunday 31 January 2016. You’ll also need to pay any tax owed by then – failure to do either will mean being hit with a fine.

If you haven’t already registered with HMRC then you need to act fast – as a general rule, 21 January is in effect the latest date you can register (next Thursday), although the tax authority does not specify this date.

The taxman accepts few excuses for late filing but said recent flooding and bad weather could be an acceptable reason. Ruth Owen, HMRC’s director-general of personal tax, said: “For those customers who have a genuine excuse for missing the 31 January deadline, such as the flooding, help is at hand. HMRC has set up a tax helpline for people affected by severe weather and flooding: 0800 904 7900.

* * *

Energy companies should play fair with consumers by lowering prices. Research published yesterday claimed consumers are being over-charged by £3bn on their energy bills.

The report from Energyhelpline showed that over the last two years, wholesale gas prices have dropped 51 per cent while electricity prices have fallen 33 per cent. “This could have been passed through as price cuts of around 25 per cent on gas and 11 per cent on electricity for UK households, yet all loyal customers have seen is an average of 5 per cent off gas bills and nothing off electricity bills,” pointed out Mark Todd of the comparison site.

* * *

Holidays abroad will be cheaper this year, says the Post Office. Sterling’s strength and more competition has cut food and drink costs for Brits overseas. A meal in the Algarve will work out almost a fifth cheaper this summer, for instance.

14 January

When will interest rates rise? The fact is we don’t know yet. It’s unlikely, but it could even happen today as the Bank of England’s interest-rate setting committee meets.

But nearly four out of 10 people struggling with finances has no idea that rates could rise soon. That’s despite last week’s George Osborne speech when he warned Britons to prepare for interest rate rises.

“Those with existing financial problems will be at the sharp end of interest rate rises when they do arrive,” warned Joanna Elson, chief executive of the Money Advice Trust. “After nearly eight years of ultra-low rates, we need to do much more as a society to prepare people for a higher interest rate economy.”

* * *

House prices climbed £18,000 in 2015, says Reeds Rains and Your Move. An average house rose 6.6 per cent over the year to reach £292,077.

But property values in Central London slumped by 8.7 per cent, after being hit by higher Stamp Duty. Outside five central boroughs, London experienced a 11 per cent boost in prices while the East Midlands jumped to second in the regional rankings, on the back of a 10.6 per cent climb in Nottingham’s house prices.

* * *

People could save an average £110 a month, or £1,320 a year, by cycling to work rather than using public transport, reckons bicycle insurer Protect Your Bubble.

* * *

Are insurers dragging their heels when you claim? Research from Consumer Intelligence suggests they are. It shows that more than two out of five of motor and home insurance customers have experienced delays and problems while trying to make a claim on their policy,

13 January

Shock new figures published today reveal that household debt has soared by two-fifths in just six months. Aviva’s Family Finances report found that average debt now stands at £13,520 – a climb of £4,000 from £9,520 last summer.

It’s the highest levels seen in the quarterly survey for two and-a-half years. “It is concerning to see that household debt has grown to such levels,” said Caroline Siarkiewicz, head of UK debt advice for the Money Advice Service.

The rise in the figure – which doesn’t take account of mortgage debt – means the average amount owed is 24 per cent higher than in winter 2011 when the data was first recorded.

“The alarming levels of rising household debt, along with a recent reduction in income and savings levels, paints an uncertain picture for the family purse in 2016,” said Louise Colley, managing director, protection, Aviva Life UK.

***

Are you on a fixed rate energy tariff? Check when it’s due to end - if you do nothing before the deadline, you’ll simply be put on your supplier’s standard rate, which is likely to be a lot more expensive.

For instance, anyone on Extra Energy’s Fresh Fixed Price Jan 2016 deal will end up paying £258.26 a year more for their gas and electricity if they don’t switch when the deal finishes at the end of this month.

In fact there are 24 fixed energy deals ending in January from seven different energy suppliers, reported uSwitch. As well as deals from Extra Energy, there a tariffs coming to an end from nPower, Scottish Power, Sainsbury’s Energy, Co-operative Energy, First Utility and M&S Energy.

* * *

Almost half of us worry that we won’t have enough money when we retire because we can’t afford to save any, according to a report published today by the Joseph Rowntree Foundation.

It warns that struggles with day-to-day cost such as rent, childcare and household bills means that saving for the future is out of reach for many.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: “Older workers are trapped between a rock and a hard place. The high cost of bills means that many are unable to save more for retirement, while a lack of opportunity to gain new skills or progress at work is making it difficult to work for longer."

The JRF called for action to simplify pensions after its research showed that many people find some parts of their pension, such as tax relief, difficult to understand.

* * *

What do most people use a credit card for? To pay for fuel, says the AA. On average, they spend £94.29 a month on fuel.

* * *

Have you thought about volunteering in 2016? Citizens Advice is recruiting across the country. Details at bit.ly/1L9SB52

12 January

Co-op Bank has launched a new current account reward scheme offering up to £5.50 a month for good banking behaviour.

Customers on its Standard Current Account can earn rewards by staying in credit, paying in a minimum of £800 a month, choosing to receive paperless statements, setting up at least four monthly direct debits or logging into online banking or their mobile app at least once a month.

The Co-op’s Matthew Carter said: “Everyday Rewards pays customers for using their account in a normal, everyday kind of way at no extra cost.”

Andrew Hagger of Moneycomms.co.uk said: “It’s pleasing that Co-op hasn’t gone down the route of rivals such as NatWest and Barclays who have used the smokescreen of a rewards programme to introduce a monthly account fee by the back door. Co-op Bank is living up to it’s ethical reputation by offering to donate the rewards to charity.”

* * *

Annuity rates have more than halved since 1994, according to Moneyfacts. In the last year alone they’ve fallen by 5.6 per cent.

“2015 proved to be difficult year for annuity rates with providers forced to cut rates to react to low gilt yields, the reduced business volumes brought about by pension freedoms and the need to factor in new Solvency II requirements,” said Richard Eagling, head of pensions at Moneyfacts.

* * *

Brighton, Bristol, Edinburgh and Newcastle were the UK’s rental hotspots in 2015, according to Homelet. Average rents climbed between 16 to 18 per cent in the four compared to 4 per cent in the likes of Birmingham, Sheffield and Leicester.

* * *

Almost nine out of 10 of us pay over the odds for flights by booking at the wrong time, warns Skycanner. Yesterday was its busiest day of the year as Brits got holiday fever. Yet its research shows that half of us book flights at least 13 weeks in advance of when they fly when the best time to book a flight is actually, on average, just seven weeks in advance.

11 January

It’s getting harder to clamber onto the property ladder after the average deposit paid by first-time buyers increased by 13 per cent in 2015 to £32,927.

Meanwhile the average price paid by first-time buyers hit a new high of £190,180 after climbing by 10 per cent last year, according to the Halifax. There were 310,000 first-time buyers last year, roughly the same as the previous year.

***

Heavy-handed government departments are treating people worse than private companies when chasing debts, a charity has warned. Citizens Advice investigated the debt problems most commonly raised – council tax arrears, tax credits overpayments, benefits overpayments and magistrates court fines.

It found evidence of poor practice, including a lack of consideration given to whether people can afford repayments and people forced to pay a debt when it is under dispute.

Citizens Advice said the number of issues people have sought help for on local and national government debts has doubled from just under 200,000 a year to around 400,000 in the last decade. The charity said that nearly £1 in every £5 of the debt people contact them for is now owed to government.

Gillian Guy, Chief Executive of Citizens Advice, said: “There is a difference between people who can’t pay and won’t pay. Our evidence shows glaring inconsistencies in how some government departments and private companies go about recovering money.”

***

A record 50,000 women in the UK are now in the highest tax bracket, reckons tax investment specialist Radius Equity. It says since the additional rate for those earning £150,000 or more was introduced in 2010, the number of women paying the higher amount has climbed 48 per cent.

However, it warns that growth in the number of high earning women has slowed to its lowest level since the recession. For instance only 15 per cent of approved financial services staff in the UK are now women – down from 18 per cent in 2008.

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