For those lucky enough to have children, the issue of pocket money rears its ugly head sooner than you might think, although it could be said that you are never too young to learn about how to make the most of a small amount of money.
However, with a myriad different ways to pay for stuff these days, none of which involving actual cash, the practicality of paying out pocket money can become a problem. Who has that many pound coins. So modern technology comes to the rescue again with some apps that take the hassle out of paying pocket money AND give you an innocent way to stalk your child.
There are two main apps, GoHenry and Osper. Both work on the basis of parents funding a bank account for the child, and the child has a debit card (partnered with either Visa or Mastercard respectively) that allows them to spend their money wherever a debit card is accepted, or to withdraw cash from a cash machine. They cannot spend what isn’t there, so there’s no risk of them getting into debt, but it does allow them to practice saving and spending before they are let loose on the world of credit cards at 18.
As an added bonus, the apps, through which you manage actually paying your children their weekly/monthly income, provide you with an instant notification of spending on the child’s card. This means that you can check-up on your little darling to make sure they are where they say they are, provided they are spending money doing it, of course.
But while this is less likely to be an issue for the eight year olds (the youngest age you can get one of these cards), they can run right up to age 18, although whether the pocket money will still be flowing at that point is perhaps another question. You will need access to at least one device (smart phone or tablet) so that the parent can manage the funding, and the child can check their balance and purchase history. Cards can be blocked immediately should the card get lost (likely) or stolen.
Of course, these people are not providing this service out of the goodness of their own hearts and there is a charge. GoHenry currently gives you three months free, and then charges £1.97 per child per month. Osper is free for a year, and then costs £10 per card per year.
So if you don’t want to pay out anything extra in pocket money, or you just don’t like the idea of an eight year old with plastic, you could try Roosterbank which is an app that does it all virtually- basically keeping a record of how much you owe your child in actual money. The child can save their pocket money for something (and earn ‘interest’) and you can deduct ‘money’ from their account when you buy them something. Basic membership is free, but has limits on the number of transactions. The app also includes games (with premium features) and a shop selling actual toys etc, although they can’t physically pay for things themselves as there’s no real money in their account. Again there is an iPhone app, but there is also a desktop version. Roosterbank also allows you to pay children extra for doing extra chores. Bit like bob-a-job. But a bit more expensive.
Tim Weller was the last senior executive at the payday lender who was appointed by Errol Damelin, the company’s controversial founder who jacked it all in back in June.
Andy Haste has now taken over the day-to-day management of Wonga, and he says: “At a critical time for Wonga, when we will complete our forbearance programme, prepare to apply for FCA authorisation and introduce a cap-compliant product, I’m taking an even more active role in leading the business.”
“Tim Weller therefore stepped down as CEO in October. This was a mutual decision, following a comprehensive handover, and will ensure clear leadership in the weeks and months ahead. I want to thank Tim for his three years in the business as chief financial officer.”
“Our search for a permanent group CEO is well underway and Tara Kneafsey, our new UK managing director, will join us in December.”
Running Wonga is a tough gig at the moment as, only last month, they were forced to write off £220m of customer debts after they admitted they’d be wrong in lending money to some 330,000 people. While they were at it, they also axed interest charges for another 45,000 customers.
We wrote about RBS getting fined by the Financial Conduct Authority, speculating that they’d be hit with a £50 million fine.
Well, we weren’t far off as regulators have slapped the bank with a fine of £56m after their software malfunction saw millions of customers unable to access their own money in their bank accounts in June 2012.
The fine is actually a twofer, with a £42m penalty coming from our pals at the Financial Conduct Authority and another fine of £14m being served by the folks at the Prudential Regulation Authority.
RBS chairman Sir Philip Hampton said the problems “revealed unacceptable weaknesses in our systems” and that it ”caused significant stress for many of our customers,” adding: “As I did back then, I again want to apologise to all customers in the UK and Ireland that we let down two and a half years ago.”
“Modern banking depends on effective, reliable and resilient IT systems,” said Tracey McDermott, director of enforcement and financial crime at the FCA.
“The banks’ failures meant millions of customers were unable to carry out the banking transactions which keep businesses and people’s everyday lives moving. The problems arose due to failures at many levels within the RBS Group to identify and manage the risks which can flow from disruptive IT incidents and the result was that RBS customers were left exposed to these risks.”
The FCA said the fine was down to the problem which saw customers unable to use online banking facilities to get at their accounts. obtain accurate balances from ATMs, make mortgage payments, access money abroad and, on top of all that, RBS Group’s banks applied incorrect credit and debit interest to accounts. As well as the aforementioned, some businesses weren’t able to pay their staff as a result of this cock-up.
In what can only be described as quite good news for the consumer, the average price of a basket of things such as bread, milk and veg now costs 0.4% less than a year ago, as the latest figures from Kantar Worldpanel show.
However the price wars have had a knock-on effect on the fortunes of the UK’s biggest supermarkets, with the overall market contracting by 0.2% in the 12 weeks to November 9.
Kantar also claim that it is the first time they’ve recorded a decline since it started in 1994.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said: “The major supermarkets have all had a difficult period, hit by both the flow of shoppers toward the discounters and reduced revenues as they competitively cut prices.”
Tesco did the worst with their sales sliding by 3.7%, yet Morrisons’ slumped faster down from 1.3% to 3.3% a month ago.
The only growers and showers included Waitrose who increased to 5.6%. Aldi slowed down a fraction from 29.1% to 25.5% and Lidl went down from 17.7% to 16.8%.
Market share in the 12 weeks to 9 November:
• Tesco: 28.7%
• Asda: 17.2%
• Sainsbury’s: 16.4%
• Morrisons: 11.1%
• The Co-operative: 6.2%
• Waitrose: 5.1%
• Aldi: 4.9%
• Lidl: 3.5%
When you hear the words “sustainability campaign group”, you are more likely to roll your eyes at the prospect of more recycling than to rub your hands in glee. However, a new initiative from such a group, Wrap, could see you saving up to 25% on a new telly, or getting a cheaper refurbished one, all in the name of saving the planet. Win/win.
The “revolutionary” new recycling scheme launched today has got 50 electrical retailers signed up- who collectively corner 66% of new TV sales in the UK- and they will give you vouchers or a discount when you bring back your old electrical appliance in good working order.
The list (below) includes a number of major retailers such as Sainsbury’s, Argos, Homebase and B&Q, and the scheme could potentially offer drop-off points where customers can take their old trash TV, with smaller retailers possibly collecting old appliances in a van.
Likely estimated resale values range from £170 – £240 for a laptop between 2 and 4 years old, £475 for a three year old 55″ LCD telly, and £50-£70 for a 2-3 year old SatNav, which would mean that if the retailers give you full value for your recycled product, you might be able to reduce the cost of a new TV by as much as a quarter. However, experts suspect that discounts are “likely to be smaller.”
And that is the thing. Although the scheme has been announced today, with much trumpeting of trumpets and the like, the 50 signatories to the Electrical and Electronic Sustainability Action Plan have got the next three-to-five years to come up with a fully-functioning buy-back service under the agreement. They have also promised to design more durable products, particularly for the kitchen, to reduce the need for never-ending white goods replacements.
Still, with electrical items worth around £1 billion languishing, unloved, in Britain’s homes, this has to be a good way of not only saving the planet, but saving everyone’s pocket. Manufacturers will be able to recycle products and parts, particularly gold used in circuitry, which might otherwise end up in landfill, and consumers who aren’t the type to rush out and buy the latest TV every two years will be able to buy a reconditioned TV through the scheme at a cheaper price.
Dr Liz Goodwin, chief executive of Wrap, said returned items would create a new market in second-hand goods that could add £3 billion to Britain’s economy.
“This has the potential to revolutionise how we design, manufacture, sell, repair, reuse, and recycle electrical and electronic products,” she said, adding “this is a win-win situation for consumers and businesses. Consumers could get money for a product they no longer want, someone who can’t normally afford a product or particular brand can now do so from a reputable source.”
Wrap now hopes to convince other companies to join the pioneering 50 signed up to the initiative, while we all wait with baited breath for cheaper tellies to arrive.
How much is your gas bill? Nope. Your annual Council Tax charge? Wrong again. Chances are, you’ll be way off on practically all of your main household bills to the tune of £770 a year according to new research by Santander.
Council tax was actually the least accurately estimated bill, which may be because there’s pretty much naff all you can do about the cost. Still, most people are WAY off-according to the survey, bill payers underestimated their council tax bill by a whopping £721 per year. Gas (£279) and electricity (£91) bills were also underestimated, which is no surprise, but the cost of TV/phone/broadband bills was actually £386 over-estimated.
What’s even less impressive is that we are actually getting worse at knowing how much things cost. The same survey compiled last year also saw us underestimating our bills, but we were much closer- only guessing £467 too little for the major bills, a whole £303 closer than we were this year. While costs have largely increased this year, it is unlikely this accounts for the whole difference. Perhaps things are looking up for people such that they don’t have to pay such close attention to bills anymore?
Santander head of banking Matt Hall said, helpfully: “Increases in household bills have added to the cost of living in recent years and it’s more important than ever that people check their bills thoroughly. Some can be tricky to understand, so it’s important that households keep an eye on statements and call their supplier if anything is unclear.”
However, thoroughly checking statements is not something we are necessarily great at. More than a quarter of people (26%) admit to never checking their statements, and 4% don’t even bother opening the envelope. That’s a million people not even opening their bills.
David Mann, head of money at uSwitch.com, says: “Consumers are in a lose-lose situation with everything shooting up except for their income. It’s time to start paying serious attention to managing household bills. By cutting the amount you spend on the essentials, you’ll have more money to spend on the non-essentials, which is welcome news at this time of year.”
The much loathed MasterCard SecureCode and Verified by Visa systems are set to be usurped by a much easier to use set-up.
The systems that ask for further information and an extra password were meant to be a way of halting fraud and making it safer to shop on the internet.
However the systems have also been considered a bit of a faff and open to exploitation.
Initially it all sounded quite comforting. You’d get an extra window asking for fragments of your password and you’d feel all safe and that.
Yet according to customer feedback, customers have struggled to remember additional passwords, and there’s also been issues around whether the pop-up windows were not a front for some evil.
The new system will revolve around customers having passwords texted to them, which they would then type in.
Ajay Bhalla, president of enterprise security solutions at MasterCard, said: “All of us want a payment experience that is safe as well as simple, not one or the other. We want to identify people for who they are, not what they remember. We have too many passwords to remember and this creates extra problems for consumers and businesses.”
MasterCard believe that mobile payments will account for 30% of online retail sales by 2018.
The youth of today won’t remember what it was like back when you had to use your own bank’s cashpoint* to get your money out. If you were a Lloyds’ customer, heaven help you if you wanted to use an HSBC cash machine. Or at least, you’d be charged somewhere between £1.50 and £3 for the privilege.
Before long, however, some banks ganged together so you could all use each other’s machines, with rival bank- gangs facing off until it became the free-for-all it is today.
Or at least it’s now mostly free. Now just three in 10 cash machines levy charges, which is the lowest proportion in a decade and is down to people power and increased competition between providers. Back when we were all happy to pay charges, there were loads of fee-paying machines, now we’ll just walk a bit further to find a free one.
What’s interesting, though, is that more than half of the cash machines in Britain are currently owned by independent operators- 34,733 of the total 68,630 machines are now run by businesses other than banks or building societies. You might think that independent machines would be more likely to charge, being as they don’t have a myriad other ways to extract money from you same as your bank. However, the spirit of free competition has come to the rescue, with operators banking on low margin/high volume beating those £3 fees.
How cash machines work for independent operators is that each time someone makes a withdrawal, the operator is paid 25p by the customer’s bank. This fixed fee covers the operator’s costs, such as employing someone to put money in the machine and paying a “rent” fee to the landowner. If you get enough 25ps, you will be laughing all the way to the bank, which is why operators are positioning new machines in the middle of busy pavements or pedestrian areas.
Graham Mott of Link, the industry body for cash machines, said: “Independent providers have realised that if a rival is charging a few pounds for withdrawals down the road, they can install a free machine and lure customers away.”
“Free cash machines are a real asset for shops, too, as customers are more likely to visit and spend in store, so many retailers are requesting that option.”
There are now more than 48,000 free cash machines in the UK, up from 32,729 in 2004, according to Link.
James Daley of consumer website FairerFinance.com said: “People hate paying to get hands on their own money, so this is good news for the consumer. Yes, it’s cheaper for banks if you used their own machines and they are always looking for ways to steal a little more from customers. But banks are making such large margins that there would be no excuse to pass on the extra costs of people going to independently-run machines.”
* actually, you can’t call them a cashpoint unless you are specifically talking about a Lloyds machine. They own the word. Fortunately cash machine works just as well.
The Retailer’s Offer scheme is open to their debit and credit card customers, who can pick out their favourite stores from a list of 100 or so, such as Argos, New Look, Hertz, Patisserie Valerie and Heals.
There’ll be a handful of personalised offers each month, which will be based on what the get up to in the high street.
The move by Santander follows in the footsteps of Halifax, Lloyds Bank and Natwest, which also launched rewards schemes in recent months.
Santander already offers their 123 customers 1% for supermarket shops, 2% for department stores and 3% for TfL, National Rail and petrol.
It also pays 1% on water, council tax and Santander mortgage payments, a higher rate of 2% on gas and electricity bills and 3% on mobile, home phone, broadband and paid for TV packages.
The perk is offered to both new and existing account holders for free through their online banking so you can’t just shout “BUT I’M WITH SANTANDER!” at a shopkeeper and demand cash back. Click here to find out more.
Our friends over at Which! have been very helpful and have calculated the cheapest energy deals on the market at the moment. Although Halloween was actually a heatwave (comparatively speaking), it is now November and it’s going to be time to don the thermal undies and/or twiddle the thermostat sometime soon.
For the first time, all of the top five cheapest deals now come in at under £1,000 (on average estimated usage) AND the top five includes not one, but two of the big six energy suppliers. Which just goes to show that they can be cheaper if they only try hard enough. Nevertheless, the top spot is still held by smaller supplier First Utility.
Of course, whether these tariffs will be cheaper for you will depend on your current tariff and your energy usage, but, based on standard listed tariffs, you could save around £200 on any of these beauties:
1. First Utility iSave Fixed March 2016 (v37) estimated annual cost £960.47
2. Eon Energy Fixed 1 Year v12 £964.65
3. Ovo Energy Better Energy Fixed (Online) £973.33
4. Extra Energy Fresh Fixed Price Dec 2015 v1 £973.65
5. Npower Online Price Fix November 2015 £999.84
The prices listed above are averaged across all regions and are for a dual fuel customer (gas and electricity) paying by monthly Direct Debit and choosing paperless billing, collecting various bonus discounts/cashbacks in the process. The annual costs have been calculated using Ofgem medium consumption figures of 13,500kWh for gas and 3,200kWh for electricity.
It is also worth noting that these are all fixed rate tariffs, which may be preferable and give you some peace of mind, but also means that you won’t benefit from any price cuts during the fix period. And before you scoff, think of all the people who fixed last winter.
As noted above, however, the above prices are estimates and you should use a comparison site to check if these new deals work for you. However, with average energy costs coming in at less than £85 a month, perhaps we can all look forward to a warmer winter.
The Financial Conduct Authority – the finance watchdog for the UK – has been looking at payday loans and rejigging the rules so that borrowers are never forced to repay more than twice the amount of the loan they initially took out.
The FCA said interest and fees will be capped at 0.8% a day and that the total cost of a loan will be limited to 100% of the original sum. The default fees are to be capped at £15 also.
We’ll see these changes coming into play on 2nd January 2015, which means that, if you borrow £100 from a payday lender for 30 days, you’ll not pay more than £24 in fees and charges (provided you pay off your loan on time).
Some quarters think that the FCA haven’t gone in hard enough, but the watchdog has said that they don’t want to be running anyone out of business.
Martin Wheatley, the FCA chief executive, said: “I am confident that the new rules strike the right balance for firms and consumers. If the price cap was any lower, then we risk not having a viable market, any higher and there would not be adequate protection for borrowers. For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts. For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections.”
With much being made of the new pensions regime in the news of late, together with tales of stock market depression and pitiful savings rates, you could be forgiven for wondering if you might need a financial adviser. Headlines from a new report by unbiased.co.uk suggests that now could be a good time to get financial advice, given that prices have fallen around 14%. However, as with most things, and particularly things related to financial advice, you have to remember that prices can go down as well as up.
The thing is, that a new charging structure was imposed on financial advisers during 2012. Instead of being able to offer ‘free’ advice, but rake it in over a number of years in trail commission, advisers became compelled to be up-front about fees and charges and had to levy a fee to make it clear to consumers exactly what they were paying. Previously, an adviser might have received an annual commission over a number of years, commission paid out of annual charges levied on an investment (for example) meaning that, over time, you would have paid far more for the service than if you had paid an up-front bill.
However, up front charges can put people off, even if there may be some scope for offsetting and initial commission earned, and in 2013, just after the new rules were introduced, it seemed financial advisers were exacerbating the problem, as median hourly rates for advice went up from just over £150 per hour in 2012 to £175 an hour in 2013. The latest figures show that the hourly rate has now fallen back to what it was before the change in the rules at a median £150 per hour.
But what the unbiased.co.uk survey also showed is that standard fees for various financial scenarios have not actually changed much, as shown in the table below.
This information is, of course, useful for people who might want to get some advice, but don’t know how much it will cost. The Money Advice Service (MA) has also produced a helpful guide for when it might be more worthwhile not to pay for advice, but rather do the research yourself- in general terms, the greater the risk to your cash, the greater the likelihood that financial advice might pay off in the long run. MA also highlight that you can still get advice covered by commission from tied agents, but these are only going to offer you products from their employer, and this might not actually be the best product for your particular circumstances.
MA is also currently compiling a list of financial advisers, using FCA data, and intends to list the fees charged by various advisers as part of the directory. MA wants to make the process of getting financial advice simpler and more transparent for consumers, although the industry is apparently concerned that publishing these details might lead to a ‘price war’ with advisers competing on cost. Which is supposed to be a bad thing?
The government has to upgrade living standards for Britain’s hard working families with £7bn of tax cuts and childcare subsidies, otherwise they will rescind the right to bang on about ‘hard working families’, according to the CBI.
The group reckon that some fairly radical ideas need to be dreamt up and implemented, as families and low-income workers are forever at the wrong end of the crap-stick, financially.
It is calling for changes to national insurance, an extension of free childcare and extended maternity pay as measures that would make an immediate difference.
In a new report called A Better Off Britain, John Cridland, the director general, said: “The financial crisis and the slow recovery have hit people’s finances hard. Living standards will gradually improve as the economy does. But growth on its own will not be the miracle cure.”
The CBI is also calling for a gradual increase in the threshold at which employees pay national insurance to £10,500 – bringing it line with the income tax personal allowance – over the next parliament.
It is estimated that this would bring in an extra £363 a year. While not staggering, it’s better than nothing.
The CBI is also calling for an extension of the 15 hours a week of free childcare for three and four-year-olds to all one and two-year-olds, saving the average family with a one-year-old £3,430 a year. As well as recommending statutory maternity pay be extended from nine to 12 months, closing the gap between when maternity pay ends and financial assistance for childcare kicks in.
Cridland went on to say that despite the expense to the Treasury – about £7bn over the next parliament – the measures did not amount to the government abandoning its deficit reduction plans.
“Tackling the deficit is an absolute priority, but I don’t think it’s an either/or debate. We need to be more ambitious about the ways we tackle the deficit. Deficit reduction doesn’t have to be cut and slash.”
The average couple with two children saw their real income fall by £2,132 a year between 2009-10 and 2012-13 according to the CBI. Inflation has outpaced wage growth for much of the period since 2008.
He also hit out at large companies who refuse to pay the minimum wage: “The National Minimum Wage is about ability to pay. The Living Wage is what people need to earn. Should companies pay the Living Wage if they are able to? Yes. I would encourage them to. Can it ever be more than an encouragement? No.”
Water meters are, in theory, a sound idea. If you pay for what you use, how can that be wrong? Apparently it can, with a third of people who have switched to water meters wishing they hadn’t.
A poll by money.co.uk found that, not only were a third regretting their decision, only 42% of switchers actually saved money by switching, leaving the logical conclusion that 58% of people are paying more with a meter. Meters are, of course, not compulsory, unless of course you live in a house built after 1990, when installation of water meters in new houses became compulsory to ease the stress on the water supply.
However, more people might be better of with a meter, but because they only get estimated bills once very six months, many householders don’t actually know whether they are better off or not. And it certainly isn’t conducive to making an informed decision whether to switch back to rateable water bills, which must be done within 12 months of having a water meter, or be stuck with it forever.
The poll has prompted some sorts to call for an inquiry into the national roll-out of water meters, which has accelerated over the past 12 months. Last year the Government suggested to nine of the 24 water companies that they might like to consider compulsory metering for all their customers.
Frank Field, Labour MP for Birkenhead, said: “The trend across the country has been towards a ‘one size fits all’ mode of more metering. Yet this data blows wide open the assumption that we will all be better off with a meter.
“Less wealthy families living in smaller homes are being ripped off. We now need Ofwat to audit each water supplier’s customer base to find how many households would be better off on rateable bills, and direct that they should be transferred or have their bills capped at this level.”
Money.co.uk said those who lost out were £100 worse off on average and that 30% of water companies failed to provide calculators on their websites to show customers whether they would save money.
But isn’t everyone missing the point? Whether you save or lose money with a water meter is dependent on whether you are using more or less than you are currently being charged for. If you ‘lose’ money all it means is that you are now paying for your own water instead of allowing all the other water rate payers to subsidise you…