Live Better blog: Financial February.
Need a financial update? We’ve got you covered.
Here’s everything you need to know from the past month…
Many homeowners have found themselves in serious leasehold traps after being misled by housing developers.
In some cases, contracts would allow ground rents to double every 10 years, which could leave people struggling to sell their homes.
Some buyers weren’t told upfront about the leasehold or what it meant, and by the time people found out, it was often too late to pull out of the sale.
The Competition and Markets Authority (CMA) said it would investigate and called for refunds to be paid and the law to be changed, saying there should be a ban on the sale of new leasehold houses, and ground rents for new leases slashed to zero.
The investigation is currently ongoing…
Help to BYE.
The government-backed equity loan to help first-time buyers is coming to an end in 2023, but what will replace it?
There’s been a lot of talk around a new government scheme called First Homes – here’s what we know about it so far…
Although it seems quite likely that First Homes will happen, it’s still in the consultation process, which closes on 3rd April 2020. As far as we’re aware, the scheme will give priority access to military veterans and key workers, such as nurses, police officers and fire fighters.
The difference between First Homes and Help to Buy? Nobody will have to be repaid when the house comes to be sold. Instead, the 30% discount will be permanent, meaning that when it comes time to sell, the house will be sold at a 30% discount to its then-valuation.
There has been comment that the new scheme could push other types of affordable housing, such as controlled rents and shared ownership, out of developers’ plans, with the government seemingly favouring the .
Flaws in previous housing policies mean that only time will tell whether First Homes will be a success…
Deposit-free renting. Is it worth it?
Paying a smaller, non-refundable fee in place of a traditional deposit may reduce upfront costs, but warnings have arisen that pushing deposit-free options could cost renters more over time.
The BBC explains: ‘A traditional deposit is typically up to five weeks’ rent, which is refunded at the end of the tenancy, minus any deductions for damage or unpaid rent. With deposit-free options, renters pay less initially (usually a one-off payment equivalent to one week’s rent or a monthly fee), but this is generally non-refundable and cannot be used to pay for damages’.
Generation Rent, a campaign group, says due to the competitive renting market, some tenants may feel pressure to accept deposit-free options, which can earn letting agents commission.
It’s always wise to look at other options before diving into a deposit-free contract – some councils may provide interest-free loans to cover deposits!
Online shopping. The new normal.
It’s the new easy and convenient way to shop – and now you don’t even need to pay anything upfront!
Buy now, pay later services such as Klarna and ClearPay are growing at a rate of 39% a year, leading some to worry that younger customers could “sleepwalk into debt”.
Around seven million people in the UK have used Klarna, which is twice as many as a year ago, so consumer groups are .
The biggest concern is that many young shoppers may not realise the charges and costs involved if a payment gets missed, which could impact credit ratings.
Research suggests these types of services were the fastest-growing online payment method in the UK, growing 2 times as fast as bank transfers!
Be wise, shoppers.
A bang for your buck.
To encourage people to save, more and more banks are looking to gamify customer experiences by turning their savings journey into an enjoyable game involving prize draws and competitions. But just how likely is it that you can win a cash prize through your savings?
Many would prefer their account to simply offer higher interest rates on their savings, as the prize draws offer a slim chance of winning a small amount.
For example, some credit unions offer PrizeSaver account holders a 3,500-1 chance to win the £5,000 prize, with the odds lengthening as more accounts open.
In comparison, Halifax has paid out over £63 million to 123,728 winners since 2011 in their savings prize draw, and the Family Building Society offer a monthly prize of £50,000 to anyone who has a minimum of £10,000 in their Windfall Bond account.
So, if you do some research and shop around, there can be much more attractive offers on the market for savvy savers than the standard small prize draws many high street banks are offering.
A serious breach.
Moneybarn, a car finance company, has been fined £2.77m for not helping customers who fell behind with loan repayments while in financial difficulties.
The company’s main customers are those who struggle getting car loans from mainstream lenders due to their personal circumstances, and who are at greater risk of detriment if they fall into arrears.
Between 1 April 2014 and 31 December 2017, Moneybarn entered into 71,254 loans with customers, some of which didn’t have a proper chance to clear their debts over a realistic timeframe.
Due to this breach, Moneybarn has compensated 6,000 of its customers with £30 million.
If you’re worried about your own car finance agreement, you should always talk to your provider about your options. If you feel like your debts are getting out of control, you can speak to specialist advisors about how to get your finances back on track.
Just click here to find out how the experts at MoneyPlus Advice could help you!
Sterling gets a boost.
Did you go away for the school holidays in February? You might’ve noticed you got a bit more for your money when going abroad, thanks to Sterling being close to its highest level against the Euro since the EU Referendum aftermath.
But, if you got your cash exchange at an airport, your rate could’ve been 34% worse than that of the market rate!
There’s still a wide gap between buying on-the-day airport deals and getting your currency in advance online, so you should always make sure you plan well in advance when changing your holiday money.
Just click here to see where you can get the best exchange rates!
N26 is shutting its doors.
Berlin-based bank, N26, will be closing all UK accounts on the 15th April, citing operational challenges due to Brexit.
The challenger bank only began offering current accounts in the UK after the EU Referendum, but says that “timing and framework” of the Brexit Withdrawal Agreement made it difficult to continue.
N26 had about 200,000 customers, and was one of the UK’s smaller banking operators.
If you have an account with N26, it will operate as normal up until April 15th, at which point you should have transferred your funds to an alternate account. If you haven’t moved your money by the deadline, it will be moved into a holding account, and you’ll need to contact N26 directly to arrange a transfer of your money.
Out of contract, out of pocket.
Around 20 million broadband, TV and phone customers are paying more than they need to due to being out of contract with their current suppliers.
However, new rules came into effect in February that give customers the chance to avoid hefty price hikes, with some users able to save £150 a year on broadband alone!
Service providers will now need to text, write or email their customers 10-40 days before their contracts end to let them know if a better deal is available.
All the more power to the consumer!
At MoneyPlus Telecoms, we’ll always let you know about our other deals that could help you save that little bit more, or that give you more for your money (who doesn’t want that?!)
Our best value deal is the Unlimited, which will get you unlimited texts, calls and data for only £20 per month on a 12 month contract!
Sound good? Just head to our website to see more of our great SIM-only offers: moneyplustelecoms.com.
P.S we don’t do credit checks, so you’re guaranteed to be accepted.
A welcome change.
About 15 million UK households will see their energy bills drop as the energy regulator cuts the default price cap and pre-payment meter cap by £17!
The default price cap protects about 11 million households around the UK and the pre-payment meter cap protects a further 4 million households, all of which will have cheaper bills for the April-September period.
The regulator says this pricing change is due to wholesale gas and electricity prices being at their lowest levels for 10 years thanks to healthy stock inventories.
Currently, an annual levy on gas and electricity bills (about £186 of a typical bill) is used to fund renewable energy, with the burden of payments falling unfairly on those who are worse-off financially.
With the Treasury looking to cut emissions to zero by 2050, it is estimated that more than £20 billion a year will be needed over the next decade to fund this transition.
Currently, about £10 billion per year is being invested in clean technology, with consumers footing £5.5 billion of that total through levies on bills.
The government is currently looking at how the costs are distributed, which may involve a shift from bill payers to tax payers…
From May, gas and electricity customers who have had their energy supply switched by mistake (also known as an erroneous transfer) will receive automatic compensation of £30. If your suppliers don’t sort the issue out in a reasonable period, you’ll keep getting compensation for as long as it takes to fix.
The energy regulator’s new rules are put in place to help give consumers peace-of-mind when shopping around for the best deals, as more than six million people switched energy suppliers last year.
So if you get switched by mistake, you can rest assured that you’ll be compensated!
Free Energy for a Year!
The second winner of our Win Free Energy for a Year competition is… Mark Trevethan from Devon!
Well done, Mark.
We’ve extended the draw until the 31st March, so there’s still more winners to be announced! Just head to moneyplusenergy.com to switch, and you’ll be entered into the draw to win your energy bills paid for a full 12 months, or up to £1,400!*
*T&C’s apply: http://bit.ly/2HPtFIN.
“By creating and writing down your financial goals, you’re giving yourself permission to make it happen and choose the lifestyle you want to live”.
– Money Nuggets Blog.