UK Energy Companies Give Away Free Gas To Get Customers Back

Posted on February 6, 2012 by admin

Britain’s largest energy companies are giving away millions of pounds worth of free gas to disgruntled customers who defect to rivals, prompting experts to question whether the firms’ profit margins are as low as they claim.

UK Energy Companies

UK Energy Companies

Rising energy bills have caused tens of thousands of households to switch their gas and electricity accounts from one of the ‘big six’ suppliers to a smaller, cheaper supplier in recent months. According to website Uswitch.com, 35,500 households switched from a big to a small supplier in January alone, a ten-fold increase on last September.

Now in a bid to lure lapsed customers back, some of the large energy companies are offering households cash incentives worth over £100 to return.
British Gas, the UK’s largest energy company with 15.9 million household accounts, is offering £125 of free gas to former customers who have recently moved to a rival supplier. Under the terms of the offer, the amount would be knocked off a customer’s bill if they returned to British Gas and remained for a year.

Meanwhile Npower, another of big suppliers, is working on a plan to offer a “monetary” reward to lapsed customers who return, a spokesman said.

MPs questioned how the companies, who claim to operate on low margins, can afford to pay such incentives, which together could amount to million of pounds of free energy.

The big six companies have argued that household gas and electricity prices are so high because the cost of energy on the world markets has increased. Last year British Gas said that it made profit of just £24 after tax from a typical dual fuel customers.

However Fiona O’Donnell, MP for East Lothian, said that the cash payments “raise questions” over whether the energy firms’ profit margins are as squeezed as they say they are.

Tom Greatrex, MP for Rutherglen and Hamilton West, said that the payments are another example of “predatory pricing”.

Martin Lewis, founder of Moneysavingexpert.com, said that the payments show the financial benefit of switching supplier.

“If you change yourself from a customer who is taken for granted to a customer who is on the move, you get a financial dividend,” he said.

A British Gas spokesman said that the offer of money was “not unusual” in the energy sector, however she said that the figure offered varies.

“We have a range of cash back offers which our customer service agents can use at their discretion as time-limited offers to attract customers,” the spokesman said.

Other big six companies such as SSE, EDF said that they do not offer financial incentives for customers to return.

telegraph.co.uk

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Saving Money On Insurance

Posted on January 30, 2012 by admin

Insurance policies are one of the few things we buy in the hope of never having to use – but they’re costing more than ever.The average car insurance policy rose by 15% to £971 last year while home insurance cover costs went up 6% to more than £200, according to the AA’s premium index.

Saving money on insurance

Saving money on insurance

In public, the insurers blame the usual issues – mainly the cost of personal injury claims. But in private, they admit many Britons are paying too much by over-insuring and adding extras to policies that they don’t need. Here – in many cases on condition of anonymity – they reveal how Britons can cut the cost of insurance.

ALL POLICIES
There are three crucial steps before buying. One, never accept a renewal price. Two, visit several comparison sites, including moneysupermarket.com, gocompare.com and confused.com, to price new deals. Doing so triggers an average saving of £370. Three, use a cashback site – quidco.com is a top choice – to secure up to £150 off the cost of a policy.

If possible, buy cover in full rather than monthly payments, which end up costing far more. Rising prices mean that it is a good idea to secure a cheaper price well before renewal time: quotes from Churchill, Barclays, Aviva and Direct Line remain valid for three months.

HOME
Don’t assume you need extras like legal expense cover. One major insurer admits: “It can be useful if you need legal advice, say after a dispute with neighbour, but it’s not used very often.” Play around with excesses – you might get more cover for no extra fee. “Different companies have different cut off levels for insurance,” says Ian Crowder, of AA insurance. “You may find that a £200 and £250 excess cost the same amount, so go for the lower one. Insurers use ranges to calculate prices, so playing around with your quote will ensure the most value for money.”

But make sure you’re not under-insured: with many homeowners extending properties, remember that adding a room in the loft or garage increases the value of your home for building cover and probably for the contents too. And make sure you stick to the rules: insurers are sticklers for them.

One admits that a frequent get-out for payouts is when high-value goods such as paintings and coin collections aren’t named in policies. Insurers usually have a limit of the amount of valuables they will accept of about a third of the total value. If a Persian rug costs almost the same as the rest of a home’s contents put together, go to a high net worth insurer or specialist broker.

CAR
A speedy route to major savings is by adding a friend or relative who is a low-risk driver to your policy. One reader tells of saving more than £200 by adding his dad – a sixtysomething with Institute of Advanced Motorists membership who drove another vehicle – to his policy.

Moneysupermarket says drivers are saving more by cutting mileage thanks to car pooling.

Nowadays, fully comprehensive car insurance is cheaper than third-party-only cover. Look at customer service ratings too. “Policyholders need clear, simple information about how to make a claim, precise details of telephone numbers and email addresses, and instant access to a claims handler throughout the process,” says Jeffrey Roberts of insurer Equity Red Star.

TRAVEL
“Almost 90% of all our travel insurance claims come from medical expenses and cancellation,” says Greg Lawson of insurer Columbus. “Make sure those are covered. For medical expenses, most claims are under £500,000 so if you’re looking to save money that could be enough. But more cover is required for some countries, most famously the US where healthcare is very expensive.

“Our other top countries for total claims are Spain, France, Turkey, Greece and Egypt. In non-European countries, the cost of medical expenses has accelerated.”

Check if your policy includes financial failure cover, particularly if you’re flying with Cheap Airlines R Us. But don’t over-insure for a cancelled trip. Most cancellation cover is per person, so if your family trip cost £1000, you’ll only need £200 cover each. “Personal liability or legal expenses cover also very rarely get claimed on,” Lawson adds. “Most people don’t have a legal expenses cover when they’re in the UK, so many won’t need it overseas.”

Make sure baggage cover is enough to pay out for gadgets. The average single-article limit is £300 – not enough to buy an iPad. Don’t double-insure: if valuables are covered abroad by home insurance, there’s no need to re-buy.

thisislondon.co.uk

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Ordinary Families In The UK To Face Wage Squeeze Until 2020

Posted on January 23, 2012 by admin

Low to middle income earners will not see their disposable income approach pre-recession levels until 2020 at best, a report from think-tank the Resolution Foundation has warned.

Wage Squeeze

Wage Squeeze

The Squeezed Britain study said households in this bracket, which typically bring in just over £20,000 in take-home pay a year, are also facing a 22-year wait to save up enough cash to buy their first home.

The report exposed the “daily struggle” of these families, which account for 5.8 million households and nearly one third of working age homes in Britain. It suggested that incomes for this group will decline before flattening out around 2016-17.

If this is followed by strong growth, it will take until 2020 for low to middle income households to return to the levels of disposable income they had before the recession, but if growth is stagnant real incomes could be 8% lower than in 2007.

Under both scenarios, the gap between low and middle income earners and those on higher incomes will widen, the report warned.

The study also charted the “disappearing” property ladder for these households, who typically took four years to save for a first-time buyer deposit in 1991.

By 2001 this group took eight years to raise a deposit and by 2011 this wait had more than doubled to 22 years, with those aged under 35 facing being stuck in rented accommodation, perhaps forever.

Researchers put the sharp rise down to house price rises as well as bigger deposits as a percentage of house prices needing to be raised, while wages remain flat.

They based their calculations on a deposit of around 20% currently being needed to purchase a first-time buyer house, typically costing just over £124,500.

Low and middle income earners saving around 5% of their annual wages, amounting to just over £1,000 a year in savings before interest, would take 22 years to raise a deposit of just under £25,000.

telegraph.co.uk

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Economic Forecasters: UK Back In Recession

Posted on January 16, 2012 by admin

The UK is likely to have already fallen into recession as the eurozone crisis scuppers hopes of imminent recovery, two respected economic forecasters have warned.

UK Recession

UK Recession

The Ernst & Young ITEM Club and the Centre for Economics and Business Research (CEBR) both say gross domestic product (GDP) shrank in the final quarter of last year.

Both also predict it will fall again in the first three months of 2012.

That would represent a second consecutive quarter of contracting output – fulfilling the definition of a recession.

And export trade crucial to any improvement in the British economy is being hit by problems within the eurozone, according to both reports.

The warnings come shortly after France, the eurozone’s second biggest economy, had its AAA credit rating downgraded by Standard & Poor’s (S&P).

Professor Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, said: “Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement.

“But it’s not going to be a repeat of 2009 – we are not going to see a serious double dip.”

The ITEM Club report forecasts GDP growth of just 0.2% this year before increasing to 1.8% in 2013 and 2.8% in 2014.

The ITEM Club said deteriorating levels of confidence will see business investment stagnate in 2012, while export prospects have already slowed.

However, the group said UK companies have stronger balance sheets than in 2009 and have built up large cash stockpiles, which will provide a useful insurance policy if the situation deteriorates further.

Meanwhile, CEBR revised down its forecast for growth for 2012 as a whole from 0.7% growth – as predicted last October – to a decline of 0.4%.

It said there was a risk of a more serious decline of 1.1% if developments in the eurozone are worse than feared.

Douglas McWilliams, chief executive of CEBR, said: “We take no pleasure in outlining such a bleak forecast.

“But the world is going through a fundamental change where previously poor economies are industrialising fast.”

A Treasury spokeswoman said: “The uncertainty in the euro area continues to have a chilling effect on the UK as well as elsewhere but there are reasons to be optimistic: business surveys showed the UK service and construction sectors strengthening at the end of 2011, and the Government’s credible fiscal plan is helping keep UK interest rates at record lows.”

finance.yahoo.com

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Tesco Expected To Post Poor Christmas Trading Results

Posted on January 9, 2012 by admin

The winners and losers in a supermarket price war are to be revealed this week amid fears Tesco has suffered its worst Christmas in decades.

Britain’s leading grocers slashed prices over the festive season in a desperate bid to tempt shoppers.

Tesco

Tesco

With competition from budget supermarkets Aldi and Lidl, analysts warned the promotions frenzy was likely to have hit profits.

Waitrose set the bar high last week when it reported a 3.8 per cent jump in underlying sales as the premium end of the market survived unscathed.

But Tesco, Britain’s biggest supermarket chain with 2,700 stores, is expected to report falling sales on Thursday.

Matthew Truman, an analyst at JP Morgan Cazenove, forecast a 1.5 per cent slide in sales over Christmas.

He said: ‘It’s clear that the retail industry has suffered a difficult Christmas and we do not believe that Tesco has emerged unscathed.’

Sainsbury’s is likely to fare better on Wednesday as it benefits from its ‘Live Well for Less’ and ‘Feed your Family for £50’ campaigns.

The City expects Christmas sales to have risen by nearly 2 per cent but Numis analyst Rod Salmon warned it may not last.

He said: ‘Longer term, we continue to believe that Sainsbury’s will be the big loser in food due to a lack of clarity in its offer.’

Morrisons has fared better than its rivals in recent months under new boss Dalton Philips, but sales growth look set to have slowed.

Justin Scarborough, an analyst at Royal Bank of Scotland, said: ‘We believe that while Christmas eventually arrived for the industry, it came late and since the Christmas period sales trends have reverted to more subdued levels.’

thisismoney.co.uk

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Tips To Help You Get In Top Financial Shape In 2012

Posted on January 3, 2012 by admin

Forget faddy diets and exhausting exercise – start 2012 with these financial resolutions and you could really make a difference to your lifestyle.

UK Pounds

UK Pounds

Change your current account

Statistically, you are more likely to get divorced than switch your bank account, but this hasn’t stopped banks offering all kinds of carrots to entice you to move your custom.

Santander currently offers the top prize of up to £300 for moving your main current account to its Preferred account, but you must already have a mortgage and some savings with the bank to qualify.

The Preferred account pays you 5 per cent on balances up to £2,500, as long as you deposit at least £1,000 a month into it. This is market-leading for a current account, but it only applies for a year. After 12 months, the rate drops to 1 per cent.

First Direct – voted best bank for customer service in consumer surveys – offers you £100 to switch, and if you’re not happy with the bank after six months, it will give you another £100.

Halifax offers no joining sweetener, but as long as you pay in £1,000 a month it will pay you £5 cash.

Are you energy efficient?

There’s no point in spending money heating your house if it is simply leaking into the atmosphere, so make sure your home is as insulated as possible. According to the Energy Saving Trust, cavity wall insulation is the most cost-effective measure.

By injecting foam into the gaps between the external and internal walls in your home, you could cut your bills by £110 a year.

Loft insulation is common in most homes, but by upgrading existing insulation to 270mm thick you could save an extra £25 a year.

If you are part of a low-income household or a pensioner, you can apply for grants of up to £3,500 to install insulation under the Warm Front scheme.

Take advantage of Bank Rate

Savers may rue the day the Bank of England slashed Base Rate, but mortgage owners should take advantage of the historic low.

If you are lucky enough to be on a tracker mortgage you will have seen your monthly mortgage payments halve over the past five years. As long as you can do so penalty-free, make overpayments to reduce your debt.

Your mortgage will be your cheapest debt, however, so if you have a credit card racking up interest at 18 per cent, make sure you pay this off first.

Ensure you’re insured

Seven million British households are underinsured – with a total of £200 billion of home contents at risk. Make a checklist of items in each room of your house, noting the cost of replacing each item with a new model, and inform your insurer of the total. You may find your premium rises, but it is cheaper than having to fork out the extra from your own pocket should the worst happen.

Preparation is key

If you have not done so already, make 2012 the year you start a pension.

Accountants at Pricewaterhouse Coopers recently calculated that the state pension age could rise to 70 by 2050. But even with an increased working life, our pensions will be stretched.

If you start saving at the age of 20 and put away £75 a month for your entire working life, your savings should produce an income for life of about £17,000 at retirement. Delay payments until you’re 50 and the same monthly savings would produce an income of about £2,000. Putting it off until you are 30 would cut your likely income to £8,850.

telegraph.co.uk

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Survey: Consumer Confidence In The UK Low For 2012

Posted on December 28, 2011 by admin

Fewer than half of consumers confident about New Year finances as price hikes, pay freezes and austerity measures bite.

UK consumer confidence

UK consumer confidence

After seeing the cost of living soar this year, four out of 10 people say they will be even worse off next year, according to a new survey. Another quarter of those surveyed said their financial situation “will remain tough” in 2012.

Almost half of those surveyed said they expected their disposable income to shrink next year, with almost one in five expecting it to be cut dramatically.

The survey, by Uswitch.com found consumers had little to celebrate come December 31, with more than three quarters worried about the rising cost of living, while almost two thirds are concerned about household bills. The financial squeeze of the last year has taken its toll with half of consumers feeling less financially well off than before.

Consumers also fear the unknown as they head into the New Year. Almost a quarter are worried about the uncertainty over interest rates, with one in four concerned about job security and one in five anxious about their current level of debt.

With consumers already struggling to make ends meet, it’s likely 2012 will be a very frugal year as nearly half of consumers make paying off debt and saving money top priorities.

Michael Ossei, personal finance expert at uSwitch.com, says: “The next year looks set to be another difficult one with consumers already geared up to cut back, curtail spending and try to clear outstanding debt. Instead of the fresh start many were hoping for, 1st January may just signal the start of yet another tough and frugal year.”

telegraph.co.uk

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UK Households Spending Power Drops

Posted on December 19, 2011 by admin

Households are being squeezed as a damning new report suggests that families are £10 worse off a week than a year ago.

According to the Bank of England’s Quarterly Bulletin, disposable household incomes have fallen by a staggering £46 a month in the last year.

UK Pounds

UK Pounds

Over the last 12 months, the average family’s spending power has fallen by £552. The report found that homeowners with high loan to value mortgages had the most disposable income, and renters had the least.

The report also found that struggling Brits could face another recession. The UK economy has taken a turn for the worse and appears to have slowed down considerably. The key reason for this appears to be that people are not spending sufficiently.

Around half of those reported to have been affected by the current economic climate have been looking for an additional income or working longer hours to make ends meet.

The report also highlighted that households can expect to have their finances stretched further in the future, as the economy shows little signs of recovery.

“Households reported that their income available after paying tax, housing costs, bills and loan payments had fallen, continuing the trend of the past four annual surveys.

“Households also reported that they had been affected by the fiscal consolidation, mainly through lower income and higher taxes,” commented Spencer Dale, Chief Economist and Executive Director – Monetary Analysis and Statistics.

More than half of households said they experienced a fall in their available monthly income. Worries over debt problems have fallen since last year, however, they are still significantly higher than pre-recession levels.

moneyexpert.com

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Halifax: UK Housing Market Will Be Stable In 2012

Posted on December 12, 2011 by admin

Halifax has released a forecast for the UK housing market for 2012 that predicts there will be little change to house prices in 2012.

The forecast expects house prices to remain broadly stable, rising or falling by no more than two per cent either way as the slump that many people fear will not materialise, according to the Halifax.

Hose prices are at an average of £161,731 at this time, little changed from the end of 2010 and they are not expected to deviate substantially from that figure over the next 12 months.

This is despite most leading economists predicting that the UK will enter recession in the first part of 2012 and that the eurozone and other areas of the global economy are likely to follow suit.

The Halifax predicts regional differences with London and the south-east remaining strong and the north/south divide set to increase.

The Halifax predicts possible difficulties for households in accessing mortgage funding and that unemployment will increase. However, the Bank of England is expected to maintain base rate at 0.5 per cent for the whole of 2012 which will help householders continue to be able to afford repayments and increase their debt levels by encouraging people to pay down their mortgages.

The continued imbalance between supply and demand of new homes is also expected to keep the value of UK homes at a stable level.

Halifax’s housing economist, Martin Ellis said: “House sales and the supply of properties on the market for sale have remained very stable since late 2010. These steady market conditions have helped to stabilise house prices and sales. As a result, the average price is currently little changed from that at the end of last year.”

If you are able to get a mortgage the rate of mortgage affordability is at its lowest level since 1997, with just 26 per cent of disposable earnings required for mortgage repayments in the third quarter of this year, compared to the long term average of 37 per cent over the past 25 years and 48 per cent of disposable earnings as recently as 2007.

“The prospect of an exceptionally low Bank of England Bank Rate over the foreseeable future is likely to continue to support the market over the coming 12 months, Mr Ellis added.”

myfinances.co.uk

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UK Shop Price Inflation Slows Down

Posted on December 7, 2011 by admin

UK shop price inflation fell to its lowest level for a year in November, according to the British Retail Consortium (BRC).

Shop price inflation

Shop price inflation

The rate of price increases was 2% in November, down from 2.1% in October.

Food price inflation was still relatively high, but down to 4% from 4.2% the previous month. Non-food inflation remained at 0.8%.

The retailers’ organisation said competition between shops had also helped keep prices down.

“It’s been a slow start to Christmas trading and many retailers have reduced prices further in recent weeks to help boost footfall and spend in store,” said Mike Watkins from Nielsen, the analysts who collate the data.

Lower inflation

Last month the Office of National Statistics reported that UK Consumer Prices Index (CPI) inflation fell slightly to 5% during October, down from a rate of 5.2% the month before.

Falls in the price of food, air transport and fuel helped to push the inflation rate lower.

Despite the drop, the rate still remains well above the Bank of England’s target of 2%.

Retail Prices Index (RPI) inflation – which includes mortgage interest payments – also fell to 5.4% from 5.6%.

bbc.co.uk

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