Do you read the small print when taking out financial products? A report has found that it’s costing us all £428 each year. Remember when smart energy meters were set to make our lives easier? Apparently they could leave us worse off.
Don’t worry though – it’s not all doom and gloom. The drop in oil prices has sparked a petrol price war at the pumps, set to continue into the New Year. We’ve also got the best free ways to track Santa as he delivers presents around the world this Christmas, and news of a new phone scam affecting Brits. Time to find out more…
2.6 million Brits struggling with severe debt problems
Despite the steady economic recovery and drop in unemployment, 2.6 million Brits are still in severe problem debt, and 8.8 million people are in moderate financial difficulty according to our latest report, ‘Navigating the New Normal’.
The report shows how income shocks, such as illness, losing a job or having hours reduced at work are tipping millions of people into a debt problem because they don’t have safety nets they can rely on, such as savings.
The report also calls for policymakers to think more about helping people ‘plug the gap’ between their income and bills after they’ve faced a shock to their income, to help avoid people turning to credit and putting themselves at a higher risk.
Could smart meters lead to higher energy costs in future?*
Smart energy meters seem like the ideal solution to the dull task of providing meter readings to your supplier, to monitor energy usage and to help avoid being wrongly charged or getting an unexpected bill.
However a newspaper investigation has discovered that Ofgem, the energy watchdog, recently warned that firms could use smart meter data to create new tariffs based on energy usage at different times of the day.
This is all based on a recent trial scheme run by British Gas, to help people save money at times when electricity is used less. However the newspaper found, from reviewing the trial data, that people who use most of their energy at peak times were actually left on average £58.60 a year worse off. British Gas dispute the findings and say that it’s based on the wrong data.
*To note: We updated this piece after initial publication
Beware: Action Fraud Litigation scam calls!
ActionFraud, the UK’s national fraud and internet crime reporting centre has received reports of people being targeted by fraudsters pretending to work on their behalf.
The fraudsters have been claiming to work for ‘Action Fraud Litigation Services’ on behalf of the City of London Police. They explain that they’re legal prosecutors, able to help victims recover money lost in a previous fraud. They then charge victims a one-off fee to ‘represent them’, usually £239, although this can vary. When victims call the number back there’s no answer and the scam has left many people at a loss.
Action Fraud has stated that ‘Action Fraud Litigation Services’ is not a legitimate organisation and that they would never ask anyone to make payments over the phone or by email. They’ve advised people to be particularly wary of the scam.
Financial ‘jargon’ costing UK consumers £21bn a year
Being a team of debt experts, we know how complicated financial jargon can be. Often it’s so confusing it may as well be written in a different language! So we weren’t surprised when a recent consumer group found that most people need to be educated to a university level to understand financial small print. The research suggested that misunderstanding financial jargon ends up costing an average of £428 for every adult, or £21bn a year.
A separate report from The Money Advice Service also found that four out of five adults didn’t read the terms and conditions when they took out financial products, which is hardly surprising when it’s so difficult to understand.
Students Loans Company overcharging graduates
Being a student can be expensive, leaving many people with debts that are hard to manage. A recent study by accountancy firm Baker Tilly has found that graduates have overpaid more than £45 million through salary deductions in 2013-2014. This isn’t just the first time this has happened either; the number of people making overpayments has been rising steadily since 2009.
The overpayments are a result of miscommunications between HMRC and the SLC which leads to graduates paying extra money off their loans. For some people, monthly student loan repayments are a big financial burden and the overpayments could lead them out of pocket and having to ‘jump through hoops’ to get their payments refunded.
Petrol prices drop below £1 as oil prices tumble
Good news for drivers as the price of petrol has dropped to below £1 a litre, sparking a petrol price war and giving a boost to families ahead of Christmas. Filling the tank is now around £10 cheaper than a year ago, with energy and petrol prices set to continue falling in 2016.
Get a free personalised letter from Santa!
And we couldn’t finish without a Christmas story…
If your little ones still need convincing that Santa is real (of course he is) then a truly magical way of doing this is with a personalised message from the man himself!
That’s it for this month, we’ll be back in January with more debt and money stories. Ho ho ho, Merry Christmas everyone!