Welcome to Sarah Pennells’ personal finance column
Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.
Online ticket companies could be investigated
The consumer body Which? has given online ticket companies until Wednesday to justify the fees (such as for booking and ticket delivery), or it will refer them to the Competition and Markets Authority for an investigation.
Since Which? started its ‘play fair on ticket fees’ campaign, it says that most online ticket firms now display any extra fees upfront. But its research shows that compulsory fees added an average of 18% onto the price of a ticket, but could vary from 5% to 31%.
Some ticket companies charge customers up to £2.50 to print the ticket at home (shouldn’t we be charging them for printer ink?!), while others charge £3 if you made the trip to pick up the ticket in person.
If the Competition and Markets Authority does investigate online ticket companies, there’s unlikely to be a quick fix as these types of investigations normally take many months.
Off abroad? Watch your card spending!
If you’re going on holiday, be careful if you’re planning to flash the plastic. Depending on the card you use and what you use it for, you could be charged a transaction fee (for using your card in shops and restaurants), which could be up to 2.75%, a purchase fee (which could be a flat fee) and a cash withdrawal fee, for taking money out at a cash machine while you’re abroad.
SAVVY/SAVVYWOMAN TIP: If you use your credit card to take cash out while you’re abroad, you’ll be charged interest from day one, even if you pay off your bill when you get home.
Check with your debit or credit card provider about how much you’ll be charged, before you go on holiday, or look for a card that’s free to use abroad.
If you prefer, you can take out a prepaid card instead. Some people prefer them because there’s not the same risk of fraud – because these cards aren’t linked to your bank or credit card account.
SAVVY/ SAVVYWOMAN TIP: If you use a prepaid card, check the fees for loading the card, spending money and – most importantly – the exchange rate.
Clearer information from insurers
Insurers will give customers clearer information when they renew their insurance policies, under plans drawn up by the insurers’ trade body, the ABI.
If these changes are introduced, it would mean that when you renew your insurance, your insurer will tell you how much you paid this year, as well as how much your new premium will be. And if you’re taking out an insurance policy with the company for the first time, it will have to state clearly that any discounts may not be on offer when you come to renew.
The Association of British Insurers’ proposals would only apply to household and car insurance, but other types of insurance, such as travel or pet insurance wouldn’t be covered.
SAVVYWOMAN/ SAVVY TIP: These changes are only proposals at the moment. Another idea is to tell people exactly how big a discount they’ve been given when they switch insurer.
Copycat websites arrests
Have you applied for a new driving licence recently? Or an EHIC – a card that gives you access to free or low cost medical treatment in Europe? If so, did you end up on a copycat website? One that looks like it’s an official government website but charges you for services that you could get for free?
If so, you’re not alone. Many thousands of people have used these websites over the last few years, and more than five thousand have complained about them to Citizens Advice. But last week, five people were arrested in police raids around the UK, which could mean that 25 copycat websites are either shut down or aren’t able to stay online.
SAVVY/ SAVVYWOMAN TIP: If you’ve used one of these copycat sites, and don’t get what you’ve paid for, you may be able to get your money back if you paid by credit or debit card. Contact your bank or credit card provider and ask them to do a ‘chargeback’, which is essentially a reversal of the payment. Be aware that there are time limits. If the service you paid for cost more than £100, you have legal protection under something called Section 75 and you may be able to get your money back.
Interest rate cap on payday loans
The financial regulator, the Financial Conduct Authority, says that payday lender won’t be able to charge more than 0.8% interest a day, if its plans for an interest rate cap go ahead. The FCA says that this would mean it would cost someone no more than £24 to borrow £100 for a month. At the moment, payday lenders charge between 0.4% and 4% a day.
The FCA would also force payday lenders to charge no more than £15 for a late payment letter and payday loan customers would never pay more than twice the amount they borrowed. The changes could be introduced next January.
Debit cards and apps for children
Fancy giving a debit card to your eight-year-old (if you have a young child, that is!)? The idea of giving a child a debit card might fill you with horror.
But there are an increasing number of companies offering prepaid cards and apps to help children manage their pocket money.
Companies such as GoHenry and Osper let children aged eight upwards have a prepaid debit card, while MeCard is one that’s aimed at children aged 13 or older. There’s no overdraft facility and the cards are preloaded with cash by the parents.
Parents can – in some cases – limit where children use their debit cards, such as on the high street or online, and the cards can’t be used to buy adult services, such as on gambling sites. Parents may also be able to give children financial rewards for completing certain tasks and track their children’s spending.
The companies say that children learn how to manage money in a controlled environment, but some people are concerned it could encourage spending in children.