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.
Real or fake?
If you’re shopping online for gadgets or electrical items, watch out because there’s been a rise in the number of fake and counterfeit goods on sale, and Trading Standards says they’ve seen more fake goods sold through Facebook and other social media sites.
With some things, you can tell they’re fake because the price is so low or they don’t look like the real thing, but others are very hard to tell apart from the genuine item and are sold at similar prices.
If you’re thinking of buying a gadget online, do some research into the seller before you buy. Find out whether the retailer or trader has good reviews for customer service. Register the product with the manufacturer, if this is an option (most manufacturers ask you to do this and some offer an extended warranty if you do).
SAVVY TIP: Don’t use a gadget if you think it’s not working properly or if it’s making an unusual noise – it could be a warning before the whole thing melts or explodes.
Travelling home for Christmas
If you’re driving home for Christmas, when should you travel to avoid the crowds? Well, whatever you do, don’t drive on Friday (18th) as, according to the AA, 13 million journeys of at least 20 miles will be made that day. That’s a rise of about three million on last year.
Hanging around until Christmas Day may not be the best plan either, as almost seven million people will be travelling then. The good news is that most of the major roadworks will be lifted over the holiday period. And the second bit of good news is that petrol prices are at record lows (yay!)
The bad news is you aren’t guaranteed to escape the traffic jams unless you travel in the middle of the night. But if you’re travelling late on Christmas Eve, at least you might get to see Santa…!
0% interest…on your savings
Have you checked how much your savings are earning recently? No? You could be in for a nasty surprise. Your bank could be paying you absolutely no interest whatsoever. Not a penny.
The regulator, the Financial Conduct Authority, named and shamed over 30 banks and building societies for paying pitifully low interest rates on savings. Two of them paid no interest whatsoever on some accounts, while others were paying as little as 0.01% interest (so if you had £1,000 in the bank you’d earn a rather forgettable 10p in interest after a year).
If you’ve got some savings you’ve forgotten about, switch them to earn more interest:
- Check how much you could earn if you switched your current account, rather than your savings. Some providers are paying 5% interest if you’re in credit (although it’s only on a limited amount for a year) while others are paying between 3% and 4%. That compares to about 1.5% on an easy access savings account or cash ISA.
- Compare rates on offer from cash ISAs with ordinary savings accounts. Cash ISAs pay interest tax free, but from April next year you’ll be able to earn up to £1,000 in interest without paying tax (£500 if you’re a higher rate taxpayer), so ISAs won’t have such an advantage.
- Make a note on your phone, desktop calendar or diary to check the rate every six months (unless you’ve chosen a fixed rate account, where the rate will stay the same).
SAVVY TIP: If you put money into a savings account that doesn’t have a fixed rate, the bank can change the rate whenever it wants to. Just because it advertises an eye-catching rate doesn’t mean you’ll continue to get that.
Should you sell your annuity?
If you’ve already converted your pension fund into an annuity, you’ll be able to sell it from April 2017. The government confirmed that it’s going ahead with its plans to let people sell their annuity if they’ve already retired. But should you?
Here are my tips:
- Most people will be better off keeping their annuity. That’s not just my opinion, it’s the opinion of the government which is introducing this change. Why? Because an annuity will give you a guaranteed income. You know what you’ll get year in, year out.
- If you want to sell your annuity, make sure you get the free guidance from Pension Wise (a government initiative) or take advice from an independent financial adviser.
- Shop around. You’ll be able to use a free online calculator, which will give you a rough idea of how much your annuity will be worth. Don’t take the first offer you’re given – compare it with at least two others.
- Think about how you will generate income, if that’s what you need. Savings rates are low at the moment so, if you need a regular income, you’ll probably need to take some investment risk with your lump sum (which means it could go down in value). Are you happy with that?
Christmas card trick
How many Christmas cards have you been sent? I mean actual cards made of paper, rather than emails with jingling attachments… If it’s more than 23 you’re doing better than average! Research by an insurance company shows we receive 11 fewer Christmas cards, on average, this year than we did a decade ago.
But cards are still popular at Christmas. While over 70% of people said they’d prefer to receive a handwritten Christmas card, just 12% said they’d prefer a personal email, only 8% wanted a text and only 4% said they’d like a personal message on a site like Facebook. Time to get your pen out!
SAVVY TIP: Be quick – the last posting date for Christmas is Saturday 19th for second class and Monday 21st for first class.