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.
Gearing up for a Black Friday bargain?
It’s that time of year again – Black Friday – on November 25th, promises amazing bargains. That’s if you believe the retailers! It’s true that lots of shops – both online and in the high street – will have price reductions, but it doesn’t necessarily mean they’ll be the big bargains we’re all hoping for. Here’s why:
- Prices often rise in the run-up to Black Friday. There’s a nifty comparison website called Idealo, which lets you see what’s happened to prices over the last 90 days. I had a look at the price of one garden leaf blower, which had rocketed from less than £75 to almost £175 between the end of August and the beginning of September. One TV set I checked was less than half price in October before the price rose again.
- Some shops apparently buy in stock specifically for Black Friday – it could be older models (for example, TVs and laptops) – while others make sure the older models they want to sell have the biggest discounts.
So, make sure you:
- Do your research – thoroughly – if you’re going bargain hunting. And remember, if you buy online, you have 14 days to change your mind and get your money back. The only exceptions are if you buy something that’s been custom-made for you, or buy flowers or fresh food (which seems fair enough!).
- Don’t buy anything you need to borrow to pay for. It’s a good idea to pay for things on your credit card because of the consumer protection, but not if you’re going to take months to pay it off.
- Take a step back from the ‘buy now’ frenzy! I don’t know about you but I rarely make the best decisions when I’m in a rush, but it’s exactly what the shops want. That’s why they like it when there’s a big queue when the stores open – because we know that if we don’t bag the ‘bargain’ someone else will.
- Watch out for fake websites or ones that ask you to pay by direct payment rather than credit or debit card. If you buy something and transfer money directly to the seller’s bank account (for example, using online, mobile or phone banking), your bank won’t give you your money back if the seller turns out to be a fraudster or if you’ve bought something that’s fake. It’s not just shops that will be busy on Black Friday!
Energy firms’ profits investigated
Another week, another energy story! This week the government said it will investigate the Big Six energy companies after a newspaper claimed that they were making six times the profit they admit to. The paper said that rather than making a profit of around 3% the big energy suppliers are making 24% on customers who are on the standard tariff.
The standard tariff is likely to be the most expensive of all and it’s the tariff you end up on if you never switch or once your deal has run out (and over two thirds of customers are on it).
Official figures from the regulator, Ofgem, show that in August, the average annual tariff for gas and electricity was £1,066 a year, but the cheapest was £744 – a saving of £322!
Lots of people don’t switch because they don’t think they’ll save money or think it will be a hassle. My view is that I’d prefer it if the energy companies didn’t charge loyal customers the most (through the standard tariff), but until that happens, it is worth switching.
Here are my tips to reduce your energy bills this winter:
- If you’ve not switched in the last six months or so, find out what deals are available. Check on at least two price comparison sites as sometimes they come up with different results.
SAVVY TIP: Make sure you tick a box saying ‘show me all tariffs’ as, if you don’t, you’ll only see the ones you can switch to via the comparison site and you may miss out on the biggest savings.
- Don’t just choose the cheapest. Check out the service record of the energy supplier before you switch (some price comparison sites have a user rating). Some energy companies are truly appalling at dealing with customer complaints so it’s best to avoid them.
- Take the strain out of switching with an app. There are a couple of apps available that will automatically find you the best deal for you when yours runs out. Some are free (and get a commission from the supplier), while others charge you but only if they can save you more.
- Take regular meter readings – whether or not you’re switching. If you don’t have a smart meter, your energy company will be estimating how much gas and electricity you use, unless you tell them. Most energy companies make it easy to submit readings, so do it regularly.
- Ask for money back if you’re in credit. If you pay by monthly direct debit, you’ve probably overpaid in the summer and your account is likely to be in credit. You’ll obviously use more gas and/or electricity in the winter, but you can ask for the money back if you’re in credit by too much.
SAVVY TIP: Some energy suppliers will automatically refund you on the anniversary of you opening your account, but only if they’ve had a meter reading recently.
- If you’re leaving your supplier, make sure you get a refund of any money you’ve overpaid and keep an eye on your bills from your new supplier. Occasionally gas and electricity companies mix up meter numbers when you switch, which could mean you’re not billed for the right amount.
New mums missing out on the state pension
New research shows that thousands of new mums could be missing out on credits to build up their state pension. How? When you register for child benefit, not only do you get money towards the cost of your children, but it builds up your state pension when you’re not working (until your child is 12).
Three years ago the government introduced a tax for couples where one partner earns more than £50,000 a year. I know from running my website that some couples decided not to claim child benefit rather than getting it and having to fill in a self-assessment tax return to pay the tax.
What they didn’t realise was that by not registering for child benefit they won’t get state pension credits. So, my tip is that if you or your partner earns more than £50,000 a year and you have children, make sure you’ve registered for child benefit. You can always opt out of receiving child benefit payments afterwards, but this way you’re registered for the state pension.
One in ten thinks parents are spending too much
Are you relying on your parents to help with your finances? According to a new survey one in five adult children are. But one in six parents expect their children to help them financially when they retire. Hmm!
Alarmingly, one in ten adult children are annoyed that their parents are spending too much of their own money (the kids’ inheritance). Hmm…I can see it might not be a peaceful family Christmas for everyone!
Don’t forget it’s the Autumn Statement on November 23rd – the first from the new chancellor Philip Hammond. I’ll have a rundown of the main points in the next newsletter. In the meantime, I wonder what the chancellor’s key phrase will be? We had ‘hard working families’ and ‘long term economic plan’ when George Osborne was chancellor… get ready to play Autumn Statement word bingo on Wednesday!