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.
Your rights when a retailer goes bust
It was a dismal end to the month for the high street with both Toys R Us and Maplin going into administration. It’s obviously tough for anyone who loses their job, but there can also be a lot of uncertainty for customers who may have outstanding orders or unused gift cards.
So, what are your rights if a retailer goes bust? If a shop goes into administration, branches will normally stay open, at least for a couple of weeks, while the administrators try and find a buyer. But that’s not always the case.
The administrators have responsibility for finding a buyer and paying creditors (businesses and individuals who are owed money). In Maplin’s case for example, the administrators told me that the stores will process outstanding orders and take payments by gift card, at least in the short term. However, the administrators are reviewing this, so it could change quickly.
As a general tip, if you hear that a company is going into administration, you should spend any gift cards or vouchers you have as soon as possible. But bear in mind that if you buy something that costs less than the value of the gift card, you won’t normally get change. Sometimes, administrators say that shops will only take gift cards if they make up less than 50% of the purchase price.
SAVVY TIP: My advice would be, where possible, to buy items that are from a well known brand. Choose one that’s not linked to the shop that’s going bust so you can contact the manufacturer if there’s a fault. Secondly, where you can, pick items that are less likely to go wrong (I realise this isn’t always easy to work out in advance!).
New broadband rules
New rules for broadband providers mean companies will have to promise a minimum speed, and let you ditch your contract if they don’t meet it. The regulator, Ofcom, is giving broadband providers a month to improve their speed if the speed drops below the promised level. If there’s no improvement, customers will be free to leave that provider without having to pay a penalty. You’ll be able to ditch your landline and TV contract at the same time, if it’s been bought as part of a bundle with broadband.
Companies will also have to highlight their speeds at peak time (as even the speediest broadband slows down when everyone’s logging on!). If these changes sound like welcome news, there is a catch. They don’t come into force for until March 1st 2019. And for many, I’m sure that’s not a moment too soon…
SAVVY TIP: At the moment, you can still ditch your contract if you don’t get the minimum guaranteed speeds. However, adverts aren’t regulated by Ofcom, and the minimum guaranteed speed may not be the same as the one in the shiny adverts!
Insurance claims snowball (geddit?!)
Blimey it’s been chilly recently, but for some people, snow can result in an insurance claim, not just frozen fingers. According to one insurer, motorists made £17 million of claims – twice the usual number – in just four days, thanks to the Siberian winds and snow.
Contrary to popular belief, you are insured if you drive when there’s a red alert for weather, but you should – obviously – take extra care.
When it comes to claims for home insurance, it’s a bit more complicated. If your home is damaged by snow, you may not be able to claim. For example, if your home had a conservatory and the roof was damaged by snowfall, your insurer may not have to pay out if the snow fell over a period of a few days. But if there was a snowstorm with strong winds, your insurer may have to pay out.
SAVVY TIP: It’s a good idea to take photos of the damage as soon as you can. Take screenshots of local weather reports as well. If your insurer turns down your claim, get evidence of what the weather was like in your area. If you’re still not happy, you can always complain to the Financial Ombudsman Service. It’s free to do.
New credit card rules
New rules could mean some people who are struggling to pay back credit card debt are offered cheaper loans, or have their interest and charges written off. It’s estimated that three million people are in what’s called ‘persistent debt’, where they don’t pay off much of the amount they borrowed but end up paying a lot in interest and charges.
The new rules came in at the start of March, but credit card companies have six months to fully comply with them. If you’ve paid more in interest and charges over an 18 month period, your card company should get in touch with you. It will suggest you increase your repayments, if you can afford to. If you can’t do this and you continue to pay more in charges than you repay from your card balance, your card company will contact you again and warn you that the credit card may be suspended. Credit card providers will also have to offer people who are struggling to pay back what they’ve borrowed, a range of ways to repay.
If you’re only currently paying the minimum on your credit card, try and increase the amount you pay, if you can. If you borrow £1,000 on a credit card charging a typical interest rate of 18.8% and you repay the minimum, which will start at £25 and then decrease, it will take you almost 18 years to pay it back. If you can pay an extra £25 a month, you’d be debt free in around three and a half years.
SAVVY TIP: Even an extra fiver a month will make a difference. Don’t think that because you can’t pay off your credit card in full that it’s not worth increasing the amount you pay. It really is!