The financial news you need to know with Sarah Pennells – December 21st 2016

Christmas ordering dates

Have you done your Christmas shopping yet? Have you even started it? If not, don’t panic! Many shops will be open as usual on Christmas Eve and if you’re shopping online, you can – in theory at least – leave it until December 23rd to order. But you’ll have to be prepared to shell out for next day or same day delivery – and not all retailers offer it.

I had a look at what some of the biggest online retailers (Amazon, John Lewis, Next etc) are doing and several of them let you order as late as December 20th with standard delivery and it should still arrive before Christmas. Leave it any later and your presents won’t arrive in time if you don’t pay extra for speedy delivery.

Online ordering rights

If you’re shopping online for Christmas (isn’t everyone?) do you know what your rights are if you don’t like what you’ve ordered when it turns up, it fails to turn up at all or it’s been damaged during the journey? Here’s my one-minute guide:

  1. The right to change your mind: You have the right to change your mind if you order something online or by mail order. You have 14 days in which to tell the retailer you’ve changed your mind and another 14 to return what you’ve ordered. There are some exceptions – you can’t send back flowers (obvious, really!) or fresh food that could go off.
  2. If you order something online and it doesn’t arrive, or it’s damaged when it does turn up, it’s the shop’s responsibility to sort it out, not the delivery company. Some online retailers try and fob off customers and tell them to take it up with the delivery company, but that’s not what the law says. The only exception is if you’ve said, for example, that you’d like the delivery company to leave the item somewhere (like next to a side gate or in a recycling bin) and it disappears. In that case, the shop has done its bit by getting the delivery to you.
  3. Always check where the website you’re ordering from is based. If the site is based outside the EU it could be hard – or expensive – to enforce your rights. I always look at independent online reviews before I buy from a website I’m not familiar with, especially if it’s something expensive.

Giving a gift card?

If you’re looking for a last minute present to give, a gift card might seem like a good option. But be aware that it could be worthless if it expires or if the shop it can be spent in goes bust.

  • Expiry date: Not all gift cards have an expiry date, but of those that do, 24 months seems like a popular choice. The clock may start ticking when you make a purchase or when you top up or check your balance – this varies from card to card.
  • If the shop goes bust: If the retailer the card is linked to fails, the card may be worthless. It all depends on whether the shop is in administration (meaning it’s still able to trade) or if the receivers have been called in (it’s bust). If the administrators are called in, they can decide whether or not to accept gift card payments and, if so, whether to accept them at full value or only if you pay for part of the purchase in cash. Some gift cards can be used in several retailers, which reduces the risk.
  • Losing the gift card. If you’ve bought it online, the retailer may be able to cancel it and send you a new one. If you bought it in a shop, check what their policy is.

Crowdfunding concerns

Crowdfunding and peer-to-peer lending have grown rapidly as ways of raising finance and lending money. These platforms let you either invest directly in young and start-up companies or lend money to businesses or people.

But now the regulator is concerned that some people may not be aware of the risks. It’s considering introducing tougher regulations after it discovered that some investors may find it hard to compare different platforms. It was also concerned that some adverts may be misleading. So, what does that mean if you’re thinking of investing in a business through a crowdfunding platform or lending money though a peer-to-peer lender?

Here are my tips:

  1. Understand the risks. Peer-to-peer lending may feel like putting money in a savings account, but it’s a very different beast! For a start, if the businesses or people you lend money to can’t pay it back, your money isn’t protected by the UK savings compensation scheme. However, some peer-to-peer lenders have their own fund that could cover some or all of the losses.
  2. Be aware that most young companies go bust. If you’re thinking of investing in a young company, the chances are you could lose some or all of your money. Also, it may be difficult – if not impossible – to get your money back if you need it in a hurry.
  3. Start small to get a feel for peer-to-peer lending or crowdfunding. If you are going to lend or invest your money, do so in stages. You can normally start by lending or investing upwards of £10 at a time.
  4. Don’t invest money you will need in the short term. Look on this as a long term investment. That way you won’t be stuck if you need your cash in a hurry.

Workplace pensions review

Have you been opted into your workplace pension yet? No? If you haven’t, you probably soon will be. Until a few years ago you normally had to fill in a form before you could join your company pension scheme, but through something called ‘automatic enrolment’, it’s up to your employer to put you in the scheme and for you to leave if you don’t want to stay.

Why should you stay in your workplace pension? Well, for one thing, your employer will make contributions on your behalf. You will also get ‘tax relief’ from the government, which means that some of the tax that you pay goes into your pension instead.

SAVVY TIP:  If you decide not to stay in your workplace pension just think how you’ll pay for your life in retirement. The state pension will only pay you around £20 a day in today’s money and you may not get it until you’re in your late 60s (eek!).

Not everyone is automatically enrolled, as there are some exceptions. You won’t be enrolled unless you’re a worker (so if you’re working for the company as a freelancer and you pay your own tax and National Insurance, you won’t be opted in). You also won’t be automatically enrolled if you’re under the age of 22 or over state pension age, or if you earn less than £10,000 a year – and that limit is for each job, not your overall salary.

SAVVY TIP: Not many people know this, but if you earn more than £5,824 but less than £10,000 from your job, you can ask your employer to put you in their pension scheme. They’ll also have to pay into it for you.

This week the government announced it would be reviewing the scheme and looking to try and encourage more people who are self employed to take out a pension because, at the moment, many people who work for themselves don’t have one. It will also look at whether it should make it easier for people – mainly women – who have several low paying part-time jobs to qualify for automatic enrolment.

Off for a skiing holiday?

If you’re going skiing or snowboarding (or something more high adrenaline, like para skiing) make sure you’re covered with your insurance. Most travel insurance policies cover winter sports, but some have much more limited cover than others.

For example, some policies will only pay out if the ski resort you’re staying at is closed because of a lack of snow, not if one or more pistes are closed. And even those that will pay out because of piste closure can be pretty – well, frankly, stingy. Try and find a policy that will pay out at least £25 a day (£35 or more is better).

Watch out for the equipment limits if you’re hiring your skis. Cover on some policies can be quite low and you should check that you have generous limits on your personal liability cover. If you ski into someone else – or cause an accident – you could be on the receiving end of a very expensive claim.