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.
Smart meters not so smart after all
Do you have a smart meter for your energy supply? If you don’t, you probably will soon. Smart meters are due to be installed in households in England, Scotland and Wales by 2020. The idea is that they’ll give energy companies real-time information about the energy we use and they should make it easier for us to reduce our bills.
SAVVY TIP: You don’t have to accept a smart meter, but your energy company is supposed to offer you one by 2020. The energy regulator, Ofgem, says that if you don’t have a smart meter there is a chance that you won’t be offered your energy supplier’s cheapest tariff. If your energy company insists you have a smart meter and you don’t want one, you should complain to Citizens Advice.
The idea behind smart meters seems to be a good one: if you have a smart meter you will only be billed for the energy you use, rather than getting estimated bills, which are basically guesswork!
However, not all homes can currently have them. People who live in a flat may not be able to have a smart meter (it depends on the size of the block and where the meters are situated), properties with a poor mobile signal may also not be suitable, and people using an economy 7 or 10 tariff may also find they can’t have a smart meter. There are also some concerns they may not be accurate.
A study in the Netherlands found that some smart meters produced wildly inaccurate electricity readings – in some cases as much as 600% too high. The study tested nine brands of smart meter and found some under recorded energy use (by up to 13%) while others produced much higher readings. Meters connected to LED bulbs, dimmers and energy saving lightbulbs produced the most inaccurate readings.
You say LISA, I say LYSA….
The financial services industry is littered with acronyms (ISA, IHT, CGT…I could go on!). But now there’s a new one for us to get used to – the LISA. It stands for lifetime ISA and it will be launched on April 6th. It’s designed to help people save for a first home or for retirement. So, how will it work? Here are some key facts you need to know:
- You’ll be able to take out a lifetime ISA if you’re aged between 18 and 40 and you can pay into it until you’re 50.
- The maximum you can pay in every year is £4,000 and you’ll get a bonus of up to £1,000. The bonus will be paid at the end of each tax year.
- There’s no tax to pay when you cash in a lifetime ISA. But you can only cash it in when you buy a property or after you’re aged 60.
- You can use the money you’ve saved in a Lifetime ISA to buy a property costing up to £450,000 if you’re a first time buyer or for anything you like after you’re aged 60.
- You will be able to have one cash ISA, one stocks and shares ISA and one lifetime ISA in each tax year, should you want to. But money you pay into a lifetime ISA is part of your overall ISA limit (which will be £20,000 from April 6th 2017).
SAVVY TIP: As I write this, only a handful of providers are offering lifetime ISAs and they’re mainly aimed at people who want to invest rather than keep their money in cash.
Bailiffs abusing powers
Debt charities are warning that rogue bailiffs are flouting rules that were introduced three years ago. Bailiffs are used by companies that have been to court to get a debt repaid or by local councils if you owe them council tax or a parking fine. They can also be used by HM Revenue and Customs to collect unpaid tax.
SAVVY TIP: Bailiffs shouldn’t be confused with debt collectors, who are used by banks, loan providers and energy suppliers. Debt collectors have far fewer rights than bailiffs.
The rules were tightened up in 2014 and bailiffs aren’t supposed to enter your home after 9pm, via a window (they can only come in through the door) and they must give you a week’s notice before their first visit.
But a report published by seven major charities shows that bailiffs are regularly using intimidating behaviour, not taking account of vulnerable customers and are not accepting reasonable payments. All of these are against the rules. The rules aren’t legally binding, but if a bailiff has broken one or more of them, it should strengthen your case if you want to complain about them.
SAVVY TIP: If you’ve been visited by a bailiff and you think they’ve broken the rules, you should complain to the firm in the first instance. It’s also worth copying in the company you owe money to. Contact your local Citizens Advice for more information on how to complain.
Book your insurance with your holiday
Thinking of booking your summer holiday? If so, do take out travel insurance when you book. If you fall ill while you’re on holiday, travel insurance could save you a fortune in medical bills. And I do mean, a fortune! But if you don’t buy travel insurance until the last minute, you won’t be covered if you have to cancel your trip.
Here are my three top tips if you’re going to buy travel insurance:
- You still need travel insurance if you’re going on a European holiday. If you’re travelling in the EEA (which is made up of countries in the European Union, plus Norway, Iceland and Lichtenstein), you get medical treatment on the same basis as if you lived there. That doesn’t always mean it will be free and it won’t cover things such as the cost of an air ambulance or being flown home.
- Make sure you have enough cover. Some of the cheaper policies have very low limits on luggage cover and have a high excess (that’s the first part of the claim that you have to pay). If you’re taking an expensive smartphone or tablet you may not have enough cover.
- Check whether activities are covered. Not all policies insure adventure sports and the definition of what’s an adventure sport may vary from policy to policy. Some insurers will only cover tourist activities, such as hot air balloon rides, if they’re booked in the UK before you travel.
Phone scam that’s not a scam
There have been reports online and in the newspapers recently about a new phone scam called ‘Can you hear me?’. The idea is that you’re called out of the blue by a scammer or rogue trader who asks you if you can hear them. Y
If you answer ‘yes’, they record this, and drop the recording into you answering another question, such as ‘do you want to buy some double glazing?’. When I first read about this, I thought it sounded a bit implausible, despite warnings that this scam was ‘sweeping America’.
I spoke to the chief executive of Get Safe Online, and he doesn’t think this is a genuine scam. He said that if a company did try and enforce a contract you’d supposedly signed up to like this over the phone, they’d find it very difficult to do.
But, there are plenty of phone scams that are doing the rounds. According to Action Fraud, the latest one is that scammers are using music, similar to that used by banks, when you’re put on hold. The message is, don’t be reassured by annoying, tinny music!
SAVVY TIP: It’s very easy to feel under pressure if you’re called out of the blue by someone supposedly from your bank, but don’t do anything you wouldn’t normally do, such as transfer money to a ‘safe account’. It’s far better to be over cautious or suspicious than to risk losing thousands of pounds.