The Financial News You Need To Know with Sarah Pennells – November 2 2016

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.

Fraudsters impersonating banks’ Twitter team

Watch out if you use Twitter to sort out your banking queries. Fraudsters have been impersonating banks’ social media teams by setting up bogus customer service accounts.

In August it emerged that customers at one leading bank had been targeted by fraudsters who redirected customers to a fake website where they were supposed to enter their personal details, and last week another bank was targeted by fraudsters who set up a bogus customer service Twitter account.

So, how can you stay safe if you use social media channels such as Twitter?

  • Check to see if there’s a blue tick by the Twitter account, which means it’s been verified by Twitter.
  • If there isn’t one, that doesn’t mean it’s a fake, but I’d recommend checking how long it’s been active for (most of the big banks have had Twitter accounts for several years), what else has been posted and how many followers they have.
  • Double check links you’re being directed to. If you’re not sure, call the bank to check it’s not a dodgy link.
  • Never tweet personal information. Banks will only ask you to send information by DM (direct message). Last week I saw that someone had tweeted his credit card company, including a scan of a letter he’d received which had his full address and most of his card details. Not recommended!

Self employed, employed or a worker?

After an employment tribunal ruled that Uber taxi drivers weren’t self employed (but weren’t employees either), you might be a bit confused. And you’re probably not the only one!

So, here’s my two-minute guide to your rights if you work for someone else:

  • You’re self employed if: the person or company you work for agrees a fixed price for your work, you can work for more than one client, you can decide what work to do and when to do it. If you’re self employed, you are responsible for paying your own tax and National Insurance, you don’t get sick pay or holiday pay and you’re not eligible to join a workplace pension scheme.
  • You’re a worker if: you have a contract to do some work (but it doesn’t have to be a written one), you have to turn up to work even if you don’t want to and you only have limited rights to send someone else instead. People who are on casual or zero-hours contracts are often workers. You have some rights, including paid holiday, the right to be paid the National Minimum Wage and protection from discrimination.
  • You’re an employee if: you have to work and do a minimum number of hours, you can’t send someone else to do your work and your manager or supervisor sets out the work you should do. You also normally work at the company’s premises when they tell you to. In return, you can join the company pension scheme, get holiday pay and have full protection from unfair dismissal and can ask for things like flexible working.

Too much insurance? Too little?

If you own your own home, how much insurance do you have? Working out how much buildings and contents insurance you need isn’t always straightforward, but if you don’t have the right amount of cover you could be paying too much or you might not get the full amount of any claim.

If you don’t have enough insurance, an insurer will generally pay you a percentage of your claim. So, if your contents are insured for £40,000 and you’ve actually got £60,000 of contents, your insurer may only pay two thirds of the claim amount.

So, how do you work out what you need?

  • For contents insurance, the most accurate option is to go from room to room and add up the value of your possessions. It’s quite a faff but once you’ve done it you can just add in new things as you buy them – so it’s not something you’d have to do every year.

SAVVY TIP: If the thought of adding up the value of everything you own like this makes your heart sink, a couple of the price comparison sites have contents insurance calculators and some home insurance providers have unlimited contents cover – so you an never be under insured.

  • For buildings insurance, the amount you should insure your home for isn’t the same as the price you paid for it or its market value. That’s because, should the worst happen and it all burns down, you wouldn’t have to pay for the land it’s on. As a very rough rule of thumb, the rebuild cost is about a third less than a property’s market value. But, it’s a good idea to get a rebuild estimate from your surveyor either when you buy your home – or when you take out insurance (you’ll have to pay if it’s not part of your home buying survey).

SAVVY TIP: Some insurers offer unlimited buildings insurance. This can be useful because you know you’ll never be under-insured, but if your property won’t cost much to rebuild, you could be paying for more insurance than you need.

Happy 60th birthday Premium Bonds!

It’s 60 years since Premium Bonds went on sale but, according to National Savings & Investments, there are over a million people who’ve won a prize but not claimed it (it adds up to a staggering £54 million in unclaimed prizes!).

The biggest unclaimed prize is £100,000, but there are thousands of smaller unclaimed prizes, from £25 upwards. Unlike with some lotteries, there’s no time limit on claiming a Premium Bond prize, so even if you have a win from years ago, it will still be waiting for you!

If you have Premium Bonds, you can check whether or not you’ve won by going to the NS&I website or downloading the prizechecker app to your phone.

Save energy around your home

With the weather realising it’s winter, it will soon be time to put the heating on (if you haven’t done so already…!). The average dual fuel energy bill, according to the regulator Ofgem, was £1,165 last year, although you can pay a lot less if you’re on the right deal. So, how can you save energy around the home?

  1. Book an annual service for your boiler and think about replacing it if it’s old and you can afford it. Condensing boilers use a lot less gas or oil (they’re over 90% efficient) because they recover heat from flue gases that would otherwise be wasted. And that means lower fuel bills.
  2. Get a good thermostat and timer and make sure it’s in the right place. The thermostat should be in the living room and not in a hallway and you should have lots of options for programming the heating. If you rent your home, you may not be able to move the thermostat (although you could ask your landlord). Smart thermostats, that let you control your heating with your phone, can be expensive but they will cut down on wasted heat.
  3. Learn to love jumpers! Wrap up rather than switching the heating to high if you feel the cold. If you turn your thermostat down by one degree you could save around £75 a year, according to the Energy Saving Trust.
  4. Fit a thick curtain in front of a door if it’s a bit draughty, fit heat reflectors behind your radiators (it’s basically tin foil on a thick backing!) and put your curtains behind the radiator if it’s under a window. It may all sound a bit dull and grown up but it can reduce the heat you lose.
  5. Be clever with your cooking! Try and cook meals that are oven baked in batches so you use the oven less (and never put it on just for one solitary baked potato – that’s what the microwave is for!).

Junior ISAs – five years old

It’s five years since junior ISAs were launched – a tax-free savings or investment account for children. They work in a similar way to adult ISAs in that you can save and get interest paid tax free or invest in stocks and shares and there’s no tax to pay when you cash it in.

Last year, around 60% of junior ISAs that were opened were cash junior ISAs. Many parents prefer the idea of cash because it’s less risky than investing in stocks and shares, but you can get a better return by investing, rather than saving the money in cash (especially if you can leave the money invested for at least ten years).

Most children don’t pay tax anyway, so there’s no real tax advantage to saving into a junior ISA rather than an ordinary savings account. The only exception is if you can get a better interest rate on the junior ISA (the best buy account is paying 3.25% as I write this).

If you want to open a stocks and shares junior ISA for your child, the choice of funds can be a bit baffling. At SavvyWoman, we’ve done some research looking at how the ten best selling stocks and shares junior ISAs have performed over the last five years. We’ve found that the best performing fund produced a return of almost 170% in five years, while the worst produced a return of just over 50%. It’s a huge difference – but even the worst of the top selling funds produced more than you’d get if you’d taken out a cash junior ISA.