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.
Bank fraud victims shouldn’t be blamed
Banks shouldn’t try and fob off customers who are the victims of fraud. That’s the warning from the free-to-use financial complaints body, the Financial Ombudsman Service. It says that banks are wrongly blaming customers for fraud; accusing them of being ‘grossly negligent’.
That’s crucial because under the rules, if you’re a victim of fraud, your bank must refund any money that’s been stolen. But it doesn’t have to do this if you’ve been ‘grossly negligent’. That normally means that you’ve written down your card PIN and kept it in your wallet alongside your card or that you’ve shared your banking password or PIN with others.
Some types of fraud are on the rise, especially fraud where customers transfer money into fraudsters’ accounts. This typically happens when they think their own account has been targeted or when they think they’re paying a builder or solicitor, but the fraudster’s hacked their emails . Last year people lost a staggering £240 million through this kind of fraud.
Frauds have also become increasingly sophisticated. It’s possible for fraudsters to send a text that looks like it’s genuinely from your bank or to ‘spoof’ the number of the bank’s call centre. And gone are the days when phishing emails were riddled with spelling mistakes. These days they look like the real thing.
If you’ve been the victim of fraud and your bank has refused to refund you, contact the Financial Ombudsman Service. If it finds in your favour, it can make the bank refund you.
Help to Buy ISA rates increase
If you’re saving for a deposit for your first home, last month’s interest rate rise might bring some good news. While banks and building societies have generally been – well, shall we say – less than enthusiastic when it comes to passing on the full 0.25% rate rise, several have increased the interest rates on their Help to Buy ISAs by 0.25% – or even more.
In most cases, the interest rate rises only kicked in at the start of September. But it means that if you have an existing Help to Buy ISA, or you’re looking for one, you could earn up to 2.5% interest, depending on which bank or building society your ISA is with.
The interest is only part of the return, as you get a 25% bonus from the government when you buy your first home, as long as you’ve paid in at least £1,600. Under the rules, the maximum you can save in a Help to Buy ISA is £12,000 (if you add in the £3,000 from the government, that makes £15,000 in all).
SAVVY TIP: If you’re buying with a friend or partner, each of you can have a Help to Buy ISA, but you can only use it to buy a property costing up to £250,000 or £450,000 in London.
Thinking of buying a second-hand car? Now is a good time to do it as more second-hand cars will be available, thanks to the release of the new ‘68’ number plate at the start of September. Many people shy away from buying second hand because they don’t realise how they’re protected by consumer laws.
If you buy a second-hand car from a trader or dealer, you get the same rights as if you bought it new. However, it is often harder to enforce those rights because the dealer may say the issue is down to wear and not a fault in the car. With a new car, you don’t have that problem.
It’s different if you buy a second-hand car from a private seller. In this case, you get far less protection as they only need to make sure that the car is roadworthy, matches the description and is theirs to sell.
As an extra protection, if you’re buying from a dealer, try and pay the deposit by credit card. That way, if there’s a problem that the dealer won’t sort out, you may be able to complain to the credit card company.
Student bank accounts
It’s that time of year again: the ‘A’ level results are out and hundreds of thousands of students are heading off to university for the first time. It’s also a time when some of the big banks offer freebies and interest-free overdrafts with their student bank accounts.
Banks know that once we’ve signed up, we’re likely to stay with our bank for years. So, choose wisely!
I’d suggest you look at:
- The amount of interest free overdraft you’ll be offered. This ranges from nothing with some banks to £3,000 with others. That doesn’t mean you’re automatically guaranteed this overdraft level, but it will tell you the maximum you could borrow interest free. Bear in mind that the upper limit is only available in your final year.
- What you’ll pay for the overdraft once you graduate. Banks will generally reduce the amount you can borrow interest free over a two or three year period, but some are a bit more enthusiastic in how they do this than others!
- How user-friendly the bank is for the way you bank. If you bank online or using your mobile, find out how the bank’s online banking and mobile app is rated. Likewise, sometimes it can be handy to have a branch nearby, so check where the nearest one will be.
- How the bank is rated for service. All the big banks have to display this information on their websites and in their branches. It’s based on whether their existing customers would recommend the bank to their friends and family.
- Incentives and freebies. These shouldn’t be top of your list, but if you’re trying to decide between two similar banks, it’s worth working out what you’d save with the freebies.
One year to claim PPI
There’s less than a year to claim compensation if you’ve been mis-sold payment protection insurance (PPI). August 29th 2019 is the cut-off date for PPI complaints. You must have sent or emailed your complaint to the bank or card company and been told that it’s been safely received, in order to meet the deadline.
If you’ve not complained about payment protection insurance already, you don’t have to use a claims company to do it – it’s entirely free of charge if you complain direct to the bank or card provider.
You can complain if:
- Your PPI policy was included in your loan without your knowledge,
- You were told PPI was compulsory,
- You were self employed or had an existing medical condition,
- You had retired, or if
- There were exclusions you weren’t told about.
If your claim is successful, you’ll get your premiums back, plus interest. You can find more information about how to complain on the Financial Conduct Authority’s website (fca.org.uk).
Need cheering up? Get some savings!
What you do reach for when you need cheering up? I bet that checking your savings account balance isn’t top of your list! But new research from a leading bank has found that almost three quarters of people who save regularly say they feel happy compared to over a third (36%) of those who don’t.
Of course, that doesn’t necessarily show that saving makes you happy, but, when questioned, over half of people (53%) said that having a savings plan did have an impact on their mental health.
Not everyone can save, for example, if you only just have enough money to pay the bills, or you’re paying off expensive debts (such as a credit or store card). But many people could save – even just a little – but don’t get round to it.
There are lots of banking and money-saving apps that help you to save or, if you prefer a low tech version, you can just pay yourself at the start of each week or month by setting up a standing order to pay a regular amount into a savings account.
I know that interest rates are pretty lousy at the moment, despite the interest rate rise. But for most people, the real benefit of saving is having some money for an emergency. If you don’t have anything to fall back on, you may have to borrow at high interest rates (by using something like an unarranged overdraft) if it’s an expense you can’t avoid.