Monday Money Money advice if you are renting Money

18
gloucestershireecho.co.uk
Gloucestershire Echo, Monday, July 22, 2013
GEC-E01-S2
Monday Money
Money
Matters
With TV and radio
money expert
Martin Lewis
Money advice if
you are renting
IF you live in rented accommodation,
you don’t need your landlord’s
permission to save money.
There are many things you can do to
slash bills around the house. With the
number of tenants rising, rents are
fiercely expensive in many areas, so
never has it been more crucial. Here are
my top tips for renters:
Renters have a right to switch and
save on energy (even prepaid)
If you pay the gas and electricity bill
directly (not via the landlord), and it isn’t
specifically banned in your tenancy
agreement, you can and should
compare and switch. Don’t stick with
the previous tenants’ supplier, as it can
be costly. Always do a meter reading as
soon as you move in.
You don’t need your landlord’s
permission to do this. Even if your
contract says you can’t switch, you may
be able to challenge it. Communicate
with the landlord, and get in touch with
Citizens Advice for help.
To find your cheapest deal, use an
Ofgem Confidence Code comparison
site, where you simply plug your details
in and it gives you the answer.
Beware joint bank accounts with
flatmates
Shared bank accounts for bills can
mean you’re credit-linked, even if you
hardly know each other. Then, when
applying for products, their history can
be taken into account. If it’s poor, it hits
you. So keep things separate. If you
used to have a joint account, but don’t
any longer, apply for a notice of
‘disassociation’ to ensure you’re not still
linked.
Is your deposit protected?
According to Shelter, a fifth of private
renters don’t know if their deposit’s
been protected. By law, from April 6
2007 in England and Wales most private
landlords must use a
Government-backed deposit protection
scheme, giving you rights.
Cheap contents insurance
If you rent, your landlord is responsible
for buildings insurance, so you only
need contents cover. As for what each
covers, a quick way to picture this is to
think of all the stuff that’d fall if you
turned your home upside down.
If only you and/or your family live in the
home then getting the cheapest cover is
quite simple. Simple combine
Confused.com and
Comparethemarket.com to bag the
maximum number of quotes in the
minimum time. Then check aviva.co.uk
and Directline.com, which they miss.
How to improve the
returns on savings
My Money
THE value of savings are being
steadily eroded warns James
Swaby, an international
investment specialist with
Cheltenham-based wealth
management firm, Attivo Group.
Interest rates have been at an
historic low of 0.5 per cent for
over four years, with inflation
quietly eroding the purchasing
value of deposit account savings.
If people continue to sit on their
hands then someday they’ll get a
nasty shock when they realise
how much value has been drained
away in real terms, by which time
it could be too late to rectify.
I think it’s an important period
now, for all investors to take time
to reflect on what they require
from their savings and
investments, which have usually
taken years to accumulate.
They also need to consider the
benefits of adding shares or bonds
of companies who receive their
revenues internationally, not just
from the UK.
That doesn’t necessarily mean
looking for companies no one has
heard of listed on exotic stock
exchanges, some of the best run
international companies are
based right here on our doorstep
in the UK.
Investors must adopt a global
perspective to maximise the
returns on their portfolio.
His tips to all investors,
regardless of their age, or the size
of their portfolio:
■ Don’t put all your eggs in one
basket, spread your risk by
including different assets such as
bonds and shares.
■ Include exposure to developed
markets overseas such as the US
and emerging markets like Asia
and Latin America.
■ Reinvesting dividends forms a
■ ADVICE: James Swaby, an international investment specialist with Attivo Group.
strong part of your overall return.
For example, if you invested
£10,000 ten years ago in the FTSE
100, the UK’s leading index of
shares, and spent the dividends,
your money would have grown to
just under £15,000.
But had you reinvested those
dividends your money would have
grown to £22,700.
Apps service extended
MOBILE ‘instant messaging’ apps are
already more popular than traditional
texts – but interest is set to soar higher
with BlackBerry expanding its service
for smartphones.
BlackBerry Messenger is one of the
most popular apps but until now was
confined to users with BlackBerry
phones. It is extending the free service
to iPhone and Android. Instant
messaging apps such as BBM and the
even more popular WhatsApp appeal to
smartphone users who can download
the software from the internet.
It is important to bear in mind
that the capital would have
fluctuated considerably in that
time and so would the income but
it is not such a bad result
considering half of that period
includes the worst financial crisis
since the Great Depression of the
1930s.
Remember that investing in
anything other than cash should
be viewed as long term.
James worked in the high-growth
region of South East Asia, before
returning to the UK, and joining
Attivo.
He is now an investment manager
and a member of his
organisation’s investment
committee.
Switch and save
Subaru’s safe drivers
THE average bill is at a record
£1,352 a year, compared to £819
just five years ago.
Switching energy provider can save
you up to £310 a year, according to
Energyhelpline.com. However, this
level of saving is only likely if you’ve
never switched and are not signed
up to a duel fuel, online tariff paying
by direct debit.
If you already do this then the
saving will be much smaller.
OWNERS of a Subaru have helped
shake-off their ‘boy racer’ tag as
drivers of the Japanese brand are the
least likely to make a claim for an ‘at
fault’ accident on their car insurance,
research has found
But fellow motorists might want to
avoid any Seat drivers in Watford,
with the Spanish car maker and
Hertfordshire town topping the
league of shame for claims by
manufacturer and location,
respectively.
gloucestershireecho.co.uk
GEC-E01-S2
Gloucestershire Echo, Monday, July 22, 2013 19
Monday Money
Students
urged to
get advice
to manage
finances
PARENTS in Gloucestershire are
being urged to speak to their
children about looking after their
money as more than 4,000 people
in the county are expected to
leave for university this summer.
Financial education charity pfeg
(Personal Finance Education
Group) is encouraging parents to
“seize this last chance” to discuss
with their sons and daughters
how they will manage their
student finances, in a bid to
prevent them falling into financial
difficulty.
Around 4,005 people in the
county’s local authority unitary
areas accepted university places
last September, according to
information obtained from
Cheltenham-based university
admissions service UCAS, with
new official figures suggesting a
three percent rise in applications
in England this year.
This includes 650 in Gloucester,
735 in Cheltenham, 555 in the
Cotswolds, 480 in Tewkesbury, 735
in Stroud and 425 in the Forest of
Dean.
Next year, it is estimated 670 in
Gloucester, 757 in Cheltenham, 572
in the Cotswolds, 494 in
Tewkesbury, 757 in Stroud and 438
in the Forest of Dean will apply.
Anna Hay, head of Student Advice
and Guidance at the University of
■ SHOULD IT BE
THE PARENT’S
RESPONSIBILITY?
Former student Niall
Mann.
My Money
Gloucestershire, said the
university was committed to
supporting students through its
Money Advice Team.
She said: “We can help them
explore bursaries, loans and
grants and offer information on
how to find work and how to
budget. Our student finance
advisers offer confidential and
free advice on everything from
fees to Access to Learning Funds,
benefits advice and emergency
funding.”
Niall Mann, who recently
graduated from the University of
Gloucestershire, said more
support could be given but
questioned whether it ought to be
the responsibility of parents to
help students manage their
money.
But pfeg, which offers free
financial education resources and
support to schools in
Gloucestershire, said that parents
had a “key role to play” in
teaching their children about how
to manage their money at
university.
Tracey Bleakley, pfeg chief
executive, said:
Probe into legal cover
UNWITTING motorists are forking out for
cover they wrongly believe will pay all
their legal fees if they are involved in a
crash.
So-called motor legal expenses cover is
a huge money-spinner for insurers, who
typically rake in an estimated £17 to £21
for it from each policy they sell.
Nearly half of all motorists take it out —
many believing it will save them from big
bills if they are sued or taken to court if
they have a crash. The Financial Conduct
Authority has launched a probe into how
the cover is sold.
“It is really important that
parents in Gloucestershire seize
this last chance to sit down with
their children before they go off to
university and help them think
ahead to how they are going to
manage their student finances.
“For most new students,
university is the first time they
will have managed their own
money – and it’s crucial that they
know how to make their first
student loan last the entire term.
“In the longer term, we need to
ensure that financial education is
taught in all schools in
Gloucestershire and across the
UK, to equip school leavers with
the skills they need to manage
their money as they enter adult
life.”
Five top tips from pfeg for
Gloucestershire’s university-goers
1. Budget your student loan
payments: It can be all too easy to
blow your first student loan
Flight delays claims
A LANDMARK ruling opened the
doors for travellers who have
holidays or business trips hit by long
flight delays to claim compensation.
Last October the European Court of
Justice ruled that delays, caused by
events such as lack of flight crew or
even technical faults, merited
compensation. However, while
passengers have been able to make
claims against airlines, the rule had
not been implemented legally until
earlier this year.
instalment in the first few weeks
of term. Make sure you plan
ahead.
2. Prioritise your spending: Once
you know how much you have
coming in and what you will need
to pay for, it is crucial to
prioritise your expenditure.
3. Don’t get trapped by problem
debt: It might seem tempting to
take out a loan or use an overdraft
if you find yourself short of funds
before the end of term, but be
extremely careful about any
borrowing you do as a student.
4. Get the best deals: Be a savvy
student! There are lots of offers
out there if you take the time to
look, compare prices and find the
best deal for you.
5. Seek free advice: If you need
help with managing your money
or you are worried you are getting
into difficulty, don’t hesitate to
seek free advice. All universities
have Student Money Advisors
who are there to help.
Bankruptcy down 27%
IMPROVED fortunes for young
couples and families have been the
driving force behind the fall in
personal insolvencies since the turn
of the year, according to credit
reference agency Experian.
The first three months of 2013 saw
the number of people going bust fall
to its lowest level in five years with
Insolvency Service figures earlier in
the week showing bankruptcy
dropped by 27 per cent compared to
2012.
Lifestyle pension
funds concern
CONCERNS have been rising about the
effectiveness of ‘lifestyled’ pension
schemes, which move the bulk of pension
pot investments from more volatile
equities into the supposed safe haven of
bonds, the closer a person gets to
retirement to safeguard the value.
The value of lifestyle pension funds
invested in bonds are estimated to have
fallen by five per cent since the beginning
of May, so do those approaching
retirement with lifestyled pots need to act,
and what are the options?
As the value of government bonds –
known as gilts – fall, annuity rates should
rise as the yield on these bonds should
increase.
But annuity rates are not informed by gilt
yields alone and insurers are notoriously
slow at passing on yield rises to
customers – much in the same way petrol
stations treat drivers.
Nonetheless, those whose investments
have suffered from a fall in bond prices
should make it back up when they come
to buy an annuity – even if the recent fall
in bond values hasn’t yet been followed
by a marked rise in annuity rates.
Who might this strategy not be right for?
Around 90 per cent of defined
contribution pension holders are
estimated to buy annuities that provide
level incomes with their pension pot, but
that still leaves a good portion who don’t.
In particular, those who are leaving their
pension pot invested in retirement –
whether through income drawdown or via
an investment-linked annuity – have little
to gain from shifting their pension savings
into bonds as they near retirement.
What are the alternatives if you don’t
fancy bonds?
Those considering switching out of
lifestyling should get in touch with the
trustees or insurer who run their
workplace pension scheme.
In terms of where to invest instead, the
safest bet to ensure the amount in your
pot doesn’t go down would be to invest a
portion of your money in cash.
Whatever you do, nothing is without risk
Although bonds have taken a bit of a
beating over the last couple of months, it
still comes after years of unprecedented
rises as a result of economic stimulus
measures. The bursting of the bond
bubble remains uncertain for now, and
other investments are not risk-free either –
even saving in cash will leave you
vulnerable to inflation.
For more, visit ThisisMoney.co.uk.
Savings raided for hols
SUMMER savings are being raided to
pay for holidays and weekend breaks,
with the average amount withdrawn from
savings accounts standing at more than
double the average amount deposited,
according to a bank review.
More than three quarters of people (77
per cent) managed to save something
over the last three months, putting away
an average of £829, Halifax research
shows. However, over a third of people
(35 per cent) have raided their savings
over the same period, taking out an
average of £1,824.