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The Consumer Council’s Tips on Managing Your Money
It’s never been more important to have the skills, knowledge and confidence to manage our money well. Check out the following tips from consumers, debt advisors, benefits and other experts to help you make your money go further.
Get every penny you’re entitled to
- Unclaimed benefits
There could be as much as £350 million in unclaimed benefits here[1]. Make sure you’re getting everything you’re entitled to by contacting:
Advice NI 028 9064 5919 or visit www.adviceni.net
Citizens Advice 028 9023 1120 or visit www.citizensadvice.co.uk - Working Tax Credit
Single men or women with no disability, aged 25 or over and working at least 30 hours a week but earning a low wage could be entitled to Working Tax Credit. You should also check if you qualify for Housing Benefit for help with rent or rates. - Pension Credit and Housing Benefit for couples
Couples of pension age could be entitled to Pension Credit and Housing Benefit for help with rent or rates. If you’re under 65 and need care or have mobility problems you should also look into Disability Living Allowance (DLA). If you’re 65 or over and need help with personal care then you may also qualify for Attendance Allowance (AA). Unlike other benefits listed in this article, AA and DLA entitlement are not affected by income or savings. - Living alone
If you are a single female pensioner with a small state pension it is particularly important that you check if you’re entitled to help with rates because of the changes made to the rating system.
If you are a pensioner aged 70 or over, and you live alone, you are entitled to a discount of 20 per cent on your rates. You should also check your entitlement to Pension Credit, Attendance Allowance and Disability Living Allowance. - Families
Check if you qualify for Child Tax Credit and Working Tax Credit and Housing Benefit for help with rent or rates. - People with a disability and in employment
If you work at least 16 hours a week, check if you’re entitled to Working Tax Credit and also Disability Living Allowance. If you have a disability and are working, you are not automatically disqualified from DLA - the intention of this benefit is to enable those with disability to stay in work. - Single parents not in employment - (ie not working 16 hours a week or more) check your entitlement to Income Support, Child Tax Credit and Housing Benefit.
For more information on these benefits visit the Consumer Council website at www.consumercouncil.org.uk, contact an adviser at your local branch of Citizens Advice028 9023 1120 or Advice NI 028 9064 5919. - You could be sitting on a small fortune!
There's about £12 million lying forgotten about in bank and building society accounts and £6 million in Ulster Savings Certificates that hasn't been touched for years. To check if you're in the money, contact the Consumer Council on 0800 121 6022 or complaints@consumercouncil.org.uk.
You can also visit: www.mylostaccount.org.uk for bank, building society, national savings and investment accounts; or www.dfpni.gov.uk for Ulster Savings Certificates - For more information about accessing benefits visit www.a2b.org.uk
What you need to know about mortgages
- Choosing your mortgage provider
Your home is likely to be the most expensive purchase you ever make so take time and get professional advice before deciding which mortgage to go for. Independent mortgage advisers can help you weigh up the different options. Most advisers get the same fee no matter which mortgage you eventually go for, but always check with them first. This means that the advice given is more likely to be impartial. - Get the key facts
The Key Facts Illustration (KFI) provided by your lender will give you a personalised quote for the total cost of a mortgage. If your mortgage has fees, ask for two illustrations, with and without arrangement fees added to the mortgage. Depending on your circumstances, a slightly higher monthly interest rate with no arrangement fee might be a better deal than a lower rate with a large fee up front. - Pay extra
When you take out a mortgage, interest payments mean you pay back much more than you originally borrowed. If you can manage to pay a bit extra along with your monthly repayment, this can significantly lower the interest costs and shorten the overall length of your mortgage. Check with your mortgage lender for more information. - Exit strategy
Remember, when you switch mortgage providers you’ll have to pay what’s called an exit fee. On average these are £163 but can be as high as £295. However, if switching mortgage lender gains significant savings then it may be worth doing it anyway. - Watch your spending
Setting a budget allows you to take control of your finances. The Consumer Council’s Home Budget Planner helps you to work out what money you have coming in, what’s going out and where you can save. For your free copy, call us on 028 9067 2488 or download a copy from www.consumercouncil.org.uk
Shopping around for the right insurance
Shopping around for the right insurance
Consumer Council research shows that shopping around for insurance is definitely worth the effort - consumers could save as much £389 per year. Here are a few ways to shop around for insurance to ensure you are getting the best deal for you:
- Never accept a renewal quotation
Don’t just accept your insurance renewal quotation. Do a little homework and see what other deals are available. Your current insurer may try to match or better quotations from other companies. - Use Insurance comparison websites
Price comparison websites check with lots of insurance companies so that you can see all the prices at once on your computer screen. - Don’t forget about your broker
A broker will do the shopping around for you. They will also be able to check what level of cover is offered and they should be able to advise you on which is the best policy at the best price. - Try direct
Some insurance companies aren’t included in price comparison websites and others may offer a better deal if you contact them directly. - Remember cheapest is not always best!
Before buying always check the policy carefully to make sure it meets your needs. It is also important to know exactly what you are and aren't covered for in the event of a claim.
Make sure your money is protected
- Paying by credit card - gives you extra protection. Under the Consumer Credit Act 1974, the law states that the credit card company has joint liability for single items costing over £100 and no more than £30,000. This means that if the goods turn out to be faulty, you can claim against the supplier, or your credit card company or both. Or, if a business goes bust before you receive goods, you can claim against the credit card company to get your money back. Even if you pay for part of the purchase with your credit card, you will still be able to claim against the credit card provider.
- When you can’t claim against your credit card provider - Sometimes credit card payments are made through a payment service (eg Paypal for some Internet sites). As the payment does not come directly from the credit card company to the trader, you will not be able to claim against the credit card company if there is a problem with the goods or service.
- Paying by cash or cheque - If you are paying installments by cash or cheque towards a big purchase, you could be left with nothing if the business closes. If possible, pay a small deposit and get a receipt. Then pay the balance in full nearer to the delivery date or when you receive the goods.
- Paying by debit card - If you pay by debit card and the business goes bust or you don’t receive your goods, you may have rights under “chargeback”. This rule allows your debit card company to try and get your money back for you. This rule can vary between companies, so check your rights with your debit card company before you buy.
- Keeping your savings safe - If you have more than £50,000 with a bank or building society you should consider spreading the money out between different banks and building societies. This is because the Financial Services Compensation Scheme (FSCS) will only guarantee up to £50,000 with one bank. But be careful, some banks are owned by the same parent group and therefore only £50,000 is guaranteed per parent group. For example, Ulster Bank and Tesco Personal Finance are owned by the same parent group, Royal Bank of Scotland, and any money you have in these banks above £50,000 would not be guaranteed. For more information on this and a list of some of the largest UK deposit takers, visit the Financial Services Authority's Money Made Clear website: http://www.moneymadeclear.fsa.gov.uk/about_the_fsa/compensation.html#groups.
Banking
- Staying out of the red
Check your bank accounts regularly and if you can, sign up to Internet or phone banking so that you can check your balance anytime. Keep an eye on the money leaving your account in case a mistake has been made. If you think you have spotted a mistake let the bank know immediately.
When you write a cheque, remember that it may be a few days or weeks before it is lodged so you might think you have more money in your account than you actually do. - Negotiate the best overdraft for you
If you need an overdraft speak to your bank but also check out what other banks are offering. Some give an automatic overdraft which is free to use. Check the overdraft interest rate and any other fees you may be charged. But remember, an overdraft can be an expensive way to borrow money and the bank has the right to ask you to pay back everything you owe them at anytime. - Shop around for the bestbank account
Don’t stay loyal to your bank if it’s not working hard for your money. For your free, easy to use guide to switching bank accounts call us on 028 9067 2488 or download a copy from www.consumercouncil.org.uk. - Don’t be swayed by introductory offers
If you are thinking of choosing an account because of an attractive introductory offer; make sure you look at what the account will offer over the long term.
- Do your sums
Some accounts offer interest free overdrafts which is good if you’re likely to go into the red on a regular basis. But remember to check what the rate will be once the interest free period comes to an end. - Check your direct debits and standing orders
Are they all relevant and current - are you really using your gym membership or home video delivery service? Are you getting the best value from the things you’re signed up to? If not, cancel them. - Getting the right credit card for you
If you owe money on your credit cards and are paying large amounts of interest each month, it may be possible to switch your balance onto a lower rate or 0 per cent credit card.
If however you’re paying off the full balance every month, try to get a little more from your credit card provider in terms of cash back or rewards. - Going abroad?
If you're planning to use your debit card abroad, contact your bank to see if you’re likely to incur any extra charges.
Tips for surviving the recession
Visit the FSA website for more tips on surviving the recession
Worried about money? Help is at hand.
- Get talking - If you are struggling to make ends meet, or if you are finding it difficult to manage your debt, it’s important to talk to someone and get help early. Burying your head in the sand or trying to deal with problems alone will only make things worse.
- Immediate steps:
- Open your post – don’t ignore letters even if they’re addressed ‘to the occupiers’;
- Pay priority debts first – a mortgage is a priority debt. If you are not able to make repayments on your mortgage contact your lender as soon as possible to make new arrangements and discuss your options;
- If you’re facing possession proceedings, always attend the court hearings. Court proceedings do not mean you will automatically lose your home; and
- If you’re struggling to make mortgage repayments, do not be tempted to abandon the property – seek advice.
Who can help?
If you are worried about debt and need advice, contact:
AdviceNI 028 9064 5919
Citizens Advice 028 9023 1120
Consumer Credit Counselling Service 0800 027 4990
Visit www.debtlineni.org
If you have missed mortgage payments or rent, contact:
Housing Rights Service 028 9024 5640
Each of the above organisations have trained professionals who will offer a listening ear and sound advice to help you get things back on track.
If you have a complaint about planes, trains, buses, ferries, electricity, natural gas or coal, call us on 0800 121 6022 or email complaints@consumercouncil.org.uk
[1]Calculated by adding the maximum amount of unclaimed benefits stated in DSD Press Release - 29 November 2007 - Statistical press release - income related benefits estimates of take up in Northern Ireland 2004/06
