Making Money Work

Are you paying the price for a single life?

Single-person households are on the increase, according to government statistics. And the cost of living alone? A shocking £250,000 over a lifetime. Fight back by coupling up. Make love, save money.

By Naphtalia Loderick

I’ve recently become a proper grown-up and made the move from a houseshare to living alone. And my, there isn’t much money left at the end of the month anymore. Instead of expenses being shared between three, it’s now just me. And while I consume less gas and electricity, unfortunately other bills don’t fall just because I’m on my own.

Water remains the same. And there’s no switching supplier so you’re pretty much stuck with the cost which is a hefty £465 a year for me. It grates on me to know I’m paying as much as the family of five next door.

My only option is to get a water meter and be billed for my actual usage. Industry wisdom says water meters are generally beneficial if you have more bedrooms than people. But I’m one person in a one-bedroom property. Despite this, my water supplier says costs will fall with a meter so I’m going to take their advice and get one fitted. I’ll let you know if it pays off.

Council tax is another area that gets my goat. A single person gets a 25 per cent discount on the full cost. Now, I may have only got a C in GCSE maths but surely one person should be half the cost or less.

Faced with the increased costs that come with living alone, the only answer is to save more money or make more money. And, following a conversation with my friend the other week, she told me the easiest way to make more money – move in with your partner!

Now, I had been wondering how she was affording recent extravagances. I mean, this friend is possibly the most frugal person I know. So imagine my surprise when she told me she’d planned three or four holidays this year. And on a recent weekend away she hired a car to get to her destination instead of taking public transport.

But it was when she travelled to her hometown by train instead of the Megabus that I knew something was up. I asked if she’d won the lottery. "No," she said. "I simply moved in with my boyfriend," she laughed. "It’s like having a second income stream."

Sounds calculating, I know, but they moved in for love I assure you. Still, she has a point: living with a partner is cheaper. Hey, it can even cut the cost of heating – snuggle up with your other half at night and you'll keep you warm and in credit during the cold winter months.

Indeed, recent research by uSwitch found that the annual cost of being single was £4,794, which between the ages of 22 to 75 adds up to an astonishing £254,082.

Having to carry the full burden of rent or mortgage payments, holiday costs, insurance premiums and utility bills as a single person all adds up.

Even going on holiday costs more, due to single supplements. Food costs more too – want those two for one deals? Better make sure you eat it before it goes off or that’s a wasted saving.

And more of us are living alone. Statistics from the Department for Communities and Local Government estimate that by 2031 18 per cent of the total population of England will live alone.

So all you singletons out there, or you couples living apart, you can follow all the advice that we journalists publish on how to be good with your finances – or simply find a partner and move them in. You’ll cut your costs in an instant.

End of rip-off card charges: travellers to benefit

Rip-off credit and debit card charges could be on the way out as the Office of Fair Trading promises a crackdown.  

Airlines and other travel firms have been ordered to stop imposing rip-off charges on customers when they book trips with debit and credit cards.

An investigation by the Office of Fair Trading (OFT) into card surcharges found that the fees – which are most commonly levied by travel companies – were often excessive and unjustified. The OFT estimated that UK consumers spent £300 million on payment charges to airlines alone in 2009.

It has told companies to stop imposing surcharges on debit cards, and reduce the fees applied to credit cards, or face legal action.

The OFT investigation followed an official complaint by consumer organisation Which?, which said these card charges were unfair.

Which? said the surcharges paid by consumers were in many cases significantly higher than the actual costs faced by retailers for processing card payments.

The worst offenders

These card surcharges have become increasingly common and budget airlines are among the worst offenders.

Ryanair charges £6 per passenger per one-way flight if they pay with a credit or debit card. This means a family of four would pay £48 extra for a return trip.

EasyJet charges £8 for debit card payments and for credit card payments the cost is even higher - £8 plus an extra £4.95 or 2.5 per cent of the flight price, whichever is higher.

What the OFT investigation found

The OFT focused on the passenger transport sector where it found considerable evidence of companies using “drip pricing” practices for surcharges online – this means adding payment charges to the total price only after consumers have navigated through a number of web pages during their purchase.

The organisation also ruled that card surcharges were misleading, particularly when avoiding them was only possible for a small proportion of consumers.

For example, Ryanair customers are not charged if they use a MasterCard prepaid debit card – but less than 5 per cent of UK adults have one. Similarly, easyJet customers do not have to pay to book if they use a Visa Electron Card – but only 11 per cent of UK adults have one.

Cavendish Elithorn, senior director of the OFT's goods and consumer group, said card surcharges were frustrating consumers.

“You can't buy online with cash and people are frustrated about being asked to pay for paying.

“Consumers find it harder to shop around and find the best deal if they have to invest time and effort in discovering surcharges.”

What is the OFT going to do about it?

The OFT has promised tough action saying travel companies must change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws.

It says traders should stop charging for paying by debit card – which it describes as the “online equivalent to cash”.

And the OFT says charges for paying by credit card should be made more transparent so that whenever prices are displayed on a website, surcharges must be made clearly available via a single click rather than being revealed at a late stage in the shopping process.

The OFT also says retailers should clearly reference card surcharges on any advertising material when prices are being promoted.

In the longer term, it has called on the government to ban debit card charges altogether.

Hidden charges and booking fees came top of a recent Confused.com poll of “most annoying rip-offs” so the OFT’s ruling is welcome. Hopefully, a better deal for consumers will be on the way sooner rather than later.

An Oscar-winning documentary investigates the financial crisis - we have five copies up for grabs

Three years after the worst financial meltdown in recent history and "not a single financial executive has gone to jail", says Charles Ferguson, director of the new Oscar-winning documentary Inside Job.   

Inside Job won Best Documentary Feature at last year’s Academy Awards and it’s easy to see why. This powerful account of the economic crisis of 2008 will leave you feeling enraged that no-one has been brought to account for the global financial meltdown that has affected us all.

We’ve all felt the pinch of the so-called credit crunch, from first time buyers unable to secure a mortgage due to lenders no longer extending credit, to rising inflation eating into our buying power.

Inside Job examines the reason behind the financial failure and concludes that greed, a loosening of financial regulation, and a lack of accountability by those in charge is to blame.

Indeed, the focus of Ferguson’s firm is on the fact that no one among the financiers, politicians and academics who contributed to the crisis has been called to account for their role.

‘A heist movie’

In fact, according to Ferguson, many are still working in the industry and are earning even more money now than they were then.

In an interview with BBC News Online, the director said: “The essence of what happened is quite simple.

“It's a heist movie - but the heist was conducted by the people running the banks rather than by people walking into the banks with guns.

“I think it's important for people to understand the role that the political system played and the role that academia played."

Inside Job, out now on DVD, features exclusive interviews with major financial insiders, politicians, journalists and academics. 

Boom and bust

Narrated by Hollywood actor Matt Damon, the documentary starts with a look at the boom years that preceded the bust.

What emerges is a tale of financial deregulation which led to ever more risky and complex financial ventures which were packaged as safe investments and sold from investor to investor and which, when seen for the worthless investments they were, triggered the start of the global economic crisis which haunts us to this day.

The problem with explaining the global economic crisis is that, like the complex financial ventures being traded before the storm, it’s a devil to try and explain in layman’s terms what actually happened.

Fortunately for the viewer, Inside Job goes a long way to breaking it down and contends that the crisis could have been avoided.

A similar account of the financial crisis is the BBC’s excellent three-part documentary The Love of Money, which aired in September 2009.

If you can find a copy, I’d recommend it as an informative and engaging companion to Inside Job, particularly as it covers the financial crisis from a British point of view, with interviews with then Prime Minister Gordon Brown and then-chancellor Alistair Darling.

Inside Job is available on DVD now, courtesy of Sony Pictures Home Entertainment. We have five copies to give away. To be in with a chance of winning, answer the following question: “Which Hollywood actor narrates the documentary Inside Job?”

To enter, email editor@confused.com with your answer in the subject line. Please put your full name, date of birth and postal address in the body of the email. 

Closing date for entries is 2359 on 23 June 2011. Only one entry per person. Please find full terms and conditions here. 

Heinz Baked Beans or Tesco Value: Why brand loyalty doesn't pay

Brand loyalty – it’s good for business, but doesn’t benefit the consumer, here’s why.

Loyalty - faithfulness or devotion to a person, country, group or cause. And, of course, in these consumerist times, we can add product to that list.

Brand loyalty is what many big companies rely on, as our repeat custom boosts their coffers. But it’s not just our loyalty they’re after; it’s also our recommendation of said brand to our friends and family.

And our recommendations are responsible for keeping the best-known brands in the UK at the top, according to a recent survey.

First Direct, Samsung, Saga, Tesco Mobile, Churchill Insurance and Apple are among the most recommended brands according to UK consumers. Satmetrix, the customer behaviour analysis firm which carried out the research, surveyed more than 6,800 UK consumers who had purchased products or services from each company within the previous 12 months.

So brand loyalty benefits businesses. But does it benefit the consumer? Of course not! Loyalty doesn’t pay. What pays for the consumer is to shop around for the best deal.

“Shop around” - such an important mantra that a whole industry has been built off the back of it. Price comparison sites like Confused.com exist because of a need to make finding the best deal in a crowded marketplace an easy experience.

But for every money-savvy shopper out there, there are plenty more convinced that their bank, credit card provider or gas and electricity supplier has their best interests at heart.

Think about newspaper, television and radio adverts for savings accounts, mobile phones, TV and broadband packages etc, with their attractive interest rates and low prices. More often than not, these deals are reserved for new customers only. So whether your loyalty is purposeful - you think the brand you’re with is the best - or whether it’s lazy - you simply can’t be bothered to shop around - , the only winner is the company.

Of course, I’m not immune to the power of brand loyalty, both purposeful and lazy. I used to be purposefully loyal to Heinz baked beans. Why? I’d grown up with them, I liked the taste, and they were the priciest. A high price often makes people think something’s better: a colleague admits she used to choose travel insurance like she chose wine – not the cheapest, but the second cheapest because she didn’t want to look too, well, cheap! (We all have an inner snob - admit it, we’ve all looked down at the supermarket shopper with a trolley full of value goods?!) But back to beans.

My predilection for Heinz changed five years ago when the newspaper I worked for had a delivery of Branston baked beans (it was for a promotion). I was a bit strapped for cash so I took a tin home one night. And my, they were so tasty, I changed my beans buying habit there and then. 

Now, this switch hasn’t saved me money. It wasn’t about that. But loyalty borne out of laziness has cost me money when it comes to the cost of heating and lighting my home.

For years, I read all the bumf about how switching gas and electricity suppliers could save you money.  But for years I did nothing – much to the benefit of British Gas, I’m sure. But a recent house move led me to compare prices for the first time – and I’m now en route to saving myself more than £100 a year.

Of course, loyalty isn’t just about price, it’s about service too. But that’s the point of working out the best deal for you – consider price, service, and any other area that matters to you, such as opting for a green energy tariff because of your environmental views, even though this tariff may not be the cheapest.

Be an active consumer: weigh up what your brand loyalty is costing you, and you’ll be the one benefitting from your financial decisions, not big business.

Private renters need respect

Why landlords and the law need to stop treating tenants as second-class citizens.

In England alone, 3.4 million or one in six households are in privately rented accommodation, up from 2.4 million in 2005.

These figures are reflective of the fact that it’s harder for wannabe first-time buyers to get a foot on the property ladder, thanks to sky-high house prices and the overwhelmingly large deposits that are now needed to secure a mortgage.

Yet it appears that many private renters are treated as second-class citizens, both by landlords and the law.

The assured shorthold tenancy, widely used within the private sector, provides tenants with little security – normally a fixed term of just six or, if you’re lucky, 12 months. And once the fixed term has ended, the landlord can get rid of you as long as he gives you just two months’ notice.

But with the average age of the first-time buyer in the UK ever increasing, the private rental sector needs to change to reflect the needs of the market in terms of longer-term letting. The last place I rented I stayed for five years and for many people I know it’s the same. After all, it’s a hassle to move, so if you find somewhere you like why would you not stay put?

I figure the longer I stay, the fewer the landlord’s rental voids. But in my experience, landlords are no more loyal to long-serving tenants than they are to ones who are there for just six months. I’ve been treated by landlords as if they’re doing me a favour by allowing me to live in their property in the first place, conveniently forgetting that it’s actually a business deal – I pay you rent, you allow me private use of your clean, inhabitable, and well-kept property.

Instead, what I’ve found is that landlords are happy to have tenants pay their buy-to-let mortgages but heaven forbid we demand timely repairs in return, or want to decorate.

I am a working professional in my thirties and me and my fellow private renters are sick and tired of being treated like students. We want longer leases, we want more part-furnished and unfurnished properties so we’re not stuck with sticky-to-the-touch mis-matching furniture from the 70s. We want to be able to decorate without this being seen as a reason to make deductions from our rental deposits.

In many European countries, long-term leases of unfurnished properties are the norm. Unfortunately, this is not the case in the UK. So private tenants being treated like second–class citizens is simply reflective of a society where renting is seen as a waste of money, something you do simply because you cannot afford to buy. Because of course everybody wants to own, right? Wrong.

I don’t want to own. I’ve got to be realistic – I simply can’t afford it at this point in time. So it benefits me financially that someone else is responsible for the upkeep of the property. But, like many private renters, I do want a good deal - in many cities, not least London, tenants pay over the odds for properties in shocking conditions. I also want repairs made in a timely fashion. Simple demands you may think. But, unfortunately, often hard to come by.

So where do you, as a private tenant, go for advice when it comes to a dispute with your landlord? Firstly, read your tenancy agreement. It should detail your rights, expectations and obligations regarding the property. Knowledge is power and any dispute may be easily sorted once your landlord is aware you know your stuff.

Housing and homeless charity Shelter has a wealth of information on its website and offers a free advice line on 0808 800 4444.

You can also contact your local Citizens Advice bureau for free legal advice. And see if your city or town has a local law centre. It may be able to help as well.

Finally, when it comes to a dispute put everything in writing. Make notes of any phone conversations you have with your landlord as well. This documentary evidence will help in case the matter ends up in court.

Travel reviews: can they be trusted?

When it comes to booking the best holiday accommodation, should you trust online travel reviews or not?

Planning a holiday is always fraught with difficulty - from haggling with friends and family about the budget to finding a decent flight time. But making sure you book a clean, comfortable place to stay for the duration of your break is equally important. After all, no-one wants to end up staying in accommodation that could feature on ITV’s Holidays from Hell, or BBC1’s Watchdog.

But what’s the best way to research your holiday accommodation when you’re hundreds of miles away? That’s where online reviews by other holidaymakers come in. They are the 21^st Century equivalent of word-of-mouth recommendations.

TripAdvisor says it is the world’s largest travel site with more than 45 million reviews and opinions from travellers. I never book holiday accommodation without checking out their site and similar to get a feel for what other holidaymakers have to say.

But online reviews can be both a blessing and a curse. Some people claim that most holidaymakers who go to the effort of posting a review are disgruntled customers, resulting in, according to certain hoteliers, a string of unfairly negative reviews which puts prospective holidaymakers off booking a stay.

Some hoteliers have been so upset by what they claim are unfairly negative reviews that they have threatened legal action against TripAdvisor. But the company says the majority of reviews posted are positive, with an average rating of four out of five stars, and that every review is screened before it appears on the site. The company adds that hoteliers can also publicly respond to any reviews.

In a statement, TripAdvisor said: “... if the reviews people read didn’t paint an accurate picture users would not keep coming back... the sheer volume of reviews allows travellers to get the facts, spot trends among reviews and determine whether a property is right for them.”

So, what should you, as a consumer, do when it comes to making sure the holiday accommodation you want to book matches your brief?

Firstly, assess the person posting the review. Note their age if mentioned and if they were on a group, family or couples holiday. After all, a couple in their forties may understandably have a gripe against their accommodation if it also housed large groups of twentysomethings on a raucous party holiday. But if you’re planning a party holiday with friends this could be the right place for you.

It’s also worth noting when the reviewer stayed at the property as service at any accommodation during peak and off-peak season tends to differ.

Also, look at the average star rating. If the latest review is a negative one, yet the overall reviews give the establishment four stars out of five, don’t write it off immediately. Read further reviews.

However, if you’ve done your research yet you arrive at your accommodation to find it isn’t what you expected, make sure you complain.

If your accommodation forms part of a package holiday then under the Package Travel Regulations 1992 tour operators have legal responsibilities to their customers and if it fails in its duty then it may be liable to pay compensation. In the first instance speak with your resort representative. Explain the problem and give them the opportunity to move you or put things right.

If you get no joy, make notes of the problems including names, dates, places and contact details and take photographs to prove your complaint. This could prove useful evidence at a later date.

If the problems remain unresolved, write a letter of complaint to the tour operator when you get home. If it’s a member of a trade association such as ABTA then contact them. You can seek advice from your local Trading Standards department and the Citizen's Advice Bureau.

If you’ve booked directly, speak to the hotel owner and see if the matter can be sorted. If not, again, make a note of your complaint and take photographs. If you’ve booked on your credit card then under Section 75 of the Consumer Credit Act 1974 your card provider is jointly liable if anything goes wrong, such as breaches of contract or misrepresentation regarding your accommodation. This protection applies to purchases between £100 and £30,000.

And don’t forget, if your accommodation wasn’t up to scratch or equally, if it was excellent, you can always post an online review to help other holidaymakers decide where to stay.

Take my advice and fight the ID thieves

Identity fraud has risen by almost 25 per cent in the past five years but what can you do when it happens to you? Confused.com’s new writer, Naphtalia Loderick reveals all.

As a personal finance journalist, I like to think of myself as a savvy consumer. I can recite the Sale of Goods Act, well some of it, and I know all about Section 75 of the Consumer Credit Act - the one that protects you for purchases made on your credit card.

But when I discovered someone had fraudulently used my credit card details to purchase mobile phone top-ups, I was stumped.

I only discovered the fraud when I called my credit card company to pay my balance. My ears pricked up when the automated service reeled off £30 transaction after £30 transaction. "But I haven't spent on my card in the past month," I said.

Customer services confirmed that these transactions had been made to the Orange mobile phone network. "But I'm not with Orange," I protested. "These transactions aren't mine!" I was baffled.

Particularly as I had my credit card in my hand but then I realised I had been a victim of skimming. This is where thieves attach card readers and small cameras to cash machines to capture your card details and your PIN.

Skimming can also happen using card readers in restaurants and petrol stations. All it takes is one crooked employee to put your card through a machine which electronically copies the information held on its magnetic strip.

This all falls under the banner of identity fraud - using stolen or false identity to obtain goods and services by deception. And according to anti-fraud organisation CIFAS, identity fraud has risen by almost 25 per cent over the past five years and accounted for nearly half of all frauds recorded in 2010.

So what could I do about the fraud on my account? Well, my credit card provider told me to contact Orange.

Orange told me they couldn't help as I wasn’t a customer of theirs. Talk about being given the runaround.

I went back to my credit card company who agreed to cancel my card and issue a new one. They also sent me forms to sign and return confirming the transactions weren't mine, which would lead to an investigation and hopefully a refund of my money, I was told.

The refund was forthcoming, the outcome of their investigation unfortunately not - why would they share it with me? I'm only the defrauded cardholder after all! But that should have been the end of it right? Wrong.

Imagine my surprise when, a month later, I received a statement for my new account - with another fraudulent transaction to Orange listed!

I wrote to my credit card provider demanding an explanation and refund. To this day I have heard nothing. And yet, despite knowing my rights and despite being money-savvy, I have yet to make an official complaint about my credit card company to the Financial Ombudsman Service (FOS) which investigates complaints by consumers about financial businesses.

But writing this has made me realise I really do need to get that complaint letter written, because while identity fraud of this type remains a matter for credit card companies and not the police, my experience suggests there is little effective deterrent to fraudsters.

They will go on nicking our names, addresses and credit cards numbers in the knowledge that the police and the credit card companies rarely come after them.

Here are my top tips to stop yourself becoming a victim of credit card or any other type of identity fraud:

• Check your statements regularly. CIFAS has found that while 94 per cent of people think they are at risk of ID fraud, only 44 per cent regularly check their statements for rogue entries.

• Don't just bin financial paperwork, shred it.

• Many of us organise our finances online. Make sure you have the latest anti-virus software on your computer and update it regularly.

• If you have been defrauded and are in the unfortunate position of having to contact your bank or credit card provider, put your complaint in writing. State clearly why you are complaining and what remedy you are seeking. The bank has 40 days to respond. If it doesn't, you can take your complaint to the FOS.

Get top money saving deals

If you’re beginning to recover from your Christmas spending and feel like hitting the shops, then check out what deals are around below.

Although most deals have been targeting lovers everywhere in light of Valentine’s Day, there are still a few bargains to be had...

If you’re in the mood for a bit of DIY then B&Q is offering 10% of loft insulation until 28 February. 

If you need a new dishwasher or washing machine then you can get 8% off when you spend over £500 at Comet. You need the voucher code LD58 and it’s valid until 19 February. It’s also got a 10% sale across a range of home appliances, quote voucher code 10SMAPP.

If you’re sick of the snow and cold weather, BMI are offering 20% off flights flying London Heathrow to Manchester, as well as London Heathrow to Edinburgh and  Heathrow to Amsterdam.

If a new pair of glasses or designer frames are your thing, then you can get a 11.5% discount at Best4glasses until 28 February. Enter code LFW115 to get the deal.

And if you need some new clobber then Kaleiodoskope is offering new customers 10% off all purchases. Enter voucher code PP2P at the checkout.

This week's top money saving deals!

As a child I remember my mum being really good at making ends meet which often entailed her cutting out vouchers from a newspaper to get discounts in shops.

Obviously as a youngster and then a teenager, this was much to my embarrassment but oh how the tables have turned and in only the space of a decade or a little more.

Instead of it being something that is done sheepishly, handing over money saving vouchers to get cash knocked off your purchase has become very trendy indeed, sparked off by the credit crunch and then the recession.  And as the UK officially pulls out of the downturn, it looks as if such money saving habits are here to stay.

So in keeping with this long-term trend, the Confused.com team has launched a new money saving blog where you can find our pick of the best money saving vouchers around.

And here they are:

Currys is offering 5% off everything in store until 5pm on Friday 12th February.

Got a bit of money to spare? Then Sainsburys is running a half price sale while stocks last of a range of products from kettles to sofas.

Boots is running a half price sale on selected fragrances as Valentine's Day gets closer.

And if you need new lights for your home, then Marks & Spencer is offering 20% of all lighting.

Debenhams has again come out with its 70% off blue cross sale which it is running across many of its lines.

And if you've watched all your Xmas DVD's, then you could save up to 80% at Zavi's off electronics, books, cds and a whole lot more.

Looking to get fit as the New Year takes hold but yet to do anything about it? Then why not check out Esporta health Clubs which is offering one day free membership to prospective joiners.

And to give your body even more of a boost, Holland and Barrett are offering a buy one get one half price deal on everything across its website, valid until 17th February.

If extreme sports is your thing then Extreme Element which has extreme sports gift vouchers and experiences on offer, is giving customers 10% off its range.

And if you need a ride getting to your extreme experience, then Megabus is hosting a 5% off sale, valid until 5pm, Fiday 12th February.

But if you are only game for slobbing out on the couch, then buy any three 9.5" Dominos Pizzas and get them for £5.55 each.

All deals correct as of 28th January 2010, but remember some deals end or sell out fast....