Weekly Money: the news stories that we noticed 8 to 15 February

All the personal finance stories you may have missed in the last week

A pleasing win for Sunderland fans this week (Getty Images)

15 February

The Ministry of Justice has announced plans to cap the fees charged by claims managers. The firms have taken an estimated £3.5bn in charges since 2011 from consumers they’ve helped while they’ve been accused of fueling speculative claims through aggressive marketing and nuisance calls.

“Some claims management companies charge as much as 40 per cent of the final compensation awarded for very little work,” said Justice Minister Lord Faulks. This has got to stop. We’re acting to make sure people aren’t being taken advantage of by these greedy practices.”

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There have been more gas bill cuts announced, this time by independent suppliers. Ecotricity is cutting charges by 7 per cent while Good Energy is reducing gas bills by 7.2 per cent.

The Big Six energy giants have announced cuts of around 5 per cent. “The 5 per cent reductions that we’ve seen so far just aren’t enough,” said Dale Vince, Ecotricity founder.

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Today’s workers will be forced to work into their late 70s and beyond if they want the same level of pension as their parents’ generation.

The warning comes in a new report published today by Royal London. It reckons you would need to work to 77 to get the sort of pension that many people retiring today enjoy, and to 71 even for a more modest pension. This is even if you save every year from the age of 22.

“Many face a cruel disappointment if they think that current minimum contribution levels will deliver them the sort of retirement they are looking for,” said former Pensions Minister Steve Webb, now director of policy at the insurer. “Without significant increases in contributions, we could be witnessing the death of retirement.”

12 February

EDF yesterday became the last of the Big Six to announce a gas cut, following an announcement earlier in the day from British Gas. EDF will be reducing gas bills by 5 per cent from 24 March, while British Gas’s 5 per cent reduction will take effect two weeks earlier, from 16 March.

Earlier this week Npower said it will reduce average gas prices by 5.2 per cent, but not until 28 March. Meanwhile Scottish Power’s 5.4 per cent takes effect from 15 March.

E.on’s customers have benefited from a 5.1 per cent gas bill reduction since the beginning of February but SSE customers will still have a long wait until the very end of March to get cheaper bills, despite the company announcing the cut back in January.

The delays simply confirm the impression that energy firms put their profits ahead of customers.

However the moves will see customers on standard tariffs of all the Big Six energy firms saving an average of £32 a year on their bills.

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A third of young adults is too scared to check their bank balance, according to a new survey. Intelligent Environments, also found that a third of 18-24 year olds expect to go into debt this year.

The two are linked, with those ignoring their bank balance much more likely to slip into debt as a result. Shelly Asquith of the National Union of Students said: “more than half of students struggle to cover their basic living costs. With rising rents and grants being cut back, we are facing a national crisis of student poverty.”

The answer? More help from banks and government to educate youngsters about money management and budgeting. “It’s up to banks to help young people achieve the right balance between spending and saving,” said David Webber of Intelligent Environments.

11 February

Good news from BT, it’s upping the battle against nuisance calls and is calling on customers to join the fight. It is putting together a blacklist of rogue numbers and customers will be able to sign up to have calls from those numbers blocked.

BT reckons the new service - which will be offered to customers later this year - will allow it to divert up to 25 million unwanted calls a week.

The blacklist will be expanded if large numbers of customers identify further troublesome numbers. Customers will also be able to compile their own personal blacklist by adding individual unwanted numbers.

You can register your interest for the service now online at www.bt.com/nuisancecalls

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Building and contents cover has risen 1 per cent in the last three months to an average £316, according to the Association of British Insurers. But the Association blames George Osborne for the increase.

The ABI said that without the rise in Insurance Premium Tax from 6.5 per cent to 9 per cent last November, which the Chancellor announced in his Spring Budget, the average price paid for home cover would have fallen.

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House prices climbed £700 in January (0.2 per cent), according to Your Move, a rise of £23 a day. Property prices are climbing at twice the pace of earnings, up 5.5 per cent a year compared to 2.1 per cent salary growth.

The biggest monthly boost was in Bournemouth with a 2.9 per cent rise, driven by more tech jobs in the town. But the strongest annual sales surge was in the North West, up 8.8 per cent.

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Npower and Scottish Power continue to be ranked worst energy firms for customer satisfaction, said Ofgem.

10 February

The continuing cold weather is forcing millions to cut back just so they can afford their energy bills, warns Santander.

Just over a fifth are taking on a second job or extra hours to raise the extra cash they need while one in six are sacrificing holidays or cancelling TV subscriptions. According to the bank’s research, three million even spend more time at work because it’s warmer than at home.

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Crooked current account applications more than doubled in a year, reckons Experian. Its figures show that by the end of last year, 156 applications in every 10,000 were fraudulent, up from 73 at the start of 2015.

The fraud is doubly dangerous as it not only threatens having a large overdraft run up in your name, but can act as a gateway to other fraudulent debt as crooks often open other financial products such as loans or credit cards.

“Companies and consumers must remain vigilant to the evolving tactics of fraudsters which become more sophisticated with each passing day,” said Experian’s Nick Mothershaw.

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Online dating websites can be a godsend for fraudsters. They use simple tactics to trick lonely hearts out of their savings.

Which? warns that two in five using a dating site or app have been asked for money, with one in seven admitting to sending cash to someone who asked for it. “People must be vigilant when using dating sites or apps,” advised Alex Neill of Which?

9 February

Mortgage fees have reached their highest level for almost two years. Moneyfacts reckons the average charge when you take out a home loan now stands at a 21-month high of £956: it stood at £888 in June 2014.

“The mortgage market boasts some of the lowest rates on record, but the increase in the average mortgage fee clearly shows that some of these rates are being compensated for elsewhere,” said Charlotte Nelson of Moneyfacts.

Some of the fees borrowers are being asked to pay are shocking, with up to £7,499 being charged for some high value loans.

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Npower is the latest big six energy giant to reveal a £32 cut to standard tariffs. It’s reducing average gas prices by 5.2 per cent, but not until 28 March.

The move follows similar cuts announced by SSE, Scottish Power and E.on last month, and British Gas last year, leaving EDF as the only one of the big six not to have reduced gas prices for customers against a background of a 23 per cent fall in wholesale prices last year.

Ann Robinson of uSwitch said: “Consumers will be exasperated at yet another small cut from the big six which is too little too late.”

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Some of the poorest regions in the UK are paying the most for their gas and electricity. New research shows that North Wales, Merseyside and Northeast England have the least affordable energy.

Comparison site energyhelpline says those in Merseyside and North Wales have the highest average bills at £1,227 and are forced to spend 8.3 per cent of their average income on heating and lighting their homes.

In London bills are cheaper at £1,169 meaning those in the Capital need spend just 5.5 per cent of their income on energy.

8 February

A new not-for-profit company offers hard-up people an alternative to rip-off finance firms that charge a fortune to buy emergency goods like washing machines and fridges on credit.

Fair for You offers affordable credit for essential household items to families who get turned down at high street mainstream lenders. For instance, buying a new Hotpoint 60cm fridge freezer from Fair for You rather than market leader Brighthouse, could mean saving of £742.35.

Chief executive Angela Clements said: “It is hard for lower income working families to access affordable credit when hit by a relatively minor emergency such as a broken essential household item. They need access to credit quickly to keep their homes running and their children in hot meals and clean clothes.

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Those with mortgages can probably enjoy another few months of the ultra-low rates they’ve been favoured with for the past seven years after the Bank of England kept the base rate at 0.5 per cent last Thursday.

In fact things are even looking up, according to Mark Harris at SPF Private Clients who expects lenders to introduce five-year fixed-rate deals at less than 2 per cent to reflect existing cheap swap rates and the fact that interest rates aren’t rising yet.

He reckons now is a good time to fix your mortgage. “If you can’t afford to be wrong – that is, if rates rose, you would struggle to pay the mortgage – then a fixed rate makes sense,” he explained. “Anyone who secures one of these rates won’t be disappointed when they look back in years to come.”

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Drivers are baffled by the rules of the road, warns Aviva. Its research shows that only one in 10 knew the correct meaning of double yellow lines while a third don’t know the speed limit.