Weekly Money: the stories we noticed 19 to 23 October

23 October

There’s a new pension scam which is proving a favourite among fraudsters. They’re now ringing up unsuspecting victims to flog individual parking spaces at airports as an investment for private pension funds. But it shares the hallmarks of other recent pension scams, such as cold-calling and the promise of high, guaranteed returns on assets which are ultimately outside the control of the individual investor.

Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: ‘Pension freedom has been a good thing, however the lure of large sums of newly accessible pension money is inevitably attracting unscrupulous fraudsters out to make a quick buck at someone else’s expense.”

He warns people to ignore seductive sales pitches for dodgy schemes around car parking, property development, overseas investments and storage pods. “Investors should never trust cold-callers and critically, they should only deal with regulated businesses,” he added.

* * *

Car insurance premiums saw a 4.8 per cent increase in the last three months- up ?26 - leaving the average premium at ?569, says the AA. The average cost of cover has climbed ?48 in the last year.

* * *

Nine out 10 of the best performing ethical funds over the past decade offered double digit returns when compared to their sectors within the Investment Association, according to research by FE Trustnet.

The best performer was the Kames Ethical Equity fund, which grew more than 160 per cent. Its sector, the IA UK All Companies returned just 64 per cent in the same 10 years. Meanwhile Royal London’s Sustainable Leaders Trust returned 147 per cent – more than half of what its sector did.

22 October

Britain’s banks are ripping us off when it comes to current accounts, the Competition & Markets Authority said. After a year’s investigation into retail banking it concluded most of us could save ?70 a year by switching current accounts.

Those who slip into the red could save twice as much while heavy overdraft users could save on average ?260 a year by moving to a better value account. So what does the watchdog propose to do about it? Almost nothing, it turns out. To be fair, the report included only provisional findings and it will publish its final proposals next spring.

But the chance of there being some real chunky guidelines for banks to force them to play fair with customers looks pretty slim. What has the Authority actually proposed? It said “Banks must address long-term problems and make it easier for customers to take charge of their accounts”. It says potential solutions are requiring banks to prompt customers to review their service at certain “trigger points”.

It also suggested that the online tool Midata – which rounds up information about charges and fees -could be improved to make it easier for consumers to compare bank accounts.“We think customers need to be put in charge of their banking,” said Alasdair Smith, chairman of the retail banking investigation.

***

Switching should get easier under new government plans. Business Minister Nick Boles said consumers should be able to switch electricity or gas supplier, bank accounts, telephones, broadband or TV providers quickly and without charge.

They should also have free access to information about how they consume these services. “By setting out clear principles for switching suppliers, this government will make it simpler and easier for consumers to shop around for the best deals,” Mr Boles said.

The government wants to hear consumers’ views on how businesses can be more responsive to customers when switching supplier. The deadline for responses is 4 December. Find out more at bit.ly/1XkdnI8

* * *

If you shop online you’ll know how frustrating it can be if a website is hard to navigate or inefficient. Which? has canvassed its members to find out which sites are good and which are poor and publishes results today.

Retailer AO.com and beauty specialist LizEarle.com were joint top of the table with a score of 87 per cent, with customers praising their speed and efficiency. At the bottom came telecoms firm EE with 58 per cent and criticism for having a hard-to-navigate website and a lack of information. Evans Cycles, Vodafone and Homebase also performed poorly.

* * *

There’s a new online database of professional financial advisers at thepfs.org/yourmoney that’s been put together by the Personal Finance Society. It includes details of around 22,000 qualified financial advisers and is designed to give consumers details of advisers close to them.

Other places to find financial experts include vouchedfor.co.uk - which includes reviews of advisers - and unbiased.co.uk - which includes solicitors and accountants as well as independent financial advisers.

21 October

The Competition and Markets Authority will be publishing the provisional findings of its Retail Banking Market Investigation tomorrow. Hopes are high that it will be the beginning of widescale changes in the way banks operate when it comes to current accounts. The hope is that banks will be forced to make it easier for consumers to switch accounts and, indeed, understand which account is best.

One of the biggest problems is that – even though new rules came into force two years ago to make switching much easier – people are confused about which account to choose and are even scared that they may end up with a worse deal.

***

More than a million Londoners living in poverty are in a working family, according to a new report by the New Policy Institute, funded by the Trust for London charity. Shockingly the figures have climbed more than 70 per cent in the last 10 years.

Campbell Robb, Shelter’s chief executive, said: “It’s heart-breaking to know that in one of the wealthiest cities in the world, hundreds of thousands of children are living in poverty because of our housing shortage,” said Campbell Robb, chief executive of Shelter.

More than a quarter of people in the capital are now said to be in poverty compared with 20 per cent across England.

* * *

Complaints about communications companies have more than doubled in the last three years. Nearly a third of complaints in September were about billing issues, such as complicated invoices, direct debit amounts or incorrect account details, reported Ombudsman Services.

People in the Midlands have been most dissatisfied with communications firms this year, making one in 10 of all complaints.

* * *

It was three months ago this week that British Gas announced a price cut for its standard plan customers, the second of the year. But despite further cuts in the cost of wholesale energy over the summer, the other big suppliers are yet to follow.

In fact just two of the big six suppliers responded to a letter sent by energy secretary Amber Rudd in May suggesting they lower bills because the threat of Ed Miliband’s price freeze had been lifted. Since, only British Gas has cut prices, but by only 5 per cent and only on gas.

“It’s simply astounding that the other major suppliers are still dragging their heels,” said Ann Robinson of uSwitch. “Forecasters are warning this winter could be one of the coldest in 50 years. Now is time for suppliers to respond to the mounting pressure from the Government and consumers before the cold weather starts to bite.”

20 October

Being diagnosed with cancer is an expensive experience, as well as a distressing one. It means additional costs for victims that can add up to around ?570 a month. The extra cost includes increased energy bills because patients need to be kept warm, changes in food and clothing requirements and being unable to work because of treatment.

So it’s good news that Nationwide Building Society has tied with charity Macmillan to launch a support service for people affected by cancer. It will give patients a range of aid with their finances, from helping them manage their current account to their mortgage payments.

Lynda Thomas, chief executive at Macmillan, said: “The banking industry has a vital role to play in helping to minimise the financial impact of cancer yet the majority of people with cancer report they are not receiving the help and support they need. The whole industry must come together and adopt these solutions so that no one living with cancer faces financial worries alone.”

* * *

There’s a new generation of socially- and environmentally-aware people who are going to help us change the world for good. They’re the much-maligned millennials, according to Amanda Young, head of responsible investment at Standard Life Investments.

Research by the company suggests that young adults use shared knowledge to become better consumers, who demand more from companies. The report also shows that they’re spending in a different way. They buy less because of old-style brand-values and are more likely to choose products or services from firms that have values or ethics they sympathise with.

It means they’re turning away from global multi-nationals such as Amazon or Starbucks who pay little tax in the UK and looking for forward-thinking firms that are reacting positively to the growth of the emerging sharing economy.

Amanda says there’s been a “huge and significant shift” in the way young adults are choosing to spend and invest. Their collective power is forcing companies to behave better which, in turn, is helping companies to build more sustainable businesses and grow profits.

So, to mark Good Money Week, it’s time to think differently about ethical finances. Rather than avoiding firms that you think harm our world, Amanda says consider instead impact investment, where you back firms that have a positive social and environmental impact. Find out more in a video interview with Amanda at ind.pn/1Px1Tzo

***

Independent supplier GB Energy has launched the cheapest energy deal on the market and the first to drop under ?800 since 2011. Its variable duel fuel tariff is just ?799 a year and has no exit fees. However, as the company doesn’t pay to appear on comparison sites, you’ll need to select the ’whole of market’ option to find it.

* * *

Green energy company Ecotricity hopes to raise up to ?25m to help it build more green energy projects in Britain. Ecobond Three will offer a return of 5.5 per cent a year (or 6 per cent for Ecotricity customers) and help finance six new green energy projects that could power 10,000 homes.

19 October

There’s another major financial mis-selling scandal looming, this time centred around the pension freedoms launched in April, an influential committee of MPs warned today. “These reforms have been in operation for six months now: long enough for the scammers to get going, working on defrauding people out of their life savings,” said Frank Field, chair of the Commons’ Work and Pensions Committee.

He said the government must urgently provide data on how the reforms are working and close gaps that have already become apparent. The pensions freedoms gave people aged 55 and over the right to take their retirement savings as cash. But fears are rife that many attracted by the opportunity to get at the money now will not consider the long-term implications for their later years or be aware of the tax charge as only a quarter of their pension pot can be taken tax-free.

“Good quality, co-ordinated and accessible guidance and advice will be the best tools to ensure people make the best, informed decisions about their retirement savings, and protect them from scammers,” said Mr Field.

***

Watch the charges if you call your favourite TV show - the cost of calling expensive phone numbers such as 084, 087, 118 or 09 is rising dramatically. From 3 November, for example, if a Three customer calls the Strictly Come Dancing vote line, their call could now cost 60p a minute, compared to 40p previously.

The increases have been quietly introduced since a new system was introduced in July to make the charges for calling non-geographic and premium rate numbers simpler for consumers to understand. Now we pay the network provider an ‘access charge’ and the company they’re calling a ‘service charge’.

But some networks have increase access charges to premium and non-geographic numbers by as much as 96 per cent, said Ernest Doku at uSwitch. “With no cap on what phone companies can charge, the providers can now set whatever access charge they want,” he warned.

* * *

The amount of money invested in green and ethical investment funds more than doubled in the last decade. EIRIS, sustainable investment research specialists, said the figure topped ?15bn this year, up from approximately ?6bn ten years ago.

Stephen Hine of EIRIS, said: “With continued consumer interest in global issues like climate change, human rights and equality, it is not surprising that consumers are keen to explore responsible finance.”

The figures have been published to mark Good Money Week, which aims to raise awareness of sustainable and responsible finance. “If you’re new to ethical investing, it’s worth doing some research,” said Julie Hutchison of Standard Life. “For instance, if you’re in your company pension scheme, you could check if there’s an ethical fund choice which would be right for you and your circumstances.”