02/11/2013 Your Money


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said, not so fast. Hello and welcome to Your Money `


your weekly guide to making the most of your cash, here every weekend on


BBC News television, available all week on the BBC iPlayer. Capping


pension charges. We'll look at the Government's plans ` to let you keep


more of your savings for yourself. Defective clutch. Faulty brakes.


Kevin Peachy looks at complaints about second`hand cars and how you


can protect yourself from a dodgy dealer. Keeping the roof over your


head after a divorce. We've got news on how mortgage companies deal with


child support payments ` they're not all the same. And there's advice on


how mothers can protect themselves and their children. And another way


for the energy companies to put up your bill. We've got the details on


that. If you're working ` and you're saving for your old age in one of


the new Government`backed pension plans ` you pay someone to look


after that money. You might not realise it, but you do ` it's called


a management charge. The Government says it wants to cap those charges `


at somewhere between 0.75% and 1%. That may not sound like a big


number, but let me show you how it all adds up. The Government says if


you save in a pension for 46 years, starting with ?100 pounds a month `


and increasing the amount you save by 4% every year, a 1% charge would


cost you ?170,000, taken out of your pension pot. That calculation


assumes the fund grows by 7% a year. The pensions expert Malcolm Maclean


is with me ` he's a consultant at the firm Barnett Waddingham.


When we talk about these management charges, what percent of what? Of


the fund. You put money on by way of the fund. You put money in by weird


contributions, your employer puts money in, the government gives you


tax relief and then you are old pension ought. Every year, there is


an annual management charge on that. If the charge is 1%, and you have


?10,000 in the box, 1% of that is ?100. The second year, that happens


again. At the end of year two, you are


paying charges on what was paid in and year two and years three, GPU on


your one and year to end US lead. Yes, because the service is ongoing


and the fund managers and pension administrators have to be paid every


year. But they are helping themselves year after year to money


they have managed already. Yes, but with investments, you constantly


have to check on the months which them, but most people don't actually


understand this. He raised a good point. When you talk about 1%,


people think, that leaves 99% for me. But it makes a big difference in


long`term investments. If we spammed this over 40 years, there is a lot


of money coming out and the government is getting a little bit


worried about it. Now is the time to look at this and see if it should be


capped will stop the cap, if it goes ahead, it will come in from next


April. I think it is probably likely to happen. And this will only apply


to people saving in the new Government backed workplace pension


schemes, the scheme the people were signed up for this they didn't have


their own plans already. Yes, that is being phased in and not everybody


is in it yet. It will cause problems, because some employers


have planned scheme already and will have to unscramble it to take


account of any new cap coming in. You do wonder why they did not have


the cap in place will stop we have been talking about this for years.


But there is a problem. Many of the new schemes brought in recently are


not charging 0.75%, they are only charging 0.5%. What would worry me


slightly about bringing in a cap, is that if your scheme charges only


0.5%, it is likely that the charges might be increased. You mean the


pensions industry would use the cap as an excuse to put the prices up?


It might just happen. One of the things worrying people is that


ultimately the employer chooses the scheme. We started with the big


employers and are moving through to the smaller employers. Many of them


don't understand pensions and are not interested in them, and could


sign up to something that doesn't fit the individual. There are


downsides to this, but I think it is going to happen. It


Well, it wouldn't be an edition of Your Money without some mention of


energy bills. This week we have two. Don't like your energy prices?


The Government says switch to a cheaper company. And now you'll be


able to do that faster. The Energy Secretary, Ed Davey, says we should


be able to change companies within 24 hours. At the moment, it can take


up to five weeks. If you're organised and pay your energy bill


quickly ` five of the big six energy firms will give you a discount. It


can be as much as 40 quid a year. Well, now they're all getting rid of


it. The companies blame new rules from the energy watchdog. The


Government's scheme to help people with little savings buy a house or a


flat has had its first success. The Financial Times says the first house


purchase under phase two of the Help`to`Buy scheme was completed


last Wednesday ` a ?153,000 two`bedroom flat in Dartford in


Kent. The borrower had a 5.5% deposit. Under the scheme, the


Government guarantees to pay up to 15% of the loan to the lender` if


the borrower gets into financial trouble. New plans to attract


Islamic finance to the UK. The Prime Minister says Britain will become


the first non`Muslim nation to borrow money by issuing an Islamic


bond ` under the rules, the Government can't pay interest like


it normally does, but it can pay a profit. He also announced plans for


a new Islamic index on the London Stock Exchange. Islamic investments


are thought to be worth ?1.3 trillion a year.


Seven million second`hand cars are sold in the UK every year, but


buyers don't often like what they find under the bonnet. Consumer


groups say used cars bought from independent traders top the list of


consumer complaints. Kevin Peachy steers us through this story.


Used`car dealers are often depicted as lovable rogues. The epitome of


ducking and diving salesman. But data from citizens advice shows


there are more consumer complaints by far about second`hand cars than


any other product. 22 postgraduate Natasha bought a Nissan Micra for


thousands of pounds, almost with a clutch to feel within two weeks. She


was given a replacement. But then on the way back, the brakes failed. I


want my money back, I don't want to buy a second`hand car again. Now the


government says it is time to tackle the rogue traders. They are going to


find that action is being taken against them. That consumers will be


informed about how to get the rights. They will have to shape up,


because they are not going to get away with it stop but then industry


trade body says that reputation is unwarranted. Used`car dealers are a


charismatic people in many cases. They call a spade a spade, but they


are the salt of the Earth and quite honest people in many cases.


Unfortunately, there is a nucleus of rogue operators, which there are in


any sector, and those operators should the identified. We work very


hard to drive those people out. Now all sides of the debate will have a


say, because the Government is looking at the source and solution


to these used`car rights. They will report back in the spring. In the


meantime, the message to anyone buying a car is to triple check you


are not buying a wreck. Cross`reference the documents and


use a database to check the history. Take an expert with you to look over


the technical aspects of the vehicle. If the seller is part of an


approved scheme, there is more chance of getting help. What are


your rights if you discovered a problem that wasn't pointed out? If


something goes wrong within the first few weeks of buying it, we


would see you're to repair or money back. If something happens six or


seven or eight months down the line, you have to prove the fault


was there at the time of the sale. If you fall in love with that card,


remember to do your homework before you buy it or you could be left


heartbroken. Talk about excess`ss`ss baggage.


According to the Belfast Telegraph ` Passengers on a plane got a shock


when they realised one of their fellow travellers had taken a snake


on board. EasyJet said the animal was harmless and those on board were


not in any danger. You do wonder what the Ryanair charge might be for


that. If you split up from your partner, you could be forced to keep


your ex's name on the mortgage if you're with a lender that doesn't


count child support payments as income. Sarah Pennells, editor of


the personal finance website Savvywoman. The rules vary from


lender to lender, but what is the basic story? The problem is there is


not any basic story, because the couple of lenders will not take


child support into account a tall as income. A couple of others will take


about half of the value into account. The majority of lenders we


spoke to which take child support into account if it was backed by a


payment order or court order. The problem is dumb parents make a


private arrangement between them, in which case they would not fall into


that category. Going back ten steps, there will be some parents, mostly


mothers, for whom child`support payments may be the only income they


have in which case how do they keep up payments? They might get child


benefit or tax credits on top, but again, some lenders take a different


approach as to whether or not they take tax credits into account. For


those mothers, the option is not to have a mortgage or get someone to


guarantee the mortgage for them, which is where the ex`husband might


have to be left on the mortgage or appearance. That is not an option


for all couples getting divorced, so it can be a serious problem. You may


not be aware of your lender has that bothers you, because it is not


something you check when you are in wedded bliss and taking out the


mortgage between you and you think everything is going to last for


ever. That is exactly the point, because although lenders will have


information on their websites about it, but if you have no thought of


getting divorced when you do get the mortgage, why would you check out


their policy on child support? One lender ignores it completely and


another lender accept it if you have banks take on showing it has been


paid for three months. It is not the kind of thing you check until you


get divorced and you may realise you're stuck with the wrong lender


and your options may be limited. What were you saying about


separating parents making private arrangements? This is something that


has become more popular. The child support system is changing. The


Child support agency is going to be replaced. Part of the Government's


policy is to get more parents to make private arrangements between


them. In future, parents would have to pay to use the service, so there


is an incentive to do it, but they might be penalised by their lender.


That's all from Your Money for this week. Keep up to date all week long


` with the Your Money pages on the BBC's website. You can get updates


by following our feed on social media ` we're @ BBC Your Money.


We're back next week. Bye for now.


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