Browse content similar to 02/11/2013. Check below for episodes and series from the same categories and more!
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said, not so fast. Hello and welcome to Your Money ` | :00:12. | :00:15. | |
your weekly guide to making the most of your cash, here every weekend on | :00:16. | :00:18. | |
BBC News television, available all week on the BBC iPlayer. Capping | :00:19. | :00:27. | |
pension charges. We'll look at the Government's plans ` to let you keep | :00:28. | :00:31. | |
more of your savings for yourself. Defective clutch. Faulty brakes. | :00:32. | :00:33. | |
Kevin Peachy looks at complaints about second`hand cars and how you | :00:34. | :00:36. | |
can protect yourself from a dodgy dealer. Keeping the roof over your | :00:37. | :00:41. | |
head after a divorce. We've got news on how mortgage companies deal with | :00:42. | :00:44. | |
child support payments ` they're not all the same. And there's advice on | :00:45. | :00:47. | |
how mothers can protect themselves and their children. And another way | :00:48. | :00:55. | |
for the energy companies to put up your bill. We've got the details on | :00:56. | :01:00. | |
that. If you're working ` and you're saving for your old age in one of | :01:01. | :01:03. | |
the new Government`backed pension plans ` you pay someone to look | :01:04. | :01:06. | |
after that money. You might not realise it, but you do ` it's called | :01:07. | :01:10. | |
a management charge. The Government says it wants to cap those charges ` | :01:11. | :01:14. | |
at somewhere between 0.75% and 1%. That may not sound like a big | :01:15. | :01:18. | |
number, but let me show you how it all adds up. The Government says if | :01:19. | :01:22. | |
you save in a pension for 46 years, starting with ?100 pounds a month ` | :01:23. | :01:25. | |
and increasing the amount you save by 4% every year, a 1% charge would | :01:26. | :01:29. | |
cost you ?170,000, taken out of your pension pot. That calculation | :01:30. | :01:40. | |
assumes the fund grows by 7% a year. The pensions expert Malcolm Maclean | :01:41. | :01:43. | |
is with me ` he's a consultant at the firm Barnett Waddingham. | :01:44. | :01:50. | |
When we talk about these management charges, what percent of what? Of | :01:51. | :01:59. | |
the fund. You put money on by way of the fund. You put money in by weird | :02:00. | :02:01. | |
contributions, your employer puts money in, the government gives you | :02:02. | :02:04. | |
tax relief and then you are old pension ought. Every year, there is | :02:05. | :02:11. | |
an annual management charge on that. If the charge is 1%, and you have | :02:12. | :02:17. | |
?10,000 in the box, 1% of that is ?100. The second year, that happens | :02:18. | :02:24. | |
again. At the end of year two, you are | :02:25. | :02:29. | |
paying charges on what was paid in and year two and years three, GPU on | :02:30. | :02:36. | |
your one and year to end US lead. Yes, because the service is ongoing | :02:37. | :02:42. | |
and the fund managers and pension administrators have to be paid every | :02:43. | :02:46. | |
year. But they are helping themselves year after year to money | :02:47. | :02:52. | |
they have managed already. Yes, but with investments, you constantly | :02:53. | :02:56. | |
have to check on the months which them, but most people don't actually | :02:57. | :03:02. | |
understand this. He raised a good point. When you talk about 1%, | :03:03. | :03:09. | |
people think, that leaves 99% for me. But it makes a big difference in | :03:10. | :03:15. | |
long`term investments. If we spammed this over 40 years, there is a lot | :03:16. | :03:19. | |
of money coming out and the government is getting a little bit | :03:20. | :03:29. | |
worried about it. Now is the time to look at this and see if it should be | :03:30. | :03:34. | |
capped will stop the cap, if it goes ahead, it will come in from next | :03:35. | :03:40. | |
April. I think it is probably likely to happen. And this will only apply | :03:41. | :03:45. | |
to people saving in the new Government backed workplace pension | :03:46. | :03:49. | |
schemes, the scheme the people were signed up for this they didn't have | :03:50. | :03:55. | |
their own plans already. Yes, that is being phased in and not everybody | :03:56. | :03:58. | |
is in it yet. It will cause problems, because some employers | :03:59. | :04:04. | |
have planned scheme already and will have to unscramble it to take | :04:05. | :04:08. | |
account of any new cap coming in. You do wonder why they did not have | :04:09. | :04:13. | |
the cap in place will stop we have been talking about this for years. | :04:14. | :04:17. | |
But there is a problem. Many of the new schemes brought in recently are | :04:18. | :04:24. | |
not charging 0.75%, they are only charging 0.5%. What would worry me | :04:25. | :04:31. | |
slightly about bringing in a cap, is that if your scheme charges only | :04:32. | :04:39. | |
0.5%, it is likely that the charges might be increased. You mean the | :04:40. | :04:45. | |
pensions industry would use the cap as an excuse to put the prices up? | :04:46. | :04:53. | |
It might just happen. One of the things worrying people is that | :04:54. | :05:00. | |
ultimately the employer chooses the scheme. We started with the big | :05:01. | :05:04. | |
employers and are moving through to the smaller employers. Many of them | :05:05. | :05:10. | |
don't understand pensions and are not interested in them, and could | :05:11. | :05:15. | |
sign up to something that doesn't fit the individual. There are | :05:16. | :05:18. | |
downsides to this, but I think it is going to happen. It | :05:19. | :05:23. | |
Well, it wouldn't be an edition of Your Money without some mention of | :05:24. | :05:30. | |
energy bills. This week we have two. Don't like your energy prices? | :05:31. | :05:32. | |
The Government says switch to a cheaper company. And now you'll be | :05:33. | :05:36. | |
able to do that faster. The Energy Secretary, Ed Davey, says we should | :05:37. | :05:39. | |
be able to change companies within 24 hours. At the moment, it can take | :05:40. | :05:42. | |
up to five weeks. If you're organised and pay your energy bill | :05:43. | :05:46. | |
quickly ` five of the big six energy firms will give you a discount. It | :05:47. | :05:50. | |
can be as much as 40 quid a year. Well, now they're all getting rid of | :05:51. | :05:53. | |
it. The companies blame new rules from the energy watchdog. The | :05:54. | :05:55. | |
Government's scheme to help people with little savings buy a house or a | :05:56. | :05:59. | |
flat has had its first success. The Financial Times says the first house | :06:00. | :06:02. | |
purchase under phase two of the Help`to`Buy scheme was completed | :06:03. | :06:04. | |
last Wednesday ` a ?153,000 two`bedroom flat in Dartford in | :06:05. | :06:07. | |
Kent. The borrower had a 5.5% deposit. Under the scheme, the | :06:08. | :06:10. | |
Government guarantees to pay up to 15% of the loan to the lender` if | :06:11. | :06:13. | |
the borrower gets into financial trouble. New plans to attract | :06:14. | :06:18. | |
Islamic finance to the UK. The Prime Minister says Britain will become | :06:19. | :06:21. | |
the first non`Muslim nation to borrow money by issuing an Islamic | :06:22. | :06:24. | |
bond ` under the rules, the Government can't pay interest like | :06:25. | :06:27. | |
it normally does, but it can pay a profit. He also announced plans for | :06:28. | :06:35. | |
a new Islamic index on the London Stock Exchange. Islamic investments | :06:36. | :06:37. | |
are thought to be worth ?1.3 trillion a year. | :06:38. | :06:42. | |
Seven million second`hand cars are sold in the UK every year, but | :06:43. | :06:45. | |
buyers don't often like what they find under the bonnet. Consumer | :06:46. | :06:49. | |
groups say used cars bought from independent traders top the list of | :06:50. | :06:53. | |
consumer complaints. Kevin Peachy steers us through this story. | :06:54. | :07:01. | |
Used`car dealers are often depicted as lovable rogues. The epitome of | :07:02. | :07:11. | |
ducking and diving salesman. But data from citizens advice shows | :07:12. | :07:14. | |
there are more consumer complaints by far about second`hand cars than | :07:15. | :07:22. | |
any other product. 22 postgraduate Natasha bought a Nissan Micra for | :07:23. | :07:27. | |
thousands of pounds, almost with a clutch to feel within two weeks. She | :07:28. | :07:34. | |
was given a replacement. But then on the way back, the brakes failed. I | :07:35. | :07:39. | |
want my money back, I don't want to buy a second`hand car again. Now the | :07:40. | :07:45. | |
government says it is time to tackle the rogue traders. They are going to | :07:46. | :07:51. | |
find that action is being taken against them. That consumers will be | :07:52. | :08:00. | |
informed about how to get the rights. They will have to shape up, | :08:01. | :08:03. | |
because they are not going to get away with it stop but then industry | :08:04. | :08:08. | |
trade body says that reputation is unwarranted. Used`car dealers are a | :08:09. | :08:14. | |
charismatic people in many cases. They call a spade a spade, but they | :08:15. | :08:19. | |
are the salt of the Earth and quite honest people in many cases. | :08:20. | :08:24. | |
Unfortunately, there is a nucleus of rogue operators, which there are in | :08:25. | :08:31. | |
any sector, and those operators should the identified. We work very | :08:32. | :08:36. | |
hard to drive those people out. Now all sides of the debate will have a | :08:37. | :08:42. | |
say, because the Government is looking at the source and solution | :08:43. | :08:47. | |
to these used`car rights. They will report back in the spring. In the | :08:48. | :08:51. | |
meantime, the message to anyone buying a car is to triple check you | :08:52. | :08:57. | |
are not buying a wreck. Cross`reference the documents and | :08:58. | :09:01. | |
use a database to check the history. Take an expert with you to look over | :09:02. | :09:03. | |
the technical aspects of the vehicle. If the seller is part of an | :09:04. | :09:10. | |
approved scheme, there is more chance of getting help. What are | :09:11. | :09:12. | |
your rights if you discovered a problem that wasn't pointed out? If | :09:13. | :09:18. | |
something goes wrong within the first few weeks of buying it, we | :09:19. | :09:23. | |
would see you're to repair or money back. If something happens six or | :09:24. | :09:30. | |
seven or eight months down the line, you have to prove the fault | :09:31. | :09:33. | |
was there at the time of the sale. If you fall in love with that card, | :09:34. | :09:37. | |
remember to do your homework before you buy it or you could be left | :09:38. | :09:44. | |
heartbroken. Talk about excess`ss`ss baggage. | :09:45. | :09:47. | |
According to the Belfast Telegraph ` Passengers on a plane got a shock | :09:48. | :09:50. | |
when they realised one of their fellow travellers had taken a snake | :09:51. | :09:53. | |
on board. EasyJet said the animal was harmless and those on board were | :09:54. | :09:56. | |
not in any danger. You do wonder what the Ryanair charge might be for | :09:57. | :10:00. | |
that. If you split up from your partner, you could be forced to keep | :10:01. | :10:03. | |
your ex's name on the mortgage if you're with a lender that doesn't | :10:04. | :10:06. | |
count child support payments as income. Sarah Pennells, editor of | :10:07. | :10:08. | |
the personal finance website Savvywoman. The rules vary from | :10:09. | :10:15. | |
lender to lender, but what is the basic story? The problem is there is | :10:16. | :10:22. | |
not any basic story, because the couple of lenders will not take | :10:23. | :10:25. | |
child support into account a tall as income. A couple of others will take | :10:26. | :10:29. | |
about half of the value into account. The majority of lenders we | :10:30. | :10:35. | |
spoke to which take child support into account if it was backed by a | :10:36. | :10:40. | |
payment order or court order. The problem is dumb parents make a | :10:41. | :10:43. | |
private arrangement between them, in which case they would not fall into | :10:44. | :10:49. | |
that category. Going back ten steps, there will be some parents, mostly | :10:50. | :10:53. | |
mothers, for whom child`support payments may be the only income they | :10:54. | :10:59. | |
have in which case how do they keep up payments? They might get child | :11:00. | :11:07. | |
benefit or tax credits on top, but again, some lenders take a different | :11:08. | :11:12. | |
approach as to whether or not they take tax credits into account. For | :11:13. | :11:16. | |
those mothers, the option is not to have a mortgage or get someone to | :11:17. | :11:19. | |
guarantee the mortgage for them, which is where the ex`husband might | :11:20. | :11:24. | |
have to be left on the mortgage or appearance. That is not an option | :11:25. | :11:28. | |
for all couples getting divorced, so it can be a serious problem. You may | :11:29. | :11:33. | |
not be aware of your lender has that bothers you, because it is not | :11:34. | :11:38. | |
something you check when you are in wedded bliss and taking out the | :11:39. | :11:42. | |
mortgage between you and you think everything is going to last for | :11:43. | :11:47. | |
ever. That is exactly the point, because although lenders will have | :11:48. | :11:51. | |
information on their websites about it, but if you have no thought of | :11:52. | :11:56. | |
getting divorced when you do get the mortgage, why would you check out | :11:57. | :12:02. | |
their policy on child support? One lender ignores it completely and | :12:03. | :12:07. | |
another lender accept it if you have banks take on showing it has been | :12:08. | :12:11. | |
paid for three months. It is not the kind of thing you check until you | :12:12. | :12:15. | |
get divorced and you may realise you're stuck with the wrong lender | :12:16. | :12:21. | |
and your options may be limited. What were you saying about | :12:22. | :12:24. | |
separating parents making private arrangements? This is something that | :12:25. | :12:29. | |
has become more popular. The child support system is changing. The | :12:30. | :12:35. | |
Child support agency is going to be replaced. Part of the Government's | :12:36. | :12:40. | |
policy is to get more parents to make private arrangements between | :12:41. | :12:47. | |
them. In future, parents would have to pay to use the service, so there | :12:48. | :12:51. | |
is an incentive to do it, but they might be penalised by their lender. | :12:52. | :12:55. | |
That's all from Your Money for this week. Keep up to date all week long | :12:56. | :12:59. | |
` with the Your Money pages on the BBC's website. You can get updates | :13:00. | :13:02. | |
by following our feed on social media ` we're @ BBC Your Money. | :13:03. | :13:04. | |
We're back next week. Bye for now. | :13:05. | :13:11. |