:00:00. > :00:00.more than half a million quid, which might not have a big impact on many
:00:00. > :00:11.people, but it could have an impact on the rest of the housing market.
:00:12. > :00:16.Hello and welcome to Your Money, your weekly guide to making the most
:00:17. > :00:19.of your cash here every weekend on BBC News television and available
:00:20. > :00:23.all week on the BBC iPlayer. Limiting home loans. Lloyds puts a
:00:24. > :00:26.cap on the size of its bigger mortgages. Will the others follow
:00:27. > :00:29.suit? We'll ask one mortgage expert. We pay more for your gas and
:00:30. > :00:35.electricity if we pay by cash or cheque. One MP says it's time to
:00:36. > :00:38.curb the extra charges. Consumer champion Ann Robinson tells us to
:00:39. > :00:41.switch to direct debit for a cheaper deal.
:00:42. > :00:43.And making your holiday cheaper by working for it. We'll show you how
:00:44. > :00:51.it's done. The mortgage lenders are already
:00:52. > :00:56.asking tougher questions to make sure new borrowers can afford to pay
:00:57. > :01:01.their loan back. Now one big lender is capping its biggest mortgages. If
:01:02. > :01:03.you need a new home loan of more than half`a`million quid, Lloyds
:01:04. > :01:07.will only lend you what you earn over four years. The amount you can
:01:08. > :01:11.borrow is capped at four times your annual salary. Jane King is mortgage
:01:12. > :01:18.adviser at Ash`Ridge Private Finance If you're with Vodafone and
:01:19. > :01:24.this only applies to all its customers for loans of more than
:01:25. > :01:32.half a million quid so that is quite a small number of people. It will
:01:33. > :01:37.only affect about 8% of Lloyds customers who want to borrow more
:01:38. > :01:41.than half ?1 million. For the last majority of lenders, four times
:01:42. > :01:47.Valerie is the norm across the board. `` four times salary.
:01:48. > :01:54.So this isn't a signal that we have been slack in the past?
:01:55. > :01:58.I think if you look at it, the people who want to borrow that type
:01:59. > :02:02.of money are going to be high earners so I would say from a risk
:02:03. > :02:04.basis, it has not really been thought through properly.
:02:05. > :02:10.This is something that you and I will remember if you wanted a
:02:11. > :02:15.mortgage, they would only give you two and a half times your salary. Is
:02:16. > :02:21.there an informal cap that is in place for all mortgage borrowers or
:02:22. > :02:26.do they look at different ways of affordability?
:02:27. > :02:29.There is a general cap by which they won't go over but they do take into
:02:30. > :02:35.account commitments and other things. Although there is an
:02:36. > :02:40.affordability element, even if you have no commitments, there is a
:02:41. > :02:45.maximum income they will use. When they talk about salary, do they
:02:46. > :02:52.mean the base salary, over time, bonuses?
:02:53. > :03:02.Normally it is income tax can be evident so 100% of salary, 50% of
:03:03. > :03:04.bonus, commission. Unless it is declared to the revenue, they won't
:03:05. > :03:07.take it. If you're with Vodafone and you've
:03:08. > :03:11.got a deal that says how many minutes and texts you can have every
:03:12. > :03:14.month and then you use more than that allowance, you're going to have
:03:15. > :03:17.to pay more for it. Vodafone is increasing its charges. A standard
:03:18. > :03:18.UK call outside the allowance in your contract will cost 45p a
:03:19. > :03:21.minute. increasing its charges. A standard
:03:22. > :03:26.UK call outside the That's an increase of 5p per minute. But the
:03:27. > :03:33.cost of a European call will fall by just under 6p per minute to 18.7p.
:03:34. > :03:38.It will cost five pounds to call some directory enquiry services.
:03:39. > :03:45.Five quid! That's for calls to 118 500, 118 404, 118 247, and 118 212.
:03:46. > :03:48.Here's an important thing to remember ` under new rules, if your
:03:49. > :03:52.bill goes up by more than 10% you have the right to tear up your
:03:53. > :03:54.contract early and go to another phone company without charge.
:03:55. > :03:56.Vodafone says anyone wishing to do so must write to them before prices
:03:57. > :04:05.are raised on 28 June. Just looking at the Vodafone website
:04:06. > :04:11.earlier ` there's a specific section on cancelling your account. You get
:04:12. > :04:14.to it by going to the main page, typing "cancel account" into the
:04:15. > :04:21.search box and clicking on the obvious option offered. But that
:04:22. > :04:28.page only offers you a live web chat or a phone number. If you want to
:04:29. > :04:32.write to the company, on its tech forums Vodafone says you can use the
:04:33. > :04:35.form on its "contact us" page. Make sure you put the words "cancel
:04:36. > :04:39.contract" into the message box. Just to be clear we're not advising
:04:40. > :04:41.you to do cancel or telling you to cancel, just giving you the
:04:42. > :04:45.information about how to do it if that what you've decided to do
:04:46. > :04:48.already. It's your decision. If you do NOT use direct debit to
:04:49. > :04:53.pay your gas or electricity bill you probably pay more for your fuel. 12
:04:54. > :04:58.million people pay an average of ?80 more a year each simply because they
:04:59. > :05:01.pay the bill by cash or cheque. One MP has told our reporter Brian
:05:02. > :05:03.Milligan that enough is enough and the extra charge should be capped at
:05:04. > :05:14.?24. If you pay each energy bill as and
:05:15. > :05:21.when it arrives, you are subject to a surcharge of around ?80 a year.
:05:22. > :05:25.Unlike customers who pay by direct debit. You won't find mention of
:05:26. > :05:28.this on the bill itself and as a result, many customers are not aware
:05:29. > :05:31.they have to pay it. I didn't know that.
:05:32. > :05:36.Will you change your mind? Possibly.
:05:37. > :05:43.I would rather feed my house than the shareholders.
:05:44. > :05:47.Would you like to save money? Yes, but I would rather it was in my
:05:48. > :05:52.bank account. Do you know it costs you ?80 a year
:05:53. > :05:57.not to pay by direct debit? No. ?80?
:05:58. > :06:04.Some companies charge even more if you don't pay by direct debit. Among
:06:05. > :06:11.the big six, npower charges ?94 yet several smaller companies charge
:06:12. > :06:13.nothing at all. One MP wants the surcharge capped at ?24 to protect
:06:14. > :06:20.consumers. This is not a discount, it is a
:06:21. > :06:25.premium on the country who prefer not to pay by direct debit and it is
:06:26. > :06:32.an extortionate amount of money and unnecessary.
:06:33. > :06:36.Energy companies defend the charges by saying it is a more expensive way
:06:37. > :06:41.for them to collect the money they are owed because some people don't
:06:42. > :06:46.pay their bills on time and ?80 is the average cost of chasing bad
:06:47. > :06:53.debt. Indeed, this week the regulator Ofgem rules such charges
:06:54. > :06:58.are perfectly fair and admitted to becoming something of a seriously
:06:59. > :07:03.hot topic. A lot of questions are being asked about the fairness of
:07:04. > :07:08.these additional charges so one of the things we want to do is convene
:07:09. > :07:11.a round table with MPs, the government and suppliers and
:07:12. > :07:19.consumer bodies to really wrestle this issue to the ground.
:07:20. > :07:21.One idea is those who pay by direct debit should share the cost of debt
:07:22. > :07:29.collection but that would mean higher bills for 14 million people.
:07:30. > :07:34.Ann Robinson long time consumer champion currently works for the
:07:35. > :07:38.price comparison website U`switch. We have long known the people who
:07:39. > :07:44.pay by cash or cheque paid more because the company said that it
:07:45. > :07:47.costs more to administer the payments but ?80 a year is a lot of
:07:48. > :07:52.extra administration. It is a lot of money and I'm happy
:07:53. > :07:56.to hear there will be a round table so people can be assured and we can
:07:57. > :08:01.get to the bottom of this but the real point is it costs more if you
:08:02. > :08:05.pay when you get your bill. It is not just about chasing debt, there
:08:06. > :08:11.are a lot of other customer service issues about people clarifying their
:08:12. > :08:14.bill. Let's get to the bottom of it and finding out what the position
:08:15. > :08:19.should be. As Brian said, there is a big
:08:20. > :08:26.variation. One company was ?94 and one company with no charge at all.
:08:27. > :08:29.Between the big six, there is a company that charges ?71 and as you
:08:30. > :08:36.said, another company is charging ?94. I really do think that
:08:37. > :08:41.everybody should seriously consider direct debit. We know, for example,
:08:42. > :08:45.over half of us to pay by direct debit and the surprising fact is
:08:46. > :08:52.that some of the people who struggle the most to pay their bills, half of
:08:53. > :08:56.them pay by direct debit. I think it is right that what you pay reflects
:08:57. > :09:03.what it costs to run your account and not subsidise because you can
:09:04. > :09:05.find that people are in desperate situations and subsidising other
:09:06. > :09:08.people so it is right we picked up the cost before.
:09:09. > :09:14.But you understand the concern with the direct debit, it is the energy
:09:15. > :09:17.company that says how much comes out of your account. You have to trust
:09:18. > :09:21.them to ask for the right amount and you have to trust them the bank is
:09:22. > :09:25.going to do it right. First of all, the energy company has
:09:26. > :09:30.to review that direct debit and if there is going to be any change,
:09:31. > :09:36.they have to talk you through it and explain why. The second great thing
:09:37. > :09:43.is there are no rules `` there are new rules whereby if the company is
:09:44. > :09:49.hanging onto Your Money, you can get a repayment. There is another point
:09:50. > :09:53.I would like to make. Too often people on direct debit sit back and
:09:54. > :10:00.take no notice. Don't do that. Stay in control. If you're mutual hasn't
:10:01. > :10:05.been read by the company, make sure you are checking your meter. Do it
:10:06. > :10:10.twice a year or so you can make sure your direct debit is accurately
:10:11. > :10:13.reflecting the energy you use. Stay in control.
:10:14. > :10:20.There are putting your feet up. Stay in control. `` no putting your
:10:21. > :10:23.feet up. So you have to ask for Your Money
:10:24. > :10:29.back? Most of the companies have actually
:10:30. > :10:32.agreed to an annual review so they will look at it once a year, review
:10:33. > :10:40.it and if you are in credit, pay it back. If you ask for your cashback,
:10:41. > :10:42.take it to the energy ombudsman. You are entitled to do that.
:10:43. > :10:46.It's a Bank Holiday Weekend. Here comes the rain. If you're looking
:10:47. > :10:48.for a holiday with a difference, how about a working holiday? Even the
:10:49. > :10:50.kids can join in. Ramzan Karmali laboured long and hard over this
:10:51. > :10:59.one. You might think of the working
:11:00. > :11:05.holiday as something from yesteryear, like this. Or perhaps
:11:06. > :11:10.gap year trips to far`flung faces. But working vacations here in the UK
:11:11. > :11:13.are growing in popularity supply are more and more people willing to roll
:11:14. > :11:18.up their sleeves and pitch in rather than relaxing on a sandy beach?
:11:19. > :11:23.We've done all sorts of things, helping with beach clearance...
:11:24. > :11:26.Melanie has been on around half a dozen working holidays. She has been
:11:27. > :11:32.able to take advantage of sailing lessons and cave tours and for her,
:11:33. > :11:37.this side of the vacation is one of the many and if it is.
:11:38. > :11:43.I am a museum curator so I am used to working inside with object so it
:11:44. > :11:46.is quite different to be able to get outdoors and just be outside and
:11:47. > :11:50.trying all these different conservation activities. Working
:11:51. > :11:56.with other like`minded individuals and meeting new people as well.
:11:57. > :12:00.There are a number of organisations that offer a wide variety of
:12:01. > :12:04.getaways. Possibly one of the key attractions to a working holiday is
:12:05. > :12:10.the cost. A more leisurely break at a National trust cottage will start
:12:11. > :12:16.at around ?220 but a working holiday could set you back ?135 for the
:12:17. > :12:18.week. If you are thinking of a king one of these, there are things to
:12:19. > :12:22.look out for. A working holiday or volunteer
:12:23. > :12:26.holiday is still something you have to work for so you have the cost of
:12:27. > :12:32.the holiday itself, insurance, travel and also some extras because
:12:33. > :12:35.they are quite basic, on the whole. The accommodation is likely to be
:12:36. > :12:39.basic so if you like your creature comforts, you will probably have to
:12:40. > :12:42.take them with you. There is quite a choice when it
:12:43. > :12:48.comes to these holidays, from farming to construction and even
:12:49. > :12:52.working on an archaeological dig. Some of these holidays can cater for
:12:53. > :12:59.the whole family. These breaks can be both rewarding and challenging.
:13:00. > :13:04.For the organisations you will be working for, it is essential.
:13:05. > :13:09.Some of it is physical. The sort of thing we do in the countryside is a
:13:10. > :13:17.lot of habitat management though we are out in all weathers, carrying
:13:18. > :13:24.tasks with hand tools. They have a real important influence.
:13:25. > :13:28.If you are looking for new experiences, willing to get your
:13:29. > :13:32.hands dirty and up for learning new skills, this could be the holiday
:13:33. > :13:36.for you. That's all from Your Money for this
:13:37. > :13:42.week. Keep up to date all week long with energy bills, savings, pensions
:13:43. > :13:45.and mortgages on the BBC's website. You can get updates by following our
:13:46. > :13:50.feed on Twitter. We're @BBCYourMoney. Thanks for watching.
:13:51. > :14:07.More next week. Hope I've got your company then.
:14:08. > :14:13.This is BBC News. We've received a statement from the Prime Minister,
:14:14. > :14:18.David Cameron, following the discovery of the upturned hull of
:14:19. > :14:19.the yacht, the Cheeki Rafiki and the loss,