24/05/2014 Your Money


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more than half a million quid, which might not have a big impact on many


people, but it could have an impact on the rest of the housing market.


Hello and welcome to Your Money, your weekly guide to making the most


of your cash here every weekend on BBC News television and available


all week on the BBC iPlayer. Limiting home loans. Lloyds puts a


cap on the size of its bigger mortgages. Will the others follow


suit? We'll ask one mortgage expert. We pay more for your gas and


electricity if we pay by cash or cheque. One MP says it's time to


curb the extra charges. Consumer champion Ann Robinson tells us to


switch to direct debit for a cheaper deal.


And making your holiday cheaper by working for it. We'll show you how


it's done. The mortgage lenders are already


asking tougher questions to make sure new borrowers can afford to pay


their loan back. Now one big lender is capping its biggest mortgages. If


you need a new home loan of more than half`a`million quid, Lloyds


will only lend you what you earn over four years. The amount you can


borrow is capped at four times your annual salary. Jane King is mortgage


adviser at Ash`Ridge Private Finance If you're with Vodafone and


this only applies to all its customers for loans of more than


half a million quid so that is quite a small number of people. It will


only affect about 8% of Lloyds customers who want to borrow more


than half ?1 million. For the last majority of lenders, four times


Valerie is the norm across the board. `` four times salary.


So this isn't a signal that we have been slack in the past?


I think if you look at it, the people who want to borrow that type


of money are going to be high earners so I would say from a risk


basis, it has not really been thought through properly.


This is something that you and I will remember if you wanted a


mortgage, they would only give you two and a half times your salary. Is


there an informal cap that is in place for all mortgage borrowers or


do they look at different ways of affordability?


There is a general cap by which they won't go over but they do take into


account commitments and other things. Although there is an


affordability element, even if you have no commitments, there is a


maximum income they will use. When they talk about salary, do they


mean the base salary, over time, bonuses?


Normally it is income tax can be evident so 100% of salary, 50% of


bonus, commission. Unless it is declared to the revenue, they won't


take it. If you're with Vodafone and you've


got a deal that says how many minutes and texts you can have every


month and then you use more than that allowance, you're going to have


to pay more for it. Vodafone is increasing its charges. A standard


UK call outside the allowance in your contract will cost 45p a


minute. increasing its charges. A standard


UK call outside the That's an increase of 5p per minute. But the


cost of a European call will fall by just under 6p per minute to 18.7p.


It will cost five pounds to call some directory enquiry services.


Five quid! That's for calls to 118 500, 118 404, 118 247, and 118 212.


Here's an important thing to remember ` under new rules, if your


bill goes up by more than 10% you have the right to tear up your


contract early and go to another phone company without charge.


Vodafone says anyone wishing to do so must write to them before prices


are raised on 28 June. Just looking at the Vodafone website


earlier ` there's a specific section on cancelling your account. You get


to it by going to the main page, typing "cancel account" into the


search box and clicking on the obvious option offered. But that


page only offers you a live web chat or a phone number. If you want to


write to the company, on its tech forums Vodafone says you can use the


form on its "contact us" page. Make sure you put the words "cancel


contract" into the message box. Just to be clear we're not advising


you to do cancel or telling you to cancel, just giving you the


information about how to do it if that what you've decided to do


already. It's your decision. If you do NOT use direct debit to


pay your gas or electricity bill you probably pay more for your fuel. 12


million people pay an average of ?80 more a year each simply because they


pay the bill by cash or cheque. One MP has told our reporter Brian


Milligan that enough is enough and the extra charge should be capped at


?24. If you pay each energy bill as and


when it arrives, you are subject to a surcharge of around ?80 a year.


Unlike customers who pay by direct debit. You won't find mention of


this on the bill itself and as a result, many customers are not aware


they have to pay it. I didn't know that.


Will you change your mind? Possibly.


I would rather feed my house than the shareholders.


Would you like to save money? Yes, but I would rather it was in my


bank account. Do you know it costs you ?80 a year


not to pay by direct debit? No. ?80?


Some companies charge even more if you don't pay by direct debit. Among


the big six, npower charges ?94 yet several smaller companies charge


nothing at all. One MP wants the surcharge capped at ?24 to protect


consumers. This is not a discount, it is a


premium on the country who prefer not to pay by direct debit and it is


an extortionate amount of money and unnecessary.


Energy companies defend the charges by saying it is a more expensive way


for them to collect the money they are owed because some people don't


pay their bills on time and ?80 is the average cost of chasing bad


debt. Indeed, this week the regulator Ofgem rules such charges


are perfectly fair and admitted to becoming something of a seriously


hot topic. A lot of questions are being asked about the fairness of


these additional charges so one of the things we want to do is convene


a round table with MPs, the government and suppliers and


consumer bodies to really wrestle this issue to the ground.


One idea is those who pay by direct debit should share the cost of debt


collection but that would mean higher bills for 14 million people.


Ann Robinson long time consumer champion currently works for the


price comparison website U`switch. We have long known the people who


pay by cash or cheque paid more because the company said that it


costs more to administer the payments but ?80 a year is a lot of


extra administration. It is a lot of money and I'm happy


to hear there will be a round table so people can be assured and we can


get to the bottom of this but the real point is it costs more if you


pay when you get your bill. It is not just about chasing debt, there


are a lot of other customer service issues about people clarifying their


bill. Let's get to the bottom of it and finding out what the position


should be. As Brian said, there is a big


variation. One company was ?94 and one company with no charge at all.


Between the big six, there is a company that charges ?71 and as you


said, another company is charging ?94. I really do think that


everybody should seriously consider direct debit. We know, for example,


over half of us to pay by direct debit and the surprising fact is


that some of the people who struggle the most to pay their bills, half of


them pay by direct debit. I think it is right that what you pay reflects


what it costs to run your account and not subsidise because you can


find that people are in desperate situations and subsidising other


people so it is right we picked up the cost before.


But you understand the concern with the direct debit, it is the energy


company that says how much comes out of your account. You have to trust


them to ask for the right amount and you have to trust them the bank is


going to do it right. First of all, the energy company has


to review that direct debit and if there is going to be any change,


they have to talk you through it and explain why. The second great thing


is there are no rules `` there are new rules whereby if the company is


hanging onto Your Money, you can get a repayment. There is another point


I would like to make. Too often people on direct debit sit back and


take no notice. Don't do that. Stay in control. If you're mutual hasn't


been read by the company, make sure you are checking your meter. Do it


twice a year or so you can make sure your direct debit is accurately


reflecting the energy you use. Stay in control.


There are putting your feet up. Stay in control. `` no putting your


feet up. So you have to ask for Your Money


back? Most of the companies have actually


agreed to an annual review so they will look at it once a year, review


it and if you are in credit, pay it back. If you ask for your cashback,


take it to the energy ombudsman. You are entitled to do that.


It's a Bank Holiday Weekend. Here comes the rain. If you're looking


for a holiday with a difference, how about a working holiday? Even the


kids can join in. Ramzan Karmali laboured long and hard over this


one. You might think of the working


holiday as something from yesteryear, like this. Or perhaps


gap year trips to far`flung faces. But working vacations here in the UK


are growing in popularity supply are more and more people willing to roll


up their sleeves and pitch in rather than relaxing on a sandy beach?


We've done all sorts of things, helping with beach clearance...


Melanie has been on around half a dozen working holidays. She has been


able to take advantage of sailing lessons and cave tours and for her,


this side of the vacation is one of the many and if it is.


I am a museum curator so I am used to working inside with object so it


is quite different to be able to get outdoors and just be outside and


trying all these different conservation activities. Working


with other like`minded individuals and meeting new people as well.


There are a number of organisations that offer a wide variety of


getaways. Possibly one of the key attractions to a working holiday is


the cost. A more leisurely break at a National trust cottage will start


at around ?220 but a working holiday could set you back ?135 for the


week. If you are thinking of a king one of these, there are things to


look out for. A working holiday or volunteer


holiday is still something you have to work for so you have the cost of


the holiday itself, insurance, travel and also some extras because


they are quite basic, on the whole. The accommodation is likely to be


basic so if you like your creature comforts, you will probably have to


take them with you. There is quite a choice when it


comes to these holidays, from farming to construction and even


working on an archaeological dig. Some of these holidays can cater for


the whole family. These breaks can be both rewarding and challenging.


For the organisations you will be working for, it is essential.


Some of it is physical. The sort of thing we do in the countryside is a


lot of habitat management though we are out in all weathers, carrying


tasks with hand tools. They have a real important influence.


If you are looking for new experiences, willing to get your


hands dirty and up for learning new skills, this could be the holiday


for you. That's all from Your Money for this


week. Keep up to date all week long with energy bills, savings, pensions


and mortgages on the BBC's website. You can get updates by following our


feed on Twitter. We're @BBCYourMoney. Thanks for watching.


More next week. Hope I've got your company then.


This is BBC News. We've received a statement from the Prime Minister,


David Cameron, following the discovery of the upturned hull of


the yacht, the Cheeki Rafiki and the loss,


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