Financial and business news and articles
Miles Brignall
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Posts by Miles Brignall
Time to hang up on 3’s mobile phone policy?
Mar 13th
Insurance wouldn’t cover my broken mobile because I reported it ‘too late’
In June last year I was persuaded to take out mobile phone insurance on a new Nokia N95 by a saleswoman in a 3 store. I have since been paying £6.99 a month.
I dropped my handbag, and my phone fell out on to a tiled floor, cracking the screen. I was going away on holiday and, on my return, claimed from Lifestyle Services Group, which manages the insurance on 3’s behalf. My claim was declined because I hadn’t reported it within 48 hours.
This might have been in the small print, but I cannot see how this has any bearing on the veracity of a claim. As far I can see, it is only designed to enable them to refuse paying out on as many claims as possible. JH, Plymouth
Guardian Money has long warned that mobile phone insurance is a waste of money, because policies are riddled with get-out clauses, and rarely pay out – as your case demonstrates. We asked 3 about your claim, and it immediately agreed it should have been handled differently. The 48-hour rule should only apply if the phone was stolen, to prevent the thief running up a big phone bill – not an issue in your case. After getting nowhere with 3, you bought a replacement handset on eBay.
The companies have now had a rethink, and have agreed to pay £230 for the phone and to waive the excess as a gesture of goodwill, which is much more like it. Also, 3 says it will be taking this issue up with its insurers and retail team to make sure it is better interpreted in the future.
Can we help? If you’ve got a problem you would like us to investigate you can contact us by emailing consumer.champions@guardian.co.uk or writing to Bachelor & Brignall, Money, The Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number.
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RAC car cover went into automatic
Mar 13th
I found cheaper roadside cover, but RAC took my premium and won’t give it back
I was recently sent a roadside cover renewal letter by the RAC which quoted a new premium of £228.
Thinking this was rather high, I rang the call centre and was eventually offered the same cover at £163.50, but decided this was still too much. After shopping around, I found similar cover for £100 and bought it. I have now discovered the RAC has taken the £228 via my debit card – even though I didn’t authorise it to do so. All my attempts to get my money back have failed. Please help! CT, Hove
The RAC says you were placed on an annual automatic renewal payment in 2009, which comes with a 14-day cooling-off period to allow you to cancel. The RAC admits mistakes were made when you called, and you weren’t made aware of this. However, since we got involved, it has moved super-fast to resolve it. It has now sent you a cheque for the £228, plus a further £50 to cover your costs and say sorry. It also says it will be taking stringent measures to ensure this problem is not repeated.
Can we help? If you’ve got a problem you would like us to investigate you can contact us by emailing consumer.champions@guardian.co.uk or writing to Bachelor & Brignall, Money, The Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number.
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Credit card limits slashed
Mar 13th
Consumers with excellent credit histories are seeing their card limits slashed, often without warning. Miles Brignall reports
Are you one of the growing band of Britons to have mysteriously had their credit card limit cut in recent months? Despite signs the economy is improving, and with huge sums of money being pumped into the banking system, it appears credit card providers fearing a rise in bad debts have been slashing credit limits.
In recent weeks Guardian Money has had letters from readers complaining about limit cuts, in some cases for no apparent reason. Internet chatrooms are buzzing with similar complaints.
The problem now appears to be increasingly affecting customers with excellent credit histories.
Traditionally, it has been the financially wayward who have seen their limits unilaterally lowered.
Citi is one of the latest card providers to upset some customers in this way. Last year Citi said it was going to withdraw its popular Shell MasterCard, which offered discounts on petrol purchases. However it has recently issued replacement cards with, in some cases, significantly reduced credit limits and higher interest charges.
Some other cardholders claimed they didn’t know their limit had been lowered until a payment was refused.
Jan Johnson, who lives in Harrogate, North Yorkshire, contacted us after Santander wrote to say that it was reducing the limit on her Asda credit card from £5,000 to £300. The teacher, who regularly spends around £1,500 a month on the card, always paying in full each month, has repeatedly asked Santander why it picked on her but, in spite of a lengthy correspondence, has failed to get a straight answer.
“I’ve had the card for eight years without a problem. I phoned to ask what was going on and they suggested I check my credit rating. When it came back as being in the “excellent” category – 999 out of 1,000 – I wrote back pointing this out, and was then told their decision was based on either a change in employment, a change in personal circumstances or credit rating, or a change in payments. None of these applied to me, so I wrote again. Finally, they said they could do what they wanted under the terms and conditions of the card.”
Like many others in the same situation, she has taken out a card from a different provider.
“A card with a £300 limit is a waste of time. It’s up to Santander how they run their company, but to remove virtually all of a customer of eight years’ credit limit, and to not give an explanation, is a strange way to do business. Everyone I tell this story to is as intrigued as I am,” she says.
Steve Rosson, from Wythall, near Birmingham, is another reader affected by this problem, albeit in a different way. He has taken out another card after Barclaycard cut his limit from £10,750 to a “paltry” £750.
In his case, the first the retired teacher knew of it was when his wife had a payment refused in a store. Only when he queried it was he told his limit had been slashed.
“We must have been customers of Barclaycard for at least 20 years, if not longer. I pay off our balance in full every month, but was told because I had made two late payments – an oversight on my part – within 12 months it was reducing our limit by £10,000. The company only wrote to us after the card was refused, and my calls for more information have gone unanswered.” When he pointed out his excellent payment record over many years – the second of his missed payments was a day late, and neither was due to lack of funds – it had no effect.
“We are off to Australia soon and I needed to book air tickets, car hire etc. I understand they might want to cut my limit – I don’t need £10,000 – but a card with a £750 limit is useless.” Like Johnson and other correspondents, he doesn’t feel he has had an adequate response from the card provider.
On 13 February, Guardian Money carried a report about a 61-year-old retired teacher, a customer of NatWest for more than 40 years, whose limit was reduced from £4,500 to £300. That prompted a 61-year-old university lecturer to contact us to say the limits on their two Royal Bank of Scotland cards had been slashed from more than £6,000 to £360 and £350, despite having not missed any payments in the last few years.
And on 6 March, we carried a letter from a reader who had “an unexpected large reduction in my credit limit on one card which was quite unjustified by my usage”. He later discovered incorrect information on his credit file, and his limit was restored.
Banks tend to hide behind a blanket of secrecy when it comes to credit limits and credit scoring. The lack of transparency is a major source of frustration to those affected.
A look at financial websites tells a similar story to those of our readers. Moneysavingexpert.com’s forums have plenty of disgruntled cardholders, and suggest Virgin, Halifax and MBNA have been cutting limits.
Paul Lawler, a credit card specialist at Moneysupermarket.com, says banks could be trying to limit their exposure to bad debts. “There was a lot of this going on at the height of the credit crisis, and customers saw their limits cut. Card providers may be under pressure to limit their exposure and are acting accordingly.” He says that a card provider will often look to see what other lines of credit are available to a customer, and may be more inclined to cut limits if they spot someone has other options.
“Prior to the credit crunch, many consumers held several cards as a result of transferring balances, but didn’t close old accounts.
“Many lenders experienced problems because of this. As credit dried up, those consumers who were used to transferring balances between cards at 0% were forced to open lines of existing credit. A lot of bad debts were caused by this, and lenders have been tightening up as a result,” says Lawler.
A call to the various banks mentioned above elicited little to reveal why this is happening.
A Santander spokeswoman says: “As a responsible lender, we undertake ongoing reviews of customer credit limits using internal data and data provided by our credit reference agencies.
“On occasion, this can result in a customer’s credit limit being adjusted. Customers are free to contact us should they wish to discuss any changes made to their account.”
In Jan Johnson’s case, it says that a manual review should have led it to “reassess its decision”, and apologised for this not happening.
Barclaycard says it will cut a credit limit if its information shows the customer may be experiencing financial difficulty and their circumstances may have changed. “If this appears to be the case, then their credit limit may no longer be appropriate and needs to be readjusted. We always try and contact the customer as soon as a decision like this has been taken,” it adds.
Citi made similar points, saying: “Due to the way credit card lending works, other costs relating to fraud, bad debt and operations have to be taken into account. Customers’ interest rates are determined by a number of factors which include our costs, the cost of borrowing in the wholesale market and customer behaviour.”
Meanwhile, if you get such a letter, try not to take it personally. If you complain, don’t be surprised if you come up against a wall of silence. Bank staff appear not to want to change their mind, even in the face of compelling evidence that nothing in your circumstances has changed. As in Johnson and Rosson’s cases, you may find it easier to opt for a card from another bank rather than toughing it out with your existing provider.
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Capped energy tariffs don’t fit, so switch supplier
Mar 12th
Millions of us are ‘locked’ into costly capped energy tariffs. But, as Miles Brignall reports, it may be worth taking the hit on penalty fees and switching to a cheaper supplier
Up to 3m households are missing out on energy price cuts because they are “locked” into expensive capped tariffs, according to a report this week. It says many of those affected would be better off paying exit penalties and moving to the cheapest deal.
Price comparison website Energyhelpline.com says large numbers of electricity and gas customers would have signed up to the capped tariffs offered by British Gas, E.ON, EDF, ScottishPower, and Scottish and Southern Energy over the past two years. They were heavily marketed as a way of avoiding further price rises, and sold on the basis that those who signed up to similar fixed-price tariffs in the past had done well.
Customers typically have to pay cancellation fees of £50-£70 – and, in some cases, up to £100 – if they want to switch to a cheaper deal, but energyhelpline says many need to do just that. It says the penalties appear to be scaring off many who signed up to these deals, and some customers will even be unaware they are overpaying.
The warning came in the same week that five of the big six suppliers announced relatively small (3%-8%) reductions to gas prices, leading to cuts in annual bills of typically £50-£60. The move has made the price gap between those on the cheapest online and the most expensive capped tariffs even more marked. According to the figures, the most expensive capped tariff, from British Gas, is, on average, £539 more expensive than the cheapest internet tariff – £889 offered by First Utility.
• Pensioners promised £80 rebate on heating bills
• Scottish Power trumps EDF with gas prices cut
• Compare and switch energy suppliers
Mark Todd, director of Energyhelpline, says millions of customers are now paying over the odds. “Many switched to these tariffs at the height of the price rises in 2008, but the charges they are now paying are way above current market conditions. Many feel they cannot leave these plans and they are stuck with them until the end of the contract.
“However, they should take stock of their situation because it’s generally cheaper to take the hit on the penalty fee, and switch to a cheaper deal. The average lock-in tariff is around £250 more expensive than the cheapest tariff.” He says the British Gas Fixed Price tariff, that runs until the end of January 2012, costs an average of £1,428 a year – a huge difference when compared to the cheapest available tariff of £889. Those signed up to the EDF Energy Price Protection 2010 plan until 30 September this year could also save more than £400 a year by switching to the cheapest option.
“Internet energy prices have been dropping rapidly, and many capped tariffs have been left behind. There is no reason why people should be missing out on these cheaper prices, so the time is definitely right to consider switching,” says Todd.
The message that you can switch was reiterated by Audrey Gallacher, from watchdog Consumer Focus. “If people are worried about being on fixed-price deals, there’s nothing to stop them leaving.
“They may be exposing themselves to a termination charge and therefore they should do their sums, do a price comparison, look at how much they can potentially save, and look to offset that against any potential termination fee,” she says.
British Gas, which has the biggest price differential, says it offers long-term contracts “because, like mortgage customers, many energy users want the peace of mind that fixed products offer. Customers can, at any time, choose to exit their deal before maturity on payment of an administration fee, which is clearly explained to customers when their contract starts”.
So, if you are on a fixed-price deal, how do you know whether you are being overcharged? The table above only shows the most expensive fixed-price tariffs; there are plenty of others that are similarly affected, albeit with smaller price premiums.
Your gas and electricity bills will show which tariff you are on. Armed with that information, go on to one of the comparison websites (others include the Guardian’s switching service, TheEnergyShop.com and uSwitch.com), input your annual bills, and they will estimate potential savings.
If you prefer to talk to someone, call the Guardian’s switching service on 0800 634 5192 and it will do the same. The cheapest tariffs mostly require you to manage your account online. The cheapest dual fuel deal is First Utility’s internet tariff named iSave V3. The second cheapest is British Gas WebSaver 4, priced at an average 899 a year.
Armed with the potential savings, it is a simple case of working out whether they will outweigh the exit penalties. It will depend on how much longer your deal has to run. Clearly those on British Gas’s fixed-price 2012 deal have nothing to lose by moving. They will save £500 by moving to British Gas’s cheapest online tariff – quite a saving.
The EDF deal which runs until the end of September is probably worth leaving, but the saving won’t be huge, given we have left the winter months behind, when usage is at its highest.
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Solar panels the hot new item as pay-as-you-save launches
Mar 6th
Get a loan of up to £15,000 to green your house – but the scheme could falter if the government loses the election
If you want to install solar panels on your roof and take advantage of lucrative new feed-in tariffs but have been put off by a lack of funds, you could soon get a loan to cover the whole cost.
This week the government unveiled plans to offer homeowners 20-year loans of up to £15,000 to allow families to invest in green technologies, safe in the knowledge that their loan would be taken over by the purchaser if they move before it’s paid off.
This follows an announcement by the Department of Energy and Climate Change (DECC) that it will start paying feed-in tariffs to households installing green technologies, most notably solar water heaters, typically costing £4,000, and electricity generating photovoltaic (PV) systems, which will set you back around £12,500. Households with south-facing roofs able to install a solar PV system will receive payments and savings totalling between £900 and £1,100 a year from 1 April.
Until now households wanting to introduce these carbon-reducing measures had to pay the upfront installation costs, or borrow the money, leading to accusations that they were only affordable for the well-off. Equally, spending thousands on solar power made little sense to anyone planning to move home a few years later.
The government has tried to answer both criticisms this week by introducing a pay-as-you-save scheme, which follows a pilot run in a number of cities.
Although details of how the scheme will work are yet to be finalised – and it looks like the election could be a major stumbling block to its introduction – we now have a rough idea:
• The loans, typically between £10,000 and £15,000, are expected to come from commercial organisations rather than government funds. As well as the big six energy companies, Sainsbury’s, B&Q, Co-op Bank and HSBC are among those expressing an interest.
• Once taken out, the loans would effectively become a charge against the house in the same way as a mortgage. They are expected to be paid back over 20-25 years, but, unlike a mortgage, if you move house before the loan is paid off, the new buyer would take over the payments. Of course, they also take over the savings, and any feed-in tariffs payable, which DECC says would always be greater than the repayments. It should make the home more attractive to any purchaser.
• The interest is yet to be determined – 6% has been mentioned, but as the loans will be coming from the private sector rates will reflect the market at the time. It is likely the rate would be similar to a long-term fixed-rate mortgage, typically 5%-6%. If you have lots of equity in your home, and you are remortgaging, you might find it cheaper to add the cost to your mortgage.
• Households would be able to spend the money on a variety of technologies. Solar PV and water heaters will be favourites, but so will solid-wall insulation which is aimed at homes that were built without cavity walls. It is much more expensive than cavity wall insulation, but can bring down energy bills significantly. Ground and air source heat pumps and wind turbines will qualify.
DECC says it is aiming for 7m households – owner-occupier and rented – to benefit by 2020. It wants to make the loans available to the widest possible group rather than just the well-off. It aims to have a single point of contact for those hoping to get a loan, pushing applicants to the most appropriate commercial supplier.
One option could see the power firms, which already have responsibility for paying the feed-in tariffs, also overseeing the loans and simply paying the customer the surplus at the end of each month. This would enable those with less-than-perfect credit histories to install carbon-reducing measures.
However, before you start rubbing your hands in expectation, there is one major hurdle: DECC says the initiative will require primary legislation, and it will not be put before this parliament. If Labour is returned, parliamentary time would almost certainly be found to enable the first loans to be awarded in 2012. But if the Conservatives win, or if there is a hung parliament, its introduction looks more shaky.
The Tories have said they support feed-in tariffs and would not overturn their introduction. However, new governments tend to arrive with a host of legislation they want to introduce, and measures proposed by previous administrations, however laudable, have struggled to get parliamentary time in the past.
Questions are also being raised as to whether the scheme offers best value to taxpayers.
This week environmental campaigner George Monbiot launched an attack on the government’s feed-in tariff, saying it would cost more than £8bn and only save 7m tonnes of carbon by 2020. While acknowledging that these measures make great financial sense for the households installing them, he described them as “comically inefficient”. He recommends that the money be invested in big renewables schemes that deliver significant economies of scale.
This week the Guardian reported there could also be possible delays to the feed-in tariffs unless the government moves ahead swiftly with the enabling legislation.
The first payments are due to be made in less than a month, on 1 April.
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Isa transfers can keep your savings growing
Feb 27th
It’s worth chasing better rates on your Isas, says Miles Brignall, and they’re easy to transfer when that headline rate falls away
Have you put your savings into Isa accounts that are now paying paltry interest rates? There’s nothing to stop you moving the cash into a better-paying account, while keeping all the tax-free advantages. And switching Isas is easier than you think.
Although Isas have been around for 11 years, there’s still a surprisingly large number of savers who are unaware they can move their money around.
Isas can be one of the best ways to save, but to make them work, you’ve got to be prepared to chase the best rates. Too many of us open an account and forget about it.
Best-buy Isas are often launched with an attractive rate in a bid to boost bank and building society cash reserves. Typically, it will include a bonus rate for the first 12 months, but at the end of the year this will often fall away alarmingly.
Santander’s offer this year is a good example – a launch rate of 3.5% falling to 0.5% in 12 months. To see what previous best-buy accounts are now paying, see How low can they go?
However, there is nothing to stop savers from transferring their money at the end of the year – or at any other time – to a better-paying rate. Often the highest-paying accounts won’t allow “transfers-in” – the 3.5% account from Santander is a case in point. However, there are plenty that will.
Despite horror stories that have appeared in this and other papers, transferring is easy and, in most cases, goes without a hitch. Simply contact the provider to which you want to transfer your money. It will give you a form to fill in, at which point you name the account(s) and balance that you wish to move across.
• Isa factsheet
• Compare cash Isas
• End of tax year is a time to perk up
Your new bank, to which you’re moving the cash, will then arrange for it to be transferred. The process should be completed within 30 days.
Note, you shouldn’t physically withdraw the money, and then pay it into the new Isa provider. If you do, you will lose the tax-free status – the money has to be transferred between banks.
There are a few other rules. Savers can transfer a cash Isa opened in the current tax year (April 2009 to April 2010), but you have to move the entire balance to the new provider.
Cash Isas taken out in previous tax years, can be transferred in part, or in their entirety. You can even switch your cash Isa to a stocks and shares Isa, but you cannot switch from shares to cash. There is nothing to stop you putting the next tax year’s Isa allocation (£5,100) into Santander, and transferring any previous accounts to one of the best-buy accounts that allow transfers-in – listed on the right.
It’s worth noting that some banks won’t allow transfers in if the money is already held in an Isa account within the bank. And just in case anything does go wrong, you are advised to keep a copy of the paperwork until you are sure the money has safely arrived at the destination bank. HM Revenue & Customs rules allow the existing Isa manager a “maximum of 30 days” to respond to the transfer request. The banks now aim to move the money within 10.
Transfer and other Isa problems have usually been caused by banks being unable to cope after being inundated by applications when offering a great rate. In most cases, they backdate the interest paid to ensure savers don’t lose out. So where should you transfer your money at the moment?
First Direct is paying the top instant access rate for those wanting to transfer – 2.75%. This includes a 2.52% bonus payable until August 2011. Marks & Spencer Money is the next best instant account paying 2.65%.
If are happy to give 120 days notice the Yorkshire building society is paying 3% on transfers.
Those happy to forgo access for a year should head to the Aldermore bank which has the top paying one-year fixed-rate at 3.05%. Be warned: it has a minimum deposit of £3,600.
Meanwhile, there are some very appealing five-year, fixed-rates. The Leeds building society is offering those happy to lock away their money until February 2015 a return of 4.6%.
That might look good now, but when interest rates return to normal levels you could find yourself locked into a low rate of return.
Several banks are expected to announce Isa accounts between now and 6 April, so it may be worth waiting a few weeks. But whatever you plump for, make sure you keep an eye on the rates you are being paid.
And, at the end of the bonus period, or once it falls below the best rates, look about for another transfer.
Is it worth putting money in a tax-free account?
Some people are sceptical about cash Isas, taking the view they can get a better rate from a standard savings account. But once you factor in tax, most people will probably find that Isas come out ahead.
If you are a basic rate taxpayer, you usually pay 20% on your savings interest, outside of an Isa. If you pay tax at the higher rate, that goes up to 40%.
Let’s take this week’s new 3.5% instant access cash Isa from Santander. A basic-rate taxpayer would have to find a standard no-notice account paying at least 4.37% gross to get a return equivalent to 3.5%, while a higher-rate individual would have to track down a rate of at least 5.83%. However, according to data provider Moneyfacts, the best non-Isa instant access rates available are around the 2.75%-2.8% mark.
The top one-year fixed-rate Isa (from Aldermore) is paying 3.05%, while the leading one-year fixed-rate savings bonds (from the Post Office and Bank of Ireland) offer rates of 3.3%. But take the 20% tax off the latter, and you are left with a rate of 2.64%, says Rachel Thrussell of Moneyfacts.
It is a similar story over five years. Birmingham Midshires has a fixed-rate Isa at 4.55%, while the AA and Saga (for which Birmingham Midshires provides savings accounts) have non-Isa bonds over the same period paying 5.1%, but that falls to 4.08% after the 20% tax is deducted.
“Everyone should take advantage of Isas because you get your interest tax free,” says Thrussell, though she adds that some may feel there isn’t a huge difference in rates.
“I think Isa rates are going to start creeping up, so you’ll be better off with an Isa as opposed to a normal account as we come into the main Isa season,” she says.
However, there will be people out there with money sitting in poor-paying cash Isas who may find their institution has non-Isa accounts offering a better rate. For example, Cheltenham & Gloucester’s cash Isa is paying a paltry 0.05%, yet it has a number of other accounts paying more than this.
It is worth taking a bit of time to look at what your Isas from previous years are paying now. You may be in for a nasty surprise . Rupert Jones
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Solar water heaters come to the boil
Feb 20th
Payments of £400 a year offered to far-sighted households, but you’ll need a south-facing roof, says Miles Brignall
Government incentives are about to make solar water heating panels a financial no-brainer for millions of households across Britain, as long as they have a south-facing roof.
Two weeks ago Guardian Money outlined the attractiveness of electricity generating panels as a result of the introduction of “feed-in” tariffs, which will pay households for the extra energy they produce. However, the installation cost – at around £12,500 – will put many people off.
Less off-putting are solar water heating systems, which cost some £4,000-£5,500 for a typical 2kW system and are likely to pay an annual return of around £500 for the next 20 years. But do make sure you’re not burnt by the significant number of cowboy installers working in this sector.
The government carrot is called the Renewable Heat Incentive and will come into force in April next year. It is aimed at encouraging far-sighted households to install technologies such as ground or air source heat pumps, biomass boilers and – the one likely to appeal to the greatest number of homes – solar thermal water heaters.
You can install it now, safe in the knowledge you’ll get the incentive payments – expected to be around £400 a year – in 14 months.
Solar thermal systems use solar collecting panels to absorb heat from the sun. The hot water is then pumped to a storage cylinder to heat its contents. Ideally you need a south facing roof – south-east or south-west works too, but not as efficiently.
Solar thermal panels should provide most of your hot water from April to September and contribute to raising your water temperature during the remaining months, while saving you up to £100 a year on bills. Solar panels are compatible with most hot water systems, although you may need a cylinder big enough to hold two days’ worth of hot water.
If you have a “combi” there are possible complications, and you’ll have to check with the manufacturer to see if it accepts pre-heated water.
The government is still consulting over its proposals. When it made the announcement, the Department of Energy and Climate Change (DECC), said it would pay households installing solar thermal 18p per kWh, though it is yet to work out how this will be calculated, given that it is impossible to accurately measure the output of a working solar thermal system.
On top of the annual £400 the government has indicated it will pay, households can expect lower energy bills. A solar water heater can provide up to half of your needs, reducing your heating bill by between £50 and £100 per year, depending on use. With careful management, you can get that figure up to 70%.
To get the “clean energy payments” as they are being termed, you have to fulfil certain criteria. You will only get the money if your system has been installed by a Microgeneration Certification Scheme approved installer, which is controversial because many small installing firms that have built successful renewables businesses are not MCS approved. In the past it has been expensive to become accredited.
Because the system has to be approved, this also appears to rule out the £400-a-year payments for those who are building their own systems. Many of the 100,000 solar water heaters already being used in UK homes are home-built affairs.
Also if you installed your system before July of last year, you will not be entitled to the payments.
David Matthews, chief executive of the Solar Trade Association, says the Renewable Heat Incentive will be the biggest thing to hit the renewables sector. However he questioned why the financial support for solar thermal was less than for other technologies.
The DECC has said it wants the return for those installing solar thermal technology to be around 6%, but it will give payments that equate to a return of 12% for those installing biomass boilers or heat pumps.
Meanwhile, if you have the money and a suitable roof or other place to site your panels, you can start planning your installation. Given that the DECC has yet to finalise how it is all going to work, and there’s the possibility of a change of government in May, it may be worth waiting a few months before you sign on the dotted line. That said, the Conservatives have indicated they support the policy, so you can start getting the brochures and working out if it works for you.
• Pressure is growing on the government to give households that have installed electricity-generating photovoltaic panels the same access to generous feed-in tariffs as those fitting them now. Anyone putting these panels up on their roofs now will be paid 41.3p per kWh they produce, and the new tariff is expected to lead to thousands of new installations.
Early adopters are up in arms, because many will see their payments fall to 9p per kWh under the terms of the scheme. There is a petition on the No 10 website calling for the tariffs to be equalised. The Conservatives have said they will give all PV generators access to the higher feed-in tariffs if they win the next election.
Scheme turns up heat on installers
For many years unscrupulous sellers of solar thermal systems have used a lack of regulatory controls to rip off unsuspecting customers. As a result, it’s become difficult to find a reputable installer. For an example of what can go wrong, see this week’s Capital Letters column on page 10.
It hasn’t been helped by the fact that plenty of small firms, specialists in their field with many happy customers, have not felt the need to be approved by the Microgeneration Certification Scheme (MCS) – until now. The Renewable Heat Incentive will effectively force many of them to sign up because households won’t get the £400-a-year payment unless they use an accredited installer. The MCS website (microgeneration-certification.org) lists approved installers; in future it will be easier and cheaper to become accredited, according to the Solar Thermal Association. Another way to find a reputable installer is to look on the excellent website yougen.co.uk, set up by Cathy Debenham, who lives in a low-carbon home in Devon.
The site describes how each technology works, the costs and any pitfalls. It also has a forum on which individuals can recommend installers they have used, all with an Amazon-style rating.
One problem with solar thermal is the huge range in prices offered by installers, as Debenham highlights. Researchers at Oxford University’s Environmental Change Institute analysed the prices of systems in receipt of Low Carbon Buildings Programme grants between 2006 and 2008: they ranged from £1,000 to £8,000. The researchers suggested the benchmark price for a 2kWh/year system was £4,000, though they now cost between £4,000 and £5,000.
Installation prices varied considerably. Even looking only at larger companies, there was a range from £2,790 to £4,650.
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Car prices: No need to drive a hard bargain in the showroom
Feb 20th
A new car can cost £5,000 less online, and prices are expected to fall further when European rules change in March, says Miles Brignall
Motorists are finally overcoming their fear of buying new cars on the internet, tempted by savings of up to £5,000 offered by online brokers and added legal protection.
Which? Car recently trawled the market for 14 popular new models and found that all bar two could be bought cheaper online than at the local dealer, many of them substantially so.
The consumer group found five models offered by online brokers at more than £5,000 below their list price, and six were more than £1,000 cheaper online compared with the best showroom deal. The five-door Honda Jazz 1.4 ES, which has a list price of £12,485, could be bought for a best showroom price of £12,185. However, the group found it online for just £11,537, giving an extra saving of £648.
Which? Car also price-tested the VW Golf 1.4 TSI and found the best showroom price at £18,450. Online it could be bought for £15,884, a £2,566 saving.
Richard Headland, editor, Which? Car, says: “The internet is revolutionising the way people are shopping for cars, and we’re all for it. Not only can buyers find bargain prices online, they have better legal rights. The web has thrown down the gauntlet to traditional car dealerships.”
He says that on top of big discounts, car buyers going online get the benefit of distance-selling regulations. These apply if you complete your deal on the internet rather than in person, and give buyers a seven-day cooling-off period in which you can reject the car and get a complete refund. If a deal is done in a showroom, you have no chance to change your mind.
Richard Sanders, founder of Drive the Deal (drivethedeal.com), claims to have sold the first new car on the internet in 1998.
Since then, he says, there has been a 35% increase in people buying online year on year. “I saw building a website as a way of quoting large numbers of people at minimal cost, so that I could pass on to the consumer as much of the saving as possible. People like being able to get a quote without pressure to buy. Contrast this with going to a showroom – if the buyer doesn’t know what discount to ask for, they may not get a good deal.”
Brokers such as Drive the Deal have been joined online in recent years by independent and franchised dealers, and even reverse auction sites where traders bid for the chance to sell the consumer the car they want.
Drive the Deal and Broadspeed.com buy large numbers of cars from dealers, then pass on the bulk discount they negotiate to individuals. The car is supplied by a dealer with full UK warranty and is exactly the same as you would have got from your local dealership. Which? Car says only 5% of the consumer group’s members bought their last car online, but 18% said they are likely to do so in future.
Simon Empson, managing director at Broadspeed, which has been selling cars via the web since 1996, says business has never been better.
“Buyers have now become used to buying cars online from trusted companies. We now have some customers who have bought three or four cars from us and say they would never go back to trailing around the dealers. The only problem we have is getting cars quickly enough.
“In the face of the recession manufacturers slashed production for the UK market, but demand has remained strong and the industry is struggling to get cars. The discounts are still there but now most bookings we are taking are factory orders.”
He suggests that when “block exemption” rules on who can sell new cars are ended in March by the European Commission, it could have a big impact on prices .
“We’ll be able to order new cars for customers direct from the factory,” Empson says. “We’ve successfully trialled working directly with five manufacturers over the last 12 months, and estimate this buying method could knock 25% off a car’s asking price.”
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Vouchercloud app saves money and forests
Feb 19th
New app for iPhone saves consumers printing out discount vouchers
If you own an Apple iPhone and eat out frequently, you should consider downloading a free, new app that gives you scores of discounts without having to print out vouchers.
In the past two years such vouchers have become a boon for consumers, with shop and restaurant chains offering 20% discounts, or two-for-one deals, in an attempt to keep the tills ringing. Until now, users had to plan where they were going, and arrive armed with their vouchers printed out.
But the new Vouchercloud app – downloadable at vouchercloud.com – lets iPhone users take advantage of the same deals spontaneously. Turn it on any high street and it will use the phone’s GPS system to show the discounts on offer at nearby restaurants.
Currently it has more than 2,500 retailers and chains on board, including Carluccio’s, Cafe Rouge, Strada and Coffee Republic. The deals vary according to the chain, but are typically two courses for £10, or a set percentage discount on the final bill.
The system works so well that you can check it in the middle of your meal.
When the bill arrives, you show the waiter the code on the phone’s screen and the bill is lowered accordingly. The company has also done deals with a number of upmarket restaurants to give bigger discounts in return for a small fee, typically £1.79.
Vouchercloud claims it has been one of most downloaded apps in recent weeks. There’s only one problem. The undisputed king of discount vouchers, Pizza Express, is not one of the participating outlets yet.
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Regulation of estate agents ruled out after OFT inquiry
Feb 18th
• Complaints against estate agents fell only 3%
• Housing market transactions dropped 60%
Estate agents are to be given a clean bill of health and escape a regulatory crackdown when a year-long investigation by the Office of Fair Trading (OFT) reports its findings later today.
Despite repeated calls over a number of years by consumer bodies and even some agents’ groups, the OFT will conclude that the industry is generally working in consumers’ best interests and that a regulatory regime is not required.
Over the last 12 months, the OFT has been investigating all aspects of the process of buying and selling homes in the UK, including price competition, quality of service, and whether the industry needs to be regulated.
At present anyone can set up as an estate agent. Despite the huge sums of money at stake, no qualifications are required. Peter Bolton King, the chief executive of the National Association of Estate Agents and one of those who has led the call for better regulation, said he was disappointed.
“Once again the OFT has categorically failed to see that better regulation of the home-buying and selling market is required. Buying a home is often the largest single transaction of a person’s life and it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed.”
He said the OFT’s decision was in stark contrast with the views of the Department for Communities and Local Government, which is proceeding with the full regulation of lettings agents.
“This inconsistency is very difficult to understand given that the same agents and firms often deal with sales and lettings. The NAEA would like to see a more regulation to ensure that professional, qualified estate agents are not confused with those who fail to meet the basic professional standards we would expect from our members. The need for consumer protection in the form of a more professional industry is the driving force behind our plans to introducing a licensing scheme for our members later this year.”
Today’s report concludes the second investigation of the industry in six years. Back in 2004 the OFT was accused of “bottling out” by the Royal Institution of Chartered Surveyors, after it stopped short of demanding legislation of the profession. In March last year the ombudsman for estate agents, Christopher Hamer, reported that disputes with estate agents involving property sales had only fallen by 3%, despite a 60% drop in the number of properties changing hands.
The OFT which publishes its report at midday today, declined to comment.
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