WHAT does the year ahead promise? Whatever your plans, you can count on one thing – the cost of living will be more expensive than ever. But there is good news, too.
Regulators are trying to make it easier for people to get fair deals, and good returns on their savings. We look at the key finance events next year . . .
BAD NEWS: Commuters will see rail fares rise by 2.7 per cent from January.
TIPS: See if your employer does season ticket loans. Or put the season ticket on a credit card with zero per cent interest, to spread the cost over a year.
GOOD NEWS: Under new Ofcom rules, broadband providers must tell customers when their contract is finishing and what their best deals are.
TIPS: Haggle for the best deals at the end of every contract.
GOOD NEWS: Homes will now have a legal right to demand a decent and affordable broadband connection — at least 10Mbps download and 1Mbps upload speeds.
TIPS: To benefit, you will need to contact “universal service providers” BT or Kcom if you live in Hull. They will fix it for you, regardless of who your internet provider is, providing the cost is under £3,400. If it is above that, you will have to contribute.
April: Happy new financial year
GOOD NEWS: Homeowners will be able to leave more to their children tax-free. Anyone with residential property can pass on an extra £25,000 of their home’s value from April, totalling up to £175,000 each, on top of the standard £325,000 that everyone gets before having to pay inheritance tax. Together, couples with homes worth £350,000 or more can pass on £1million.
BAD NEWS: Banks are being forced to overhaul overdraft charges to make them fairer — although the changes will leave many customers worse off. Instead of fixed daily or monthly overdraft fees, customers will get a single interest rate, under new Financial Conduct Authority rules.anks must also charge no more for unarranged overdrafts than authorised borrowing. It means HSBC account-holders who dip into the red will be charged a 39.9 per cent interest rate, more than treble the 11.9 per cent that some currently pay.
MORE BAD NEWS: As happens at this time every year, there will be price hikes on many household outgoings, including council tax, prescriptions, TV licence and mobile phone bills.
TIPS: Haggle down your bills wherever you can.
BAD NEWS: This month spells the end of free TV licences for around 3.7million pensioners aged over 75. After this, they will be stung for the current £154.50 fee.
TIPS: If you are over 75 and claim pension credit, you can still get a free licence. Check your eligibility.
GOOD NEWS: Fancy a different summer holiday? Virgin Galactic is expecting to launch commercial space flights around this time. The bad news is, they will cost around £200,000.
TIPS: Get a good deal on a sunspot closer to home.
BAD NEWS: Watch your energy bills as hundreds of fixed-price deals come to an end around now, as well as in August and September. Last year, the average annual increase was £269 per household.
TIPS: Use a price-comparison site to fix your energy price. It takes ten minutes.
GOOD NEWS: Pension firms are to start offering new products — known as investment pathways — to help retired people who have not taken financial advice. The aim is to make sure their pension savings — and how they are invested — make enough money to last after they retire. It could boost income by a third over 20 years, according to the Financial Conduct Authority. The changes affect those who go into drawdown, meaning their pots remain invested in stocks and shares while they withdraw income when they need it.
TIPS: Talk to The Pensions Advisory Service for guidance on your plans for later life.
GOOD NEWS: Workers hitting the age of 18 will now be automatically enrolled into their employers’ workplace pension schemes along with all their older colleagues.
Currently, under-22s are not automatically enrolled into these schemes. If they earn £6,136 or more a year, they have the right to opt in.
TIPS: If you can enrol into a pension scheme, do it — you will benefit in later life.
BAD NEWS: The state pension age will controversially rise to 66 for men and women, as the Government tries to lessen the cost of providing pensions.
TIPS: Save as much as possible for retirement because, in more and more cases, people will have to stop working sooner than the age when they can claim their state pension.
BAD NEWS: The roll-out of the Government’s new welfare system Universal Credit — which will merge six benefits into one payment — is expected to begin on a large scale. The flagship reform will leave some families worse off, so expect protests around this time.
TIPS: If you are struggling with the move to Universal Credit, the charity Turn2Us can help.
GOOD NEWS: Mobile phone operators will be banned from tying customers into long split contracts, where handset and airtime payments are sold together. Customers use these deals to afford expensive phones but the long length of some tariffs makes it harder for customers to switch to cheaper ones, Ofcom says. As a result, it is banning bundled deals if the handset contract is longer than 24 months.
TIPS: It is often cheaper to buy handsets upfront rather than as part of a bundled contract.