Podcast Summary
Save money and improve health with online doctors and affordable mobile plans: Online doctors like PlushCare can help you start weight loss journey with FDA-approved meds, while Mint Mobile cuts mobile phone plan prices to save customers money
There are various ways to save money and improve your health. PlushCare offers online access to board-certified physicians who can help you start your weight loss journey with FDA-approved medications. Mint Mobile, on the other hand, is cutting its prices to help customers save money on their mobile phone plans. Meanwhile, Martin Lewis shares tips on saving during sales events like Grey Friday and the upcoming Autumn Statement, where fiscal drag could lead to more people paying taxes. Remember, if you buy something on sale that you were going to buy anyway, you've saved money. But if you buy something unnecessary just because it's on sale, you've wasted money. Stay informed and make thoughtful decisions to maximize your savings and well-being.
UK Faces Economic Challenges Amidst Energy Crisis and Inflation: The UK faces significant economic challenges including rising inflation, potential energy bill increases, and potential mortgage difficulties. The government is expected to provide targeted support, but clear communication and planning are necessary to alleviate concerns.
The UK is facing significant economic challenges, including departmental spending cuts, an end to the energy price guarantee, and rising inflation. These issues could lead to substantial increases in energy bills, inflation on benefits and pensions, and potential mortgage difficulties. The government is expected to provide targeted support to help those in need, but clear communication and planning are necessary to alleviate financial and mental health concerns. Inflation, currently at 11.1%, is a measure of past price increases, but its future trajectory is also crucial to consider. The energy crisis is not going away soon, and addressing it with targeted and sufficient support is essential. Additionally, more flexibility and forbearance in mortgage products could help those struggling financially. Overall, the situation requires careful consideration and decisive action from the government to mitigate the impact on individuals and the economy.
Understanding Inflation's Impact on Prices: Despite predicted inflation drops, prices will continue to rise as inflation decreases, making it a challenging year for many, especially those on benefits.
Even though inflation is predicted to drop in the future, it does not mean that prices will follow suit. Inflation is a measure of price increases, and items will still become more expensive as inflation decreases. Martin Lewis, a financial expert, emphasized that this is the new normal and that prices are unlikely to decrease significantly. He also mentioned that he has had communication with the current Chancellor, Jeremy Hunt, but cannot disclose any details due to Chatham House rules. The recent budget focused on addressing the high rate of inflation, with universal credit and legacy benefits increasing in line with September CPI inflation of 10.1%. However, many people on benefits will still find it difficult, and it will be a challenging year for them. The pension's triple lock was also kept, meaning pensions will continue to increase more than those on benefits. Overall, the budget aimed to help people cope with the high inflation rates, but it will still be a tough year for many.
State pension rises, but energy bills and taxes increase as well: The state pension increases, but energy bills rise significantly, offsetting the income boost. More people will pay higher taxes due to fiscal drag, and tax-free allowances decrease.
There are significant changes coming to both income and taxes in the UK. The state pension is increasing by 10.1%, which will raise it to £10,600 for those on the full new state pension. Energy bills, on the other hand, are set to rise to nearly £3,000 for those with typical usage, making energy bills almost 30% of the full state pension. The National Living Wage is also increasing, bringing wages up to £10.42 an hour for those over 23. However, these income increases will be offset by fiscal drag, resulting in more people paying taxes, including more people paying the 40% and top tax rates. Additionally, the capital gains tax allowance and tax-free dividend amount are dropping. The energy price guarantee, which has been subsidizing energy bills, is now set to last until 2028, but its longevity is questionable as it's more of a political announcement than a definitive policy.
Energy bills to rise significantly in 2023: Consumers face a 20% average increase on energy bills to £3,000 per year, with govt guarantee until Mar 2024, and potential future cuts to lower price cap rate.
Energy bills are set to rise significantly from April 2023, with an average increase of 20% taking a typical bill to £3,000 per year. This is less than the predicted 49.5% increase under the price cap, but still a substantial hike from the current rates. The government's energy price guarantee will remain in place until the end of March 2024, but consumers will pay more than they currently do. There is a possibility that future price cuts could be below the energy price guarantee rate, in which case consumers would pay the lower price cap rate instead. The government is also considering a social tariff to protect vulnerable consumers who cannot engage with the competitive market. Cost of living payments will be provided for some, but not all, individuals, with amounts varying based on eligibility. Mortgage and rent payments are also affected, with changes to support for mortgage interest. Overall, energy bills are expected to continue to be a significant financial burden for many consumers in the coming year.
Changes to unemployment benefits and social housing rents: Unemployment benefits waiting period shortens to 3 months, social housing rent increases capped at 7%, mortgage market flexibility increases, credit card deals becoming less favorable
The rules surrounding unemployment benefits and social housing rent increases are changing. The waiting period for unemployment benefits is being reduced from 9 to 3 months, and the cap on social housing rent increases has been reduced from CPI inflation plus 1% to the current rate of 7%. Additionally, there are plans to increase flexibility and forbearance in the mortgage market to help mitigate the impact of rising interest rates on both mortgage holders and renters. Another key point is that 0% deals on credit cards are becoming shorter, fees for balance transfers are increasing, and cashback deals are disappearing. If you have existing debt on credit cards, it's important to act quickly to take advantage of current offers before they change.
Use an eligibility calculator to determine credit card acceptance chances: When uncertain about credit card eligibility, utilize a calculator to increase approval chances. Seek help from debt counseling charities for managing debt and reducing stress.
If you're dealing with credit card debt and are unsure about which card to apply for due to eligibility concerns, use an eligibility calculator. This tool can help determine which cards you're most likely to be accepted for without affecting your credit score. When choosing a 0% deal, aim for a long enough term to clear your debt with the lowest fee. If you're struggling to repay your credit card debt and it's causing significant stress, consider seeking help from debt counseling charities like Citizens Advice Bureau, Step Change, National Debt Line, or Christians Against Poverty. They can provide guidance on debt management plans, IVAs, or even bankruptcy if necessary. Remember, it's essential to get help as soon as possible, especially during busy periods like January, when these organizations are in high demand.
Plan and budget for Christmas expenses: Put money aside monthly to avoid financial stress and debt during the holiday season, prioritize basic needs over expensive gifts, and consider negotiating credit card limits before making new purchases.
It's essential to plan and budget for Christmas expenses instead of waiting until the last minute and overspending. Christmas is an expected expenditure, and putting money aside each month can help avoid financial stress and debt. It's important to remember that one day of celebration should not lead to long-term financial consequences. Children understand financial realities when explained, and parents should prioritize their children's basic needs over buying expensive gifts. By taking the pressure off ourselves and our children, we can have a more enjoyable and less stressful holiday season. When it comes to credit cards, if your limit isn't big enough, consider paying off existing balances before making new purchases or negotiating a limit increase with your credit card provider. Remember, the goal is to enjoy the holiday season without causing unnecessary financial strain.
Don't give up on balance transfer cards with low credit scores: Keep trying for approval, consider limit increases or another card, and use responsibly to save on interest
If you're denied a balance transfer credit card due to a low credit score, don't give up. A low acceptance rate means that some people in similar situations have been approved. Instead of focusing on the rejections, try to find your highest chance and go for it. If you don't have any room on your existing cards, consider asking for a limit increase or applying for another balance transfer card with a lower interest rate. Remember, the key is to use the card responsibly by clearing the debt before the 0% period ends and making all minimum monthly payments on time. Overpaying each month can help you pay off the debt faster and save money on interest. Balance transfer cards are designed to help reduce the cost of existing debt, not for spending or cash withdrawals.
Effective Debt Management: Prioritize and Plan: Freeze credit cards in water, prioritize high-interest debts, consider overdrafts, plan ahead for Christmas shopping, use cashback websites, and consider Chase debit card for cashback
Managing debt effectively involves careful planning and prioritization. Do not assume that a credit card is a one-stop solution for spending, as interest rates can be high. Freezing your card in water as a thinking tool can help prevent unnecessary spending. If you have multiple debts, prioritize paying off the one with the highest interest rate first. Surprisingly, an overdraft can often have the highest interest rate, so focus on reducing it while paying the minimums on other debts. Planning ahead for Christmas shopping by using a Christmas cupboard or cashback websites like Top Cashback or Quidco can help save money and reduce stress. A simple yet effective tool for managing debt is the Chase debit card, which offers 1% cash back on most spending during the first year.
Earning Cashback on Your Purchases: Cashback methods include debit/credit cards, websites, and apps. Remember responsible usage and timely payments for credit cards. Be aware of protection limits and bank stability when saving with financial institutions.
There are various ways to earn cashback on your purchases, including cashback debit and credit cards, cashback websites, and mobile apps like Airtime Rewards. These cashback methods can help you save money during your holiday shopping or any other time of the year. However, it's crucial to remember that credit cards require responsible usage and timely payments to avoid interest charges that could outweigh the cashback benefits. Additionally, some cashback cards have minimum spending requirements to qualify for rewards. Regarding the financial industry, it's essential to be aware that even UK-regulated banks can face financial instability and potentially go bankrupt, as shown with Arthur Niyaka Bank. In such cases, the Financial Services Compensation Scheme (FSCS) protects depositors up to a certain limit, which is currently £85,000 per person per institution. If you had deposited £500,000 into Arthur Niyaka Bank, you would not be fully protected, and you would lose the excess amount if the bank went under. Always double-check the protection limits and the financial stability of the banks where you keep your savings.
Protection of Savings in UK Financial Institutions: UK savings up to £85,000 per person, per institution are protected by the government. Temporary high balances up to £1,000,000 are protected for 6 months after deposit. Not all financial institutions are linked, and Tesco Clubcard vouchers have extendable expiration dates.
Every penny put into a UK-regulated financial institution is protected by the government up to £85,000 per person, per financial institution under the Financial Services Compensation Scheme. This general rule applies unless there is a specific life event involved, in which case temporary high balances are protected up to £1,000,000 for 6 months after the amount was first deposited. It's important to note that not all financial institutions are linked, so having more than £85,000 in one institution may leave your savings unprotected. Additionally, Tesco Clubcard vouchers with an expiration date are extendable through specific methods. These are important financial tips to keep in mind for effective money management.
Extend Tesco Clubcard vouchers and letters to Santa: Extend Tesco Clubcard vouchers by spending a small amount, get new vouchers with longer expiry dates. Write letters to Santa through Royal Mail or NSPCC for personalized responses, but note different deadlines and charity donations.
Tesco Clubcard vouchers have expiry dates, but you can extend them by making a small purchase on the Tesco Clubcard rewards page. This will give you new vouchers with a new expiry date. For example, if you spend 50p using a £10 voucher, you'll get £9.50 back as new vouchers. There's no minimum spend for this, and it's a good way to extend your other vouchers. Another takeaway is that children who are partially sighted can get a free letter back from Santa by contacting the RNIB and filling out an application form. The deadline for this is December 2nd. Lastly, children can write a letter to Santa at Father Christmas, Santa's Grotto, Reindeerland, XM45HQ, and the Royal Mail will write back on Santa's behalf. The deadline for this is December 9th. If you want a guaranteed response and want to support a charity, you can write to Santa at the NSPCC for a personalized letter, but there's a suggested donation of £8. These are just a few of the tips discussed in the podcast. Remember to check out the Martin Lewis podcast on BBC Sounds for more helpful tips every week.
