Running a household is
an expensive business. Energy bills, phone costs and mortgage repayments can
all quickly diminish your bank balance. But there are many things you may be
spending money on that you needn’t be. Here are 10 products no one should be
paying for.
Identity theft has
become big news, so there are plenty of firms hoping to cash in with identity
theft insurance. For example, pay £90 a year to specialist insurer CPP and
it’ll give you an ID health check, unlimited access to your credit report and a fraud expert to help you get any
stolen money back.
But you don’t need to
pay for this. Under the Consumer Credit Act and the Banking Code, you can claim
back money from your bank or credit card provider if you are the victim of
identity theft without paying a penny. And you can easily access your credit
report for £2 through the major credit agencies (Experian, Equifax and Call
Credit).
SAVING: £90 A YEAR
2. EXTENDED WARRANTIES
Buy an electrical
product and most companies will try to push an extended warranty on you. But
these policies are costly – typically around 25% of the price of the product.
There are also exclusions such as accidental damage to watch out for.
As you are already
entitled to a refund if the product is faulty under the Sale of Goods Act 1979,
and most products come with a year’s warranty, these policies tend to be a
complete waste of money.
SAVING: £39 A YEAR
3. PAID-FOR CURRENT ACCOUNTS
Packaged accounts , which include standard current account facilities and extras such as
breakdown cover, cost around £15 a month, but they don’t often save you money.
For example, NatWest’s Select Gold Account costs £155 a year for a current
account and includes add-ons including mobile phone and travel insurance.
The bank claims the
account will save you £713 a year but this is based on mainly unnecessary
costs. For instance, you can add your mobile phone to your homecontents insurance for a small fee and an annual travel
insurance policy costs from £29 with insureandgo.com. When you add up all the
individual savings, NatWest’s account costs you £35 more than it saves you.
SAVING: £35 A YEAR
4. PAYMENT PROTECTION INSURANCE CLAIMS
Lots of firms have
started cashing in on the payment protection insurance mis-selling scandal by offering to help victims
put in their claims in return for a chunk of their compensation. For example,
claims firm Gladstone Brookes deducts 25% of any money you receive in return
for processing your claim.
With an average
compensation payout of £2,750, according to the FinancialOmbudsman Service, that means they are pocketing
nearly £700 per claim. But the process is very simple and won’t affect the
outcome, so make a claim yourself and save a fortune.
How to reclaim your PPI premiums
SAVING: £700
5. CHAPS PAYMENTS
CHAPS sterling payments allow you to transfer money instantly
between banks within the UK
Sandra Quinn,
spokesperson for the Payments Council, says: “All payments will be completed
within two hours and the benefit of Faster Payments is it works all day
everyday, whereas CHAPS is a business-day-only service.”
SAVING: £20 PER
PAYMENT
6. MOBILE PHONE INSURANCE
Losing your mobile
phone can be annoying and costly. Mobile phone insurance can safeguard against
this but it costs £7 a month on average and only tends to pay out if your phone
is stolen or damaged.
It may also be
completely unnecessary as your phone may be covered under your home insurance
policy. If not, you can add an ‘all risks’ option to your policy for around £15
a year to include valuables taken outside of your home.
SAVING: £69 A YEAR
7. PREMIUM-RATE PHONE NUMBERS
Premium-rate phone
numbers are expensive and can leave you with a huge monthly bill. Some landline
providers will waive certain calls to these numbers but if you call them from
your mobile, you’ll likely be charged even more.
Calls to ‘09’ numbers
are the most costly – prices can rocket to £2.04 per minute and minimum call
durations usually apply – and lots of companies charge 35p a minute for calling
numbers starting with ‘08’.
The website
saynoto0870.com lists alternative local numbers you can use, which will be
included in your call allowance. Many company websites also list a separate
phone number to be used when calling abroad. These will start with +44 and will
only charge you the local telephone rate.
SAVING: £2 PER CALL
8. USING YOUR CREDIT CARD ABROAD
Most companies will
charge you if you fl ex your plastic abroad. The charges vary between providers
but a 2.75% commission fee is not unusual. So spend £500 on your Barclaycard
while you’re away and you’ll end up handing over around £14 for the privilege.
However, some credit cards waive foreign exchange fees, such as the Halifax
Clarity Card or the Post Office Platinum Card.
SAVING: £14 PER TRIP
9. DEBT MANAGEMENT PLANS
The last thing you
need when you’re in debt is another bill but some firms charge extortionate
amounts to help you sort out your debts. For example, Debt Free Direct charges
up to £100 a month to help people create and maintain a debt management
plan.
However, this is a
complete waste of money because charities such as the Consumer Credit
Counselling Service and National Debtline offer the exact same debt management
service completely free of charge.
SAVING: £1,200 A YEAR
10. BASIC NHS DENTAL TREATMENT
Dentists are currently
being examined by the Office of Fair Trading to see if they offer fair service
to patients. The main complaint is that NHS dentists are charging customers too
much for basic treatment. For example, an examination should cost £17 and
include a scale and polish so don’t cough up £35 for a separate hygienist
appointment.
SAVING: £35 PER VISIT
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