Get paid for being in credit

Switching to Ovo Energy would ensure you did not miss out on any money by building up a credit in its coffers over the summer when you use less energy. Although you can ask for your money back, most people fail to, leaving a whopping £454m* – around £89 per customer – in the accounts of energy providers. These balances with Ovo Energy would generate a massive £13m in interest.

Scottish Power already offers a service where you can get £1 for every £33 over £100 – stick with it – that you have in credit with it. But it limits any payments to a maximum of £12. Really, if you are that much in credit, you should get your money back and pare back your direct debit payments.

However, no other energy supplier currently gives you anything back for giving them a free loan – that is what you are doing after all, since they are going to be making money out of your deposits, you can be sure.

Not all bills are going down

Remember though, not everyone is playing so fair. For example, Scottish and Southern Energy – known as SWALEC in Wales, Scottish Hydro-Electric in Scotland, and Southern Electric everywhere else – has a new product, Go Direct 5 which is replacing Go Direct 4. The new version is £86 more** than its previous version, and is a rise even though most other suppliers have actually reduced their costs in recent months.

This may give some savings to customers, but there are much better deals out there. So, get your own back on your provider, and find out if you could save money by switching now. For example, a couple living in a two-bedroom property in Sheffield who have their gas and electricity provided by British Gas on its Standard tariff could save themselves £200 a year by switching to Eon’s FixOnline v8 tariff.

Switch now for a better deal

It only takes five minutes to switch, and you if you make the change now during the summer, you can enjoy the savings throughout the winter when you have to pay more on energy.

Check though how much you have built up with your energy supplier, and ask for your money back if you are in credit.

*Source: Moneysupermarket
**Source: Confused.com

1. Find out if these special ‘existing customers only’ deals are any good by reading our special report.

Lenders offering special mortgage deals to their current account customers include Alliance & Leicester Direct,Halifax, HSBC, Lloyds TSB, Lloyds TSB Scotland, Nationwide Building Society, NatWest, Norwich & Peterborough Building Society, Royal Bank of Scotland, Santander, The Co-operative Bank, Ulster Bank.

Tempting

Alliance & Leicester and Santander – they are now the same group – is offering a 3.99% fixed for two years, and if you are an existing account holder putting £1,000 a month into your account, you would not have to pay any fees at all on that mortgage.

The catch is that you have to have held the account for at least six months. So no point in you setting up the account this week ready to apply for the mortgage next, but existing customers can benefit.

Shenanigans

Nationwide’s deal initially seems appealing, but then it falls away when you compare it to the competition. It is offering 90% mortgages to existing FlexAccount customers, so if you need to borrow this amount, you may think this is a reasonable option.

But when you compare the deal to others available it’s clear that there are better deals out there. A two-year fix with Nationwide at 90% is currently 5.98%, and you would pay £396 for the privilege.

Existing customers with Halifax can borrow up to 95% loan-to-value on some deals. A 5.19% fixed for two years would cost £999, and if you want to avoid paying a fee, you can get 5.49% fixed for two years.

If you need to borrow less…

HSBC Advance customers can get a tasty 4.39% fixed for two years, but you would need to borrow 80% of your property’s value or less to qualify, and the booking fee is £399. However, this is not the best deal available. You can – without the need to get another product – get a two year fix at 80% LTV with the Post Office at 3.79%. The arrangement fee on this is £999 – so even though the fee is higher, you would save yourself £1,560 over the two years on interest and fees on a £180,000 loan.

Lloyds TSB customers are looking at 5.79% fixed for two years on an 85% LTV, with an £895 fee. This rises to a staggeringly high 6.79% if you go up to 90% LTV, with the same fee. Definitely not good value.

NatWest customers with Private Business, Advantage Private, Advantage Business and Advantage Gold customers can access 3.69% on a two-year fix at 75% LTV – without these products you would be paying 3.79% – although the fee is the same at £199.

Royal Bank of Scotland – which owns NatWest – you would think would be offering the same deals. You would be wrong. Its Private customers can get 3.69%, 3.74%, 3.89%, 3.94% and 4.79% all fixed for two years. Confusingly, all the fees on the first four of these deals are currently listed on its site at £999 – you would expect them to fall if the rate was rising, and they are all for up to 75% LTV – while the final deal has a fee of £299.

The Co-operative Bank is offering a 2.49% (1.99% above the Bank of England Base Rate) tracker mortgage at 75% LTV, which lasts for the lifetime of the loan, but only to its Current Account customers. There is no application fee on this.

Ulster Bank’s ufirstgold account customers can get a 3.78% two year fixed rate up to 75% LTV, and you would pay £495 on this deal.

2.      Complete your research by comparing the rest of the market with a trusted broker.

Some of the 90% LTV deals may look appealing. But compare them to some of the other deals out there, and the Nationwide deal, for example, can look very expensive. For example, you can get a two-year fix with Chorley & District Building Society at 5.25%, for 90% LTV, but you will pay £1,800 to secure the deal.

The Post Office is offering 5.45% over the same period, and you would pay just £999 for that.

If you needed to borrow less, then you could get 2.99% with HSBC at 70% LTV, fixed for two years, with an arrangement fee of £999.

Mansfield Building Society has a 3.09% two year fix for 75% LTV or less, and you would pay £945 in fees booking and arrangement fees on that product.

So even if you can get some deals without paying any additional costs, they may not be the best for you. A broker will be able to compare all aspects of the mortgage costs for you, and tell you which is the best deal overall, not just which has the cheapest interest rate. You should speak to a broker before you make any decisions that will cost you in the long run.

This week the last of the big energy providers announced price cuts for gas of up to 9%. That’s the headline that has been getting all the press, but the truth is that a much more significant price war has been waged for the last six months. If you really want to save, online tariffs are where the real savings can be made.

The average standard annual bill is still around £1,150 – £1,200, but the cheapest online tariff is around £900. The potential savings from comparing and switching is huge. Doing this takes a few minutes and could save you hundreds of pounds.

Last month we blew the lid on the scandal of how energy companies are sitting on £1.3 billion of your money. Want to get some of your money back? Read on…

Millions of us have been overpaying on our energy bills, and the providers have built up a nice £1.3 billion cushion in their accounts at our expense – so what are you waiting for? Ask for it back now, and get the benefit before the summer.

Two in five overpaying in Britain’s coldest winter for 30 years

An unbelievable two in five householders are overpaying on their energy bills, with the average amount owed reaching £124.34. One in 10 of us is owed as much as £500.

Who is at fault?

One in three think energy companies deliberately keep their bills complicated to make it hard for us to see what we are being charged. Yet the same number of us fail to check our meter readings when we get a bill. This simple step can prevent you from being charged more than you should for your energy. It only takes a minute, and will save you a packet in the long run.

Don’t be shy, ask for your money back

One in five of us have not even bothered to ask for our money back, around half just let the balance ‘rectify itself’ and one in 10 people are too embarrassed to ask for their overpayments back. Or they can’t be bothered.

Is this you? It is your money, they have to give it back to you, so just ask. If you want to wait until you have cleared the last bill for the winter, then ask for any money back that is outstanding after March. Your bills will go down in summer, so get that money into your bank account – rather than leaving it in your energy provider’s account – so you can benefit from the interest.

Get a better deal for your energy

Whether you get your money back or leave it for your provider to even things out, you should pay less for your energy if you can. The big six providers have all cut their bills now, but it is at the end of the winter so you benefit less. Even with the cuts, there are much better deals out there.

So compare utility prices to get a better deal. For a homeowner in Edinburgh with Scottish Power and paying £100 a month for both gas and electricity on the company’s standard tariff could save £290.52 a year by switching to EDF Energy’s Online S@ver Version 6. It does not matter where you live, you can usually save around £250 on average by switching.

Debt relief orders – introduced last April – accounted for just 11,831 of the 162,613 total insolvencies for 2009. But the number of people using them from the second quarter of last year to the end of the year grew a massive two and a half times.

Debt relief orders have got lenders in a spin because anyone granted one will have their debt discharged after a year. The creditors are unhappy because they think they are too easy to get.

They are losing money because the debts are wiped out so quickly – bad news for them, but great news for anyone struggling under the burden. The debt relief order costs just £90, and will help you deal with debts of less than £15,000.

To qualify for a debt relief order, you cannot own your home, must have less than £300 in assets and a disposable income of no more than £50 a month. While this will not help everyone, Citizens Advice reckons around 50,000 people – about a third of the clients it advises – will be eligible.

But even if you are not one of these people, there is plenty of debt help available:

Debt Management Plan

The simplest way to deal with your debts is with a debt management plan. You get an expert to help you formulate the plan, and they will also help to liaise with your creditors. As they know what they are doing, they are likely to get a better result for you than if you did this yourself.

Your interest will be frozen, stopping your debts from growing any more, you can reduce the total amount you owe – as many creditors will write off a portion of your debt – and you pay a set amount each month that you can afford, agreed with the debt management advisor.

Failing to keep up with this could result in your creditors taking action against you though, and because this is an ‘agreement’ rather than legally binding, they could change the terms any time.

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding agreement, and you pay a full and final settlement to your creditors, and the debt is cleared within five years. You have to owe more than £15,000 before you can consider this as an option, but once you have 75 per cent of your creditors voting in favour of this option, you know you are on the way to being debt free.

You have to disclose the value of all your assets, and you would pay an agreed amount per month for a set period, usually five years. The IVA is run by an insolvency practitioner, so you must get advice before signing up.

Bankruptcy

This is the most extreme form of debt protection, yet can be started – by you or a creditor – if you owe as little as £750.

You have to petition the County Court or High Court for bankruptcy, and everything you own will be taken into account for the bankruptcy order. The Official Receiver handles your case, and he or she will decide how your assets should be used to pay off your debts.

A bankruptcy order costs £510 to get – so it is not cheap – and the rules are much more stringent. You cannot get credit, and you can only have a minimum amount of disposable income.

Many bankruptcies are now discharged within a year, so it could be seen as a short –term blip. But don’t be fooled, it will have a big impact on your ability to get credit for years to come. It is not an easy way out.