For all the resilience the UK economy has shown, there is no doubt that this year's ISA season is set against a backdrop of uncertainty. Whatever the pros and cons, Brexit, and a lack of clarity on what our future economic relationship with the EU will look like, has left us at a crossroads.
Energy price caps - how you can do more to save
The so-called Beast from the East may have subsided, but despite a welcome rise in the mercury, there is one inescapable consequence of the cold winter we've just endured - high energy bills.
The steady increases in the cost of gas and electricity has been a major issue for a long time, with the public aghast at how the Big Six energy firms (British Gas, EDF, E.ON, Npower, Scottish Power and SSE) ostensibly exploit consumers' need to keep their homes warm. In particular, those on standard variable tariffs (SVTs) have consistently seen price hikes which have comfortably exceeded the level of inflation. Recent analysis by the Guardian found that UK consumers on SVTs collectively paid over the odds to the tune of nearly £1.5bn to the Big Six last year.
However, the balance of power appears to have finally shifted, as legislation for a cap on energy bills was announced in parliament last week.
How will the energy cap work?
The proposal, known as the Domestic Gas and Electricity Bill, will cap energy bills for roughly 11 million Brits who remain on SVTs or default tariffs. Regulator Ofgem will be compelled to implement this cap when the bill is enshrined into law by the end of the year, and it will be in force until at least 2020 - with the option to extend the cap until 2023.
Experts believe this will save consumers on these plans in the region of £100 per year, and thus bring welcome relief in the face of controversial tactics from major energy suppliers with regard to their customer communications and pricing.
So, the energy cap is a good thing, right?
On the face of it, the answer is yes, and certainly for those on SVTs or default tariffs, it will mean many more pennies remain in their pockets. However, as with any price cap, market forces can respond in unfavourable ways.
For example, some within the industry are fearful that firms will hike costs for other types of tariff in a bid to compensate for lost profits. Specifically, it is thought that fixed-rate tariffs (whereby unit costs for gas and/or electricity are fixed for a set period) will be a soft target.
At present, switching providers remains the best way to substantially cut energy bills. However, if those on SVTs and default tariffs now believe they are on an acceptable deal (given the price cap), and the gains from switching to a fixed tariff are reduced, then inertia is the likely outcome, and it is the Big Six oligopoly who stand to benefit.
Is switching worth it?
Whether fixed-rate tariffs end up being impacted by the price cap remains to be seen. However, relying on the price cap alone to save you money still makes little sense in most cases. Recent studies have found that the average annual cost of a SVT offered by the Big Six is roughly £300 more than the average cost of the best 20 deals on the market. Even factoring in exit fees (if applicable), it is clear that there are huge gains to be made by switching provider and/or to a more competitive fixed-rate tariff.
Such a glaring saving is finally beginning to be made by more of us, with Energy UK reporting that 5.5 million Brits switched electricity supplier last year - a 15 per cent increase on 2016. Separate figures from Ofgem showed that the corresponding figure for gas was 4.1 million.
How does switching supplier work?
For many UK consumers, there are two common myths that deter them from switching supplier: a perceived lack of competition, and the 'hassle' involved.
In fact, there are nearly 70 different energy suppliers in the UK, and thus an abundance of alternatives to the market leaders. And, as for the process of switching, it could hardly be much simpler. It is merely a case of finding the deal/provider which appeals to you, contacting them to initiate the switch, and leaving them and your existing supplier to take care of the rest. There is no disruption, no messing with the pipes - the same gas and electricity will still be used to power your home, it will just be someone else in control of the (cheaper) bills. And the switch should be completed within three weeks.
Can I trust smaller providers?
While the Government's introduction of energy price caps Is well intended, and will be cheered by many households, the Big Six will continue to profit significantly until we shake our reluctance as consumers to switch, as this is where the biggest savings of all are going to waste.
While brand reputation is important, the truth is that you'll generally stand to benefit financially if you look further afield in terms of energy provider. And even if your new, possibly smaller, provider goes bust, Ofgem is obligated to transfer you to a new supplier, with zero disruption to your supply.
The power of collective action
No amount of Government intervention can match the collective force we have as a public when it comes to energy. The more we switch, and play the many, many suppliers against each other, the greater the downward pressure on this household cost will be. By sparing a few minutes to compare prices, and taking action accordingly, we as consumers have the ability to create a self-fulfilling prophecy that will not only fix the 'broken' energy market, but also leave us with healthier bank balances in the process.
The 2019 ISA season is now in full swing, and it's as good a time as any to focus on financial planning - and, within that, looking ahead to your retirement years to ensure financial security.
The Lifetime ISA (LISA), announced in 2016, would prove to be one of George Osborne’s last flagship gestures to UK savers and investors as Chancellor, eventually launching against a backdrop of anti-climax a year later in April 2017.
As the tax year end approaches, the financial services industry readies itself for a flurry of activity. That's in large part because, with just a couple of months to go, the so-called 'ISA season' is upon us.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Loan underwriting is the process that we undertake to analyse all of the information provided by each loan applicant and their credit file to assess whether or not that applicant meets our minimum loan criteria. As part of that process all data is verified, analysed and summarised to paint a picture of each applicant.
When you earn interest from a regular bank savings account, for example, the bank automatically deducts basic rate tax (currently 20%) before paying your interest. With interest earned from peer-to-peer lending, tax is not deducted automatically so lenders will need to declare their income to HMRC.
As 2018 draws to a close, with our bellies full of Christmas turkey, it's only natural to look back on the past 12 months and reflect. No doubt, it's been a turbulent one economically and politically, and not everyone has had it all their own way.