NEWS… BUT NOT AS YOU KNOW IT
I’ll let you in on a secret. The vast majority of money ‘news’ is made up. I mean, it’s not necessarily inaccurate, but it’s based on press releases sent to every news outlet in the country.
Some of these so-called news releases are vaguely interesting, occasionally they offer a genuinely new perspective or insight. Others make me want to pull my eyelashes out. All of them have one thing in common: an agenda.
Other than official statistics – things like how much we’re all borrowing on credit cards as counted by the Bank of England, or how many homes were bought and sold based on registered titles at the Land Registry – it’s all biased.
So is it useless? Not necessarily, but a little bit of cynicism is no bad thing when it comes to making money decisions. Here’s what I mean…
Who said it: Pensions And Lifetime Savings Association.
Why they said it: They represent pension companies, which want you to put more money in your pension. These companies make money out of ‘managing’ your savings. Effectively it’s lobbying.
Is it useful? The underlying principle is useful. Most of us aren’t saving enough to ensure we have a comfortable retirement and we could all do with saving more. However, pointing that out is slightly annoying if you can’t afford to max out your pension contributions.
What to take away from it: If you can, increase your contributions – if you’re employed it effectively gives you free money from the government and your employer. If you’re self-employed, you’ll still get a top-up from the government and you can use pension contributions to cut the tax you pay.
Who said it: Everyone.
Why they said it: Give a day a name and suddenly it’s a marketing opportunity.
Is it useful? Not sure. Several companies put out statements warning that poor mental health can lead to financial problems and financial problems can lead to poor mental health. Most of these companies offer, guess what, financial advice or planning and charge a pretty packet for their services. Useful for rich people, but not for the vast majority of us.
What to take away from it: Get help if you’re stressed about money. There is nothing to be ashamed about. Everyone is struggling with bigger and bigger bills.
StepChange Debt Charity: 0800 138 1111
PayPlan: 0800 280 2816
National Debtline: 0808 808 4000
Citizens Advice: 0800 144 8848
Debt Advice Foundation: 0800 622 61 51
Turn2Us: 0808 802 2000
Who said it: Timothy James & Partners.
Why they said it: They are independent financial advisers and want you to think they can solve this problem for you.
Is it useful? Well, it’s true-ish. Saving for your retirement is generally a good idea and investing those savings sensibly for your circumstances is a really good idea. But paying between one and two per cent of your savings to an independent financial adviser every year is going to take a chunk out of any returns you make on those savings.
What to take away from it: If you can afford to pay for financial advice, you’ve probably got upwards of 50 grand in your pension. If you can’t, or you don’t fancy handing over a wedge to an adviser, have a look at Vanguard’s LifeStrategy range of tracker funds. Average charges are 0.2 per cent and they’re probably a good bet for anyone unsure about where to invest their pension.
Who said it: Nationwide Building Society.
Why they said it: All banks and building societies want more customers. People like having banks and building society branches where they live. Nationwide wants that cosy association in your mind.
Is it useful? Access to cash is absolutely vital, especially for older people. Keeping branches open is also really important. For some customers, going into a branch will save them from being scammed and, for others, it forms part of their social interaction. I really think these branches are a public service. By supporting that, Nationwide’s doing a good thing.
What to take away from it: Keep using cash so access to it continues for those who rely on it. There’s also the old argument that spending in cash rather than on a card is a really helpful way to budget and spend less.
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Who said it: money.co.uk.
Why they said it: They are a comparison website. They make money when you switch your broadband, energy provider, mortgage, credit card, savings, car insurance. You name it, they earn commission on it.
Is it useful? The principle is useful. It’s likely that if you haven’t switched, for example, your broadband or car insurance since your deal ended, you’ll be paying far more than you could be paying. Switching to a cheaper deal will take at least some of the pressure off, hopefully meaning you can rely less on credit cards, overdrafts or buy now, pay later schemes.
What to take away from it: It’s worth a trawl through all your monthly bills and checking whether you could switch and save. Usually, though, you’ll get a better deal by going directly to the provider.
Who said it: Yonder.
Why they said it: Because they’re a credit card provider and they want people to think spending on credit cards is somehow related to being a responsible, educated person.
Is it useful? Yes. Arguing the case for financial literacy is. Learning maths provides the bedrock but we’re still leaving school none the wiser about what a mortgage is, why you have a pension or what investment means.
What to take away from it: Talking about money earlier in life is something we should all be doing more of. Responsible use of credit cards can help you when it comes to getting a mortgage. But only if you pay it off every month.
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