Apr
28
2021

Archive: MoneySavingExpert's Money Tips Email

28 April 2021

Over 50 ways to save, incl... how to borrow at 0%, Martin's warning to parents, Nectar shake-up, 100GB Sim '£9.50/mth', new top savings, Boots & Fitbit hacks, free £100+, new student loan rate

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A masterclass in borrowing... if you need to
How to borrow at NO COST (0% interest) & maximise your protection

Cheapest routes whether it's a new fridge, kitchen, car & more

Lockdown's easing, retail's opening, and spending's likely to restart. Some will be able to draw on savings but others will be thinking about taking on new debt. So if you're going to borrow, we want to ensure you do it the cheapest and safest way.

It's worth being aware that the lending landscape has changed during the pandemic. Buy now, pay later options from Klarna, Clearpay and others have exploded - pushing many, sometimes inadvertently, into debt when they pay online.

That's dangerous. Borrowing should always be conscious, via the right method, and never done willy-nilly...

Don't borrow unless you NEED to. If you do need to, ensure it's a planned purchase, you can afford repayments and you'll repay as quickly as possible. If you can't afford it, don't do it.


So let's take you through the pros, cons and cheapest options product-by-product.

Credit cards: 0% for up to 21mths + Section 75 protection

MSE guide to the best 0% credit cardsDone right, credit cards are the cheapest way to borrow at no cost for a decent time, though that's provided you can pay for what you need on a card (eg, replacing a broken fridge or washing machine). Yet it takes discipline not to overspend on it. 

✔️ Pros: Interest-free for a decent time | Gives Section 75 protection - so card provider jointly liable for purchases | Regulated - so can complain to the ombudsman if you've problems | Can check eligibility without applying

❌ Cons: Easy to overspend and overborrow | Repayments aren't fixed, so easy to underpay | Not everyone can get one

Top deals right now: What really counts is what you'll be accepted for, so ALWAYS check which 0% spending cards you're most likely to get first. Current top deals are:

- Longest 0% deal: Lloyds Bank 'up to' 21mths 0% card*.
- Longest non-up to 0%, with rewards: M&S Bank's 20mths 0%*. Unlike Lloyds, all accepted get the full length plus M&S points on spending (though don't let that encourage you to spend too much).

Only use these cards for a planned purchase(s) - NOTHING ELSE - then ensure you repay it within the 0% period. It's best to set up a direct debit repayment for a fixed amount, like with a loan, to ensure you clear it (and never miss a payment). After the 0%, both cards jump to 21.9% rep APR.

Full info and more top picks in Top 0% Cards (APR Examples).

Loans from 2.8%: Best for bigger borrowing, fixed repayments

This is your only prime route for most borrowing of £3,000 and above. So while a card might be good to use to replace a broken fridge, a loan is a better option if you need to replace the whole kitchen. You'll pay interest, but rates are currently close to all-time lows.

✔️ Pros: Allows bigger borrowing & longer to repay | Fixed repayments - so easier to repay in set time | Can check eligibility without applying | Harder to borrow more | Regulated - so can complain to the ombudsman if you've problems

❌ Cons: Allows bigger borrowing | Not interest-free | No Section 75 protection | Not everyone can get one

It's also worth being aware acceptance is not just on credit score; the more you borrow, the bigger an impact your income has. As always, if you do need to borrow, try to minimise both the amount and the term (ie, repay as quickly as possible).

Top deals right now: What really counts is what you'll be accepted for, so ALWAYS check which loans you're most likely to get first. Current top deals are...

- For £3,000-£4,999: Ratesetter 7.8%*, AA 8.3%*
- For £5,000-£7,499: Ratesetter 2.8%*; Virgin Money 3.4%*, Tesco Bank 3.4%*
- For £7,500-£15,000: Cahoot 2.8%*, MBNA 2.8%*, Ratesetter 2.8%*

Important: All these loans are 'representative APR', which means sadly only 51% of accepted applicants need to get the rate shown. Full help and more deals in our Cheap Loans guide. Also see Rep APR Examples.

PS: Struggling for acceptance at a decent rate? It's always worth finding your local credit union, as often these local savings & loan co-operatives will give you far better options than high-cost credit.

Buy now, pay later: Easy, interest-free, but only for 3mths and no protection

The MSE guide to buy now, pay laterBuy now, pay later (BNPL) does exactly what it says on the tin. Usually, you get offered it at the checkout when you're buying something - pushing you to get the item now and to spread the cost over a few weeks or months. Our new Should I buy now, pay later? guide takes you through it.

✔️ Pros: Interest-free | Easy to get | Repayments are fixed

❌ Cons: Many borrow when they don't need to | It's (currently) unregulated - no recourse to the ombudsman if things go wrong | No Section 75 protection on purchases | Short-term only

The biggest problem with BNPL is people get it when they don't need it. They attempt to seduce people in at online checkouts as "an easy way to spread the cost", but if you weren't originally planning to borrow for what you're buying, don't.

However, if you do need short-term borrowing on items you need for up to a couple of hundred quid, provided you can afford to repay, it's easy and interest-free. There are no top picks here as it's linked to your shopping.

The only major concern is if things go wrong - hitting your credit file, no delivery of items and more. There's little recourse, as it's not yet covered by the Financial Ombudsman. Plus the Section 75 rules don't apply, so it's best avoided for anything larger.

0% credit card loans: Good for smaller amounts but complex

If you want a cash loan (eg, you're buying something you can't pay for on a credit card), then for less than £3,000, a 0% money transfer credit card may be a way to effectively get one far more cheaply than traditional loans.

Here, for a one-off fee of 3-4% of the amount shifted, you transfer money from the card to your bank account, then owe the card firm instead. 

✔️ Pros: Interest-free for a decent time | Can check eligibility without applying | Regulated - so can go to the ombudsman if there are problems

❌ Cons: One-off fee | No Section 75 protection | Easy to overspend and overborrow | Repayments aren't fixed, so easy to underpay | Not everyone can get one

Like with 0% spending cards, money transfer cards are best for those who trust themselves to use them only for a one-off purchase and to clear the card before the 0% ends. These cards are complicated, so please read our 0% Money Transfers guide to ensure you get it right.

Top deals right now: What really counts is what you will be accepted for, so ALWAYS check which 0% money transfers you're most likely to get first. The current top pick is MBNA's up to 18mths 0% (2.99% fee)*, though some poorer credit-scorers may get a 3.49% fee. After the 0% ends, it's 22.9% rep APR (APR Examples).

Once you have a card, do the transfer ASAP. Then ensure you repay it within the 0% period - the best route is to set up a direct debit repayment for a fixed amount, a bit like if you had a loan, to ensure you clear it (and never miss a payment).

Overdrafts, student loans, mortgages, payday loans, car finance and other lending...

If you're looking for new borrowing, we've run through the main options that are worth doing, yet they're not the only borrowing fish in the debt sea. And there are specific loans that may be better (or worse) in some cases. So let's just briefly whizz through those...

  • MSE guide to cutting overdraft chargesOverdrafts are a new debt danger (cut yours to 0% and get paid £100). Overdrafts are a costly form of debt for most, they now average a hideous 40% APR and are best avoided. If you're already overdrawn, one option worth looking at is shifting to First Direct, as it has a £250 0% overdraft for most, and pays you £100 which will help clear it further. More help in Slash your overdraft costs.

  • Mortgages are a whole other category. If you're planning to buy a new home, or are getting a new mortgage on your current home, that's a different story and is too much to put in here. There's a huge amount of help in our mortgage MoneySaving section.

  • Is your car a wreck and you need a new one to get to work? The cheapest way to borrow to buy a new car is usually with a cheap personal loan. However, specialised car finance packages can be more flexible. Our car finance guides have full pros and cons of each.

  • Student finance works more like a tax than a loan. Many people get what's called borrowing to go to uni, whether that's for tuition fees, living costs or both. Yet in practice what (if anything) you repay and the interest depends on what you earn afterwards, so it's actually a bit like tax - the more you earn, the more you pay. Find out how they really work in Student Loans Mythbusting.

  • And finally... don't touch payday loans or high-cost credit with a bargepole. They're an interest and financial nightmare. If you've got one, check out our Payday Loan Help guide. If you previously had one, you may also be able to reclaim mis-sold payday loans.
In debt crisis? Don't borrow - get free debt help

The options above are for new, planned borrowing. Yet some try to borrow their way out of debt. It doesn't work, so don't try it. Martin has three questions that are worth asking about your debts...

- Do you struggle to meet minimum monthly payments?
- Does your total debt (excl mortgage and student loan) exceed a year's salary?
- Do you have sleepless nights or depression/anxiety over debt?

If you've said yes to any of these, don't borrow more - instead get free, one-to-one debt counselling help from Citizens Advice, StepChange or National Debtline. And if you need emotional support, try CAP.

They're there to help, not judge. The most common thing we hear after is: "I finally got a good night's sleep." Read inspiring stories in our Debt-Free Wannabe forum and see our Mental Health & Debt and Debt Crisis Help guides.

 
 

DON'T believe the fake 'Martin Lewis' or 'MSE' ads
Lots of scam ads litter social media and even newspaper websites - some of these lie that we or Martin promote Bitcoin, binary trading etc. See Fake ads warning.

 

 
 

Martin: 'A warning to parents - whether your child's 7 or 17, be prepared. There's a hidden parental contribution if they go to uni - our NEW CALCS show how much you need to save'


True independence aged 18?The MSE how much should you save for your child to go to university calculators Well, that may be old enough to vote, marry, or fight in the army, but no... those who go off to university usually find the value of the maintenance (living costs) loan they get is dictated by a means test of 'family residual income', which for most really means parental income. 
The higher it is, the less you get.

Logic implies parents are expected to fill the gap, which can be over £10,000 during a course - tough to fund if unexpected. So this warning isn't about tuition fees, but the less discussed issue of living loans. To help, we've new 'How much to save for my child to go to uni?' calculators, adding the other UK nations to our one for England.

  • The MSE how much should you save for your child to go to university calculatorsEach UK nation is different - so we've separate calcs / info for each. What counts is where you are usually resident, not the UK country of study.

    - England: The living loan starts to reduce when total family income is just £25,000/yr and by the time it's about £60,000/yr it can be halved. Check out your situation in the England parental contribution calc and guide.

    - Scotland and Northern Ireland: In both countries, students get a mix of a loan and a non-repayable grant to live off. A bigger family income means a bigger proportion of this is a loan. Yet as higher income also reduces the total support, it means a shortfall here too. Check out your situation in our new Scotland and Northern Ireland parental contribution calcs and guides.

    - Wales: This is the only UK nation with no parental contribution. Here family income dictates what proportion of the total support received for living costs is a loan and what is a non-repayable grant. See our new Wales living funds info.

  • Outrageously, you WON'T be told about this - even when you get the loan. There's barely a mention of this in the official literature. Students just get a letter telling them what their living loan (and/or grant) is - without indicating how much it has been reduced due to the means test.

    That leaves many heading off to uni without knowing their loans are a fraction of the full amount. I've met students whose parents won't give them money as "it's about learning independence", without realising their loan's been halved, in the expectation of parents meeting the gap. Students have no way of forcing parents to make a contribution, but at least awareness of the system helps to start a conversation and reduces friction.

  • I will again ask govts to at least make this transparent. For years, I've met a parade of UK university ministers to ask them to make this transparent. They've all nodded but done nowt. I will write again though, this time not just to the ministers for England (UK), but also Scotland and Northern Ireland.

  • Bust more student finance myths. Correcting misunderstandings about this is a passion for me...

    - Watch my Student Loans Decoded 1hr prog designed for parents and future students (perfect to show to a class).
    - Read the Student Loans Mythbusting guide to take you through the system step by step.
    - Watch the Should I pay off my Plan 1 student loan? video or read Should I pay off my Plan 2 student loan?
    - And for those not yet ready for uni, download a copy of the free personal finance education textbook.
 

Jaw drop! A huge 100GB of mobile data for just '£9.50/mth'. Why pay more? MSE Blagged. You get unlimited minutes & texts, and enough data to stream all series of Line of Duty every month with this Three Sim*. It costs £15/mth but until 11.59pm on Fri we've blagged you £67 cashback, automatically paid after 99 days. Factor that in over the 1yr contract and it's equivalent to £9.42/mth - the cheapest of its type we've ever seen. Want a different network / a handset / less data? Use our powerful Cheap Mobile Finder tool.

Revealed: Sainsbury's mystery Nectar shake-up. It's made changes to its Nectar scheme incl stopping weekly offers for some but WON'T give full details. Yet we're piecing it together from your feedback... Nectar shake-up.

Martin: 'Govt votes down interest rate cap for mortgage prisoners, keeping 250,000 in financial hell - but we won't stop fighting.' See mortgage prisoners' fight continues.

8 Boots hacks (incl new up-to-70% off clearance sale). Full info in Boots bargain bonanza.

Three banks now pay a FREE £100+ to switch - but not for long. Choose from... Top service: First Direct*, rated 91% 'great', offers switchers a free £100 and many a £250 0% overdraft. Top for upfront cash (ends 9 May): HSBC offers switchers to its Advance account* a free £125 + a £20 Uber Eats vch. Top for possible monthly cash (ends 4 May): Switch to a Halifax Reward account and you can get a free £100, plus if you spend £500+/mth on its debit card or keep £5,000 in the account you can get £5, 2 movie rentals or 1 cinema ticket each month. Full details, incl crucial bonus eligibility info, in Best Bank Accounts.

Student loan interest is currently up to 5.6%, but we think we now know next year's rates. For what we're predicting for the new rates from next term, and how we're predicting them, see Student loan interest rate to be cut?

'A big thank you - we saved £2,000 a year switching energy.' Success of the week. We were gobsmacked by the amount, but it shows the value of doing an energy comparison to check you're not overpaying. Jane emailed: "A big thank you. Saved £2,000 a year switching electricity company. Great tips on weekly emails. You are a star ⭐." (Send us your MoneySaving success on this or any other topic.)

 
 

New. Top savings. Finally rates are on the up... a smidgeon, though even a little helps. How to maximise every penny in safety

Staggeringly, the Bank of England estimates £180,000,000,000 of extra savings has built up during the pandemic - as many of those still in work (or some on furlough) saw their commuting and other costs slashed. The problem... interest rates are pitiful, so for those who want to put money away in total safety, returns are poor. We can't do too much to change that, but can at least show you how to maximise every penny in Top Savings. All accounts here have the full £85,000 savings protection...

  • MSE guide to the top savings accountsNew. Top easy-access account, and this time it's a cash ISA. With easy access, you can put money in and take it out whenever you want. Interest rates are variable though, so keep an eye on them. Top picks...

    - Top cash ISA 0.45%. A cash ISA is just a savings account you don't pay tax on, yet as most people don't pay tax on savings anyway, and ISA rates aren't normally that hot, we rarely mention them. Unusually though, the current top easy-access cash ISA from Kent Reliance 0.45% AER (min £1,000) pays more than normal savings. So if you're not already using your full £20,000/yr ISA allowance, you may as well grab it. More info in Top Cash ISAs.

    - Top normal savings 0.41%. Paragon Bank 0.41% AER just pips Goldman Sachs' sister brands Marcus 0.4% AER* and Saga 0.4% AER*. All let you save from £1. Full options in top easy-access savings.

  • Ends Fri. Earn 1.25% easy access + £10 cashback via special MSE code. Newbies to autosaving app Chip can get a higher rate on up to £10,000, plus some can get £10 cashback on top. Yet it's complex, so read our full 1.25% savings help first.

  • New. Top fixed savings: 0.63% for one year. If you're prepared to lock your money away without access, you can earn more and the rate is locked in. Top 1yr fix: Shawbrook Bank's 0.63% AER (min £1,000). Top 2yr fix: United Trust Bank's 0.8% AER (min £5,000). Or longer fixes pay up to 1.35%. Full help and more options in top fixed savings.

  • Special accounts to boost your interest even further...

    - 50% bonus for many on universal credit or tax credits. Find out if you're eligible for Help to Save.
    - 25% bonus for first-time buyers age 18-39. 
    Open one ASAP - full info in Top Lifetime ISAs.
    - Pay off debt with savings? Don't save if you've costly debts - see Pay off mortgage? and Pay off credit cards?
    - Earn up to 3.5% if you save each month. Big interest on smaller amounts - full info in Regular Savings Accounts.
    - Earn 2.02% on smaller savings. Some current accounts give higher rates, but with strict criteria.
    - Earn '1%' with Premium Bonds, but prizes are a lottery. Full info and who they're best for in Premium Bonds.
    - Prefer to invest? Possibly much higher returns, but losses possible too - see Stocks & Shares ISAs.

    Full options in our savings section.
 

11 Fitbit tips, incl save £50 with the right colour & add free Fitbit features to your phone. With many out walking / running more as the weather warms up, we've taken steps (sorry) to update our Fitbit MoneySaving tips.

ALERT. Watch out for a cheque if you're an HSBC, First Direct, M&S or John Lewis bank customer. It's not a scam. There's a new refund scheme for those wrongly charged interest - find out more in HSBC / First Direct refunds.

NOW SOLD OUT 72 flowering plants for £20 delivered (norm £55, reduced from £113). MSE Blagged. 2,000 bundles available, though not in NI. Suttons plants

On universal credit? Beware a bank holiday payment trap. It's complicated but the upcoming bank holidays could mean you get NO universal credit in May. See full info in universal credit bank hol help.

Spotify to hike prices for some by up to £24/yr. From June, but you can cancel penalty-free. Spotify hikes

5,000+ mags & newspapers on your phone / tablet for free, eg, OK, Gardeners' World, Good Housekeeping. MSE Blagged. 2mths' free access for newbies to app that lets you read mags offline. Mag-nificent

 
 

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AT A GLANCE BEST BUYS

Longest 0%: HSBC (check eligibility / apply*) or M&S Bank (check eligibility / apply*29mths 0%, 2.75% fee - min £5 (21.9% rep APR) 

No-fee 0%: Santander 18mths 0% (check eligibility / apply*) (20.9% rep APR)

Cheapest good-service deal: Green 12mth variable, save £242/yr
Cheapest good-service fix : Green 12mth fix, save £167/yr
Cheap big-name deal: E.on Next 12mth fix, save £159/yr
Want us to help you pick a tariff and switch you yearly? Try MSE Pick Me A Tariff Every Year

Savings include £25 MSE cashback & bill credit (where paid). Assumes typical use vs price cap. Links go via Cheap Energy Club.

Top standard easy access: Paragon Bank 0.41%, min £1
Top easy access cash ISA: Kent Reliance 0.45%, min £1,000
Top one-year fix: 
Shawbrook Bank 0.63%, min £1,000

Get comparison site quotes in this order:

  1. MoneySupermarket*
  2. Confused.com*
  3. Compare The Market*
  4. Gocompare*

Cheapest for £5,000-£7,499: Ratesetter (check eligibility / apply*) (2.8% rep APR)
Cheapest for £7.5k-£15k:
 
Cahoot (check eligibility / apply*), Ratesetter (check eligibility / apply*) or MBNA (check eligibility / apply*) (2.8% rep APR)

Standard b'band & line rent (10Mb+): Plusnet equiv £13.99/mth
Fast fibre b'band & line rent (30Mb+): Shell Energy equiv £17.83/mth
Superfast fibre b'band & line rent (55Mb+): Shell Energy equiv £18.74/mth

Free £125 for switching + £20 Uber Eats vch: HSBC
Free £100 for switchers + top service
:
 
First Direct

 

THIS WEEK'S POLL

Which stores do you LOVE or LOATHE? Retailers love us to have a relationship with them. Indeed, many people feel an almost intimate connection with some brands, but wouldn't be seen dead crossing the threshold of others. So this week we want to know how you feel about some of the biggest names on the high street and online.

Most MoneySavers say it's acceptable to borrow for a new home or car - but not for Christmas. Last week, we asked what you think it's appropriate to borrow for - over 4,000 of you responded. Almost everyone - 97% - said it's OK to borrow for a new home, and 87% for a new car, but only 6% said the same for Christmas - and most were also against borrowing for football season tickets, hobby equipment and holidays. See the full poll results.

 
 

MONEY MORAL DILEMMA

I sold the books my brother didn't want - should I share the money with him? For the last four years, I've stored various things given to me and my brother at my house. My brother's made it clear he doesn't want any of them, so I've begun to sell some to free up space - I got £50 online for a couple of books. Now my brother says I should give him half the money, even though I stored them, listed them for sale, paid the listing fees and posted them off. Enter the Money Moral Maze: I sold the books my brother didn't want - should I share the money with him? | Suggest an MMD | View past MMDs

 
 

MARTIN'S APPEARANCES (WED 28 APR ONWARDS)

Wed 28 Apr - Ask Martin Lewis, BBC Radio 5 Live, 1pm. Listen again
Thu 29 Apr - This Morning, ITV, 10.30am, then phone-in from 11.10am

MSE TEAM APPEARANCES (MOST SUBJECTS TBC)

Thu 29 Apr - TalkRadio, Early Breakfast with James Max, personal finance news review with Steve Nowottny, from 5.35am
Sat 1 May - BBC Radio Leicester, Mid-morning with Summaya Mughal, from 11am
Tue 4 May - BBC Radio Berkshire, Mid-morning with Sarah Walker, with Guy Anker from 11.40am on travel rights
Tue 4 May - BBC Radio Cambridgeshire, Mid-morning with Jeremy Sallis, from 12.40pm

 

HOW TO GO GREEN WITHOUT IT COSTING THE EARTH

That's all for this week, but before we go... last Thursday was Earth Day, an annual global event to show support for environmental protection, so we asked you what eco-friendly things you do which also save cash. Top tips included buying a second-hand sofa and investing in a water butt, while one MoneySaver simply said: "Washable everything - wipes, nappies, cloths, hankies, napkins." See the full list of tips and add your own on our Earth Day Facebook post, and for more inspiration, see our 26 quick ways to go green and save guide.

We hope you save some money, stay safe,
The MSE team