Holly's Blog: Strepsils, energy caps and Interactive Investor on the move
By Mike Narouei, Content Producer at Boring Money
6 Sep, 2017
So. In the news this week. An opinionated headline-hungry blonde at the Tory Conference we all wish would disappear in a puff of their own hot air. I refer of course to Katie Hopkins. And Theresa May wins the national “I’ve had the worst week at work” award. Amidst the Strepsils and the pantomime, there were 2 important personal finance announcements. Energy caps and changes to tuition fees.
Ed Miliband first floated the idea of energy caps to widespread derision some years ago. “Red Ed revives 70s socialism” shrieked the Mail. How times change. Although there’s an argument for caps stifling competition, the energy companies have continued to abuse their power and I think we do need this cap. The pricey “Standard Variable Tariffs” effectively punish either loyalty or apathy (depending on how you look at it.) But whilst we wait for the Government or the regulator to act, do check out any of the energy comparison sites if you haven’t switched for 12 months or more. Switching takes about 10 minutes to complete and you can get a quote in about 2 minutes on uSwitch if you know which plan you’re on today. I know it’s boring but it is one of my fundamental 5 easy-things-to-avoid-being-rinsed-by-greedy-Big-Boys.
Tuition fees will be capped at today’s levels of £9,250 in England. More meaningful is the increase in required earnings to £25,000 before repayments kick in (which will be levied at 9% of income above this). Calculations suggest this means the ‘typical’ graduate – whoever that is! - would pay back £15,700 less over 30 years, before any unpaid loans are written off. And an estimated 83% of grads won’t pay back their loans in full. For parents struggling with the idea of “Should They. Shouldn’t They?” about uni - don’t let the loans headlines put you off. This is really a sort of supplementary income tax for your kids in the future, rather an a straight-up loan.
An investment marriage and a new fixed-fee baby
In other more specific investment news this week Interactive Investor has pushed the GO button on the integration with the acquired TD Direct (https://www.boringmoney.co.uk/best-buys/stocks-and-shares-isas/td-direct-investing-stocks-and-shares-isa/) business. Clients of both will all be housed on the TD technology system. But with the Interactive Investor (https://www.boringmoney.co.uk/best-buys/stocks-and-shares-isas/interactive-investor-stocks-and-shares-isa/) brand and the Interactive Investor fixed £ fee (not the TD % fee). Which typically favours larger accounts of £50k +.
I met the Chief Grand Fromage of Interactive this week and I think this merger has the potential to deliver a big new player to the pricier Hargreaves Lansdown dominated scene. But shifting tech platforms is never easy. Both the TD and Interactive gang will be continuing to watch the ongoing fallout from grumpy Barclays Stockbrokers clients who are hating the migration to the new, ‘shinier’ platform. Barclays Smart Investor (https://www.boringmoney.co.uk/best-buys/reviews/barclays-smart-investor/). You can see what they have to say on our Reviews pages and it’s not pretty!
Pre-paid cards and apps for kids
I have set up accounts for both kids with Osper – applied for the second one last week. A pre-paid card for children which you can load pocket money to and it teaches them all about budgeting and saving. But the customer service from Osper has been so bad this week (I have tried 4 times to speak to someone on the phone and been diverted to a messaging service with no calls back) that I am going to up sticks and move to competitor goHenry instead. Another job on the admin pile………#sigh