Experts are warning that up to a million households in the UK are facing ‘fuel poverty’ this winter after one of the country’s major energy suppliers announced price rises of £200 per year.  Scottish Power has announced that it will increase electricity prices by an average 10 per cent and gas prices by an average 19 per cent in August.

With the other ‘Big Six’ firms set to follow suit, most households in the UK are set to see rises in their energy prices this autumn. So, in order to avoid becoming one of those families plunged into ‘fuel poverty’, here are three tips to help reduce the impact of the price rises.

Shop around for a better gas and electric deal

The price rises come just months after energy companies raised gas prices by 5.6 per cent and electricity prices by 6.4 per cent. Scottish Power claims that wholesale gas prices have risen by 30 per cent and their UK retail director, Raymond Jack, said: “We understand times are difficult for many people and we have done what we can to absorb these additional costs for as long as possible to minimise the impact on our customers.”

One way to minimise the impact of rising prices is to shop around for the best gas and electric deal.  With fierce competition between energy suppliers, you can often save hundreds of pounds simply by switching on to a more competitive tariff with another supplier.

It is easy to compare gas and electric prices by using an online comparison service. You will typically need your postcode and your average gas and electricity usage (you can find your consumption on your latest bill). You will then be offered a number of tariffs which can save you money on your current bills.

Conserve your gas and electric

Reducing your consumption of gas and electric is also a good way of cutting your energy bills.

Installing a smart meter – a device that shows how much electricity your household is using – can be a good way of monitoring your energy habits and helping you to conserve power. Energy saving light bulbs are a simple and effective way of reducing your electricity bill, while taking showers instead of baths can also help to reduce the amount of gas or electricity you are using.

Fix your gas and electric payments

The charity National Energy Action believes that the planned price rises will result in a million households being plunged into ‘fuel poverty’. One way to protect yourself against future price rises is by considering fixing your energy payments.

Many energy suppliers now offer fixed rate tariffs which will guarantee your unit energy price for a specified period of time. This means that you can protect yourself against future price rises – although of course it means you won’t benefit in the event that gas and electric prices were to fall in the future.

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Over recent years, virtual credit cards have been more and more common. They have become a useful alternative to prepaid cards and other credit cards for fair credit and our guide looks at what they are, who they’re ideal for and what the main alternatives are.

What are virtual credit cards?

Virtual credit cards are a type of payment card that works in much the same way as a traditional credit card. However, the main difference between a virtual and a traditional credit card is that no physical card actually exists. Virtual credit cards can either be printed on paper for the duration of their use or simply exist in an electronic format.

When you need to make a card payment online or by telephone, the card details (card number, security number and expiry date) are all generated electronically. Depending on the provider of your virtual credit card the card information is either generated on a piece of software downloaded to your PC or on the card provider’s website.

Who are virtual credit cards designed for?

There are two main types of people that virtual credit cards are designed for.

Firstly, they are perfect if you already hold credit cards but you don’t want to disclose your card details to retailers.

Secondly, they are an excellent alternative to guaranteed approval credit cards or credit cards for fair credit. If you are struggling to be agreed for a credit card – perhaps because you have a less than perfect credit history – then virtual credit cards can work as a ‘prepaid’ card, helping you if you can’t get a credit card elsewhere.

The pros and cons of virtual credit cards

If you want to pay for goods and services from a retailer who you do not 100 per cent trust, virtual credit cards can work well. They enable you to avoid providing your actual credit card details to the retailer and, if the service is offered by your credit card company, you don’t even need to open a new account.

Virtual credit cards are also a good alternative to guaranteed approval credit cards if you want to buy goods and services by telephone or online and you don’t have a credit or debit card.

Bear in mind that virtual credit cards are only for ‘card not present’ transactions and so you can’t use them in High Street stores. They are designed for online and telephone use. In addition, you may have to download software to generate your card details which means you can’t use them if you’re away from your PC. And, as you get a different card number each time, you will always have to fill out payment details when you buy something online.

What are the alternatives to virtual credit cards?

If you’re struggling to be accepted for a credit card then you could also consider guaranteed approval credit cards. These cards are available to everyone, irrespective of their credit history.

In addition, credit cards for fair or bad credit are also available, although you may pay a higher rate of interest on these cards than on traditional credit cards.

Prepaid cards are also increasing in popularity. You load money on to a prepaid card and then use it to pay for goods and services or to withdraw cash from an ATM. You can never go overdrawn and there is no interest to the card provider.

Online services such as PayPal and Google Checkout are also viable alternatives to paying for goods and services. These systems hide your card details from retailers, although you do have to link these services to a credit or debit card.

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A Eurostat report published earlier this year found that 7 per cent of British internet users suffered financial losses in 2010, through so-called ‘phishing’ or ‘pharming’ attacks or fraudulent use of their debit or credit card.

Even though credit card fraud fell in 2010 – the Daily Telegraph recently reported that card fraud was down 17 per cent – identity theft and credit card fraud remains a serious problem. So, if you want to avoid being the victim of card fraud, why not consider these four alternative payment methods?

Cash

One simple way to avoid fraud on a debit or credit card is to pay with cash. Paying by cash concludes the transaction there and then, meaning there’s no possibility of your identity or personal details being stolen and used fraudulently.

Of course, the downside to paying for all items with cash is that you may have to carry a large sum of cash on your person, which wouldn’t be replaced if it was stolen or lost (unlike a card), unless you had insurance to cover the cash you carry on a day-to-day basis. However, careful account management could mean you use free prepaid debit cards or your bank account ATM card to withdraw cash as and when you need it.

Prepaid cards

A free everyday or travel prepaid card can be one of the safest alternatives to using a credit or debit card. Free prepaid debit cards allow you to top up your card with cash and this is not registered to your home address or to your bank account. This means that if your card was used fraudulently, the thief could only ‘steal’ the money that had already been topped up on to the card.

A prepaid travel  or everyday prepaid card is easy to manage and you can top them up by bank transfer online, at a bank or Post Office, or at a PayPoint.

If you’re considering this type of card, it’s important that you compare prepaid debit cards in order to find the one that is most suitable for you. While some free prepaid debit cards have little or no fees, others charge around £5-20 upfront. Also, some other prepaids levy a monthly fee or add a charge each time you make a purchase or top up your card.

PayPal

Another excellent alternative to free prepaid debit cards to pay for goods and services online is the payments service PayPal. PayPal allows you to use your bank account, debit or prepaid card securely without having to provide your financial details to different retailers each time you buy something.

Many websites now accept a PayPal payment and you simply log into your PayPal account when you confirm the payment for your transaction.

Secure online shopping

If you’re planning to buy goods and services online then it’s vital that you only do so through a site which is 100 per cent secure. Whether you’re paying for your item with prepaid debit cards, credit cards or PayPal, it’s crucial that the site is secure.

A good sign that the site is secure is the padlock symbol in your internet browser. The website address of the web shop will often start with ‘https’ which also indicates that the site is secure and that your payment information will be encrypted.

Alternatively, you can consult a website such as Shopsafe which has vetted over four thousand sites and rated them based on the security of their payment system.

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A survey by the Foundation in early 2011 found that home broadband was voted as the most useful technological innovation over the last decade. Home broadband has made access to the internet quicker and more convenient for millions of people in the UK.

And, since its introduction, the average broadband speed in the UK has risen while the price of the cheapest broadband has fallen.  It’s never been easier to head online to compare broadband prices in order to save money.

So, once you’ve secured the cheapest broadband, you are likely to need a router in order to allow all the PCs in your household to access the internet.  Here are three questions to ask when shopping for a router:

Why do I need a router?

In the past, PCs have been connected to the web through a modem. However, a modem usually allows just one computer to connect to the internet. So, if your household has several PCs you either need to install several modems and internet connections or you make your one connection available to all your PCs.  That’s the job of a router.

A router links your home broadband network with the internet. It can also help you link other devices together such as printers or external hard drives.

Should I choose a wireless or a wired router?

After you compare broadband suppliers and sign up to a service, your main choice is whether to select a wireless or a wired router.

A wired router can be useful if all your equipment is close together or you already have cables in place. However, if you may want to connect a PC that isn’t going to be in the same room as your broadband modem then a wireless router may be preferable.

A wireless router has aerials and ‘broadcasts’ the broadband signal around your home. Each PC has a ‘receiver’ that accepts the wireless signal – these are often built in or you can buy them as USB adaptors or internal cards.  It is advisable to place your router somewhere where there are as few obstacles as possible to the signal reaching your PCs as the radio waves can be affected by walls, ceilings etc.

What other factors should I consider?

One of the main considerations when setting up a home network is security. Whatever your average broadband speed, it’s often worth considering a router that has built-in firewall protection.  And, if you’re using a wireless router, other people may be able to piggyback on your signal and so it’s worth looking for either WEP (Wired Equivalent Privacy) or WAP (Wifi Protected Access).  And, don’t forget to set up a password when you install your router.

Another factor to consider is the ease of setting up the router at home. If you’re not a technological genius it is worth considering a router that is easy to set up at home. Most come with full instructions and have technical support, and reviews of products online will help you establish whether a router is easy to install.

Price will no doubt also be one of your main considerations. If you’ve shopped around for the cheapest broadband you may not want to pay hundreds of pounds for a state of the art router.  However, it’s often worth spending as much as you can afford on a wired or wireless router, and it’s also worth taking into account that you may need to buy cables or network adaptors for each PC that you want to connect to your home network.

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Over the last few years, saving money has become a way of life for millions of Brits. The increased focus in newspapers and online on the global financial crisis and the savings that can be made on a range of financial services have led more and more people to seek out ways of saving money on their household bills.

However, a recent survey from a comparison website has found that one in four Brits are still failing to shop around for any of the twenty most-common financial products. Millions of consumers are missing out on cost savings having never switched their current account, credit card or home insurance. Almost one in five have never considered changing their mobile phone provider.

And, despite offering some of the most significant potential savings, nine in ten people in the UK have never looked into how to save money on gas and electric bills.

Brits failing to compare gas and electric prices

The survey, published in the Financial Times, found that a quarter of Britons had never shopped around for any common financial products including home energy, bank accounts or car insurance.

31 per cent of respondents had never switched bank accounts, 64 per cent of people hadn’t changed their car insurance provider over the past year and 18 per cent had never switched their mobile phone supplier.

The figures were even more startling for home energy. Despite rising gas and electricity prices, just nine per cent of people had switched their energy supplier. This means that 91 per cent, which equates to millions, of Brits are missing out on hundreds of pounds of potential savings.

John Miles, business development director of the comparison website that conducted the survey, said: “Consumers could make much needed savings by reviewing their financial products and switching to a better deal. But, as our survey reveals, nearly a quarter of consumers haven’t switched on to the benefits of switching.

“Usually financial services providers offer the best deals to attract new customers – not to reward loyal customers. While over half of the people questioned in our survey recognised this, many are still not shopping around for best deals.”

How to save money on gas and electric

It has never been easier to compare gas and electric prices. Despite the industry regulator, Ofgem, conducting an investigation into the wide range of different tariffs offered by the major energy suppliers, comparison websites can help find the cheapest deal for you.

To compare gas and electric prices you will need two things. Firstly, you will need an idea of your average gas and electricity consumption which you can easily find from your latest bill. You will also need your postcode.

By entering this information into a comparison website you will normally be able to see which tariffs can save you money on your bills. The switching process is also very easy – you do not change your meters or any supply cables – and your new supplier will talk you through the straightforward process.

When you compare gas and electric prices it is not unusual to save several hundred pounds by switching supplier. So, if you’re one of the 91 per cent of Brits that haven’t changed your gas and electric supplier, isn’t it time you considered the savings that are available?

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A recent survey from Barclays found that increasing numbers of young people in the UK have difficulty in managing their money. Over a third of respondents aged between 16 and 24 said that they regularly ran out of money. Meanwhile, others didn’t understand how credit cards and current accounts worked.

So, if you’re looking to make your child more ‘money smart’, here are five tips to help you.

Help them open a bank account

There are lots of young persons’ current accounts on the market and opening a basic bank account is a good way to teach kids how to manage their finances. Children from the age of around 10 can generally open a bank account.

Shop around for the best current accounts for teenagers and you’ll find that many offer credit interest, a cash card for withdrawing money at an ATM and no monthly fees. You may have to provide your consent if you want your teenager to benefit from an electronic debit card.

Stress the importance of saving versus spending

Teaching children to save is an important part of their financial education. Understanding that they have to put money away in order to buy a more expensive item will teach them the benefit of keeping money in their savings or bank accounts until they have enough to pay for an item.

It’s also important that you make saving fun. Many banks and building societies offer accounts aimed specifically at children which try and make saving interesting. Buy a ‘fun’ money box which encourages kids to save their coins and then help them pay their money into the account regularly so they get used to seeing their savings build up.

Alternatively, you could consider paying them interest for money that they save at home. They will learn to understand how compound interest works and how quickly their savings can build up.

Give them an allowance in a way that promotes saving

Whatever pocket money or allowance you give your children, it often helps to give them the money in denominations that encourages saving. For example, if you give them £5 every week, give them five pound coins rather than a five pound note. This should encourage them to put one or two coins away for saving while keeping the rest as their spending money.

Charge interest on loans

If your children do come to you for a ‘loan’ or an advance on their allowance, why not consider charging them interest? Even a small amount of interest will help teach them how borrowing works, providing them with a useful lesson about the workings of credit cards and loans.

Help them set goals

By setting savings goals for your children you can help them become responsible for themselves. If they want a new gadget, toy or video game, you can help them to set a savings goal. By saving over a number of weeks you could even reward them with a ‘bonus’ if they reach their savings target.

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Trying to maximise your savings returns can be tough. With interest rates having been held at a record low rate for over two years, it has been a difficult time for savers. And, with inflation rising to over 4 per cent, finding an account to keep pace with increases in the cost of living has been all but impossible.

So, if you’re looking to get the best return on your savings, here are four of the best types of savings accounts you should consider:

Individual Savings Accounts (ISAs)

Individual Savings Accounts, or ISAs, allow you to save a certain amount each year without paying any tax on your interest. In the tax year 2011-12 you can save up to £5,340 in a cash ISA and you will receive all your interest, as none will go to the taxman.

ISAs pay interest gross, so they can often be some of the best high interest savings accounts. Basic rate taxpayers receive 20 per cent more interest simply due to the fact that no tax is deducted – higher or additional rate taxpayers can benefit even more.

ISAs come in all shapes and sizes. Many cash ISAs offer instant access to your cash with a minimum investment of £1 while others offer fixed rates of interest if you maximise your ISA allowance with one lump sum.

Online savings accounts

It costs banks and building societies millions of pounds each year to maintain a High Street branch network. Paying overheads, such as rent for premises, heating, staff, lighting and security, costs financial institutions a huge sum.

So, as online accounts have lower overheads to manage it means that the interest rates can often be better. Many of the best savings accounts are ‘online only’ accounts, meaning that you link your savings to your bank account and make deposits and withdrawals by bank transfer through the savings account provider’s website.

Savings Bonds

If you are prepared to commit your savings for a period of between one and five years, a savings bond may offer a better rate of interest than easy access accounts.

Bonds typically offer a fixed rate of interest, although you will often find that you are penalised if you withdraw your money before the maturity of the bond.  However, as you’re committing your savings you will find that bonds are among the best high interest savings accounts.

Bear in mind that if you fix your interest rate at the outset, you won’t benefit from any rises in interest rates during the term of the bond.

Notice accounts

Notice accounts have been available for decades but still remain some of the top savings accounts.  A notice account allows access to your money, but you have to provide a notice period – this can range from a week up to around 90 days – to make a withdrawal.

Accounts with a notice period can often be managed through a branch, by post or online and offer the chance to benefit from a good rate of interest while retaining some access to your money.

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If you’re heading abroad for your summer holiday, managing your money while you are away will be one of your main considerations. There are loads of ways to pay for goods and services when you’re overseas, including foreign currency, traveller’s cheques and credit cards.

Now, though, travel prepaid cards are becoming more and more popular with travellers. Our guide looks at the pros and cons of foreign currency versus prepaid cards to use abroad in three different categories.

Security

One of the main disadvantages of taking foreign currency overseas is that you may have to carry large sums of cash with you. Even if your hotel or room has a safe, your cash may not always be 100 per cent secure. Many holiday destinations are hotspots for pickpockets and travel insurance policies only tend to have limited cover for foreign currency.

Travel prepaid cards are therefore an excellent alternative. They allow you to withdraw cash from a local ATM as and when you need it (some cards don’t charge for this, so look out for those if you want to withdraw cash several times while away) meaning that you don’t need to carry large sums of cash on your person.

In addition, travel prepaids are often issued in pairs, meaning you can keep them separate and use the second card if your first card is lost or stolen. It’s easy to report the loss of a prepaid card and simple to have your account frozen so you don’t lose out.

Fees and charges

When exchanging sterling into foreign currency you may pay a one-off charge to the bureau de change. However, that tends to be the only cost you pay. Once you have your euros, dollars or other currency then you don’t normally pay any more fees or charges. Indeed, you can often negotiate a discount for paying in cash at many overseas shops, markets and bazaars.

Prepaid cards to use abroad, however, do sometimes have fees. You may pay an initial fee, depending on the card that you take out, although it is possible to obtain prepaid cards with no fees.  You may pay an ATM fee to withdraw your cash from a foreign ATM (always check what an ATM will charge before you make a withdrawal) and some travel prepaid cards will add a small cost when you transfer money to top up your card.

Prepaid cards normally have no fees for paying for goods or services use while you’re abroad – as long as you are paying in the same currency as the cash loaded on to your card.

Exchange rate

If you have ever changed foreign currency abroad you will know that the exchange rate offered by some hotels or bureaus de change can be very poor. Lots of overseas locations offer much lower conversion rates than you would benefit from if you changed your currency at home.

When you use travel prepaid cards abroad, however, the exchange rate will generally be set by the provider of your card. As these are often banks or financial services providers, the exchange rate is often highly competitive. Even prepaid cards with no fees tend to offer exchange rates comparable to a good quality foreign exchange bureau.

Verdict

If you’re planning to head overseas this summer it is certainly worth considering travel prepaid cards as an alternative to foreign currency. Taking a small amount of currency and then using travel prepaid cards to pay for hotels, care hire and restaurant bills can give you an excellent mix of security and flexibility.

The market is full of prepaid cards to use abroad and so it’s important that you do your homework and shop around before you depart.

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The row over gas and electric prices has intensified in the UK after two more energy firms warned of rising gas and electricity prices, despite posting increased profits.

One of the UK’s largest utility companies, Scottish and Southern Energy, recently reported a 50 per cent increase in profits while warning that it may be ‘forced’ to raise its gas and electric prices for domestic customers.

Profits rising while the average gas and electric bill is also set to increase

There has been anger from many consumer groups who believe that energy companies are fleecing consumers by raising their gas and electric prices while posting ever-increasing profits.

The Guardian reports that ‘Scottish & Southern Energy further angered consumer groups by deciding to reward its investors with a £700 million dividend for the 12 months to 31 March.’

Scottish and Southern Energy defended its position, claiming that the increase in profits was as a result of an ‘accounting entry for financial derivatives’. The company claimed that its adjusted profit (before tax) of £1.3 billion – up only 1.6 per cent on the previous year – was a more realistic illustration of its financial position.

It also pointed out that it had to invest £1.5 billion every year to modernise power networks and to build renewable energy solutions such as wind farms.

Ian Marchant, Chief executive of Scottish and Southern Energy, also admits that rising wholesale gas prices might see the average gas and electric bill in the UK rise over coming months. He said: “I hope we don’t have to put them up but we may be forced to. We don’t enjoy doing that but you can only defy the market for so long.”

This warning comes after similar comments from another of the UK’s major suppliers, British Gas.

Energy companies face Competition Commission enquiry if prices found to be unfair

Audrey Gallacher, head of energy at Consumer Focus, believes that consumers are finding rises in gas and electric prices increasingly unpalatable as companies report huge profits. She said: “Customers simply don’t have faith that they are being asked to pay a fair price and Ofgem has shown this lack of trust has firm foundations.

“As suppliers move to put up prices, the regulator faces its first major test since its market review. If it isn’t satisfied that price rises are fair, and that suppliers are making the changes on transparency and service needed, the threat of a Competition Commission inquiry must become a reality.”

Compare gas and electric bills to reduce prices

With gas and electric prices rising sharply, it’s never been more important for you to regularly review your energy supply to check that you are not paying too much.

There are lots of websites where you can compare gas and electric prices in order to make sure that you’re on the cheapest and most suitable tariff. Switching energy supplier is easy and you can save hundreds of pounds every year simply by switching from one gas and electric supplier to another.

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The desire of thousands of Brits to avoid tax on savings accounts led to a significant increase in the amount of money invested in tax-free accounts in April 2011. New figures from the Building Societies’ Association (BSA) show that the amount of savings invested in cash Individual Savings Accounts (ISAs) in April 2011 was more than double the level of the previous April.

If you’re looking for a good home for your savings, ISAs can often be the best savings accounts purely because the interest rate they offer is boosted by the fact you don’t have to pay your usual rate of tax on the interest you earn.

Tax free savings in building societies exceeds £1 billion in April 2011

Cash ISAs are accounts which are available to every adult and allow you to invest up to a certain amount each tax year without paying any tax on your interest. In the 2011/12 tax year you can invest up to £5,340 in a cash ISA. With the tax on savings accounts generally charged at 20 per cent, investing in an ISA can help you maximise your income as no tax will be deducted.

The BSA figures showed that Brits invested £1.37 billion in cash ISAs in April 2011, compared to £668 million in April 2010.

In addition, the figures for all savings accounts (after deducting withdrawals) showed that building societies had net receipts of £983 million in April 2011 compared to just £537 million in April 2010.

David Cutter, chief executive officer of Skipton, one of Britain’s biggest building societies, said: “Mutuals had a significant inflow of funds into savings accounts during April which was helped by particularly strong deposits into ISA accounts compared to April last year.”

Shop around to get the right savings account for you

Many Brits are finding it hard to save in the current financial climate, which makes finding the best savings accounts even more important.

David Cutter, from Skipton Building Society, continued: “It will be difficult for deposit takers to maintain a positive inflow of funds this year given the squeeze on household finances.”

So, if you’re looking to add to your savings, it’s vital that you find the right type of account. With so many different types of savings accounts on the market it’s crucial you pick the right one in order to maximise your return.

If you plan to save less than £5,340 between now and next April, and you’re a taxpayer, ISAs are often the best savings accounts for you. You can maximise your return simply because ISAs pay interest with no tax deducted.

Bear in mind that there are different types of ISA savings accounts. While many are instant access, allowing you to withdraw funds as and when you need them, others offer fixed rates and require you to commit your savings for a specified period.

If you have maximised your ISA allowance then there are different types of savings accounts you can consider. If you want to save on a monthly basis, ‘regular savers’ are a popular way of maximising your return. These accounts normally run for a twelve month period and will often pay a bonus rate of interest if you contribute a certain sum to the account every month for a year.

If you have a lump sum that you want to invest, savings bonds can be the best savings accounts for you. These products require you to commit your savings (typically for a period of 1-5 years) and generally pay a fixed rate of interest. Bear in mind though that you will often be penalised if you withdraw your savings before the maturity date of the bond.

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