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Money digest: today’s need-to-know financial news

7 April 2016

9:10 AM

7 April 2016

9:10 AM

Millions of internet users face costs of up to £60 a year to keep their email address if they switch broadband provider. Others risk losing their account altogether if they switch.

This is according to which reports that BT is tripling the amount former customers will have to pay to keep their BT email address when they switch provider. The charge used to be £1.60 a month but from May it will be £5 – a massive £60 a year.

Meanwhile, a new study suggests that the new state pension – which came into force yesterday – would cost retirees around half a million pounds if bought on the open market. The new flat rate state pension pays out £155.65 a week to retirees who have paid National Insurance contributions for 35 years. But to buy a similar product with private savings would cost a man £243,000 and a woman £264,500, according to a study by insurance firm Aegon. The state pension is worth around £8,000 every year and always at least beats inflation.

The Times reports that Britain’s landlords were protected from the worst of the recession by escalating rents, leaving tenants increasingly impoverished. On average tenants are spending a fifth of their disposable income on rent today, compared with 12 per cent in 1986. Since 2012, rents have risen at almost twice the rate of incomes, the Office for National Statistics said.

The analysis paints a clear picture of wealth being transferred from young renters to landlords and will renew concerns about the financial challenges faced by younger people. It is also likely to pile more pressure on buy-to-let owners, who have been outbidding first-time buyers on the property ladder and driving up rents.

In other news, British households are showing signs of using their properties as a piggy bank for other spending habits once again after the rate of mortgage repayments fell to its lowest level in six years. Since the financial crisis homeowners have been paying off their mortgages rather than using the money elsewhere but that has dropped to its lowest level since 2009, according to figures from the Bank of England.

Economists said that the most recent figures may fuel concern that consumers are starting to borrow more and save less. In the build-up to the 2008 crisis, housing equity withdrawal was common as homeowners remortgaged and spent the spare cash on holidays or other items. The trend switched after the crisis.

Gas and electricity bills are still a mystery for six in ten Britons as energy suppliers were voted the worst offenders for providing confusing bills, according to a new survey. Despite reforms introduced by watchdog Ofgem two years ago requiring suppliers to make bills clearer, such as including details of their cheapest tariff, nearly half said they have seen no difference. More than half of the 2,000 people surveyed by comparison website uSwitch also said they could not recall seeing mention of cheaper deals on their bill.

Finally, new research shows that British dog owners collectively spent more than £1 billion on ‘petcessories’ for their animals last year. According to Direct Line Pet Insurance, excluding essential items like food and veterinary treatment Brits spent an average of £76.13 per dog. And Britons aren’t just spoiling their pets financially. More than half of British dog owners have kissed their dog and spoken to them like they were a child. You couldn’t make this stuff up.


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