Halve broadband costs, warning for NS&I savers, free £175 switch bonus, cheap West End theatre tickets and free wills month. These are our Money Saving Expert Martin Lewis’ Tips of the Week.
Remember, deals can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these deals will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.
New broadband rules for millions who are out of contract – but you can save £100s by switching
Millions are out of contract on their broadband and massively overpaying. New rules set by the regulator Ofcom for broadband firms (and TV, mobile and home-phone firms too) are set to reduce that…
The provider must now alert you by letter, text or email 10 to 40 days before the end of your contract, and each year they must keep reminding you if you stay out of contract. The alert must say what you’re currently paying, what the price will rise to once the contract ends, and it must also include how to end your contract. Crucially the alerts must include what the best deal that firm offers to new customers.
But bizarrely, while the provider must tell you what the cheapest deals are, they don’t have to offer it to you. Though some including BT, Sky, TalkTalk and Vodafone have voluntarily agreed they will – in which case at the very least do that. But as the best deals tend to be hot short promo deals from comparison sites not direct, which include incentives like £100 credit on your bill, a £75 Amazon voucher or a £150 on a prepaid Mastercard – they won’t have to offer you these either. My suspicion is this means firms will start to increase the costs of tariffs, and instead give even bigger sign up perks to new customers only.
As broadband deals are constantly changing Martin’s Broadband Unbundled tool shows you what deals are currently available, plus as many deals are limited depending on postcode, it enables you to see what you can actually get (sadly in some areas there’s very little choice at all). Add up what you’re paying, someone out of contract on BT for broadband and home for example (others are similar) would be paying up to £45/mth (that’s £550/yr).
Most of the hot deals are via promos on comparison sites, for basic broadband and line, factor everything in (ie cashback or vouchers) and it’s as cheap as £12/mth. For fibre broadband & line until Saturday there’s a Vodafone deal (only via comparison sites) where you pay £22/mth and get £100 Amazon voucher, so it’s an equivalent of just over £16/mth over an 18-month contract. And up to 100Mb superfast broadband and line is a little over £20/mth done right.
A warning for savers with NS&I
The Government's savings provider NS&I announced it's chopping rates on many of its accounts in May. Millions of people have money in these accounts, and the cuts are savage. Its Direct Saver drops from 1% to 0.7% and its Income Bonds from 1.15% to 0.7%.
These are easily beatable by the top easy access accounts which pay 1.3% AER with Marcus and Saga. And while many like to save with NS&I as they like they idea that it’s Government backed and 100% safe, the truth is all UK-regulated savings are protected up to £85,000 per person, per institution too. So as long as you’ve less than £85k savings in one account, your money is just as safe there.
The premium bond prize rate will also drop from 1.4% to 1.3%. And while that sounds better, Premium Bonds are no great shakes.
The biggest boon was that the ‘prize’ money was tax-free but with the personal savings allowance – which means basic-rate tax payers can earn £1,000 interest tax-free (higher-rate £500) – 95% of savers don’t pay tax on savings interest anymore.The percentage is just a 'prize rate' - all it really means is for every £100 saved in Premium Bonds, £1.40 is paid out per year in prizes across all savers, dropping to £1.30 from May. Yet actually it doesn’t work like that, the smallest prize is £25 – so it’s all about the prize distribution. Just think for every £1m winner lots of people get less. Indeed, someone with £1,000 in premium bonds with typical luck (based on the median average) you’re likely to win nowt.
In fact, with typical luck most people will win less than the prize rate, so easy access savings beat it. Having said that many like the chance of winning the £1m and the rate isn’t awful, so especially if you get closer to the maximum £50,000 in there, the better your chances of earning closer to the prize fund – so I’m not that anti it.
Where it does come into its own is if you're one of the 5% of people who pay tax on interest (ie earn over £1,000 interest a year as a basic rate taxpayer, £500 as higher rate). Firstly, for this group, tax-free cash ISAs (top easy-access is Leeds BS at 1.3%) will likely beat normal savings and Premium Bonds, but if you've maxed your £20,000/yr ISA allowance, and you hold a lot of Premium Bonds, you've a decent chance of beating the returns you get from normal savings with bonds.
Free Will for over 55s. There's no getting around it, death happens. So, if you've children and/or assets, such as a home or savings, and people you want to look after when you're gone, it's vital to sort a will. And now’s a good time to do it. March is Free Wills Month, so those aged 55 or over can get a gold standard solicitor-drafted (or updated) will for free (it can usually cost around £200 for a single or £300 for a joint). It's hoped you'll then leave a donation in your will to a partner charity (including Age UK, British Heart Foundation, Dog's Trust and Diabetes UK), though you don't have to (perhaps a good minimum is leaving enough that would cover the solicitors’ fees normally). Whatever you choose, there's nothing to pay upfront.TodayTix or its free app till Sunday 8 March and you’ll find discounted theatre tickets to over 35 top West End plays and musicals for £15-£35 (normally £20- £65). Shows include the new production of Les Misérables (tickets for £25 that are normally £30)at the recently revamped Sondheim Theatre, Endgame starring Daniel Radcliffe at the Old Vic (tickets for £15, normally £20), and The Seagull starring Emilia Clarke at the Playhouse Theatre (tickets for £35, normally £62.50).Date availability varies by show but some can be booked as far ahead as October. Unfortunately, you can’t choose your seats – these are allocated for you, but you’ll be shown which seats you’re given before booking.
New Free £175 switch bonus from NatWest and RBS: Both NatWest and RBS have launched a £175 switching bribe for newbies on many of their accounts. The standouts are RBS/ NatWest Reward, as with this account you pay a £2/mth fee, but it gives you £5/mth so you’re £3/mth up £36 a year. Or RBS / NatWest Select just gives £175 with slightly less-stringent criteria.
To get the £175, you must start the switch by 2 April, pay in £1,500+ (which you could withdraw the next day) and log in to online or mobile banking by 10 May. With the Reward accounts to qualify for the £3, each month you must pay in £1,250+/mth (equivalent to a £17,000/yr salary), log in to its mobile app and have two direct debits paying out £2+/mth