Business and Finance

Hit new heights in 2014 with a money makeover: Your complete guide to coping with the big changes heading your way

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ENERGY

This year saw new rules come into force to try to get gas and electricity suppliers to treat customers fairly.

Suppliers are limited to offering four core tariffs per type of fuel and per payment method, following the Retail Market Review.

All tariffs will have a standing charge – a daily fee to cover costs such as meter readings – but this can be set at zero. The price per unit of energy used must also be a single flat-rate.

Previously energy companies were free to charge one rate in pence per unit up to a threshold, and then a different price for energy used above that level, making tariff comparisons tricky.

By the end of March you will be given personalised information about the cheapest tariff your supplier offers and all letters will feature a Tariff Comparison Rate.

However, this comparison will be based on ‘medium’ energy users, so the tool is not precise for everyone. To find the cheapest offer for you, use an Ofgem-accredited comparison website such as the energyhelpline (0800 0740745) or uSwitch (0800 0515493).

By June, customers sitting on a ‘dead tariff’, one that is no longer marketed to the public, will be transferred to the supplier’s cheapest variable rate, unless the former remains the least expensive option.

Changes: The annual sum you can save into an Isa will rise by £360 to £11,880 from the start of the new tax year in April
Changes: The annual sum you can save into an Isa will rise by £360 to £11,880 from the start of the new tax year in April

SAVING

The annual sum you can save into an Isa will rise by £360 to £11,880 from the start of the new tax year in April. Half can be held in a cash Isa, where interest earned is tax free.

For stocks and shares Isas, which can hold the full annual allowance and where dividends are subject to a 10 per cent tax credit deducted at source, there may be interesting developments.

TABLES: BEST CASH ISAs   
Provider Rate(%)
1 Post Office 1.80
2 Virgin Isa 1.75
3 Britannia Isa 1.75
4 NS&I Direct Isa 1.75
5 KRBS Isa 1.70

One idea is the inclusion of peer-to-peer loans in Isas, where savers lend to individuals and businesses directly with the expectation of earning higher returns than from high street banks.

Experts are meeting the Treasury next month to discuss this proposal.

Stuart Law, chief executive of Assetz Capital, a peer-to-peer lending platform, says: ‘I believe peer to peer loans could represent 50 per cent of investment portfolios within five years once Isa inclusion is confirmed.’

Parents with cash held in a Child Trust Fund will be able to shift their children’s funds into the more competitive Junior Isa scheme. Previously this was not allowed.

For either type of account the maximum annual tax-free allowance is rising from £3,720 to £3,840. To find the best rates for savings accounts visit rate-checking website Savings Champion.

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