Energy giants to refund £2bn to consumers

Energy companies will tell you it's a good idea to build up credit for higher winter bills. But the cash stockpile the Big Six - British Gas, npower, Scottish Power, E.ON, SSE and EDF - are hoarding is now in the £2bn region.

Enough to pay them more than £30m extra in interest a year. Now they've been ordered to repay you, with interest. %VIRTUAL-SkimlinksPromo%

Hoarding your money

Quoted in the Mail, a Government source says the Big Six will be ordered to pay interest to those with a credit surplus. If they don't, then they could be fined. As energy bills and monthly direct debits have grown - the average duel fuel bill now tips £1,500 - so have energy industry cashpiles.

"The minister will urge energy companies to agree to new industry wide best practice for this winter and will push them to pay interest to customers who are in surplus," a Government source told the paper.

A meeting between energy minister Greg Barker and energy companies is thought to happen soon. The Government remains under pressure to show it is sensitive to consumer worry about the rising cost of energy, as well as responding to Labour's promise to freeze energy prices.

Not all the energy players hang onto customer cash without paying interest. Ovo Energy's refund policy pays 3% on credit balances currently, for example, but Ovo is in the minority. Bear in mind this 3% interest rate is better than many bank account interest rates - and it's also tax-free.

20m cash injections

Npower told AOL Money it automatically refunds customers who have built a credit of more than £60 - though this is only done once a year, on the anniversary of when each account was opened - while the threshold is £100 for SSE.

20m UK consumers pay their energy bills via direct debit, with an average credit of around £100 on each account, it's estimated. Very few consumers request a cash rebate once credit is built up.

On the other hand, there's something to be said to building up a credit, especially after the hard winter of 2012/13 - as long as interest is paid. What would you prefer? Some cash saved up in advance - or in your pocket?

Meanwhile prices continue to climb. Scottish Power joined other energy suppliers recently by announcing an 8.6% hike in prices. From 6 December, 2.2 million customers will see a £118 hike in their bills, a total rise of £137 over the last year alone, according to Moneysupermarket.com.

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Energy giants to refund £2bn to consumers

Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.

To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.

Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.

At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.
Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.

It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.

With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.

No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.

Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.
It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.

Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.

While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.
What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.

Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.

However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.
To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger 'economy' packs really are cheaper than the smaller versions.

Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.

However, you can cut the cost of train travel by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.
Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.

Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.

Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.
Before signing up, it is therefore essential to check that you will make use of enough of the benefits, and that you cannot get them for less elsewhere.

Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.

Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.
You can, however, avoid these charges by using a Saga Platinum or Nationwide Building Society credit card.

Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute from a mobile phone.

And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.
Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the saynoto0870.com.
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