*These stories were taken from the BBC news website, and all figures quoted from this source.
Nisa Rule Change Prompts Saving Surge
In the financial news this week, savers have deposited more than £4.9billion in July after a £15,000 increase in Nisa savings and investments was mentioned in the yearly government Budget. Usually, a barrage of deposits is made in April, coinciding with the start of the new financial year, however many have waited until the new allowance comes into effect before starting their new savings.
New Individual Savings Accounts have been made more attractive to savers who had previously received a return of 0.86%. Chancellor George Osborne changed the rules by increasing the allowance which can, for the first time, be held in stocks and shares, cash or both. This was intended to help promote saving, and it works! The huge £4.9billion deposits are a huge change from the £806million in July 2012 and the £18million of last year, demonstrating savers’ need for generosity and clarity with regards to how much they can save.
Energy Suppliers’ Profits Take Nosedive
In other news this week, the predicted profits of the UKs biggest energy supplier will be lower than previous months, says industry watchdog Ofgem. Although the energy companies have said they disagree and Ofgem has said these numbers depend on cost efficiency and individual hedging strategies, the average pre-tax margin will be lower than last month.
For example, a dual-fuel energy bill at an average price of £1,330 will leave the provider with a profit margin of just 8% (£102), a £4 decrease on last month’s estimate. This number is due to a range of reasons, including network, social, environmental and wholesale costs which can amount to over £1,000 of the total bill price.
Energy suppliers have been under constant scrutiny from both the media and individual customers, who constantly question the clarity of charges and what the money they pay is used for. Judging by the latest Ofgem research, there is little money being made by the company through bill payment and perhaps this is one of the reasons hidden charges are so prevalent within the industry.