Unauthorised Overdraft Fees: Similar To Payday Loans?

May 10, 2016 Posted by Allan

A recent investigation by consumer rights watchdog Which? has revealed that having an unplanned overdraft at the bank is actually more costly in fees and interest than taking out a (much maligned and criticised) payday loan.

According to Which?, unauthorised overdrafts can potentially be “much more costly” when people are borrowing in the short term – up to 12.5% more if the time period is just 24 hours.‎

Connected to this, January 2015 saw the Financial Conduct Authority (FCA) introduce price caps on payday loans. I‎nterest and fees are now capped at 0.8% per day of the amount borrowed in a payday loan. Someone taking out a £100 payday loan now for 28 days and paying it back on time will now never pay more than £22.40 in fees and related charges. Many payday lenders are notorious for their high interest rates: infamous lender Wonga charges a representative APR of 1,509%, for example. ‎

Banks, however, have no such cap on many of the fees they can charge. In the world of current accounts, if that same individual had borrowed the same amount via a high street bank’s unauthorised overdraft, the resulting fees epic be much higher. The borrower would face a bill of £90 at NatWest and its parent bank, Royal Bank of Scotland (RBS), for comparison. ‎At NatWest and RBS, if a current account customer goes into an unauthorised overdraft by more than £10, they are charged a fee of £6 for each day in they remain in that unauthorised overdraft. This is capped at £90 per “charging period”, which runs from month to month.

These unauthorised overdraft charging structures vary from bank to bank, resulting in a wide variation in the amounts charged when current account customers go into the red without permission. At Barclays, the resulting charges would be £29.75, with charges of £67 at Santander, according to the Which? study. Competitors Lloyds, HSBC and TSB would each charge £80 for unauthorised overdrafts. ‎Which? also noted that these charges could be even higher if any interest payments or possible unpaid item fees were included. The charges could also rise if the money was borrowed over two consecutive monthly charging periods; the maximum charge discovered related to the charging period, and not on how long the money was borrowed for.

The Which? study ‎came to the conclusion that, using the example of borrowing £100 for just one day, the charges imposed by some major high street banks were up to 12.5% higher than the amounts that payday lenders are allowed to charge for the same. As a comparison, the Financial Conduct Authority cap for a payday lender for one day would be 80p, with Lloyds charging £10 under the terms of their Classic Account.

Releasing their findings, a Which? spokeswoman said the consumer rights company was now calling for fess and charges on unauthorised overdraft to be set to the same level as authorised overdraft charges. Further, Which? is calling for the FCA to review bank overdraft charges and fees in the context of other forms of borrowing and credit. The spokeswoman said that the findings showed that financial regulators needed to crack down urgently on such “punitive” unauthorised overdraft charges, that were ultimately causing great harm to vulnerable customers. In a statement, Which? Director of Policy & Campaigns Alex Neill said that those people “with a shortfall in their finances can face much higher charges from some of the big high street banks than they would from payday loan companies. The regulator has shown it’s prepared to take tough action to stamp out unscrupulous practices in the payday loans market, and must now tackle punitive unarranged overdraft charges that cause significant harm to some of the most vulnerable customers.”‎

In response to the Which? report, the larger banks have sought to counter the allegations. ‎RBS’s response to the Which? study was that the bank encouraged all its customers to get in touch if they were going to be having an unarranged overdraft, regardless of amount borrowed or the length of time. RBS felt that an unarranged overdraft “is an expensive method of borrowing, and there could be a number of alternative solutions, such as putting an arranged overdraft in place, and the costs are considerably less. Our Act Now Alert service would alert the customer to being in unarranged borrowing and that they should take action.” The response of ‎Lloyds was that “the vast majority” of its customers who utilised an overdraft facility remained within their planned limit in any average month.

Payday lenders have been greatly criticised in recent years for their excessive interest rates, fees and charges, and for the public perception and image that they did little for those who are financially vulnerable. The reality is that seemingly the big banks were doing the same – just in a different, and disguised, fashion. ‎

Cutting the Cost of Transport

September 21, 2015 Posted by Allan

TrainTransport can be a big expense, especially if you commute to work over anything but the smallest of distances. Public transport prices seem to go up again and again, and running a car can barely seem cheaper a lot of the time. Fortunately, there are a few things you can do to reduce costs and make it more affordable to get from A to B.


They are not much good for most peoples daily commute since they can only be used at off-peak times, but railcards can be a great money-saver for occasional travel, leisure, and those whose work requires them to catch the train during the day or at weekends. For a relatively small fee, they cut a third off the cost of rail travel and owning one can also open up a range of other discounts and special offers too. They are only available to certain groups, but the options are fairly diverse. They include the 16-25 card, senior card and the “Two Together” Railcard (for two people, but only valid when they are travelling together). Those in the South East are lucky enough to have access to the virtually universal Network Railcard for travel within this region, which also gives the same discount to up to three adults travelling with you.

Advance Tickets

Buying tickets in advance can also get great discounts. They are often best bought from third-party providers rather than direct from National Rail, and there can sometimes be a benefit to shopping around different sellers. If you also have a railcard, you will find it varies as to whether you save any extra money by booking in advance or whether the price “bottoms out” at around the same you would have paid with the railcard anyway, but it is still definitely worth checking up on.

Bus Tickets

Buses can be the most effective way for those without their own transport to travel within a small distance, or between areas that simply do not have train stations. However, they can also be unpleasantly expensive. If travelling for more than ten or fifteen minutes each way, it is worth finding out if the bus company offers a ticket that provides unlimited travel within a certain area for a day. These often go by names like “explorer” or “discovery,” and can often work out cheaper than all but the shortest return journeys and cover a fairly wide area.


Travelling in your own car may not carry any actual ticket costs, but the price of fuel and insurance can still seem hefty. There are a few things you can do to help keep costs down. Always shop around for insurance and learn the little tricks that can bring down your insurance costs, especially if you are a new driver. Learn about how to drive in a more fuel-efficient way and, if you drive daily to work, consider sharing lifts with a coworker. A variant of car-sharing, where you simply offer a petrol money to a coworker who lives near you instead of doing some of the driving yourself, can also be an affordable replacement for a commute on public transport.

Should you buy Direct From China?

July 24, 2015 Posted by Allan

Buy From ChinaA lot of the things we buy are originally made in China, which is perhaps the biggest centre of manufacturing in the world today. Many of China’s manufacturers, as well as retailers who are able to offer lower prices than their counterparts in many other countries, also make items available online to buy directly. But is this a good idea, or something you should avoid?

The Pros and Cons

The main advantage of this approach is that prices are lower. You’re often buying direct from the manufacturer with no middleman, and even when buying from a retailer prices tend to be more affordable. If you’re not planning on buying a branded product – for example if you’re frugally-minded and looking for something that will “just get the job done” – then you might well find the same generic item that you were thinking of buying from a local seller for more.

One of the main disadvantages is that postage will be slow. Usually, it takes a few weeks for items to make their way between China and the UK. Express services may be available, but will often be expensive enough to cancel out any saving. Furthermore, China is a busy and competitive manufacturing market, with factories pumping out everything from high-quality premium goods to cheap, low-quality items from businesses that just want to grab a piece of the action any way they can. It can be hard to know what sort of quality you are getting unless you can find feedback and reviews from others who have bought the same item. Lastly, with some items – mostly those worth more than a certain amount – you may find yourself paying additional charges such as VAT upon its arrival in the UK. Once again, this can cancel out your savings and also potentially delay your order.

If the goods that arrive are faulty or not as described, it can also be harder to return them for a refund than it would be if you bought them in the UK.

Where to Buy

If you aren’t in a hurry to get your item and the cost savings are significant enough to outweigh the risks, then there are two main places you may want to buy online.

The first of these is probably familiar to you; eBay. You may have already noticed that if you sort your search results to bring cheapest items to the top, there will be a lot of results from China. The main advantage of eBay is that there will almost certainly be a good amount of seller feedback – important to check in order to minimise risks.

The second option is AliExpress.com – a China-based company which specialises in helping people around the world buy directly from manufacturers. The advantage of AliExpress is that it has a massive range of products, some of which are very cheap, but there are also a few things to  be cautious about. Make sure you check postage; many offer free postage but some have international postage charges that inflate seemingly-bargain prices significantly. The disadvantage is that there tends to be less feedback than on eBay, so try to favour sellers with at least a few buyer reviews with a definite positive slant. AliExpress also has a much weaker reputation for supporting buyer disputes than eBay, though it’s important to note that it does offer a full dispute process.

Streamline Your Finances and Save

May 31, 2015 Posted by Allan

Sometimes, we end up paying more because we’ve made the financial side of life a little more complicated than it needs to be. There are a few tactics that we can use to reduce both complexity and wastage in our personal budget while increasing the amount of money we have left over from each month’s pay packet.

Direct Debits and Automatic Repayments

Whenever possible, pay for things like bills and loan repayments automatically through direct debit. This reduces the chance of you avoidably missing a payment and therefore getting hit with late fees. Even if you are extremely diligent with making payments, there’s a danger that a payment date will end up coinciding with something big that takes up all your attention and the bill slips your mind for a while. Direct debits remove this danger entirely, and also remove the effort of making each payment manually. There’s really nothing to lose from using direct debits, but you could potentially lose out as a result of not using them.

Magazine Subscriptions

If there’s a regular magazine you pick up off the rack every week or month, you should probably subscribe to it. Subscriptions are easier – each new issue gets sent straight to your door – and often you receive each new edition before it hits shop shelves. More to the point, subscriptions can be much, much cheaper than paying the cover price of each individual issue. Digital subscriptions on e-reader devices can be cheaper still. Zinio is another service offering affordable digital access to major magazines, and in some counties you can access many of their publications for free if you join your local library.

Buy a Coffee Machine

This step isn’t for everybody, but it can be a big financial boon for coffee-loving commuters. If you, like many, can’t do without your morning coffee and normally get one from the shop on the way to work, you should probably just buy a coffee machine. It will almost always be quicker and easier to get a proper coffee from your own machine before you leave, whether you drink it at home or take it with you in a thermal flask, than to detour into the coffee shop and deal with queues. The massive price difference between brewing your own coffee and buying one from a shop will soon pay for the machine and start saving you money. If you’re quite fond of instant, you could even just buy a thermal flask to take some of that on your journey to work.

Three Ways to get Free Stuff

March 31, 2015 Posted by Allan

Free StickerEveryone likes getting something for free, especially if it’s something we would have got anyway but had to pay for. There are a number of ways you can get stuff for free (and without breaking the law), and these are well worth exploring before you open your wallet and spend your money.

Free Music

It is entirely possible to get free music online (without resorting to illegal downloads). Services such as Spotify make huge amounts of music including pretty much anything in the charts, much-loved classics and obscure indie artists available for free. The funding comes from advertising, much like on the radio except you have the freedom to listen to exactly the music you want at any given moment. Apps extend this freedom to your smartphone.

There is a time limit for holders of free accounts, however. If you are likely to exceed these limits (which vary by service and change comparatively often), think about how much music you usually buy to work out whether it will be cost-effective to shift to a paid plan or not.

Free Software

Software packages can be surprisingly expensive, but sometimes necessary. Common examples include needing access to office software that is only included in paid editions of the market-leading Microsoft Office, or annually renewing your anti-virus suite.

There are many free software packages available – in fact pretty much every kind of software offers a free version. Sometimes these are just as good as the paid versions, meaning there is no real reason to spend money at all. For instance, several free anti-virus packages rival and beat expensive and popular paid packages when tested. Others are not quite as good, but depending on your needs it may be worth the compromise in order to save money. For instance Libreoffice, a leading free office suite, offers comparable functionality to the expensive full Microsoft Office package but has an old-fashioned, less polished look.

Free Clothes

Clothes are an essential, but they can also be expensive. Cheaper clothes are readily available from places like charity shops and certain discount shops, but you may also be able to obtain clothes for free – though you may have to give some up in exchange.

Most major cities and many other parts of the country hold regular clothes swaps. Technically this is not free so much as negligible cost. Dig out some of the things buried in your wardrobe that you never wear or which no longer fit, and bring them along. There may be a small entry fee, but for the number of clothes you can potentially get this could work out as low as pennies per item. For each piece of clothing you bring (sometimes up to a maximum) you get to pick an item someone else has donated and take it home as your own.

Grabbing a Bargain in the Sales: A Quick Guide

December 24, 2014 Posted by Allan

Sale2Once Christmas is out of the way, it is time for the sales to begin. With the Christmas shopping rush over and new products to make room for, retailers slash their prices to help clear the shelves. Competition for the best deals can be fierce, and in extreme cases can result in scenes similar to those recently seen on Black Friday. Real bargains have a tendency to sell out quickly.

If you want to find the best bargains and grab them before they go, without needing to reach the front of a stampede, there are a few things you can try. A few simple steps can seriously improve your chances of getting just what you want at the best possible price.

Don’t get Carried Away

Nothing is a bargain if you don’t really want it, and however much money has been cut off it is never a good idea to buy something you can barely afford unless absolutely necessary. Before you set out, think about what you want. This might be something you actually need, or something you have long wanted and hope to find within your budget in the sales. This will prevent you getting carried away and spending money on purchases you will regret (something many do in the sales. It will also help you to focus your efforts and head straight for the things you want, improving your chances of getting them before they sell out.

Look Online

The sales are not purely a brick-and-mortar phenomenon. Most online retailers, with or without a high street presence, will offer bargains. In fact, web stores are often where the best prices can be found as products bought online are frequently cheaper than they would be in store. If you want to find the best bargains, make sure you check the web instead of only rushing out to the shops.

Be Quick

Ultimately, the sales can be something of a race. Getting a good bargain is not just about finding the best price but also getting there before the product has sold out to other shoppers. This is especially true online, where people from around the country and possibly beyond can converge on a single site. The advent of internet retail has also shifted the start of the sales forward, and it is important to ensure your habits reflect this. Since websites can still accept orders even when the staff are at home eating turkey, many online stores introduce their reductions on Christmas Day, but sales in the past often haven’t peaked until Boxing Day. If you get a chance to look for bargains when the festivities have wound down on the 25th, you may be able to beat the crowds.

Beauty Money Saving Tips – Frugal Beauty

October 8, 2014 Posted by admin

  • Wash hair with baby shampoo first! By using the baby shampoo to remove all hair products and dirt, the expensive shampoo can be used to work its magic and treat the hair, rather than do both!


  • Use baby wipes to remove all make-up, including the stubborn mascara. Cheaper to purchase, yet still gentle enough for the face!1


  • Buy cheap shampoo as a refill for the soap dispenser. Can save money without anyone being aware!


  • When it seems the time has come to throw away hand cream, shampoo, body lotions etc, simply cut the tube/container in half! You will be surprised to see how many more times it can be used.  Scoop a saving.


  • Removing make-up does not have to be expensive, baby oil and Vaseline are good enough to take it all off. Baby oil and Vaseline work just as good as expensive make up removers in removing eye make-up and do not sting!


  • Search for the same branded make-up you use on eBay.  Most brands can be purchased online and cost far less than the high street.  Most sellers also offer free postage on small items, saving the journey to the shop.


  • Dig out free facials! Many department stores can offer free facials for customers to experience high end products. No need to actually pay for it when you can test it for free and get all the benefits!


  • Use olive oil for the entire body. It is a good moisturiser (recommended on babies), can cleanse the skin and even be used as a hair mask for soft, nourished hair.

Saving Money on Clothes

August 22, 2014 Posted by Allan

Clothing Money SavingClothes are a necessity and, for many people, also a luxury. But when you need to refresh your wardrobe, they can also be a drain on your budget. Whether you just want something functional to wear or you take pride in expressing your individual style, there are a number of ways you can get clothes for less.

Charity Shops

Probably the first places people go for cheap clothes are charity shops. This is an excellent starting place. Charity shops are a great place to get high-quality, branded and stylish clothes for less. Usually, clothes will only be sold if they are in good condition and often they have only been donated after lying mostly untouched at the back of a wardrobe (though it is still a good idea to double check for any damage). Like other shops, charity shops also sometimes have sales and when this happens the prices are often extremely low.


A lot of places, especially larger towns and cities, host regular clothes swap events. Generally, you pay a small entry fee and bring along some clothes that you no longer want, need or fit into. Everybody’s items are then pooled together, and you can pick out some new things. Usually, you are limited to the same number of items you brought with you and, apart from the entry fee, you will come away with some fresh additions to your wardrobe completely free.

Buy Off-Season

Summer is now drawing to a close, so you might be surprised to hear this could be just the right time to stock up on T-shirts, swimming costumes and sunhats. Most people buy these clothes just when they need them – often in a hurry because the weather has caught them out – and high demand allows retailers to charge higher prices. When demand has fallen, the opposite happens. Struggling to sell coats in summer or T-shirts in winter, retailers push prices right down to encourage sales. By buying a season ahead, you can save a lot of money.


A lot of things are cheaper to buy online, and clothes are no exception. Online businesses are cheaper to run, and these costs are usually passed on to the customer in an effort to maintain competitive prices. Whether you want to buy generically-branded essentials or designer clothes, buying online will probably save you a few pounds. Shop around for the very best deals. However, be careful buying from sellers you don’t know and trust, especially on auction sites. If in doubt, always try to find feedback or website reviews to be sure you are getting genuine, good-quality items.

Unnecessary Spending to Avoid

June 30, 2014 Posted by Allan

Sometimes you get what you pay for. Other times, spending more won’t get you anything. In other words, on some products opting for a more expensive version is just a way to give the companies a bit more money. Here are some examples of products where you can safely cut costs:

HDMI and Other Video Cables

The market is stuffed with different “grades” of HDMI cable. Prices range from as little as £1 up to £60, £80 or even beyond. At time of writing, the most expensive cable available from leading high street retailer PC World clocks in at £149.99 and boasts “hyper speed.”

Most people don’t feel the need to splash out too much on a simple cable as long as it does the job. Only real tech-lovers in pursuit of the very best picture tend to buy the most expensive cables, but even the average consumer might be reluctant to trust a bargain bucket £1 cable. But the fact is, which HDMI cable you buy makes absolutely no difference to picture or sound quality. Cable quality may have made a small difference in the days of analogue television, but now every device carries a digital signal. The nature of digital means that, as long as a signal gets to the television set, exactly the same picture will be produced. This is why digital television doesn’t get a “snowy” picture when there is slight interference the way analogue broadcasts used to.

Painkillers and Medicine

When buying medicines, there are only three things to look at and brand is not one of them. Look at what drug it contains, what the dosage is, and how much it costs. These are the only things that will make any difference to either effectiveness or value. Big companies selling over-the-counter medicines such as painkillers like to use brand names that sound scientific. This way, the brand name sounds like a drug and they can foster the idea they use unique ingredients to offer something better than the alternatives. A closer look at the label, however, will reveal that they are actually just standard medicines like ibuprofen which can be readily purchased at the same strength from own brands and discount brands.

There is one important caveat when choosing the cheapest medicines. When buying from a shop shelf, this principle should hold true. If getting your medicines from the internet, however, take care to ensure that the vendor you are buying them from is legitimate. Buying medicine online can be a minefield and it can be difficult to know what you are really getting.

Saving Money on New Driver Car Insurance

April 22, 2014 Posted by Allan

New DriverCar insurance for new drivers is notoriously pricey. Insurance companies deal in risk, and new drivers represent a statistically much higher risk than their experienced counterparts. However, there are a number of steps you can take to help keep the cost down.

Always Compare Prices

This step is not specific to new drivers, but it is extremely important. Yearly insurance premiums can vary by hundreds of pounds between different providers, and even if a company offered the best deal for a more experienced family member it does not mean their new driver policies will be just as good. Research the market online through price comparison websites.

Pay up Front

Paying for the full year up front will always get you a better deal, and for new drivers this will be particularly crucial. A monthly policy is essentially a high-interest loan, so if you cannot afford to pay up front from your own money you might want to seek a cheaper finance option. Using a credit card, for example, will likely offer you a better interest rate as long as you keep up the repayments. A 0% card is, of course, ideal.

Add Named Drivers

If you add more experienced family members onto the policy as named drivers, even if they rarely use the car, this can reduce risk in the eyes of the insurance company and bring down the cost. However, do not insure the car in someone else’s name with yourself as a named driver. This practice is classed as fraud and could invalidate your policy. In the event of an accident, it will be investigated and likely discovered.

Avoid Modifications

Car modifications are popular with young and newly-qualified drivers. With the options likely limited to sensible, un-flashy cars, a bit of personalisation can seem like a nice touch. However, even simple cosmetic modifications can push up insurance costs. Barring any added safety features you might want to add, it is best to keep the car as the manufacturer intended.

Choose a Car Carefully

Newly-qualified drivers are likely to look for cars on a limited budget, but it is worth considering more than just the price of the car. Different cars can result in wildly different insurance premiums, so seek out a quote before buying the car.

If you find yourself looking at two cars and find that one will cost £100 more but save £100 on insurance, it may seem like there is nothing to be gained. However, buying the more expensive car is still often the better option. Assuming you intend to keep it for more than a year, it will save money on the following year’s insurance as well. Also, buying the more expensive car will often (though not always) mean you get a better vehicle for your money.