The Money Well

Everybody hates the additional charges many of the low cost airlines add to the cost of a flight but the companies concerned keep coming up with new and ever more devious ways of adding to the cost of a flight and emptying your pockets. It can be very hard to know how to make any sort of comparison between the different airlines to compare costs but there is a very useful webpage at APH.com where you can see the various charges made by the airlines laid out to compare.

View additional charges list by clicking here

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

Consumers have been ripped off for phone calls for years with companies forcing us to us 0845 numbers for support and general enquires which can sometimes cost much more than standard phone numbers.

There are many reasons for this and not all of them are to simply make a profit from customer calls but it has led to confusion amongst consumers and many calls cost us much more than they should if we had the choice of which sort of number to call.

One big problem has been for people calling 0800 numbers which are, in theory, free to call. Unfortunately many mobile providers have chosen to charge for these calls even though they are free from a landline. I do have some sympathy with the mobile operators here since there were many services using the free 0800 service to redirect calls to phone numbers all over the world so they were having their service used and abused while other people were making a profit on the back of their systems.

Whatever the reasons for the various charging systems in place OFCOM has at last decided the conumer needs a bit of help here, to try to understand what they are paying for their calls.

Proposals include:

Simpler numbering ranges:

The aim is to make non-geographic numbers and their prices more intuitive, with clearer division between number ranges. Our main proposals are:

• Freephone: (080 and 116 numbers) to be free from all telephones, landline and mobile;
• 03: to become the only non-geographic number range linked to the price of a call to a geographic number (i.e. the 01/02 number ranges);
• Revenue sharing ranges: (084, 087, 09 and 118 numbers -where a portion of the retail charge is passed back to the receiver of the call) are to have a common simplified structure.

Below is an illustrative example of how the number ranges could in future be displayed on Ofcom’s and consumer advice websites as a result of these proposals. Communications Providers may also provide this guide to their customers when they sign up to a new telephone package.

 

There is little doubt these changes are needed. The phone numbering system is confusing and with many of us getting free calls on our landlines on evenings and weekends and hundreds of free minutes on our mobiles it seems crazy that a call to an 0800 number or 0845 number, which is supposed to be the equivalent of a local call, should cost us more than a standard call.

The consultation is open from 04 April 2012 through to 27 June 2012 and if you wish to make your views known you can do so online at https://stakeholders.ofcom.org.uk/consultations/simplifying-non-geographic-no/howtorespond/form

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

Should There Be A Penalty For Paying Off Student Loans Early

There has been a lot of discussion going around about student debt and whether there should be a penalty imposed for early repayment. The thinking being that this is cheap debt and only wealthy people should be able to clear student loans early and a penalty would mean that many less wealthy people would avoid the penalty and let the debt run down slowly over time.

It has now been announced by Business Secretary Vince Cable that there will be no penalty for early repayment and some fear that this will encourage people who have other far more expensive debts to endeavour to pay off their student loans because they feel they are a long term burden even though they are likely to be much cheaper and a much better deal than almost any other loan they accumulate after leaving university.

I can see both sides of the argument but it also makes me wonder about the financial knowledge and maths skills of ex university students if they would not look at the financial implications of early repayment of student loans and the alternative options they might have and how they might get more benefit from repaying far more expensive credit card debt and loans instead.

Understanding The Impact Of Personal Loans And Debt

If the students of today are not fully aware of how finance works in daily life and the cost and impact of personal loans and credit cards compared to low cost student loans then they will face many of the problem of debt that have become clear in recent years. It is fair to argue that it was a lack of knowledge and understanding of the true cost of debt that got many of us into financial difficulties over the last few years. We are a nation up to our necks in debt both personal debt and government debt. If we are not doing anything to educate young people about the pitfalls of debt then we are letting them down badly.

It is clear to everyone that loans and debt are a part of our everyday life now. Whether that is a good thing or a bad thing is open to debate but debt is a part of almost everyone’s life these days. The least we can do is try to understand how it works and what the differences are between one debt and another. We should all be able to at least roughly work out which debts are most expensive and would be the better ones to pay off as soon as we can.

Perhaps there should be required classes as part of every university degree course to educate our young people about the way money and debt works. The classes should give some guidance on the benefits and disadvantages of loans and debt and how to work out the cost of those debts. Interest added to the cost of debt is money that is not available for future purchases or saving. This is a simple fact we all tend to ignore in our quest to acquire more stuff. It is a lesson we all need to understand, especially those embarking on their adult lives with an significant student loan around their necks.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)