This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
FOOL'S EYE VIEW
Don't you just hate it when you boldly buy a product, only to find later that you've paid over the odds or been fleeced? Oh dear! This stressful situation happens particularly often when it comes to buying financial products. Almost every one of the UK's 47 million adults has bought the wrong financial product at some point – and paid a high price for doing so! Then again, partly thanks to the Internet revolution, market competition has heated up in the last few years, leading to the introduction of many great-value products. So, if you want to make better financial decisions and become a cannier consumer, read this guide to not being taken for a ride! 1. Standard variable rate mortgages By the end of November 2004, UK homeowners owed a whopping £868 billion to mortgage lenders, which works out at about £74,000 per mortgage. Clever homeowners have discovered that many Best Buy home loans charge interest rates below the Bank of England's base rate, currently 4.75% a year. So, with a great special-rate deal, you could be paying an annual interest rate approaching 4%. However, millions of homeowners are blindly paying their mortgage lender's standard variable rate (SVR), which is the bog-standard rate offered to all borrowers who don't have a special-rate deal. The main problem with SVR mortgages is that they are hideously expensive, with annual rates around two percentage points higher than the base rate. Why pay nearly 7% APR, when you could pay much less by switching to a better deal with your current lender, or moving your business to one of its rivals? By paying your lender's SVR, you're needlessly handing over thousands of pounds in extra interest. Switch and save today! Check out the great deals in our Mortgage centre. 2. Standard-rate credit cards Credit-card companies borrow money at under 5% a year and then lend it to their cardholders at rates of up to 25% APR. That's great news, but only for the card issuers, who are making record profits at the expense of their borrowers! At the end of last year, we owed £58 billion on our credit cards (an all-time record), but only around a sixth of this total (£10 billion) was on wonderful, marvellous, brilliant 0% cards. These cards charge no interest on balance transfers for an introductory period of up to a year. Although there are around sixty 0% cards on offer, fewer than one in five cardholders (18%) have moved an existing debt to one. Why on earth isn't everyone playing the 0% game? It's sheer madness to pay interest on credit-card debt if you don't need to. With a half-decent credit history, you should be able to get your hands on a 0% credit card within a fortnight. Dynamite your expensive debts today with a 0% balance transfer! We have several superior 0% cards in our Credit Card centre. 3. Outdated savings accounts British savers have almost £503 billion on deposit, which comes to over £20,000 per household. Sadly, though, this money is hugely unevenly distributed: where's my twenty grand, for a start? One major problem is that most of this money is in rubbish, past-it accounts that pay pitiful rates of interest. There are over a thousand different savings accounts available in the UK, yet only a handful pay tip-top interest rates. If your savings aren't earning, say, 5%+ a year, you're missing out on a lot of extra interest. Don't be a sluggish saver and leave your money rotting - join the savings revolution and snap up a Best Buy account today! Our Savings centre includes several accounts that pay 5%+ a year. 4. Traditional bank accounts Of the forty million British adults who have a bank account, around four out of five have an inferior, old-fashioned account with one of the major banks. These accounts are junk for three main reasons: Switching your current account to one of the "new generation" accounts is an easy way to get more from your money. How do you fancy earning 55 times as much interest? Learn more in The Perfect Bank Account. Find a better bank account in our Online Banking centre. 5. High-street personal loans If you go shopping for an unsecured person loan on the high street, expect to pay well over the odds. For example, in my article today on personal loans, the lowest interest bill on a £5,000 loan over three years comes to £448, with a "typical APR" of 5.8%. Take out a Barclayloan, however, and your interest bill rockets to £1,150 (14.9% APR). That's over £700 more than our Best Buy. The best way to get a cheap personal loan is to shop around online. Start with a visit to our Personal Loan centre. 6. Payment protection insurance (PPI) PPI is sold alongside mortgages, personal loans, credit and store cards, and other finance agreements. It is optional insurance that covers your monthly repayments if you cannot work because of accident, sickness or unemployment (plus life cover for loans and cards). However, thanks to dubious sales techniques, it is widely mis-sold. What's more, the small print of PPI policies is riddled with get-out clauses, which makes claiming benefits an uphill struggle. Even so, thanks to the UK's credit boom, sales of PPI have soared in recent years, with millions of policies being bought every year. I estimate that lenders and insurers raked in up to £5½ billion in PPI premiums in 2004, yet paid out only a fraction of this total to claimants. As a former marketing manager in this field, I reckon that PPI adds perhaps £4 billion a year to lenders' profits. In other words, its profit margins are around 80%, which makes it one of the UK's biggest financial rip-offs. Until PPI providers put their house in order and stop making excessive profits, most borrowers would be better off self-insuring (putting money aside to meet repayments when times are hard). Alternatively, try shopping around online for this cover, or contact a reputable insurance broker. It's easy to find PPI at a fraction of its high-street price. 7. Life and health insurance I'm a huge fan of term insurance, which is life insurance that pays out a fixed sum if you die during a prearranged period, say, the 25 years of your mortgage. However, I would always apply for this cover via a specialist insurance broker, preferably online, because high-street prices for life cover are astronomical. Thanks to my Rule of Three, millions of people have paid too much for their life cover. Yet a £10 reduction in your monthly premium would save £3,000 over 25 years (the term of a typical mortgage protection policy) – and this is easily achievable. The same goes for critical illness (protection against cancer, stroke, heart attack, etc.) and income protection (long-term sickness) insurance. In particular, mortgage lenders charge the earth for their policies, which often offer inferior cover to the Best Buys. Be careful when switching critical illness polices, though, as this market is evolving rapidly, so like-for-like replacement policies are hard to find these days. (By the way, the same goes for home and motor insurance from mortgage lenders or high-street providers, which are also universally overpriced.) Lower your premiums with a visit to our Insurance centre. 8. Travel insurance In this recent article, I warned readers against buying travel insurance from tour operators and travel agents. Research from independent market research firm Defaqto showed that unsuspecting customers of these firms are paying £235 million a year too much for holiday cover. What's more, insurance from travel firms can cost up to seven times as much as a Best Buy policy. Crikey! So, if you automatically buy your travel insurance from your tour operator or travel agent, you could be wasting £200+ a year. Go for one of these Best Buy policies instead, and pay a visit to our Insurance centre, too. 9. Gas and electricity Last year, the news was filled with stories of fuel suppliers raising their domestic tariffs. 2004 was the year of massive gas and electricity price rises, with some providers raising their charges three times. On average, we're now paying about a sixth more for our domestic fuel than we did a year ago. In other words, a yearly fuel bill of, say, £420 is now around £490. Although switching is quite straightforward (I've done it twice without a hitch and am about to do it in my new home), only about a third of UK households have switched fuel providers. For the other sixteen million households, here's how to save an average of £170 a year. Bash your gas and electricity bills with Fool partners uSwitch and Powergen. 10. Managed funds Millions of UK investors entrust their money to highly paid, highly educated professional fund managers. Almost all of the money that pours into pension, insurance and investment funds is controlled by these clever folk. However, perhaps the City's greatest myth is that these high flyers earn their fees by beating the market and, thus, give their investors value for money. Sadly, this isn't true: over the long term, less than a fifth of fund managers beat the market benchmark that they seek to outperform. And yet they charge fees of, typically, 5%, upfront plus 1.5% a year for this marked lack of success. Rather than be disappointed by these "experts", I prefer to invest in a low-cost, simple, flexible index tracker. Best Buy index-tracking funds charge no initial fees and an annual fee of around 0.5% a year. These low charges give me an immediate advantage over investors in managed funds, because more of my money gets working on day one. Although the returns from my trackers won't beat the market, they won't massively underperform it, either! Learn more in our Index Tracker centre. That's it for now. Good luck with replacing your old dogs with shiny new stars! More: Short of time? Start by finding a 0% credit card , high-interest savings account or a cheap personal loan.