Car Insurance

Car insurance comparison website Tiger.co.uk has launched a guide to savings accounts to help shoppers who are trying to identify the best place to house their extra money.

A report from the Centre for Economics and Business Research forecast that the amount of money being saved by people living in Great Britain is set to increase by nearly £20 billion to £94 billion over the next five years.

It seems that one of the effects of the financial crisis is that many more people are looking to save money in an attempt to feel more financially secure and, as such, there will be many people looking for the best return they can get on their savings.

Tiger.co.uk introduced its savings account comparison service in early 2012. The new guide to savings accounts is designed to explain the range of savings products available and provides detail on the benefits and conditions associated to each so that shoppers can select the best product to suit their individual circumstances.

Andrew Goulborn, Commercial Director of the car insurance comparison site, commented: “The number of people looking to put some money aside is growing and no doubt a lot of savers will be looking to make sure that their savings are safe. Provided that cash is in a UK regulated bank or building society it is protected under the Financial Service Compensation Scheme, meaning that up to £85,000 per person, per account, is protected. We offer a number of different accounts on Tiger.co.uk, many of which are regulated, but we are also seeing increasing interest in peer to peer, or social savings schemes which are not covered by the Financial Conduct Authority but offer a higher rate of return in exchange for a little more risk. Everyone’s circumstances are different which is why it is important to do some research and shop around before committing to an account.”

With a wide variety of savings accounts to choose from it can be tough to come to a decision about which account is best suited to individual needs. There are lots of different products on the market ranging from simple instant access accounts to more complex ISAs and bonds.

This guide is designed to explain more about the savings products that are offered through comparison site Tiger.co.uk.

Instant Access Accounts

For those who tend to dip in and out of their savings every now and again an instant access (also called a "no-notice") account could be a good option. This type of account is designed to allow account holders easy access to their savings and, as such, it can be useful for those occasional rainy days.

Some accounts will place a restriction on the maximum number of penalty-free withdrawals the account holder can make within a given time frame, so it is important to review the terms and conditions before opening this type of account.

Interest rates on instant access accounts tend to be variable, which means that they can fluctuate. The interest rate is usually low when compared to savings accounts where the money is locked in for an agreed period of time.

Like instant access accounts, notice accounts give the account holder access to their money but they require that a notice period is given prior to making a withdrawal. The period of notice required is usually 30, 60, 90 or 120 days. If the notice period is ignored, the account holder will face a penalty. Deposits into these accounts can usually be made at any time. Interest rates on these accounts are also variable and, typically, the longer the notice period the higher the rate of interest paid.

As the name suggests, a regular savings account requires that the saver deposits money into it each month. This type of account can offer a good interest rate compared to instant access and notice accounts but there are limits on how much can be saved and the headline rate only lasts for a year.

Savers normally have to pay in £10 to £500 each month but if payments are missed or the money needs to be withdrawn early, some of the interest may be sacrificed as a penalty. Regular savings accounts are normally set up so that there is no access to the savings for twelve months. After twelve months the money will usually be moved into a standard account with a much lower interest rate.

UK taxpayers have to pay tax on the interest they earn on their savings. Cash ISAs offer a way of saving without having to pay tax on the interest earned and, as such, they are an attractive option for most savers.

Interest rates on standard savings accounts are subject to interest. For example, if the account carries a 3% interest rate, a basic rate UK taxpayer would incur 20% tax on this, so the actual rate applied to the savings would be 2.4%. If the money was saved in an ISA, the full 3% would be paid out, but there is an annual limit on how much can be deposited in these accounts.

Every new tax year individuals in the UK are given a tax-free savings allowance and part of that can be invested in a cash ISA. At the time that this guide was published the allowance was £5,760. (A similar amount can also be invested into a shares ISA).

Cash ISAs do not always have the most attractive interest rates on the market but being tax-free means that savers can often get better returns than with standard savings accounts. A point to note is that as soon as any money is withdrawn from cash ISA it loses its tax-free status.

Fixed rate bonds are savings vehicles that offer a fixed rate of interest on savings for a set period of time and the money is locked in for that period.

These products generally have a lifespan of one to five years and, generally, the longer the savings are locked in, the better the return will be. Savers need to be aware that while it may be possible to release funds from a fixed rate bond, there may well be a hefty penalty imposed for doing so.

Peer to peer, or social, savings schemes are fast becoming a popular alternative to traditional savings accounts. These schemes allow savers to invest in businesses or to lend money on the loans market in order to earn a higher rate of interest than the savings accounts offered by banks and building societies can offer. In this situation a saver actually becomes a lender.

Peer to peer lending could appeal to savers who are looking for a higher return on their savings and are open to a little risk. Interest rates paid out vary depending on the risk profile of the business or individual taking the loan and range from around 4% to as much as 18% for more risky investments.

Peer to peer lending companies include:

• Zopa
• Funding Circle
• Rate Setter
• ThinCats
• Yes Secure

Both Funding Circle and Rate Setter have products that are offered through Tiger.co.uk. Some companies charge an annual fee to set up and manage the account and lenders need to have their credentials verified to satisfy money laundering rules. Borrowers are credit checked and also have to pass the lending companies’ own credit worthiness checks.

Peer to peer lending is essentially an investment – if the business or individual fails to repay the loan then investors could stand to lose some or all of their investment. Unlike standard savings accounts these companies are not regulated by the Financial Conduct Authority and, therefore, there is not the guaranteed protection of savings up to £85,000 that is provided with other savings products.

We all know that saving is essential for both rainy days and a bright future. Tiger.co.uk offers a savings account comparison service that compares instant access, notice, peer to peer, bonds and business savings accounts from many different providers. Why not take a look today?

If I have a heart condition do I have to tell my insurer?

If you have a medical condition that you are required to report to the DVLA you must also declare this condition to your car insurance provider. If you are unsure whether you need to declare the condition you can check your condition against this list: https://www.gov.uk/health-conditions-and-driving

Tiger Watch is the monthly car insurance price monitor from Tiger.co.uk, giving the UK's motorists the most up to date overview of policy pricing trends, based on the analysis of thousands of car insurance quotes.

The June 2013 data makes for interesting reading, with policy prices showing an increase of around 1.4% on the prices recorded last month, but a drop of approximately 3% compared to the rates of 12 months ago. When this is contrasted with the government's latest CPI estimate of 2.4% annual inflation, this appears to deliver good news for UK motorists.

The longer term view also shows stability in overall car insurance pricing, with the year to June 2013 yielding insurance policy prices just 0.8% higher than those of the preceding 12 month period. And the trend in pricing makes for even better news for motorists in general, with the second quarter of 2013 being 3.1% cheaper than the January to March period.

However a macro view of the data masks the very different fortunes of younger drivers of opposite genders. The Tiger Watch research looks at a number of different gender and age profiles and younger female drivers are continuing to feel the effects of the implementation of the EU Gender Directive last December. The Directive, which outlawed the use of gender as a standalone insurance rating factor, has caused UK insurance providers to re-price policies and this has had a particularly negative effect on the pricing of car insurance for young women. Tiger Watch estimates that prices for its 20-year old female driver profile have rocketed by over 23% over the last 12 months, with inflation in prices for 25 year old women running at over 8%.

Conversely, younger male drivers appear to be the beneficiary of Brussels bureaucracy, with policy pricing for 20 and 25-year olds dropping by 13% and 25% respectively compared to a year ago.

Commenting on the latest Tiger Watch data, Andrew Goulborn, Tiger.co.uk's Commercial Director, highlighted this gender divide: "Whilst it's great to see car insurance rates falling for many motorists, the EU Gender Directive is having a massive impact on pricing for younger drivers. Whilst young men are benefitting, the extraordinary rate of inflation that younger female motorists are experiencing is a real cause for concern".

Will my insurance cover me against accidentally putting petrol in my diesel car?

No. This is not covered as standard but it is possible to buy a separate policy as an add-on from most insurers to cover you against mis-fuelling.

Most of us have been there. Driving on a motorway at a sensible speed in the correct lane and seeing a "tailgater" in the rear view mirror. Or being frustrated by the "middle lane hoggers" who drive slower than the motorists in the nearside lane. Not only are these practices annoying though - the AA lists them along with mobile phone use as the three pet hates of drivers - they are also dangerous and illegal.

The problem with clamping down on this kind of careless driving behaviour is twofold. Firstly, there are fewer traffic police on the roads to spot these offences - there has been a 20% drop in traffic police numbers over the last decade. Secondly, and importantly, police simply do not have the time to take action in these cases. With the paperwork and time required to issue a summons and go to court in order to effect a prosecution, officers can understandably be reluctant to take action.

All this is about to change at the end of this month.

From July 1st, a raft of changes in motoring legislation will allow police to immediately issue a Fixed Penalty Notice with £100 fines and penalty points for a range of careless driving offences that could otherwise have gone to court.

And the changes to be made also include the first increases in fines since 2000. The fine for using a mobile phone or not wearing a seatbelt will increase from £60 to £100; and for driving without insurance from £200 to £300.

The AA and RAC have welcomed this news, hoping that it will lead to safer roads for law-abiding drivers. Others, including the Institute of Advanced Motorists, have been more cautious in their reaction, highlighting the decline in traffic police numbers as being a negative factor that needs to be addressed.

We've done an office survey here at Tiger.co.uk HQ and there's overwhelming support for the changes, especially to the increased fine for mobile phone use - something that is thought to slow driving reaction times more than in some drink- or drug-driving cases.

But we still think that more could be done to penalise those caught driving without insurance. This problem adds, indirectly, over £30 to every car insurance policy and it is estimated that around 1.5 million people are driving uninsured. The increase in the fine for this offence to £300 is a move in the right direction. But at well under half the cost of the average car insurance policy, we think that this could still look light a green light for uninsured motorists.

What do you think?