Money latest: £1 lottery ticket promise in doubt; the sign that hints UK rental market is about to change (2024)

The Bank of England is expected to hold interest rates at 5.25% next week after inflation rose unexpectedly in December, according to financial services company Hargreaves Lansdown.

The Consumer Price Index was 4% at the end of the year, up from 3.8%.

The chances of a reduction in the base rate "look very slim indeed", with three of the nine-member committee that decides the rates having been "ultra-cautious" thus far, said Susannah Streeter, head of money and markets.

Her colleague at the financial services company and head of personal finance, Sarah Coles, has given us her assessment of what this means for savings and mortgages.

Savings

When it comes to savings accounts, it is the Bank's assumptions about the coming year that matter most, Ms Coles says.

December's bump has not changed their view that rates will be cut several times this year, and they are pricing fixed-rate deals accordingly, she says.

Variable deals aren't moving because they are based on what the Bank is doing today, but fixed-rate products have fallen 0.25 percentage points in a month.

"In the coming months, there's a very high chance that rates will fall, so if you don't need the cash right now, fixing and guaranteeing the return for a year or more may well prove more rewarding," she says.

Mortgages

While Santander reacted to the inflation figures by raising rates 0.2%, this is not expected to be widespread and competition in the market remains fierce, said Ms Coles.

"The general direction of travel for rates in the coming months is still likely to be downwards.

"The Santander announcement came sandwiched between cuts from Barclays and Nationwide, so it's the exception to the rule right now."

She said buyers and those seeking to remortgage have two options.

A tracker will drop when the Bank of England cuts rates, but there are no guarantees when or how far they will go.

Or you can lock in a fixed rate deal now - up to six months before the remortgage is due. If rates fall from here, you can ditch the deal and shop around, and if they rise, you've secured a bargain.

Were you issued a voucher by EasyJet because of a cancelled flight during the pandemic?

If so, and if you haven't already used it, you need to redeem it by the end of the month (next Wednesday), when it will expire.

EasyJet said that some £58m worth of vouchers had not been redeemed as of November last year, and as they can't be swapped for cash refunds, those still in possession of them will need to get booking quickly.

It's worth noting the vouchers can only be used for flights with the company - and can't be used towards any EasyJet holiday packages.

Why are so many unclaimed?

EasyJet had previously set a deadline of 31 July last year to redeem them, before announcing it would extend that to 31 January 2024.

As a result, many voucher-holders could have thought they had missed the boat (or plane) - thinking that, as was the case for the counterpart Tui and Jet2 schemes, their vouchers had already expired.

If you have a voucher, clickherefor more information.

The cost of insuring high-value items in your home has increased by 24% over the past year, data shows.

A home insurance policy including high-value cover rose by £58 to £302 between December 2022 and November 2023, Compare The Market found.

Inflation also means more items may now be valued above the maximum amount that can be claimed for a single item on a policy without extra cover (often £1,500).

But policies with extra cover now cost £108 more than policies without it.

"High inflation means some possessions may now be worth more than the single item limit, so the policy will only partially cover the cost of a replacement," said Helen Phipps, home insurance expert at Compare The Market.

"Households should be careful not to underestimate the value of any expensive single items, such as jewellery or a big-screen smart TV."

The typical cost of all home insurance policies has risen by £46, according to Compare the Market data.

Inflation has made it more expensive to repair or replace items, increasing the cost of claims for insurers.

By Ollie Cooper, from the Money team

This week's myth or must addresses the idea that...

'Washing up is cheaper than using a dishwasher' or depending on who you listen to 'dishwashers are cheaper than washing up'.

A Beko studysuggestsnew model dishwashers with the "eco" setting switched on use only 13 litres of water to wash the same amount of dishes that would use 103 litres if done by hand.

Thirteen litres used on the eco setting amounts to just 3p. How much energy an eco cycle costs is heavily dependent on the size and make of your machine, but the total cost of running one is thought to range between 8-18p.

Using 2024 rates fromWessex Water, 103 litres to handwash would set you back about 23p, plus the cost of heating that water - around 7p for the estimated 1KwH required according toUswitch- leaving a total of 30p.

So on the face of it....

Washing up 30p veco cycle (up to) 18p

But there are a few other things to consider.

First, many people rinse their dishes before putting them in the dishwasher. Dishwasher product manufacturer Finish estimates we waste as much as 75 litres of water "each time we rinse a load of dishes before putting them in the dishwasher" - which, using the same Wessex Water rates as above, translates to 17p.

This would put the cost of using a dishwasher, even on eco setting, at between 25-35p. This puts us into either-or territory...

Washing up 30p v rinse theneco cycle (up to) 35p

Akin Garzanli, chief marketing officer at Beko, says rinsing isn't necessary.

"The long-standing notion that you should pre-rinse plates before loading them into the dishwasher to maximise result is simply not true and is a waste of [water and] energy," he says.

A second factor is that all these numbers really depend on your dishwasher model.

"[Newer] dishwashers these days are incredibly efficient and certainly give handwashing and more traditional models a run for their money," Mr Garzanli said.

Sergey Ogorodnov, chief executive and co-founder of Voltaware, says his company's estimates suggest the cost difference per year between efficient and non-efficient dishwashers "can be as high as £140".

"This demonstrates the benefit of upgrading to energy-efficient appliances wherever possible, as households can enjoy significant long-term returns on their investment," he says.

So what's the answer?

The answer is that it depends - but anyone telling you that washing up or using the dishwasher is cheapest is not telling the whole truth.

WH Smith is on course to open 110 shops this financial year - 15 of them in the UK.

More than 50 will be set up in North America, according to chief executive Carl Cowling.

The high street firm said it was boosted by its stores in UK airports, railway stations and hospitals in recent months.

The company aims to open 15 new stores in the UK each year for the near future.

The government is disappointed NHS consultants rejected a pay offer, theTreasury minister has said.

Consultants were offered an average increase of 4.95% on basic pay on top of last year's rise of 6%.

Gareth Davies told Sky News: "We hugely respect the work that NHS consultants do, they save lives every single day and that's why we're so disappointed that the BMA narrowly, very narrowly by 1%, rejected what we regard as a very fair and proportionate pay offer.

"We really urge them to get back to the table to put patients first because we know the impact that strikes have been having on patients."

Almost one in six renters missed at least one essential bill payment between December 2023 and January 2024, according to Which?.

A person interviewed by the consumer group said: "We are not living, we are existing at this point. No holidays, no luxuries, just stress and worry."

By Nick Lester, business reporter

A promise by the incoming National Lottery operator to slash the price of a ticket from £2 to £1 is under review.

Allwyn has also said delayed plans for new draw-based games will affect sales and the amount of money it can give to good causes in the early part of its 10-year licence.

The hold-up has been blamed on legal wrangling over the handover to Allwyn from Camelot, which has run the lottery for the past three decades.

Allwyn is preparing to take over the running of the lottery next week.

The firm's recently appointed UK boss Andria Vidler has said the group will not be able to make any of the bigger changes it had pledged to introduce until next year.

Ms Vidler, who took the helm last October, said the group was trying to ensure that money for good causes will not go "backwards" this year, but that this funding was directly affected by sales growth.

She said players would not notice any "Big Bang changes" from day one, adding that the delays to new games were a "consequence of the legal issues".

Ms Vidler said: "Until all of these big challenges were resolved, we couldn't get going.

"The challenges delayed the final award of the licence to Allwyn, which shortened the transition period."

The handover on 1 February marks the first time the lottery has changed hands since it was launched nearly 30 years ago.

Ms Vidler said the firm was still committed to its long-term goal to double money for good causes, but that it was set to fall short of early years targets.

On the delays to its plans, Ms Vidler said: "Of course, Allwyn as a group is disappointed."

"There's been a lot of frustration with constant delays, but collectively we have got 10 years, it's not something that will happen week one or day one."

We have tonnes of correspondence from readers this week about stories that have featured in this blog.

We start our round-up with a reader calling themselves "dogspiracy", who responded to our post on Monday about the cost of having a dog rising at double the rate of inflation...

There's a racket going on with vets and pet insurance. Vet fees are obscene but the insurance company pays out instantly, no questions asked. Why, because insurance policies have skyrocketed, vet and insurance companies' profits soar, while the pet owners are fleeced.

We had lots of views on a new survey ranking towns and cities in England, Northern Ireland and Wales for their average take-home pay after rent.

It showed Crawley, Oxford and Cambridge all gave London a run for its money for residents having less spare cash after rent.

The survey, by Adzuna in conjunction with Zoopla, suggested that those looking to keep hold of their cash should consider moving north, with Middlesbrough, Bradford and Leeds offering residents the most cash to take home after rent.

To which reader Matt from Hartlepool said...

Can you please keep the southerners in the South. It's bad enough having all our taxes funding London without you telling this lot where to buy or rent cheap houses. Referendum to devolve the North from the South please.

In the interests of balance, we also had this from a correspondent calling themselves Coolio...

Why is the narrative within the media so strong that "levelling up" means that the North is so much worse off than people in the South? Clearly people up north have far more expendable money.

Finally, we got this in fromDTPN, who thinks it's time to declare the cost of living crisis over...

Now minimum wage has gone up nearly a pound an hour for the last two years, inflation is dropping and interest rates are falling [note: they haven't yet - they are forecast to do so in May], can everyone stop saying cost of living crisis. Let's start being more upbeat and onwards and upwards.

If you've got a view on this or anything else in the Money blog, let us know in the form above - we'll feature the best here.

By Nick Lester, business reporter

London's top-flight share index has jumped to a 10-day high after upbeat earnings updates from European luxury firms boosted Burberry and Diageo.

The FTSE 100 climbed 0.8% in early trading.

Bolstering luxury stocks across Europe, French giant LVMH saw shares jump 8.2% after posting a 10% rise in fourth-quarter sales. Its brands include Tiffany's, Christian Dior, Hennessey and Moët.

In response, Burberry climbed 2.6%.

Diageo added 3.9% after French spirits maker Remy Cointreau posted a slightly smaller-than-expected decline in third-quarter sales.

The pound dipped 0.2%, helping shares of global companies such as Shell and AstraZeneca that tend to draw a large part of their revenue overseas.

Meanwhile, WH Smith has said it is on track to open 110 shops this financial year as the retailer's travel arm saw sales continue to surge.

And the boss of Superdry has warned the firm’s fortunes could still take some time to turn around with the market unlikely to "get any easier" in the near-term, following a challenging Christmas.

The clothing retailer said its revenue had fallen by nearly a quarter (23.5%) to £219.8m in the six months to the end of October.

By Emily Mee, from the Money team

A short while ago, I decided it was time for a phone upgrade.

I'd had my old one for about three years and I wanted a better camera (mine was only half working), plus people could barely hear me on calls (which does defeat half the reason for having a phone).

As I didn't want to pay a huge price tag, I decided to look for refurbished phones - and managed to nab a Google Pixel 7 for £189 less than the average retail price.

Despite the huge saving, most of the friends and family I've spoken to say they've never bought a refurbished phone.

James Francis of Mozillion says you can save up to £300 buying refurbished devices versus buying brand new - so it's well worth considering.

Some people may be put off by thinking they can't find the latest models secondhand, but he says there are already iPhone 15 Pros and Samsung S23 Ultras on the refurbished market.

On the latest iPhone, you can save yourself £170.

Mr Francis also says you can save cash if you're not fussed about the colour of the device - especially if you're going to stick it in a case anyway.

He explains there are different grades of refurbished phones, which are A, B, C, D and E - or sometimes referred to by retailers as something like "fair", "good", "excellent" or "good as new".

"Good as new" phones will be immaculate, with no small scratches or signs of wear and tear - but you can save yourself even more money by going for one of the lower grades.

"Yes, good as new looks lovely but consumers shouldn't rule out looking at some of the lower grades," he says.

"They'll still be fully functional, won't have anything broken on them, they won't have any cracks in them and still be with a warranty, it's just cosmetically they might look a bit rougher.

"But you put it in a case, put a screen protector on it and no one's going to know."

Is there anything to look out for?

Of course, there are some things to be aware of when buying refurbished phones.

Mr Francis says you should ask yourself: "Are you buying a refurbished phone that might have some third party replacement parts, ie a third party replacement screen or battery in it, or are you buying a refurbished phone that's got all genuine parts, like a Samsung phone with all genuine Samsung parts?

"If a seller can't tell you that, then my advice is steer clear because you don't know what you're buying."

For the lowest risk, it's worth buying a refurbished phone with all genuine parts.

There are plenty of reputable outlets around, including CEX, Mozillion and Back Market - while Apple has its own certified refurbished site called Apple Direct.

Mr Francis says you can also try eBay as one of its requirements for sellers is they must stipulate whether the phone uses genuine parts of nor.

He recommends buying from a reputable seller so you know who you're buying from, as you may have "no comeback" if you buy from a random seller and it goes wrong.

You should also look out for whether the site offers buyer protection.

Another thing to check for is the warranty - Mr Francis suggests looking for a minimum of 12 months.

Some good and bad news for would-be and existing renters this morning.

New Rightmove data shows the advertised rent for newly listed properties outside of London has hit a record high at £1,280.

This marks a 16th consecutive price rise, but the rise (0.2% on last quarter) is the lowest since before the pandemic - a sign the market could be easing.

Properties in London have also seen a rise of 0.2%, but the yearly increase in the capital has fallen from 12% in the last quarter to 6% - the first time a rise in single digits has been recorded on the previous calendar year since 2021.

Rightmove suggests these early signs indicate that the annual pace of rent growth will slow further throughout this year, predicting rents to be 5% higher outside of London by the end of 2024, and 3% in London.

This table shows the country's rent hikes hotspots...

More homes up for rent and enquiries down

Over the past few years, the need for rental properties has skyrocketed, with the market unable to keep up with increasing demand.

But now, Rightmove says the number of tenants sending enquiries to letting agents to move is 13% lower than the same period last year, while the number of new rental properties coming onto the market is 7% higher than last year.

"We can't keep seeing double-digit rent rises every year as tenant affordability simply cannot keep up, and 2024 is the year we think there will be a much smaller increase in advertised rents,"Rightmove's director of property science Tim Bannister said.