In a new Which? Money survey, we reveal your top ten money worries for 2011. We also look at the forecast for these areas and help you take action to minimise the impact.
1. Interest on Savings
Of the Which? members surveyed with savings accounts, 52% of you said you’re extremely or very worried about how much interest you are getting.
Interest paid on savings accounts has dropped over the last two years. The highest-paying Which? Best Rate instant-access account in November 2008 paid 6.52% and the market average on £5,000 was 3.59%. Now, the best rate is 2.9%, with the average at 0.87%.
Use our new online Savings Booster tool to see how much you’re currently earning and how much more you could get by switching account.
2. Energy prices
Our survey showed that 36% of Which? members are extremely or very worried about the rise in energy prices. The price of gas rose throughout 2010 and the Bank of England (BoE) predicts a rise of about 10% over the coming months. And as 43% of our electricity is generated from gas, electricity prices will inevitably rise, too.
Visit Which? Switch to see if you could save on energy bills.
3. Pension values
Our survey showed that 35% of you are extremely or very worried about the value of your pensions.
Those who retired and bought an annuity when the stock market plummeted would’ve seen their retirement income reduced as a result. If you’ve not reached that point, though, you can wait for the value of your pension pot to recover. However, annuity rates have reached an all-time low. An annuity provides people with personal – and some types of company – pension with a regular income in retirement.
Visit www.which.co.uk/annuities for more on annuities.
4. Future tax levels
Around 26% of you said that you were extremely or very worried about future tax levels.
Typically around 35% of the money we earn goes on tax. Direct taxes such as income tax and National Insurance account for 20% of the money we earn. The rest goes on VAT, duty on alcohol and petrol, council tax and other indirect taxes.
The BoE’s prediction is that inflation will increase further and remain above the target throughout 2011. The rise in VAT from 17.5% to 20% will contribute to this.
Our 30 great ways to save on tax guide will help keep costs down.
5. Security of savings
Of the Which? members surveyed, 19% of you said you were extremely or very worried about the security of your savings. The Financial Services Compensation Scheme (FSCS) offers a safety net to savers if the risk your bank going bust becomes a reality. If you have a savings account with a provider that is authorised by the Financial Services Authority (FSA), up to £85,000 of your savings are protected.
Visit our savings safety section for more information about keeping your savings safe. .
6. Food prices
Around 19% of you said you were extremely or very worried about the increase in food prices, and you have every right to be. Food prices are on the rise, according to a new report from the British Retail Consortium.
Latest figures show that food inflation has increased to 3.8% in August from 2.5% in July – the highest annual rate rise for over a year.
Check out our tips on ways to save on food as prices soar.
7. Pound exchange rate
The instability of the pound last year has led 15% of you to be extremely or very worried about the currency’s exchange rate.
No matter how the pound weighs against the dollar, it’s always a good idea to shop around when exchanging currency.
Our travel money pages will help you get more for your pound overseas.
8. House price falling
In our survey, we found 10% of people were extremely or very worried about the price of their house falling. The Which? survey reveals that 54% respondents believe that UK house prices will decrease over the next six months. Just 5% think they will rise.
If you’re in this situation, our guide to buying and selling in a falling market can help.
We found that 7% of our members were either extremely or very worried about losing their jobs.
With the employment market looking less than stable and 490,000 planned job cuts in the public sector over the next four years, your concerns are viable. It’s not a pleasant thought, but if you are worried, our guide to surviving redundancy can help.
10. Repossession of home
Only 1% of our members were either extremely or very worried about having their house repossessed.
Anyone running into trouble with paying off their mortgage should contact their lender immediately. You have the right to discuss options with your lender, and remember the new mortgage support scheme which could help you if you face repossession.
Check out our advice and tips if you are facing repossession.
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