Two Pennies Worth

Why six is the magic number when it comes to refunds

When it comes to your consumer rights, it pays to play the numbers game. Sam Dunn explains all.

Three may well be the magic number for culture vultures, school kids learning to count and musicians alike.

But when it comes to your consumer rights, you’d do better to put your faith in the number six instead.

Vital rules on making a complaint and taking faulty goods back turn on two separate sixes – commit them to memory and, in turn, you’ll be able to knock stubborn retailers themselves for six.

Six months

First up is the six-month rule for faulty goods.

If you buy any goods that break or develop a fault within this period, you can take them back to the store where staff must immediately offer to repair, replace or refund them depending on how many days or weeks have passed.

It’s worth stressing the word “must” here.

Thanks to a key piece of European legislation called the Consumer Guarantee Directive, UK consumers have enjoyed extra protection from what’s known as the Sale and Supply of Goods to Consumers Regulations 2002.

In short, it means that if you return goods within six months, the retailer has to accept that they were faulty when you bought them (and so must make amends).

Critically, if the store refuses to accept that your goods were faulty, then it’s up to them to prove this.

In other words, if store staff believe that you’re chancing your arm and damaged your goods by accident yourself, it’s up to them to demonstrate this.

Understandably, few retailers want to spend cash going this extra mile - especially since it’s often cheaper to simply offer a replacement or repair – and so any such problems can usually be solved swiftly.

Swift solution

So buy a new washing machine only to discover five months later after normal use that the drum won’t revolve properly, and you can return it for repair or replacement.

You might find the shop manager huffs and puffs as he or she examines the machine but if there’s no explanation of the fault and no signs of damage, you must be compensated.

However, there’s an evident flipside to the six-month rule; what happens afterwards.

Say your washing machine stops working properly after seven months and you return to the store to complain (assuming there’s no one-year guarantee which, to be fair, most white goods do include).

This time, the manager is entitled to ask you to prove that the fault was there when you bought the goods – even though it has taken several months for the flaw to emerge.

This means you could need to show that neither ordinary wear and tear nor your own damage is to blame, or that a particular component – the drum motor, say, in our example – shouldn’t have broken down so quickly.

This might sound like a nightmare but it’s usually solved fairly simply; plenty of independent engineers or electronics repair specialists will examine white goods and prepare a report, often for as little as £40 to £50.

They can usually be found as members of their industry trade association. For your washing machine and many other household appliances, try the White Goods Trade Association.

In reality, most white goods today come with a guarantee lasting 12 months but once this expires, the onus is largely down to you.

Six years

And here is where the second “six” can help you out.

If your goods stop working or break at any time up to six years after you bought them (five years in Scotland), you can ask for a repair or part-refund, taking into account how much use you have already made of your goods.

However, there is a major caveat.

You can do this as long as it is reasonable for the goods to have lasted this long in the first place.

Unfortunately, there is no legal foundation as to what actually constitutes “reasonable”.

For example, while it’s clearly reasonable to return a mobile phone that barely picks up any incoming calls, is it unreasonable to take back a handset that can’t take calls in your own home (but is fine elsewhere) because of a poor local signal?

Life expectancy

It’s not made any easier by there being no set timelines for reasonable “life expectancy” of various appliances: much depends on use, condition, manufacturer and quality of parts.

Many believe a washing machine should last at least seven years, for instance, but a washer constantly on the go in a household with three children will likely break down long before one used much less regularly.

The added value in the six-year rule is that it allows you to buy goods and use them at much later date without losing rights: for example, if you give a pair of shoes as a gift that aren’t opened for a year only for the recipient to then discover the leather is ripped, the rule means they can take them back.

Remember, though, that not all companies will dig in their heels whenever parts fail, or rebuff you at every turn.

In many cases, quoting the Sale of Goods Act 1979 and explaining your rights should be enough to convince staff that your goods were shoddy and should be repaired or replaced at no charge to you. 

The danger of minimum repayments

If you only repay the minimum on your credit card you could end up spending decades in debt, says consumer champion Sam Dunn.

It’s the stuff of Alice’s Adventures in Wonderland – apply for a credit card, digest the small print for “minimum repayment only” and gawp as your debt mushrooms to ceiling-busting proportions.

What follows is fantastical but for all the wrong reasons. Imagine you’ve built up £2,000 on a credit card with an APR of 15 per cent and, to reduce your outgoings, decide to make only the monthly minimum repayment.

Using a bank’s typical minimum repayment calculation that asks you to pay the greater of 1 per cent of the balance plus interest or £5, it would take you a stonking 23 years and six months to repay £2,176 of interest - on top of your original £2,000 debt.

Well how about that - a near quarter century of repaid interest that costs you more than your original balance. There’s nothing minimum about that. Fantasy figures aside, the bleak reality is that minimum repayments – easy to pay and manage - are also hideously easy to forget and overlook.

A clever trap

And no wonder: it's in companies’ interests to set repayments at ridiculously low levels that keeps you indebted for great stretches at a time. About one in eight cardholders make only the minimum repayment and while many families will use it as a lifeline allowing greater affordability - especially at times of financial stress - it is also a clever trap.

When your repayment is so small, it can swiftly slip out of your financial sights and shortly slide out of mind. Then, when conveniently below the radar, all it needs is time to let the interest payments pile up and do the real damage.

New rules introduced during this year’s revamp of the Lending Code have sadly done little to discourage this. For anyone now taking out a credit card, the minimum repayment must be at least 1 per cent of your outstanding balance plus interest and any default charges or annual fees from the same month.

Brand new rules

Previously, many card calculations didn’t have to factor in a 1 per cent threshold and so could take even more of the cardholder’s repayment as interest rather than on reducing the actual debt. While it might not sound like much of a change, it is an improvement of sorts as more of your debt is now repaid.

But it doesn’t change the mechanism of the trap: because you pay a percentage of your outstanding debt rather than a fixed sum, as your overall debt falls so does your monthly repayment. Canny, eh?

However, at least another change better addresses the deeper problems of entrenched minimum repayment makers. The new regulations also insist that card companies must now contact cardholders who regularly make only the minimum to warn that this will cost them much, much more in the long term.

This will hopefully prove a useful wake-up call for many unaware that their choice of debt repayment is saddling them with horrendous long-term interest payments.

Take action yourself

Yet there’s plenty that cardholders stuck on the minimum repayment can do to limit long-term damage to their personal finances. If it’s affordable, the best step to take is a fixed monthly sum to pay down the card debt – this way, real inroads can be made into what’s owed rather than simply chipping away slowly.

It doesn’t have to be enormously high sum, and certainly not one that imperils other finances, but if possible it's worth aiming for a sum equivalent to at least 5 per cent of the outstanding debt – and ideally 10 per cent.

Alternatively, if the debts are held on an expensive credit card, users with a decent credit score could transfer to a 0 per cent balance transfer card and reduce the overall cost of their long-term debt.

Even better, if you’re not grappling too hard with your personal finances and have some savings you can tap into, using cash that’s unlikely to be earning more than 3 or 4 per cent in a savings account to pay down any debt costing more than this – and many cards will be at 18 per cent and above – will make sound financial sense. 

Consumers shouldn't be punished for trying to find cheap credit deals

We must reform the system that punishes consumers who seek the best card and loan deals, says Sam Dunn. 

A novel way to buy a car

Pick a dealership you like the look of – perhaps it’s one you’ve used before – and run an eye over the models.

When you’ve decided which one you like, ask the salesman if he thinks you should be allowed to drive it or not.

To your dismay he says: “Sorry sir, the answer’s no; but have you thought about this more expensive make instead?”

Twisted, eh? But there’s more.

Unwilling to pay more for a vehicle you really don’t want and can’t afford, you decide to visit rival dealerships.

The same process happens again but each time you visit a new forecourt, the staff are fully armed with the knowledge of where you’ve been before – and the decisions the other dealerships have made.

You’re caught in a trap, entirely at the whim of profit-hungry companies.

The credit trap

My car analogy sounds like a pretty bizarre way to make a major financial commitment but unfortunately it’s one already in practice – when we apply for credit cards and loans.

Frankly, it’s a ludicrous system that would be funny if the consequences weren’t so severe. When you apply for a particular loan or credit card, the very act prompts a “search” entry to pop up on your credit file.

This has an immediate effect on your credit score: positive if you’re successful, negative if you’re turned down.

If it’s the latter, now the nasty part starts. Say you apply for a 0 per cent balance transfer card but your bank tells you that actually a 14 per cent interest card is the best you can get – understandably, you decline.

Yet your ability to then shop around for a cheaper card deal from a rival lender is compromised because of the very act of your first application – regardless of what the offer was.

A vicious circle

Or say you want a credit card offering cashback but your lender can only manage to offer you one without and you refuse – again, the very application taints any future chance of success.

And there’s the rub: too many rejected credit search applications, particularly in a short space of time, can catapult you into a vicious circle.

This is because multiple searches leave imprints on your file and can ruin your credit score as lenders may consider your behaviour as desperate, a sign of over-commitment to debt, or even fraudulent, and rate you accordingly.

Worse, people are lured in by lax marketing laws made more lax by a recent EU ruling that lets card companies advertise headline-grabbing, dirt-cheap “typical rates” as long as 51 per cent of applicants get them - it used to be 66 per cent.

So say if 1,000 people apply for a cheap seven per cent loan, only 510 must qualify: this means 490 go away with a marked card to begin the process all over again.

Each application is essentially a gamble, leaving only the lenders as the real winners.

A better solution

In theory, there’s a way out of this: the “quotation search”.

Instead of an application search which marks your credit files, this type leaves no trace and lets you compare credit cards or loans without fear of further damage.

However, this option is still largely ignored by lenders because, as well as being expensive for them, there’s a much greater risk you’ll simply go elsewhere for a better deal.

The banks should be forced to allow quotation searches, but as yet they don’t have to.

The Treasury Select Committee examined this issue but decided it wasn’t grave enough to warrant any drastic change. That's a poor decision given how expensive credit is today, with many households struggling to find the best deal to help them manage their personal finances.

It’s left price comparison sites such as Confused.com to fill the gap with a service that can help you avoid constant rejection by giving you an indication of the type of card you can apply for and your likely success rate. Find out more about Card Matcher. 

But the fact that cosumers continue to be punished for trying to find the best deal is an utter nonsense Treasury Select Committee, and has no place in consumer-friendly Britain.

Make pension saving more interesting and we’ll all be better off

Consumer champion Sam Dunn calls for someone to spark a serious interest in saving so we don’t all retire poor.

Bouquets or brickbats? Praise and encouragement versus punishment and fear of failure have long been minted as two sides of the same coin: how best to motivate an individual to succeed?

Which suits you most comfortably is rather less simple, of course.

However, sometimes you won’t even have the choice – when it comes to saving for a pension, it’s the bogeyman approach or bust.

The scale of the pensions shortfall

Last week, a fearful report by the Chartered Insurance Institute estimated the UK's overall retirement savings deficit – the chasm between what we will retire with and what we really need for a decent income in old age - stood at a jaw-dropping £9 trillion.

Earlier this year, a mournful survey from insurer Aviva warned that a fifth of the current over-55s owe £65,000 on average while trying to save for a pension – and heaven help those whose debts hover at the higher end of this sad scale.

Separately, the OECD, who work to improve the economic and social well-being of people around the world, recently noted that, on average, UK pensioners only manage to take home less than a third (30 per cent) of their pre-retirement salary when they stop working. The OECD found that much needed to be done to avert a crisis.

Other industry reports continue to underline the mountainous task facing us: for a £25,000-a-year pension, your pension pot must currently aim to top a staggering £500,000.

Are we getting the message?

These are undoubtedly big sticks and they do a good job of beating us around the head about the sheer size of the problem. Yet how much do they actually achieve? Precious little, might be one conclusion given the low retirement savings rates.

Some 12.5 million employees aren’t even members of a company pension scheme while nearly 2 million UK pensioners are officially in poverty. And worryingly, six out of 10 single pensioners in Britain take home an annual pension of less than £10,000 – that’s way below half the national £26,000 average salary.

Heartless hectoring of the UK’s workforce about their poor pension provision isn’t exclusively to blame, naturally. Plenty of deep-rooted factors are at play here: small salaries, ignorance, huge personal debts and mistrust of the UK financial services industry (and who can be surprised after countless mis-selling scandals?) to name just a few.

Each of these carries an emotional charge which in turn complicates the matter for pension providers trying in vain to make a more general connection with the population at large and encourage saving.

However, it’s horribly evident the message is being scrambled.

A better approach

So instead of the scaremongering, perhaps it’s time for a subtler, softer – nay, smarter – approach to encouraging saving for retirement.

Rather than spout blood ‘n’ thunder about the dangers of not saving enough, why not introduce – via Citizens Advice, financial advisers or even product literature - a more positive “can do” approach along the lines of “Save £50,000 over a lifetime and this is how much you can expect to have in retirement; save £75,000 and it’s this; £100,000 and you’ve this; and so on”?

Or why not – this time through a Government agency - harness the vast company pension databases to throw up some more encouraging statistics such as the number of new savers and their average contribution size, and how much it’ll likely give you assuming 5 per cent annual growth, say?

Could a pension lottery do the trick?

Although the soon-to-arrive semi-compulsory national pension scheme (nicknamed NEST) is part of a long-wished for radical rethink on pensions, a subtle change in the way savers are talked to is arguably as important.

Ros Altman, director-general of Saga and a respected pensions specialist, has gone so far as to suggest renaming pensions and even introducing a monthly £1m lottery prize to reinvigorate interest. Gimmicky, yes, but still one hell of an incentive likely to spark some serious interest in saving.

I’d suggest a key caveat, though: at least half of the windfall must be kept back for the winner’s pension. 

How to get a refund, repair or replacement for faulty goods

Consumer champion Sam Dunn explains your rights when it comes to getting a refund, repair or replacement for faulty goods.

By Sam Dunn

To get on in school, it paid to master the key three Rs: reading, writing and arithmetic.

As a consumer pitched against canny companies, you’ll need to concentrate on a rather different trio instead: refund, repair or replacement.

When you buy faulty items you’ll often run up against corporate flimflam, a fog of confusion or – worse – downright ignorance from customer service staff desperate to avoid paying out. So it pays to know what you’re entitled to.

Your right to refund

First, and most clearly, you’re entitled to a refund if you immediately discover your goods are faulty without even using them. For example, you get home and then spot a missing or cracked part, say, or can see damaged casing.

As long as you can show proof of purchase - the original receipt is easiest but a print-out of a credit card or bank statement will pass muster – then this is usually a watertight case for a refund.

In many cases, you’re also eligible for a refund if you only use the goods a couple of times before realising they’re damaged or faulty – for example you realise after a day or two that your new fridge doesn’t keep your food cool or your DVD player won’t play discs without randomly ejecting them.

Don’t leave it too late

The key emphasis here is on time – and making sure you don’t take too long to decide whether to “reject” (as it’s known in the trade jargon) your faulty goods.

Unfortunately, there is no legal definition of just how much time you can take to complain and reject faulty goods.

It’s something that companies sneakily use to wriggle out of paying up - and whether or not you can get a refund can depend hugely on the type of goods and circumstances surrounding a delay in your complaint.

For example, one national high-street retailer recently refused to refund a brand new kitchen appliance that had only been used once because the buyer hadn’t installed it for six weeks. The reason? He was busily looking after his unwell daughter instead.

To preserve your right to a refund, install, test or check anything you buy ASAP.

The minute you think they’re faulty, stop using the goods immediately and contact the seller as soon as possible by phone (and put it in writing to boot as a sign of your intent).

Repairs and replacements

Once you’ve run out of time for a refund, you’re left with a repair or replacement option – but when are you entitled to which and why?

First, let’s dip briefly back into the legalese.

If you’ve bought and used goods for a considerable time – say you’ve had a new lawnmower for a couple of months but its recently sputtering engine suggests a developing fault – by law you have now “accepted” the goods.

This means you’re no longer entitled to a refund but the store or garden centre you bought it from should offer to repair or replace it.

Your choice of a repair or replacement isn’t clear cut and you probably won’t be able to make an outright preference because the law goes someway towards keeping costs down for all parties.

So if a lawnmower repair is likely to be significantly cheaper than a replacement for you, then the store can first offer this. However, it should carry out your repair within a reasonable time and without causing you any significant inconvenience (and if it does, you can ask for a partial refund).

Dealing with further problems

If the repair’s unsuccessful, you can ask for a replacement but if even this doesn’t stop the problem – and the motor still starts to conk out with your second new mower - what next?

At this point, you should then be able to claim a part-refund.

The store will be entitled to knock off a fair bit from the original price you paid to take into account the “successful usage” you managed to get from it.

It’s also worth stressing that some stores won’t even get as far as suggesting a repair or replacement and will simply offer you a partial refund immediately (or allow you to keep the goods but give you some money back for the fault).

However, it can only do this if the cost of repair is more than the value of your goods or could take months to sort out.

Rip-off Britain is here to stay

Consumer champion, Sam Dunn tells Confused.com warns us that the most common day to day rip-offs are here to stay.

If you took the reins of a major UK company, would you instinctively hustle your customers?

I only wonder because every month or so, another swathe of the British public falls victim to hucksterish rip-offs.

Last week, Consumer organisation Which? filed a so-called “super complaint” with the Office of Fair Trading (OFT) in a bid to kibosh "rip off" surcharges levied by companies on debit and credit card transactions.

Teams of Which? researchers discovered that, while the cost to companies for processing a payment by debit card hovers around 20p and is no more than 2 per cent of the transaction value for a credit card,  companies regularly charge far higher fees.

Egregious examples included train-ticket booking site the Trainline slapping on a £3.50 charge for credit card payments while Eurostar laid it on extra thick at £4.

Naturally, the retailers themselves contend that they’re trying to recoup the cost of charges levied to them by banks and card issuers.

The Which? salvo is just the latest in a frankly ludicrous litany of criminal charges and rapacious rip-offs that continue to leave the average UK punter blinking in a state of incomprehension.

What could go wrong with council tax band valuations? Easy: estate agents drove down streets in second gear and wrongly valued some 400,000+ homes leaving many overpaying thousands since the early 1990s.

Or how about the sale of over-priced payment protection insurance on credit cards and personal loans?

And don’t forget monstrous personal pension mis-selling in the late 1980s where providers creamed the fattest of commissions for their own pay packets while convincing retirement savers to swap a secure final salary scheme for the vagaries of the stock markets.

Then there’s endowment mortgages (cheap interest-only home loans were an easier selling point than complex stock market-related endowments), high-risk precipice bonds for elderly savers, door-step selling, split cap investment trusts….

It would all seem to suggest that being a modern-day mountebank is either too lucrative to ignore – hang the inevitable penalty fines that ultimately come with it! - or that it doesn’t take much to swindle the ordinary British customer.

But I wonder how much of it is vanquished victims and the rest middling mugs?

Part of the problem is that enough of us, when faced with outrageous card charge hikes or preposterous sales pitches, still plough ahead and buy anyway.

In worst-case scenarios, many won’t have a choice because of lack of income or poor knowledge – especially among the vulnerable and elderly – and that’s a nasty exploitative situation we can all do without.

However, it’s also the case that many more who do have a choice will be complacent and won’t think to cast even a fleeting glance at small print; won’t blink at a spiralling credit card charge because they can afford it; or are simply too trusting to ever balk at a particular charge and say ‘Excuse me, did you just say that would cost me X? I’ll have to think again.’

Of course, there’s greed too: barrelling headlong into a financial arrangement – take your pick from store finance to hire purchase or credit card promotion – simply to get your hands on favoured goods is nobody’s fault but our own.

Unfortunately, all these flaws favour those with money over those without: and if enough of the former carry on with their daily financial routines like this, it’ll simply get worse for the latter.

Rip-offs thrive in such adverse conditions as, when consumers don’t all pull in the same direction, their overall protection remains stunted.

Until this changes, all manner of snake oil salesmen, profiteers and traders seeking to make a fast buck – whether dressed up in corporate suits or flogging fakes in back streets - will continue to creep into our lives.

So look lively: the rip-off is here to stay for a long while yet.

Coming soon: UK house prices, the opera!

Confused.com writer Sam Dunn explains why we shouldn’t pay too much attention to house-price surveys. 

Thrill to bloody events and thunderous singing as our beleaguered heroine – the plucky homeowner – battles for survival against furious and frenzied price fluctuations.

Hold your heart in your mouth as her hopes, dreams and bricks ‘n’ mortar are haplessly tossed about by economic squalls, evil interest-rate movements and mercurial market sentiment.

Tickets aren’t (yet) available for my fictitious piece of am dram but don't worry: there’s more than enough hammy acting, shrill hyperventilation and bulging eye-ball over-reaction in reality.

Here the centre stage belongs to the glut of national house price indices and the incessant, breathless media reports that accompany them without context or clarity.

The problem is embedded in a three-way tangle: the oversupply of house price indices (now in double-digits), their usual monthly frequency (causing statistical pile-ups) and the small but vital differences between them (rarely explained).

For instance, while Halifax and Nationwide monitor the size of monthly mortgage approvals, Rightmove scrutinises asking prices and the Land Registry is a final record of actual sale prices.

Each has a glaring weakness: mortgage approvals regularly change in size or collapse; asking prices might be at the sharp end of public opinion but yo-yo wildly; and factually accurate completion data tends to emerge up to six weeks after a sale.

There’s also a broad diversity of geography to account for: Halifax traditionally has a larger presence in the north of the country, Nationwide the south. The confusion created often appears comic – last year, Nationwide unveiled a 0.9 per cent fall in August while Halifax suggested prices were marching upwards by 0.2 per cent. 

Yet neither was wrong, just offering a subtly different snapshot of the short-term at a given moment in time.

But the intrinsic monthly value of each – to all manner of movers, first-time buyers and renters thinking of buying – is minimal. It won’t tell you where house prices are likely to go in the future, nor offer any kind of barometer against which to make a sound house-buying decision.

Here, then, is danger of a real skewering: short-term reporting of the price of an asset whose real value is established over the longer term as an investment where, for the vast majority, it’s a home to live and raise a family.

This lack of substance is then compounded by the dismaying frequency with which the statistics are slavered over by shrieking media; barely a day or two will pass without some update of any small movement in property values.

I recently listened to a  radio report gravely imparting news of a 0.1 per cent fall in house prices before moving on to other news of public-sector cutbacks, welfare policy shake-ups and similar less important pieces of information.

The real drama is that a great deal of Britons look to homeownership as a bellwether of wealth, status, aspiration and power in the shape of equity and – importantly for many – a legacy for children.

Which means that house prices sell. No matter how trifling the move, or that a rival index reported a grossly different version of events just days ago, stories about property will bring in the listeners, viewers, readers and advertisers.

Unfortunately, a healthy interest in housing – especially when it matters, during economic turmoil, with rises in repossession, negative equity and defaults – has turned into a meaningless obsession with the minutiae of monthly updates.

It’s not often I can turn to Michael Winner for help but, to paraphrase one of his commercials: “Calm down, dear, it’s only a house-price index.” 

Inflation is a bruising bully make no mistake

 
Sam Dunn, freelance money writer for Confused.com and national newspapers, shares his views on inflation and how you don’t have to let it get the better of you.

When the price of everyday goods rises faster than income or savings interest can grow, it can have a drastic effect on your personal finances. In particular, it can wallop the retired, who rely on a fixed monthly pension and - since they’re no longer working - can’t try to lick it by earning more.

Many struggling families and workers will also have groaned at last week’s revelation that the Consumer Price Index (CPI) cost of living edged up from 3.7 per cent to 4 per cent in January - the highest annual inflation rate in more than two years and double the target in the Bank of England crosshairs.

It’s easy to see why: petrol is now at £1.27 a litre (a record high); car insurance is up by 29 per cent over the past 12 months; transport costs have risen by 7.7 per cent; food and non-alcoholic drink have gone up 6.3 per cent (soft drinks bubbling up a startling 12.1 per cent); and bills for dining out or hotel visits are up 4.5 per cent.This general picture of a national average is invaluable to all manner of policymakers, investors, savers and speculators – yet its relevance to great chunks of the population is harder to pin down.

We all live very different lives, buying goods and paying for services that suit our own lifestyles, income and tastes – and for many the national average may as well be from a different country.

The statisticians calculate inflation using a “basket of goods” that regularly changes content as it tries to reflect our national spending habits. Its considerable size helps it cover plenty of all-encompassing factors – food, travel, fuel bills, alcohol etc – as well as a cornucopia of other, less commonly bought, items to create a decent overall picture.

From the price of a small pet hamster (classified under “recreational items”) to the cost of getting your busted home PC repaired (audio-visual), charge for home removals (transport) and night-club admission (cultural services), the detail is mind-boggling.

To move with the times, contemporary items recently introduced for price comparison include Blu-ray movie discs, bottles of mineral water, powdered baby formula and cereal bars. Of course, not everything is afforded the same space in the basket: an appropriate weighting is calculated and then fed into the inflation machine to spit out the monthly update. However, the upshot is that inflation is a hideously complex beast – and the 4 per cent CPI figure is, for millions, either a basic guide at best or, at worst, hopelessly off course.

There will be plenty who cycle instead of use a car, rarely use public transport, hardly ever eat out and would shudder at the idea of chugging fizzy drinks – their own inflation rate is likely to be considerably lower than that of fellow Britons who do the opposite.

Similarly, older Britons and the retired will be hit by 1.4 per cent fuel price inflation but less likely to be clobbered by the 3.5 per cent in mobile phone costs; ditto students noticing 6.7 per cent alcohol and ciggy (I generalise horribly) inflation won’t largely feel the huge 29 per cent motor insurance and 3 per cent new car inflation.

For many, the solution is to use the national average as a prompt to instead take control – where you can – of your own inflation.

First, try a personal inflation calculator by filling in your spending details at either the official ONS site and try the Confused.com cost of living calculator with tips on keeping your spend down. Be prepared for a shock; you could find it may be much worse than the national 4 per cent.

More importantly, though, you can then put one over on CPI by ensuring you bag the cheapest prices on as much of your daily spend as possible. Keep a lid on your own inflation by outsmarting retailers and services at every turn, whether for example it’s “downshifting” a supermarket shop; using price comparison sites and haggling for car/home/travel insurance; switching to online gas/electricity tariffs; or picking a bundled TV/landline/broadband deal instead of separates.

When you're in charge of keeping a lid on price rises, inflation doesn't have to be such a thug.

Could David Cameron protect drivers from soaring costs?

As fuel costs soar yet again, Prime Minister David Cameron has floated the idea of a “fair fuel stabiliser” to stop drivers being priced off the road. But how would it work? Confused.com’s Stephen Jones takes a closer look.

Motorists in Britain have long bemoaned the soaring cost of fuel, which has crept above the £1.30-a-litre mark in recent weeks. Consecutive governments have failed to deal with the problem and, with scenes of civil unrest dominating media reports in recent weeks – students in particular have made headlines after smashing windows and poking royalty (see below) – the Con-Lib coalition could do without a repeat of the nationwide fuel protests Tony Blair encountered 10 years ago.

Perhaps sensing that trouble may be afoot in the months ahead, David Cameron used a speech at Caterpillar’s factory in Leicester to float the idea of a “fair fuel stabiliser”, a price mechanism by which the government could reduce fuel tax when petrol inflation is at its highest.

A nice idea, perhaps, but this isn’t the first time the Conservatives have mentioned it. Indeed, a consultation on the measure was actually promised in their pre-election manifesto. There was, however, no mention of the stabiliser in the coalition agreement, and the proposal looked to be dead in the water by September, when an Office for Budget Responsibility study dismissed the idea for being too costly.

All of a sudden, though, the stabiliser has mysteriously re-appeared. Whether this is political posturing, or a genuine attempt to offset rising costs for drivers, it’s difficult to know. What’s certain is that most motorists would welcome any moves to drive down the price of fuel.

If David Cameron really does want to help drivers, he might also want to keep a close eye on next week’s debate into the rising cost of car insurance. The Transport Select Committee will meet to discuss the issue for a second time on 11 January, after hundreds of you contacted us to tell your stories about soaring premiums.

Goodbye!

And that's my last rant on Two Pennies Worth... I'm moving onto pastures new, so a big thanks to everyone who's followed this blog and especially to everyone who has commented or emailed me with your stories.

Farewell, it's been emotional!

Got a view on the rising cost of driving? Would a fair fuel stabiliser work? Have your say by commenting below or email: editor@confused.com.

Will 2011 really be "a horrible year"?

2010 was yet another tough year, with Britain pulling slowly out of recession and witnessing the start of tough new government money-saving measures. But trade unions are now warning that we should expect even worse in 2011. Are they right? Confused.com's Stephen Jones considers it all.

Most Brits could be forgiven for breathing a huge sigh of relief as 2010 draws to a close. It's been a tricky old year, and few, if any, have escaped the pain altogether - whether they've suffered from low interest rates, continued job losses, stuttering property prices, falling annuity returns or indeed anything else that's come with this economic downturn.

However, if the Trades Union Congress is to be believed, we could be in for worse in the coming 12 months. In a cheery New Year message, general secretary Brendan Barber warned that "2011 is going to be a horrible year", before arguing that cuts to benefits and public services, along with increases to taxes such as VAT will lead to growing public hardship in the coming months.

Is this fair? Well, certainly things will get tougher for some. Charities such as Shelter have warned of a rise in home repossessions as a result of government cuts to housing benefit and mortgage support schemes, while this would undoubtedly be exacerbated if interest rates were to rise from their current record lows. And of course, an estimated 500,000 public sector job losses aren't likely to help.

On top of that, the Bank of England predicts that the Consumer Prices Index (CPI) is likely to stay above its 2 per cent target throughout 2011 – meaning earnings and savings rates are likely to stay below inflation for the next 12 months at least.

But there are some reasons to be cheerful, even if they might be hidden underneath all the bad news. The British Chambers of Commerce recently pointed out that growth in the private sector would mean that the country shouldn't slip back into recession next year, and a recent study by the Forum for Private Business predicted that more than half of small businesses would create jobs in the coming 12 months.

It may seem that economists are just damning our economy with faint praise, but you only have to look at Greece or even across the Irish Sea to see how much worse things could get. So let's be grateful for small mercies, and keep our hopes up for a prosperous 2011.

And on that note –thanks to everyone who has followed this blog during 2010, I hope you all have a very happy new year. Here's hoping it's not so horrible after all!

What are you expecting for 2011? Have your say by commenting below.