Pocket money... “buy now, pay later” debt burgeons

⬤ “Short-term savings rates are having a moment,” says George Nixon in The Sunday Times. The best available for savers this week is 5.21% on SmartSave Saga’s threemonth bond. The next four best deals are all fixed for just six months. “You usually get higher rates if you tie up your money for longer, but expectations that interest rates will be cut this year mean that many of the best deals are now very short-term.” Allica Bank has a six-month bond paying 5.18% but you need a £10,000 deposit; or you can invest in its one-year bond with a 5.16% return.

⬤ “Motorists on the hunt for more affordable car insurance are being warned to watch out for a marketing trick that makes deals look cheaper than they are,” says Laura Whateley in The Guardian.

Insurers are being accused of offering policies with lower premiums to get them to the top of the comparison tables, but they cover their costs with massive excesses. When you are looking at quotes you can increase your voluntary excess to reduce your premium. “Over the past year it has become easier to push a voluntary excess higher, according to data company Defaqto, which found that insurers varied their range anywhere from £100 to as much as £3,000.”

If you are shopping around for car insurance, check both the compulsory excess and the voluntary excess as you’ll have to pay both if you make a claim. “Any saving you make because of a particularly high excess might have to be repaid several times over if you later claim,” Sam Richardson from Which Money told the paper.

⬤ “Ministers are being urged to intervene over a surge in unregulated ‘buy now, pay later’ credit after the amount UK consumers spend online using such deals rose... to £1.7bn a month,” says Jon Ungoed-Thomas in The Guardian. The deferred payment market has more than quadrupled since 2020. Many people are using deferred payments to buy household essentials. The government promised action three years ago but failed to deliver, Morgan Wild from Citizens Advice told the paper. “In that time, use has rocketed, and our frontline advisers are now seeing three times as many people who need help to repay their debts as a result. Many require emergency support like food bank vouchers.”