Other Money News

We all know that the cost of TV and broadband packages can be expensive, but new research shows that cutting out the TV could save you far more than you may think – if you used the money saved to overpay your mortgage instead, you could shorten your mortgage term and save a whopping £20,000 in the process!

Hefty savings

That's according to figures from Freesat, which certainly make for interesting reading. Let's say you're a first-time buyer who bought a home for £205,170 – the average price for a first home, according to Halifax – and were able to put down a deposit of 10%. This would result in a mortgage of £184,653, with monthly repayments of £925 (based on a 25-year mortgage term with a 3.5% interest rate).

At the same time, the average TV customer pays £44 a month for their contract, but Freesat's calculations show that if you quit the contract and used the £44 to overpay your mortgage each month instead, you could clear your mortgage a year and nine months earlier than planned.

Those extra monthly payments could amount to £12,276 over the shortened mortgage term of 23 years and three months, and thanks to the earlier repayment, you'd save £7,255 on interest, equating to a combined saving of £19,531 – all from cancelling your TV contract!

Time to take the plunge?

Given that typical pay-TV customers only use a small amount of the content they pay for – the report cited research showing that 99% of Sky TV customers' most-watched shows are available on free to air channels, while 24% of sports channel subscribers admit to watching just one hour or less of sports content a week – it could be far more cost-effective to move away from paid-for TV.

Many subscribers aren't happy with their current deal, anyway: Freesat found that 42% of those surveyed are unhappy with their contract, with 32% thinking about quitting, and a further 42% feel taken advantage of by regular price hikes. So don't put up with it!

"Paying for a TV subscription may not seem like a significant outgoing when you consider the cost on a month-by-month basis, but over the course of 25 years, TV customers will spend £13,000 on their contract," said Freesat spokesperson Jennifer Elworthy.

"While we don't expect everyone will consistently overpay on their mortgage, our calculation illustrates how a moderate monthly saving can add up to a life-changing amount of money. Free-to-air channels already offer a great range of quality TV to consumers, and for those looking for surplus entertainment, there are far cheaper options."

What next?

If you're paying more than you'd like for your current TV and broadband package, it's time to take a look at the alternatives. Use our broadband comparison tool to get started – you may find a cheaper TV offering, or you may want to forego paid-for TV altogether and opt for a simple broadband deal instead. Whatever you decide, we can help you get the best deal possible, so get searching and see how much you could save!

Those of you who are subscribed to our weekly Saturday newsletter may be surprised to find something different in your inbox tomorrow. We have been working hard behind the scenes to create a new newsletter that will hopefully give you even more joy and relevant finance news, and now it's finally here!

Because our new newsletter is chock-full of all the latest savings, mortgages, loans and credit cards information, it doesn't fit in a single email, which is why you'll get just a teaser which will allow you to click straight through to the section that is most relevant to you.

Missing out? If you haven't yet subscribed, now might be the perfect time to get on board – just put your first name and email address in the 'Stay in the know' box you can find on the right side of every page, and enjoy your Saturday morning finance update!

As mums up and down the country get ready to be pampered for Mother's Day – which is this Sunday, in case anyone needs a last-minute reminder – it's the perfect time to reflect on the importance of the mothers in your life. Given their essential role, it's worrying that most mums are lacking financial protection.

Research from Scottish Widows shows just how essential they are, as 31% of mums admit that their household would be placed at financial risk if they were to lose their income unexpectedly. Meanwhile, 25% say they could only pay their mortgage for another three months without their income, while 39% would have to use their savings to get by.

Despite this, 60% of women with dependent children have no life insurance, and only 13% have critical illness cover. This leaves many families at risk of financial hardship if the mother were to fall seriously ill, for instance.

The main reason mums give for not taking out life insurance is that they think they don't need it, and yet 61% say that with all the childcare and housework they do, their family would struggle to complete their everyday responsibilities without them. Clearly, this needs to be discussed, no matter how uncomfortable it may feel.

"Many mothers don't consider having insurance as a necessity, with almost a fifth saying they don't rate having critical illness cover as a financial priority," said Johnny Timpson, protection specialist at Scottish Widows. "But there's also the value of a mother's contribution to the home, outside of employment. It's just as important for full-time mums to be insured … as [their contribution] could be very costly to replace."

So, if you don't have a back-up plan in place yet, consider building up a sizeable emergency savings pot, or look into life insurance and/or income protection. That way, you can have the peace of mind knowing that your kids and partner won't fall into financial hardship if something were to happen to you.

Savers left hundreds of pounds out of pocket from years of economic uncertainty have been urged to consider the merits of stocks and shares in the quest for better returns.

A combination of rising inflation and low interest rates mean that since the Brexit vote in 2016, the value of savings deposited in cash has fallen by up to 4% in real terms, according to Scottish Friendly. By contrast, those who put their money in a stocks and shares ISA tracking the FTSE All-Share have enjoyed a real return of 9% in that time.

The calculations reveal that savers who deposited their full allowance of £15,240 into a cash ISA in September 2016 - three months after the Brexit vote - have seen their pot grow by just £225 to £15,465 over the past two-and-a-bit years.

However, due to the rising cost of living, the real value of that money has actually diminished by 4% to £14,620 over the past two years. After accounting for inflation, this equates to a real annual interest rate of -2.1% over the period, equivalent to a total loss of £620.

By contrast, had the same amount been invested in a stocks and shares ISA tracking the FTSE All-Share Index instead, a gain of £2,344 would have been made.

Even adjusting for inflation, investors would be sitting on a pot worth £16,623 in September 2016 prices – a real return of 9%, equating to an annual interest rate of 4.4%.

"Just when savers thought things couldn't get any worse, the Brexit vote happened," said Calum Bennie, savings specialist at Scottish Friendly. "This contributed to rising inflation – the silent killer of savings – and meant that the value of any money in poor-paying cash accounts was gradually eroding. What's worse, most people will have been unaware that their savings were slowly becoming less valuable."

The risks that come with investing mean it is not an avenue that everyone wants to explore. While the actual sum of money deposited in cash-based savings accounts is guaranteed not to fall in value, there are no such assurances when it comes to stocks and shares - indeed, you could even end up with less than you put in.

However, if you are willing to accept the risks, there is the potential to earn returns above and beyond those available on a traditional savings account. Importantly, investing should be considered a long-term venture, meaning five years is probably the minimum length of time you need to be thinking about committing your money.

"While it's a good idea to keep a healthy sum of money in an accessible cash account to cover emergencies and planned expenditure, more needs to be done to educate savers that the stock market offers potential for greater returns," adds Calum Bennie. "Of course, there is risk associated with investing, but if you're willing to keep your money in the stock market for the long-term, your investment will have the opportunity to ride out the ups and downs of the stock market. Naturally, many people are nervous about investing but it needn't be scary if you start by investing a modest amount on a regular basis."

What next?

Find out more about stocks and shares ISAs