Watch Out

Brown is himself out of date. As he doesn’t yet accept Britain is in a recession, his aides have probably not shown him the extensive coverage by this and other newspapers of how people are trading down, making do and generally scrimping.

Apacs, the credit-card trade body, reckons that we are repaying nearly everything we owe on plastic each month. That’s not the same as when we used to save 10p in every pound we earned, but it’s a start.

The Money Central blog in timesonline.co.uk has posted 50 tips to ride out a recession, including how to haggle even in supermarkets.

And, as the Treasury recognised last week with a plan to spend more on financial education, waste is not confined to the dustbin. We impoverish ourselves more than most of us realise, by making poor decisions about money and by sheer neglect.

Rest assured

Lloyds TSB has come up with a sensible scheme to help us cut down on one of the biggest sources of financial waste: home insurance.

Its Personal Home Plan customers are automatically covered for fire, theft, flood and subsidence, and can choose from 21 other options such as garage contents or plants, trees and shrubs.

If you don’t have a garden or a garage, you will save by not paying premiums for those areas.

This is a first for home insurance — and not before time. Computer analysis enables insurers to price risk much more accurately than before, so they should be able to offer much more precise cover.

It reflects ill on the industry that two-thirds of the over-fifties polled by Lloyds complained that they spend too much subsidising others.

Insurance companies encourage us to throw away money uselessly on coverage we don’t need. But too many of us fall for the false economy of not insuring our homes because we don’t think disaster will strike us.

If the worst happens, and it does regularly somewhere around the country, we can be ruined by major damage to our home or our possessions if we have to foot the bill ourselves. That is why mortgage lenders normally insist on at least a basic buildings policy.

A major drawback of the new Lloyds policy is that it is not for anyone under 50 — yet. I predict that it will be available to all before long, if only because competitors will not want to miss out on the business it will bring in once the word gets round.

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