Experts predict year ahead in personal finance

The past 12 months have been extremely turbulent in the world of personal finance and with 2010 just around the corner, moneysupermarket.com's experts offer their predictions for utilities, mobiles, broadband, insurance and money.

Head of banking, Kevin Mountford, said: "With banks desperate for retail inflow, we will see a fair amount of competition in 2010 in the savings market, although a relatively flat base rate makes creativity around pricing difficult. Despite this, 2010 will be good for savers. We will see some competitive fixed rate bonds early in the year and into March, with the focus on switching ISAs as the new higher allowance kicks in from April.

"The ‘need to save' message has to be back on the policy agenda in 2010 to incentivise consumers to put some money away. The challenge for any government is how to offer further tax breaks or incentives for individuals to save whilst tackling the budget deficit.

"Throughout 2009, there has been a lot of focus on current accounts. I expect to see some innovation returning to the market following the bank charges ruling and I urge banks, regulators and government to make sure we create a healthy, competitive current account market. Consumers need to understand their requirements and shop around for the most appropriate accounts for their needs, rather than being seduced by rates."

Credit cards expert, Peter Harrison, said: "2010 will be a difficult year for credit card providers who are facing challenges on many fronts. The proposed regulatory changes will hit the industry, while increased losses from customers who are unable to pay off their debts will be another blow to providers. Ultimately this impacts consumers - for example there's no doubt only those with excellent credit histories will qualify for the leading credit cards next year.  There will be fewer zero per cent balance transfer deals around, and generally credit limits will be low and the supply of credit more limited.  This, of course, may not be a bad thing!  2010 could be the year we see the widespread return of annual and monthly fees across the industry.  Overall we expect consumers to react by reducing the number of cards they hold in their wallet."

Mortgages expert, Hannah Skenfield, said: "I expect the 2010 mortgage market to be similar in shape and size to 2009.

"Lenders will maintain a tight rein on credit, and the competition for the 'best' customers will increase. First-time buyers will struggle to get on the property ladder - a situation not helped by the end of the stamp duty holiday on 1st Jan 2010. We will see more products available at higher Loan To Value rates, however these will remain more expensive than products for customers with large deposits.

"Tracker products will remain popular next year, however, I urge customers attracted by a tracker to beware: interest rates will start edging up and a rise of just a few percentage points could mean that monthly payments quickly become unaffordable.

"The FSA's Mortgage Market Review could have a heavy impact on consumers. Nobody wants a return to the excess lending of recent years but a vibrant and competitive mortgage and housing market is good for consumers and the economy and any regulatory change must not stifle the market further."

Head of loans, Tim Moss, said: "As unemployment this year has increased the number of customers unable to meet their unsecured loan repayments increased too and we expect to see more of the same in 2010.

With high default rates banks have cut back on unsecured personal lending and many now only lend to their existing customers.  They've also increased the price of credit.   There's no reason to believe that this will change over the next few months"

Utilities manager, Scott Byrom, said: "The price of gas and electricity will remain a hot topic in 2010.  Ofgem has repeatedly asked providers to pass on the reductions in wholesale prices to customers, whilst providers continue to argue that the wholesale price isn't a good guide to the real cost of supplying utilities to retail customers.

This year customers who are prepared to buy their utilities online and pay monthly by direct debit have enjoyed price cuts, but these have not been passed on to those who pay quarterly by cash or cheque and get paper bills.  We expect this differential to widen further in 2010.

If we don't see prices drop in 2010, fuel poverty will remain a big issue especially in an election year.

Insurance expert, Steve Sweeney said: "Insurance companies will try and push premiums up in 2010, however, the arrival of smaller, less well-known insurers should keep prices down. Home insurance premiums will rise due to an increasing number of claims for theft and accidental damage - a by-product of the recession. The recent bad weather and flooding will also put upward pressure on premiums.

"For travel insurance in 2010 I expect to see a rise in the number of policies bought at the last minute as the trend for booking travel late continues.  Travel premiums will be fairly flat especially as late booking will see a reduction in cancellation claims.

"Holidaymakers are also increasingly looking for more tailored travel insurance products so I also expect bespoke products to become more popular.

"As ever they advice is to shop around to find the best cover - not just the cheapest price - and be sure to read the small print to avoid any nasty shocks in the event of a claim."

Head of protection, Emma Walker, said: "Unfortunately for many, insurers pulled back from offering unemployment and payment protection policies this year, with some also cutting benefits and reducing premiums just at the time people needed the products.  The good news is that I expect to see these protection products reintroduced back into the market in 2010. Providers will adapt to the changing market with old products re-emerging, and new products being developed that cover unemployment only.

"I expect more providers will reduce critical illness premiums, where cancer has been excluded from their policy and develop a much fairer product, which offers protection for other conditions they may have."

Broadband and mobiles spokesperson, Julie Owens said: "We will see more competition in the smartphone market with Vodafone offering the iPhone early in the year and rival handsets from the likes of Palm, Nokia and Blackberry.  The rumoured Google phone will also be eagerly anticipated.

"The Government backed development of the super-fast broadband network will continue to be a priority and this will lead to the introduction of more super-fast packages."

The New Year gives consumers the perfect opportunity to get their finances in order. In 2009 moneysupermarket.com helped UK households save a massive £400m, a welcome saving given the current economic circumstances.