10 letters it will cost you to ignore

When a letter from your bank lands on your doormat, do you: a) shove it on a pile with all the others, b) stick it in a drawer to deal with it later (and then forget), or c) read it diligently?


If you've answered ‘a’ or ‘b’, you're certainly not alone. According to research by the Debt Advisory Centre, around 6million Brits (12%) don't always open important bills or financial statements.

And it isn't just those who receive their bills or statements in the post who choose to disregard them: 28% of respondents said they find online bills and email statements easier to ignore than traditional post, compared to just 8% who said they were harder to file away.

But pushing your post to one side could have negative consequences. Here, we reveal 10 letters you should never ignore.

1. Change in savings rate

Savings rates are pretty dismal right now, which is why it's vital to ensure you're always getting the best rate of interest possible on your savings. If you have a variable savings account, the interest rate could change at any time. And if it has a temporary bonus rate built in, the interest rate will plummet as soon as the bonus expires.

Some banks and building societies will notify you of these changes in advance, giving you the opportunity to switch to a more competitive savings account. But by ignoring your post, your money will be left languishing in an account paying next to no interest.

2. End of credit card deal

Similarly, failure to read your post could result in you not realising that the interest-free window on your credit card has come to an end. And you could be in for a shock when you next receive your credit card bill and discover how much interest you’ve been charged.

3. Overdraft changes

Your bank should also inform you of any changes to your overdraft, which you'll miss if you don't read your post. Halifax, for example, altered its current accounts at the start of May, with those who dip into the red being most heavily affected. You can read all about the changes here.

And from July 12, 2013, NatWest/RBS will also be changing its overdraft charges. Rather than being charged interest, those with an arranged overdraft will have to pay a fee of £6 a month on overdrafts over £10. Some accounts will still charge interest on top.

4. Your insurance renewal

Insurers will usually send you a letter or email to tell you when your car or home insurance is up for renewal. But they don't just leave it there. If you don't respond, some will go on to renew your policy automatically if you originally paid by direct debit.

As the renewal price is often far higher than the most competitive deal on the market, you'll be paying far more than you should be. So read your letter, tell your insurer you don't want to renew, and carry out some research using our car insurance channel to find a better price elsewhere.

5. New account benefits

Letters from your bank don't always contain bad news. They could be telling you about improvements to your account.

Nationwide, for example, recently upped the annual equivalent rate (AER) paid on balances up to £2,500 in the FlexDirect current account from 2.00% to 5.00%. You can read the full story here.

Given that a rate of 5.00% is higher than most savings accounts pay, if you already have the FlexDirect account you'd be mad not to take advantage of this and stash in more funds if you have them available. But if you've shoved your post in a drawer unread, you won't be any the wiser.

6. Your bank statement

Keeping an eye on your bank statements is important. Not only will it help you to keep track of what you're spending where, it will also help you to spot any unfamiliar transactions which could be a sign of fraud. Should you spot anything you don't remember paying for, contact your bank immediately.

7. Your new bank card

When your existing debit or credit card is approaching its expiry date, some banks will send out your replacement card in a scruffy-looking envelope, with a ‘handwritten’ name and address on the front, in an attempt to disguise it and deter anyone from stealing it.

It's well worth bearing this in mind before you simply toss the letter aside, assuming it's not important (or perhaps the fact the envelope doesn't bear your bank's logo will make you more inclined to open it!).

8. Your energy bill

Failing to read your energy bill could mean you miss whether your bill is based on an estimated reading, rather than an actual one. If it is estimated, you could be paying far more for your energy than you should be. So take a meter reading yourself and phone up your supplier to get it corrected.

9. Tax letters

Tax is a boring topic but if you ignore letters from HM Revenue & Customs (HMRC), you might never discover you're on the wrong tax code and paying too much tax as a result.

Your tax code is usually made up of several numbers and a letter. You can find it on your payslip, your PAYE Coding Notice (which you should receive a couple of months before the start of the tax year), and your P60 form (which you get at the end of each tax year).

If you multiply the number in your tax code by 10, you'll get the total amount of income you can earn in a year before paying tax. The letter shows how the number should be adjusted following any changes to allowances announced by the Chancellor. You can find out more about this on the HMRC website.

If you don't think your tax code is right, contact HMRC immediately.

10. Missed payments

 Ignoring letters about missed payments or money you owe is never a good idea. Burying your head in the sand and hoping your financial problems will disappear of their own accord is only likely to make matters worse. So the sooner you face your finances and read your letters, the sooner you can get any problems sorted.

If you are struggling financially, talk to your bank and also contact a free, independent debt advisory service such as StepChange, Citizens Advice or National Debtline.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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