AI Money Advice and Heating Oil Costs Rise

0:00This BBC podcast is supported by ads outside the UK.

0:30offer or solicitation, nor a description of any products or services of Axel XL.

1:00You get your podcasts.

1:30which will be extended to 1.5 million more low-income households in 2028. But first, about a quarter of us have asked AI for help with our money, rather than a human. But new research published this week found that free AI chatbots gave inaccurate answers to financial questions more often than not. If you pay to have an up-to-date upgrade, it will do slightly better, but not much. We'll hear one example of that after we've heard from our reporter, Joe Krasner, and these shoppers in Liverpool. I'm Emily. I'm 17 years of age and I do not use AI for my finances, but if I had a chance to, I definitely would.

2:10And would you trust it? I would trust it. And would you check the information it gave you? I'd read over it and check it. I'm mum. I'm 58. I do use AI, definitely. And my husband uses a lot with his business. a read through, a proofread it, yeah? Because you're giving it the information and you're reading it, so it just makes sense to trust it. Hi, I'm Tuba and I'm 29 years old and I don't use AI to manage my finances. Why not? I think it's a bit too complicated for me, A. And B, I like to do it myself, manually, you know, I have my ways so I use that, yeah. Not a big fan of AI. Hi, my name's Olivia, I'm 32 years old and no, I don't.

2:53I'm admittedly a little bit sceptical. I'm quite nervous about putting personal details into AI, especially resolving my financial circumstances and where or how that might be used is a bit of an unknown for me. Hi, I'm Deb. I'm 70. No, I don't because I don't want to put personal details into AI. People in Liverpool this week. That research was carried out by a company called Saturn AI, which works with financial firms. It ran 121 financial questions through 18 different AI platforms, asking each question five times. It checked those 10 ,000 plus answers against key criteria to decide whether they passed or failed.

3:36The research identified errors in 57 % of the answers. These were to popular questions on student loans, mortgages, pensions, tax, savings, and this one on debt. How should someone with several debts decide which ones to prioritise? The AI responded, Prioritise debts by focusing first on those with the highest interest rates, credit cards, payday loans, as these cost the most. But Saturn gave that a fail. It omits the priority versus non-priority debt framework and the serious consequences of not paying priority debts. eviction or repossession, bailiffs, disconnection of services, imprisonment for council tax, instead telling the client to pay highest interest debts first.

4:27Well, listening to that is Mark Poulsen. He's the chief executive at the financial research consultancy, the LangCat. Mark Poulsen, I should say first Saturn, which carried out this research, is one of your clients and it's an AI company which sells admin services to financial advisors. Do you know how many of us use AI to answer financial questions? Yes. Hi, Paul. Yeah, that's right. We do work with Saturn, though we weren't anything to do with this research report. We've done some recent research ourselves in connection with YouGov, and the figure came back around 24 % of UK adults have asked AI about their personal finances, with about a third of those being pension-related queries and another third about investment-related queries.

5:14So lots and lots of usage out there. And do they do it like people sometimes use it for medical things before they go to the doctor? Do they do it before they see a financial advisor or instead of seeing one? They absolutely do both. So I think if financial advisors are getting increasingly used to people turning up with a sheaf of questions or comments that Claude or ChatGPT or whoever have given them. And as far as people taking action themselves without checking with someone else, our research found that 57 % of people acted on what the AI told them, but 13 % were just taking it straight from the AI without even checking in with, I guess, friends, family, an advisor or anyone else.

6:01Yes. I mean, I was looking at the questions and it says it found errors in 57 % but that example I gave isn't wrong, is it? It's just not the whole answer, missing out the need to make sure rent and council tax are paid. If a human was talking to you, it would say that but it would be more nuanced, wouldn't it? Well, that's right. I think the Saturn report tries to draw out that we need a level playing field when it comes to finance. It's worth saying that if you do go and speak to somebody who is professionally involved in helping you with your finances, you have a world of regulation and redress available to you, none of which applies when you go through these kind of systems.

6:46So Saturn, I think, is calling for a more level playing field. That echoes what the FCA called for earlier this year, actually, in terms of where regulation has to go to catch up with these models, which are moving so fast. is very hard for the regulator or government to keep up with what's going on. But they can do technical things very well. I mean, I tried the inheritance tax question, for example, through an AI that I use a lot, and it gave a very correct answer, a clear, useful background. I mean, it produced a report in about a millisecond that I would have been pleased to get from a financial advisor.

7:22So this was a paid-for model. So should people pay for their AI to make sure they get the best? Well, the report itself doesn't say that AI always gives you bad results. It does get things right. And in the paid models, up to about 60 % of the time it was doing well. So you got one of the good ones there. So that's really good. When we go down to the free tier, the worst performing free model was wrong about 80 % of the time, or at least incomplete 80%. So I think, yes, if you want to pay, you can get a better result. But it's still the case that there is too much error, too many hallucinations and too much inconsistency for people to blindly trust what an AI chatbot gives them back.

8:14Yes. And you should always check, of course. And they do tell you that. And I suppose one of the problems is people don't quite know how to check. They just think the AI sort of is the check in a way. There's so much in the press, though, about AI doing all sorts of things, even financial advice and breaking into government departments, stealing data. Do you think it will ever be possible to create a financial advice AI that does get it all right? Because there's a limited number of rules, a limited number of questions, aren't there? Yes. And I think the answer is yes, it will be possible. and there's lots of people working on lots of exciting things in that direction at the moment.

8:54It's not here yet anywhere in the world. The US is probably a little further ahead, but you're still not relying on an AI to give you correct financial advice, partly because the jeopardy is so high. If you take advice on, I don't know, a mobile phone contract or something, you may be disappointed with your mobile phone contract, but you're not making a mess of your retirement. I think it's possible that the AIs will get the technical stuff right. You can see how you would train an AI to do that. But that human connection that you get when you work with an advisor who says, I'm not sure this is what's technically correct, but actually there's something you're not telling me.

9:34What else is going on here? That process of challenge and support that you get with a really good financial planner. Hard to see how the robot could do that. Mark, I must stop you there. Mark Polson from the Lancat, thanks. We did ask the top AI firms, two responded. ChatGPT and Copilot both said their systems are not intended to replace financial advice and always check the information. Innovation has always kept the world moving forward, but it also comes with risk. As technology and AI evolve, AXA XL is facing into risk. As a leading global insurer, we constantly push the boundaries to protect your data and network from cyber risks.

10:17Axel XL, facing into risk for a future to be imagined. This advertisement doesn't constitute an offer or solicitation nor a description of any products or services of Axel XL. It's late 2007 and while attending a Christmas party, Facebook's Mark Zuckerberg meets a woman who would change the course of his company forever. She joined Facebook as Chief of Operations in 2008 and has been credited for making the company profitable. And herself enormously rich. On Good Bad Billionaire, we're exploring the life and fortune of billionaire tech leader Sheryl Sandberg. Listen on BBC.com, the BBC app or wherever you get your podcasts.

11:03Now, if you go to a price comparison website when you need home or travel insurance, how do you judge what the best deal is? Is it the price of the policy, the reputation of the provider? The regulator, the Financial Conduct Authority, told the House of Lords Committee this month those are not a reliable measure of whether or not you're getting good value. And this weekend marks one year since the Consumer Group Witch launched what it called a super complaint where it described the way insurance products are sold as broken. So what does this mean for people who just want to know they're buying the best cover?

11:35Dan Whitworth's been investigating. Dan? Well Paul, more than three quarters of us has now actually used price comparison websites for insurance. But whilst WITCH says things like 99 % of car insurance claims are paid out, that drops sharply to 80 % of travel insurance claims and drops even further to 63 % for home insurance buildings claims. Now its super complaint highlighted problems with the way claims are handled and the sales practices insurers use. In response to that complaint, the Financial Conduct Authority, the regulator, well, it began its own investigation, which is due to report by the end of this year.

12:12And I asked these people in Chester what they do to check the value of the insurance they're buying. You can't make a judgment just off price, and that's what it's ranked in. And it doesn't give you enough detail to be able to make an informed choice. So you've got to go to another website to look and see what you're getting. And so I tend to look at it, then I'll go off to the website, then come back again. what's at the top yeah it may be the cheapest but it doesn't mean that you're getting the best value for your money i tend to go for brands rather than um when i'm on a comparison website i'll go middle of the road so i don't go to the top one i don't go to the bottom one and i tend to go middle of the road do you ever dig a little deeper than just price comparison websites do now i do now because i was caught out yeah and and that was was somebody that was middle of the road that I thought it was going to be a reputable brand but actually then when I went to claim I wasn't covered for what I needed.

13:05What will make you make a decision? Will it just be the cost? Will it be a brand name? Probably the cost in all honesty. I'll probably just look at what kind of just covers our family for basic what we need and probably not look too much deeper which probably should do considering we've got kids and things you never know what's going to happen. Always use comparison websites. Always. Do you ever dig a little deeper? No. Why not? It's price, to be honest with you. You know, it's all about the price, who's the best price and what they're offering. And if they're offering the same as they've already got, then, you know, fair enough.

13:36Do you ever worry about information that isn't on the price comparison websites? To be honest with you, no. I think the only time it would come about is if I needed to claim. And thankfully, I have not had to claim. Touch wood. Touch wood, exactly. Well, Dean Dunham, KC, is a leading consumer rights lawyer. The big problem we've got is here we are in the middle of a big cost of living crisis and people are all price led. So when you go to a comparison website, your mindset is you're going there to get the best deal. And people think the best deal is the best monetary deal. That is a huge problem.

14:09Because when it comes to insurance, it's not all about the price. It's all about what happens if I've got to make a claim? What's that insurance provider going to do? Because it doesn't matter how much I've spent on the policy. If it doesn't pay out at the end, it's all been a big waste of money. And Dan, one of the directors of the FCA, the regulator, gave evidence to a House of Lords committee on that. What did he say? Yes, it was the FCA's David Geel which gave evidence to that House of Lords Financial Services Regulation Committee and it certainly caught people's attention. In terms of is there a reliable measure of value at present for all the price comparison websites, no, but I think that's what they're interested in putting on and that's something we've said will work with them to achieve.

14:51Now it's important to note his exact words there. He said, quote, In terms of whether there is a reliable measure of value on price comparison websites at present, there is not. Now, he went on, as you heard, to say it's something insurers are interested in putting on. Well, that committee is due to report in the next month or so. Sam Richardson, from WHICH, says he hopes these various investigations will lead to real change for people when it comes to finding those best insurance deals. We hope you have a really different experience buying and using insurance. start off with buying insurance we expect that exclusions will be much clearer spelt out in plain english not expecting you to be some sort of financial detective to spot gaps in the cover and then once you've held the insurance and you're unfortunate enough that you have to claim we hope for a start your claim is more likely to be accepted not only because you're aware of what the exclusions are but also because the insurer themselves aren't using very let's say niche t's and seas to avoid paying out, for instance, the way they define storms.

15:54And then once the claim has been accepted, we hope the process of getting your life back to normal will be simpler. Now, Sam hopes that will include things like claims and the people making them being handled a lot smoother. And we're talking about stopping examples like BBC News, as reported on before, for a man whose home was damaged by a storm was initially refused to pay out for repairs because the wind speed was two miles per hour less than the insurer's definition of a storm. And Dan, you gave figures earlier that 63 % of home building insurance claims are met. Now that means more than one in three is rejected.

16:28Could we see insurers forced to put their claims record on comparison sites? Very possibly. One note on that though, Paul. One of the experts I spoke to this week, they voiced concerns that highlighting lower rates for claims being accepted might put people off getting, say, travel insurance, which they were worried would be a bad thing. And what's the industry had to say to you? OK, well, the Association of British Insurers told me, we recognise that insurance can sometimes be complex, which is why together with consumer groups, including WITCH, the FCA and price comparison websites, we're working on a substantial programme of work to improve consumer understanding.

17:06I also, Paul, contacted the three main price comparison websites and the general theme was they want to provide more information to consumers. It just needs to be accurate, uniform and consistent. The ABI also told us FCA data shows 80 % of consumers who make a claim are satisfied with how it's handled. Hang on, Dan. The insurance industry is boasting that one in five of its customers is not happy with the way claims are handled. That is one way of looking at the same statistic. But also the ABI continues that the industry paid out more than£6 billion in property claims last year and nearly half a billion in travel claims the year before.

17:43Thanks, Dan. Always check. A bit like when you use AI. Now, the price of heating oil has risen sharply this month. Today it costs around£1 ,100 to fill a 1 ,000-litre tank, £400 more than it cost in early July. As we reported earlier this year, the price spiked in March to as much as£1 ,340 because of the Middle East war, and before that prices were stable at around£600 for a tankful. There are around 1.5 million households across the UK who rely on heating oil to heat their homes, many in rural areas where there's no mains gas. We spoke to two heating oil users, Jackie, who's Suffolk Cottage is 300 years old, and first, Quentin, who lives in North Wales.

18:26I buy about 2 ,000 litres of heating oil a year. Back before it all kicked off, that was costing me about£1 ,000 a year. That's more than double now. So I'm facing a bill just to get through to January of something like£1 ,100. And of course, I've got to pay that up front. I buy the oil in advance. So it's doubled in price and that's quite painful. So it's going to be a bleak and cold Christmas for a lot of us. It's virtually doubled. It's way up there and it's outrageous prices at the moment. So I'm just going to hold off. I'm not going to fill up just yet. and just to see if, for any reason, the prices might drop a little.

19:03Otherwise, it's a pay what the going rate is, I'm afraid. But I will be using the heating very sparingly. And I live here with my adult daughter. And we've both decided it's going to be like lots of jumpers and let's just keep the heating as low as possible. Listening to that is Ellen Fraser, energy expert at the consultancy Beringa. Ellen Fraser, been a tough time for people using heating oil this year. And now, of course, they face winter buying oil as the price heads up. Is it a good idea to wait like Jackie? Yeah, it's always really hard to give advice because the energy markets are incredibly tight at the moment.

19:38And that means that they're really volatile. So you get bounces up and you get bounces down. But when we're looking at the oil markets currently, the forward curves don't suggest that they're going to come off much over the winter period. And we're expecting those prices to stay high until at least April and May, which is obviously far too late to fill the tank. So if I was in those shoes now, to be honest, I would probably lock in and fill up. Yes, and take the punishment now. Is the price going up simply because tensions have been growing or is it also demand? People have held off and now they've got to buy the oil for the winter.

20:10There are so many things going on here. So we've got the Strait of Hormuz, which has taken out both crude oil but also refinery capacity. We've got what's going on in Russia and that's taken out refinery capacity, particularly in the diesel markets, which is behind some of the spike here. But for diesel and some other products, we're also going into the winter months. So people are stocking up before we go into winter. And for agriculture, for example, we've got all the farmers out in the field harvesting. And that's just putting general pressure on refined products and a bit of a consumption peak.

20:44And that's causing the prices to nudge up a little as well. Yes, so really world events as much as anything. Now, the Competition and Markets Authority looked at all this situation in July and it did recommend there should be a regulator for this industry because it's not regulated, is it, like electricity and gases by Ofgem? Exactly that. It's not regulated. So you have quite a few boundary heating mechanisms, so things like district heating and heating oil. And also people have got off-grid LNGs, so natural gas tanks as well. Their prices are not currently regulated by the price gap And that's certainly something that Ofgem is looking at.

21:21But in the meantime, it's really just a question of shopping around really hard and being economic with fuel. Yes, and talking of Ofgem, its price cap rises on Wednesday. Price of gas is going up, electricity fairly flat. But then from the 1st of January, there have been two forecasts. There's one reported in the paper today. The price cap will rise by 25%, an extra£400 odd a year. Do you agree with that? So we haven't got a solid prediction yet. And it typically comes from Cormel Insight. That hasn't been published yet. But based on gas prices, which have at least doubled during the period since the last price cap was set, and certainly since the beginning of this year, that's creating a lot of upwards pressure, specifically on the gas element of the domestic price for customers.

22:09And remember that the 20%, 25 % that you've quoted there is for a dual fuel customer who's got electricity and with gas. And those cost increases are sometimes spread differently across the bill. But that's not unrealistic. I think that's a good approximation. We'll obviously see later this week how that plays through. Gosh, that's as close to yes as you're going to go. But that's pretty much yes to me. And finally, before you go, filling up your car, the average price of unleaded 174 a litre diesel this morning. I saw it over£2, breaking possibly the record. The RAC says price is likely to rise further.

22:43In a few words, do you agree? I think that is likely based on the really tight demand side market, so yes. And all those things you mentioned about refineries and so on earlier. Ellen, very many thanks to you. Ellen Fraser from Beringa. And if you're struggling with the cost of heating oil, there is government help available for people on low incomes. In England, the money is distributed by local councils, so the rules and amounts vary. Ask about their crisis and resilience fund. In Scotland, you can apply to Advice Direct for£300, but applications must be in by Wednesday. In Wales, there's a£200 payment from your local council if you get council tax reduction.

23:26Claim it by Wednesday, but you may get some support after that. And in Northern Ireland, low-income households can get a£100 fuel voucher until the end of March through the NI Direct website. The government has paid out more than£300 million since 2018 to customers of a scheme to help people on low incomes build up a savings pot. This week, new figures show that more than 650 ,000 people are now using this scheme called Help to Save. Dan's back. Dan, remind us how it works. Well it's a savings account for people on universal credit who also work but they only have to have earned at least£1 in the month before they apply.

24:06Now you can save up to£50 a month and the government adds a bonus of half of what you put in. You can save for four years so if you pay in the maximum you could get£1 ,200 in government bonuses over that time. And can you get your money out if you need it? Yes, although that can affect the bonus you get. Now the bonus is based on the highest balance you've built up in the account, so taking money out could mean you get smaller bonuses. Those payments are made at the end of the second and fourth years when the account will close. And we now know from this week that more than 650 ,000 people have one of these accounts.

24:41How much have they put into them? Right, more than£670 million since 2018. and the government says almost all those savers are putting away the maximum£50 every month. Also worth noting, Paul, there is a change coming in about who can use it. From April 2028, anyone on universal credit will be eligible, including people who are not working. The government expects that to make another one and a half million households eligible. Thanks, Dan. And for more information, search Help to Save on gov.uk. And if you are saving up and you live with someone as a couple, who will be entitled to the money if you split up?

25:22There's been controversy in the press recently about government plans to give people in unmarried couples who live in England and Wales more rights when it comes to their partner's money. And the next programme to drop on your subscription will be Felicity Hanna taking on that debate on Moneybox Live. Have you split up and found you were left with nothing? Or are you happy choosing not to marry to keep your finances completely separate? If there's time, email moneybox at bbc.co.uk or WhatsApp 0306 783 183. We do read and listen to them all and you might get them the show. In fact, they're coming in after the programme very quickly today.

26:03In this podcast, reporters were Dan Whitworth and Joe Krasner, Research is Ima Devlin and Amber Mahmood. Studio manager, Isabel Whitehead. Our editor is Jess Quayle. I'm Paul Lewis. This was a BBC News Money and Work production for BBC Sounds. 25 years on from the deadliest terror attack in history, why are thousands of grieving families still fighting for answers? In early 2000, two young Saudis arrived in San Diego. They'd never been to America, spoke almost no English, and had no idea how to open a bank account or rent a flat. Within weeks, they'd done all of it. Twenty months later, they hijacked a plane and crashed it into the Pentagon.

26:46Jane McMullen investigates the hidden story of a man who helped two of the hijackers and reveals a story that the U.S. and Saudi governments have fought to keep secret. From Radio 4, this is Intrigue, a 9-11 story. Listen first on BBC Sounds.

27:07He's the founder of the Adani Group, one of India's major infrastructure conglomerates. And with interests ranging from ports to airports to power generation and green energy. He's become one of Asia's wealthiest individuals. On Good Bad Billionaire from the BBC World Service, we're delving into the life and fortune of billionaire businessman Gautam Adani. Listen on BBC.com, the BBC app, or wherever you get your podcasts.

27:35Thank you.