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Energy price cap increase: how much will your bill go up?

on February 3, 2022

Energy price cap increase: how much will your bill go up?
Image source: Getty Images

Today, many families are waiting with bated breath to see what will happen to energy prices. Ofcom is expected to announce that it will increase the energy price cap by 50% from April 2022. 

Here, I take a look at what the change in the energy price cap means for families and how much your energy bill is likely to increase.

Why is there a cost of living crisis?

This year is going to be tough for many families. Energy prices are rocketing and food bills are increasing. It comes at a time when many people have seen their pay frozen during the Covid-19 pandemic. Inflation is also galloping away, and it’s expected to hit at least 6% by the spring. All of these factors are contributing to the current cost of living drisis.

What is the energy price cap?

The energy price cap is set by Ofgem every six months. It places a limit on the amount energy companies can charge for their variable energy tariffs.

This price cap has been holding down energy prices for many households since the autumn. That’s because wholesale energy prices have soared, putting up the cost of gas for many suppliers.

The price cap has meant that energy companies can’t pass on the whole cost of the energy price increases to their customers. This has led to many energy companies going out of business and customers being forced to transfer to other suppliers.

What is causing energy prices to increase?

Energy prices are increasing due to the increase in wholesale gas prices. That’s the price energy companies pay for their supply of gas.

The wholesale price increases are due to a cold winter in Europe during 2020-21, which led to stores of gas reducing. This was compounded by increasing demand for energy in Asia and a windless summer that meant wind farms were underused.

How much will your bill go up if the energy price cap increases?

Ofcom is expected to raise the energy price cap by 50%. If you’re on a fixed tariff, then the change to the price cap won’t immediately affect you. But if you’re on a variable tariff, then you could end up paying 50% more for your energy from April 2022.

The average UK household is expected to see their energy bill go up by £600, and a further £400 increase may be coming later in the year.

What can you do to save money?

If it is a warm spring, then many households won’t need to be using as much energy by the time the price increase kicks in. No one really knows what will happen to energy prices over the rest of the year. Some experts think that wholesale energy prices may reduce over the summer so that they’re more affordable by next winter.

But in the meantime, what can you do if you’re worried about energy prices. Here are some tips:

  • Switch off appliances: take a look at the appliances that use the most energy in your home and think about whether you could use them less and switch them off completely when not in use.
  • Make a budget: it’s a good idea to go through all your spending to see exactly where your money is going. You can then work out a budget for spending to help you save as much as possible. Many people find that using a budgeting app really helps them get on top of their spending.
  • Get some help: if you’re struggling with debt or managing your finances, then there is help available from charities like Citizens Advice and Stepchange.

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About the author

Avatar for Alice Guy (FCA)

Alice Guy (FCA)

Alice is a Suffolk-based personal finance writer specialising in pensions, tax, investment and small businesses. She is a qualified Chartered Accountant and has previously worked for KPMG London and Tesco Plc.

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

This growth share is down 70%! Time for me to buy?

on February 3, 2022

The past 12 months have been a rough journey for many growth shares. As uncertainty surrounding inflation and interest rates became elevated, many high-flying businesses have watched their stock prices plummet. One such company from my portfolio is Teladoc Health (NYSE:TDOC).

Let’s explore what this business does, why it’s down, and whether now is actually a good buying opportunity for me.

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The rise and fall of Teladoc Health

The telemedicine company provides virtual care solutions, enabling its customers to quickly get in touch and discuss various health concerns with doctors from the comfort of their own homes. Needless to say, demand for such a service skyrocketed in 2020 when the pandemic forced everyone to stay indoors.

By the end of the year, the number of paying users in the US jumped from 35 million in 2019 to 51.5 – a 47% increase. Consequently, total revenues nearly doubled, reaching $1.09bn, and the share price erupted.

Throughout 2020, shares of the growth stock climbed an impressive 150%. But today, that gain has been completely wiped out because over the last 12 months, it has collapsed by nearly 70%! What happened?

Looking at the latest earnings report, user growth has begun to slow considerably from 47% all the way down to 2%. At the same time, the business, which was on the verge of becoming profitable, suddenly saw its net losses explode from $99m in 2019 to $485m in 2020 and $418m during the first nine months of 2021.

After seeing this, I think it’s pretty understandable why investors decided to run for the hills. But getting deeper into the numbers, a very different picture is painted.

Digging a bit deeper

The slowing user growth is concerning. However, despite this, the expansion of the revenue stream has actually accelerated. In the latest results, total revenue jumped 108% to $1.48bn. The surge can be partially attributed to the massive $18.5bn acquisition of Livongo in 2020. But if the top line is growing in the triple-digit range, what happened to the bottom line of this growth share?

Acquisitions of this size take time to digest, and it can be an expensive process. Breaking down the $485m loss in 2020 shows that $88.2m consisted of integration expenses, with a further $386.4m in stock-based compensation. But both of these costs are one-time only. In other words, they’re not repeatable.

A similar story can be seen with the net losses in the first nine months of 2021. Of the $418m, $241m originates from stock awards that continue to be vested from the Livongo acquisition. With a further $134m on writing off acquired intangibles – a common process during large-scale acquisitions.

Time to buy this growth share?

So, what does all of this mean? Despite what the fall of this growth share would suggest, Teladoc as a business appears to be doing rather well. However, it’s still digesting its acquisition of Livongo, which is dragging its profits into the red.

Personally, I will wait for the full-year results to come out later this month before deciding whether or not to increase my position.

In the meantime, I’ve spotted another growth share that looks even more promising. Did you know?…

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Zaven Boyrazian owns Teladoc Health. The Motley Fool UK has recommended Teladoc Health. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

3 high-yielding dividend stocks to buy with £500 in February

on February 3, 2022

Inflation is soaring and returns on traditional savings accounts remains dire. But I’m not getting depressed by this double whammy. By buying high-yielding dividend stocks I still have an opportunity to make a positive return on my hard-earned cash.

Here are what I consider to be three of the best dividend stocks to buy right now. Each carries a dividend yield that tops the current rate of inflation in the UK (5.4%). I’d happily spend £500 on each of them this February.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

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ContourGlobal (7.6% dividend yield)

I think ContourGlobal could be one of the best dividend stocks to buy as rocketing inflation endangers the economic recovery. This is because the electricity the FTSE 250 stock produces from its power stations remains broadly unchanged, regardless of broader conditions.

My main concern with buying ContourGlobal is the prospect of project delays that could hit profits and, consequently, dividends. But my fears are soothed by the company’s strong track record on this front. I think ContourGlobal could prove to be a great long-term buy. Certainly as global energy demand steadily rises, driving the need for new power plants, and in particular low-carbon power. ContourGlobal has put renewable energy front and centre of its growth strategy.

Persimmon (9.9% dividend yield)

Housebuilders like Persimmon remain highly-attractive shares, in my book. Recent data from Nationwide showed house prices in the UK soared at their fastest rate for 17 years in January amid buoyant homebuyer demand. With the government failing to get to grips with the country’s homes shortage, it looks like property prices will remain strong for some years to come too.

In this landscape I expect profits — and consequently dividends — at FTSE 100-quoted Persimmon to continue marching northwards. I am aware, though that construction and labour costs pose a danger to future shareholder returns if they keep rising at current rates.

Polymetal International (10.7% dividend yield)

Gold prices struck two-month peaks above $1,840 per ounce in January as inflation-related fears rocketed market confidence. They’ve fallen back since then amid fears of severe central bank rate hikes. But as inflation continues to soar past economist forecasts — and patchy economic data in parts of the globe casts a doubt over aggressive interest rate rises in 2022 — I think having exposure to the precious metal remains a good idea.

Polymetal International is one FTSE 100 share which I’m considering buying today. The revenues the mining stock make would naturally rise if gold prices leapt again. But soaring inflation isn’t the only reason why bullion prices could soar in the near future. A full-scale conflict in Ukraine, more trouble for China’s real estate sector, and bad news concerning the pandemic could all lift gold prices again.  

I think Polymetal could prove a great addition, even though unexpected production problems could have a big impact on costs and sales. In the current economic and political climate, I think it could be one of the best dividend stocks for me to buy.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

3 reasons why the 4-day workweek can supercharge the side hustle world

on February 3, 2022

3 reasons why the 4-day workweek can supercharge the side hustle world
Image source: Getty Images

The last two years have been a rollercoaster for everyone. Despite all the grief and economic fallout, the pandemic managed to bring in some much-needed changes. The period was characterised by wider adoption of technology, the introduction of the hybrid model of work and, for many, a new side hustle.

These were amongst the biggest changes we have seen so far. However, there is one that has the potential to completely turn upside down the way we work. Even more so, it can also supercharge the gig economy, which is estimated to contribute around £72 billion to the UK economy, according to Henley Business School.

4-day work week is the new buzz   

Spending less time at work while earning the same amount sounds like a dream, right? Well, this is now about to become the reality for some in the UK. And I’m not referring to the condensed work week, where you do 35-40 hours over four days. It is actually working less time for the same rewards.

The idea behind the four-day workweek is to achieve the same results in fewer hours, so employees can spend more time away from the workplace, following their interests and having a better work-life balance.  

Around 30 companies have already signed up for the trial. Starting in June, they will implement a four-day workweek while keeping the salaries of their employees intact. The experiment is being run by leading academic institutions in the UK and US and a think tank, with the 4 Day Week Global campaign providing oversight. 

Have similar trials been conducted elsewhere?

The short answer is yes. And the trials were actually deemed successful. 

Between 2015 and 2019, Iceland held the largest trial of the concept. The experiment was labelled an ‘overwhelming success’. And productivity either improved or remained unchanged for the majority of participants.

In 2019, Microsoft also implemented a four-day workweek for its employees in Japan. It resulted in a 40% increase in sales per employee in comparison to the previous year. 

Other countries that have confirmed taking part in a trial similar to the UK’s are Ireland, the US, Spain, Canada, Australia and New Zealand. 

3 reasons why side hustlers should be excited 

A four-day workweek will free up additional time for employees. Here are three reasons why this is great news for side hustlers. 

1. Having more free time to develop a side hustle

One of the main reasons for implementing the four-day workweek is that people will have a better work-life balance. Having more free time could allow people to test the water with a new business venture or a side gig that they have always dreamed of.

The timing couldn’t be better as the pandemic has resulted in a boom in the gig economy. In 2021 alone, more than two thirds (77%) of 18-24-year-olds took on a side hustle, whilst a quarter (25%) of all UK adults are believed to have at least one. 

2. Having a better quality of life 

The pandemic has surely streamlined the adoption of the hybrid model of work, but it has also made people less active. Employees who work extended hours are at higher risk of burnout and taking more sick days. And this is in no way practical for both businesses and workers, especially if you have ambitions to start a job on the side.

So, having that extra day to relieve stress and relax could really help entrepreneurs to chase their dreams at no cost to their wellbeing. 

3. Greater transparency between businesses and side hustlers 

A common sentiment amongst side hustlers is to keep their 9-5 bosses happy. And let’s be frank, we all know someone who has lied to their employer in order to start a project on the side. This is usually out of fear that knowledge of their side hustle could jeopardize their main source of income.

But if the concept of the shorter week becomes the norm, there’s the potential to change that perception. It could empower workers to become upfront about their endeavours without the fear of negative consequences. This alone could be enough of an incentive to get more people into the gig economy. 

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Atanas Nikolaev

Nas is a freelance personal finance writer who is passionate about all things personal finance. He’s an accredited MRS researcher, aiming to bring content that allows readers to make better financial decisions.

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Why an S&P 500 ETF is the first pick for my 2022 Stocks & Shares ISA!

on February 3, 2022

I think using a Stocks and Shares ISA is a smart way to invest. With these investment accounts, any dividends I receive or capital gains made within them aren’t taxed.

For my own ISA I firmly believe in having a long-term outlook. I invest in stocks I expect to hold for 10 years or more and that ideally provide dividends I can reinvest to help build my wealth. If I’m lucky, hopefully the investment will grow to be worth a lot more and because of the tax-free wrapper, I should get to keep all of the gains.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

I could pick individual stocks, but I prefer to use exchange traded funds (ETFs) and for my 2022 Stocks and Shares ISA, my first pick is going to be an S&P 500 ETF.

Why the S&P 500?

At the end of 2020, the total value of the worldwide stock market was estimated to be almost $94trn. Out of that, the US accounted for over 55%. Therefore I feel that the US is a good starting point.

The S&P 500 is the key important index in the US. with 500 large companies selected by a committee. Firms must have a big market cap, at least 10% of shares outstanding and meet liquidity and profitability requirements.

It includes big-name companies such as Microsoft, Apple and Amazon and covers a wide a variety of sectors.

Not that it’s perfect. One issue is that the index only includes US companies. It’s true that many of them derive some earnings from outside of that country, but this percentage has been falling over time.

Another downside of buying the S&P 500 is that I limit my returns to those of the index. I could be wrong, but by picking individual stocks I might be able to outperform it.

However, this fund allows me to invest in 500 companies by holding a single share. It’s a low-cost way of diversifying across companies and sectors. I’m happy to give up the possibility of a higher return from investing in individual companies for the ease of this diversification.

Selecting a fund

As such an important index and essential barometer of US stock market health, it’s no surprise that there are lots of ETFs available. 

The largest one listed here in the UK is iShares Core S&P 500 UCITS ETF. The cheapest one is Invesco S&P 500 UCITS ETF with an ongoing charge of 0.05%.

For my own ISA, I’m again choosing Vanguard S&P 500 ETF (LSE: VUSA). It sits in the middle in terms of size ($47m) and costs (0.07%) and pays a dividends of 1.12% that I’m planning to reinvest into my ISA.

During 2021 its price rose around 30%. However, year-to-date, it’s down around 6%. That said, it’s been a turbulent start to 2022 and much of the stock market is down. However, for my ISA I’m more interested in the long term and over 10 years, it has seen a 320% increase.

The US index has averaged around 10% growth a year since 1957 and though nothing in investing is certain, I’m hopeful that can continue. I’m happy to make this S&P 500 ETF the first pick for my 2022 Stocks and Shares ISA.


Niki Jerath owns shares in Vanguard S&P 500 ETF. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon, Apple, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Are you aware of this trick to beat inflation with a credit card?

on February 3, 2022

Source: Getty Images

Inflation is rising and many people are understandably concerned about the impact on their finances. But did you know that you can actually use a credit card (yes, a credit card) to use inflation to your advantage?

Here’s everything you need to know about a trick that is sometimes referred to as ‘stoozing.’

What’s the current situation with inflation?

According to the ONS, inflation is currently running at 5.4%. This is far higher than the government’s 2% annual target.

So, with inflation running so high, it’s now impossible to stash your cash in a normal savings account and earn anything close to the current rate at which prices are rising.

Right now, the top easy access account pays 0.71% AER variable. Meanwhile, the top fixed-rate savings account pays just 2.12% AER (fixed for FIVE years). These low rates show that if you want to beat inflation, savings accounts probably aren’t the way to go.

How can you protect your wealth from inflation?

Unfortunately, there’s no sure way of beating inflation.

While some may choose to invest in stocks and shares through a share dealing account to combat rising inflation, others may instead prefer to invest in fine art, antiques, commodities (such as gold) or even real estate. Whatever you choose, remember that there are inflation risks associated with any asset class.

So while there is no guaranteed way of beating inflation, it’s worth exploring how a credit card could allow you to at least benefit from the current situation.

How can you beat inflation with a credit card?

Given current concerns around rising prices, it’s worth being aware that you can use a credit card to benefit from rising inflation. This is all thanks to something known as ‘stoozing.’

‘Stoozing’ refers to profiting from a 0% credit card deal in an unconventional manner. To profit from inflation by using a credit card, there are three steps to follow:

1. Use a 0% purchase credit card for your everyday spending.

As long as you have a decent credit score, it’s likely you’ll qualify for a lengthy 0% purchase credit card. Right now you can borrow for up to 23 months at 0%!

If you’re accepted for a card, use this for your normal spending until the 0% period ends. Just ensure you stay within your credit limit.

2. Let inflation eat away at your balance

As and when you add to your credit card balance, anything you rack up will, in real terms, reduce in value as a result of rising inflation.

For example, run up a £5,000 balance on a 0% credit card for one year, with a 7% inflation rate (as some analysts predict), and your balance will be worth roughly £350 less in a year’s time. In other words, your balance will, in real terms, have decreased thanks to rising inflation. 

3. Clear your card (or do a balance transfer) before the 0% ends

Once your 0% period is almost up, you can clear your balance as normal, safe in the knowledge that you’ve managed to borrow at 0% during a period of high inflation.

Alternatively, if inflation continues to take off in the years to come, then you can continue to see your balance reduce in real terms by shifting your debt to a 0% balance transfer credit card. That’s because these cards allow you to move existing debts to them. 

Do this, while making the minimum repayments, and you’ll continue to see the value of your balance erode in real terms. 

If you do go down this route, ensure you don’t spend on your new balance transfer card. That’s because balance transfer cards rarely let you make interest-free purchases.

What else do you need to know?

While using a 0% credit card can offer a nifty way to use inflation to your advantage, no credit card should be used as an excuse to overspend. In other words, it’s best to only use a 0% purchase credit card for your normal spending.

If you wish to explore using a 0% credit card to beat inflation, then also ensure you make the monthly minimum repayments during the interest-free period. If you don’t, you’ll lose the 0% deal.

Are you interested in learning more about credit cards? See our article that explains the types of credit cards.

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About the author

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Karl Talbot

Karl is a writer specialising in investing and personal finance content. He regularly contributes articles on savings, bank accounts, mortgages, and loans. He was previously a Personal Finance Writer for MoneySavingExpert.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Will a physical Klarna card plunge more people into debt?

on February 3, 2022

Image source: Getty Images

Buy now pay later (BNPL) firm Klarna has announced it is launching a physical card in the UK. Customers will be able to get their hands on a little pink or black card they can use to purchase items in store or online.

Will this be good news for customers? Or does it risk plunging more people into debt?

Key details of the Klarna card

  • Visa physical card in either black or pink.
  • You can pay via Apple Pay or Google Pay.
  • Payments must be made in 30 days.
  • The payment due date can be extended for 10 days for free.
  • In-store contactless payment.
  • Instant push notifications for all transactions, even if the payment is declined.          

The benefits

There are some potential benefits to a Klarna card:

  • Daily eligibility checks. This could help protect consumers from overspending and taking on debt they cannot afford to pay back.
  • No foreign exchange fees or mark-ups.
  • Real-time spending updates. These are available on the app and via push notifications.
  • 24/7 in-app customer support.

The debt risk of the Klarna card

Despite these positives, there are some serious risks, notably surrounding cardholders taking on large amounts of debt.

The eligibility requirements for the Klarna card are not as stringent as with other traditional credit cards. Klarna says prospective customers will undergo a ‘soft’ credit check and must have used Klarna at least once before and repaid the amount owed in a timely manner.

This means a lot of people who would struggle to be approved for a traditional credit card may find themselves with access to significant amounts of credit.

What’s more, outstanding balances have to be paid within 30 days. This makes the debt very urgent. Some customers may struggle to keep pace with the repayments.

While BNPL is often presented as ‘risk free’, the opposite may be true. Missing payments could lead to you being contacted by debt collectors.

What the experts say

Unsurprisingly, Alex Marsh, head of Klarna UK, is a big fan of the new card.

He said: “Consumers are rejecting credit products which charge double-digit interest rates while allowing repayments to be put off indefinitely.

“For online purchases where credit makes sense, buy now pay later has become the sustainable alternative with no interest and clear payment schedules. The launch of Klarna Card in the UK brings those benefits to the offline world, giving consumers the control and transparency of BNPL for all of their in-store purchases.”

However, not everyone is quite so enthusiastic. Debt expert Sarah Williams, who runs the Debt Camel blog, told the Mirror: “With this new card, some users may accumulate more debt that it is urgent to repay than they can easily manage.

“This is made worse if they have bought several items at different times using different buy now pay later accounts – then it isn’t easy to see how much you owe overall and what needs to be paid by when.”

She went on to warn: “What seemed like a convenience could result in you missing a payment, being contacted by debt collectors.”

If you’re not sure Klarna is the best option for you, why not take a look at our top-rated credit cards for 2022 instead?

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About the author

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Katie Royals

Katie is a financial journalist and personal finance writer. She writes on a range of topics including investing, insurance, and managing your money.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

2 ‘no-brainer’ growth stocks to buy in February

on February 3, 2022

The UK is home to many growth stocks — you know, those companies that typically see sales and profits surging above the average for the market. Many of these tend to be small or mid-sized companies. Such smaller companies are often less-well-known and not so widely covered by City analysts. This can create great opportunities to find undiscovered gems.

Top growth stocks

So which ‘no-brainer’ growth stocks would I consider buying in February? At the top of my list right now is a small medical equipment provider called SDI Group (LSE:SDI). It focuses on digital imaging and sensor products. What I like about this Cambridge-based business is its strategy. It aims to grow by buying smaller, niche and high-margin businesses. By allowing them to operate somewhat independently, SDI can respond quickly to new trends and events. It’s a strategy that seems to be working. Sales have tripled over the past five years, while profits have grown six-fold.

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Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

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Bear in mind that to continue above-average growth it will need to keep finding new businesses to buy. That can take time so I might need to be a patient investor. And acquisitions can be risky too if they don’t work out. But with a profit margin and return on capital both above 20%, I’d say this is a high-quality business. For me, mixing growth and quality characteristics is a winning combination and I’d be happy to add it to my Stocks and Shares ISA.

TV and Movies

The next top growth stock I’d buy in February is Zoo Digital (LSE:ZOO). With a market capitalisation of just £125m, it’s firmly in the small-cap group. But what it lacks in size, it makes up for in potential. Zoo provides media services to the global entertainment industry. For instance, it provides a host of services including subtitling and dubbing to adapt TV and movie content to global audiences.

Major global streaming giants like Netflix continue to create more content for its subscribers. Global content spend has reached record levels and is forecast to rise further over the coming years. It’s creating volumes of TV material that needs to be prepared for distribution in many countries and languages, resulting in more demand for Zoo’s services.

An exciting growth story

It’s not just Netflix either. WarnerMedia, NBCUniversal and ViacomCBS have all launched streaming video platforms in the US and they’re expected to expand internationally in 2022. I reckon all of this new original content bodes well for Zoo over the coming years.

A word of warning, though. The profit margin is relatively slim at under 3%. I’d like Zoo to focus on growing that number. A greater margin could provide more of a buffer. Also, as the market grows it could invite stronger competitors. Zoo will need to stay on its toes to keep up.

That said, Zoo recently reported a strong trading performance, and it expects revenues for the year to be ahead of analyst expectations. Also, it’s encouraging that it has been appointed as a primary vendor for an upcoming European launch of a streaming video service. This is likely to raise sales further. Overall, the future looks bright for it in my opinion and I’d buy this growth stock today.

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Harshil Patel owns Scientific Digital Imaging. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Want a £1,000 side hustle? Five top tips for selling on eBay

on February 3, 2022

Want a £1,000 side hustle? Five top tips for selling on eBay
Image source: Getty Images

Startups, a leading resource for starting a business, reports that nearly 50% of Brits have a side hustle earning them £1,096 per month on average. Selling on eBay is a popular second source of income, with 187 million global users according to Oberlo, 25% of which are in the UK.

Are you looking for some extra money to buy a car, invest in stocks and shares or just pay off your debts? Selling goods on eBay could make you over £1,000 per year.

Whether you’re looking to declutter your home or start a business selling products online, here are five top tips to maximise your profits on eBay.

1. What products should you sell?

New items account for 80% of products sold on eBay. However, Oberlo reports that used items have a higher success rate with 50% of listed items being sold.

According to Good Housekeeping, these were the best items to sell in January, together with average selling prices:

  • Mobile phones: £163
  • Watches: £131
  • Women’s bags: £45
  • Video games consoles: £85
  • Men’s coats: £48

You may be able to charge higher prices if you can find a niche with a limited supply. For example, a friend of mine sells vintage Lego. He buys boxes of second-hand Lego for £20 and re-sells the higher-value individual pieces. Some items (such as a 1980s astronaut’s helmet) sell for £10-£20 and total sales are around £100 per box. Another of my friends sold dumb bells during lockdown.

Branded items sell well and vintage clothing is currently popular. That garish 1980s shell suit at the back of your wardrobe may just start a bidding war! Broken electronics can be sold for parts.

2. How do you maximise the sale price?

The eBay search function for completed listings is a great tool for researching sale prices. You can search by product name and filter by completed/sold items.

eBay has two main selling options to choose from:

  • Fixed price or Buy it Now: you list the product at a set price (88% of eBay sales).
  • Auctions: you set the duration (from 1-10 days) and the starting price, and the highest bidder wins.

Auctions are good for high-demand items, where competition can push prices up, although you can end up selling for a low price too if interest is low. When using the auction approach, it’s best to:

  • Choose the longest time period (10 days).
  • Time the listing to end on a weekend evening (using the free ‘schedule listing’ option).
  • Choose your starting price carefully. eBay encourages sellers to list at 99p to attract more buyers and maximise the selling price. But this is risky for an expensive item if you end up with only one bidder. It may be helpful to look at the start price and bidding history on sold items.

3. How do you minimise fees?

eBay charges two types of fees:

  • Listing fees: free for private sellers (up to 1,000 listings per month).
  • Final value fees: 12.8% of the total sale (including postage) plus a fixed charge of 30p per order. This can add up on small-value items. If you sell something for 99 pence plus postage of £1, then you’ll pay 55p in fees.

eBay has regular fee promotions every few weeks, with £1 maximum and 70-80% off final value fees. It’s worth ending and re-listing your items during these promotions.

4. How do you save on postage costs?

Postage costs can seriously erode your profits, particularly as you pay a 12.8% fee on your quoted postage costs too. Here are some ways to save:

  • Offer free postage on your orders (and incorporate the cost into your item price). You may attract more buyers and you’re automatically given the maximum feedback rating for ‘postage’.
  • Royal Mail is often the cheapest option for letter-sized items. If you’re sending a 2kg small parcel by second-class post, it costs £3.20 at the post office, but £2.90 if you do it online.
  • Sites such as Parcel2Go allow you to compare the cost of sending your item by courier (Hermes, DPD, UPS, etc.).
  • If the item is too heavy to post, you can set your listing to ‘collection in person only’.

5. How else can you maximise your profit?

Keywords help to make your title as detailed as possible, and it’s good to include a number of photos. Be honest in your description; if your coat has a hole in the sleeve, mentioned it in the ‘item condition’ section. This reduces the likelihood of the buyer raising a dispute that the item wasn’t as described.

Sellers with a feedback score of over 95% sell more items. Dispatching your item quickly, keeping your buyer informed and ensuring that your listings are accurate should maximise your feedback from buyers.

Above all, I recommend deciding the minimum amount of profit you want to make before setting your selling price. Consider the cost of the product (if applicable), fees, postage and packaging, as well as your time, to make this side hustle work for you.

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About the author

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Jo Groves

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Why the HSBC share price rallied 18% last month

on February 3, 2022

In January, one of the best performing FTSE 100 stocks was HSBC (LSE:HSBA). The HSBC share price moved 18% higher and is currently trading at levels not seen since early 2020. It’s also up 40% in a year. There are a few reasons for the bump higher last month, with some of them indicating to me that further gains for 2022 could be had for shareholders.

Interest rates set to rise

The main reason for the rally in the share price was rising interest rate expectations. HSBC is a global bank, and so generates revenue in a variety of countries and currencies. With a few exceptions, most developed nations are considering raising interest rates in the coming months. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

For example, here in the UK, the rate hiking process has already begun. The first hike was in December, with the Bank of England expected to increase rates by another 0.25% today. In the US, the Federal Reserve has also indicated that it’s going to increase rates several times this year. 

For HSBC, this is good news. On the one hand, it means that rates it can charge on loans and other liabilities can increase. For deposits, it’ll have to increase the rates paid to customers a bit as well. But overall, the difference between the two (known as the net interest margin), will increase. This allows the bank to increase profitability over time.

Although this was a key driver for moving the HSBC share price higher in January, I don’t think this move is over yet. I think that central banks could continue to raise rates even late in the year and into 2023. This could support further gains in the share price.

Higher dividends going forward on HSBC shares?

Another reason for the move upwards was speculation around higher dividend payments for this year. The latest results from November highlighted an increase in the common equity tier 1 (CET1) capital ratio. The more elevated this is, the more solvent the bank is judged to be. 

On top of solvency, the bank also reiterated that “we now expect to move to within our target dividend payout ratio range of 40% to 55% of reported earnings per ordinary share”.

So if the bank is more profitable due to rate hikes this year, then it stands to reason that the dividend can also increase. Given the target dividend payout ratio, the jump higher in dividend per share could be substantial.

The current yield is 3%, so any move higher will attract income investors. I think some have already started to buy in at the start of this year, as people look where they want to allocate their money for 2022. Hence January was a good month for the HSBC share price.

Looking ahead, the next key event for the share price will be the Bank of England meeting tomorrow. 

FREE REPORT: Why this £5 stock could be set to surge

Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.


Jon Smith has no position in any share mentioned. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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