8 financial products you don't need in 2022

Some financial products are vital - such as travel, home and car insurance but there are some you should think twice about before buying.

This might be because they haveprohibitive restrictions or limitations, because the amount you'll pay outweighs the maximum most people will ever get back, or because you can get equivalent cover cheaper elsewhere.

Some are the frequent subject of members' calls to the Which? Money Helpline and some are outright scams.

We've rounded up eight financial products on sale that you don't need.We're not saying that none of the products we've highlighted ever have any value - for a small minority of people, some might.

However if your financial portfolio is already bulging at the seams with products of dubious value, it could be time for a clear-out.

1. Over-50s life insurance

Over-50s plans pay out a lump sum when you die. This is usually fixed rather than increasing with inflation, although there are exceptions. Unlike regular life insurance, there's no medical screening; all that's checked is age and smoking status. You choose your monthly premium, which can start from around £5.

What's the problem? By the time they die, most people will have paid more than their beneficiaries will receive.

Using quotes from four leading providers, we found that a 55-year-old non-smoker paying £20 a month would start exceeding the lowest-paying policy aged 76, and the highest paying one aged 80 - but average life expectancies for both sexes are now above 80.

Another thing to remember is that some premiums must be paid until you die or the policy cut-off age (which is often 90), and cancelling or missing a single payment can risk your beneficiaries receiving nothing.

What's the alternative? Putting £20 a month into a savings account paying just 0.5% interest, starting from age 55, would leave you with nearly £6,400 if you kept paying in until you were 80 - £336 more than the highest paying over-50s plan in our scenario.

If you're in good health, consider a regular life insurance policy instead.Only people whose poor health could seriously impact their life expectancy are likely to benefit from an over-50s plan, as providers don't ask about health conditions.

• Find out more:what is life insurance

2. Boiler cover

Boiler cover typically gives you an annual boiler service and pays for repairs or a replacement boiler. On average, policyholders pay £297 a year, according to our survey of 7,930 Which? members in summer 2021. Some include extras such as plumbing, drains and pest control.

What's the problem? Our analysis of survey responses shows that boiler cover is only worth it for 1% of customers - at most.

Only 21% of people we surveyed had needed a boiler repaired over the previous year, and the cost of annual boiler cover almost always exceeds that of paying for an annual service plus any repairs as needed.

What's the alternative? Make sure you choose a reliable boiler to reduce the risk of it breaking. Book an annual boiler service to catch potential problems before they turn into faults - you can expect to pay £86 on average for this one-off service, according to a 2021 survey of 153 Which? Trusted Traders.

If you're worried about your boiler breaking down, put some money aside to cover this; £300 should be enough to pay for the most common boiler repairs.

• Find out more:getting the best boiler service

3. Extended warranties

Extended warranties are commonly sold by retailers to cover the cost of repairs or replacement of malfunctioning products once any free manufacturer's guarantee has run out. They typically include wear and tear, and exclude accidental damage.

What's the problem? Most products are reliable over the period usually covered by extended warranties - and repairs usually cost less than a five-year warranty.

Remember for the first six years of ownershipyou're protected by the Consumer Rights Act 2015, which requires products to be of satisfactory quality.

If an appliance develops a fault earlier than you would expect, you might be able to claim from the retailer regardless of any warranty. However after the first six months the burden of proof is on you to prove the product is faulty.

What's the alternative? Use our reviews to help you find high-quality, reliable products. You may have some level of appliance breakdown cover as part of your home contents insurance, so check with your insurer. If not, set aside an amount to cover possible repair costs if they do occur.

• Find out more:how to get a refund, repair or replacement

4. Lifetime trusts to cut care costs

Placing money or property into such trusts (often called 'asset protection trusts') means you no longer officially own the assets. Instead, they're held and managed by the trust, usually with a view to the assets being later transferred to someone else.

These trusts can have valid uses, such as to ringfence money for a child until they reach a certain age however you'll need to pay legal fees, trust management fees and potentially upfront inheritance tax.

What's the problem? Asset protection trusts are sometimes (mis)sold as a tool to avoid your home being used towards paying care home fees.

If you create a lifetime trust when you're young and healthy, the local authority is indeed likely to disregard the assets in it (although it's by no means a given). But if it believes you set the trust up specifically to avoid care home fees, perhaps because you were already unwell, it will regard this as 'deliberate deprivation of assets' and assess your home's value as if you still owned it.

Unless you have another clear reason for creating the trust, this will be a difficult matter to contest.

What's the alternative? Before doing anything to reduce your care fee liability, seek independent advice from a qualified trust adviser (the Society of Trust and Estate Practitioners is a good starting point). Never take out a lifetime trust off the back of a cold call or a hard-sell ad.

• Find out more:lifetime trusts explained

5. Car hire excess cover

When you hire a car, basic insurance is usually included. But the excess on hire car insurance - the maximum amount you must pay towards any damage - is often £1,000 or more.

A 'super collision damage waiver' (SCDW) covers you for this liability, reducing it to a much lower level or nothing at all.

What's the problem? SCDW is expensive. When we got quotes for a week's car hire in Spain in 2020, the cost of SCDW from seven major car hire companies averaged £147.What's more, damage to the tyres, windscreen and/or underbody might be excluded, as might misfuelling cover, key cover and personal belongings.

What's the alternative? Buying equivalent cover from a standalone insurance company, which is known as 'excess reimbursement insurance', is usually a much cheaper option of being covered.

We found the average cost of excess reimbursement insurance for a week in Spain was £22. Although it is worth noting that with this you have to pay the excess to the rental company and claim it back from the standalone insurer.

• Find out more:best excess reimbursement insurance providers

6. Appliance cover

This 'insurance style' product has the same drawbacks as extended warranties but we've singled it outbecause many of the cold-callers who sell it are outright scammers, claiming to be from legitimate firms and bamboozling victims with misleading claims. Plus there's no guarantee the policies will even pay out.

What's the problem? Cold callers frequently aggressively target (and re-target) vulnerable people. We came across one case of a reader's father-in-law being misled into setting up 28 direct debits for appliance cover in a month, totalling £1,000.

Any firm offering or arranging insurance must be regulated by the Financial Conduct Authority, but most companies we've investigated lack regulation.

What's the alternative? Never buy appliance cover following a cold call. If you're worried about a vulnerable friend or family member, help them minimise cold calls. Register them with the Telephone Preference Service and consider call-blocking phones.

• Find out more:how to get your money back if you've been scammed

7. Gadget insurance

Available from mobile networks, manufacturers or standalone insurers, gadget insurance covers repair or replacement of devices if they're lost, stolen or broken.

You can insure a single item or get a multi-gadget policy. Monthly costs from standalone gadget insurers range from £2 or £3 for a single, basic gadget to around £15 or £20 to insure several gadgets under a multi gadget policy.

What's the problem? There are limitations and restrictions to be found in the small print. Cosmetic damage isn't usually covered, and you might not get an identical replacement for a lost or stolen item.

If you own an expensive device, insuring it isn't a bad idea but before buying a policy, you should make sure you're not already covered by some other product or service you pay for.

Many packaged bank accounts roll in mobile or gadget insurance. Or your home contents insurance might include cover for portable items away from home, known as 'personal possessions' cover.

What's the alternative? Consider adding personal possessions to your home contents insurance. It could work out to be cheaper than standalone insurance - potentially amounting to just a few pounds a year, depending on the cover level and your personal circumstances.

Check cover limits though, as you might need to pay extra for individual items that are valued above a particular amount.

• Find out more: how to get the best insurance cover for mobiles

8. Packaged bank accounts

These paid-for bank accounts commonly include travel insurance, car breakdown cover and mobile or gadget insurance. You sometimes also get cashback or preferential interest rates. The annual cost of accounts that we've analysed ranges from £156 to £372.

What's the problem? There's no problem, if you use all the benefits that are offered; indeed, a packaged account can be cheaper than buying the various benefits separately. But if you don't use all the benefits, the value is more debatable.

What's the alternative? If you won't use all the benefits, getting a free bank account and separately buying the products you need could be cheaper.

Here are some indicative costs, totalling £213.33 for all three:

• £91.75 for European, annual travel insurance for a couple in their 50s with Gold cover from Cedar Tree, which we rated highly for its Covid cover.
• £72.50 for breakdown cover (including Europe) from Start Rescue, a Which? Recommended Provider
• £49.08 for iPhone 12 64GB insurance from popular gadget insurer ProtectYourBubble.

Find out more:best packaged bank accounts

The article first appeared in the January 2022 issue of Which? Money magazine. Try Which? Money to have our impartial, jargon-free insight delivered to your door every month.