Consumers still failing to get best rates on their savings

According to a recent study many consumers in the UK are still failing to make the most of their savings by finding an account that pays a competitive interest rate.

The news comes despite the five interest rate rises that have been applied to the base rate by the Bank of England over the past year, taking the base rate from 4.5% to 5.75%. Experts state that consumer apathy is resulting in many savers losing out on significant amounts of interest each year.

Many banks have come under fire over the past year for failing to apply interest rate rises in full, or at all in some cases, to their savings accounts. Even those that do pass the rate rises on have been under fire for taking their time to do this, whilst moving much more quickly when it comes to applying the rate rise to borrowing.

Although many savings accounts have let their interest rates stagnate, and some pay very low rates of interest, there are also some account that have passed on all interest rate rises in full, and are now paying above and beyond the base rate.

Amongst the savings account that are now paying well over 6% in interest to savers are ICICI, Sainsbury’s online savings account, and IceSave. However, despite the availability of higher rate savings account research shows that many consumers are allowing their savings to snooze in low rate account where they are earning very little in interest.

Many consumers don’t bother to research higher interest rate alternatives, and some simply feel that they don’t have the time to switch. However, for many – particularly those with substantial savings – switching to a higher rate account could mean a significant difference in the amount of interest earned.

One industry professional stated: “I guess it’s just clients are looking for reliability and consistency; they don’t always want to be chopping and changing their bank accounts. So I think people are aware of it, it’s just a matter of priority. You don’t want to be changing your bank account every couple of months.”

Tom Smith
28th August 2007

Tags: consumers, earn, higher, rates, interest

Mortgage lending on the rise

Figures released by the British Banking Association (BBA) show that mortgage lending has reached a total of £21.3 billion in July, an increase of 12 per cent on last years’ figures.

The average mortgage loan rose to £156,900 in July, which is a rise of 13 per cent from July 2006.

Net mortgage lending growth rose to £5.7 billion, with unsecured lending rising to £200 million.

BBA head of statistics, David Dooks, said: “With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks’ lending in July.

“Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks’ lending to continue over the next couple of months.”

Building society lending is not included in the figures – which reflect higher overall levels of remortgaging activity.

Tags: stable trend, cent, british, statistics, mortgage, Banking

Barclays must suspend penalty banking charges, judge says

Barclays Bank must not take penalty overdraft charges from their customers until the High Court has reached a verdict in the test case, it has been reported.

Judge Abraham, of Luton County Court, adjourned the case of Nadine Fry before the outcome of a test case in the High Court was revealed.

According to The Times he told the court: “until the expiry of the stay, no further penalty charges or interest on penalty charges should be debited to the claimants account by the defendant”.

Personal banking customers have been reclaiming bank charges recently as part of a widespread consumer revolt against the extra fees.

Barclays alone has repaid nearly £90 million in charges this year.

A spokesman for Barclays Bank said: “All county court judges are saying different things. This is why the banks are going to the High Court to get some clarity around this issue.”

The High Court’s ruling is expected in February 2008. A ruling in favour of customers could result in the end of free banking and losses of £10 billion for the banks.

Tags: court judges, personal banking, revolt, luton, county court, ruling, investment

No more chip and pin for RBS credit cards

The Royal Bank of Scotland (RBS) is all set to introduce a new contactless credit card which uses radio waves to make payments.

All you have to do is touch the new credit card on terminals provided at participating outlets to pay for items under £10 – no pin is required.

Shops will start to use the new technology in September. RBS’ launch comes close on the heels of the new OnePulse credit card introduced by Barclays.

The OnePulse card works in the same way but can also function as an Oyster card, Barclays having signed a three-year exclusive deal with Transport For London.

The speedy nature of RBSs new credit card’s transactions was displayed after the company drove an AT & T Williams formula one car to a McDonalds drive through to buy a meal using the new technology this week.

Tags: Credit Cards, chip, September, The Royal Bank of Scotland, McDonalds, card

Some Brits could be in debt all of their lives

A recent report has highlighted how many consumers in the UK could be facing lifelong debts that will be with them for many decades as a result of high debt levels and low income.

Research was conducted by the Citizen’s Advice Bureau and indicated that many consumers in the UK could be facing debt for up to 77 years. This was based on the people that have been contacting the charity for assistance and advice in relation to their debts.

The debt mountain facing the UK has been the centre of concern for some years, and more and more people have been finding themselves unable to meet their financial obligations and having to find help. According the toe CAB the majority of consumers that made contact in order to get advice and help with their debts were, on average, around £13000 in debt, but were on just half of the national average income.

According to the CAB many of these consumers will face a lifetime of poverty, as they will spend many decades trying to repay their debts with a minimum income. The number of those needing advice and counselling for unsecured debts had doubled in the last eight years according to CAB officials.

David Harker, Citizens Advice chief executive, stated: “Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients’ debt problems. The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt.”

The Cab is now looking to the government to put forward plans for solutions to these debt problems, such as Debt Relief Orders (DROs) which could help to ease the debt problems for those with high debt levels, low income, and nothing significant in the way of assets.

Tom Smith
28th August 2007

Tags: spend, debts, relief, orders, advice, cab

Have you lost track of your account?

The government and the British Banker’s Association are working together to try and deal with the issue of dormant bank accounts, where banks are unable to trace the owners of account, which have been left dormant for years with no transactions being made on them.

Accounts that have not bee touched for three years or more are generally classed as dormant, and both the government and the BBA have been looking at ways to try and deal with this issue.

The priority is to try and reunite these dormant bank accounts with the account holders, as even though the account is classed as dormant the money in it is still the account holders. Many accounts have just a few pounds in them, and there are also many dating back ten years or more when many people were opening a number of accounts with £100 deposit in order to cash in with a windfall in the event that the building society became a bank or there was some sort of merger.

So far a number of accountholders have been successfully reunited with their lost accounts. One BBA spokesperson stated: ‘Already this year, we’ve processed 6,000 claims. This compares with 7,000 for the whole of last year.’ Those that think that they have a dormant account are being encouraged to contact the British Bankers Association for further information and to make a claim to the account either by phone or via the BBA website, which is www.bba.org.uk

The government is also looking into options for the use of money from accounts that are not claimed by any consumer. A commission was set up 18 months ago to deal with this, and it is likely that monies from unclaimed accounts will be used towards a number of worthy causes.

Tom Smith
27th August 2007

Tags: costs, personal, accounts, interest, uk, bank, savings, charges, claim

Is international medical insurance something that you need?

Most people in the UK are well aware of the benefits of having medical insurance, and many enjoy peace of mind thanks to the protection that this type of cover provides for them and their loved ones.

However, the needs of consumers looking for medical insurance cover have changed over recent years according to some industry experts, and this has also impacted on the type of cover that medical insurance companies are now able to offer to consumers.

Recent reports suggest that more and more consumers in the UK are opting to go abroad on a long term or even a permanent basis, with many deciding to head abroad to enjoy their retirement. Some younger people decide to head off abroad to enjoy some travelling experience and even to live and work abroad for a while. Many others travel abroad on a regular basis as a result of their work or business, again often spending extended periods of time in another country.

As a result of these lifestyle changes an increasing number of medical insurance firms are now offering international cover according to recent research, enabling those that intend to live or move abroad, or spend longer periods of time abroad, to enjoy the peace of mind of having cover even when they are away from home.

One industry professional stated: “We have done research that shows that the number of internationally mobile employees will continue to grow over the next five years. Add to this an extra 2.3 million Brits who are set to retire abroad and by 2020, and one in five older people who will be living outside the UK. So, naturally the number of companies providing international medical insurance has increased.”

Tom Smith
27th August 2007

Tags: Insurance, medical, surgery, cost, treatment, international

Are cheque payments becoming a thing of the past?

There was a time when paying for something by cheque was the norm for most people, but with the soaring popularity of credit and debit cards in the UK it seems as though cheque transactions are becoming a primitive payment method that will soon be left trailing.

This is being reflected by the number of retailers that are now turning away cheque transactions, and the latest to jump on the bandwagon of saying no to cheques is Sainsbury’s.

The supermarket giant has announced that as from the 1st August this year it will no longer be accepting cheque payments from customers. Although this does reduce the range of methods that customers can use to make payment for goods, the vast majority of customers tend to use debit cards, credit cards, or cash anyway. The no cheque rule will be applied in all 800 of the supermarket chain’s stores.

According to officials from the supermarket chain it makes sense to stop accepting cheques because so few people use them and because processing them can be time consuming. A number of other high profile retailers have also decided that they will stop accepting cheque payments, and this includes WH Smith, Morrisons, Boots, Asda, and Shell. Again, the main reasons seem to be lack of use by customers and time consumption for the companies in question.

With more and more retailers stopping cheque payments it is likely that an increasing number of transactions will now be made using credit and debit cards, which could see the number of card transactions made each year in the UK rocket even further.

Speaking about cheque use one Sainsbury’s spokesperson stated: “Like other retailers they are being used less and less by our customers.”

Tom Smith
27th August 2007

Tags: debit, purchases, credit, cheque, payments, dated, spend

Expat banking comes recommended

An expatriate lifestyle magazine has today mapped out some of the typical preferences regarding banking abroad for expats.

Rhiannon Williamson, director of ShelterOffshore.com, said that her clientele tended to gravitate towards established banking names because they were a “known institution”, and regarded banking using different currencies as a “bonus”.

Offshore savings accounts – favoured by expats – differ from conventional accounts in that they tend to calculate interest on a daily basis due to the account’s inherent increased flexibility, which tends to lead to lower interest rates.

“Expats seek flexibility and low charges when banking abroad,” Ms Williamson said.

She added: to have the ability to bank and transact – i.e. transfer money and pay bills – in various currencies is a bonuses and a benefit.

“In our experience at ShelterOffshore, those who do business internationally or who live, travel or work in more than one country have a strong requirement for bank accounts with a single bank in more than one currency.”

For more information, ShelterOffshore’s website offers a comprehensive overview of the positives and negatives of various different accounts suitable for expatriates.

Tags: lifestyle, Expat, savings accounts, benefit, expatriate, experience

Debt “now outweighs GDP” in UK

The debt mountain in the UK has now grown so high that it is now bigger than the country’s entire gross domestic product (GDP).

This is the shocking new claim from consultants Grant Morgan, whose research on debt, published today, lays bare the true scale of the problem in Britain.

The figures show a total debt – made up of mortgages and unsecured loans, among other debts – of £1,345 billion, which slightly outweighs a national GDP of £1,330 billion.

Stephen Gifford, chief economist at Grant Thornton, said: “Britain’s huge level of consumer debt is symptomatic of the country’s well established ‘buy now, pay later’ culture.”

He added: “Fortunately, most consumer debt is secured and can be repaid over several years otherwise we would be technically bankrupt.”

The implications of the research is stark. Extrapolating from national consumer debt as it currently stands, 2007 debt levels would now take until January 5th next year to be covered by GDP.

By contrast, just ten years ago, debt would already have been swallowed up by August.

Tags: consultants grant morgan, country, level, product, Gross domestic product, shocking new claim, research, Grant Morgan

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