British parents help children choose first home

British parents have collectively paid out more than £27 billion to help their children buy their first homes, according to new research.

Findings from Abbey Mortgages revealed that an average of £5,874 is given to each child to enable them to take that first step onto the property ladder.

Up to one in seven first time buyers receive money from their parents to invest in their home with one in sixteen borrowing money.

Nici Audhlam-Gardiner, head of Abbey Mortgages, said: “Because house prices have increased so much over the past few years, buying that first home is also a bigger and more daunting investment than it was for the previous generation so guidance is undoubtedly needed.”

The research also showed that finding a home for their offspring also costs parents time, with an average 17.8 hours spent helping with choosing the property and 22.5 hours spent helping them move in.

According to figures from the Office for National Statistics Social Trends survey, more young people are living with their parents for younger with the rises in property being blame, reported ITN.

Tags: step, Banking, head of Abbey Mortgages, british parents, GBP, borrowing, Mortgages, Trends

Banks moving ahead of overdraft charges ruling

Banks have made a move to reduce overdraft charges ahead of the High Court ruling over unauthorised customer fees, according to new research.

Findings from MoneyExpert showed that the average unauthorised charge has dropped by five per cent over the past year, decreasing to 20.01 per cent compared with 25.25 per cent.

Sean Gardner, chief executive with finance experts, said that the current account market is changing very rapidly.

“It is encouraging that average unauthorised overdraft rates have dropped by five per cent in the past year. That said though a 20 per cent rate is still very high and well above the average standard credit card rate,” he said.

An estimated nine providers, including Northern Rock, still charge customers 29 per cent on going into the red.

According to MoneyExpert, a further 52 out of 136 accounts from 27 providers charge more than 25 per cent on their overdraft facilities.

Meanwhile, analysis from the financial experts showed that customers who insist on a passbook with their saving account are receiving an average of 0.5 per cent less on their cash.

Tags: Transactional account, findings, savings account, Banking in the United Kingdom, Moneyexpert, unauthorised, card, overdraft facilities

Slowing of consumer spending is “worrying”

Despite the economy growing by 0.6 per cent in the last quarter of 2007, consumer spending slowed dramatically, according to new figures.

Findings from the Office for National Statistics (ONS) showed that increases in household expenditure fell to 0.2 per cent, a drop from the 0.9 per cent previously seen in the last quarter and the weakest growth since 2006.

Speaking to theherald.co.uk, Howard Archer, chief UK economist at consultancy Global Insight, said that the breakdown of the ONS’ data was worrying.

“The faltering in consumer spending, business investment and exports in the fourth quarter increases concerns that UK growth will slow markedly in 2008 and increases pressure on the Bank of England to cut interest rates again sooner rather than later,” he said.

According to the figures, business investment and exports also faltered at the end of last year, declining by 0.5 per cent and 1.2 per cent respectively.

Meanwhile, Tim Besley, member of the Bank of England’s Monetary Policy Committee, told the Daily Mail that a reduction in the rate of consumer spending was worrying.

Tags: Business Finance, Office for National Statistics, drop, Global Insight, england, Daily Mail, UK growth, chief UK economist

Northern consumers spend more

People in London spend less on nights out and entertainment than consumers in the north and Scotland, according to a new survey.

Following research that British singletons have a higher disposable monthly income than those in a relationship, David Kuo, head of personal finance at Fool.co.uk, said that Londoners spend slightly less money than their northern counterparts when it comes to going out and socialising,

“The Scots spend about around £74 a month, people in the north spend £72 a month and Londoners only spend around £61 a month,” he stated.

However, the research from Fool.co.uk revealed that while Northerners are more inclined to spend money on going out, Londoners spend more on nights in and dvds.

The research also showed that the average single Brit is £255.42 per month better off than those in a relationship.

Single Brits spends £281 a month on rent and bills, compared with the £500 paid out by someone in a relationship, meaning the singletons make a massive £2,600 saving per year on rent alone.

Tags: northern counterparts, David Kuo, massive £2, Northerners, new survey, head, entertainment, Brits

Tracker mortgages ‘best bet’

Tracker mortgages are the “best bet” for those consumers who want to benefit from falling interest rates this year, according to finance experts.

Moneysupermarket.com said that while rates have been going down, increasing numbers of consumers have been reverting to tracker mortgages.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “At the moment, the percentage of customers that are on trackers… although it’s only 24 per cent, that’s the highest it’s been since back in 2005.”

She added that trend for rates is going to be down, so these products are useful for those spenders where affordability is no issue.

However, moneysupermarket.com warned that tracker mortgages should only be used by those consumers who can afford to risk higher repayments in the future.

The most recent figures from the Council of Mortgage Lenders, for December 2007, show that 29,600 tracker loans were taken out by homebuyers – making up 24 per cent of all home loans.

A survey by Fairinvestment.co.uk last week revealed that 23 per cent of Britons polled would favour a tracker mortgage.

Tags: Business Finance, Mortgages, show, tracker, favour, interest

Paying off last year’s debts contributing to budget strain

Paying off last year’s debts and current levels of inflation are both using up consumers monthly budgets, one debt expert has claimed.

Debt Action said as inflation has kicked in, people have found that more of their take-home salary is taken up with paying back pre-Christmas loans as well day-to-day expenses.

Chris Tapp, director of Credit Action, said that increasing numbers of consumers have been forced to use their credit cards to fund their everyday lifestyle.

“This is a very worrying scenario to find yourself in and at that point – when you start using your credit card as a necessity, or you’re unable to pay it off month by month – you should go and get help,” he stated.

Credit Action also warned that in the long-term, consumers cannot use a credit card to pay off a mortgage and this is a “worrying indicator” for a spenders’ financial future.

According to figures from Debt Help UK, up to 74 million credit cards have been issued in Britain and by 2009, credit card possessions are estimated to rise to 99.2million cards.

Tags: Chris Tapp, consumers monthly budgets, inflation, strain, card, christmas, personal finance, Stoozing

National Grid fined £41.8m by Ofgem

Power distributor the National Grid has been fined £41.8 million by energy watchdog Ofgem for breaching competition law and harming customers.

The fine is the largest ever imposed by the regulator for behaviour which allegedly prevented suppliers from contracting with other companies for cheaper metering deals.

Sir John Moog, Ofgem chairman, said: “National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.

According to the watchdog, the National Grid made a number of long-term contracts with five of the six main energy suppliers to supply and maintain gas meters.

The contracts included financial penalties imposed on suppliers if they replaced more than the small number of meters allowed under the contract by National Grid.

Ofgem said that this has severely restricted the rate at which suppliers can replace even National Grid’s older meters with cheaper or more advanced meters from rival operators.

Meanwhile, the National Grid has launched an appeal against the verdict, insisting that it has not harmed any of its competitors.

Tags: Sir John Moog, Grid, term contracts, competition law, power, gas

Car insurance premiums rise by 5%

Car insurance premiums have risen by five per cent over the course of the past year, according to new research.

Findings from Sainsbury’s Bank revealed that the average premium was £497.26 in December 2007, compared with £472.52 in December 2006 which saw an increase of 5.24 per cent.

Joanne Mallon, Sainsbury’s Car insurance manager, said: “Car insurance premiums continue to rise which makes it all the more important for motorists to shop around for competitive insurance.”

She added that “the trick” is cutting your costs without cutting your cover.

Those motorists aged between 40 and 50 saw an average rise of seven per cent, which was the highest of any age group, higher even than the under 25s who had rises of just 6.59 per cent.

According to bank’s figures, men continue to pay more for their car insurance than women on average – £525.35 compared with £453.38.

Meanwhile, the bank has also warned drivers to be wary of ‘frosting’, a technique thieves use to take advantage of drivers who leave their cars unattended while warming up the engine.

Tags: car, trick, car insurance premiums, Sainsbury, course, sainsburys, age, Insurance

Number of credit cards offering capped transfers falling

The number of credit cards with capped balance transfer fees is falling, according to financial experts.

MoneyExpert.com said that 12 months ago consumers could choose from 18 different credit cards with capped balance transfer fees, compared with the seven which are now available through five different providers.

Sean Gardner, chief executive of MoneyExpert.com, said: “Credit card switching is big business. Someone switches a credit card every two seconds and there are very few cards out there that still do not charge a fee for the privilege.”

He warned that those consumers looking to move their credit card provider could be “in for a shock” if they do not choose a card with a capped balance transfer fee.

According to MoneyExpert.com, the average balance transfer fee is 2.8 per cent of the amount transferred, meaning the typical cost of a balance transfer is some £74.65.

Customers with higher balances could incur much larger fees – a £5,000 balance transfer could cost as much as £150 with a three per cent fee.

Meanwhile, recent figures from MoneyExpert.com revealed that up to 5.9 customers switched credit card providers in the past six months.

Tags: finance, shock, personal finance, balance transfer, provider, offering

Store cards ‘most expensive form of credit’

Store cards are probably “the most expensive form of credit that anyone can consider, claim debt experts.

Thomas Charles said that if consumers do decide to take a store card out, they should think very carefully about how they intend to pay the balance off.

James Falla, managing director of Thomas Charles, said: “My advice 100 per cent is don’t take out a store card full stop.”

He stated that this is because the average store card is 29 per cent APR, a rate which is “very, very high”.

Mr Falla also added that the credit crunch has resulted in credit criteria being tightened with some consumers claiming their limits are being reduced.

According to recent research by comparison site uSwitch, shoppers with store cards are paying an average of 62 per cent more interest than those using credit cards.

The average store card APR is 26 per cent – a figure ten per cent higher than the average credit card at 16 per cent APR.

Tags: Payment systems, anyone, director, cent, average store card, United States

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