Competition pushes loan rates down further

A number of lenders across the UK have reduced their personal loan interest rates over the past few months, which has increased affordability when it comes to borrowing in the UK. Most lenders have applied their best rate reductions to loans in the mid-range section, which are generally unsecured loans of between £7500 and £15000.

It has been reported recently that competition in the personal loan sector is resulting in increasingly affordable deals coming onto the market for potential borrowers. The base interest rate in the UK has been standing at just 0.5 percent for twenty two months now, which is the lowest level it has ever been in the history of the Bank of England, which spans well over three centuries.

The increasing competition means that lenders are continually trying to get one over on one another by reducing personal loan rates to make themselves more popular amongst consumers. This is helping to further drive down the interest rates charged on loans, as when one lender reduces the rates the others tend to follow. One lender, M&S, has now reduced the interest rate on its mid-range personal loan to just 6.9 percent, and this is the first time in around two and a half years that it has dropped below the 7 percent barrier.

According to one industry official restrictions are being eased up to some degree, giving consumers access the more affordable deals on the market. He said: ‘At long last, after a period of inactivity, we are starting to see the whole personal loan market starting to open up. Many lenders are beginning to open their books to more consumers and we are seeing more competitive deals, even for loans below £7,500.’

Tags: competition, Affordability, drive, lenders, section, rate, rate reductions, best rate reductions

New energy statements failing to make impact

A recent survey that was carried out has suggested that new energy statements that were launched to make the energy market more competitive and improve understanding of payments for consumers are failing to have the desired impact. The survey was carried out by the price comparison service uswitch.com and involved questioning consumers about the new annual energy statements that have been brought in.

However, despite the aims of the annual statements is appears that consumers had either not received the new statements or may have received them but did not realise that they had received them. The statements are supposed to have been delivered to all homes in the UK and are meant to explain the various discounts that are available on different tariffs so that consumers can get the best deal possible on their energy.

Any household that hasn’t yet received one of these statements is due to receive one soon, but many may not even realise that they have received their statement. One industry group has described the statements as a ‘huge undertaking’. Suppliers were told to start sending out the first of these statements by the end of last year by the energy regulator Ofgem. The aim of the statements is to make consumers more aware of their energy use and why they may be paying as much as they are, with the hope of encouraging more competition in the market.

Ann Robinson, director of consumer policy at Uswitch, said: “Annual statements are a linchpin of Ofgem’s push to get the competitive energy market working properly, but consumers clearly do not think they are coming up to scratch. The vast majority of households will have received an annual statement by now, but only 37% recognise that they have done so. The statements appear to be poorly labelled, difficult to understand and do not stand out from ordinary energy bills.”

Tags: industry group, consumer policy, market, end, energy regulator ofgem, energy market, price comparison service, new energy

Rising unemployment sparks debt fears

Increases in unemployment levels seen in the final quarter of last year have sparked concerns about rising repossessions and spiralling debt problems according to recent reports. Personal debt levels in the UK have been causing concern for the past few years, with the recession, global credit crisis, and difficult financial climate highlighting the debt problems that many people were experiencing.                                                                     

It has been revealed recently that the level of unemployment in the UK soared in the last three months of last year, with the figure increasing by 44,000 taking the total number of unemployed to nearly 2.5 million. Many of those affected by unemployment are younger people. Concerns have now increased with regards to how the rising level of unemployment will affect people that have debts that they are already struggling with and those that have a mortgage to pay.

In addition to this the strong possibility of interest rate rises this year will also impact upon the ability of consumers to pay both their mortgages or rent and their other debts such as credit cards, loans, and other forms of finance. It is thought that the base interest rate, which has been at an all time low of just 0.5 percent for the past twenty two months, will soon have to increase in order to curb spiralling inflation, which is at twice the target level set by the government.

The government has acknowledged that the level of unemployment soared in the latter part of 2010 but claims that it has now started to improve again. Chris Grayling, the Employment Minister, stated: “We’ve got a long way to go and I want to see these figures start to come down, but certainly the evidence is over the past month things have settled down and we are not seeing the increases we saw earlier in the last quarter.”

Tags: interest, concern, inflation, addition, evidence, strong possibility, business, Minister

A third of cardholders hit by fraudsters

According to recent figures one third of cardholders have been hit by card fraud in the past five years. The figures show that around fifteen million Brits have fallen victim to card fraud over the past five years, which reflects a sharp increase on the figure eighteen months ago, where the number of cardholders hit by card fraud stood at 27 percent.

According to ACI Worldwide a greater number of Brits have been defrauded on their cards than in any other major country apart from China. However, despite this there was a greater level of consumer satisfaction amongst British consumers with regards to how banks dealt with their claims than there was in other countries.

Around 80 percent of customers said that they were satisfied with how their fraud case had been dealt with by their bank, and this compared to 75 percent in 2009. Around 40 percent of these said that the main reason for this high level of satisfaction was the speed at which they received their money back after falling victim to card fraud.

It is estimated that card fraud in the UK costs the economy around £30 billion a year, and with fraudsters using a range of sophisticated methods and hunting grounds to commit their crimes this is a figure that could easily increase.

David Divitt, from ACI Worldwide, said: ‘Fraud is constantly changing and, looking forward, the industry will need to increase focus on identifying identity theft and assisting victims to maintain this improvement in customer experience.’

However, the UK Cards Association has stated: ‘The most recent card fraud figures for the UK, which are based on actual losses and not on research, show that card fraud is falling – a 28% fall in 2009 and a further 20% fall in the first half of last year.’

Tags: GBP, aci worldwide, show, greater number, increase, focus, money, satisfaction

Mortgage holders breathe a sigh of relief over base rate

Many mortgage holders around Britain will be breathing a sigh of relief this week after the Bank of England announced that it was keeping the base interest rate on hold at just 0.5 percent. This is the 22^nd month that the base rate has been at this record low, leaving the base rate at the lowest level that it has been in the three century history of the Bank of England.

The Monetary Policy Committee has been under increased pressure from various industry groups because of the soaring rate of inflation, which has rocketed to way above the 2 percent target set by the government. However, the committee has also taken into account the continued fragility of the economy, and has therefore decided to keep the base rate at the level it has been at for nearly two years.

There were no further plans for Quantitative Easing announced following the February meeting, which also came as no surprise to most industry officials. It is not yet known how the decision amongst MPC members was split. However, in the January meeting there were two members that voted for a rate increase and one that wanted to see the QE scheme extended.

A spokesperson for the manufacturing group EEF said: “The MPC is right to hold off on rate rises for now as an increase will do little to alter the path of inflation in the short term, which is being driven higher by commodity prices and tax. The contraction across the economy in the final months of 2010 may well have been a blip, but as the bigger risk now appears to be growth, the MPC should continue to hold steady until the picture becomes clearer and the economy is firmly back on an upward track.”

Tags: Quantitative, blip, short term, Many mortgage holders, monetary, bigger risk, century history, bank of england

Should there be caps on charges for payday loans?

Payday loans have become increasingly popular over recent years. This is not because they provide great value for money on borrowing or anything along those lines. The reasons for their popularity is clear – they are easily accessible for those that work because no credit check is required, they enable struggling consumers to get the money that they need pretty much right away, and they offer short term loans to tide people over until they get paid, which suits many of those that simply cannot make their monthly wages stretch quite far enough anymore.

The rise in the cost of living, the increase in VAT, cuts in wages, and potential job losses have all taken their toll on consumer finances, and this has left many people unable to make their budget stretch far enough to even afford the basics. Many of these people are turning to finance such as credit cards and overdrafts. Others are turning to payday loans, which come with extortionate APRs but are often the only possible short term solution for those with poor credit.

There are now set to be discussions in the House of Commons with regards to whether increasingly stringent legislation should be brought in with regards to the charges made for credit by payday loan provider and home credit lenders. The House of Commons is set to vote on the backbencher motion later this week. The move comes as consumer prepare for another year of hardship and worry over jobs, benefits, debt, and other financial issues.

It was reported recently that one in every ten people were unable to make their wages stretch for the whole month, and their wages tended to run out on the 20^th of each month, leaving them with more than a week without money.

Tags: hardship, great value, backbencher, solution, accessible, week, caps, check

More people rush to fix their mortgages

It has been announced that a rising number of homeowners are rushing to fix their mortgage rates amidst fears that the base interest rate could shoot up over the course of this year. With inflation having rocketed to nearly double the target set by the government there are concerns that the base rate will have to be increased in order to bring inflation down to a more acceptable level.

With the speculation and rumours over when the base rate will increase many homeowners with variable rate mortgages are now getting concerned, and are flocking to try and get their mortgage rates fixed. As a result of this surge in demand many lenders have been pulling their cheapest deals and replacing them with more expensive ones.

There are concerns that inflation is set to soar even higher, and the shocking increase in the cost of living has sparked panic amongst homeowners who are now worried that interest rate increases are set to send repayments rocketing. Some economists expect inflation to rise to a staggering 5 percent within a matter of months, which would force the Bank of England and the Monetary Policy Committee to start increased interest rates. This would then impact on repayments on mortgages, and could tip many homeowners over the financial edge.

One mortgage broker said: ‘People will rush to fix because they’ve probably been worrying about interest rates for a while. It is inevitable that more people will fix because rates are expected to start rising.’

Around two thirds of homeowners currently have variable rate mortgages. However, a fixed rate mortgage offers the security of static repayments for the period of the fixed term, which will remain the same even if interest rates increase.

Tags: term, base interest rate, economists, while, rate, bank of england

Shapps wants more help for first time buyers

Since the onset of the global financial crisis banks have become increasingly cautious over their lending levels, and many people hoping to purchase a home have suffered as a result, particularly first time buyers who are being told they have to pay huge deposits to even stand a chance of getting a mortgage. Ministers are now concerned that the High Street banking giants are failing to offer loans to first time buyers even if they have excellent credit ratings and history.

In fact, concerns have become so bad that a meeting is being arranged for next month, where senior officials from major lenders will have to answer to ministers with regards to why lending levels are so high. Recent figures released by the British Banker’s Association have shown that mortgage approvals for 2010 fell to their second lowest level in eleven years, with the lowest number of approvals being seen in 2008.

It has been revealed that the Housing Minister, Grant Shapps, will be demanding answers from lenders with regards to why their lending levels are so low, and why they are no lending to first time buyers even if they have perfect credentials. There are concerns that this failure to lend to first time buyers, who are needed to keep the property market buoyant, could have a serious negative impact on the property market in the UK.

Shapps said: “We have to avoid pulling up the housing ladder and cutting off a whole generation of young people who want to buy their own home. We want to do more to help aspiring first-time buyers – the average age of the first-time buyer with no support from their family is now 37, and there are 1.4m households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. So I’m calling together key figures from across industry to discuss how we can tackle this problem. “This cannot be achieved simply by top-down diktats from Government – there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market.”

Tags: first time buyers, history, chance, level, Association, uk, Recent figures, Loans

Consumers try to avoid High Street debt

In the current difficult climate there are many people that are looking for ways to cut back on their outgoings. For many this has meant cutting back on their spending and reducing their debt levels. His desperation to avoid debt was reflected in recent figures that showed there had been a drop in High Street store card borrowing and High Street finance for the month of November.

November is normally a busy time when it comes to spending on store cards and store finance, as many people are purchasing gifts for their loved ones for Christmas. Whilst in the past people may have signed up for store cards or taken out store finance to purchases these goods, a shift in attitude brought about by the challenging financial climate has resulted in fewer people spending on store cards or taking out store finance to make purchases.

Figures have shown that during the month of November last year the level of lending on store cards plummeted by 25 percent compared to the same period in the previous year. Just £202 was advanced on store cards during the month. Instore instalment finance levels also fell, with an 11 percent drop in the level of store finance compared to the same period a year earlier.

However, whilst store borrowing definitely took a big hit in the month of November there was an increase in the number of personal loans that were taken out by consumers. The figures were released by the Finance and Leasing Association, and showed that borrowing through personal loans increased by around 34 percent over the course of the month.

The report also showed that the largest source of advances was credit cards, which came as no surprise to most people. Whilst credit card lending for November remained was flat in November year in year it was still the source of £2.71 billion worth of lending.

Tags: consumers, christmas, period, drop, shift, Unsecured debt, card, financial climate

Consumers could be paying for their banking services

One consumer watchdog official has recently said that the idea of free banking in the UK is nothing more than an illusion, and that more and more of us are ending up paying for our banking services in one way or another. The spokesperson, Oliver Morgans, who is from Consumer Focus, said that banks were managing to extract money from current account customers in one way or another, so even if the account is advertised as being a fee free account the average consumer will still end up paying.

Morgans said that in addition to having to pay for our current accounts in one way or another, consumers in the UK were also putting up with poor service and performance standards. He said that whilst people liked the idea of getting something for nothing, most were not getting this, and were in fact compromising on the service that they were receiving to boot.

A number of practices have been highlighted as providing banks with the ability to make cash from their customers for having a credit account. Overdraft charges are one way in which banks are making their money, and many charge huge fees when the accountholder goes over the limit. Another way in which banks make money from current account holders includes having a packaged account, which can be quite expensive each month.

Another consideration that consumers will have think about is interest on their current accounts – or lack thereof. A rising number of banks have now stopped paying interest on debit balances for accountholders, and this means that accountholders are missing out on this money.

Figures have shown that in the last four or five years the interest on overdraft charges has increase, the number of packaged accounts that are active has doubled, and a rising number of banks now pay nothing at all in interest on customers’ current accounts.

Tags: uk, consumer watchdog official, official, money figures, credit account

Turner wants FSA to have more power to protect bank customers

The reputation of banks, and the confidence that consumers have in these financial institutions, has plunged over recent years, since the onset of the global credit crisis in 2007. With this in mind the chairman of the UK’s financial regulator, the Financial Services Authority, has called for the authority to be given greater powers to protect bank customers.

Lord Turner said that the FSA needs greater powers in order to protect consumers. The FSA is now set to launch a discussion paper based on the protection of bank customers. The debate will be centred around how the FSA could help, and what sorts of measures it could take in order to protect customers.

Officials from the FSA said that they want to find ways to take action to protect bank customers earlier on rather than having to wait until a number of complaints have been made before any action is taken. Some of the measures that the FSA is likely to look at will include the banning of some financial products, and a cap on the fees that are being charged on a variety of other financial products.

Lord Turner is set to argue that the FSA, or its replacement agency if it is disbanded, should be given greater powers to give bank customers the protection that they want and need. This comes following a surge in activity at the FSA, which has been cracking down on insider dealings, and has enforced a greater number of fines over the recent years.

Referring to the debate one FSA spokesperson said: “The debate will be about the types of things we do, different product regulation. Rather than waiting until lots of consumers have had to make complaints, can we take action earlier?”

Tags: financial, agency, hector sants, confidence, replacement agency

Pressure on interest rates stems from inflation

Many borrowers with variable rate mortgages or loans could see their monthly repayments rise over the course of this year, as the pressure is piled on for the Bank of England and the Monetary Policy Committee to increase the base rate in order to keep a lid on inflation. The level of inflation has now soared to 3.7 percent, which is close to double the target level of 2 percent as set by the government.

There are now concerns that the MPC will have to make the difficult decision to increase the base rate so that inflation can be brought back under control. The base rate has been at an all time low of just 0.5 percent for nearly two years now, and this has brought welcome relief to many people with variable rate loans and mortgages, as it has resulted in their repayments coming down.

It is thought that inflation could continue to soar, and this rise in inflation will not be helped by the increase in VAT, which rose to 20 percent at the start of this year reflecting an increase of 2.5 percent. A number of other things were blamed for the increase in inflation, including food costs,  higher utility bills, soaring fuel prices, and air transport.

One economist said: “Despite the undeniably significant risk to growth coming from the fiscal tightening that is now increasingly kicking in, there is mounting pressure on the Bank of England to enact at least a token near-term interest rate hike to send out the message that it has not taken its eye off the inflation ball.”

The British Chambers of Commerce warned: “Raising rates at a time when fiscal policy is being tightened, while businesses and individuals are facing greater pressures, would be a mistake and should be avoided.”

Tags: significant risk, target, air transport, inflation ball, Business Finance, relief, variable rate loans, policy

Rental arrears still on the rise

It has been claimed by a property firm that the level of rent arrears amongst private tenants has increased again. According to LSL rental arrears for the month of December increased compared to November, rising from 10 percent to 12 percent. The data was collated as part of a monthly survey that was carried out by LSL, and showed how financial problems were impacting on the abilities of private tenants to keep up with their rent.

According to LSL the level of rent that was either paid late or not paid at all increased by 2 percent between November and December of 2010. In addition, the value of unpaid rent increased to £276 million. Officials from the company said that rising unemployed had impacted severely on the ability of private tenants to pay their rent, and that continued increases in unemployment levels following government cutbacks would see the problems with rent arrears continue.

The data also showed that in the month of December the average rent charged by private landlords actually decreased slightly by 1.2 percent to £684 per month on average. This was because they wanted to try and tempt prospective tenants during the cold winter period, and many prospective tenants did not venture out in the cold weather to look for property.

An LSL official said: “Arrears have been rising since October as public sector spending cuts start to bite in many areas of the country. With unemployment set to increase this year, and rents likely to rise once more in the spring, more tenants will be at risk of falling behind with rent payments.” He added: “Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period. If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents re-start their upwards march before the spring.”

Tags: private landlords, average, sector spending cuts, Renting, costly void period

Huge fine for Barclay’s over investments

High Street banking giant Barclay’s Bank has been fined a fortune by the financial services regulator, the Financial Services Authority. The bank has been ordered to repay customers around £60 million, and has been fined £7.7 million on top of this, resulting in total fines of nearly £70 million.

The fines have been imposed as a result of investments that were mis-sold by the bank. The FSA carried out an investigation that revealed ‘serious failings’ in the way in which the bank had sold the two investments, which were Aviva’s Global Balanced Income fund and Global Cautious Income fund. The two funds were sold between July 2006 and November 2008, and the total value of the investments came to nearly £700 million.

According to the FSA the investments were mis-sold because the bank did not take into account a number of crucial factors when selling the funds. The regulator said that the funds were sold to over twelve thousand customers in total, but that the FSA did not consider important factors such as the financial circumstances of the customers, their investment knowledge and experience, or their investment objectives.

An official from the FSA said: “The FSA requires firms to have robust procedures in place to ensure any advice given to customers is suitable. Therefore, when recommending investment products, firms should take account of a customer’s financial circumstances, their attitude to risk and what they hope to achieve by investing. On this occasion however, Barclays failed to do this and thousands of investors, many of whom were seeking to invest their retirement savings, have suffered. To compound matters, Barclays failed to take effective action when it detected the failings at an early stage. “

She added: “Because of this, and given Barclays’ position as one of the UK’s major retail banks, we view these breaches as particularly serious and fully deserving of what is a very substantial fine.”

Tags: important factors, substantial fine, High Street, financial services regulator, compound matters

Interest rate increases will mean paying out more on debt

Industry officials have said that increases in interest rates over the next four years will result in families having to find more money every year to make increased payments on debt such as credit cards, loans, and other forms of finance that are based on variable rates. This could result in families having to find a whopping £1800 a year more in order to deal with the increased interest on these debts.

For nearly two years now the base interest rate has been at an all time low of just 0.5 percent, and this is he lowest it has been in the history of the Bank of England, which spans over three centuries. However, inflation levels are now soaring and many industry officials now believe that the rate of interest will have to rise over the course of this year in order to keep a lid on inflation, which could mean more financial hardship for many households.

There are a number of experts that think the rate rises could start by this summer, which means that households would have to cope with additional interest on their debts as well as higher living costs and increased VAT, which went up by 2.5 percent at the start of this year. Mortgage payers will also be affected with extra payments, which could leave many on the financial edge and put them at risk of missed repayments.

The Bank of England said: “Currently, around two thirds of outstanding mortgages in the United Kingdom have floating interest rates, somewhat above the average over the past five years. That proportion is rising as mortgagors move on to standard variable rate products as existing fixed-rate deals expire. This exposes more households to the risk of increases in interest rates.”

Tags: interest rates, lid, year, households, GBP

Officials say mortgage interest rates must stay low

Earlier this month the Bank of England announced once again that the base interest rate was to stay at its all time low level of just 0.5 percent, where it has stood since the first quarter of 2008. This is the lowest level in the history of the central bank, which spans over three centuries. For many borrowers and homeowners this low rate has come as a relief, as it has kept down their repayments.

Economist from the Ernst & Young ITEM Club have now said that it is important that interest rates remain at this low level over the course of this year, despite the fact that inflation is spiralling out of control. Officials said that there is a very tough year ahead, but although many believe that interest rate will and should increase economist from Ernst & Young said that they needed to stay on hold.

The report that was released by the economists indicated that this year was going to be a gloomy, tough, and very challenging one, with inflation possibly rising to 4 percent as early as February. House prices are set to fall by 5 percent over the course of this year, according to the report, and only slight improvement is expected in 2012.

One economist from the Ernst & Young ITEM Club said: ‘It’s going to be a tense start to 2011. The fiscal retrenchment will keep GDP subdued while commodity price rises and the VAT hike will push inflation close to 4% and leave the MPC agonising over whether to increase the Bank base rate. However, it’s vital that the MPC stands firm. A premature rate rise would boost the pound, weakening the UK’s ability to increase its exports – particularly into the emerging markets – which we have long maintained hold the key to the UK’s economic recovery.’

Tags: lowest level, house prices, improvement, gdp, slight improvement, mortgage, course, relief

Property prices end 2010 on low

It has been revealed by a major High Street lender that property prices in the UK ended last year on a low, having slid from the start of the year. The price of property in the UK was said to be around 1.6 percent lower at the end of 2010 than at the start of the year. The data was released by the banking giant Halifax, which said that property prices fell by 1.3 percent in December compared to the previous month.

It is thought that property prices have been driven down by a number of factors. One of these is that many homeowners are flocking to sell their homes whereas there is a distinct lack of interest from buyers. This is because many buyers are unable to get the mortgage finance that they need due to continued restrictions in the mortgage market, and many others simply don’t want to make a huge financial commitment in the current financial climate and with the uncertain future with regards to jobs.

A spokesperson from the Halifax said that if homeowners become more reluctant to sell this year the falling property price trend could be halted. He also said that it was unlikely that there would be much change in terms of movement in the property market over the course of this year, and this was because interest rates were unlikely to change.

The Halifax said: “Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

Another mortgage expert added: “While there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities, not least the capital, the right type of property is still commanding the right sort of price.”

Tags: earnings growth, climate, Real estate, type, mortgage, end

Insurance claims to rise due to bad weather

The motoring group, the AA, has recently said that vehicle insurance claims are set to soar as a result of damage caused by bad weather. During the winter months there are usually increases in vehicle insurance claims, as many people are involved in accidents due to the ice and snow on the roads. 

However, the AA says that further increases in insurance claims are set to result from the damage caused to the roads in the bad weather. Over recent weeks, where temperatures have fallen to their lowest in December for over a century, the roads in the UK have sustained severe damage, with many areas having to cope with huge potholes on the roads.

The potholes have come about due to water seeping under the road surface and then freezing, which then loosens the tarmac. This is then made worse by traffic driving over the loosened tarmac, which turns it into a pothole. These potholes have resulted in many drivers sustaining huge amounts of damage to their vehicles.

Often the damage sustained to vehicles involves the suspension, the bodywork, and the wheels, and one driver had to put in a claim for £14,000 after hitting a pothole, losing control of his car, and then crashing it. According to the AA drivers need to be very careful at present, as local authorities are still in the process of trying to repair the potholes.

The AA said: “It is really important that drivers keep a sharp eye out for potholes and keep their speed down, particularly on secondary roads, remembering that in wet weather deep potholes may be obscured by water. Cuts in road maintenance budgets of 20% mean that local authorities face very difficult choices on the roads they prioritise for repair. While they may fix the dangerous potholes, many are likely to go unrepaired.”

Tags: maintenance budgets, Depressions, motoring group, surface, insurance claims, group, pothole, AA drivers

Consumers should seize opportunity to overpay their mortgages

Industry officials are urging consumers to seize the opportunity to overpay on their mortgages whilst the base rate remains at its all time low of just 0.5 percent. This is the lowest level the base rate has ever been in the history of the Bank of England, which spans over three centuries, and has been at this level for nearly two years.

However, there are now fears that the base will have to increase at some point in the near future, which will result in repayment for those with variable rate mortgages increased again. Over the past two years these homeowners have seen their monthly repayments plummet, leaving them with more disposable income each month and reducing the risk of repossession for non-payment of mortgage.

However, by overpaying their mortgages whilst they have spare money consumers can significantly reduce the term of the mortgage loan as well as the amount that they end up paying in interest. Officials are now telling consumers to consider making these overpayments whilst they still can before the interest rate increases again. Many homeowners have already been making overpayments since the base interest rate fell, and officials have said that the low interest rates combined with the uncertain future facing many people means that it would be sensible to overpay on the mortgage at this stage.

One official said: “Whilst homeowners may be enjoying the chance to spend some extra money from the savings that they are making on repayments the money would be far better spend on paying off as much of their mortgage debt as possible. Those that have been making overpayment since the base rate fell will save a fortune on the interest that they pay and will find that the mortgage is paid off much, much earlier than had been originally planned.”

Tags: bank, sensible, risk, spare money, rates, mortgage debt, centuries

Many Brits prefer keeping money at home than in banks

It has been reported that so many Brits are now losing faith in the British banking system that many of them have given up on putting their hard earned cash into banks and prefer, instead, to keep their money in their own homes, in places such as money boxes and safes, in drawers, and even under the mattress.

Since the onset of the global financial crisis the credibility of the banking system has taken a real knock, and many people now find themselves unable to trust banks. The lack of consumer confidence in the banking system is reflected in the number of people keeping money at home, and according to figures a huge number of Brits are collectively keeping around £7 billion around the home, not including the money that they carry in their purses or wallets.

Of the people that took part in the survey around 10 percent said that they preferred having control and possession of their own money rather than giving it over to a bank. However, many have simply decided not to bother putting their cash in banks because of the minimal returns that they receive on their savings, which has plummeted as a result of the rock bottom base rate, which stands at 0.5 percent.

However, one industry expert said: ‘Even though rates are currently low, those wishing to save money should always do so with a bank, building society or credit union which is covered by the FSA, the UK financial regulator. It is vital that savers know their money is protected up to the new limit of £85,000. By contrast, those deciding to keep money at home, whether as savings or for convenience, may not be covered by household insurance in instances such as burglary. Under new rules, if financial institution were to fail most customers will get their money in a few weeks, so there really is no need to stash it at home.’

Tags: percent, Fractional-reserve banking, British banking, minimal returns, Banking, rate

Competition increases in personal loans market

The start of this year has marked a change in the personal loans market that has seen a variety of well known lenders reducing the rates on some of their personal loans, and this has resulted in the average rate of interest being charged on loans of between £7500 and £15000 falling to their lowest level since November 2008.

Many consumers who have been considering a loan will welcome the news, as it means that they will pay far less for their borrowing as lenders compete with one another to offer the best deals and entice consumers away from their competitors. High Street banking giant Santander is offering a personal loan between these amounts at just 7.3 percent, and others are also offering similar rates.

However, those that are after a loan of £5000 or less will find themselves paying far more in the way of interest, as the rate of interest on smaller loans has actually increased during this period. Sainsbury’s, Tesco, and M&S Money are amongst the other lenders that have decided to reduce their interest rates on larger loans, but some are only offering the most competitive deals to existing customers rather than both existing and new customers, which may cause some disappointment amongst both consumers and industry officials.

A financial expert stated: ‘It’s welcome news for customers to see loan rates falling at long last and from some of the largest providers in the market. It’s a shame that the rate cutting has, apart from Tesco and M&S Money, been targeted at existing customers only. The other downside is that lower interest rates are not on offer for smaller borrowings, so for anyone looking to borrow a sum of say £2,000 to £3,000, the interest rate will be well into double figures and in some cases pushing 20% APR.’

Tags: apr, customer, year, expert, loan rates

Insurance fraud costing millions

According to a recent report insurance fraud in the UK is costing the industry tens of millions of pounds a year, with fake insurance claims becoming more and more prevalent, particularly in the current financial climate. The cost of investigating, repairing, and even paying out on fraudulent claims has resulted in a surge in costs for the insurance sector, and unfortunately these costs are then being passed on to the honest consumer.

It is thought that insurance fraud is costing the industry around £800 million a year, and officials from the Association of British Insurers have said that the most common type of fraud is in relation to home insurance. Figures indicate that in the UK around 170 homeowners file a false insurance claim every day, showing just how the value of fraudulent claims has soared to such a high level.

Whilst the insurance industry has become far more stringent with regards to running checks on claims that are made, particularly if there is something that does not seem to gel, many of these false claims still slip through the net, often because there is no way of proving that the claimant is not telling the truth. This level of fraud is costing not only the insurance industry a fortune, but also honest policyholders who have to pay more for their cover in order to cover the losses that are resulting from fraudulent claims.

An official from the Association of British Insurers said: ‘Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record. The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.’ 

Tags: net, homeowners, level, uk, honest customers, recent report insurance fraud

House prices still set to fall in 2011

According to recent figures the property market in the UK did edge up a little over the course of 2010, and the average property price in December was up by around 0.4 percent compared to the same month a year earlier. The figures were released by High Street lender, Nationwide, with officials from the building society stating that despite this year’s slight increase property prices were still set to drop in the first half of next year.

Nationwide said that property prices in 2010 had declined in the second half of the year compared to the first half, and that in the first half of 2011 prices would continue to fall. Nationwide said that demand for property remained weak, which would contribute to the slump in property prices. One economist from the building society said that there were two few buyers interested in property and too many properties available.

The lender also said that although property prices had edged up in December, prices had fallen in four of the last six months and were likely to continue doing so. Property prices have been falling as a result of lack of mortgage availability, increased caution from potential buyers who are steering clear of the market at present, and an over-supply of properties for sale.

An official from Nationwide said: ‘At the moment, there are probably still too few buyers chasing too many properties. As a result, the slow drift down in house prices is likely to persist in 2011, at least for the first half of the year. Whether it continues into the second half will depend on the flow of new property on to the market.’

He added: ‘Despite December’s increase, house prices have fallen in four out of the last six months and it would be premature to suggest that the recent downward trend has been broken on the basis of one month’s figures.’

Tags: slump, mortgage, building society, Business and Economy, economics, result, Irish property bubble, Mortgage loan

Consumers could benefit from consolidating debt in 2011

According to industry experts many people that are hoping to streamline their budgets over the coming year may be able to benefit from consolidating their debts with the use of a low rate consolidation loan. With New Year coming up there are many people whose resolution will be to sort out their finances after a very challenging year financially, and consolidation is something that may be able to help with this.

Consumers who want to reduce the amount that they are paying out each month, cut the interest that they pay overall on their combined debts, and reduce the number of repayments that they have to make very month may find that a consolidation loan is the ideal solution, as this can eliminate all three of these problems.

Those that are considering consolidation can look at wrapping all of their unsecured loans, credit cards, store cards, and other unsecured debts into one loan, which means that they benefit from increased convenience, less work due to having to deal with fewer creditors, and hopefully lower repayments by finding a low cost consolidation loan.

Those that want to consolidate their loans are advised to shop around for the right loan, as there are a number of providers and lenders that offer these loans, but things like the interest rate charged and the eligibility criteria can vary from one provider to another.

One industry official said: “The start of the New Year is often a great time for people to make a fresh start with things like their finances, and finding a low cost consolidation loan to wrap up existing finance and streamline the budget could benefit many consumers as long as they find the right deal.”

Tags: consolidation loan, official, rate, Budgets, rate consolidation loan, Unsecured loan

New pet owners should get their pets insured

With Christmas Day now over for another year there are many households that will have a new addition to the family in the form of a new pet, such as a cat or dog. However, whilst families will be looking forward to starting the New Year with a new member of the family it is also important to start thinking about the health and welfare of the pet as early on as possible.

It is important for new pet owners to start thinking about getting their pet some health insurance, so that if they pet falls ill or suffers an accident it can get treatment or medication without the owners having to worry about finding the huge amounts of money that this can cost without insurance cover.

Officials have advised new pet owners to compare pet insurance to find a good deal, and to make sure that their pet gets the protection of health insurance as soon as possible. This is particularly important for those that have had younger pets such as kittens and puppies, as they are more susceptible to health problems.

Whilst there are a number of insurance companies that offer competitive health insurance policies there are also some veterinary surgeries that offer their own pet cover, so when you get your pet registered with a pet – which should also be done as soon as possible – you can enquire about their own bespoke pet health cover schemes.

Without pet insurance cover in place it can be very difficult for pet owners if something happens to their beloved animal, but with cover in place pets will have the protection of being able to get treatment and medications quickly and easily if the need arises, and pet owners will be able to enjoy peace of mind.

Tags: worry, officials, Ownership, welfare, new pet owners, Pet Emergency Management, pet

New rules set to come in for credit card companies

The start of 2011 will see new rules come into force for credit card providers, which will means that changes will have to be implemented with regards to minimum repayments on credit cards as well as on how repayments are allocated to the debt that is outstanding on credit cards.

It is thought that the changes that are brought in from this weekend coming will have a positive effect on millions of credit card users, as it means that they will pay off their credit card debt more quickly as a result of changes made to the minimum repayments, and also that they will save money on interest because card provider will have to allocate repayments to the most expensive debt first rather than the cheapest debt, as many do at present.

However, whilst the changes will come as good news for many consumers industry officials are warning that credit card firms could be sneaky in their tactics to try and recoup money. This could see some credit card firms hiking up interest rates to make more money from customers, and some may add on sneaky charges and fees.

The biggest change, and the one that will most benefit consumers, is the fact that credit card firms will have to allocate repayments to higher interest debt first before the cheaper debt. This could make a huge difference to the amount of interest that is paid by consumers.

One industry official said: “The new regulations and changes that have been brought in will be highly beneficial to credit card users, and could make a big difference to the amount of interest that they pay. However, it will also make credit card firms sit back and think about how they can make back their losses, so consumer need to remain vigilant.”

Tags: Stoozing, repayments, consumer, The start, result, Debt settlement, positive effect, Money Management

Santander admits to glitch over statements

Banking giant Santander has recently admitted that it has made a grave error that resulted in tens of thousands of its customer receiving the details of other customers on their bank statements. This is another of a string of security breaches made by banks and building societies over the past couple of years that has put consumer at increased risk of identity theft.

For many, ID theft is a very serious and frightening prospect and with fraudsters becoming more and more prevalent in the current climate many people have become increasingly nervous about falling victim to their crimes. However, security breaches such as the one by Santander can put people at increased risk of falling victim to this sort of crime.

According to officials from Santander it was a printing error that caused the problem on this occasion, as it resulted in pages from other people’s statements getting mixed in with accountholder statements that were being run to send out. This meant that whilst accountholder received details of their own transactions they also receive details of other accountholders transactions too.

Whilst the bank has apologised for the breach it has also said that customers accounts cannot be accessed using the details from the statements. An official from the bank said that although customers could see other customers’ details they could not be used to get into the account. Some customers are still worried though.

One customer said: “Initially I thought the statement was mine because my name, address and account number were correct, but when I turned the page over, I could see that transactions were someone else’s. I could also see the other person’s name, account number and sort code,” said Anne Robb, from Edinburgh. I called the bank to complain. The staff were very professional and helpful, but I am still concerned that someone has details of what money comes into and goes out of my account.”

Tags: breach, run, name, banks, theft, problem, identity, robb

Doorstep lenders can cause huge problems for consumers

It has been claimed in a recent report that doorstep lenders in the UK often cause huge problems for consumers because the loans that they offer can put borrowers in a cycle of debt that is difficult to escape. The OFT is now on a mission to try and protect vulnerable consumers from getting into financial hot water with these doorstep loans by making lenders prove that they are adhering to the Consumer Credit Act.

 

In the past eighteen months over 100 applications for licenses from doorstep lenders have been turned down by the Office of Fair Trading, and according to reports the watchdog has now written to around half of these companies asking for proof that they are adhering to the regulations and rules of the Consumer Credit Act. Companies have three months to provide this information.

 

Some doorstep lenders have been accused of misleading customers by failing to provide details about things such as their right to cancel, which makes some borrowers think that they are stuck in the credit agreement when in fact they are still within the time period where they can cancel. Others were accused of turning up at people’s houses without any prior notification or arrangement.

 

The crippling rates of interest charged by doorstep lenders have also been highlighted as a problem, and whilst the loans are only meant to be short term ones the APR that is charged by these lenders can be extortionate. This can quickly lead to already vulnerable consumers falling into even more severe problems with their finances. The OFT said that at this time of year in particular, with many people desperate for money to spend on Christmas purchases, tackling this issue was a priority in order to help people to avoid further debt problems and issues.

Tags: mission, uk, severe problems, year, credit agreement, recent report, doorstep lenders, notification

Loan sharks could become bigger problem because of Christmas

There are concerns amongst industry officials that problems relating to unlicensed and unregulated loan sharks could get worse as a result of the festive season and the current financial climate. Many people have struggled to get finance such as loans, credit cards, and overdraft, for the past couple of years due to the financial crisis, and with Christmas around the corner money will be tighter than ever leading to increased desperation for many.

 

The lack of finance availability for many people has resulted in many vulnerable consumers turning to other measures such as doorstep lenders and loan sharks, and this is something that has already been causing concern for officials. Whilst doorstep lenders charge a lot of interest they do not cause as much concern as loan sharks, as these are not even licensed lenders and have been known to swindle borrowers, resort to violence to get their money, and more.

 

Authorities are now continuing to urge consumers to steer clear of loan sharks no matter how desperate they get, as taking money through an illegal loan shark will not only financially crippling but could actually end up ruining the lives of people who get caught up with some loan sharks who will resort to anything to get their money.

 

Officials are also worried that with Christmas coming up more struggling consumers could end up turning to these sharks, and could put themselves in financial and physical danger as a result of this. Many people do not have any savings to spend on Christmas, and reports have shown that there are many consumers that are unable to raise even £200 to cover the cost of Christmas gifts and other purchases, which would increase the chances of them turning to less reputable lenders and illegal lenders.

Tags: climate, GBP, loan sharks, finance availability, loan, authorities

Will the mortgage market ease next year?

Over recent months there have been mixed reports and opinions with regards to whether the mortgage market in the UK is likely to ease up next year, and whether people will stand a greater chance of being able to get a mortgage having experienced difficulties for the past couple of years since the global financial crisis and recession swept across the UK.

Some believe that the worst is over when it comes to the property and mortgage markets, and that whilst the market remains challenging after the chaos that the financial meltdown has caused lenders are starting become less stringent and are more relaxed over their lending rules. This comes after several years of severe restrictions that caused a mortgage drought in the UK and in other countries around the world.

However, despite the optimism of some industry officials there are many others that believe that the market will become even more challenging, with the coalition government cutbacks and concerns over jobs likely to affect the market. Many experts believe that people will find it increasingly difficult to get mortgage finance over the course of next year, and that it could be some time before things start to ease off and mortgage lending becomes more relaxed.

One industry expert said: “I don’t believe things will get any easier when it comes to mortgage finance in 2011, and if anything first time buyers could find things have become even more difficult as the banks struggle to cope with having to repay bailout money to the government.” She added: “First time buyers also still have the added pressure of having to raise larger deposits in order to get affordable mortgage deals, as well as the threat of interest rate increases next year that could make repayments less affordable.”

Tags: finance, mortgage finance, world, bailout money, course

Consumers advised to focus on debts for New Year

Industry experts are advising consumers to focus on their debt issues once the New Year comes around in order to avoid having to spend another year struggling with their finances, particularly given that the economy and job situation is still very challenging and fragile. Many people will have been struggling with debt for some time, whereas others may accrue temporary debt over the Christmas period. Either way, experts are suggesting that they tackle their debt problems head on once 2011 hits.

For many people in debt it is all too easy to bury their heads in the sand and try and forget about their debts until they spiral out of control to the extent that action has to be taken either by the borrower or their creditors. Many people are using, or have already used, their credit cards to fund their purchases over the festive season this year, and this could lead to spiralling debt levels for many people.

Tackling debt can be difficult but officials believe that by kicking the New Year off in the way that they mean to go on consumers are able to tackle their debt issues more effectively by streamlining their finances and getting things into order. Some are advising consumers to go through their budget with a fine toothcomb and go through their income and outgoings to see where they can make cutbacks to save on the amount that they pay out each month and avoid further debt.

One official said: “Another option for consumers when the New Year comes around is to consider taking out a consolidation loan and wrapping all of their various debts into one lower interest one, as this could save them money and the hassle of dealing with different creditors.”

Tags: job situation, time, festive season, month, debt consolidation, job, Business Finance, action

Credit card spending to soar this week

As Christmas Day fast approaches many people are rushing around trying to sort out their last minute Christmas shopping, and many will be doing this using their credit cards. Research has been carried out and the results indicate that many people will be spending on their credit cards this week in the run up to Christmas. The research was carried out by Sainsbury’s Finance.

Many people that have already done their Christmas shopping will have given their credit cards a good airing, but it appears that the consumer assault on credit cards is not over yet, as many are still hitting the shops brandishing their plastic as they rush around to try and get their last minute gifts or try and pick up a bargain in the last few shopping days before the big day.

Officials from Sainsbury’s Finance are now claiming that consumers will spend almost £2 billion on their credit cards in the week leading up to Christmas Day. In total around £6.7 billion is expected to be spent in the run up to Christmas, and just under one third of this will be on credit cards.

The big freeze that has been seen over the past couple of weeks has put people off from hitting the High Streets in the usual way, but has not put people off from shopping. Many will be getting their credit cards at the ready and getting online to order goods from the comfort and warmth of their own homes using their credit cards.

However, those that are planning to make purchases online in time for Christmas need to be conscious of the effect that the weather conditions are having on deliveries, which could result in some deliveries being delayed until after Christmas.

Tags: Business Finance, finance, Christmas Day, High Streets, christmas

Mortgage rationing to continue next year

Officials from the Council of Mortgage Lenders have stated in a recent report that mortgage rationing is set to continue next year, and consumers that are hoping to get mortgage finance in order to get onto the property ladder may still face disappointment as banks continue to slash their lending.

One of the problems facing the banking industry is repayment of some of the bailout money that they took at the height of the global financial crisis, which needs to be repaid. Sadly, it is likely to be consumers that pay the price once again, as this will result in further restrictions on mortgage and other types of lending, making things more difficult for those that need to take out finance.

The CML has also said that repossession numbers are likely to increase next year, although the increase is likely to be modest. There are a number of factors that may affect repossession numbers, and this includes the government Spending Review and cuts, which could affect people’s jobs. Buyers are also likely to be put off from taking out mortgage finance even if they are able to get it, and this is due to the fragile state of the economy.

The CML said: “Given the continuing economic uncertainties, there is little to encourage buyers. First-time buyers will continue to find it difficult to get into the market. With funding in short supply, the availability of mortgages for first-time buyers will remain limited.”

The Council of Mortgage Lenders concluded: “Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.”

Tags: disappointment, cml, report, bank, property

Survey shows households in UK still overstretched

A recent study has shown that households in the UK are still overstretched financially, with the findings showing that more than 50 percent of them have been struggling to repay their debts. The study was carried out by the Bank of England and involved polling around two thousand people.

According to the results of the study more than half of households were struggling meet repayments on debts such as credit cards, loans, and other unsecured debts. The results also showed that around 22 percent of consumers had been put off spending money because it was becoming more difficult to borrow money – this reflected an increase from the 16 percent that said the same thing in a poll carried out last year.

In addition to looking at difficulties with debt repayments and spending the survey also looking into how people thought they would be affected by government cutbacks. The results showed that a massive 90 percent of consumers thought that they would be affected by the cutbacks and spending cuts that were being imposed by the coalition government.

However, despite the fact that so many believe that the cutbacks will affect them less than 50 percent had actually taken any steps or action to try and prepare themselves for the possibility of being affected, such as saving more money, looking for a new job, or working longer hours. Reliance on credit cards and loans has been growing according to the Bank of England report, and a quarter of households are struggling to meet payments on bills.

In its report the Bank of England noted: “The burden of unsecured debt has risen this year, most likely reflecting a combination of weak earnings growth and the interest rates on unsecured debt remaining high over the past two years.”

Tags: debt consolidation, fact, weak earnings growth, United Kingdom, report, spending, addition, Household

Cold weather could result in huge insurance claims

It has been claimed in a recent report that the cold weather that has swept across Britain could result in a billion pounds worth of insurance claims this year. The claims has been made by the Association of British Insurers, which believes that the cold weather is going to cost insurance firms dearly, with claims being made for all sorts of weather related damage.

Just over one billion is said to have been paid out to homeowners by insurance companies last year following what turned out to be the coldest winter in thirty years, according to the ABI. The association warned that damage such as leaks and burst pipes could cost insurance firms a massive £11 million per day this year.

The Insurance Information Institute reported that last year winter storms and weather cost insurance firms in the United States around $770 million, and this was said to be the lowest total in eight years.

The freezing weather and sub-zero temperatures in the UK have resulted in many schools being closed and chaos on the roads of Britain. With temperatures continuing to plunge many people will find themselves having to cope with problems in the home, for which they may end up having to claim from their insurance firms.

Consumers are urged to make sure that they have winter insurance cover in place, and make sure that it is adequate and covers their needs in order to ensure that they are able to make a claim should any problems arise. Homeowners should also make sure that their heating is serviced so that it does not break down and to reduce the risk of pipes freezing and bursting.

Tags: huge insurance claims, leaks, coldest winter, business, home, coldest

Gas bills could soar higher

The icy cold weather and snow has already struck in the UK, leaving many households having to turn up the heat in order to get warm. However, the cold snap has also caused gas prices in the country to rocket to their highest levels in eighteen months, causing concern amongst many households with regards to how they will cope with their increased bills.

With many still struggling in the continued difficult financial climate the prospect of even higher bills is one that will create concern and stress. The freezing temperatures has meant that households have had no option but to increase their heating, and on 5^th December demand for gas was 25 percent higher than it was on the same day last year, and the third highest daily amount on record.

The temperatures have hit unprecedented lows for this time of the year in many parts of the country, and this has seen demand for gas amongst households and businesses rocket.          The National Grid reported a huge increase in demand for power, and the surge in demand created concern in wholesale markets, sending the price of gas surging to its highest level in eighteen months at sixty two pence per therm, which reflected an increase of eleven pence.

With more and more people staying in the home to avoid the cold, turning up the heating, and trying to keep warm, energy bills are likely to rocket, and officials have warned that households need to brace themselves for a sharp increase in costs.

An official from Consumer Focus said: “We’ve been expecting it any day. If this cold weather continues causing high demand, the question is how much more will they need to go out and buy on the spot market. Our fear in these situations is that gas companies are able to talk up price rises on the back of unusual weather. We really wouldn’t want to see further rises because of this cold snap.”

Tags: energy bills, Snow, rocket, freezing, market, wholesale markets, Heating, eleven pence

Homeowners advised to check insurance cover is adequate

Officials are warning consumers to make sure that they have adequate insurance cover in place as the cold weather sets in. The cold snap across the UK has already caused chaos, and with weather conditions set to get worse many people could find that it affects their homes as well as causing problems such as traffic issues.

Officials have warned that as the winter sets in homeowners need to make sure that they have the right insurance cover and the right level of cover in place in order to protect themselves against the damage that can be caused by freezing temperatures and heavy snow. Claims are said to shoot up at this time of year, and for those that find their cover is not adequate – or who have no cover in place – the financial implications can be huge.

Frozen pipes and broker down boilers are amongst the more common problems that can affect households at this time of the year. If homeowners do not have any insurance, do not have the right cover, or do not have an adequate level of cover, in place then getting these problems sorted out could be extremely costly. However, with the right cover homeowners can simply arrange for repairs to be carried out through their insurance provider.

Another thing that winter brings with it is the dark nights, making it easier for thieves to gain entry to houses without being spotted. Homeowners should therefore also ensure that they have the right level of cover in place to protect them in the event of damage and theft caused by burglars.

With Christmas coming up many thieves will be on the lookout for expensive gifts that households have received or have bought to give to others. Make sure that if you have valuable gifts in the home you are adequately insured, as otherwise you may not be able to claim for them.

Tags: officials, Insurance, right cover, United Kingdom, pipes, chaos, traffic issues

Warning for women over store cards

Christmas is fast approaching and many High Street retailers will have geared up to try and get women to take out store cards when they go into the shop to buy an outfit for the festive season. Many women every year take out store cards, as shop sales staff make them sound enticing by offering customers money off their purchase right away.

Many of the popular High Street retailers have a big push on store cards at this time of the year, but these cards come with very high rates of interest, with some charging almost 30 percent interest. This means that a debt as small as £500 could take over a decade to repay if the cardholder only pays the minimum repayment each month, as the bulk of the repayment will be swallowed up in interest.

Store cards are said to be one of the most expensive forms of borrowing, but despite this there are around 12.9 million of them in circulation, with around £2.2 billion spent on them. The number of single women struggling to repay store card debt is three times higher than the number of single men, and women are now being urged to think twice before taking out and spending on a store card this year.

An official from the Citizen’s Advice Bureau said: ‘There is a problem with the way store cards are sold. Targeting young women at the till means customers are usually more focused on the discount for their purchase than the terms and conditions of the credit.’

Another finance industry official added: ‘Customers who repay only the minimum amount on store cards could end up paying twice the price and still be repaying the debt in a decade’s time. Do not touch store cards unless you can afford to pay off the balance in full every month.’

Tags: single men, sales, advice, expensive forms, way, finance industry official, Debit card, repayment

Older consumers struggling to get travel cover

A recent report has highlighted how difficult it can be for older consumers to find affordable travel insurance cover, with many finding the cost of this cover too high to afford. Many older people aged sixty five and above find themselves in a difficult situation where they suddenly have more time to travel following retirement but then discover that their age is making it difficult or impossible to get insurance for their travel.

Figures have shown that the average cost of cover for someone in their thirties is under twenty pounds for a single trip cover policy. However, for someone that is eighty years of age the cost can be around five times that amount, and that’s only if the older traveller is fit and healthy. For those that have past and existing medical problems the cost can be too much to afford.

Older people often struggle to get travel insurance cover, and this is because insurance firms see them as a higher risk and a liability become of their age and frailty. The amount charged for travel insurance for someone aged sixty five can more than double for someone aged sixty six who is going to the same destination for the same period of time.

The amount of choice that older travellers have is also limited, as there are some firms that will not provide cover for anyone aged over sixty five. The cost and availability of travel insurance cover for older people has resulted in some people being unable to enjoy the plans to travel following retirement because they simply cannot afford the cost of the cover.

One industry official said: “It can be very difficult for people of retirement age to get affordable travel insurance cover, and it is vital that they take time to compare because some insurance firms will charge a fortune.”

Tags: industry official, Types of insurance, travel, amount, consumers, policy, cost, finding

Scottish consumers want more choice when it comes to banks

According to a recent report consumers in Scotland would be keen to see increased competition when it comes to High Street banks, and would like to see a greater choice of High Street banks. A survey was carried out by accountancy firm Deloitte, and the results showed that consumers would like to see more banks entering the market so that they have more choice with regards to which bank to use.

This comes despite the fact that consumer confidence in the banking industry is still low following the global financial crisis and the recession. However, whilst consumers are looking for more choice when it comes to the banking industry it also emerged that many would be worried about handing their money over to a new entrant in the market, especially in the current financial climate.

The Independent Commission on Banking has already launched an investigation into the state of competition in the UK’s banking system, and there is particular concern over competition amongst banks in Scotland because the Royal Bank of Scotland and Lloyds TSB are the dominant players in the sector.

The survey showed that around 30 percent of Scottish consumers wanted to see more choice when it came to High Street banks, and around 17 percent have switched some part of their banking to a rival provider, such as their savings accounts or mortgages. Deloitte officials said that these factors showed that there was room for new entrants to the banking sector in Scotland.

One official from the accountancy group said: “Our findings suggest that consumers will look to more established and recognised brands who extend into banking, with one in 10 saying they would be happy to bank with any large ‘household brand’. Further, consumers are more likely to take out certain products such as savings accounts from new entrants, but remain cautious about committing to longer term products such as mortgages.”

Tags: official, lloyds tsb, confidence, recent report, whilst, savings accounts, high street banks, bank

Airlines dragging their feet over ash cloud insurance payout

The Icelandic volcanic ash cloud that swept across UK airspace earlier this year caused havoc for many travellers, leaving many stranded abroad and many others unable to set off on their travels. UK airspace had to be closed towards the end of April this year for around a week, and many people that were stranded abroad had to pay for food, accommodation, and to contact people at home.

Thousands of travellers had to put in claims as a result of the chaos and the money that they had to pay out to stay abroad until UK airspace was opened again. However, it has emerged that eight months later many are still waiting for their claims to be sorted out, with some airlines dragging their feet over payment on claims.

A number of unscrupulous practices are said to be going on amongst some airlines, which includes capping payouts to consumers, only paying a fraction of the amount being claimed by consumers, delaying claims until early next year or beyond in some cases, making consumers contact foreign compensation schemes and pay for translators, failing to respond to emails forcing consumers to contact them via expensive phone numbers.

Industry official have expressed concern that many consumers with travel insurance who were trying to claim for the disaster are being directed to foreign complaints bodies that do not provide translation services.

One official said: ‘This has meant travellers have had to pay for translators to get their complaint put in to the local language. They would not have to do this if the airlines just met their obligations. For example, they cannot limit claims, and we have seen that happening. We are in constant discussions with the airlines about their responsibilities.’

Tags: compensation schemes, Volcanic ash, Financial services, phone numbers, translation services, contact, year, food

Some drivers wasting money on wrong insurance cover

Having vehicle insurance cover in place is a legal requirement in the UK for drivers that intend to operate a vehicle or take their own vehicle out on the road. However, the cost of vehicle insurance can be expensive, and increases in premiums have left many people struggling to afford this cover.

However, in their bid to save money on the cost of insurance cover some drivers could simply be wasting money according to a recent report. It is claimed that many people are taking out vehicle insurance cover that offers them little to no protection simply because it is the cheapest they can get. This means that they are paying out money for insurance cover, but if they need to make a claim it could turn out that they are not adequately covered.

Many of those that are taking out the cheapest car insurance even though it may not be suitable are using price comparison sites to find their cover. Price comparison sites often give consumers the impression that they are getting a very good deal on their insurance cover, when they may actually just be getting the cheapest cover without the level of cover that they need.

Officials have said that many of those that simply opt for the cheapest cover without really thinking about the level of cover that they need are taking a huge risk, as they may find themselves with real problems in the event that they have to make a claim.

Consumers who are looking for cover are advised to make sure that they compare the features and coverage levels of the plans that they are considering rather than focusing their attention on the price of the cover, as this could turn out to be a false economy that will cost them far more in the long run.

Tags: United Kingdom, Healthcare in the Netherlands, finance, wrong insurance cover, focusing, level

Another decade for first time buyer mortgages to stabilise

It has been claimed in a recent report that it could take another decade before mortgages for first time buyers stabilise and reach the level that they were at prior to the global financial crisis. Before the credit crunch first time buyers were usually easily able to get a mortgage, and often did not have to even put down any deposit. However, this has all changed and these days those looking to get onto the property ladder feel that they are hanging on to an impossible dream.

Over the past couple of years things have become increasingly more difficult for first time buyers. Restrictions in the mortgage markets resulting from the financial crisis have resulted in more buyers being turned down by lenders when they apply for a mortgage. Those with damaged or poor credit history are also charged high rates of interest or turned down for a mortgage altogether.

Another huge hurdle that has faced first time buyers over the past couple of years is the matter of the deposit that lenders want in order to get a mortgage. In the past first time buyers were able to get a mortgage without even putting down any deposit, and could even borrow over and above the value of the property with a 125 percent mortgage.

However, these days lenders are demanding huge deposits from first time buyers such as 20 percent or more, which is leaving many people out in the cold when it comes to getting onto the property ladder.

One official from the homeless charity Shelter said: “The failure of successive governments to tackle Britain’s housing crisis has left an entire generation of young people with little hope of ever accessing a secure and affordable place to live. The impact both on them and on wider society is already becoming clear, with rising numbers of young people delaying having children, unable to move for job opportunities and spending longer and longer living with their parents because of the crippling cost of housing.”

Tags: crisis, Financial crisis of 2007–2009, little hope, percent mortgage, mortgage, Subprime mortgage crisis, business

Comparing breakdown cover can save you money

It has been revealed that drivers who take the time to compare breakdown cover with different insurance companies are able to save more money in the long run than those that just automatically take the cover offered to them by their car insurance provider or simply go for the first breakdown cover plan they come across.

Over recent years an increasing number of people have started to take on vehicle breakdown cover plans, with more and more of them realising just how valuable this cover can be in the event of a breakdown either at home or whilst out and about. There are different levels of cover available, including plan that include home start, where someone will come out to you even if you break down in your own home.

There are now more vehicle breakdown providers than ever, as demand for these services has resulted in a surge in the number of companies that are offering cover. This means that drivers now have far greater choice, and can find a breakdown cover plan that offers them the level of cover that they need for a price that is highly competitive.

A study was recently carried out, and the results showed that people that took the time to compare different breakdown cover plans and providers were far more likely to get affordable breakdown cover than those that did not compare the different options available.

One industry official said: “The cost of breakdown cover plans can vary quite widely between different providers, and you may end up paying far more for your cover with one company than you would for exactly the same level of cover with another provider. This is why it is so important to browse and compare a number of plans and providers before you commit.”

Tags: vehicle breakdown cover, affordable breakdown cover, car insurance, official, insurance provider, whilst, music, time

Insurance company wins award

A leading insurance company that deals with private medical insurance has won an award that could see it becoming an even more popular choice amongst companies and individuals that are looking for a private medical insurance plan. The award was won by the insurance giant Aviva UK which won the award for health insurance company of the year at the recent Health Insurance Awards that were held in London.

The winner last year for the same award was Bupa, but Aviva pipped the rival provider to the post and took the crown for this prestigious title. The company also won two other awards during the evening, and this could really boost its profile and increase its popularity, both on a personal basis and a corporate one. Bupa also lost out when it came to the international private medical insurance award, which it has won for nine years in a row – this year it lost out to IMG Europe.

Aviva officials have said that they have been focussing on making healthcare easier for their customers by providing them with a range of tools and resources to make it easier for them to take care of their health effectively.

One official from the insurance giant said: “Aviva has developed several online tools such as a BMI calculator and MyHealthCounts to help our customers better manage their health.”

More and more people are becoming interested in private health insurance cover, as they become more conscious about their health. There are a number of providers offering competitive deals on private medical insurance cover, and it is important for anyone that is considering taking out this sort of cover to make sure that they compare different deals in order to get the most competitive price and the most suitable plan.

Tags: prestigious title, insurance company, IMG Europe, corporate, official, Health Insurance Awards

Mortgage lending in UK to remain subdued

According to a mortgage industry group mortgage lending in the UK is likely to remain subdued and could go into decline as the year comes to an end. Lenders are said to have loosened up on their restrictions over mortgage lending over recent months following the financial chaos caused by the credit crisis and the recession, but many are still struggling to get the finance that they need to buy a property.

The Council of Mortgage Lenders claims that the mortgage market is likely to continue its decline, with the number of loans approved for the month of October this year down by 9 percent for the same month last year. This was also the lowest total for the month of October since 2000. The group said that year on year lending levels for mortgages are likely to continue their decline over the coming months.

The Council of Mortgage Lenders has also stated that the total gross mortgage lending figure for the whole of this year is likely to reach £137 billion, which is thought to be the lowest since 2001. Many first time buyers are still struggling to get a mortgage at the moment, which has left many unable to get onto the property ladder, forcing them to have to rent and driving up the cost of renting a property.

However, in a separate study that was carried out by Sainsbury’s Finance it was claimed that the rock bottom base interest rate, which still stands at just 0.5 percent, is resulting in homeowners’ mortgage repayments plummeting, with the average cost of mortgage repayments said to have fallen by around 27.67 percent since 2008. This takes the figure for mortgage repayments to an average of £8059 per year according to the figures from the supermarket giant.

Tags: credit, Banking, decline, Loans, mortgage, finance, Subprime crisis impact timeline

Consumers warned against locking into costly fixed rate energy tariffs

With winter now upon us it is not surprising that many people are getting concerned about their energy bills, and this is made even worse by the fact that energy usage prices are set to soar with the energy giants increasing their prices and adding the financial burden that many households are already experiencing. Scottish and Southern Energy has already announced an increase of 9 percent from the start of December, which could see the average annual bill rising by almost £70 a year.

Officials have said that it is likely that more of the UK’s energy giants will follow suit and increase their prices. However, they have also said that consumers should resist the temptation to lock themselves into costly fixed price energy deals, as this way they could end up paying hundreds of pounds extra each year. It is claimed that fixed tariffs are around 27 percent higher than online tariffs, and this could add over £230 to the average annual energy bill.

EDF Energy announced yesterday that it would be freezing standard gas and electricity prices until March 2011. However, the annual cost of this comes to £1098 a year, compared to £867 a year for its best online tariff, reflecting a difference of 27 percent.

Ann Robinson from the price comparison service uswitch.com said: ‘Fixed tariffs can be expensive; it is only worth paying the extra if you are confident prices will increase by that much. There are two key steps to keeping a lid on your energy bills – make your home more energy efficient, and switch to a competitive energy plan so you pay less for the energy you use. This could save around £422 per year.’

Tags: Ann Robinson, officials, fixed rate, EDF, tariff, price comparison service, price, Renewable energy

Older people likely to cut back on spending before younger consumers

It has been claimed that older people in the UK are more likely to curb their spending on things such as credit cards and current accounts than younger consumers. With many people struggling financially, and with rising living costs, increasing VAT levels, and rising unemployment levels likely to further affect spending power amongst consumers, cutting back has become a necessity for many people.

An official from Lovemoney.com claims that it is the older members of society that are likely to react to economic changes before younger ones, and older people are more likely to reduce their spending on credit cards and via their current accounts. Older people are also more likely to start putting money aside in savings than younger people.

Ed Bowsher, the official from Lovemoney.com, said that with interest rates still at a record low younger people are more likely to continue spending in the short to medium term and less likely to think about reining their spending in or trying to save any money. However, he said that older people would not have that ‘feel good’ factor.

Bowsher’s prediction comes after the publication of a recent report, which showed that since the start of the recession around 75 percent of consumers in Britain had altered their spending habits, with many having to make huge changes to their spending levels because of the financial strains that have come about from the recession and the global financial crisis.

However, many people have turned to credit cards and overdrafts in order to keep up with their financial commitment or continue with a particular lifestyle, and this has led to rising debt levels amongst households in the UK.

Tags: consumer, United Kingdom, particular lifestyle, overdrafts, power, debt levels, necessity, factor

Car insurance premiums increase by up to 50 percent

It has been revealed that drivers are facing huge financial burdens, with the news that in some cases car insurance premiums have soared by up to a massive 50 percent in the space of one year. This could see some motorists now paying hundreds of pound a year extra in car insurance premiums at a time when many are already struggling to keep their vehicles on the roads due to high petrol prices and other financial commitments.

Annual renewal costs on car insurance are now said to be at an all time high, and according to some industry experts part of the blame for the soaring cost in cover lies with ‘crash for cash’ fraudsters, who are swindling insurance firms out of huge sums of cash by staging crashes and then claiming. Fronting, which is where parents are including their kids on their own cover due to the cost of insurance for a younger driver, has also been blamed for the surge in car insurance costs.

The cost of cover for male drivers aged between seventeen and twenty two years of age has soared by around 51 percent, taking the average price of cover to £2500. For female drivers of the same age the average cost of cover is around £1400 according to figures released by the motoring group, the AA.

The AA commented on the fact that many parents were engaging in fronting, stating: ‘This is actually fraud and it is driving up premiums for everyone. Insurance companies are getting much better at detecting this.’

The company added: ‘There has also been an escalation in our compensation culture, imported from America. In the past, if you had a knock or a bump and were left with a sore neck, you would take a paracetamol. Now personal injury lawyers encourage you to sue. Personal injury claim rates in Britain are four times those of any other European country – yet we have fewer accidents.”

Tags: car insurance costs, paracetamol, driver, insurance costs, paracetamol. Now personal injury

Lack of mortgages leads to increased demand for rental property in London

The financial crisis is still having severe repercussions when it comes to the mortgage and property markets, and getting a mortgage these days can be very difficult for first time buyers because of the restrictions that are still in place amongst lenders and the high deposit levels that lenders are demanding from would be buyers in order to stand a chance of getting the mortgage loan that they need.

For those that are looking to live in London things are even more difficult, and the high cost of property in the capital coupled with the problems with getting a mortgage and lack of 100 percent mortgages has made it impossible for many people that need to or wish to live in the city to actually buy a place of their own. This has led to an increase in the number of people looking to rent property in London.

The surge in applications for rental properties in London has led to experts advising those looking to rent in London to look sooner rather than later, as the demand for property in the area is set to increase. In fact, it has now got to a point where demand has reached a level that enables some landlords to accept sealed bids from interested parties.

One official said that there was a revival in the city and a large number of students looking for accommodation, all of which had added to the high demand for rental property in the area. Another official said that landlords in London needed to consider not increasing the rent on their properties, as this would encourage existing tenants to stay on and could cut costs.

Tags: london, interested parties, economics, mortgage, Demand (economics), rental properties in london, personal finance, sealed bids

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