Earning money from banks

Over recent years banks in the UK have not seen much positive publicity, and have come under fire for everything from security breaches to hefty charges. Read more

Tags: accounts, savings, bank, earn, interest

Would you notice if money went missing from your account?

Although most people live within a certain budget each month a new report has suggested that an alarming number of consumers in the UK would fail to notice right away if up to £1000 went missing from their accounts, and this indicates that many consumers are extremely lax when it comes to managing their bank accounts, putting them at increased risk of falling victim to fraudulent activity.

According to recent research an alarming nine out of ten people would fail to notice straight away if up to £1000 was missing from their accounts, which is very worrying particularly in light of the mass data loss resulting from the missing disc from HM Revenues and Customs, which contained the banking details of around 25 million people. It is thought that one of the causes of this problem is a phobia of finances, where consumers are too worries to check their accounts in case the balance is lower than they expected. In this situation consumers tend to prefer to bury their heads in the sand until they are forced to look at their finances, which puts them at risk of not even noticing if money is taken from their bank account.

One industry official stated: ‘These findings suggest consumers need all the help they can get to keep tabs on their money. Poor money management and existence of “finance-phobia” in Britain is worrying considering the rising levels of debt problems Britons face.’ In addition to failing to notice missing money, those that fail to monitor their bank accounts are also at risk of being hit with a myriad of bank charges, which will keep taking them further into the red.

It is estimated that over £43 billion worth of unwatched money is sitting in accounts across the UK. Around half of the British public do check their account balances on a weekly basis, although this would still not immediately flag up any money being taken from the account unless it was taken on the day that the consumer checks the account. However, a further 25% only check their accounts on a monthly basis, and this puts them at an even higher risk of failing to notice missing money.

Experts have been warning consumers to keep a close eye on their bank accounts for a number of reasons. Banking fraud and identity theft are rife in the UK, and failure to monitor your finances could mean that you miss the chance to spot suspicious transactions that could later land you in hot water. For millions of people it has become even more important to check bank account details and balances recently, and this is because of the loss of bank details on the disc that was lost by HM Revenues and Customs.

Checking accounts and bank details should not prove too much of a problem for those with Internet access, as most banks now offer online banking facilities that allow accounts balances and statements to be checked at the click of a button, and this can really reduce the chances of falling victim to this sort of fraud for many. Those affected by the HMRC data loss are also advised to sign up to a credit reference agency and check their credit file on a regular basis so that any suspicious transactions can be quickly identified and dealt with.

Related articles:

• How Do Bank Accounts Work?
• Can I Have More Than One Bank Account?
• Opening and Closing Bank Accounts
• Internet Bank Accounts – The Benefits and Drawbacks
• How Safe Is Your Internet Bank Account?

Tags: internet, bank, missing, online, accounts, funds, transactions

Lost data victims desperate to protect bank accounts

The millions of victims of the HM Revenue and Customs data loss blunder have been desperately taking measures to try and protect their bank accounts according to a recent report.

HM Revenue and Customs lost disks containing around 25 million bank account details recently, and although there is nothing to suggest that the information has fallen into the wrong hands the government has urged those affected by the situation to remain vigilant in order to reduce the chance of becoming a victims of fraud or theft.

Over the past few days thousands of potential victims have been flocking to change their bank account passwords and PIN numbers in a bid to try and protect their accounts. Because the data related to child benefit and contained names and dates of birth it is thought that parents using their children’s names and dates of birth as part of their banking security details may be at most risk in the event that the data does fall into the wrong hands.

Sandra Quinn from APACS stated: ‘Obviously with the scale of this there can be no guarantee that fraud won’t happen, but we are doing all we can to minimise that risk. Our best advice is that if you use your child’s name or date of birth as passwords then it would be a good idea to change them, but there is no need to panic.’
Banks are also taking precautions to try and protect customers’ accounts.

One Barclays official stated: ‘We have briefed staff to be extra vigilant, and will be asking customers for additional information as well. Obviously we won’t say what those extra measures are, but we are asking people to bear with us, as we take all steps to minimise the risk to customers.’

Tom Smith
3rd December 2007

Tags: stolen, apacs, lost, data, personal, accounts, hmrc, bank

How well do you monitor your savings account?

A recent report has suggested that many Brits with savings fail to monitor their savings accounts to the degree where many would not even notice right away if there was £1000 was missing from the account.

The report suggests that around 10% of those with savings would not immediately realize if £1000 went missing from their accounts. The survey was carried out by the mobile banking service Monilink, and comes at a time when many people may be at risk of fraudulent transactions following the loss of 25 million account details by HM Revenue and Customs.

It is thought that the reason why so many people are so lax about checking their bank accounts is a condition known as finance phobia, which is a condition where people are afraid to look at their accounts in case the balance is lower than expected. Officials from Monilink state that many people would simply prefer to ignore their accounts than risk looking at them and finding that their account balance was lower than they expected it to be. It is thought that around 20% of those that do not check their accounts blame finance phobia.

On a national basis there is over £43 billion pounds stored away in accounts that are not monitored by account holders. Around 50% of the British public do check their bank account balances on a weekly basis, but a further 25% only check their savings accounts once a month. Around 25% of those that were polled said that checking their accounts would materially affect their lives because they suffered sleepless nights as a result of their finances.

‘These findings suggest consumers need all the help they can get to keep tabs on their money. Poor money management and existence of “finance-phobia” in Britain is worrying considering the rising levels of debt problems Britons face.’

Tom Smith
1st December 2007

Tags: money, lose, balance, bank, savings, accounts

Millions may decide to switch banks

According to a recent report from consumer group Which? millions of UK consumers may end up switching bank accounts in the future if monthly or yearly bank charges are introduced for those with bank accounts.

Which? conducted a survey of 1022 people, and out of the respondents nearly 80% stated that would look at switching to another bank. Around 73% stated that they thought that fees charged on current accounts would be unfair. However, banks have indicated that these fees are a possibility in the event that they lose the right to impose charges for exceeding overdraft limits, bouncing cheques, and for returned direct debits.

A High Court test case is scheduled for next year to determine the legalities of these charges, which have been at the centre of controversy for the past couple of years. If the banks lose the case then many banking customers could be hit with high monthly or annual fees simply for having a bank account. Nearly 90% of those polled by Which? added that the government needed to ensure that caps were placed on any such account fees.

An official from Which? stated: “Consumers don’t want to be charged for their current account and will vote with their feet if their bank introduces a monthly or annual fee. Our research shows that customers would support Government intervention to make sure banks don’t overcharge.”

A spokesman from the British Banker’s Association said: “UK banks offer the most cost effective and comprehensive package of current account services around and are keen to continue to do so. We have always said there is a place for the current model of free banking and part of the reason for seeking the clarity of a court decision on bank fees is to defend this.”

Tom Smith
14th November 2007

Tags: accounts, interest, better, switch, bank, increase

Forgotten savings claimed by thousands

Following the government’s call to urge consumers to reclaim forgotten savings earlier this year, a recent report has shown that over ten thousand people reclaimed their lost savings over the summer months, and it is thought that many more will continue to do so over the coming weeks.

Consumers have used the British Banking Association’s reclaim facility in order to claim back money that has been left in dormant accounts and forgotten about.

Earlier in the year the government stated that any money that had been left in dormant accounts for fifteen years or more would be used to improve youth and community facilities if it was not claimed. As a result of this thousands of people put in their claims over the space of three months in order to get back their money, although the government did also state that the money could be reclaimed at any time and there was no deadline by which the money had to be reclaimed.

The British Banker’s Association stated that there would most likely be another flood of claims after legislation relating to claims, known as the Unclaimed Assets Bill, was mentioned in the Queen’s speech next month. Over two hundred thousand people have tried to claim money from their dormant accounts over the past year according to figures. Consumers have been able to do this through the BBA as well as directly through the bank or building society in question.

Paul Chisnall, executive director of the BBA stated: ‘We had stories of Gordon Brown stealing money in the press and on TV, which led to a huge increase in volume. That could well repeat. There may be a collective targeting mentality as a result of the legislation and we’re in a state of readiness. As banks are more active on this, that will also generate more interest. What we’re trying to tell people is – it’s your money; there has never been a better time to claim it.’

Tom Smith
10th November 2007

Tags: bank, savings, individuals, forgotton, accounts, lost, claim

Savings could hit one trillion in five years

According to a recent report the level of cash savings in the UK could hit £1 trillion by 2012 based on current savings trends.

According to the Alliance and Leicester the level of cash savings has grown five times faster than unsecured borrowing over the past seven years, and if this keeps up cash savings could hit £1 trillion within the next five years. There are have been many concerns raised in recent years over the high level of consumer debt in the UK as well as about lack of savings.

The research also showed that there was an ever widening gap between those with liquid assets and those without, and those that move money from investments into cash accounts. Since 2000 the level of cash savings has nearly doubled, and has increased by £426 billion to £876 billion. In contrast, unsecured borrowing has gone up by £79 billion in the same period, taking it to £214 billion.

In a recent poll conducted by the Alliance and Leicester amongst two thousand respondents, over one third stated that they planned to increase their cash savings over the next few years. Based on this the Alliance and Leicester has stated that cash savings could indeed hit £1 trillion. According to one industry official part of the reason for the rise in cash savings is consumers recycling money from pensions and long term investments.

He stated: “We have a savings paradox. Households appear to be stretching themselves to meet increased taxation and a general rise in the cost of living. However, perhaps surprisingly, overall savings balances have continued to increase. It seems that the pressure has fallen on pension contributions: evidence suggests that people in their prime years are saving more cash with a view to funding their retirement.”

Tom Smith
8th November 2007

Tags: accounts, interest, savings, earn, cash, Banking

New account launched by Alliance and Leicester

A new current account has recently been launched by the Alliance and Leicester. The Account, which is known as the Premier 50 account, is aimed at customers aged 50 and over, and offers a wide range of benefits that could suit consumers in this age group.

Older travellers can find it notoriously difficult to get travel insurance, and one of the benefits that this bank account offers is annual worldwide travel insurance that provides cover up to the age of 79.

Other benefits that come with the Premier 50 account include a credit interest rate of 7% AER, a range of medical benefits, and a range of lifestyle and leisure benefits. However, despite all of these benefits it is uncertain how successful the account will be. This is because research shows that consumers aged 50 and over tend to be reluctant to change their current accounts, and survey results show that nearly 50% have never switched banks.

Customers of the Premier 50 account will be able deposit cash and cheques, and make withdrawals at over twelve thousand post office branches throughout the country. A monthly fee of £10 is charges on the account, which covers the cost of all of these benefits. Medical consultations, diagnostic tests, and a 24 hour helpline are included in the benefits that are offered with the Premier 50 account.

Another bank, NatWest, recently launched an age specific account, with its NatWest Adapt account, which is aimed at those aged between eleven and eighteen. Bank officials stated that the account was aimed at helping people in this age group to learn how to manage money responsibly and sensibly.

Tags: interest, accounts, leicester, alliance, personal, bank

A fall in consumer confidence in banking

A recent survey has shown that there has been a significant fall in consumer confidence when it comes to banking in the UK, with much of this decrease being blamed on the recent turmoil and chaos with Northern Rock.

As a result of this overall, confidence in banking and finance in the UK has taken a tumble state researchers from Teamspirit, which carried out the survey. According to the results most sectors of the banking and finance industry have been affected by this fall in consumer confidence.

One industry professional stated that the recent Northern Rock situation had had a profound effect on consumer confidence in banking and finance, stating: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

The survey involved polling around 2500 people, and showed that fewer than half of consumers trusted banks and building societies, and just a quarter now trusted online banking. The number of people that still trusted building societies was slightly higher than banks, with around 48% stating that they still had trust in building societies. Around 46% now have confidence in high street banks, and just 25% are confident when it comes to online banking.

The recent credit crunch that has spread from the sub-prime sector of the United States has also affected the level of consumer confidence in banking and finance, according to officials, with financial markets in the UK and around the world facing turmoil as a result of repercussions of the credit crisis sparked in the United States. Banks and lenders have now had to raise interest rates on many areas of lending, which has further affected both confidence and affordability in terms of finance.

Tom Smith
3rd November 2007

Tags: confidence, northern rock, finance, accounts, bank, Banking

Interest payments on current accounts to be abolished by First Direct

The Internet banking arm of the HSBC, First Direct, has announced that it will be cutting interest charges on current accounts for customers.

According to officials from the bank the money that is saved from not having to pay interest on current accounts will be used to increase interest rates paid on savings accounts. However, following the mass exodus of customers earlier this year, after the bank announced that some customers would be charged monthly fees of £10, this could be a bad move for the online bank.

First Direct currently has two current accounts in place, and although these accounts do not enjoy the greatest interest rates there is still interest paid on deposits. The cheque account offers an interest rate of just 0.1% on credit balances, whilst the bank account offers 2%. However, in November the two accounts will be merged to create just one standard account known as the 1st Account, and this will pay no interest at all on credit balances.

Officials from First Direct state that customers will be compensated by way of better deals on their savings. An instant access account paying 5.5% will be available, although this is still far lower than the best buy savings accounts offered by other financial institutions, with the highest currently standing at 6.3%. An interest free overdraft facility of £250 will also be available to customers, along with free text banking that could help customers to avoid penalty charges applied when the account goes over its limit.

An official from the bank stated: “A staggering 96 per cent of our customers told us credit interest wasn’t an important factor in choosing to bank with us. We figured it made far more sense to use every single penny we now pay in credit interest to give customers the chance to earn serious interest on higher-interest savings accounts.”

Tom Smith
26th October 2007

Tags: customers, savings, accounts, direct, interest, high, Banking, first

Icesave launches new fixed rate accounts for savers

Icesave, which is currently celebrating its first birthday, has announced the launch of a number of fixed rate savings accounts for customers wishing to save between £1000 and £2 million.

These accounts allow customers to choose from one, two, or three year terms, also enabling them to choose between having their interest paid on a monthly basis or an annual basis. By choosing one of these accounts savers can lock in the interest at a fixed rate for the set term, which means that the interest rate on the savings account will not fall even if the base rate set by the Bank of England does.

Experts state that the two and three year fixed rate deals from Icesave are impressive. The three year account enables savers to enjoy interest rates of 6.31% if paid monthly and 6.5% if paid annually. With the two year account savers can enjoy 6.41% if paid monthly and 6.6% if paid annually. The one year account enables savers to enjoy 6.5% if paid monthly and 6.7% if paid annually. However, a number of industry professionals have stated that there are better one year accounts out there, and savers should shop around.

One industry professional stated: ‘The fixed-rate market is not like the variable market where you have a whole load of other factors and restrictions to consider, so the rate itself is key. On that basis, the Icesave two- and three-year accounts are the best at the moment, but you should probably look elsewhere for a one-year rate.’

Another industry official said: ‘In the fixed-rate market, if you are not being offered the best rate then it is so-so. However rates in this market are not good at the moment: they are so close to variable rates, you have to question whether it is worth locking in your money for the given period. The one-year market is very competitive at the moment. Nottingham’s 6.83% offers a good margin over variable rates, so if you are looking for a one-year bond at the moment, that’s the one you should go with.’

Tom Smith
26th October 2007

Tags: Banking, earn, fixed, accounts, interest, high

Consumer confidence in banking falls

According to a recent survey the levels of consumer confidence in banking have fallen recently, and experts state that much of this reduction in confidence has been fuelled by the recent turmoil and chaos faced by Northern Rock.

The survey was carried out by Teamspirit, and showed that levels of confidence in banking and the finance industry as a whole have taken a real knock over recent weeks, affecting many sectors of the finance and banking industry.

Almost 2500 people were polled as part of the survey, and the results showed that only 46% of consumers now had trust in high street banks. A slightly higher number of consumers expressed confidence in building societies, with 48% stating that they trusted building societies. Online banking also took a hit, with just 25% of consumers stating that they trusted inline banking – experts state that this could be partly due to severe problems that Northern Rock customers experienced over the past couple of weeks.

One official that was involved in the survey stated that the whole Northern Rock situation had resulted in a damaging effect in terms of consumer confidence in finance and financial institutions.

She said: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

Another factor that has also affected levels of consumer confidence according to many experts is the turmoil that has hit the financial markets over the past month, which was sparked by the credit crunch in the United States. This has had global repercussions, affecting many areas of the financial sector in the UK as well as in other countries.

Tom Smith
25th October 2007

Tags: Banking, building, accounts, bank, finance, personal, confidence, high st, society

Lloyds reductions in charges may not be all that great

Consumers and campaigners were pleased when Lloyds TSB, one of the UK’s major high street banks, recently announced that it was cutting its charges for unauthorized overdraft use, bounced cheques, and returned direct debits.

However, the victor has quickly turned to concern, with campaigners pointing out that under the new charging structure many bank customers could actually find themselves even worse off than they are now.

Lloyds TSB announced that it would be cutting the charges for bounced cheques from £25 to £20. It also announced changes to charges for unauthorized overdraft use. Previously going over the overdraft limit meant a customer would be charged £30 with a maximum of three charges per month. However, this has now been changed to a monthly fee of £15 and then between £6 and £20 per day for a maximum of ten days.

Officials state that this could mean that someone that exceeds their overdraft limit by £100 could clock up £200 in charges. An official from Which? stated: ‘These charges appear excessive. If you go over by £100 in the course of a month you could end up with total fees of up to £200.’ Other major banks have also made changed to their charges following in the footsteps of Lloyds, but is seems that these charge reductions may not be as beneficial as they initially appear.

The Office of Fair Trading has recently announced that if banks do reduce their charges to the satisfaction of the OFT then the test case scheduled for next year may be cancelled. However, this will only happen if the reductions made by the banks are in the consumers’ best interests.

Tom Smith
20th October 2007

Tags: tsb, fees, profits, accounts, lloyds, Banking, personal, overdraft, customer

Who is covered by the Treasury guarantee over Northern Rock savings?

Over the past week Northern Rock has suffered huge problems after it was revealed that the bank had taken a loan from the Bank of England.

Despite assurances from the government and from Northern Rock that the company was still solvent and financially sound savers flocked to the branches of the bank for days, queuing to take out their money, with billions being withdrawn by many of its 1.5 million savers. Share prices also plummeted leaving the future looking very bleak for the bank.

Earlier this week the Treasury decided to step in, and in addition to assuring consumers that it would not have considered lending money to a company that was not financially viable and stable, it also offered guarantees to savers to try and reduce the number of people hastily withdrawing their money from the bank amidst fears that Northern Rock would go bust.

The Treasury has now elaborated on its guarantee to ensure that consumers in the UK are clear with regards to who is covered and who is not. For those covered the government has guaranteed the safety of every penny of their savings. Bank accounts that were open as at midnight on 19th September, and any accounts that were closed and are now re-opened will be guaranteed. However, new accounts opened after this time will not be under the guarantee.

Officials stated: “This guarantee covers future interest payments, movements of funds between existing accounts, and new deposits into existing accounts. Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September.”

Tom Smith
17th October 2007

Tags: england, accounts, treasury, rock, savings, bank, guarantee

Students protest against HSBC

Students in the UK have launched a protest against one of the UK’s leading banks, HSBC, and the protest has been quickly gaining popularity through the Facebook website.

Students are now threatening to boycott HSBC over new regulations that will mean the end of the hugely popular three year interest free overdraft facility on graduate accounts with the bank.

Many graduates have benefited from this three year interest free overdraft facility with the HSBC over recent years, enabling them to enjoy a financial lifeline without paying interest between leaving university and starting work.

However, the bank has stated that many of these accounts were abused, and this combined with high levels of bad debt have resulted in the bank having to make a commercial decision to scrap the three year interest free overdraft facility.

However, students are arguing that the reason they joined the bank in the first place was to be able to take advantage of these popular graduate accounts. The protest comes at a bad time for the bank, which along with other banks in the UK, is now vying for the business of new students that are starting university as the academic year kicks off.

One student stated: “They’ve shot themselves in the foot to be quite honest. Why would they want to alienate themselves from graduates who’ll be earning high salaries in years to come?”

Another stated: “I am so disgusted with HSBC right now – it actually makes my blood boil… Never before have I lost so much faith in an organisation. As soon as I can I am closing my account, moving my ISA and finding a new decent bank.”

Tom Smith
6th October 2007

Tags: hsbc, debt, interest, accounts, students, graduates, bad

Make sure you have savings for an emergency

An independent financial advisor is urging consumers in the UK to make sure that they have some savings put aside to serve as a ‘financial cushion’, which can then be used in the case of emergencies.

The advisor, from Christie Scott, states that consumers should always have at least three months worth of wages put aside in savings to fall back on should the need arise. This is particularly important for the self employed, who may find that income for some months is far lower than for others, and therefore may need extra money to subsidise their income now and again.

The firm Christie Scott has pointed out that in order to ensure that there is money in the savings account for emergencies consumers will not necessarily have to dramatically cut down on their social life and spending. Simply making some basic cutbacks and reassessing expenditure could help to top up any savings in order to try and get the balance up to three months worth of salary. Consumers are urged to look through their monthly income and outgoings in order to try and direct some extra cash into savings each month.

The financial advisor stated that in some cases people believed that savings was only worth it if interest rates were high, but this was not necessarily the case.

She stated: “More people may be inclined to save when interest rates are higher. When rates are low some people see little point. Most don’t understand the concept of compound interest – meaning that even low interest rates added steadily over time will make a difference.”

Research has shown that in the second quarter of last year the average amount being saved was £1376 per person, and this has fallen to £910 per person for the second quarter of this year.

Tom Smith
1st October 2007

Tags: emergency, salary, interest, accounts, self employed, average, savings

Over 50s could enjoy great deal on their savings

Over recent weeks a number of high interest savings accounts have come to light, with many experts urging apathetic consumers to make the effort and switch from a lower interest account to one of the higher interest ones, including Icesave, ICICI, and Sainsbury’s Internet savings accounts.

A new player has now entered the field of higher interest savings accounts, this time targeting the over 50s. The account is being made available from Saga, and is offering 6.2% before tax on deposits of £1 and over.

The account will pay a minimum of the base rate plus 0.45% for the first year, and then for the second year will pay a minimum of the base rate. After year two the account promises to pay at least the base rate minus 0.25%. Any base rate changes will also be passed on to savers within two days, which will be refreshing news for many savers that have been left waiting following base rate rises whilst banks quickly act upon pushing up the rates on borrowing and then dawdle over putting up interest rates for savers.

Savers in the UK have been urged by industry professionals to start taking action in order to make the most of their savings, as it was found that many had left their savings stagnating in low interest accounts where the banks had failed to pass on all of sometimes any of the interest rate rises. Although the savings such as those from Sainsbury’s and IceSave are still recommended for the under 50s according to This is Money, the new Saga account could prove invaluable for savers over the age of 50.

Tom Smith
27th September 2007

Tags: low, accounts, Banking, earn, interest, grow, savings, high

Could supermarkets soon take over current accounts market?

There was a time when supermarkets were only used for the purchase of groceries and household goods, but all of this has changed over recent years.

Many leading supermarkets in the UK have really branched out over recent years, and have started offering an array of financial products and services, such as insurance services, loans, and credit cards, amongst others. Many offer savings accounts as well as banking services, providing the consumer with far more choice when it comes to finding the best financial products and services.

A recent survey has revealed just how popular supermarket financial services have become in the UK, indicating that one in every ten consumers has a supermarket savings account, and one in every five shoppers holds a supermarket credit card. The figures show just how much business supermarket giants such as Asda, Tesco, and Sainsbury’s have taken away from the major banks in the UK. Figures also indicate that if supermarkets decide to branch out further they could take away far more business from banks.

According to the results of the survey around half of consumers in the UK would like to see supermarkets branch out and offer more in the way of financial products, as most think that supermarkets can offer far better value and service on such services and products. Current accounts seemed to be of particular interest, and although only one in every two hundred consumers has a supermarket current account at present, if more supermarkets offer this facility they could end up with close to half of the 40 million current accounts in operation in the UK today.

One industry expert stated: “This is a massive unpicked cherry for supermarkets to target. With their low running costs, supermarkets can easily undercut other providers. They are already pinching customers from banks and in time could steal even more.”

Tom Smith
25th September 2007

Tags: consumers, accounts, Insurance, supermarkets, current, savings, products

Popularity of Internet banking results in bank closures

The UK has seen a massive rise in the popularity of Internet banking over recent years. Although there have been concerns about security and the risk of banking fraud, the rise in the number of people using Internet banking these days has reflected consumer confidence in this type of service.

Consumers are able to conduct transactions from the comfort of their own home at any time of the day or night, and can do anything from transfer money or make a one off payment to set up direct debits or simply view statements.

However, although Internet banking is both convenient and simple, it is not all good news. It seems that the huge popularity of Internet banking is now taking its toll on high street banking, and as a result of this some high street branches are going to have to close due to lack of business. The C&G has recently announced that as a result of so many people using Internet banking it will have to close a number of its branches across the UK.

C&G officials have announced that thirty one branches across the UK will be closing, which will mean job losses in excess of 315. There are 195 C&G branches in the UK in total, and the company is a part of the Lloyds TSB group. One spokesman stated that there were fewer people using the branches that were to be closed, and much of this had been put down to the popularity of Internet banking.

He stated: “Closing branches is never a decision that we take lightly. But with more customers taking advantage of technology, the number of customers coming through the doors in these particular branches has fallen. By closing these branches where customer use has dropped, we can invest in the branches that customers do use.”

Tom Smith
21st September 2007

Tags: bank, online, business, internet, grow

Lloyds TSB’s shameful behaviour over bank charge refunds

Lloyds TSB is the only bank so far that has managed to win two cases with regards to the refunding of bank charges – a row that has been going on for many months between consumers and banks.

In most cases banks have paid up, albeit reluctantly, after consumers made a claim for the return of unlawful and unfair banks charges for exceeding their overdraft limits and also for returned cheques and direct debits. However, in two cases the judge ruled in favour of Lloyds TSB in these cases.

However, Lloyds TSB has also been using its own tactics to try and get out of making payment according to a recent report, which has highlighted some of the tricks that the bank has been using in order to avoid having to return customers’ bank charges. The banking giant has issued staff with guidelines on how to deal with claims, after being accused of netting £300 million a year from overcharging customers. The training pack consists of sixteen pages of guidelines, which have been described as dirty tricks by some experts.

Amongst the guidelines issues to staff at Lloyds TSB are to reject first time claims even in cases where the consumer is in the right, not to offer a payout of more than £750 in any claim, and only to offer an immediate settlement to critically ill or dying customers. A special team has had to be set up by the banking giant in order to deal with the flood of claims it has received since the row over bank charges erupted last year.

One staff member dealing with complaints brought the training pack to the attention of a national newspaper, stating: ‘Cynical does not even begin to describe it. I was placed by a recruitment agency, working from 5pm until 1am for about £200 a day to work in this nondescript building on the outskirts of Andover. I was one of about 50 people just dealing with complaints about service charges – we were told the bank was receiving more than 500 a day. This training pack was given to me on my first morning and I was told I had to adhere to it as this was the company policy – no deviating. The booklet was telling us to reject customers asking for refunds, then to palm the more persistent ones off with nuisance money.’

Tom Smith
14th September 2007

Tags: holders, lloyds, bank, accounts, court, charge, customers, tsb

One consumer may be down nearly £200,000

As the government and the banking industry step up the search for consumers that have lost track of their savings over the years one account has been discovered lying dormant for nearly two decades, and has a balance of over £180,000.

This spears to be the largest dormant account found so far. The banking industry and government are already launching a campaign to try and find the owners of lost accounts, where the money is lying dormant.

A dormant account is being classed as an account that has not been touched for fifteen years or longer. Some of the accounts that have been discovered by the banking industry date back to the 1800s, and in some cases the accounts may have clocked up a fair amount in interest over the years, even where the amount deposited was a relatively small one. The British Bankers’ Association is urging those wishing to make a claim on their lost account to contact them via the website or by phone.

The account that has been lying dormant with over £180,000 has been untouched since 1990. The owner last made a transaction in 1990, and the account has not been touched since that time. The government and the banking industry now want to take steps to help as many people as possible to trace their dormant and lost accounts. In many cases it is thought that the consumer may have lost track of the account after moving home and failing to advise the bank about their new address.

In the meantime the government is planning to use the money from these dormant accounts to fund a variety of youth and community projects in the UK, and a committee has been set up to oversee this. However, experts state that this will not affect the consumers’ right to claim at any time, and there is no time limit placed on when a claim must be made by.

Tom Smith
14th September 2007

Tags: address, charity, bank, touched, balances, dormant, find, accounts, holders

Consumers still failing to get best rates on their savings

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

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

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

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

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

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

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

Tom Smith
28th August 2007

Tags: savings, cost, charges, accounts, higher, rates, accrue, consumers, interest, personal

Have you lost track of your account?

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

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

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

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

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

Tom Smith
27th August 2007

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

Many people permanently in the red with overdrafts

A recent report has highlighted that by the 20th of each month many Brits find themselves running out of cash and having to rely on their overdrafts to see them through the rest of the month until payday.

In some cases, once payday comes around, Brits are able to slide back into the black for several weeks. However, there are also many Brits that will go straight back into the red, even after their salary has been paid in, because their accounts are permanently overdrawn.

Around two million consumers in the UK are always in the red, unable to pull themselves out of their overdraft debt and therefore having to rely heavily on their overdraft facility. In the past year, according to research, around ten million people in the UK have used their overdraft on at least one occasion. Rising interest rates and repayments may have contributed to this figure, with more and more people having to dip into their overdrafts in order to stay afloat due to rising repayments.

One industry professional stated: ‘It’s no surprise so many people are permanently in the red – with interest rates having risen five times in the past year consumers are not doubt feeling the squeeze. People often dipping into their overdraft need to watch the Effective Annual Rate as some can be punitive and they may find they are better off spending on a 0% credit card in the future.’

Those aged 55 years and over were found to be the best at staying out of the red, with an impressive 64% in this age group managing to stay in the black. This compared to 40% of 18-24 year olds. In the 45-54 age group 5% were permanently in the red.

Tom Smith
31st July 2007

Tags: red, current, accounts, debt, credit

Further disappointment for ING Direct customers

ING Direct customers are facing increased disappointment when it comes to their savings, with ING once again failing to pass on the interest rate rise that was applied by the Bank of England.

The online savings account from ING Direct now pays 5% to savers, which is well below the best rate savings account and stands at 0.75% less than the base interest rate. The account initially attracted over a million customers when it advertised its impressive interest rates in 2003, but since then ING has come under fire for leaving interest rates to stagnate despite a series of rate rises.

The Websaver account from ING will also see interest rates remain static, at 5.5%. The rate on this savings account was actually higher than this initially, opening at 5.65%, but was cur to 5.5% before the interest rate rise in May of this year. Since this time the interest rate has not gone up, despite Bank of England rises of 0.25% in both May and July. ING Direct was hugely popular amongst savers previously, but has lately received a great deal of negative press over its refusal to pass on interest rate rises.

According to recent figures customers of ING Direct have taken over £3 billion worth of savings from their accounts and placed the money with other banks as a result of poor interest rates based on the current base rate. Although interest rates in the UK have gone from 4.5% to 5.75% in the past year through a series of five interest rate rises, the interest rate on the ING Direct savings account has risen by only 0.5% in this time.

According to ING Direct other banks get around this by offering lower rates on other accounts. One official stated: ‘If these savings providers had to pay all of their customers our 5% it would cost them a fortune and they wouldn’t be able to afford to keep offering their headline grabbing accounts.’

Tom Smith
26th July 2007

Tags: customers, cost, leave, Banking, bank, rates, rises

Good news for savers with Sainsbury’s

Those with Internet savings accounts with Sainsbury’s are in for some good news, as the supermarket giant and bank has now raised the interest rate on its Internet savings account to 6%, a rise of 0.25% from its previous interest rate of 5.75%.

According to This is Money this makes the Internet savings account from Sainsbury’s one of the best savings accounts to have. Prior to the interest rate rise the top savings account according to This is Money was with Icesave, which offered a rate of almost 6 percent.

Last week the Bank of England opted to leave the interest rates stable at 5.5 percent. Interest rate rises have taken place four times within the last year, rising each time by 0.25 percent.

However, in many cases savings accounts operators have been very slow to apply any interest rate rise to savings accounts, and in some cases have failed to pass on all or any of the rises to savers.

One the other hand they have been quick to apply to interest rate rise on borrowing, which means that those that have borrowed money have to repay more and those that are saving money get lower returns.

Sainsbury’s, on the other hand, has decided to raise the interest rate on the Internet savings account by 0.25 percent, even though there was no interest rate applied by the Bank of England last week.

The account does no require any notice and does not have any penalties attached to making any withdrawals. There is also no minimum deposit with the Internet savings account.

One spokesperson from Sainsbury’s stated: ‘With so many accounts in the market, savers need to think about which savings account best suits their needs, whether that’s benefiting from a short term bonus or being able to access their funds without any penalties. Our Internet Saver is ideal for those savers who want to receive a great rate but also want to have regular access to their cash without any restrictions.’

Tom Smith
5th July 2007

Tags: rise, interest, england, saver, bank, rate, increase, earn

Bank paid out saver’s money to wrong family

A bank has faced major embarrassment after paying out the savings of a pensioner to another customer’s family – under the assumption that the customer was dead.

The pensioner, who had £3000 in savings with the Abbey, discovered when she visited the bank that her savings had been paid out and her account closed because her records stated that she was dead.

The 77 year old customer stated that she visited the bank after her statements stopped arriving in the post. She stated: ‘I took the matter up with my local branch in Telford and they asked me if my husband had perhaps closed it.

I replied it was unlikely because he passed away 25 years ago. The young lady serving me began typing away on her computer but all of a sudden looked puzzled and told me that according to their records, I was dead. She went a bit pale, either because she was embarrassed at such a mistake or she thought she was seeing a ghost.’

After investigating the bank discovered that a customer with a similar name and of the same age had died. However, in error the wrong account had been closed and the £3000 had been paid out to the family of the deceased customer. The customer has been told that she will be getting back her money along with some compensation.

She stated: ‘Abbey have told me they have reclaimed my savings and have pledged to give me some compensation as a result of all the fuss caused. But I’m 77 and a widow, so it doesn’t do my health any good when I’m told my £3,000 has disappeared because I’m dead. It has taken a lot of time, effort and money, what with phone bills and bus fares to Abbey and my local library to process all the paperwork.’

Tom Smith
3rd July 2007

Tags: dead, money, mistake, accounts, funds, family

Online banking is booming

Ten years ago the Nationwide Building Society started the huge phenomenon that has become online banking.

And as we reach a decade of banking via the Internet it seems that this method of dealing with finances and applying for banking services has become more popular than ever. There have been some concerns over the ease of banking fraud via the Internet, but with increasingly stringent safety measures in place and customers becoming savvier than ever when it comes to security, online banking continues to thrive.

One of the UK’s leading banks, HSBC, as reported an increase of fifty five percent in terms of its online business. According to recent figures around eighteen million people in the UK now use the Internet to deal with their finances and manage their bank accounts, and HSBC alone has received nearly two billion visits.

At a recent Annual General Meeting the chief executive of HSBC stated: “More and more of our personal and commercial customers are seeing the benefits of buying online. Our websites handled 1.8 billion visits last year and online sales increased by 55 per cent.”

He also stated that the bank was starting to move more towards interaction with customers through the Internet rather than through the branch.

A number of banks that are trying to encourage customers to deal with them online have offered various incentives and rewards such as increased interest rates on savings and bonuses – this is because it is easier, faster, and more time effective for banks to deal with customers in this way rather than through a branch.

When banking online customers can make bill payments, transfer cash, check balances, apply for services such as credit cards and loans, set up and cancel direct debits and standing order, and more.

Tom Smith
11th June 2007

Tags: online, Banking, bills, bank, payments, accounts, rewards, interest, transfers, services

Three billion in savings pulled from ING

Annoyed savers with money saved with ING Direct have pulled three billion pounds in savings from the bank.

Many customers have been outraged by the bank’s failure to pass on interest rate rises to savers, and as a result many have pulled large sums of cash that they were savings with ING. According to bank officials there are a number of customers that have removed large balances from the bank to try and find a better interest rate elsewhere, but the bank also stated that overall customer numbers hadn’t been affected.

According to bank officials ING is not prepared to compromise on services for other customers in order to try and get better rates for others. Launched in 2003, ING Direct has boasted a reputation as a bank that offers competitive rates of interest as well as good customer service. However, the interest rates on savings accounts with ING Direct have been stuck at 4.75% for some time.

The Bank of England has raised interest rates four times in the past year, with interest rate rises in August 2006, November 2006, January 2007, and May 2007. Customers are angry because ING has failed to pass on the interest rates that were applied by the Bank of England in November 2006 and January 2007. However, bank officials state that the latest interest rate, which was announced in May, will be applied to savings account in June.

One ING official stated: ‘The vast majority of customers are still with ING but those customers with higher balances who are rate conscious are people who are constantly looking for best rates in the market. Are there better rates out there? Yes there are. Do those companies pay all their customers the same rate? No they do not. We are trying to be consistently fair with all our customers so 5% is the highest and the lowest interest rate they will receive.’

Tom Smith
4th June 200

Tags: interest, increase, bank, rise, rate, accounts, market, england

Savers could benefit from another interest rate rise

Over the past year the UK has seen interest rates rise three times, shooting up from 4.5% in August last year to 5.25% by January of this year.

And with experts predicting that another rise of at least 0.25% will be enforced in May, and possible a further rise in the summer, borrowers on variable interest rates are dreading dealing with their finances, as this means that repayments will go up yet again. However, for some savers the story is quite different.

According to information from Moneyfacts interest rates on fixed rate savings accounts have been climbing, and another interest rate rise could spell good news for savers. According to one expert from Moneyfacts a number of banks and building societies have been raising fixed rate interest rates by up to 0.55%. This has created stiff competition between those offering these savings accounts, and at present the Nottingham Building Society offers the highest rate at 6.2%.

According to Moneyfacts’ Rachel Thrussell: “While rates in excess of six percent are currently very competitive, instant access rates are not far short of this mark, making the reward for tying up your money relatively low. So while these rates will offer a great return and piece of mind, perhaps the market has not yet reached its peak and better rates may still be yet to come.”

In a related report from Sainsbury’s Bank, some experts were concerned that savers were being short-changed in terms on interest on their savings, with many account failing to keep up with inflation and interest rate rises. Consumers that are saving in a low interest account are urged to shop around and look for an account that offers a higher rate of interest, as this could really bump up the amount if interest earned each year.

Tom Smith
28th May 2007

More Information:

• Savings Accounts – Are They Worth It?
• Internet Bank Accounts – The Benefits and Drawbacks

Tags: interest, tax, building, increase, amount, savings, society

Over one fifth of Brits do not save

Over twenty percent of Brits do not put aside any money in the form of savings according to a recent report. Research has shown that twenty one percent of Brits fail to put aside any money in savings.

The savings survey was carried out by Nationwide in a bid to try and determine how best to tempt consumers into opening and running a savings account. The survey also showed other facts and figures relating to Brits and the way that they save – if at all.

According to the survey, over one in five Brits saved nothing at all. However, the results also showed that thirty five percent of Brits do save money on a regular basis. In addition to this the survey revealed that nearly forty five percent of Brits tended to save on an ‘as and when’ basis, putting money aside into savings whenever they had some spare but otherwise using it for day to day cost of living.

Seventy seven percent of those interviewed as part of the survey stated that their most important consideration when it came to a savings account was a good, long term interest rate. Eight four percent also stated that the account needed to allow withdrawals without any form of penalty being imposed. Nearly sixty percent stated that they would only open a savings account with a well known provider.

Shockingly, the survey also showed that some people still use the most primitive methods of trying to save money, such as stashing their cash in various places around the home – including under the mattress. Those interested in savings accounts are advised to shop around and find an account that offers a good interest rate that reflects the rising interest rate in the UK.

Tom Smith
26th May 2007

Tags: bank, money, spend, income, accounts, earn, uk, savings, cash, interest

NS&I pulls out of treasurers accounts

National Savings & Investments has announced that it will no longer be running Treasurer’s Accounts, which are designed for non-profit organizations and charities to make deposits.

The move means that around one thousand organizations and charities will have to find alternative accounts with other companies. No further Treasurer’s Accounts can now be opened with NS&I, and from August 10th no further transactions other than account closure can be made on existing accounts.

Launches in 1996, the number of Treasure’s Accounts and the amount of money invested in them has declined over the years. In 2003 there were 992 of these accounts running with NS&I, with total investments of £67 million. This has now dropped to 932 accounts with total investments of £61.3 million. Officials from NS&I state that it is necessary to make this move, as it is more cost effective for them to now concentrate their efforts on personal savings accounts.

Peter Cornish, director at NS&I, said: ‘The Treasurer’s Account has been in decline for some time which has prompted our decision to close the account. Banks and building societies offer similar accounts for non-profit-making organisations so there are plenty of alternatives available in the market place.’

He added that to continue offering this sort of account a substantial investment would need to be made, and that because of this it was no longer worth the company taking on these accounts.

Amongst those that have Treasurer’s Accounts with NS&I are various charities, and a range of clubs and societies, including youth groups, church groups, and other non-profit organizations. The accounts were thirty day notice accounts, with minimum investment levels of £10,000 and maximum investment levels of £2M.

Tom Smith
26th May 2007

More information: Treasurer’s accounts no longer available

Tags: treasurers, alternatives, charity, bank, accounts, investment

Consumers should keep an eye on their savings rate

Consumers are being urged to keep an eye on their savings rate following the latest interest rate rise by the Bank of England.

Banks and building societies are often notoriously slow at applying any interest rate rises to savings account, yet are quick to apply them on borrowing, which means that they make maximum profits from any interest rate rises. The Bank of England has raised interest rates four times in the last nine months, taking them from 4.5% last August to 5.5% earlier this week. However, although borrowers quickly see repayments on variable rate loans and mortgages going up, savers do not benefit from the same speedy action.

In some cases, according to industry experts, banks and building societies simply leave the interest rate on savings unaltered, and most consumers fail to notice or concern themselves about this, leaving the banks to rake in million in additional profit.

Experts are urging consumers to keep on eye on their interest rates on savings every time the Bank of England imposes another interest rate rise, and to make sure that they either see the rate reflected on their savings account or consider switching accounts to one that does offer a competitive rate of interest.

Many of those with savings account may have to wait until June to see any rise in interest rates on their savings, and even this small delay could rake in huge profits for banks and building societies.

Kevin Mountford, head of savings and current accounts at moneysupermarket.com stated: ‘It takes providers an average of 20 days to pass on an interest rate rise. With each half per cent rise bringing in £12m per day in interest it’s easy to see why providers delay. If the reason for the average 20-day delay is operational then banks and building societies should backdate the rise.’

Tom Smith
21st May 2007

Tags: moneysupermarket, rate, competitive, rise, savings, compare, change, accounts, interest, switch

UK banks investigations widen

Regularity bodies in the UK are set to widen their studies into banking and bank charges after months of investigations into bank charges have already been carried out.

The Office of Fair Trading and other financial regulators in the UK have been looking into the fairness of extortionate charges for exceeding an overdraft, having a returned cheque, or having a returned direct debit. Banks have been charging up to forty pounds or more in some cases in these situations.

The bank charges have been branded unlawful and unfair by regulators, and as a result many consumers have been able to reclaim their charges going back up to six years, and sometimes amounting to thousands of pounds. The OFT is likely to make a decision later this year on what is deemed a fair charge for administration that costs the bank between £2 and £5. In the meantime, consumers continue to try and reclaim their past charges.

Now that the study and review has been extended it is being described as one of the largest investigations into banking ever carried out. As part of the extended investigation regulators will be looking into the costs of banking, how the end of free banking might affect consumers and the economy, and will also continue to assess the fairness of bank charges. It is thought that placing a low ceiling limit on these charges could result in many banks charging all customers a monthly fee for holding a current account.

With regards to extending the investigation one OFT official stated: “This will provide the necessary context for assessing the fairness of unauthorised overdraft and returned item charge before we apply the law in this area.” 

A National Consumer Council official also commented on the situation, stating: “Banks must deliver a fair deal for consumers and stop dragging their customer service reputation further into the mud by waiting for regulatory action.”

Tom Smith
15th May 2007

Tags: oft, accounts, bank, charges, penalty, regulators, investigation, fees, costs

Consumers having problems finding online savings accounts

For some time industry experts have been urging consumers in the UK to shop around when it comes to finding a suitable savings account and not to stick with a savings account that they may have held for years just out of loyalty or apathy.

According to experts many savings accounts are not following the interest rate and inflation rises, and therefore consumers that save their hard earned money in these accounts are getting a raw deal when it comes to earning interest.

However, according to recent date many consumers that are taking up this advice and trying to find new savings accounts online are hitting a brick wall, with a number of financial institutes refusing to let new customers open online accounts, and reserving them strictly for existing customers – making it more difficult for those with a poor existing savings account to switch to one that pays better interest or offers more benefits.

More information: The Process and Benefits Of Switching Bank Accounts

The review into online savings accounts was carried out by Global Review, and shows that many consumers are being left out in the cold when it comes to finding better interest rates on their savings. According to Moneyfacts there can be a huge difference in interest rate levels between the best savings accounts on the market and the lowest interest ones, but it seems that despite their efforts many consumers can do nothing about the fact that they are stuck with a low interest rate.

Amongst the banks and financial institutions refusing online savings accounts to anyone other than existing customers are Lloyds TSB, Nationwide, and Barclays. Many other banks, such as Halifax and NatWest, have also been accused of not providing adequate information to those wishing to open savings accounts with them.

Tom Smith
13th May 2007

More Information:

• Internet Bank Accounts – The Benefits and Drawbacks
• Can I Have More Than One Bank Account?
• Opening and Closing Bank Accounts
• Savings Accounts – Are They Worth It?

Tags: locked, interest, savings, earn, Banking, rate

Over two billion still to be claimed in bank charges

According to figures released by the price comparison website Uswitch, over two billion pounds worth of bank charges are yet to be claimed by consumers that have been hit with hefty and unlawful penalty fees over the past six years.

The topic of bank charges has exploded over recent months, with regulators claiming that the charges imposed for exceeding an overdraft limit and for returned cheques and direct debits are unlawful and unfair. As a result many people have claimed back these charges going back up to six years, but Uswitch officials claim that around £2.12 billion has still yet to be claimed.

The figures from Uswitch suggest that around four billion pounds in charges have been netted by banks that have applied these charges to the accounts of around nineteen million consumers in the UK. So far, over half of that amount has not been reclaimed by consumers.

So many people are now being encouraged to reclaim their fees from banks that there are a number of financial services available that can help consumers to try and reclaim their fees if they are unsure as to what they need to do. However, the clock is ticking, as an impending decision from UK regulators with regards to what is construed as a fair fee may reduce the amount that claimants can file for.

Many consumers have already threatened to take their banks to court for not repaying the fees, and in most cases the banks have paid up on a last minute basis, with no banks actually having gone to court to justify the amount that they charge.

However, it seems that many consumers are frightened of the consequences of making a claim, with a number of banks having threatened to close consumers’ accounts if they try and reclaim their fees.

Tom Smith
10th May 2007

Tags: reclaim, close, accounts, claim, fees, charges

Customers could be losing out on savings accounts

Many consumers in the UK like to save some money towards a rainy day, to build a nest egg, or simply for emergencies, but recent data has revealed that an alarming number of savers in the UK are getting really raw deal on their savings and could net much more in interest each year on their savings simply be taking the time to find a savings account that pays a decent rate of interest.

Experts claim that the apathetic attitude of some savers, and even misplaced loyalty to their banks, could mean that many savers are losing out on a small fortune in interest each year.

Recent research was carried out by Sainsbury’s Bank, and according to the information from the research, around forty percent of savers in the UK are earning less on their savings than the rise in inflation.

With inflation working its way up to over three percent according to the Office for National Statistics, it seems that around two in every five savers are earning under the three percent mark on their savings, with around sixteen percent of banks and building societies paying even less than this, at two percent or under.

The Bank of England has increased interest rates three times since August of last year, taking the base rate from 4.5% to 5.25%, and many predict that there will be a further rise of at least 0.25% in may this year, which would take the base rate to 5.5%. However, despite these increases only a fifth of banks and building societies offer savings accounts that have an interest rate of fiver percent or higher.

As an illustration, officials from Sainsbury’s Bank stated that someone with £3000 in a savings account paying 5.5% could earn around £100 more in interest each year than someone with the same amount of money in an account that paid 1.5%. 

Tom Smith
28th April 2007

Tags: accounts, earn, rate, interest, bank, england, savings, Banking

More UK people using online banking than phone banking

The power and popularity of the Internet has been reflected in the figures of a recent survey that show more people in the UK are now using online banking than telephone banking, despite the many concerns that keep being raised with regards to the security and safety of online banking. Most savvy consumers are now well aware of the various online banking scams in circulation, and are aware of what to look out for and what they should and shouldn’t be doing in order to keep their personal and financial data safe when it comes to online banking.

According to the latest figures around seventeen million adults in the UK now have online bank accounts, and two thirds of these online bank account holders tend to go online at least once each week in order to check financial data or make transactions. There were nearly one and a half million fewer people using telephone banking in 2006 than there were using online banking, and 2006 has been the first year where online banking has proven more popular than telephone banking, reflecting rising consumer confidence in this method of banking.

Data shows that the number of people using telephone banking over recent years has fallen, whereas those using online banking have rocketed, rising from seven and a half million four years ago to nearly seventeen million in 2006.

Sandra Quinn, director of communications at Apacs stated:  “Our research shows that increasingly, if you are under 35, you are more than likely to be turning to the internet rather than the phone to manage your finances.” The research that was conducted also showed that ninety percent of those using online banking also shopped online, again proving the rise in consumer confidence in terms of financial transactions over the Internet.

Tags: consumers, phone, Banking, accounts, personal, online

Consumers could accrue bank charges over the Christmas and New Year period

According to recent data released by the consumer group Which? a large percentage of consumers in the UK could be at risk of accruing hefty bank charges by using their overdraft facilities to fund the expense of the Christmas and New Year period. Read more

Tags: banks, customers, charges, christmas, accounts, cost, accrue, consumers

Find the right savings account for your holiday savings

As the festive period disappears and Spring approaches many people in the UK start thinking about saving towards their summer holidays. If you are looking to start putting some money aside to fund your annual holiday in 2007, it could really pay to shop around a little and find a savings account that will make your money work harder for you. There are many different savings accounts available these days, and the interest rates on offer can vary dramatically. Depending on how much you will be saving this could make a big difference to the amount that you earn in interest.

The type of saving account that you opt for will depend on a number of factors, such as the initial deposit that you can make, the amount that you intend to put in each month, and the level of access that you require to your savings. You will find a choice of savings accounts, some of which require a certain period of notice in order to make a withdrawal without penalty and others that offer instance access. Some require a minimum initial deposit of just one pound whereas others require more, and some want to see a regular minimum amount going in each month, whereas others will accept deposits as and when you can afford them.

Amongst one of the highest savings account interest rates on offer is the Alliance & Leicester savings account, which offers twelve percent AER on its regular savings account. Choosing the right savings account for regular savings can make a big difference to the amount you make on your deposits, and consumers can quickly and easily compare the different savings accounts available, along with their interest rates and terms by going online. This is the easiest and most convenient way to see at a glance which of the UK’s savings accounts will best suit your needs and give you the best return on your deposits.

Tags: accounts, bank, online, aer, return

Will Barclays going to be taken over by Bank of America?

Speculation is rife over whether the Bank of America may be planning to put in a bid for the UK bank Barclays, which is a household name in banking in the UK. Analysts at Merrill Lynch have voiced suspicions that this bid seems imminent based on recent goings on and speculation. By market capitalization, Barclays is the third largest bank in the UK and the Bank of America the second largest in the world.

According to Merrill Lynch: “Bank of America has previously indicated that the next phase of its expansion is to become a leading global commercial and investment bank. In order to achieve that goal, we believe Bank of America is very interested in acquiring Barclays.” The analyst added: “We think Barclays is the perfect fit for Bank of America, given our understanding of Bank of America’s international aspirations.”

So far this appears to be simply speculation, and officials from Barclays and from he Bank of America have refused to make any comment regarding the situation. However, according to Merrill Lynch the recent resignation of the Chief Financial Officer at the Bank of America is a little suspicious: “While we believe de Molina resigned of his own accord to pursue a CEO role at another company, or a more entrepreneurial career, the timing of his resignation is suspect to us.”

Furthermore analysts predict that the takeover could save the Bank of America around one and a half billion pounds due to reduced corporate and staffing costs, as well as increasing chare prices to generate more in the way of profit. The analysts added: “Furthermore, we think the acquisition of Barclays would enhance Bank of America’s long-term growth rate because it would provide numerous avenues for Bank of America to continue to grow on an international scale.”

Tags: accounts, savings, bank of america, ceo, america, takeover, barclays, uk

The Pros And Cons Of A Business Credit Card

There are hundreds of business credit cards from banks and other business service providers. In fact, there are so many that it can be difficult to choose the right one.  Here’s a guide to what you should look at when choosing a business credit card and what to avoid to make sure your business stays financially healthy.

Business Card Advantages

One of the main advantages of a business credit card is that it can be used to manage cash flow. Business owners and their employees can use business credit cards to pay for goods or services that require immediate payment. At the same time, they can benefit from an interest holiday of up to 56 days before the money is deducted from their business accounts. Deferring payments in this way can be very useful for business owners.

Another key advantage benefits both employers and employees. When employees travel on business they often have to pay for hotels, car hire, flights, meals and business entertaining. In many cases, this comes out of their pocket and they have to wait to be reimbursed. Using a business credit card means that employees can charge these business expenses straight to the business without waiting for reimbursement. This keeps their personal finances healthy.

Saving Accounting Time

For employers, this practice has another advantage. Hours and hours of accounting time (and business money) can be spent on sorting out employees’ expenses. This workload is much reduced with a business credit card. While businesses may choose to have the backup of having employees submit expense reports, the business credit card statement may be enough. Each month, business owners get a statement that itemises all transactions on the business account, regardless of which employee made them. Some business accounts offer advanced reporting features that will help with VAT calculations.

Business Card Disadvantages

Despite these advantages, there are a couple of major disadvantages to business credit cards. For example, if an employee accidentally or deliberately reveals card details, there could be expensive transactions on the account. Even if the employee has committed a fraud, the business may still be liable. Such situations can also take a long time to sort out.

The other potential issue is the same for business credit card holders as it is for personal credit card holders. Money spent on a credit card is actually debt. With preferential interest rates and long interest free periods, business owners will need to make sure that they don’t get into a cycle of debt. This could seriously damage the long term financial health of their business.

Other Business Finance Options

For this reason, it is also worth considering other financing options for the business. A business debit card, for example, keeps tight control of access to the account. In addition, business owners cannot spend more than they have in the account, unless they have agreed an overdraft facility. A business loan is another option worth serious consideration. Whichever option business owners go for, it is essential to manage finances prudently and avoid getting into long term debt.

Tags: finance, apply, costs, business, accounts, personal, credit, details, expenses