Car scrapping scheme could run dry of funds early

It has been announced that the car scrapping scheme that the government put into place after the budget could run out of money six months earlier than anticipated. Read more

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Consumers are unlikely to switch accounts unless “they suffer”

Despite an awareness of the benefits of switching bank accounts, consumers are reluctant to take advantage of what this move will bring, one financial expert has claimed.

According to moneysupermarket.com, the majority of providers in the UK want consumers to come in on a service proposition, not a price proposition.

This tends to be a less tangible, lightweight offer to spenders as it merely says ‘we have better services’, said the financial advisers.

Kevin Mountford, head of savings and current accounts at Moneysupermarket.com, said that there is an awareness of the benefits of moving accounts.

“However, it does not seem that people have the impetus or the appetite to do so unless they suffer and gets a poor service from their provider,” he continued.

Of those surveyed by the Watchdog, 46.8 per cent did not think they should be charged for going over their overdraft limit without authorisation, while 28.2 per cent felt that it was difficult to get a complaint with their bank resolved.

Tags: bank, service proposition, overdraft, watchdog, service, Driving, advantage, bank account

Female savers set to miss out on Isa benefits, say experts

Many female consumers are not preparing for their financial future with 20 million set to miss out on investing in the individual savings accounts (Isas), one financial expert has claimed.

According to new research from the Co-operative Bank, two thirds of women in the UK are without an Isa.

Of the third that do hold one, less than a third intend to invest ahead of this season’s deadline in comparison to more than a half of male spenders who possess one.

Scott McPhail, savings product manager at the Co-operative Bank, said that financial planning is essential for women and not a maybe.

“Women can often retire earlier, and live longer than men, but many are simply not making enough provision for their futures and are failing to take advantage of tax-free savings,” he said.

Despite this, the research showed that women are more likely to be concerned about the state of their finances than men.

Meanwhile, the Association of Investment Companies has warned consumers to take care in researching the various Isa products on offer before making a purchase.

Tags: future, half, bank, advantage, finance, United Kingdom, new research

Brits to miss out on tax free savings

Many Brits will miss out on significant tax free savings this year, according to research from financial experts.

Findings from moneysupermarket.com have shown that while only 32 per cent of Brits plan to invest in an individual savings accounts (Isas) this year, only 27 per cent know the allowance for these tax free investments will be increased from £3,000 to £3,600 per year as of April 5th.

Kevin Mountford, head of savings at moneysupermarket.com, said: “It is disappointing so many Brits won’t take advantage of this excellent savings vehicle.”

“With just a third of people looking to utilise their tax free Isa allowance it looks like many people will miss out,” he added.

According to moneysupermarket.com, cash is the most popular option for those planning to invest in an Isa with 73 per cent saying this is where they will put their money.

Meanwhile, the finance experts recently said that savings providers are introducing more online products due to the increase in the number of ’silver-surfers’.

Tags: online products, tax free savings, advantage, cent, finance experts

‘Unattractive’ interest rates increase premium bond popularity

Unattractive interest rates are responsible for the increase in the popularity of premium bonds, claims an asset management company.

Mark Dampier, head of research at Hargreaves Lansdown, said the tax free returns from premium bonds have also helped make them more attractive.

“It is based partly on the fact that interest rates had gone down so far that people stared to think: ‘Why not have a bet in the premium bonds’?” he said.

He added that premium bonds are popular with self-employed people started to take advantage of the tax free benefits.

“If you are lucky enough have quite a lot of money, premium bonds are often a port of call. You don’t have to put them on an income tax return form,” added Mr Dampier

From August 1st 2005 there were two £1 million jackpots drawn each month and, at the current odds, over a million other cash prizes. The winning bond numbers are selected at random each month.

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Defaqto: Cash in on cash back credit cards

Consumers are advised to take advantage of the offers available on cash back credit cards, according to Defaqto.

The company explains that, although comparing the best deals is not always straight forward, there are significant “incentives” for choosing them.

Principal consultant, David Black, commented: “Despite their complexities, cash back credit cards offer a genuine return for card holders but are only appropriate for those people who always pay off their entire balance every month.

“This is another example in the credit card industry where consumers can take advantage of the offers by having more than one card and using each selectively to maximise cash back earnings.”

Some of the complexities of conditions and bonuses include tiered earning rates, introductory enhanced rates, maximum qualifying spends and enhanced earnings at specific retailers.

Defaqto is an independent financial data collection and research body, giving up-to-date product information to the financial services industry.

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Millions of Brits to switch credit cards

It is estimated that 6.5 million people in the UK will change their credit card provider in the coming year.

Over half of Brits switch credit cards to profit from interest free introductory offers for balance transfers, according to a study by Abbey.

The figure will see a five per cent increase on changes made last year and represents a total transfer between cards of £11 billion.

Roger Lovering, managing director of Santander Cards Limited, said: “These figures just show the intense competition in the credit card market. With £11 billion at stake, it’s the credit card with the best deal that wins.”

Furthermore, Abbey’s research showed 19 per cent of consumers change cards in order to take advantage of a lower APR.

Six per cent felt that a different card might have more “kudos”.

Mr Lovering added that Abbey offers interest free balance transfers for 12 months, as well as three months of interest free purchases.

Virgin are currently offering 15 months of free balance transfers with a typical APR of 15.9 per cent.

Tags: Credit Cards, interest rate, increase, card, 5 million, free introductory offers, year.Over half, advantage

Britons using savings to ease cost of living raise

An increasing number of Britons are being forced to raid their savings to keep on top of a rise in the cost of living, new research has shown.

According to the Birmingham Midshires Saving Britain report, the average consumer has been forced to withdraw £400 from their savings in the past three months, a rise of 14 per cent on the comparative figures for the tail end of 2006.

The statistics suggest that Londoners were the most likely to turn to their rainy day funds and that northerners were the least likely.

And the over 50s were the age group most in need of the saviour of savings – taking four times more from their back up accounts than the over 30s

Urging Britons to take advantage of the financial climate to make more savings, Jason Robinson, director of savings operations at Birmingham Midshires, said: “While homeowners are feeling the pressures following Bank of England rate decisions, there has never been a better time for people to put away their money.

“Interest rates at a six-year high mean great returns for savers, whatever amount you can afford to put away.”

Previous research conducted by Birmingham Midshires found that almost a quarter of Britons had dipped into their savings accounts between July and September 2006.

Tags: england, Cost of living, tail end, rainy, Midshires, research

Credit card rewards not being claimed

Millions of credit card holders are failing to take advantage of the rewards that are on offer to us.

Research by the Post Office has found that around two-thirds of us are lured by incentives on a new card but do not cash in.

The most common rewards that are available to card holders include cashback offers and other bonuses but 60 per cent are not benefiting from them.

Even those who do take advantage do not use them to their full potential, with the average reward claim being just £37 a year.

Credit card holders are being encouraged to take advantage of the rewards they are offered or opt for a card that offers more long-term benefits.

“We urge credit card holders to look at the long-term value offered by their credit card – particularly as almost a third (32 per cent) of credit card users have held their card over five years.”

It appears that this message is already prevalent among card holders, with 60 per cent of those asked stating that they would stick with one card if they could find one which offered long-term value across the board.

In addition, card holders named low interest rates, nought per cent on balance transfers and nought per cent on purchases as the most desirable features.

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