Mortgage default levels could rise

According to a recent report the number of homeowners that are defaulting on their mortgage repayments in the UK is set to rise over the coming three months. The data comes from a survey that was carried out by the Bank of England amongst lenders and formed part of the central bank’s quarterly survey on credit conditions.

Over the past three months default levels amongst UK homeowners is said to have remained relatively flat. However, the figures showed that the balance of lenders who were expecting the rate of defaults on mortgage loans to increase rose to its highest level since the end of 2009.

The survey also showed that banks were not expecting to see any sharp increases in lending over the coming months, with the outlook for bad debts being cited as one of the reasons why banks may remain reluctant to lend in the immediate future. One economist said that the Bank of England report had nothing in it that suggested banks were likely to start lending more soon.

According to the data there has also been little in the way of change over the last three months when it comes to the availability of personal loans, mortgages and business loans. The data indicated that there could be an increase in unsecured lending to households over the next three months but that mortgage lending was likely to remain flat.

The report did indicate that there had been a marked improvement in the buy to let sector in the UK, with demand for buy to let having increased over the past few months. Lenders are expecting this improvements to continue over the coming few months and for the remainder of this year according to the report.

Tags: quarterly survey, economist, uk homeowners, Federal Housing Administration, bank, business loans, United Kingdom, improvements

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: spare money, mortgage debt, risk, sensible, bank, payment, rates, 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: Fractional-reserve banking, Banking, percent, rate, household insurance, British banking, bank, minimal returns

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: property, cml, disappointment, economics, report, mortgage

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

Cost of smart phone insurance cover rising

Over the past year or two a rising number of high tech smart phones have hit the shelves in the UK, and these days more and more people are sporting these expensive gadgets. Smart phones are also high on the list of things to steal amongst thieves, and many people find themselves victims of phone theft when taking their high tech phones out with them. Many others end up losing their smart phones or causing damage to them by accident.

The smart phones of today can do all sorts of things, and are packed with apps and features. However, these phones are also very expensive, and this can cause a problem when it comes to insuring them. Recent data has shown that some mobile network operators are now hiking up the excess charges on iPhone insurance, and some will only provide reconditioned second hand phones to replace the one that has been lost, damaged, or stolen.

Consumers are advised to shop around for insurance cover for their smart phones, as the cost can vary from one provider to another. Some people may have mobile phone insurance built into their benefits package if they have a packaged bank account, but should check to make sure that the cover also applied to high end smart phones. Officials have said that another option for consumers is to consider adding it to the home insurance policy. Consumers also need to check the details of any policy to see what the phone is covered against and what the excess charges are.

One industry official stated: ‘Insurers across the board are seeing claims rise, be it because of fraud or just because new phones are more attractive to thieves. Insurers that will cover older phones are the hardest hit.’

Tags: Insurance, Technology Internet, high tech phones, Network, home insurance policy, bank, expensive gadgets, industry official

PPI bill for UK banks could hit £5 billion

An analysis group has claimed that the UK’s major banks could be facing a bill of around £5 billion in relation to PPI claims from customers that believe that they were mis-sold this cover. US investment bank officials from Morgan Stanley claims that this could be the bill that UK banks are facing over the next five years, with the estimates cost of dealing with these claims continuing to increase.

Barclay’s Banks, Lloyds TSB, and HSBC are amongst those that may be footing some of this huge compensation bill. The prediction comes after American banking giant, the Bank of America, had to set aside $592 million to deal with forecast claims over Payment Protection Insurance. Officials believe that the cost to UK banks will be even higher.

Morgan Stanley has said that at the very least, as a base case scenario, the bill for UK banks is likely to be just over £2.6 billion. However, this is based on only a quarter of PPI policyholders making a claim, and also on fewer than half of these claims being upheld. Should the claims and approvals be higher than this the cost of dealing with claims could be considerably higher.

The average payout to each successful applicant is likely to be around £2000. PPI came under fire after investigations showed that over the years banks and financial institutions had been involved in mis-selling the cover, and this has resulted in many people finding themselves eligible to make a claim for compensation.

The Financial Services Authority has been trying to clamp down on PPI sales, and has brought in new proposals. However, these are being appealed by the British Bankers’ Association, which claims that the financial regulator is trying to apply new rules and standards to old sales.

 

Tags: protection, Primary dealers, mortgage, Barclay's Banks, bank, uk banks

Mortgage borrowers can get help with energy costs

These days mortgage loans are far more restricted than they were prior to the global financial crisis, and many people who want to get a loan for a property find themselves being refused, as lender continue to be extra cautious over who they lend to, how much they lend, and what sort of deposit they are likely to accept.

However, one mortgage lender has decided to buck the trend by offering an incentive to consumers who are taking out a mortgage. The High Street banking giant, Halifax, has decided to try and tempt eligible consumers to take out a mortgage or remortgage through the bank by offering an incentive that could save the borrower a significant amount of cash on the cost of their energy bills.

As part of the new offer customers that take out a mortgage loan or decide to remortgage through Halifax could be eligible to get £500 off their gas and electricity bills, enabling them to save a small fortune on the cost of their energy usage. This could be particularly useful with the winter months fast approaching, when many people find that their energy bills soar.

An official from the banking giant said that the company was committed to encouraging homeownership, and with consumers facing such financial difficulties in the current climate the offer would help them to enjoy making at least some savings when moving into a new home or remortgaging on their old property.

He added that as part of the offer consumers may be able to save between four and six months worth of energy costs, which would help them to enjoy better value for money on their mortgage borrowing and help them to tackle the high cost of energy usage.

Tags: remortgage, cost, electricity bills, better value, bank, mortgage, halifax

Mortgage rates cut by HSBC to help consumers

Officials from the High Street banking giant HSBC have said that the lender has cut some of its mortgage interest rates in a bid to help struggling consumers in the current financial climate. One official from the firm said that it had cut rates in order to try and help those that were struggling with their finances.

The claim was made by Martijn van der Heijden, head of lending at the company, and came after the banking giant decided to cut the interest rates on all of its 80 percent loan to value mortgages, with cuts of up to 0.4 percent on these mortgage loans. This includes a number of two and five year fixed rate mortgages, a discount mortgage that comes with a £99 fee, and two tracker mortgages.

Hejden said that many people were facing difficulties in the current financial climate, and these mortgages were aimed at helping such people. He said that because the bank had cut rates in this way it would allow more people that had a limited budget to apply for a mortgage loan with HSBC.

At present many consumers have little choice when it come to finding the best lender, and this is due to the many restrictions that lenders have in place as well as the higher rates that are charges on some mortgages, making it difficult for some to afford a mortgage loan.

Hejden said: “Our 2.79 per cent discount mortgage is designed to help homeowners, many of which are facing a tough time.” He added: “As research shows more and more lenders are now reserving their lowest rates for either existing customers or those happy to deal with them directly.”

Tags: hsbc, finance, Hejden, mortgage, consumers, giant, Mortgage loan, bank

Banks fleecing customers with overdraft fees

It has been revealed in a recent report that many of the UK’s banks are fleecing their customers with extortionate overdraft rates and fees despite the fact that many of the customers, as taxpayers, have a stake in the banks because of the bailouts that occurred during the credit crisis, which were funded by taxpayers’ money from the public purse.

Last month these overdraft rates are said to have hit a new high, coming in at an average of 19.1 percent. This is despite the fact that the base interest rate still stands at a record low of just 0.5 percent, which is where it has stood for the past eighteen months. The margin between the base rate and the rates that banks are charging on overdrafts is now astonishingly wide, and many of the most cash strapped customers are being hit with the rocketing overdraft charges.

Natwest and the Royal Bank of Scotland are said to be amongst the worst offenders, and these are both part of the RBS Group, in which taxpayers have a massive 84 percent stake. The average rate of interest charged on overdrafts was a massive thirty eight times more than the base interest rate, which means that banks are making a huge profit from customers that fall into the red.

An official from the Independent Banking Advisory Service said: ‘Banks have been allowed to increase their margins despite the bank rates being so low. There is no incentive for them to do otherwise. The level of profiteering is completely out of control. Nothing about it is fair or reasonable. We face reduced incomes and increase household bills and yet again the banks are compounding our misery. We bailed them out but they have no qualms about making matters worse in our hour of need. The Government should introduce a cap on the rates. But instead it protects the banks at our cost.’

Tags: high, Bank charge, interest rate, overdraft fees, fee, overdraft, bank, crisis

Trust still shrinking in UK banks

It has been claimed that the level of trust in UK banks is continuing to shrink amongst consumers following the chaos that followed the global financial crisis. The boss of Co-op said that as a result of lack of trust amongst consumers in the banking sector many were continuing to shun traditional banks.

Peter Marks, the Co-op chief, said that banks had been through a tough time since the onset of the global credit crisis, but he added that most had deserved it because they did not always act ethically. His comments came after the Co-op Bank released its performance and profits figures recently.

The bank’s first half pre-tax profits came to £260 million, which was a hike of 17 percent. Current account openings were said to have increased by 30 percent, and lending to small businesses apparently nearly doubled from £600 million to over £1 billion.

However, confidence levels in the banking sector have been sliding since the chaos that occurred with Northern Rock, which became the first official financial victim of the credit crisis in the UK. Since then various reports ranging from huge banking bonuses to senior staff to security breaches and lack of lending have seen consumer confidence take a further battering.

At one point following the credit crisis many were too nervous even to put money in the bank, and many were keeping their savings at home or in alternative places because of their lack of confidence in banks to keep their money safe.

One industry expert said: “Some banks do deserve the battering they have taken when it comes to customer confidence levels, as many have not acted ethically. It doesn’t help when all consumers see in the papers and on the internet is reports of bosses being paid huge bonuses whilst consumers are left earning little to nothing by way of interest.”

Tags: customer, economics, Cooperative, lack of trust, bank, financial crisis, money, Co-op Bank

Apologies from Santander over poor service

An apology has been made by the Spanish owned bank Santander over the poor level of service it has given to hundreds of thousands of customers. The service problems have resulted in a range of problems, including delays with savings accounts being opened, problems with access to online accounts, and failure of bank staff to carry out transactions.

Steve Williams, director of service quality and complaints, made the apology last week, and the apology came after an investigation was carried out by the Financial Mail into chaos with administration at the bank. The bank, which took over a number of UK financial institutions such as Abbey and the Alliance & Leicester, has been accused of a number of failings following the investigation.

According to reports the bank has put all of its efforts into ensuring that the level of service is extremely high for its current accounts. However, in doing this it stands accused of letting customer service levels falls in other areas. In the first half of this year the bank received almost a quarter of a million complaints, the majority of which were in relation to its customer service levels, and this is what sparked the investigation.

Mr Williams admitted the bank’s failings when he made the apology, and he said that the bank was a growing one and that it understood that there were areas that needed to be addressed with regards to its service levels and other areas. This will partly be done through increased staffing.

Williams said: ‘We are creating more than 600 new jobs in our British branches and call centres. These roles will support our business and growth while enabling us to continue improving our service to customers.’

Tags: Mail, Santander UK, bank, access, complaints, finance, santander

Bank account options for consumers

Although the banking industry in the UK has taken quite a bit of flack over recent years the various High Street banks do offer plenty of choice when it comes to bank accounts to suit different needs. There are many different consumers with banking needs, and their different circumstances and statuses determine which bank account is going to be best suited to their needs.

One of the accounts that most High Street banks offer are basic bank accounts, and these are ideal for some people such as those on low incomes or with bad credit ratings who might otherwise struggle to get a current account. Whilst there are some restrictions with basic bank accounts, such as no debit cards or cheque books with many as well as no overdraft facility, they do offer the ability for accountholders to effectively manage and run their finances, pay bills, get money paid in, and other basic banking functions.

Standard current accounts are what most people have, and these are accounts that enable consumers to run their day to day finances. They are very similar to basic bank accounts in that you can set up standing orders and direct debits, transfer money, pay money in, make withdrawals, etc. However, many bank accounts also come with additional perks such as debit cards and overdraft facilities.

Another type of bank account that is available from many banks these days is the packaged bank account, and these accounts are fee charging accounts with fees that vary from one bank to another. The reason for the fee on these packages accounts is that they offer a package of benefits to the accountholder, which could save them money depending on how many of the services they use. Some of the benefits that come with the package include travel insurance, pet insurance, mobile phone cover, breakdown cover, and more. However, consumers should ensure that they are getting value for money and would not be better off paying for the benefits that they use on the open market rather than paying a fee for the account.

By choosing the right bank account and the right bank for your needs you can ensure that you can manage your finances more easily and conveniently, and with so many different banks and account to choose from it should be relatively easy to find one that is going to suit your needs and circumstances.

Tags: bank accounts, finance, Banking, direct debits, that enable consumers, cheque, phone, bank

Villages being affected by bank closures

It has been reported recently that many villages in the UK are being affected by bank closures, with many bank branches having closed since the turn of the century. An investigation was carried out by the Campaign for Community Bank Services (CCBS), and this suggested that more than two thousand bank branches had closed since 2000, and this has left many people living in smaller villages stranded when it comes to conducting their banking.

For many of those living in rural areas and small villages there is a particular problem because lack of broadband facilities makes it difficult for them to benefit from other options such as online banking due to lack of internet access. With many bank branches in smaller villages now struggling to stay open, despite profits recently posted by banks, villagers may really struggle to access banking services properly.

A number of major banks are said to have shut hundreds of branches in some cases over the past decade, and Lloyds TSB said to have closed around five hundred branches. It is the branches in smaller areas and villages in particular that are suffering, and many officials are now concerned that vulnerable, elderly, and disabled people could experience real problems if they are unable to travel further afield to access banking services.

An official from Campaign for Community Bank Services, Derek French, said: ‘We are concerned that banks will continue to close quieter branches and concentrate on meeting sales targets in busier, more profitable High Street branches.’  

With banks having been hit hard financially over the past few years there are also concerns that many may focus of closing branches to save money rather than making cutbacks in other areas, which will further impact on the accessibility of services for many consumers.

Tags: Branch (banking), bank, branch, bank branches, consumers, small villages

Lloyds Banking Group retains position in UK mortgage lending market

Figures that have recently been released have shown that banking giant Lloyds Banking Group has managed to retain its position in the UK market when it comes to mortgage lending levels. This comes despite the problems that the mortgage markets have experienced since the onset of the global financial crisis and the recession.

The figures show that Lloyds Banking Group managed to retain a 23 percent share of the gross mortgage market in the UK, despite the fact that the markets have remained subdued. The large market share of the mortgage market that has been taken by the group means that it remains as one of the leading mortgage lenders in the UK.

Lloyds Banking Group has also enjoyed success when it comes to profits, having announced profits of £1.6 billion for the first six months of this year. For the same period a year ago the bank reported losses of £4 billion, which means that the banking group’s fortunes have really turned around, as have those of a number of other banks in the UK. The money that Lloyds Banking Group has set aside to cover bad debt is also said to have fallen, and has gone from £13.4 billion to £6.5 billion.

Despite the profits that Lloyds and other banks have reported industry groups have expressed concern that mortgage lending is still restricted, as banks are still being cautious and many are still demanding high deposit from those looking to take out a mortgage.

Mortgage brokers have a more optimistic view, and many have predicted that they will be doing increased levels of business as the year goes on, as more and more mortgage products become available on the market.

Tags: Mortgage loan, bank, uk, mortgage, Lloyds Banking Group, Mortgage broker, percent

Banks may offer more competitive deals than brokers

A recent report has shown that banks in the UK may be offering more competitive mortgage loan deals directly rather than through brokers, which means that consumers that go through a broker could find that they end up paying more than they would if they went directly through a lender in some cases.

Direct providers and banks are said to be offering highly competitive mortgage loan deals to try and stay a step ahead of rival providers, and this means that going through a broker could end up being more expensive. However, brokers have stated that if consumers choose to bypass them they could end up missing out on a range of specialist deals.

Some mortgage lenders such as the internet banking giant First Direct, which is part of the HSBC group, have decided to bypass brokers altogether for their deals. Officials from First Direct have said that there is no need for the company to go through brokers when they are able to offer such competitive deals direct to the consumer.

However, brokers claim that there are a number of reasons why consumers should go through a broker rather than direct to a bank, such as the diminishing number of people that now qualify for banks’ deals, and the fact that whilst a particular bank may be offering the best rate at one point this can quickly change.

One broker said: “First Direct and HSBC may have the best deals today but this can change and, besides, the number of applicants who will actually qualify for the banks’ criteria of three times income, a squeaky-clean credit record and large deposit, is fast diminishing. The reality is that most cases are not this easy and will require the expertise and contacts of a mortgage broker.”

Tags: broker, Business Finance, fast diminishing, consumer, finance, bank, Mortgage broker, point

Fall in lending to businesses seen in May

According to recent reports the level of lending to UK businesses fell in May, despite efforts from industry groups and the government to try and boost lending by banks to businesses. Whilst the level of mortgage lending in May improved compared to the previous month the level of business lending took another hit.

The figures have been released by the British Banker’s Association. The level of lending to private, non-financial companies is said to have plunged by £1.3 billion in the month of May, which was slightly higher than the fall seen in April but slightly lower than the average decline seen over the past six months.

These businesses are said to form the backbone of Britain’s economy, and many have highlighted the importance of enabling these businesses to borrow the money that they need. However, banks are still being very cautious when it comes to lending, as many are still reeling from the financial meltdown.

In addition to this the falling demand for finance from these businesses is also affecting lending levels, and many businesses are loathe to take out costly loans and finance in the current climate. With fewer businesses wanting to take the financial risk of borrowing more money demand levels have fallen and subsequently so have lending levels.

Officials have also said that there has been an increase in retail sales, with the higher property sales levels now impacting upon the retail sector. Household goods and furniture retailers were said to have seen improvement, as did grocery retailers who may have benefitted from people stocking up for the World Cup.  Electrical retailers also benefitted as a result of people buying new television sets in preparation for the World Cup.

Tags: credit, loan, business, bank, finance

Net lending to businesses falls further

Recently released figures have suggested that net bank lending to businesses in the UK continued to fall in the month of May despite the fact that the recession is now over and the economy is meant to be getting back on its feet. Since the onset of the global credit crisis there has been a lot of concern over lack of lending by banks to businesses in the UK, and this is something that many thought would result in the recession being more prolonged than it otherwise may have been.

The recent figures were released by the Bank of England, and showed that net bank lending in the month of May from banks to businesses had fallen. However, it was also noted that the rate at which banks were writing off bad loans had fallen. The central bank also noted that the demand for borrowing by smaller and medium sized businesses remained subdued, which may have contributed to the falling figures.

According to figures net bank lending to businesses has been falling on a month by month basis since December of 2008, although there was a slight respite in November of last year, when net lending by banks to businesses saw a modest increase. There are concerns over the amount that lenders are now having to pay to borrow themselves, and it is thought that these costs could end up being passed on to corporate customers.

The data came from the recent Trends in Lending report from the central banks, and report noted: “The intensification of market concerns over fiscal sustainability in a number of countries at the start of May resulted in heightened volatility and a reduction of liquidity in funding markets.”

Tags: corporate customers, finance, bank, Central bank, Banking Services

Another drop in lending by banks to businesses

Recently released figures have shown that for the month of April the level of lending by UK banks to non financial businesses fell, with lending falling by £1.1 billion. The figures were released by the British Bankers’ Association, and officials said that whilst April marked another fall in business lending the level of the drop was smaller than those seen in the previous six months.

In the past six months the average decline seen over the period was £1.6 billion per months, so the April drop is significantly lower. Industry groups and government officials have been urging banks to lend more to businesses because of the importance to the economy, and the drop in lending seen in April has been put down to a number of factors.

The British Bankers’ Association has claimed that part of the reason that borrowing to businesses has fallen is because there is a lower demand for finance from UK businesses, as many are exercising caution when it comes to borrowing. The BBA said that figures from the Bank of England showed that corporate deposits had been rising sharply.

However, other industry official believe that it is not just lack of demand that is hindering lending from banks but also the fact that many businesses are struggling to get finance from banks even in cases where they need to borrow the money. On a separate note the level of net mortgage lending from banks also fell in April, dropping to £1.8 billion.

Economist, Ed Stansfield, stated: “April’s soft mortgage lending data add weight to the idea that last year’s upturn in approvals overstated the underlying health of the housing market. Moreover, since the looming fiscal austerity measures will keep a lid on mortgage demand while the uncertain funding outlook will limit the supply of mortgage credit, weak lending looks set to remain the norm for some time.”

Tags: bank, mortgage, british bankers association, Business_Finance, finance

Choose the right bank account for your needs

These days there are a number of bank account available for consumers to choose from based on their needs and circumstances, and it is important that you choose the right bank account so that you have the facilities and benefits that you need to deal with your day to day financial transactions.

Choosing the right bank account can make a big difference to how easily you manage your financial transactions, and most of the major banks these days offer three choices when it comes to bank accounts. This includes the basic bank account, current accounts, and packaged current accounts.

It is a good idea to look into the different features and benefits of these individual bank accounts so that you can better determine which of these is the right one for your needs, as this will help you to make a more informed decision.

The basic bank account is one that is designed for basic day to day financial management, and is somewhat limited compared to the standard current account in that it does not come with facilities such as a debit card or cheque book. These accounts allow you to set up direct debits and standing orders, and also come with a cash card so that you can take money out from a cash point. However, there is no overdraft facility with the basic bank account, and they are often made available to those on low incomes or credit history problems.

Current accounts offer slightly more than the basic bank account, and the additional features that may be available with these accounts include an overdraft facility (subject to status), a cheque book, and a debit card. These accounts, like the basic bank accounts, are ideal for having money paid in and out and for managing your day to day finances.

Over recent years more and more banks have been offering packaged bank accounts, and these are fee charging accounts with the monthly charge varying from one bank to another. The packaged back account allows you the same facilities and benefits as a current account. However, it also comes with a package of benefits, which often includes benefits such as travel insurance cover, preferential borrowing rates, car breakdown cover, discounts off various services and from a variety of retailers, mobile phone protection, etc. You should always check the benefits package to determine whether you will use the services and products offered, as otherwise it will not be worth you paying the monthly fee for the account.

Tags: bank account, bank, Banking, finance, packaged bank accounts, basic bank accounts

Overdraft interest charges hit highest level in ten years

Since the catastrophic global credit crisis swept across the UK, leaving the banking industry to face huge losses, the UK’s banks have been taking whatever steps necessary to try and recoup the massive losses, which were made worse by the recession, which left many borrowers unable to continue with repayments on loans, credit cards, and other forms of finance.

Reports have highlighted the various ways in which banks have been trying to claw back their financial losses and shore up their own finances, including reducing the interest paid on savings accounts to little or even nothing in some cases, and sneakily increasing the interest rates charged on loans and other forms of credit.

Another recent report claims that the interest rates being charged on current account overdrafts have now been hiked up to their highest level ten years, with the average rate of interest being charged on accounts that are in the red increasing to 14.22 percent.

The report states highlighted that this was twenty eight times higher than the base interest rate, which is at an all time low of just 0.5 percent, where it has been since March of last year. It also stated that the base interest rate was a massive 6 percent last time average overdraft interest rates exceeded 14 percent. Officials believe that this is yet another move by banks to try and make more money from customers and improve their own profits.

An official from the financial industry group Moneyfacts stated: “Despite eventually winning the OFT case banks made significant changes to the level of charges they will levy for unauthorised borrowing. As one revenue stream closed inevitably they have moved to find another. Banks are likely to be making more now from these increases than they ever were from penalty charges.”

Tags: overdraft, Bank charge, interest, finance, bank

PPI mis-selling results in compensation of millions for consumers

Consumers in the UK have won back millions of pounds from banks and insurance companies as a result of being mis-sold insurance or becoming victims of administrative errors. According to figures the total amount won back by consumers who were mis-sold insurance or experienced errors in the last six months of last year was £284 million.

The reports show that the majority of these cases related to consumers that had been sold payment protection insurance, also known as PPI. This was a type of insurance sold alongside credit such as loans and credit cards, but came under fire several years ago after investigations found that it was being widely mis-sold by many providers of financial products and services.

The Financial Services Authority, the UK’s financial regulator, made these figures public recently, and also revealed that banks had received over 1.1 million complaints relating to unauthorised overdraft charges. Banks are now dealing with a huge backlog of these complaints following the removal of a ban on addressing the complaints, which were frozen as the bank charge case went through the High Court and then the Supreme Court.

Banks and insurance firms were said to have received 2.7 million complaints between July and December of last year, which compared to 1.6 million in the six months previous. The figures also showed that of these 45 percent were upheld in favour of the consumer.

The Financial Services Authority has, in the meantime, said that it will be coming down hard on banks that are found to be failing to deal with customer complaints effectively, and has warned that there are some banks that are trying to force customers to buy financial products that they do not want or need to shore up their own finances.

Tags: finance, Insurance, Financial institutions, bank, financial products

More people to get access to bank accounts

According to recent report many more people will be able to get access to bank account facilities, after plans were announced by the government to force banks to offer bank account facilities to all. Under the plans, which were revealed in the recent budget, banks may have to offer at least a basic bank account to everyone that is legally entitled to have banking facilities in the UK. With banks having been at the receiving end of much criticism over the past year this is just one of the measures that are being looked at to try and tighten the way in which the UK’s banks operate.

The government claims that there are around 1.75 million people in the UK that have not got access to banking facilities at present, and hopes that this move will help to ensure that a large proportion of these people are provided with access to bank accounts. Many may be able to get basic banking facilities under the new regulations, and these are accounts that allow the accountholder to carry out transactions such as transfers, payments, receiving money, and setting up direct debits, but do not come with a cheque book or overdraft facility.

The British Banker’s Association has argued that the move is not necessary because people that want to have a bank account can have one anyway. Many of those that can only get access to a basic bank account are people that are on low incomes and are limited in terms of how much they can put into the account, or those that have a poor credit rating.

A promise was also made to move more quickly when deciding whether to grant a new banking licence to companies, and this was welcomed by consumer campaign group Which?. Officials from the group said: “People have been telling us how fed up they are with the sales culture that appears to have replaced customer service in our banks. New entrants in the market offering genuinely competitive products will help bring about the culture change the industry so desperately needs.”

Tags: bank account, Ethical banking, bank account facilities, british bankers association, which, basic bank account, bank, Banking

Desperate customers being shunned by banks

It has been claimed in a recent report that many banks in the UK are turning away many desperate customers who are in need of help with their finances. Read more

Tags: debt advice agency, position, United Kingdom, bank, advice agency, agency, previous year, Financial Ombudsman Service

Banks need to do more to help struggling customers

It has been claimed by the Financial Ombudsman Service that banks in the UK need to take more action to help consumers that are in dire straits with their finances and who need help to keep them afloat financially. Read more

Tags: debt management, turned away, bank, Financial Ombudsman Service, overdraft, Financial Services Authority, financial assistance

Do you want faster payments from your bank?

For many people that amount of time that their bank takes to transfer money from one bank account to another can be a real problem, and whilst banks are supposed to adhere to regulations that have been formed by the UK Payments Council there are many banks that still do not carry out the same day transfers in line with the Faster Payments Scheme, which was brought in back in May of 2008. Read more

Tags: bank account, Payment systems, BACS, finance, cheque, bank

Treasury gets involved in controversy over cheques

Recently it was announced by the banking industry that by 2018 it was planning to phase out the use of the humble cheque altogether. Over recent years a rising number of retailers have stopped accepting cheque as a form of payment, stating that cheque use can be time consuming and costly for businesses to process. This has led to the banking industry stating that it plans to get rid of cheques altogether over the course of this decade. Read more

Tags: Payments Council, treasury, Treasury spokesperson, Cheque and Credit Clearing Company, consumers, bank, cheque

FSA to monitor refunds from banks

It has been reported that the UK’s financial regulator, the Financial Services Authority, is to closely monitor refunds that are made by banks in instances where the consumer states that he or she has not authorised a transaction. Regulations that were brought in last November required banks to make immediate refunds to consumers for transactions that they claim that they had not made unless there was clear evidence that the consumer was involved in fraud or had been reckless. Read more

Tags: business, bank, Economy of the United Kingdom, hsbc, Financial Services Authority, HSBC Holdings PLC, ATM

Interest rates stay the same for eighth month

For the eighth month in a row the base interest rate has remained at its all time low of 0.5 percent. The announcement was made following the monthly Monetary Policy Committee earlier this week. Read more

Tags: bank, time, governor, output, finance, committee, quantitative easing scheme, easing

Is quantitative easing working?

When the Chancellor of the Exchequer, Alistair Darling, first announced plans for quantitative easing in the UK he said that £75 would be allocated for the scheme with an additional back up of a further £75 billion if necessary. Read more

Tags: Economic policy, recession, thing, bank, chancellor, quantitative easing, economy

Further limit reductions on credit cards could be in the pipeline

It has been claimed in a recent report that a growing number of credit card customers in the UK could see their credit limits reduced as credit card providers do their best to shore up their finances and claw back some revenue. Read more

Tags: result, bank, mention, Credit Cards, credit, United Kingdom, interest, credit card limits

£31,000 fall in average household wealth

It has recently been reported that average household wealth in the UK has fallen by around £31,000 since last year, with households seeing their household wealth drop as a result of the global credit crunch and the ongoing recession. Read more

Tags: property prices, household wealth, homes in addition, factor, billions, bank, Household, Wealth

£100 incentive from Abbey and A&L

With the competition amongst the leading UK banks and building societies for increased custom some have been offering consumers incentives to entice them to switch their bank accounts, and this is something that Abbey and Alliance & Leicester have now decided to do. Read more

Tags: alliance & leicester, rate, alliance & leicester bank account, Leicester account, bank, Current account, uk banks, bank accounts

Property prices to be higher at end of this year than the last

It has been predicted that at the end of this year house prices will be higher than they were at the end of last year, with many industry experts expecting a slight rebound in both the property market and the economy. Read more

Tags: Chartered Surveyors, case, industry experts, housing market, bank, property prices, concern, market

Is the Recession Coming to a Close?

According to the G8 ministers at a recent meeting in Italy, the world’s largest economies are starting to become more stable. However, they do warn that there are still risks to be faced. Consumer confidence appears to be on the rise, interest rates are starting to stabilize and the stock market seems to be on the upswing.

In spite of this optimism, a warning comes from the chief of the US Treasury, Tim Geithner. He says it is too early for governments to start bringing an end to their stimulus packages. He advises that they should remain in place until it is clear that the world is starting to recover economically.

The finance minister of the G8 countries met in Lecce, Italy to lay the groundwork for the G8 summit. They concluded that there is still uncertainty in the global market. According to a spokesperson, “Significant risks remain to economic and financial stability.”

There is a great possibility that unemployment numbers could still continue to rise even after stability occurs in the market.

In their joint statement, the ministers agreed that there are signs of hope, saying “We have taken forceful and co-ordinated action to stabilise the financial sector and provide stimulus to restore economic growth and there are signs of stabilisation in our economies.”

Geithner does agree that there are signs of hope, but cautions, “The global economy is still operating well below potential and we still face acute challenges.”

He went on to say, “I don’t think we’re at the point yet where we can say we have a recovery in place.” In his opinion it is way too early to start thinking of moving away from the economic policies that have been put in place to intervene in the banking crisis that occurred in September, 2008.

The Chancellor of the UK, Alastair Darling said that the economic prospects of Britain are still closely linked with those of the other G8 countries. He told the Reuters news agency, “A lot will depend on other countries making progress: on cleaning up their bank balance sheets; volatility in commodity prices, oil for example. So I think there are reasons to be cautious.”

Just two months before this meeting, the heads of the G* governments met in London and agreed to inject billions of dollars into the global economy. Although the finance ministers at the meeting in Italy agreed to start considering the scale back of the economic stimulus packages, Darling points out that it is very unlikely that this will happen at any time in the very near future. One thing we are absolutely clear about is we are not there yet. No-one’s talking about exiting now, this is some way down the track. We’ve still got to work this through,” he said.

Where the economy is headed is anyone’s guess at the present time. Some sectors of the economy are starting to look a lot better than they were several months ago, but at the same time, businesses that were doing well at that point in time are starting to experience difficulties.

Tags: opinion, Tim Geithner, uk economy, Banking, agency, recessions, bank, g8 summit

Many bank staff as confused as customers about cheques

Following a recent investigation it has been revealed that many bank staff members are as clueless as many consumers when it comes to the clearance times for cheques. The problem was brought to light in a recent investigation by the industry watchdog, the Banking Code Standards Board. Read more

Tags: investigation, banks, bank, cheques, Banking, customer facing staff, consumers

Should you Remortgage at a Lower Rate of Interest?

Lenders are offering sweet deals to homeowners who wish to remortgage their homes. HSBC is currently offering two-year fixed rate remortgage loans at the low rate of 2.69% and Nationwide has announced lower interest rates for those who can make a small deposit on the remortgage loan. Read more

Tags: remortgage, loan, fixed rate mortgage, fixed terms, bank, five-year fixed rate, homeowners, interest rates

PM – financial system needs to be regulated through five core principles

The Prime Minister, Gordon Brown, has recently explained why there is such a dire need to look at how the financial industry is regulated in the UK, and to address the issue of stricter regulation not just in Britain but also in other countries so that the needs of the future can be met. Read more

Tags: fact, global economy, bank, shadow, bank industry, financial system, International Monetary Fund

Family values needed by banks says PM

In a speech that will be made at St Paul’s Cathedral in London, the Prime Minister, Gordon Brown, is to appeal to banks and the financial industry to instil more family type values. Read more

Tags: gratification, business people, back, G20 world summit, bank, work, family values

Consumers withdrawing billions due to poor returns on savings

A recently released report has claimed that consumers in the UK have been withdrawing billions of pounds worth of savings over the first couple of months of this year, and this is because of the paltry rates of interest now being paid on many instant access and notice accounts following the dramatic cut in interest rates over the past six months. It has been revealed that in many cases savers are receiving barely above zero in terms of interest on these accounts. Read more

Tags: angry consumers, building society, pensions, bank, england, January, savings rates, notice

Homebuyers being shut out by many lenders

A large number of homebuyers are having the door shut in their faces by lenders, according to a recent report. In the current financial climate an increasing number of lenders are becoming more and more stringent about who they will lend to, and as a result of this many homebuyers have been left out in the cold because they are not able to get the finance that they need to purchase a property. Read more

Tags: bank, report, property, order, equity, buyer groups, bank of england

Increased popularity for cheaper fixed rate mortgages

Recently released figures have suggested that new lower fixed rate mortgages may be gaining popularity again, with borrowers keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. Read more

Tags: finance, council of mortgage lenders, bank of england, rate deals, deal, Mortgages, fixed rate mortgages, bank

Taxpayers pay bonus for Rock employees

Over recent months the government has been using taxpayers’ money for a variety of purposes, sparking concern amongst opposition parties and the public with regards to how the public purse is being used. Read more

Tags: bank, Business Finance, economics, northern rock, Northern Rock bonus, Northern Rock employee bonus, pay, Taxpayers pay bonus

Slump in equity release sector in 2008

A recently released report has shown that there was a slump in the equity release sector last year, and this slump stemmed from the Northern Rock crisis, which saw the building society becoming nationalised after falling victim to the global credit crunch. Read more

Tags: uk, equity release, homeowners, Key Retirement Solutions, retirement, bank, equity release market, Mortgages

Possible good news for NatWest customers

There could be some good news in the pipeline for customers of the bank, NatWest, if they have been trying to reclaim past overdraft charges that were applied to their accounts. Read more

Tags: judge, bank accounts, bank, natwest, high

Five year low on savings rates

Following the series of base interest rate cuts that have been applied over recent months figures have shown that the interest rates on savings accounts have fallen to their lowest levels in five years. Read more

Tags: GBP, base rate, finance, Financial services, savings accounts, good returns

Exercising safety when shopping online

Most of us these days have done some form of shopping online, whether it is shopping for groceries and household goods or whether it is buying gifts, entertainment, clothes, and even holidays. Shopping online has become more and more popular over recent years, with an increasing number of people choosing to enjoy the convenience, ease, and speed of shopping via the Internet. When you shop online you get to make your purchases from the comfort and privacy of your own home with no queues to worry about. You also get to enjoy incredible choice with products available from all around the world. Read more

Tags: risks, debit, online shopping, duty charges, form

Where should you head on your holidays?

Whilst most of us are trying to make cutbacks wherever possible in the current difficult financial situation, most of us do not want to give up our annual treat of some time away on holiday. Read more

Tags: family, advice, recession, whilst, holidays, shorter period, financial situation, bank

RBS will take action over refunding bank charges

High Street bank Royal Bank of Scotland has reportedly decided that in the event that the ongoing High Court case in to bank charges is lost by the banks it will be pro-active in ensuring that all customers receive a refund on their bank charges that were applied for exceeding the credit limit on the account. The banks, along with seven others, is currently appealing against a ruling made by the courts earlier this year, when it ruled in favour of the Office of Fair Trading. Read more

Tags: bank, rbs, year, bank charges, high street bank, finance, bank charge refunds

Many banks get all clear over bank charges

Following recent hearings in the next stage of the overdraft bank charge High Court case, many of the UK’s banks have received a clean bill of health from the presiding judge, who has said that most customers will not be able to use the law to challenge the terms that the banks in question have used. However, he has not given the all clear to Intelligent Finance or NatWest. And is still looking at the terms laid out by these banks. Read more

Tags: question, bank, right, overdraft, presiding judge, court, recent decision

Another bank gets nationalised

Earlier this year the financial headlines were filled with news about the government taking over the stricken bank Northern Rock. Over the past few days the government has used the same legislation that was used in the Northern Rock takeover to rush through the nationalisation of another troubled bank, Bradford & Bingley. According to reports the government will be taking on the £50 billion loan book of the troubled bank, much of which has been lent to buy to let investors, whilst the Spanish owned bank Santander, which also owns Abbey, takes on the savings account side of the business, said to be value at £20 billion. Read more

Tags: fact, Financial services, northern rock, largest level, bradford & bingley, savings, bank, stability

Top of the polls for Nationwide

In a recent poll carried out by moneysupermarket.com a building society has beaten all of the big banks, pipping them to the post with the number one spot as most trusted bank or building society amongst UK consumers. The big name banks have always claimed to be the most trustworthy and reliable, but the poll has shown that the highest percentage of people actually have more trust in a building society. The Nationwide scooped the number one spot on the poll, and its excellent service and reliability levels were highlighted. Read more

Tags: spot, uk consumers, poll, place, halifax, building society, bank

Consumers looking to remortgage could experience problems

With lenders raising the borrowing costs on their standard variable rate interest mortgages, and many people due to come of cheap mortgage deals, there are many homeowners that may be thinking about remortgaging in order to ensure a more affordable deal as their existing mortgage deal draws to an end. However, some industry officials have said that many of those looking to remortgage could experience real difficulties. Read more

Tags: tighter credit conditions, Interest rate stays, interest mortgages, uncertainty, bank, Insurance, remortgage, future interest rate

Employers say economy at risk of recession

Employers from small and medium sized businesses in the UK have said that the economy is at serious risk of recession. The warning came after a small business survey was carried out earlier this month, with businesses warning that the economy could slide into recession within a matter of months. The survey showed that orders and sales for small and medium sized businesses in the manufacturing and services sector had been drying up over the past three months. Read more

Tags: mortgage lender, interest, economy, Late 2000s recession in Europe, bank, recession, recessions, day

Mortgage lender offering some impressive rates on savings

According to a recent report a number of mortgage lenders have been offering some impressive interest rates on savings accounts in a bid to increase deposits from savers to aid funding. Many banks and lending institutions have experienced funding problems as a result of the credit crunch, which has swept across the country leaving a trail of turmoil in the financial markets. A number of high profile casualties, such as Northern Rock, have suffered terribly as a result of the problems in the financial sector, and mortgage lenders are desperate to avoid heading down the same route. Read more

Tags: issue, result, impressive rates, high profile casualties, bank, saving account

Pay and bills could further affect consumer finances

The Governor of the Bank of England, Mervyn King, has recently warned consumers that their financial situations could become increasingly strained due to rising bills and below inflation pay rises. With inflation levels soaring and the cost of energy, food, and petrol continuing to rise many households could find themselves running into severe financial problems towards the end of the year, especially with wages set to rise at levels below inflation. Read more

Tags: Monetary Policy Committee, wage increases, action, think, inflation levels, challenging year, bank, pay

Watchdog to probe sale and rent back

The UK’s watchdog, the Office of Fair Trading, recently announced that it would be launching an investigation into sale and rent back scheme, which have been gaining popularity over recent months due to the rising levels of people facing repossession due to high mortgage arrears. Whilst the sale and rent back industry has claimed that this is an ideal solution for many struggling homeowners, many campaigners have expressed concern over how fairly sale and rent back customers are treated. Read more

Tags: public improved protection, sale and rent back, office of fair trading, office, bank, change, home insurance, Subprime mortgage crisis

Online banking ‘improves personal finance’

Eight out of ten consumers who regularly use online banking say it makes them better at managing their finances, according to research.

The survey from internet bank cahoot has found that 38 million Britons have used online banking.

People now spend more time conducting their financial affairs online than they spend on internet social networking sites, the study suggests.

Matthew Timms, cahoot’s managing director, said the credit crunch is making Britons take greater control of their finances.

He commented: “We’re flocking to internet banking, where we can instantly access and manage our finances at a time and location of our choice as well as pick up some of the best rates on the market.”

Last week, separate research suggested that one in five British men believes he is “careful” with his money.

In the survey, commissioned by Scottish Widows, more men said they identified with thrifty businessman Ian Beale from EastEnders than with any other soap character.

Tags: business, Grupo Santander, britons, location, investment, character, internet bank cahoot, bank

UK Insurance overview

Consumers in the UK can enjoy a wide range of insurance options to provide them with protection against a range of issues and eventualities, and with some really good deals on offer from a wide range of insurance providers it is possible to enjoy protection and peace of mind without having to break the bank when it comes to premiums. You can get all sorts of insurance policies these days, and below are some of the most popular types of insurance currently available in the UK. Read more

Tags: loan, life insurance, insurance types, Recent insurance articles, home insurance, bank

Smart saving with a regular savings account

We all know how difficult it can be to get into the habit of putting a little money aside each month for a rainy day or even for emergencies, and even with the best of intentions many of us never get round to transferring that cash into our savings account, finding other ways to spend it instead. And when a special occasion comes around or we need some extra cash to fund a special purchase it can be very disappointing to look at our savings account balance and realize that there is very little there to rely on. Read more

Tags: savings accounts, month, best of intentions, bank, extra cash, cash, date, offer

Interest rate cuts may not affect credit availability, says expert

The Bank of England’s interest rate cuts are unlikely to have an effect on the declining availability of credit, says economic research consultancy Capital Economics.

Lenders reported that during the first quarter of 2008 they had reduced the availability of secured credit to households, and expect to reduce it further over the next three months.

This means that borrowers will be faced with putting down bigger deposits for mortgages than before, as well as paying higher mortgage rates.

Similarly, household unsecured credit availability has also dropped over the last three months with predictions that it will also continue to decline in the future.

Vicky Redwood, UK economist at Capital Economics, said that yesterday’s interest cuts would not make “a huge amount of difference” since lenders had failed to pass on previous cuts in interest rates to borrowers.

Borrowers will nevertheless benefit in the short-term from the cuts and lending rates should eventually drop, however Ms Redwood noted that “things are likely to get a little worse before they get a little better”.

Tags: Mortgages, availability, Household, credit availability, bank, rate

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: advantage, overdraft, service, Driving, bank

New bank code introduced

Consumers are expected to be entitled to fairer treatment under the terms and conditions of a new banking code, it has been announced.

The new terms stipulate that spenders should contact their bank if they experience financial difficulty in a bid to make sure they work out a practical solution rather than just burying their head in the sand.

Both building societies and banks are also compelled to do more to assist customers who are struggling with debts by contacting those who may have been perceived to have fallen into financial trouble.

Angela Knight, chief executive of the British Bankers’ Association, said that the new code “gives strong commitments that banks will lend responsibly and will help customers who may be heading towards financial difficulties”

She added that the driver for change was the consultation process which shows what customers want and expect from their bank.

Meanwhile, young consumers are set to benefit from the Young People and Money scheme, set up to provide specialised debt advice.

Tags: young consumers, Business Finance, practical solution, bank, consumers, Banking Services, debts, specialised debt advice

“There are lots of good offers” on the market for bank accounts, say experts

Due to the effects of the credit crunch meaning banks are having difficulty finding funds, “there are lots of good offers” on the market for bank accounts for UK consumers, one expert has said.

Fool.co.uk said there are differences to be found between bank accounts but to spot them consumers will have to keep their eyes peeled.

David Kuo, head of personal finance at fool.co.uk, said: “There are no ‘one size fits all’ when it comes to current accounts. So thanks to the plethora of choices, consumers can find one account that most suits their lifestyle.”

He added, as an example, if you regularly go overdrawn then a current account that provides an overdraft buffer will probably be best.

Meanwhile, a survey by Mintel has previously found that British people are more likely to get divorced than to change their bank accounts.

Up to one in two respondents were rated as being either ‘dissatisfied or extremely dissatisfied’ with their bank’s service, according to the survey.

Tags: bank, suits, United Kingdom, uk, plethora, Mintel

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: new research, United Kingdom, male spenders, half, advantage

Numbers threatened by identity fraud rises

Direct Line has responded to the latest Home Office figures on identity theft by adding Identity Fraud Assistance to its home insurance policy.

The latest figures from the government indicate that identity fraud is the UK’s fastest growing crime and it currently costs the economy up to £1.7 billion per year.

Andrew Lowe, head of home insurance for Direct Line, said the numbers threatened has increased over the last eight years.

“Victims of identity fraud could encounter debt collectors, court actions and difficulties getting a mortgage, credit card or bank account if their credit report is not corrected,” he warned.

Meanwhile, figures from Cifas, the UK’s fraud prevention service, show that 136,966 incidents were reported in the period between January and September 2007, almost a ten per cent increase on the findings for the same period in 2006.

In some cases of identity fraud, without expert help and advice, it may take the victim as long as 400 hours and cost up to £8000 before things are put right.

Tags: Victims, help, service, economy, identity theft, identity fraud rises, bank

Consumers warned not to take rates ‘at face value’

Consumers looking for savings accounts need to be wary of taking the headline rate at face value, one financial expert has claimed.

According to the Halifax bank, the headline rate does not give you all the information you require as it does not tell the consumer how to access it and what the limits to the account are.

Jason Clarke, spokesperson for Halifax, said: “The highest rates are going to be the ones with quite a few limitations in there”, citing withdrawals not being allowed through ATMs or taking place over a certain amount of time.

He added that those consumers who are looking for a savings account should decide what it is they want from their savings before committing to an account.

According to findings from the Buildings Society Association (BSA), building societies attracted a record £16.1 billion of savings inflows in 2007, almost double the amount saved with them during 2006.

The BSA revealed that the previous record was in 1988, when £13.6 billion was deposited following in the wake of the stock market crash of October 1987.
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Tags: headline rate, face, technorati, bank, face value, spokesperson

Credit card restrictions could increase debt for consumers

Credit card restrictions could lead to consumers taking on more expensive debt, one financial expert has claimed.

Moneywise magazine has said that consumers could be more likely to use their overdraft facility if credit cards are restricted, which could incur bank charges which would be a more expensive short term debt.

Rachel Lacey, editor of the magazine, said that credit conditions are going to be tight for the rest of the year.

“I think whether you’re a new borrower seeking a fresh sort of credit, like a new loan or a credit card, it’s going to be hard,” she continued.

The magazine also said that stricter lending criteria could come as “a bit of a shock” to a consumer culture accustomed to the idea of ’spend now, pay later’.

According to findings from uSwitch, the price comparison and switching website, almost one in four UK adults are finding debts unmanageable.

Up to 9.5 million have maxed out on one form of credit in the last six months and 38 per cent have had a credit card application rejected.

Tags: facility, lacey, bank, form, price, sort, Moneywise, Business Finance

Premium Bonds big win odds drop

The chances of winning big on Premium Bonds dropped yesterday.

National Savings and Investments (NS&I) reduced the rate of return on its prize fund from 4 per cent to 3.8 per cent from the start of 2008, in response to December’s cut in the Bank of England’s base rate.

While the chances of winning– 21,000 to one per £1 bond – and the number of £1 million jackpot prizes remain the same, the spread between large, medium and small prizes will be skewed further towards small prizes of £50 and £100.

Million of Brits have money invested in Premium Bonds, totalling £36 billion.

Unlike other investments, there is no risk involved in the scheme – but unlike other savings products, there is no guarantee that investors will make anything at all.

The Times noted in 2007 that the chances of winning nothing at all with a £1000 Premium Bonds stake was 60 per cent, while the chances of getting a better-than-inflation return on £1,500 was around 20 per cent.

Tags: savings products, bank, England's base rate, National, fund, Business Finance

Children lost millions through misbehaviour

Misbehaving boys and girls missed out on millions of pounds in pocket money this year, according to research from Abbey Banking.

Over 40 per cent of Britain’s 11 to 15-year-olds had their pocket money docked at some point during 2007.

The research showed that parents took £40 million worth of their children’s pocket money.

Steve Shore, head of banking at Abbey, said: “Parents have long since wielded pocket money as a powerful weapon with which to influence their children’s conduct.

“Being on their best behaviour can clearly pay real financial dividends for Britain’s money motivated minors.”

According to the findings, Britain’s naughtiest children can be found in the north where 45 per cent aged between 11 and 15 had their pocket money stopped during the year.

The best behaved children could be found in the midlands where only one in three had their money stopped.

More research from Abbey Banking revealed that two thirds of people have a bar strategy when drinking with friends.

Almost a quarter of British drinkers confess to buying early in order to maximise financial returns from friends.

Tags: maximise, Grupo Santander, bank, GBP, Farm, worth, Banking

Economists give views on where interest rates will go next

There was a sigh of relief across the UK earlier this week when the Bank of England announced that interest rates had been cut by 0.25% from 5.75% to 5.5%.

There are now mixed predictions with regards to what will happen with the interest rate next, with some predicting that 2008 will see another one or two interest rate cuts and others believing that the interest rate could fall as low as 4% in 2008. Financial experts from This is Money interviewed some economists to get their views.

An official from Investec stated: ‘Evidently the MPC is taking much more note of recent signs of a slowdown in the economy and its fears over the possible effects of the credit squeeze have begun to crystallize. The question obviously now is whether rates come down again and if so how quickly. The outlook is very uncertain. We are pencilling two further 25 basis-point cuts over the first half of next year.’

Roger Bootle from Deloitte and Touche stated: ‘Today’s decision by the MPC to cut interest rates from 5.75% to 5.5% is the first step in a prolonged period of monetary easing that could see rates fall very sharply. I previously thought that rates would drop to 5%, but I now think that they could eventually be cut all the way to 4%. Inflation is likely to rise further in the coming months. However, the rise in interbank interest rates means that the risk of a very sharp and prolonged economic downturn is growing by the day.’

A spokesman from Bear Stearns said: ‘We expect another cut in January, with rates to target 5% by the second quarter. UK rates should be at 4.5% by the end of 2008, possibly even lower if the downturn is more severe. This has been a cut to alleviate the credit crunch and provide a rescue remedy for growth. Lower rates should help to put a prop under the UK housing market.’

Tom Smith
10t December 2007

Tags: uk, interest, rates, bank, propert, credit, crunch, housing, england

Bank manager not seen by Brits in over ten years

Over half of Brits have confessed they have not seen their bank manager in more than a decade, according to new research from Lloyds TSB.

The survey showed that one in ten respondents were too embarrassed to discuss money matters.

Another one in ten did not think their financial aspirations would be taken seriously while a third were put off discussing their money concerns by a fear of financial jargon.

Liz Hogbin, director of savings and investments at Lloyds TSB, said: “We service our cars, have regular hair cuts and visit the doctor if we have any health concerns but many of us admit that we don’t take such good care of our finances.”

She added that a regular financial health check could put minds at rest and ensure consumers made the most of their money.

Just over a third of respondents had paid a visit to their bank manager in the last two years despite over half of them recognising that their financial situations had changed in that time.

Research was conducted by Ciao among 1,024 consumers between 16th and 24th November 2007.

Tags: financial situations, visit, 24th november, check, financial aspirations, fear, bank, regular financial health

Co-op under fire over bank charges

The Co-operative Bank, which described itself as ‘ethical’ has come under fire after announcing a change to the way that it charges on unauthorised overdrafts.

According to experts the new charging structure that will come into force next month will not only push people into debt more quickly, but will also affect lower income customers the most. The changes are to take effect next month, and campaigners state that lower income banking customers could really bear the brunt of the changes.

The UK’s financial regulator, the Financial Services Authority, stated earlier this year that banks could temporarily put the brakes on issuing bank charge refunds until the High Court test case had taken place in January 2008. However, experts state that the new Co-operative Bank charges appear to be in violation of the FSA guidelines. This was because banks were told at that time not to make any material changes or raise overdraft fees.

The fee from the Co-operative Bank will still be capped at £100 per month, but under the new structure many customers will clock up a higher fee more quickly, reaching the £100 limit faster than they would have done over the old structure. It is estimated that close to one million customers could fall victim to this new charging structure.

An official from the Consumer Action Group stated: ‘These clever changes will hit those people who are eking out a living day by day and go over their limit just before pay-day. This happens an awful lot for people on benefits and people like young single mums, who run out of money just at the end of the month. If you are in a vulnerable group this will happen every month of your life. These changes are likely to break the camel’s back for them. The Co-op is just throwing this at them because it knows they have no mobility in their accounts and can’t go anywhere else because of their credit rating. This is an insidious charge based on the knowledge that those affected just can’t walk away.’

Tom Smith
7th December 2007

Tags: bank, charges, capped, financial, cost, coop, fsa, fees

Investigation launched into online sale of bank account details

An investigation has been launched by the Information Commissioner after it was revealed bank account details could be purchased online.

The Times discovered more than 100 websites were selling the details of British bankers while an e-passport was also found to be on sale online.

A trafficker was also reportedly selling 30,000 credit card numbers for less than one pound each.

Richard Thomas, the Information Commissioner, has announced that an investigation will be launched into the findings by the newspaper.

He said: “We can take action against UK-based organisations that flout the Data Protection Act. If some of these websites are not UK-based we will work with our counterparts in the relevant country.”

The findings come as confidence in the government’s handling of personal data increases to ebb.

This latest furore follows the loss of two discs in the post last month of the banking details of 25 million individuals.

Tags: handling, banking details, personal data, account, bank, uk, relevant country."The findings, credit

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: transfer, savings, earn, referrals, customers, bank, interest, accounts, current

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

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

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, bank, lose, balance, accounts

Reduction in approvals ‘less dramatic than expected’

There has been a less substantial tightening in the mortgage market than was previously thought, according to the Council of Mortgage Lenders (CML).

In the Bank of England’s report today, the number of approved mortgages was shown to be steady, despite predictions that there would be a significant tightening of the market.

While there has been a slowdown, it is not unusual for the time of year and also reflects a slowdown in funding, explained Sue Anderson, head of member and external relations at the CML.

“To that extent this is pretty good news. It shows that the level of lending is looking as if it is holding up to a greater degree than some of the pessimists have been expecting,” she said.

The Bank of England report showed that net consumer credit in October this year was up on September as well as the average for the preceding six months.

Meanwhile, net credit card lending was up by £0.2 billion, which fell short of the net increase for September.

Tags: number, significant tightening, bank, lending, increase, reduction

Darling accused of incompetence over Northern Rock loan

Chancellor, Alistair Darling, found himself the recipient of a vicious verbal attack by the shadow chancellor George Osborne earlier this week, when he was challenged in the Commons over the loan that was granted to Northern Rock by the Bank of England.

The chancellor has been accused of exercising secrecy in authorising the loan to ailing bank Northern Rock, and the attack came on a day that saw the Rock’s shares plummet again, falling by over 20% in the light of no successful sale to rescue the bank.

Osborne accused Darling of misleading the public by not making the loan public, but Darling stated that the way the Northern Rock loan was handled was normal operating procedure for the Bank of England, and that making the public aware of every move could have adverse effects, which indeed it did when the public did finally learn about the loan. He added that the loan was secured against Northern Rock’s assets after being accused of putting taxpayers’ money at risk.

Mr Osborne stated: ‘Can the Chancellor tell us that all the money lent by the taxpayer will be repaid? Yes or no.’

He also said: ‘This is a tale of incompetence and weak leadership from a government that now reels from one disaster to another. We have a Chancellor who made loans he kept secret from Parliament. We have a Chancellor who has made guarantees to the taxpayer he cannot be sure of honouring. And we have a Chancellor whose weakness is contributing to the instability of the financial system. That is why we have a Chancellor whose job is on the line.’

Darling has been accused by the shadow chancellor of withholding information from the public as well as from parliament, but Darling insists that he did the right thing in authorising the loan for Northern Rock, and said that there was no secrecy involved.

Tom Smith
30th November 2007

Tags: chancellor, rock, Loans, northern, england

Northern Rock fined widow £800

An elderly widow has expressed her anger after stricken bank Northern Rock fined her £800 in the midst of the chaos in September after she withdrew her savings from the bank.

After it became public knowledge that the bank had borrowed money in the form of an emergency loan from the Bank of England panic set in amongst those with savings in the bank, and many of the bank’s 1.5 million customers quickly withdrew their savings. One of these savers was seventy six year old Mrs Heather, who had tens of thousands in savings with Northern Rock.

Mrs Heather had £173,000 saved in a thirty day notice savings account, and was therefore aware that if she withdrew the money right away she would face hefty penalties. She therefore contacted Northern Rock and asked them to keep the money in the account for the thirty day period and then send a cheque out to close the account, so she effectively gave the required thirty day notice period.

However, a week later she received a cheque for the money in the post, and given the bank’s position thought that they must have decided to waive the thirty day period in light of what was going on. However, when she then asked the bank for a closing statement she realised that Northern Rock had in fact fined her £800 for withdrawing her cash early, even though she had given notice and the mistake had been on the part of the bank.

She said that she called the bank to complain: ‘The lady I was speaking to apologised, but then got very officious and said I should have sent the cheque back to them after I received it. She was very bombastic. So they expect a 76-year-old housewife to know when they have made a mistake – even when they fail to send out a statement showing what they have done?’

Alan Wright
26th November 2007

Tags: savings, account, rock, notice, northern, 30 day, fined, bank

Another drop in Northern Rock shares

Following the turmoil and chaos that took hold in September of this year, high street lender Northern Rock has seen its share prices plummet yet again, this time falling to their lowest level yet.

According to recent reports shares in Northern Rock, which were worth £12 back in February of this year, fell to under £1 per share on Tuesday. This comes in the light of concerns over whether the bank will be bought out, as although there have been a number of potential purchasers there has been no firm offer as yet.

The serious woes faced by Northern Rock began in September, after it became widely known that the lender had approached the Bank of England for an emergency loan of billions of pounds. Once this became public knowledge, savers flocked to the bank to withdraw their savings amidst worries that the bank was about to fold, and over the space of several days over £2 billion was withdrawn from the bank.

Share prices also plummeted, and Northern Rock gained a reputation as one of the highest profile victims of the credit crunch and the turmoil that has swept across the financial sector.

One bank official stated: ‘Based on the information it has so far, the board of Northern Rock believes that the range of values for the existing equity implied by the proposals is materially below the market price at the close of business on Friday.’

Chairman Bryan Sanderson added: ‘The value to shareholders from any proposals… remains highly uncertain and will be dependent, among other things, on when and if there is an improvement in market conditions including access to liquidity and the value created, if any, from the run-off of the assets and liabilities remaining in the company following any disposal of all or part of its business.’

Tom Smith
25th November 2007

Tags: northern, drop, rock, bank, prices, shares, fall

ICICI to expand in UK

Indian bank ICICI is planning to expand its operations in the UK, offering consumers the chance to take out personal loans, current accounts, and insurance services.

The bank is planning to expand its services over the next year. In addition to expanding operations the company has stated that it will also improve on the time it takes to respond to customer queries, which currently takes between 24-48 hours.

ICICI is a subsidiary of the second largest bank in India, and was established in 2003. It has enabled consumers in the UK to enjoy excellent rates on savings accounts, and due to its high rates on savings has gained popularity amongst consumers in the UK. However, one thing that has gone against the bank is that many consumers have never heard of it and therefore have avoided it despite the high rates of interest offered on its HiSave Account.

Until recently the bank had refused to sign up to the Banking Code in the UK, and consumers were concerned about this as well as the bank’s reputation when it came to dealing with customer complaints and queries. One official from ICICI stated that the reason that it had not signed up to the Banking Code previously was because its bank cards were not yet chip and pin compliant.

One official from the bank stated: ‘The major obstacle was that our cards weren’t compliant. Customers can now change their pin numbers as they like and, as our systems have become more automated, we have cut down on the time it takes to open a new account to bring it in line with the industry average.’

Alan Wright
15th November 2007

Tags: credit, cards, bank, personal, Loans, current, account, icici

King advised Darling not to lend to Lloyds

The Governor of the Bank of England Mervyn King has spoken out about his advice to the Chancellor of the Exchequer with regards to a loan request from banking giant Lloyds TSB.

The high street bank had approached the Bank of England for a loan to the tune of £30 billion in order to fund the takeover of Northern Rock. However, the governor advised the chancellor not to authorize the loan, which Lloyds wanted to take out over two years at competitive rates.

According to Mr King he told Darling that the Bank of England should not be providing loans to a company in order to allow the takeover of another company.

Speaking on Radio 4 Mr King stated: “I said to the chancellor: ‘This is not something which a central bank can do. They don’t normally finance takeovers by one company for another, let alone to the tune of £30bn, which is rather a large amount of money’.”

When speaking on Radio 4 Mr King also added that it could take months before banks get back to normal following the effects of the credit crunch.

He stated: “I think most people expect that we have several more months to get through before the banks have revealed all the losses that have occurred, and have taken measures to finance their obligations that result from that, but we’re going in the right direction.”

He also added: “There is always, in a period like this, the possibility that a shock from outside the UK, one from the world economy, might create further fragilities, but to some extent there are always risks, there are always fragilities. What I would say is that the situation now is, in my view, different from that in August, though it’s not without risk.”

Tom Smith
15th November 2007

Tags: england, credit, lloyds, king, crunch, chancellor, bank

Halifax house price data contradicts Nationwide data

Recently Nationwide released data that showed house prices in the UK had picked up during the month of October, following an unexpected tumble of 0.6% during the month of September.

The news of rising house prices came as a surprise for many, particularly given industry predictions that house prices would continue to fall over the last quarter and into 2008. However, the Halifax has now released data that contradicts the information provided in the Nationwide report.

According to the Halifax house prices actually fell during the month of October, taking another tumble of 0.5% and bringing the annual rate of inflation to 8.9% for October from 10.7% in September. According to the Halifax report the average house price in the UK is now just over £197,000. If house prices have fallen for the second consecutive month this is the first time since April and May 2005 where there will have been two house price drops in a row.

In the three months to October house prices were 0.3% higher than the same time last year according to reports. The Halifax stated that its figures reflect the steady ‘downward trend’ that many analysts and industry experts have been predicting would take place over the final months of the year.

The Chief Economist at Halifax stated: “The rise in interest rates since August last year and negative real earnings growth so far this year are curbing housing demand, leading to a slowdown in both price growth and activity.”

He added that the data signifies a cooling market but not a crash. “The UK economy is in a strong position. Sound market fundamentals, including high levels of employment and a shortage in the number of properties available for sale, will continue to support house prices.”

Tom Smith
15th November 2007

Tags: rise, rates, england, bank, prices

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

Bank of England comes under fire for failure to reduce interest rates

Following its most recent decision to keep interest rates on hold for a fourth consecutive month the Bank of England has come under fire from a number of agencies for failing the economy by making the decision to keep interest rates unchanged at 5.75%.

Some say that the Bank of England is putting the stability of the UK’s economy at risk by failing to cut interest rates, and both lender and brokers had been hoping for an interest rate cut of at least 0.25% for November.

A broker from firm John Charcol stated: “A cut of 0.25% today would at least have pushed three-month Libor back down to about 6%. It would also have started to redress the Bank of England’s policy mistakes, as outlined in last month’s Financial Stability Report, in dealing with the credit crunch.These are all good reasons why the MPC should have cut today. Their failure to do so means that today’s opportunity to mitigate the potentially serious problems building up in the banking system has been lost.”

A property investment official added: “It’s about time that the Bank of England’s MPC saw sense and realised that the clear and present danger to the UK economy from the continuing effects of the credit crunch is more important than the less clear possibility of future pressures upwards on inflation.”

One economic adviser added: “Credit conditions have become tighter since August, both globally and in the UK. The dangers to the economy have worsened and businesses require easier credit conditions without undue delay, to avoid a nasty reversal. We urge the MPC to announce a small interest rate cut in December.”

Tom Smith
13th November 2007

Tags: finance, growth, bank, england, interest, cut, rate, businesses, Mortgages

Fewer analysts predict a cut in interest rates in November

Following the last Monetary Policy Committee meeting in October, 14 out of 52 economists that were polled by Reuters expected interest rates to fall in November.

However, according to the latest poll the number of analysts that are predicting a fall in interest rates has now fallen, with just 5 out of 60 analysts polled expecting the Bank of England to cut interest rates by a quarter point. It is thought that healthy economic growth could have something to do with the change in the level of predictions in terms of whether interest rates will fall.

Out of the 60 analysts and economists that were polled by Reuters at the end of October 55 predicted that after the next Monetary Policy Committee meeting on November 8th interest rates will remain on hold at 5.75%. Rates have gone up five times between August 2006 and July 2007, each time by 0.25%, which took the rate from 4.5% to 5.75%. However, since July of this year interest rates have remained stable at 5.75%, which is thought to be partly due to the possible effects of the credit crunch.

The poll also showed that 47 out of 59 economists that were polled expected interest rates to fall by at least a quarter point by the first quarter of 2008. Many had predicted that this interest rate would come in November’s meeting. However, these predictions fell after it was revealed that the British economy grew at its fastest rate in three years in the third quarter of this year.

One industry professional stated: “We would expect them to continue to bide their time and allow more data to come in on the extent of any economic slowdown before changing rates. With the UK economy as a whole apparently still growing slightly above trend in Q3, there is certainly no immediate need for such a cut.”  

Tom Smith

Tags: england, interest, bank, Mortgages, november, cuts, rates

Yorkshire Building Society opens 133rd branch

The Yorkshire Building Society is planning to increase its High Street presence by 10% over the next three years, and has recently made progress towards this goal by opening its 133rd branch in Chester.

The branch was opened amidst celebrations, with everything from champagne and white roses to town criers. Customers have already flocked to the branch to open accounts, and in light of the record number of deposits made in building societies across the UK over recent weeks officials have high hopes for the success of this newest branch.

A spokesman from the Yorkshire Building Society stated: ‘As a society, we have never veered from our main objective: to raise funds from the public via savings products that we can then lend on to those who want to buy their own homes. ‘The best way to raise those funds is through a healthy branch network. The public like this setup and I see no reason to change it. It’s not sexy, but in light of recent events at Northern Rock, it has huge customer appeal.’

The crisis with Northern Rock led to building societies enjoying huge rises in deposit levels over a matter of weeks, with worries savers taking their money out of Northern Rock and depositing it elsewhere. According to figures from the Building Societies Association there was a rise of nearly £1 billion in the number of savings deposits made in building societies following the Northern Rock crisis.

One of the customers that turned up for the opening of the new branch stated: ‘I find building societies more approachable and friendly than banks. ‘Although Chester is well banked and has its fair share of building society branches, it’s good to see Yorkshire offering more choice.’

Tom Smith
11th November 2007

Tags: chester, expand, society, open, branch, savings, yorkshire, bank, building

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

Barclay’s share prices fall amidst rumours

Barclays Bank, one of the UK’s high street banking giants, has seen its share prices plummet to their lowest level in two and a half years.

It is thought that the fall in share prices could be partly due to rumours that the bank has experienced financial problems in light of the recent credit crunch that has swept across the UK. Rumours were sparked back in August when the bank took out two overnight loans from the Bank of England, which was blamed on ‘technical’ problems.

Share prices tumbled by 8% at one point, taking them to 524.5 pence. This was followed by a slight recovery, with share prices at 537.5 at closing, which was a drop of 5.9%. Barclays has denied having any funding problems following the emergency loans. In fact, in order to try and restore consumer confidence the bank’s head of global retail and commercial banking, Frits Seegers, purchased £700,000 worth of Barclay’s shares on Friday.

Ian Poulter at Landsbanki Financials stated: “There are concerns about writedowns and everything else, but the comments Barclays have made to date suggest that is not an issue, as does the fact they are still buying back their own shares.”

The thirty month low in share prices comes just shortly after the crisis that hit Northern Rock, where share prices plummeted by over 80% after it became widely known that the bank had taken an emergency loan from the Bank of England. This fuelled speculation that the bank was on the verge of collapse, and over £2 billion in savings was also withdrawn in addition to a huge tumble in share prices.

Tom Smith
10th November 2007

Tags: barclays, value, price, share, bank, fall, savings

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

Banks must keep customer more informed states BBA

The British Banker’s Association has recently stated that UK banks need to do more to keep their customers informed on all levels when it comes to the services and product that they offer, as well as when it comes to any changes.

A senior official from the British Bankers’ Association stated that banks need to buck up their ideas in terms of keeping customers informed. This comes at a time when reports indicate that consumer confidence in the banking and financial sectors has plummeted.

 According to the Chief Executive of the British Bankers’ Association, Angela Knight, banks in the UK need to keep their customers far more informed in terms of banking issues. Ms Knight stated that the increasing complexity of the banking industry as a whole meant that banks needed to be far more informative with their customers. She said that banks needed to be more open and informative in terms of their procedures, and that better explanations and increased security was required from banks.

Although one recent report is said to have shown that many consumers are satisfied with their bank, another study has shown that the confidence of consumers in banks and building societies, as well as other areas of the finance sector, has taken a real hit as the result of chaos and turmoil in the money markets and the recent problems seen at Northern Rock, where many savers were in fear of losing their money resulting in the mass withdrawal of over £2 billion.

Another issue that has affected consumer confidence and satisfaction when it comes to banks is the recent controversy over bank charges, which is due to come to a head early next year when the Office of Fair Trading takes the banks to court in a test case to determine what can be construed as a fair fee.

Tom Smith
4th November 2007

Tags: money, societies, building, deposits, bank, information, funds, Banking

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

Consumers can enjoy new home insurance deal from bank

One of the nation’s leading building societies, the Nationwide, has recently launched a new home insurance package that offers a number of benefits to consumers.

Home insurance is a popular and important form of insurance cover, and is designed to protect consumers from the financial losses associated with their home and their belongings. Many people claim on their home insurance each year for anything from flood damage and accidental damage to theft or loss.

According to recent reports the Nationwide is offering a special deal where consumers can enjoy substantial savings when they sign up for home and contents insurance cover as a bundle package. Although these insurance types are available as separate products most insurance companies offer s discount to consumers taking both as a bundle, which enables the consumer to enjoy increased convenience and lower premiums.

Officials from the Nationwide have stated that consumers that opt for this new home insurance cover will be able to enjoy improved customer services and well as better cover. The cover can include unlimited cover on buildings cover and cover for items in the garden.

Consumers are advised to familiarise themselves with what the policy covers before they sign up, as this will enable them to check that the cover is suited to their needs before they make a commitment.

Nationwide is so confident about this insurance product that it if offering up to £100 refund on the difference of better cover can be found for the same premium elsewhere.

The cover offered by the building society will also cover students in the family that are living in student accommodations. Customers that pay by monthly instalments will not incur fees for the privilege of paying on a monthly basis.

Tom Smith
3rd November 2007

Tags: Insurance, deal, home, cover, bank

New card rewards ethical spending

The Co-operative Bank has announced the launch of ‘think’ today, which is a credit card aimed at rewarding consumers for making ethical purchases.

A world first, the card offers users a lower rate of interest of just seven per cent on all ethical spending with its partner organisations such as Lush, Adili.com and Ikea for six months after the payment is made.

Meanwhile, for each first use of the card, the bank has pledged to arrange the purchase and protection of half an acre of Brazilian rainforest.

David Anderson, chief executive of the Co-operative Bank, said: “According to our own Ethical Consumerism Report, conscious spending has been increasing at an average of 15 per cent a year since the start of the decade and all the signs are that this growth is set to continue.

“We want to reward those customers who make ethical choices and encourage everyone to really think about how their choices impact the wider world, which is why we have developed the new ‘think’ card.”

Furthermore, users of the ‘think’ card will be given discounts on selected partners including £35 with Ecotricity as well as reductions with Eco First and Nigel’s Eco Store.

Becoming more green is a hot issue for today’s consumers, who are increasingly calling for companies to show themselves ethically accountable.

Tags: Sustainability, card, Ethics, launch, six months, Anti-corporate activism, bank, CreditCards.com

BoE reports increased lending to individuals

The Bank of England (BoE) has reported a rise in lending in its Lending to Individuals figures for September this year.

It showed the increase in total net spending to be higher than August by £11.2 billion (0.8 per cent).

Within this figure, net lending secured on dwellings was up by £9.8 billion, up from an £8.5 billion increase in August

The number of remortgaging loans approved in September was up from August at 101,000, with loans for other purposes also on the rise at 67,000

Meanwhile the annualised growth rate increased by 0.1 per cent, despite the twelve-month growth rate seeing no changes, staying at ten per cent.

In related news, the mortgage market has taken a severe blow from recent credit squeeze, with lending at a seven-year low this month, falling 27 per cent last month from September’s figure for 2006.

Experts suggest that this could mark an eventual end to the housing boom and lead to a cool-down in the market and an easing off of house prices.

Tags: mortgage, Individuals figures, bank of england, blow, Subprime crisis background information

Borrowers reassured by mortgage advisers

Mortgage advisers in the UK are reassuring borrowers following major concerns over rising interest rates.

Many consumers are panicking over how they will be able to get a mortgage when interest rates are so high, particularly in the light of the recent credit crunch, which has resulted in a number of lenders hiking up interest rates even further, exceeding the Bank of England base rate by a considerable amount in some cases.

The worry over mortgage interest rates is being further fuelled by the fact that there are thousands of homeowners that are due to come out of fixed rate deals over the next couple of months, and they will be hit hard by the higher interest rates and rise in repayments, with many paying hundreds of pounds extra a month if they stick with their lender’s standard variable rate. Many will be looking to remortgage and go into another fixed rate deal in light of the current economic climate, but they are worried that they will not be able to find a competitive fixed rate mortgage deal to switch to.

Many mortgage advisers, however, have been reassuring consumers and have stated that there are still mortgages available at rates of 6% or under. Although this is much higher than the interest rate that many people that took out fixed rate deals in 2005 are currently on, it is still preferable compared to the standard variable rates of 8% and beyond that some lenders are charging.

The Britannia Building Society currently offers a fixed rate deal of 5.49% for a two year period, which one broker at John Charcol recommends. There are also other fixed rate deals that consumers can choosing from state mortgage advisers.

Tom Smith
26th October 2007

Tags: Loans, interest, offers, fixed, rate, Mortgages, deals, bank

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: market, bank, savers, interest, savings, Banking, high, earn, fixed, accounts

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, confidence, society, building, bank, personal

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