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: minimal returns, British banking, rate, household insurance, Banking

Mortgage lending in UK to remain subdued

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

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

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

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

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

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: direct debits, bank, cheque, bank accounts, that enable consumers, Banking, 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: Banking, finance, bank, packaged bank accounts, bank account, basic bank accounts

Mortgage approvals still slow

According to figures mortgage approvals in the UK for the start of this year have been sluggish despite optimism over improvements in the market. The Bank of England released data showing that the level of mortgage approvals in March did increase slightly from the previous month rising from 46,882 to 48,901.

The figure for mortgage approvals in March was also said to be 17 percent higher than the figure in March of last year, so there have been some signs of improvement. However, the bigger picture indicates that mortgage approvals remain sluggish for the first part of the year.

Apart from 2009 the number of mortgage approvals for the first quarter of this year was at its lowest on record according to the figures. One economist said that the Bank of England figures showed that the mortgage market and housing sector were finding it difficult to gain momentum following the turbulence of the last couple of years.

He added that over the coming months property prices in the UK were likely to be erratic, and for the remainder of the year it was most likely that property prices would be flat. The Building Societies Association added that the mortgage market remained fragile and was likely to remain so in the short term.

The group said that some of the factors that could contribute to this fragility included the uncertainty over leadership of the country, jobs, interest rates, and inflation on property prices.

One financial expert concluded: “It is good news for borrows that lenders are slowly acclimatising to a new landscape of the mortgage market and continue to improve on the competitiveness of new mortgage deals. But lending figures show that there is only a slight improvement in the market; we still have a way to go before the market returns to any sort of normality.”

Tags: finance, slight improvement, bank of england, month, Banking, societies

Cards set to replace cash transactions

According to recent reports less than half of all transactions will be made by cash in five years’ time. A report from the UK Payments Council has suggested that at the moment 80 percent of cash transactions were low value transactions that were for less than £10. The Payments Council said that cash was taking over as the main method of payment for transactions, whereas cash and cheque use had fallen into decline.

In years gone by those making purchases used cash and cheques to make payments, with only a small percentage having access to or wishing to use plastic cards. However, over the past decade this has changed, with a rising number of people having access to plastic cards and many preferring the convenience and ease of paying by card.

In addition to this the use of cheques has really declined over recent years, and many retailers have stopped accepting cheque payments altogether. In fact, the banking industry has confirmed that it is planning to phase out cheques altogether over the next eight years, but this is something that is being opposed by many pensioners who have become accustomed to using cheques.

Based on trends over the past few years the UK payments Council developed a report with predictions relating to how consumers will be spending in the future. The report predicts that by 2018 only one in every fifty workers will be paid in cash, whereas in 1999 this figure stood at one in eight.

An official from the Payments Council said: “Although cash will not disappear in our lifetime, the continuing payments revolution will make it an ever smaller part of our spending. The noughties have been the decade of the debit card. Especially since chip and pin, which has speeded up transactions, it has become socially acceptable to buy small items by card now too, for example in a sandwich shop or a pub.”

Tags: finance, plastic, cheque, Banking, cards

OFT tackles irresponsible lending

Over the course of the decade leading up to the global financial crisis there was a period of easy credit in the UK, and lenders were throwing cash at people and businesses hand over fist in a bid to get their custom. Even those with damaged credit usually had no problem getting a loan or mortgage during this time. However, when the credit crunch swept the nation things came to a head, and over the coming months the banking industry was brought to its knees bringing with it the worst financial crisis in recent history.

Whilst things have improved and the financial sector is slowly getting back on its feet the days of easy credit are definitely gone, and lenders are being far more stringent about who they lend to. One of the main causes attributed to the financial crisis was irresponsible lending from banks and financial institutions, which had been eager to lend money to people without even running checks on whether they could afford to repay it in many cases.

Of course, the financial crisis is something that the UK does not want to see repeated, and with this in mind banks are now being discouraged from falling back into their old ways of lending to anyone. The Office of Fair Trading has recently produced guidance for banks, a requirement of which is aimed at ending the days of irresponsible lending.

The OFT has told the banking industry that it must not mislead consumers when it comes to providing finance, and that stringent checks must be carried out before any finance is agreed to ensure that the consumer is in a financial position to afford the credit being taken out. The OFT sad that is fully expected the industry to comply with this.

An official from the trade association, the Finance and Leasing Association, said that the new regulation would help to protect consumers, ensure that people did not get stuck with debt that they could not afford to take on, and would help to weed out unscrupulous lenders.

The new regulation has also been welcomed by the Citizen’s Advice Bureau, which tackles many cases relating to debt that consumers cannot afford to repay.

An official from the charity said: “Irresponsible lending plays a significant part in many of the debt problems we see in Citizens Advice Bureaux. The focus on getting firms’ practices and procedures right is a big step towards ensuring consumers are treated fairly and not encouraged into taking out unaffordable and unsustainable credit that lands them deep in debt.”

Tags: Banking, credit, new regulation, lending, nation things

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

Recreated paperwork could cause problems for borrowers

According to a recent report many lenders tend to misplace or lose loan and credit agreements, and in some cases this paperwork is even disposed of, which means that if and when the banks need to refer to the agreement for any reason they are having to recreate the agreement. Whilst this is not frowned upon there is one problem that has been highlighted, and this is the fact that the recreated document often has discrepancies that leave the consumer even worse off. Read more

Tags: personal finance, Mortgage loan, consumer credit lawyer, credit, Banking, office of fair trading, debt

Cheques will be phased out if alternatives found

It has been reported that by 2018 cheques could be phased out altogether in the UK, but that this will only happen if suitable alternative for cheques are found. The data has been released by the UK Payments Council, which has set the date of 2018 to try and encourage alternative forms of payment to be developed and used so that the end of the cheque will not have such a huge impact on consumers. Read more

Tags: Debit card, cheque, Banking, Payment systems, UK Payments Council

More lenders starting to look at lower deposits

Over the past couple of years things have been very difficult for first time buyers, and one of the things that has really affected the abilities of first time buyers to get onto the property ladder is the huge deposits that lenders have been demanding since the onset of the global credit crunch. Read more

Tags: Mortgages, Banking, low deposit mortgages, interest rate, cry, property, demand, 5% mortgages

Banks make agreement following pressure from OFT

Following continued pressure from the Office of Fair Trading the banking industry in the UK has agreed that it will not only make current account charges clearer for customers but will also make it easier for customers to switch to another provider should they wish to do so. Read more

Tags: damaging reports, fault, banks compensate customers, Banking, bank agreement, office, office of fair trading, Association

Millions of RBS customers to benefit from bank charge cuts

Starting from next month around twelve and a half million RBS current account holders are set to benefit from bank charge cuts, with the bank announcing that it is going to be cutting charges on millions of accounts. Read more

Tags: rbs bank charges, bank fees, money, cut, Bank charge, account holders, Banking, bank charges

Be Wary of Christmas Clubs

Christmas Clubs are advertised as a way of saving money for the expenses you incur during the Christmas season. You invest an amount of money each month during the year and get your money back in December just in time to buy your Christmas presents. Actually you don’t receive cash that you can spend wherever you wish, but you get the money back in the form of cash vouchers that you can only use in specific stores.

Budgeting for Christmas is something that everyone should start doing in January of each year. By setting aside an amount of money each month, you will have the money you need for the season to cover the expenses of extra groceries and decorations as well as gifts for family and friends. In this way, you can avoid the headache of having bills coming due in January for the purchases you made on your credit cards during December and for which you have to spend the rest of the year making payments to bring down your outstanding balance.

When the Fairfax savings club collapsed just before Christmas in 2006 there were about 15,000 families who never saw any of the money they had paid into the club during the year. As a result, they incurred a lot of extra expenses for Christmas that year.

The Christmas Prepayment Association has reduced the possibilities of such a fiasco happening in the future. This is a regulatory body that has been established to oversee the operations of such savings clubs as Country Christmas, Family Christmas, Park Christmas, Variety Christmas and Post Office Christmas.

The regulations in place will ensure that if any of these clubs do encounter financial difficulties and have to declare bankruptcy, those who do have savings with them will get the cash vouchers they were promised.

One of the main problems with using such a club as a way of saving money for Christmas is that you can only take out the money in December. If you have an emergency at any other time of the year, you will not have access to the cash you have saved because it cannot be withdrawn during the year. Thus if you lose your job, as is the case with many UK families during the recession, you cannot get back what you have paid in to tide you over.

Another disadvantage of the savings club idea is that although you do get all the money back that you paid into the scheme you don’t make any money on the savings. The club does not pay any interest. Even though the amount of interest paid on savings accounts by banks is very low at the present time, at least you do earn some money.

When you want to save money for Christmas, it is better to open a savings account. There are many such accounts available in which you can make deposits of any amounts during the year from £10 to £250, such as that offered by Skipton Building Society Christmas Savers Account. You earn about 3.23 % interest on your money, but like the other Christmas clubs, you can only withdraw the money after November 25 of each year.

Tags: body, Banking, need, outstanding balance, office christmas, christmas clubs

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: uk economy, bank, Banking, Tim Geithner, recessions

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

Possible lower deposits for first time buyers

It has been claimed that many first time buyers could find that they are able to get mortgages with lower deposits over the course of this summer, following a turbulent period where lenders have been demanding sky-high deposits that first time buyers simply cannot afford, which has further impacted on the downfall of the property market. Read more

Tags: downfall, low deposit mortgages, deposit, credit, previous property, economics, Banking, first time buyers

National Savings & Investments sees record deposit levels

According to a recent report the level of savings being deposited into National Savings & Investments by consumers in the UK has hit record levels, and more and more worried consumers look for a safe place in which to place their hard earned cash. Read more

Tags: National, National Savings & Investments, money, National Savings, Banking, savings accounts, investments

Deposit free mortgages were a bad idea

City Minister, Lord Myners, has recently stated that the 100 percent and 125 percent mortgages that many lenders used to offer to borrowers in the UK were a bad idea. Myners described these mortgages as ‘foolish’, adding that banks should never have offered these mega mortgages. Read more

Tags: uk, result, huge deposit, accountability, Banking, Britain, deposit free mortgages, free mortgages

Buyers attracted to property market due to low interest rates

A recent report has shown that a rising number of potential property buyers are being attracted to the property market recently as a result of the historically low interest rates. Read more

Tags: low interest rates, buyers, government, survey, Banking

RBS unveils huge losses

Banking giant, Royal Bank of Scotland, which also owns NatWest, has recently revealed huge losses of around £28 billion, which reflects the biggest loss in British commercial history. Read more

Tags: rbs, Banking, confidence, bailout packages, history, package, prime minister

Mortgage rationing could get worse states CML

The Council of Mortgage Lenders has recently warned that mortgage rationing in the UK could continue to get worse, adding that mortgage lending has already been restricted for the past year due to the effects of the global credit crunch but that the restrictions on lending levels could get even worse over the coming year. A senior official from the CML, Michael Coogan, said that things could get increasingly difficult for many people as a result of the ongoing restrictions on mortgages. Read more

Tags: whilst, Banking, first time buyers, mortgage, lending levels, deposit requirements, mortgage rationing

Man claims his Abbey account was frozen in revenge

A man who gave a low rating to an employee at a call centre at Abbey bank said that he had his account frozen out of revenge. The customer of the Spanish owned bank said that he had found the customer services representative at the call centre to be ruse and arrogant, and when he had been asked to complete a survey on his experience he gave the lowest scores to the employee, which he felt was justified. However, he says that as a result his account was frozen in revenge. Read more

Tags: abbey, bank account, business, revenge, massive inconvenience, standing, money back

RBS announced higher number of branches to open on Saturday

The Royal Bank of Scotland, which also owns NatWest, has recently announced that there will be a greater number of branches for both RBS and NatWest opening on a Saturday, which will provide consumers with increased ease and convenience if they need to visit their bank. Officials from RBS said that the decision to increase the number of stores opening on a Saturday was down to increased demand from its customers. Read more

Tags: Banking Services, Financial services, demand, convenience, whilst, Banking, royal

Will inflation levels get worse before they get better?

The financial headlines has recently been filled with news about the soaring rate of inflation, and this comes as no surprise given that the rate of inflation has soared to its highest level since records began in 1997. For some months now the rate of inflation has been steadily rising, and it has been soaring above the government’s target of 2% for some months now. For July the rate of inflation hit an all time high of 4.4%, which came as no surprise to many who had already predicted that the rate of inflation would keep on rocketing. Read more

Tags: stagnant economy, inflation, economics, control, Stagflation, degree

Curb to charges could mean increase in bank fees

Britain could see an end to free banking in the near future depending on what happens with the banks charges case, and whether the fees that banks are allowed to charge for overdraft fees and charges can be curbed. If the charges are cut then banks and other financial institutions may decide that they are going to try and recoup the costs by imposing hefty service fees and charges elsewhere. Read more

Tags: road, savings, british bankers association, twenty years, Banking, increase, unjust charges

Lenders urged to tighten checks

Although consumers need to take responsibility for their borrowing, lenders must tighten their credit checking measures, an expert has urged.

Simeon Linstead, head of personal finance at price comparison website uSwitch.com, made his comments following research which showed 84 per cent of people who successfully applied for credit cards over the last 12 months did not have to provide proof of income.

This means 4.8 million people did not have to prove the details they gave in their forms, while 14 per cent of successful applicants claim they were not asked about their income and outgoings at all.

Mr Linstead remarked: “It is too early to say if the amendments to the Banking Code are resolving these problems but there is clearly an urgent need for watertight measures to be put in place to ensure that the banks are lending responsibly.”

At the end of March, various amendments were made to the Banking Code, designed to ensure new commitments to responsible lending are made by credit providers.

Tags: amendments, Banking, credit checking, comparison, credit, outgoings, Financial institutions, need

Make your money work hard for you, advises expert

Newcastle Building Society has urged consumers to ensure that “their money is working as hard as possible for them”. Read more

Tags: demand, money, last september, Newcastle Building Society, Financial economics

‘Fixed-rates offer peace of mind’

The Newcastle Building Society has said that savers looking for “peace of mind” when they open a savings account should opt for fixed-rates, as they can be sure of the returns on these types of products.

Steve Urwin, senior marketing executive at the building society, said accounts with building societies not only give savers good returns on their money, they also act as a “safe” because they have additional protection.

Mr Urwin commented: “Savings are protected by the investor protection scheme, in addition to housing their money in a trusted institution.”

The number of people opening accounts with building societies reached record levels last September, according to reports.

It was also found that savings accounts and cash Isas were the most popular products, with the demand for Isas up by almost a fifth.

Mr Urwin said that people should take advantage of Isas because most other types of savings are subject to tax.

Tags: Financial services, money, investor protection, building, Banking, Business Finance, society, Marketing

Consumers need to be encouraged to use Isas say financial experts

More needs to be done to encourage savers to put their money into individual savings accounts (Isas) by showing them the benefits of the products, one financial expert has claimed.

Findings from research from Nationwide revealed that one in ten savers topped up their Isa by more than £3,000 while only 8 per cent of Isa holders increased their limit by over £3,000.

Up to half of those questioned in a recent survey said they would like to save more money in Isas but do not have the funds to do so.

Matthew Carter, director for savings at Nationwide, said that with just over a week to go before the new Isa limits come into force, more needs to be done to encourage people to take advantage of their Isa allowance.

“With one in ten ISA holders opting to save in a regular savings account instead of their ISA, it’s essential that consumers are educated about the benefits of tax-efficient savings and how most Isas allow instant withdrawals,” he added.

The deadline for submitting an application for an Isa is April 5th.

Tags: research, individual savings account, matthew carter, Rob Fisher, Banking, application

British parents help children choose first home

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

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

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

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

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

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

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

Consumers need to be ‘wary’ of introductory Isa offers

Consumers have been warned by a financial expert to tread carefully when considering introductory offers on individual savings accounts (Isas).

Bestinvest said that introductory offers emerge when an Isa product first launches, which means no one can know the track record of a fund manager or how well it will perform.

Adrian Lowcock, senior investment adviser at Bestinvest, said: “You have to be a bit wary of them, and know what you are getting into. We tend to recommend fund managers that have a proven track record.”

He added that that one way to get “good value” with a deal is to find an advisor who will offer a discount and charge a low rate of initial commission.

Figures released in November 2007 by HM Revenue and Customs showed that the amount of money saved in Isas has now reached £208 billion.

According to the BBC, the total value of Isas has risen sevenfold from £29 billion since April 1st 2000.

Tags: Banking, bbc, investment, sevenfold, individual savings account, november, bestinvest, value

Increasing benefits to offshore banking

As increasing numbers of Britons move abroad there are increasing benefits to be found in banking offshore, one financial expert has claimed.

Natwest said that if you are working abroad or moving abroad benefits are “around the taxation side”, with consumers having increased access to specifically designed products.

Dave Isley, head of NatWest International Personal Banking, said: “Banks are becoming more and more sophisticated at providing very good products to help them do that.”

He adds that those looking to move abroad should ensure that consumers do their research “very carefully” as each country varies in terms of medical assistance and housing.

Consumers moving abroad need to know that they can afford to live there comfortably, Mr Isley concluded.

The comments come after Natwest’s latest report on British expatriates from across the world.

According to the new research, the desire for a better way of life was a strong reason to leave the UK, with over a third (37 per cent) of expats surveyed putting quality of life as their top factor for living abroad.

Tags: quality of life, financial expert, Legal entities, Banking, factor, access, United States, research

Pensioners increasingly in debt

Despite the credit crunch, borrowing levels have continued to rise and debt levels are increasing with the over-55s being the worst offenders, according to financial experts.

Research from Callcredit reveals that the elderly are the most uncertain about their future with 16 per cent of respondents over-55 financially unaware and unable to define their debt levels.

As a result the pensions gap is continuing to increase, claim the organisation.

Mark Ward, consumer debt expert at Callcredit, said: “It is essential that people start to borrow more carefully in order to avoid having to owe more than we are able to pay back.”

Over 1.5 million of those aged 55 and over claim they can’t afford to retire at state retirement age due to a lack of pension savings.

Another 1.1 million retired homeowners in the UK have outstanding mortgage on their home, with an average debt of £38,000.

Callcredit is a consumer credit reference agency and forms part of the Skipton Information group.

Tags: Banking, United Kingdom, reference, lack, finance, 1 million, information, Labor

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, Children lost millions, Grupo Santander, GBP, bank, Banking, Farm, worth

Rise in online banking reflects ‘pace of life’

The increasing use of online banking services by consumers reflects the “pace of life”, according to a leading financial association

The British Banking Association (BBA) agreed with the findings of a recent survey by Lloyds TSB, which revealed that over 50 per cent of the British public had not seen their bank manager for more than ten years.

However, the BBA believed that this was a matter of “simple convenience” rather than consumers avoiding their financial responsibilities.

Lesley Mcleod, spokesperson for the BBA, said: “We think that this is more to do with the way people live their lives these days, the pace of life is such that people are increasingly using the internet or a hole in the wall facility to do their banking.”

She added that bank managers and advisers are still available if required by savers.

“Banks are there to offer a service and they are happy to do so, but they are not a nanny facility for people,” she added.

The survey from Lloyds TSB revealed that just over a third of respondents had visited their bank manager in the last two years.

Tags: banking association, british, Banking, respondents, Economy of the United Kingdom, internet, British public, nanny

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: king, england, rock, northern, crunch, Banking, bank

Majority prefer printed bank statements

Managing your finances online may be a growing trend, but the vast majority of people still prefer to put their faith in the printed word and the postal service.

A new survey on consumer attitudes towards banking has found that almost nine out of ten people (88 per cent) still prefer to receive bank statements by mail, and that the post remains the favoured means of communicating about financial matters for 70 per cent.

Even amongst those who are keen on internet banking, 68 per cent still like to see a physical copy of their statements drop through the letterbox.

A similar proportion (67 per cent) find it easier to understand their bank statements in print than on screen.

The research has been carried out by the Henley Centre for Royal Mail.

Abi Wood, Head of Financial Marketing at Royal Mail commented on the findings, saying: “Internet banking has undeniably revolutionised modern financial services as more consumers want the accessibility it provides.

“However it is clear that traditional communication methods are still incredibly important to individuals of all age groups. Banks should continue to investigate the different and complementary roles that the different channels play for the modern consumer.”

Tags: trend, Banking, Financial services, Marketing, online, post, abi

Savings could hit one trillion in five years

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

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

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

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

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

Tom Smith
8th November 2007

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

Start saving if you are under forty

According to a recent report younger consumers in their twenties and thirties have become so reliant on credit that many are simply spending all of their money on frivolous spending or repaying debt rather than putting money away for their future.

Twenty and thirty-somethings are now being urged to put money aside into savings or investment for their future to reduce the risk of being left without an adequate retirement fund when they reach retirement age.

The government’s state pension has declined over the years, and with increased life expectancy and higher living costs to also consider younger consumers now need to start thinking about their future in terms of how they will manage financially.

Historically, most people in their twenties and thirties tend not to think much about mortgage provisions, but this has become an increasingly important consideration for the younger generation if they wish to enjoy a certain standard of living when they come to retirement age.

One official advised younger consumers to start putting money into savings or an investment fund as early on as possible to ensure that they had a tidy sum available for when they retire. Increased life expectancy means that consumers must put aside more money to cover the cost of living after retirement, and this has made it even more important for younger consumers to start putting money aside as early as possible.

Consumers in their twenties and thirties are advised to cut back on their frivolous spending, try and avoid getting into further debt, and start putting money aside on a regular basis. Many younger people are wasting a small chunk of their income each month on repayment of interest on their debts, all of which could be used towards saving for the future.

Tom Smith
5th November 2007

Tags: save, interest, Banking, wages, earnings, future, saving, salary, retirement

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: societies, bank, Banking, deposits, information, building

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

Interest payments on current accounts to be abolished by First Direct

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

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

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

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

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

Tom Smith
26th October 2007

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

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

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

Lloyds reductions in charges may not be all that great

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

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

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

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

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

Tom Smith
20th October 2007

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

Court still allowing consumers to sue over bank charges

The row over unlawful and unfair bank charges has been raging for some time, and many bank customers have managed to reclaim past charged for exceeding the overdraft limit and for returned cheques and direct debits – some going back up to six years – after UK financial regulators stated that the fees were unjust and unfair last year. Finally, earlier this year, regulators and banks decided that a test case was needed in order to determine whether or not the charges were fair.

In the meantime courts and judges were advised that pending cases filed by bank customers that were trying to reclaim their charges could be put on hold until after the test case had gone ahead in order to make a decision easier. However, despite this many consumers are continuing to successful sue their banks, which indicates that many courts and judges are continuing to let these actions to through.

One claimant who won nearly £3000 stated that her case was only heard as a result of the bank not turning up to defend itself. She stated: “When it was my turn, I found out that there was nobody from Abbey to deal with my case and went in to face the judge alone. She told me that as Abbey hadn’t turned up to defend against me, she would be finding in my favour, but had Abbey turned up, she would have granted a stay, as that was what they were all doing until after the test case.”

Apart from in Wales, and in Devon and Cornwall, where a blanket stay of outstanding cases has been granted, courts and judges can make their own decisions, and many are doing this on a case by case basis according to some officials.

• Claimants strike back at banks

Tom Smith
29th September 2007

Tags: blanket stay, bank charges, fee, september 2007 court, bank customers, test case, Banking, decision

Over 50s could enjoy great deal on their savings

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

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

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

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

Tom Smith
27th September 2007

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

Britain gets saving

According to recent report there are now more people in Britain saving up their hard earned cash than there were at the same time last year.

The research was carried out by Birmingham Midshires, which showed that the number of people putting their money into savings had risen compare to a year ago. However, the research also showed that the amount of money that was being put aside in savings was actually down by a third compared to the same time last year.

Although the rise in the number of people putting money into savings is encouraging, showing that more people are realizing the importance of putting money aside, the level by which the amount of money being saved has fallen does not make for very encouraging reading. Around 67% of consumers are now putting money aside into savings accounts compared with 62% this time last year.

Some officials think that the rise in interest rates has shocked many people into putting aside money for emergencies rather than spending it frivolously, but for the same reason Brits are not able to put aside as much as they were last year because rates have risen five times since then and therefore mortgage repayments are way higher than they were in August of last year.

One official from Birmingham Midshires stated that putting money aside is a good idea. He stated: “It’s easier said than done but it’s recommended that people have three months’ salary put aside in case of financial emergencies – this equates to £5,899 for those on an average income.” However, with another interest rate rise on the cards many people cannot afford to put as much away as they might have done a year ago, with many struggling to keep up with their repayments.

Tom Smith
21st September 2007

Tags: earn, compound, bank, interest, internet, account, Banking, grow, savings

Lenders ‘must be responsible’ under code

Under the terms of the Banking Code, lenders must ensure they are extending credit to people in a responsible way.

Adrian Lloyd, spokesperson for the Banking Code, said that lenders are committed to ensuring that people can only borrow money if they are realistically able to repay it.

“What the code actually says is: ‘We will assess whether we feel you will be able to repay the borrowing’,” he said.

“It’s something we do take seriously, ensuring that lenders under our code do dually go through a proper credit assessment and not necessarily get into difficulties.”

Mr Lloyd added that should borrowers find they are struggling with repayments, the code also includes guidance for how lenders should deal with it.

“If things do go wrong and people get into financial difficulties then our code also says quite a lot about how to handle cases of financial difficulties under the general heading that people must be treated sympathetically and positively,” he explained.

According to figures from CreditAction each adult in the UK owes an average of £28,550, including mortgages.

Tags: finance, uk, difficulties."mr lloyd, Banking, Mr Lloyd, Lloyds Banking Group

Mortgage lending on the rise

Figures released by the British Banking Association (BBA) show that mortgage lending has reached a total of £21.3 billion in July, an increase of 12 per cent on last years’ figures.

The average mortgage loan rose to £156,900 in July, which is a rise of 13 per cent from July 2006.

Net mortgage lending growth rose to £5.7 billion, with unsecured lending rising to £200 million.

BBA head of statistics, David Dooks, said: “With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks’ lending in July.

“Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks’ lending to continue over the next couple of months.”

Building society lending is not included in the figures – which reflect higher overall levels of remortgaging activity.

Tags: Banking, mortgage, british, cent, statistics, David Dooks

Bank says there is a “lack of understanding” in offshore banking

Offshore banking suffers in the UK from a “lack of understanding”, NatWest said today.

Traditionally thought of as offering tax benefits and little else, the bank says that offshore banking gives the customer a raft of advantages if they have “international requirements”, and that the service had “changed” over the past decade.

Head of international private banking for NatWest Julian Gouge said that those who retired abroad might have particular reasons to bank offshore, though he admitted that “there is a degree of complexity” to the understanding of the international taxation systems which is necessitated by the service.

“It’s [about] having an understanding of what you’re doing and when you’re going, in the same way that you would medical facilities or whatever before you go overseas” he added.

“Like all the things, the majority of people think it’s probably best to look at these things beforehand, and the tax is no different.

“I think there probably is some nervousness using them, but just because there’s a lack of understanding if anything,” Mr Gouge surmised.

Tags: Private banking, Taxation, Banking, past decade.Head, natwest, Legal entities, NatWest Julian Gouge, complexity

Free banking under threat, says BBA

Banks in the UK might introduce wide-ranging extra charges on current accounts, the British Bankers Association (BBA) said today.

The BBA said that the charges, likely to be fiercely contested by consumer groups, will bring the UK into line with regulations in the US, Australia and Europe.

Charges would include fees being levied to write cheques, to pay bills by direct debit and even to use cash machines.

According to a BBA, spokesman, the new fees would “follow patterns abroad where banks charge for transactions such as ATM use, direct debits and standing orders, in addition to an annual fee.”

The statement could be seen as a reaction to the bitter battle banks are currently locked in with customers and the Office of Fair Trading (OFT), over what is seen as their “unfair” charging procedures.

The Financial Services Authority (FSA) is currently investigating banks’ overdraft charges, and will release their findings in the autumn.

Tags: financial, Banking, Fair Trading, standing, today, bitter battle banks, overdraft, fsa

Halifax sets up dormant accounts service

Halifax announced today that it will be reuniting customers with money held in lost or forgotten-about bank accounts.

It is estimated that a total of £44 million is being held in so-called ‘dormant’ accounts.

Around 20,000 of its customers will be written to, with the savings bank estimating that these customers hold around £40 million of the total.

Halifax have also set up a website, halifaxlocateaccounts.co.uk, where customers can fill in and submit an online enquiry form to find out about dormant accounts that might be retrieved.

Mike Regnier, head of savings at Halifax, said that “the response to our campaign to reunite customers with their funds has been very encouraging, and we believe these next steps in the process will help more customers track down their money”.

An advertising campaign is scheduled to run in the press next week, to raise public awareness of the scheme by acting as a ‘memory-jogger’ for customers.

The bank is currently the only one in the UK to carry a dormant accounts reunification service.

Tags: dormant accounts reunification, enquiry, forgotten-about bank accounts.It, Banking, head of savings, reunification, dormant accounts, Awareness

Further disappointment for ING Direct customers

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

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

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

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

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

Tom Smith
26th July 2007

Tags: Banking, customers, rises, accounts, england, rates, leave, bank, base, interest. lower

Do your kids have the right savings account?

Banks and building societies have come under fire on many occasions over the past year due to the failure of many to pass on the full level of interest rate rises onto savers whilst applying the full amount and sometimes more besides on borrowing.

And it seems that it is not only the adults savers of the UK that are getting a raw deal with some banks – many are paying even less in the way of interest on savings accounts for younger savers, often paying way below the Bank of England interest rates.

According to recent reports some savings accounts for younger savers pay under 4 percent in interest, which is over 1.5 percent less than the current base rate. Amongst those paying considerably less than the base rate on children’s savings accounts are C&G, Royal Bank of Scotland, Birmingham Midshires, the Woolwich, and Barclays. Even where balances on the accounts are close to one thousand pounds, many of these banks and building societies pay poor interest rates compared to the current base rate in the UK.

On the other hand there is a great deal on children’s savings account with the Nationwide. The interest rate on the Smart Account with Nationwide has been hiked up to 5.78 percent before tax, and in addition to this the Nationwide has pledged to pay at least 0.25 percent more than the base rate until 2010. This savings account is available to those up to the age of eighteen, and with this impressive interest rate and guarantee younger savers can look forward to seeing healthy returns on their savings.

A number of other banks and building societies are offering some impressive deals on savings, and consumers with kids that are getting a raw deal on their savings should look around and compare different accounts to see whether there is something more suitable available

Tom Smith
29th June 200

Tags: accrue, account, interest, savings, payments, kids, Banking

Unexpected bills catching us out

We are regularly being hit with a bill or expense that we have not budgeted for.

That is according to new research by Abbey which shows that in the last 12 months, 79 per cent of us have had to fork out an average of £1,375 on an unexpected outgoing.

Abbey calculates that we have spent a combined £48.7 billion in this way in the past year and says that home repairs are the most expensive unexpected cost.

Around 36 per cent of Brits spent £1,206 on home repairs, 42 per cent had to stump up for surprise bills and 29 per cent spent £447 in the last year on unanticipated travel expenses.

Most of us might feel pretty hard done by if we were hit by an unexpected cost but Abbey points out that if we kept control of our banking situation, we would be prepared to deal with the surprise expenses.

“You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a ‘buffer savings fund’ to help deal with these shock events,” said Reza Attar-Zadeh, head of savings at Abbey.

“Most experts recommend that you build up a fund of at least three months salary in an instant access cash account.”

The research also found that people living in Wales were the best budgeters, while those in the south-east were the worst.

Tags: salary, money, surprise, Building Types, travel, Banking, shock events, Business Finance

Overdraft interest rates go up

Recent reports have indicated that some banks and lenders have raised their overdraft interest rates by huge amounts over the past year, by far exceeding the interest rate rises that have been imposed by the Bank of England in terms of the base rate. Read more

Tags: overdraft, banks, Banking, interest rates, bank of england

British savers are ‘fantasists’

Millions of Brits are failing to plan their banking properly and this could lead to problems in the future.

National Savings & Investments (NS&I) has slammed 33 per cent of Britons as financial fantasists.

Its research shows that many of us are expecting to see our wages increase or are hoping for an inheritance windfall to help us out.

The NS&I Quarterly Savings Survey showed that 24 per cent expect to see their wages increase, five per cent think they will be able to borrow whatever money they need and four per cent are hoping to receive some inheritance.

However, 55 per cent say that they do not have a financial plan in place and NS&I points out that it is folly to wait in hope for financial changes that may never arrive.

“It’s a real concern that such a high percentage of people haven’t made a financial plan for their future and even more worrying that a significant number are basing their financial security on their future earnings potential,” said Dax Harkins, senior savings strategist at NS&I.

“There’s never any guarantee that people will earn more as they get older so it’s really important that people start their financial planning and start saving as early as possible.”

Women are less likely than men to have a financial plan for the future in place.

Tags: NS&I points, business, plan, National Savings & Investments, Banking, britons

Online banking is booming

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

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

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

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

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

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

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

Tom Smith
11th June 2007

Tags: bills, bank, online, services, accounts

Homebuyers ‘prudent’ over mortgages

Homebuyers are increasingly prepared to take special measures to avoid getting a mortgage that will push them to their financial limits.

As the Bank of England continues to increase interest rates, many first-time buyers are cutting back on other expenses so that they will be in a better position to cope should rates rise further.

Research by Yorkshire Bank shows that 24 per cent of buyers are keen to avoid maxing out on a mortgage and this is leading to a change in lifestyle for many.

Almost a quarter of those asked said that owning their own home is so important to them that they are prepared to give up holidays, nice cars and cut back their social life to be able to afford one.

With 77 per cent of Brits apparently expecting further interest rate rises in the next year, it is little wonder that so many people are looking ahead and do not want to strain their finances too much.

“What our survey shows is prudence, not panic – all the signs are that the market will still remain strong,” commented Gary Lumby, head of retail at Yorkshire Bank.

“But with rises in the Bank of England’s base rate and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become a little more cautious with their borrowing.”

The research also found that 70 per cent of buyers expect house prices to increase in the next 12 months but only 17 per cent are prepared to offer the full asking price right away.

Tags: rise, first time buyers, economics, yorkshire, retail, rate, Banking

20yrs of debit cards

Barclays will soon be celebrating 20 years of debit cards after it launched the UK’s first on June 3rd 1987.

The bank broke the mould when it introduced the Barclays Connect card and changed the face of banking forever.

Within nine months of its launch, one million people had a Connect card in their pocket and the debit card has gone from strength to strength ever since.

Today, around 68 million debit cards are in circulation, with many people owning more than one.

A total of 143 debit card purchases are made every second, 6.8 billion transactions take place each year and debit cards out number credit cards.

“Plastic has revolutionised the way people spend money over the last 40 years,” said Brian Cunnington, head of debit cards at Barclays.

“Ever since Barclaycard became the first credit card in Europe in 1966 the nation’s spending habits have changed.

“The introduction of debit cards 20 years later gave consumers even more flexibility allowing them to withdraw cash from ATMs as well as to have payments deducted directly from their current accounts when they paid in shops,” he added.

Debit cards have remained popular through slight changes that keep them up to date, such as the introduction of Chip and PIN technology.

Tags: money, pin technology, card, banking forever.Within, uk, Payment systems, Product Release, Banking

New buyers need parents’ help

It is becoming so difficult for first-time buyers to get onto the property ladder that 31 per cent anticipate getting help from their parents to do so.

A further 35 per cent are so daunted by the housing market that they feel they need financial help in order to get their first mortgage,

Research from the Council of Mortgage Lenders (CML) shows that younger people are genuinely struggling to get onto the property market without some kind of financial help.

Figures show that 23 per cent of all homeowners had help from their parents to get where they are today, while that number soars for younger owners.

Of those aged under 29 or younger, 39 per cent had help from their parents and it seems as though this trend is set to continue.

“We were intrigued last year to find that, while around eight out of ten people believed it had never been harder for first-time buyers to enter the market and that action was needed, only eight per cent of them felt that parents should do more to help,” said Bob Pannell, head of research at CML. “Our new research helps to explain why.

“Over the past few years, parents have already been providing significant help to younger home-buyers and there is uncertainty about whether they can do even more.”

Of those who said they think they will need financial help to get onto the property ladder, only 62 per cent expect to get it.

Tags: order, Banking, younger owners.Of, Council, mortgage, kind

Consumers having problems finding online savings accounts

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

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

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

More information: The Process and Benefits Of Switching Bank Accounts

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

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

Tom Smith
13th May 2007

More Information:

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

Tags: locked, switch, Banking, higher, inflation, savings, accounts, earn, interest, rate

Consumer pressure mounts for bank fee refunds

The consumer campaign to reclaim the fees banks charge when a cheque bounces or customers exceed their overdraft limit was given fresh impetus this week when barrister Tom Brennan took his bank, NatWest, to court.

Mr Brennan, who is 30 and newly qualified, has said he would be putting his personal finances on the line by suing NatWest for alleged injustice, abuse of power and unlawful conduct.

His case is in its early stages as he seeks permission from the City of London County Court to sue the bank.

But it could become an important test-case for other consumers as well as improving awareness of the issue.

Mr Brennan’s case rests on his claim that the charges are “unfair because they do not reflect the actual loss to the defendant”.

To charge a customer £38 when a payment bounces is, he argues, “egregiously invidious” because it is disproportionate to the administrative cost to the bank.

Millions of people have now written to their banks to demand that penalty charges be refunded immediately.

Tags: fees banks, case, Business Finance, cheque, Law Crime, alleged injustice, limit, Banking

Customers could be losing out on savings accounts

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

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

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

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

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

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

Tom Smith
28th April 2007

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

OFT launches huge study into banking

The Office of Fair Trading (OFT) has announced that it is launching a wide-ranging study into personal bank current account pricing.

This will run alongside an investigation into charges for unauthorised overdrafts and returned items, making it the largest study into personal banking ever undertaken.

OFT officials will look at whether free banking offers customers enough transparency and value, while it will also focus on the fairness and impact of charges.

In addition, and perhaps crucially for the future of free banking, the study will look at the effect on consumers and competition if these type of current accounts became a thing of the past.

“This market study will enable the OFT to consider wider questions about transparency and value in the provision of personal current accounts,” said John Fingleton, chief executive of the OFT.

“This will provide the necessary context for assessing the fairness of unauthorised overdraft and returned item charge before we apply the law in this area.

“Our ultimate objective is a competitive retail banking market in which informed and active consumers drive strong competition and high levels of customer service among banks long-term, with minimum regulatory intervention,” he added.

It is unclear when the study will be completed but its findings could have a profound effect on the banking industry.

Tags: item charge, banking offers customers, Fair Trading, overdraft, charges.In addition, Banking, finance

Chip and PIN in the home

Online banking may be about to change forever after Barclays Bank revealed that it will be sending Chip and PIN card readers to people’s homes.

The initiative is designed to reduce the cases of online fraud and beef up security for those who choose to bank over the internet.

Customers who use their Barclays online account to make payments to a third party will receive their PINsentry device later this year.

It is hoped that by introducing the new devices, customers will no longer be required to remember a user name and password to make transactions and can instead simply punch in their PIN number.

“Barclays is constantly working to help protect customers and their money and that is why we have invested in this system,” said Barnaby Davis, director for electronic banking at Barclays.

“PINsentry is the next generation of fraud prevention technology and Barclays is proud to be the first organisation in the UK to roll it out to its customers.

“The popularity of Barclays online banking service comes down to convenience and security and the introduction of PINsentry will enhance both of these features,” he added.

Barclays plans to roll out the new service to half a million customers across the UK by 2008, with this number increasing in time.

Tags: online banking, barclays online banking, Banking, uk, Chip Authentication Program, year, online fraud, fraud

Credit card customers urged to check statements

UK payments association Apacs has urged credit card customers to check their statements carefully, as many people are currently guilty of not doing so.

According to research by the group, nearly half of all credit card users do not check their product statements thoroughly.

A surprising four per cent of respondents to the survey said that they never look at their credit card statements.

To help people make sense of communications from their provider, Apacs has created an advice guide explaining everything about the features and terms included in statements and giving hints on how to understand various details and terminology.

Sandra Quinn, director of communications at Apacs, said: “Although people are getting better at checking their statements, our research suggests that there is still a lot of work to be done.

“Armed with this advice guide we believe consumers will be better equipped to get the most from their credit card statement.”

The association’s study reveals that Yorkshire and Humberside is the worst region for ignoring credit card updates, with nine per cent of people admitting to never checking their statements.

Tags: Association, credit card statement, credit, apacs, economics, worst region, Banking

Mortgage aimed at FTBs

As first-time buyers (FTBs) struggle to get onto the property ladder a number of lenders are now releasing mortgages aimed specifically at them.

Earlier this month Nationwide announced that it had a fixed-rate 25-year mortgage to offer and now the Co-operative Bank is throwing its hat into the ring.

The firm is offering FTBs a mortgage which is designed to make the first steps onto the property ladder a little bit easier.

It comes with one per cent cashback, which will be helpful in covering stamp duty and any other costs that FTBs may incur.

In addition, the mortgage has a fixed rate of 6.29 per cent for five years and a free basic valuation.

Research by Co-operative Bank shows that many FTBs are still finding it extremely difficult to get onto the property ladder with cost being the main factor.

It is in response to this that the bank has chosen to release its latest mortgage.

“As house prices have continued to rise it is important that the lifeblood of the market – first time buyers – are given extra help to gain that all important first footing on the ladder,” said John Barker, head of mortgages at Co-operative Bank.

“At the Co-operative Bank we believe that new innovative mortgage products such as this should be developed to help alleviate some of the extra worry for first time buyers.”

FTBs are urged to make sure that they are completely aware of all costs before they enter into a mortgage agreement.

Tags: finance, co operative bank, main factor.It, worry, Banking, mortgage agreement, mortgage, FTBs

Isa deadline approaching

Consumers are being warned that they must not wait too long before putting their money in an individual savings account (Isa).

The Association of Investment Companies
(AIC) is telling consumers that waiting until the last minute can lead to disappointment.

The final deadline for putting money into an Isa is April 5th but the AIC is warning that some investment companies have their own deadlines in place.

“With just under a month to go until the April 5th deadline, investors may think they have plenty of time to make their Isa purchases,” said Annabel Brodie-Smith, communications director at AIC.

“Whilst it’s easy to leave things to the last minute, investors should be aware that many investment companies have deadlines well before then, so it’s important to act now to avoid disappointment.”

Isas have proved to be extremely popular since they were launched in 1999, offering people a great way of doing their banking in an efficient way.

Customers are given tax breaks on their savings and many find the fact that removing money early is a long process with some Isas to be very beneficial when it comes to saving.

If you are considering putting your money in an Isa start choosing the best one for you now as there are no concessions to the deadline of April 5th.

Tags: minute, concessions, Smith, April, Business Finance, deadline, Anime International Company, Banking

Double money for lucky bankers

A number of bank customers in Cambridgeshire were given quite a surprise when a cash machine began paying out double money.

Customers, who were merely doing their daily banking, were both surprised and delighted when they realised that they were being given twice the amount of cash that they were asking for.

Word soon spread and a huge queue formed outside the cash point, with everyone wanting to get a piece of the action.

The machine only handed out the wrong money for one hour and it is unclear how much was taken, but it is clear that the bank lost a substantial amount of money.

The error was down to a mistake made by one of the bank workers, who filled the £10-note dispenser with £20-notes.

Those who were lucky enough to get their hands on some free cash then got another surprise when the bank released a statement saying that they are allowed to keep the money.

“It was strange keying in an amount and finding you got double what you asked for,” one lucky banker told the Cambs Times.

“I’m amazed the bank has told me I can now keep the extra cash – there will be dozens of people celebrating their good fortune.”

Tags: Banks and Institutions, note, dispenser, Automated teller machine, dozens, bank workers, Banking

First-time buyers face unaffordable homes

First-time buyers were faced with the least affordable homes ever during November 2006.

That is according to the Council of Mortgage Lenders (CML), which has compiled data showing that the average homes cost 3.29 times the combined income of the buyers.

These figures represent the situation before the recent interest rate rises, meaning the market is likely to become even harder to get on to.

During November, the average mortgage for a first-time buyer was £113,877, with analysts saying that the recent interest rate rises will add a further £200 per year to the average mortgage.

“Month-on-month we see affordability constraints becoming more pronounced for first-time buyers, and last week’s interest rate rise will increase these pressures,” said Michael Coogan, CML director general.

Homeowners are now spending a record-breaking 17.8 per cent of their income on mortgage interest payments, but this has not stopped people from entering the market.

CML data shows that the number of first-time buyers is steadily increasing. In total, 37,000 people bought their first home in November, up from 35,300 in October.

“First-time buyers are clearly still keen to get on to the property ladder despite the growing financial hurdles, and it is essential that anyone wanting to buy their first home should look carefully at their finances and take a realistic view as to whether they can afford the costs of home-ownership if rates continue to rise,” added Mr Coogan.

Tags: mortgage interest payments, director, anyone, Banking, week, rate rise, Economy of the Republic of Ireland, Mr Coogan

Banks top mortgage lenders table

Banks remained the cheapest mortgage lenders for existing borrowers in 2006.

That is according to a new study by financial research company Defaqto, which also discovered that there was a huge difference between the cheapest and most expensive.

There was a difference of almost £500 between some mortgages, with HSBC being named the cheapest for standard variable rate mortgages or their equivalent.

HSBC was closely followed by Intelligent Finance, while the next three in the top five were building societies (Skipton, Nationwide and Britannia).

“Despite two Bank of England base rate increases last year, on average they did not change significantly from 2005 so it’s not surprising that it cost virtually the same to service a standard variable rate mortgage in 2006 as it did in 2005,” commented David Black, head of banking at Defaqto.

“While it is recognised that standard variable rate mortgages are only one type of mortgage, they can represent an important benchmark in competitiveness.

“This demonstrates why borrowers must take the time to check that they have the most appropriate mortgage,” he added.

The research was based on the amount of gross interest payable on a £50,000 interest-only mortgage and specialist providers, privilege and loyalty rates were not included.

Tags: bank, mortgage lenders, Banking, nationwide, Defaqto, interest rates, Mortgage loan, banks

Barclays customers hit by fraudsters over festive period

Many consumers that bank with Barclays have been receiving fraudulent emails from scam artists over the festive period, with the content of the emails designed to persuade them to provide their financial data such as account details and personal information. Millions of emails were sent out to Barclays customers over the Christmas period, with the fraudsters claiming to be from the Protection Department of the UK banking giant.

The emails that were sent out had the official Barclays logo on, as well as links to help line numbers. The emails went on to ask consumers to complete their account and financial information online. The conmen were then able to use this information to access customers’ accounts and conduct further fraudulent activity. The process of sending out fraudulent emails and setting up fake websites to obtain customers’ financial and personal details is known as phishing, and this is an activity that has seen a real increase over recent years.

Barclays officials have gone on to advise consumers that they should never respond to this type of email, as the bank states it would never send out an email asking a customers to provide their financial details. The bank also warned that anyone that has already responded to these emails by providing their data should contact the bank as soon as possible in order to get their bank account frozen to minimize the risk of further fraudulent activity on their account.

One Barclays spokesperson stated: ‘This is a mean thing to do at this time of the year. What these are, and our anti-fraud guys will have picked them up, are phishing emails. Barclays would never ask customers for personal details in e-mails. If customers get them, they should delete them straight away and not enter any details.’

For more free advice try any of the following sites:

• Citizen’s Advice
• Direct Gov
• FSA’s Money Made Clear

Tags: customers, email, scam, christmas, fraud, Banking

More UK people using online banking than phone banking

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

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

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

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

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

8000% Rise In Internet Banking Fraud

Many banks have started to offer online banking facilities in the UK, and some banks even operate exclusively online.  Although consumers seem to be growing increasingly confidence with regards to conducting their banking online, the alarming figures indicate that perhaps further information needs to be made available to consumers with regards to Internet banking fraud and how it works.

It seems that the main culprit in the rise of Internet banking fraud is a process known as phishing, and this is where fraudster set up fake website or send out fake emails in a bid to obtain the account details of consumers. Many consumers that are used to banking online don’t think twice about providing their details, but banks have already stated that they do not send out emails to account holders asking them to enter their account details.

Colin Whittaker, Head of Security for APACS, stated: “The rate of growth in phishing is down to a number of factors not least that they have been able to industrialize the process by which they are launching attacks. It seems people are falling victim to phishing attacks less often, which is one of the reasons there has been an increase in the volume of phishing emails.”

According to officials and watchdogs in the UK, millions of pounds have been swindled from unsuspecting consumers, who assume that any emails that they receive with the name of their bank on it must in fact be from the bank. However, consumers that receive such emails should never provide their account details, and should instead report the incident to their bank. 

Tags: internet, online, abuse, fraud, phishing, identity, theft, increase

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

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

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

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

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

Tags: bank of america, Banking, bank, ceo, uk

Bank claims that most consumers won’t be affected by new charges

Following its recent announcement to start charging UK customer a ten pounds monthly fee if they did not meet certain criteria, the First Direct Internet bank, a subsidiary of the HSBC Bank, has been defending its decision. The bank has been receiving calls from many angry customers who want to know why they are going to be charged a fee for using the bank’s services. The bank currently has around 1.3 million consumers, but some experts have warned that First Direct may lose a lot of its custom as a result of the new fee.

The new charge introduced by First Direct is due to come into force in February of 2007, and current account holders that do not pay in or maintain a balance of at least one and a half thousand pounds in their current account each month could find themselves being charged. Exceptions to the new charge are those customers that also have other financial products with First Direct, such as a mortgage, credit card, savings account, or loan.

One spokesperson from First Direct stated that he did not think that the bank would lose custom as a result of the new charges, and stated that most consumers that banked with First Direct would not even be affected by the new charges. He stated: “Around 85 per cent of our customers will still pay nothing after these charges are introduced. The only people affected will be those with just a current account, if they do not keep a balance of £1,500 or more. “

He also added: It’s possible that not a single one of our customers will pay the charges. We’ve got a great number of customers who’ve got accounts with us they don’t particularly use. We’re just asking those customers to bring more banking to First Direct to make us their first choice.”

Tags: Banking, interest, bank, savings, account, first, direct, fines, fees

Will other banks follow First Direct and charge fees on current accounts?

Following the shock announcement recently made by officials from First Direct Bank, a subsidiary of HSBC, that it intends to start charging customers that do not pay a certain amount into their current accounts each month, many are now wondering whether other banks and building societies will follow suits, bringing to an end the era of free banking for consumers in the UK.

First Direct made the announcement last week, shocking experts and customers by stating that a ten-pound monthly fee would be charged to current accounts that did not have at least fifteen hundred pounds in. It has now been revealed that Nationwide may also be looking into charging bank account holders in the same way at some point in the future, with one executive from Nationwide allegedly stating: “I don’t think we can rule out charging for current accounts totally although we have no immediate plans to introduce such charges at the moment.”

Halifax, on the other hand, have promised that it will not be introducing any such charges on current accounts, and is in fact planning to open three new branches in the UK, as it is thought that many existing First Direct costumers will now be eager to find alternative banking solutions in order to protest against and avoid the new charges being introduced by First Direct.

One official from the Halifax stated: “Halifax is committed to free banking, and we would hope that other banks and building societies share this commitment.” Sadly it looks as though First Direct do not share any such commitment, and the impressive reputation and customer base that this Internet bank has built up over recent years is likely to take a tumble over the forthcoming months, with consumers desperate to get their accounts switched to a non-charging bank or building society.

Tags: Banking, free, account, first, personal, interest

HSBC Becomes First UK Bank To End ‘Free’ Banking

20 years after HSBC and Barclays introduced the concept of free banking to the UK, HSBC have announced that it is now time to pull the plug on this popular product and re-introduce a charge for using its banking services.

At present, HSBC has announced that it will limit charging the fee to its online banking arm, First Direct.  Moreover, the fee charge of £10 per month will not be applied to all customers of First Direct.  The “lucky” First Direct customers who will find themselves subject to the £10 monthly fee will be those who fail to make deposits of at least £1,500 per month or those who do not maintain an average balance of £1,500 on their current accounts.

While it is true to say that the UK has remained one of a very few select countries to maintain free current account banking for those bank customers who do not go overdrawn, over time this has probably been one of the most popular products that major UK banks have offered.  Nevertheless, it seems, in this case, that the success of free current account banking in the UK has also been its eventual down-fall, with many leading UK banks having made grumbling noises over the past year or so that the because the UK has free current account banking, this no longer makes the banks competitive with their European and American competition, the majority of whom already charge for current account services.

To many of the 1.3 million customers of First Direct, however, this is going to be a bitter pill to swallow.  UK banks made record profits in 2005, so to now be told that the bank is no longer competitive with its overseas rivals merely because it has not been arbitrarily applying a monthly fee  £10 on certain financially disadvantaged customers may just sound a little like sour grapes.

Thankfully, other leading UK banks, such as Royal Bank of Scotland, Barclays, HBOS and Lloyds TSB, have decided not to follow the lead of HSBC at this time.  However, with most UK bank’s looking to recoup the estimated £1 billion in lost revenue following the Office of Fair Trading’s forced cut to penalties applied on late credit card payments, it would need optimism of the highest order to believe they won’t follow suit soon, a view clearly echoed by a spokeswomen for Royal Bank of Scotland, owners of Nat West, who, when asked RBS’s stance on the issue, was quoted as saying that: “There are no current plans, but you can never completely rule options out in the long term”.

In the meantime, the estimated 200,000 customers of First Direct who are likely to be directly affected by this latest move now have until February 2007, when the new charges will come into effect, to either get their accounts in order so that they do not fall foul of the new charges or to look for alternative free banking arrangements. 

Kindly, however, First Direct have given the 200,000 or so estimated customers it says will likely be effected by this move a ‘get out of jail’ free card: the bank will agree to waive the fee if the customer agrees to take out another First Direct product – such as a loan or insurance. 

Tags: Insurance, bank, charges, loan, lloyds, costs, Banking, uk

Banking Facilities Made Available For Migrant Community

With a vast number of new workers entering the UK on an annual basis, financial institutions have recently realized the need to offer banking facilities to those that have no national insurance number, no guarantee of employments, and no credit history within the UK. In the past migrant workers have found it very difficult to set up any sort of banking facility, leaving them in a difficult situation if they get work and need to have their salaried paid in.

With over four hundred thousand workers coming into the UK over the past twenty four months, a number of banks have now started offering facilities, such as HSBC bank, which now offers the passport bank account. This is a bank account that can be opened in advance for workers coming over to the UK, and gives workers moving to the UK valuable basic banking facilities. Account holders will have somewhere to have their salaries paid in, can use telephone and Internet banking, can set up standing orders and direct debits, and can enjoy the benefits of a current account with an International Maestro debt card.

However, HSBC has now hit out at an alternative solution that is being introduced by Mastercard. The credit card giant has introduced a pre-paid card onto which employers can pay the employee’s salary. The card holder can then use the card through the use of chip and pin technology, and it can be reloaded at one of thousands of post offices throughout the UK.

Both HSBC and the Halifax have stated that although the card might seem like a good idea for those desperate to obtain facilities and have found it difficult to open a bank account, there are hidden charges that can really add up and make using the card a very expensive alternative to a basic bank account.

Tags: faith, Banking, foreign, options, muslim, migrant, religion

Online Banking Fraud Rockets

Over recent years many UK banks and financial institutions have made online banking almost irresistible to consumers, offering bonuses and incentives for opening an online bank account, highlighting facts such as being able to conduct your financial transactions both day and night without having to worry about opening times and queues, and making it as convenient and easy as possible for consumers to switch to online banking. As a result many consumers in the UK now combine their regular banking with online facilities, and some have now joined banks that operate exclusively online.
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Tags: banking fraud, banks, Banking, fraud, online banking fraud

Student and Young Person’s Bank Accounts

Start at the beginning

Getting children to be interested in and understanding how to live with money is something they won’t usually learn at school. The earlier you can get them used to having a bank account the more able they will be to look after their money when they finally leave your protective influence and have to cope on their own. So what’s available to them when they do want to open a bank account? Read more

Tags: student bank accounts, young person bank accounts, birthdays, ideal teaching method, Banking

Can I Have More Than One Bank Account?

The more the merrier

You may have noticed that banks, building societies and credit card companies are crying out for your money as long as you have an income. All financial institutions have a duty to lend responsibly. Do they, and does having several bank accounts make a difference to the way banks treat you? Read more

Tags: secondary, more bank accounts, additional bank accounts, extra bank accounts, Banking, bank accounts

Bank Accounts For Bad Credit Applicants

With all the different products on the market today there must surely be a Bank Account available for somebody with a low credit rating. Or is there?

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Tags: time, Banking, Credit Cards, answer, bad credit, bad credit bank accounts, bank accounts, FSA Banking articles