Increase in deposit protection planned by government

According to a recent report the government is hoping to provide the nation’s savers with increased security and peace of mind by increasing protection on deposits that are made into financial institutions. Until last summer only a couple of thousand pounds of consumers’ savings benefited from the government’s 100% guarantee. However, after the Northern Rick crisis, where savers withdrew billions of pounds worth of savings amidst fears that the bank was on the verge of collapse, the government raised this 100% deposit to the first £35,000. Read more

Tags: deposit protection, poorest brits, british, level, recent reports, financial struggles, government

Uninsured drivers “think they can get away with it”

With as many as 350,000 uninsured motorists on the roads last year, there is concern that people do not view driving without insurance as a serious crime, believing instead that “they can get away with it,” says the British Insurance Brokers’ Association (BIBA).

One reason for this may be that the government has never come out with a campaign condemning uninsured driving and whilst people are aware that they should wear seatbelts, tax their cars and not drive after drinking, this issues does not seem to be on “everybody’s radar”.

Graeme Trudgill, technical and corporate affairs executive for BIBA, said: “People just don’t see it as a serious crime, they think they can pay £500 in insurance, or drive without it and if they get caught, they pay a £100 fine and that’s not too scary.”

According to MoneyExpert, 18 to 24-year-olds are the most likely to drive uninsured and 11 per cent of uninsured drivers say they can’t afford the premiums

BIBA says a new enforcement agency is going to be launched next year which will make uninsured driving more difficult and police now also have the power to seize vehicles if the driver is not covered.

Tags: british, everybody's radar".graeme trudgill, whilst, power, Driving, government, police, finance

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: British public, internet, respondents, Banking, nanny, british

ABI calls for increased help with flooding problems

June and July of this year saw heavy rains and bad weather really take their toll in some areas of the UK, causing billions of pounds worth of damage to home and resulting in rocketing numbers of insurance claims that have cost the insurance companies dearly.

Claims for damage to home have been flooding in since June, and insurance companies have had to pay out millions of pounds each in some cases to cover the cost of the claims.

The Association of British Insurers is now calling on the government to provide increased protection against future flooding, stating that although the government has planned to put aside funding for this problem around £150 million more is needed to minimize the risk of this situation arising again in the future.

Stephen Hadrill, director-general of the ABI, stated: “The scale and impact of the floods has been massive. The cost to the industry of over 60,000 claims is approaching £3bn and more claims continue to come in.”

In a letter to the Environment Secretary, Hillary Benn, the Association of British Insurers stated that some drains and watercourses were blocked as the result of poor maintenance.

The letter stated: “Some defences will have been put under great pressure in recent events and will need to be checked and possibly strengthened.”

The ABI also stated that “an urgent review is needed of how best to maintain urban and rural drainage”. 

Mr Hadrill said that this should include “whether expenditure is adequate, and how to co-ordinate better modelling of flood risk and planning of alleviation measures.” A number of areas of England were particularly hard hit in June and July as torrential rain caused major flooding across the country. As a result of the claim levels from the flooding insurance companies have had to hike up rate by up to 10% in some cases.

More info: www.abi.org.uk/floodinfo

Tom Smith
5th September 2007

Tags: torrential, british, flood, abi, rain

Rush on remortgages amidst fear of rate rises

July of this year saw over a billion pounds worth of mortgages being taken out each day with many homeowners deciding to remortgage amidst fears that that interest rates would continue to rise following five interest rate hikes in the space of a year.

The highest in over six years the base rate currently stands at 5.75%, following five rate hikes of 0.25% each since August of last year. Many homeowners have had to cope with rising repayments as their mortgage repayments have soared along with interest rates.

According to figures from the Council of Mortgage Lenders nearly £35 billion was borrowed in the month of July on mortgages, which reflects a 13% rise on the amount that was borrowed in July of last year. According to the CML this increased figures result from the surge of homeowners that have decided to remortgage in order to try and get a better deal on their mortgage in the light of the series of interest rate rises that have taken place – and the threat of further interest rate rises that may yet take place.

A spokesman from the British Bankers Association stated: ‘Longer-term trends in mortgage lending are little changed but July’s strong rise was surprising, given the expected cumulative impact of higher interest rates. The resilience shows the popularity of home ownership and also reflects more remortgaging activity.’

An official from the Building Societies Association stated: ‘As mortgage payments increase, household finances are likely to be squeezed further. Even if interest rates are near their peak, potential borrowers need to think about all their outgoings to make sure they do not overstretch themselves financially.’

Tom Smith
26th September 2007

Tags: year, August, Longer-term trends, surge, british, increase

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: mortgage, Banking, statistics, stable trend, cent, british bankers association, David Dooks, british

Online banking offers greater flexibility, according to BBA

A top banking association has hailed the advance of internet banking as providing greater flexibility and convenience for customers.

According to the British Bankers’ Association (BBA), which represents around 200 banks across the UK, the service is especially liked by holidaymakers, who can access their accounts just by going online without needing to be near a branch of the bank.

According to communications director at the BBA Lesley McLeod, “you can do it from an internet cafe when you’re sitting in Rome so people like that flexibility.

“People who travel a lot like [online banking] as it gives them access without having to bother whether they can get to their branch and people quite like that aspect of it.”

Ms McLeod said that the company detected an overall bias towards the under-50s to the online service, although it was by no means exclusively used by the young.

Figures from Apacs payment association testify to the popularity of internet banking, showing that 24 million adults used the service in 2006. It predicts that two in three adults will use remote banking by 2014.

Tags: director, 50s, bank, british, Association, BBA Lesley McLeod

Flood claims could hit £1 billion

According to industry professionals the cost of flood related insurance claims in the UK could top the £1 billion marks, after thousands of people were left to deal with the horrific damage caused by the torrential rain and storms over the past week or so.

Many areas of the UK have been particularly hard hit by the weather, with consumers suffering the misery of seeing their homes and belongings wrecked as a result of serious flooding. With more bad weather to come it is thought that the estimated cost of claims could still keep on rising.

The average claim for flood related damage in the UK is likely to be between £15,000 and £20,000 according to analysts, and with thousands of people submitting claims for such high amount, insurance companies are going to have to deal with huge payouts.

Ultimately, this is likely to push up the cost of insurance premiums for the future state some experts, which means that all consumers with home insurance will end up suffering financially.

Another factor that claimants should take into account apart from the rise in premiums is that the time taken to process their claims is likely to be far longer than normal simply due to the sheer level of claims currently pouring into insurance offices.

The Association of British Insurers has been offering advice on its website for those affected by flood damage to enable them to make their claim as quickly as possible. One ABI official stated: ‘If you have been affected by flooding, contact your insurance company. Their priority is to deal with all claims as quickly as possible.’

Each year there are, on average, just over 13,500 claims to insurance companies as a result of flooding. However, last week there were nearly 9,000 claims made in one day alone according to report estimations.

Tom Smith
13th July 2007

Tags: claim, consumers, damage, Insurance, car, cost

Bank charge row

The British Bankers’ Association (BBA) has hit out angrily in retaliation to a Which? magazine report that claimed banks are trying to trick their customers.

The publication looked into bank charges and found that many banks are employing “underhand methods” to prevent consumers challenging the charges.

According to the report, those who attempt to challenge the banks can be threatened with account closure and having their details passed onto debt collectors.

“In an attempt to avoid paying consumers what they are due, we have found banks employing increasingly underhand methods,” said Doug Taylor from Which?

“It is important that the exposure of these tricks does not put people off reclaiming their charges, though, as that would be playing into the banks’ hands.”

In response to the claims made by Which?, BBA has launched a scathing counter attack, labelling the report “sensationalist” and “personally insulting”.

BBA says that it is perfectly reasonable for a bank to close a customer’s account when it is clear that the relationship has broken down.

Additionally, the organisation points out that a bank is acting within its rights if it chooses to use a debt collector if it has chased an individual a number of times.

“Which? is clearly trying to exploit its position as a consumer body by sensationalising what could be a useful piece of research,” said Angela Knight from BBA.

“The way in which Which? has approached this is not only sensationalist, it’s also personally insulting to the front line bank staff who do an excellent job serving their customers.”

Another report into bank charges, carried out by the Office of Fair Trading, is due to be published soon.

Tags: british, banks, Bank charge, bank, research, office of fair trading, relationship