More compensation payouts to be issued by Halifax

High Street banking giant, Halifax, has recently admitted that it may have to pay out more compensation to customers over a mix up with its mortgage rates. Earlier this year the lender identified around 600,000 customers who may be eligible for compensation over confusion about mortgage rates, about half of whom ended up receiving compensation payouts. The lender has now stated that there could be another 250,000 people who may be eligible with around half of them expected to actually receive compensation.

The compensation that the lender pays out could be up to £4500 per person based on a mortgage of £150,000 where the borrower has been affected for three years. The payouts will equate to either 1 percent of the mortgage interest for each year that the borrower has been affected or will be a fixed compensation payout. With tens of thousands of borrowers potentially set to receive compensation, Halifax could have another huge bill on its hands.

The confusion has arisen over Halifax increased the cap on its standard variable rate mortgages from 2 percent above the Bank of England base rate to 3 percent above. The UK’s financial regulator, the Financial Services Authority, expressed concern that wording on documentation may have led borrowers to believe that they would receive advance warning of any such changes. Halifax subsequently came to an agreement with the FSA over paying compensation to customers who were affected.

A Halifax official said: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers. We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.”

Tags: payout, concern, year, uk, Mortgage loan

Repossessions increase by 15 percent

It has been reported recently that repossession numbers have increased by 15 percent in the UK, with the first quarter of this year reflecting the first quarterly increase since the third quarter of 2009. According to officials repossession figures have been in decline for the past five quarters. However, a range of factors has now seen this figure increase with many officials stating that it is likely to continue increase over the course of this year.

The Council of Mortgage Lenders released these figures, and it is officials from the CML that believe the number of repossessions will continue to soar over the coming year. In the three months to the end of March 9,100 property were taken back by lenders and it is predicted by the CML that this could rise to as many as 40,000 or more over the course of this year. Some people are coping at present simply because of the base interest rate being at its rock bottom low of just 0.5 percent. However, if this increases over the next few months, as many believe it will, more and more people could find their homes being repossessed.

Officials have highlighted a number of factors which are thought to be partly responsible for the increase in repossession numbers. There are concerns that more and more people are struggling with their finances and finding it difficult to meet mortgage repayments because of factors such as frozen wages, increased taxes, government cutbacks, and rocketing living costs.

The Council of Mortgage Lenders stated: ‘Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.’

Tags: regulator, increase, concern, officials, March, while, rate, repossessions

Rising unemployment sparks debt fears

Increases in unemployment levels seen in the final quarter of last year have sparked concerns about rising repossessions and spiralling debt problems according to recent reports. Personal debt levels in the UK have been causing concern for the past few years, with the recession, global credit crisis, and difficult financial climate highlighting the debt problems that many people were experiencing.                                                                     

It has been revealed recently that the level of unemployment in the UK soared in the last three months of last year, with the figure increasing by 44,000 taking the total number of unemployed to nearly 2.5 million. Many of those affected by unemployment are younger people. Concerns have now increased with regards to how the rising level of unemployment will affect people that have debts that they are already struggling with and those that have a mortgage to pay.

In addition to this the strong possibility of interest rate rises this year will also impact upon the ability of consumers to pay both their mortgages or rent and their other debts such as credit cards, loans, and other forms of finance. It is thought that the base interest rate, which has been at an all time low of just 0.5 percent for the past twenty two months, will soon have to increase in order to curb spiralling inflation, which is at twice the target level set by the government.

The government has acknowledged that the level of unemployment soared in the latter part of 2010 but claims that it has now started to improve again. Chris Grayling, the Employment Minister, stated: “We’ve got a long way to go and I want to see these figures start to come down, but certainly the evidence is over the past month things have settled down and we are not seeing the increases we saw earlier in the last quarter.”

Tags: evidence, inflation, interest, Minister, strong possibility, business, concern, addition

Payday loans soar due to credit crunch

Payday loans have been at the centre of controversy for some time, and this is largely due to the high rate of interest charged by these lenders on an annual basis. However, some have argues that these lenders receive unnecessary bad press, because the interest charged is not that much providing the loan is paid back in time, and some officials argue that these loans can be very useful for those that desperately need short term financial help.

It has now been reported that the level of payday loans being taken out has soared partly as a result of the global credit crunch, which has left many people short of cash and in financial dire straits. In the space of four years the number of people taking out these payday loans is said to have quadrupled, as more and more people find themselves desperate for cash for a short term period.

The APRs that some of these payday lenders charge has caused a lot of concern over recent years, but for those that only borrow for a short period and repay the loan on time rather than rolling it over the cost of borrowing is not as bad as it sounds. Some charity officials have said that it is preferable for consumers to go to payday loan companies for short term loans to tide them over rather than unscrupulous loan sharks.

Whilst there have been calls for these loans to be banned officials from Consumer Focus said: ‘These products are controversial, but we don’t agree with calls for them to be banned. Outlawing payday loans could leave some borrowers vulnerable to illegal loan sharks. Instead we need sensible safeguards now to stop borrowers becoming dependent on this high cost credit and prevent even more stringent controls being needed in the future.’

Tags: rate, borrowing, loan, Payday loan, credit, help, concern, debt

Demand for cheque alternative from pensioner group

It was announced last year that the banking industry is looking to do away with the cheque, which has been a method of payment for millions of older people for many years before debit and credit cards came along. Many pensioners and older people still rely on cheques to make payments for various services and purchases, and the announcement that the cheque was to be phased out caused concern that many of these people would be left without a viable alternative.

The banking industry has said that it is planning to phase out cheques by around 2018, but many officials have said that this could impact on pensioners negatively, causing them stress and difficulties. A pensioner group is now calling for an effective and suitable paper alternative to cheques to be offered so that those that cannot use the Internet to make payments will still have a viable choice.

The group that is lobbying for the paper alternative to the cheque is the National Pensioners Convention, and its protest to find an alternative comes shortly after the BCC revealed that more than 75 percent of pensioners were against cheques being phased out. The NPC is now calling for a guaranteed paper alternative to be offered to older people in place of cheques.

An official from the NAC said: “If cheques are taken away from older people it will create an enormous stressful situation for them, because their bills are paid on time, with a cheque, in an envelope and put in the post. We have told the authorities that what is going to be required is a paper trail to replace the cheques.”

A spokesperson for the Wandsworth Older Peoples Forum added: “A lot of people who are housebound use cheques daily, and a lot of people who have no computer and therefore can’t get onto the internet or do internet banking would be lost without it.”

Tags: cheque, time, payment, finance, pensioner

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

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

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

How Are Your Savings?

Most of us struggle to put aside as much money as we can into savings, especially in the current financial climate, and we all want to know that our savings are as safe as possible. However, with the financial turmoil being experienced by the UK and other major nations around the world consumers are becoming more and more jittery about just how safe their money really is. Read more

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Does inflation level mean that rate cuts are ruled out?

Inflation levels over recent months have been soaring, and in July inflation hit the highest levels since records began in 1997. coming in at 4.4%. In fact, inflation has been soaring for quite some months, and has been way over the government target of 2%. The latest rise in inflation has resulted in the rate of inflation being more than double that set by the government. Read more

Tags: inflation, concern, oil, energy, Worryingly, highest levels, energy usage

Brits admit saving less for retirement

As the prices of food and fuel continue to increase, Britons admit they are saving less for their retirement, a new report reveals.

Research published by financial services firm Edward Jones has shown that many people are cutting down on such savings in order to meet their everyday living costs.

Andrew James, retirement planning manager at the firm, said the findings are a “big concern”.

People who fail to save sufficiently for their old age are likely to face issues in the future, he continued.

Mr James also expressed worry that 23 per cent of those questioned admitted failing to save any money towards their pensions.

“It is imperative the government and all those involved in the pensions industry do all they can to keep driving the message home that people must continue to make provisions for their retirement,” he urged.

Earlier this month, financial services firm Life Trust warned that because people are living longer than ever, many could be forced to re-think their financial strategies for retirement.

Tags: provisions, Pension, big concern".People, life trust, findings, personal finance, concern, report

UK business confidence affected by credit crunch

A recent report has shown how business confidence levels across the UK have been affected by the effects of the credit crunch that was sparked in the sub-prime sector of the United States.

The credit crunch made its way across the Atlantic and took effect in the UK and in other countries around the world back in August, and since this time the levels of optimism and confidence amongst businesses in the UK have fallen significantly according to recent figures.

The figures were revealed in the quarterly Business Opinion Survey released by the Institute of Directors in the UK. According to the figures on the reports around a quarter of company bosses were optimistic and confidence about business prospects at the beginning of August before the effects of the credit crunch took hold in the UK. However, more recent figures indicate that this level has now dropped to just 4%, reflecting the adverse effect that the credit crunch has had in terms of UK business confidence.

Around 15% of company bosses stated that the credit crunch had affected sales and performance for their business. Back in August around 77% of company bosses said that their business was performing well rather than badly, but even this has dropped to around 73%. A spokesman from the Institute of Directors stated: “This is a pretty gloomy survey, with the decline in business confidence worrying.”

He also added: “Thankfully, actual business performance remains high. Across the whole economy there is a real divide between the actual impact of the financial crisis to date and expectations of what it might bring in the future. The key question now is whether optimism will bounce back because, if it doesn’t, business investment could be hammered.”

Tom Smith
19th November 2007

Tags: confidence, business, economy, sales, concern

Customer service top for bank customers

Consumers rate good customer service as the most important requirement for their current account, according to a new study.

Research carried out by Defaqto found that a third of account-holders think customer care is key to their satisfaction, more so than being free when in credit and a good interest rate.

“The research findings send a clear message to the banks that what customers really want is a high quality of service,” David Black from Defaqto said.

“This suggests that good service has a value that exceeds the monetary advantages of having an account which is free to operate or which pays a good rate of interest.”

Other factors that respondents cited as important were benefits like insurance and low penalty fees.

A separate report from Alliance & Leicester revealed that while 3.4 million Britons regard money as their biggest concern, 45 per cent of bank customers have never switched.

Tags: britons, account-holders think customer, quality, biggest concern, concern, new study.Research, Financial services, rate."The research findings

Stamp duty reforms get mixed response

The housing industry has reacted angrily to Gordon brown’s failure to raise the lower threshold for stamp duty.

Some experts had been hoping that the Chancellor would introduce a higher threshold so that it would be in line with the average UK house price.

The average person now has to get a mortgage above £125,000 lower stamp duty threshold as house prices have risen dramatically in recent years.

However, Mr Brown failed to offer a break to people looking to buy a home in this bracket, meaning that almost all property buyers are now required to pay at least one per cent stamp duty.

“House price inflation remains a key concern for everyone in the UK, particularly first-time buyers and so it is disappointing that this year’s budget has not addressed the UK’s out of date stamp duty thresholds,” commented Duncan Berry, director of mortgage sales at GE Money.

The Chancellor’s promise to completely do away with stamp duty on carbon-neutral homes up to a value of £500,000 however, has bee welcomed, although Nationwide has highlighted that Mr Brown is letting down the poorest in society.

“We feel that it is important to do more to help hard-pressed homebuyers,” said Stuart Bernau from Nationwide.

“We have calculated that if the stamp duty threshold had been raised in line with house price inflation since 1993 it would now stand at £206,000.”

Tags: bracket, GBP, concern, lower stamp duty, gordon brown