Brits turn to credit cards three weeks after getting paid

It has been claimed in a recent report that millions of Brits are able to manage for around three weeks or so after getting paid before they are forced to turn to their credit cards. The reliance of many Brits on credit cards has increased as a result of soaring living costs, spiralling bills, frozen wages and government cutbacks. All of this has led to people being unable to manage as well as they used to in terms of their finances.

Whereas in the past consumer wages may have lasted more people for the full four week before the next payday came around, many are now finding that it lasts for only three of the four weeks, leaving them with a week where there money has run dry. This is the point where millions of Brits are turning to their credit cards to fund their living costs for the final week before payday comes around.

The research showed that around a quarter of consumers in the UK turn to their credit cards once they have run out of cash in their current accounts. The majority tend to run out of cash around three weeks after getting paid, at which point they turn to their credit cards. However, around one tenth of those that have to subsidise their monthly spending with a credit card are only able to manage for fifteen days before having to turn to their cards.

An official involved in the research said: “With most of the population feeling the pinch at the moment, it’s no surprise to see so many people reliant on credit so early in the month. However, unless you plan this properly and know you’re able to pay off your balance, this can be a dangerous trap to fall into. If you’re the type of person who doesn’t pay off their card every month, you need to look at the steps you can take to reduce monthly expenditure before turning to credit products. Budgeting is crucial at the moment and people will be amazed at how much cash they can free up each month by simply sitting down and going through their finances.”

Tags: monthly spending, pinch, spiralling, expenditure, budgeting, consumers, type, person

Consumers try to avoid High Street debt

In the current difficult climate there are many people that are looking for ways to cut back on their outgoings. For many this has meant cutting back on their spending and reducing their debt levels. His desperation to avoid debt was reflected in recent figures that showed there had been a drop in High Street store card borrowing and High Street finance for the month of November.

November is normally a busy time when it comes to spending on store cards and store finance, as many people are purchasing gifts for their loved ones for Christmas. Whilst in the past people may have signed up for store cards or taken out store finance to purchases these goods, a shift in attitude brought about by the challenging financial climate has resulted in fewer people spending on store cards or taking out store finance to make purchases.

Figures have shown that during the month of November last year the level of lending on store cards plummeted by 25 percent compared to the same period in the previous year. Just £202 was advanced on store cards during the month. Instore instalment finance levels also fell, with an 11 percent drop in the level of store finance compared to the same period a year earlier.

However, whilst store borrowing definitely took a big hit in the month of November there was an increase in the number of personal loans that were taken out by consumers. The figures were released by the Finance and Leasing Association, and showed that borrowing through personal loans increased by around 34 percent over the course of the month.

The report also showed that the largest source of advances was credit cards, which came as no surprise to most people. Whilst credit card lending for November remained was flat in November year in year it was still the source of £2.71 billion worth of lending.

Tags: christmas, shift, financial climate, card, consumers, period, Unsecured debt, drop

Older consumers struggling to get travel cover

A recent report has highlighted how difficult it can be for older consumers to find affordable travel insurance cover, with many finding the cost of this cover too high to afford. Many older people aged sixty five and above find themselves in a difficult situation where they suddenly have more time to travel following retirement but then discover that their age is making it difficult or impossible to get insurance for their travel.

Figures have shown that the average cost of cover for someone in their thirties is under twenty pounds for a single trip cover policy. However, for someone that is eighty years of age the cost can be around five times that amount, and that’s only if the older traveller is fit and healthy. For those that have past and existing medical problems the cost can be too much to afford.

Older people often struggle to get travel insurance cover, and this is because insurance firms see them as a higher risk and a liability become of their age and frailty. The amount charged for travel insurance for someone aged sixty five can more than double for someone aged sixty six who is going to the same destination for the same period of time.

The amount of choice that older travellers have is also limited, as there are some firms that will not provide cover for anyone aged over sixty five. The cost and availability of travel insurance cover for older people has resulted in some people being unable to enjoy the plans to travel following retirement because they simply cannot afford the cost of the cover.

One industry official said: “It can be very difficult for people of retirement age to get affordable travel insurance cover, and it is vital that they take time to compare because some insurance firms will charge a fortune.”

Tags: amount, finding, industry official, cost, policy, Types of insurance, travel, consumers

Beat the VAT rise and pick up your big ticket items now

As outlined in the emergency budget earlier this year, which was delivered by the Chancellor of the Exchequer, George Osborne, VAT is set to increase from the start of next year, rising from 17.5 percent to 20 percent, as the coalition government strives to make more money to clear the huge public deficit.

This will come as bad news for the many cash strapped consumers who are already struggling to make ends meet, because it means that price on many things will soar even further. This is why many people are now rushing to make their purchases in the few weeks that they have left prior to the rate of VAT increasing.

The items that many people are rushing to buy include big ticket items such as electrical items like televisions, fridge freezers, washing machines, and the like. Many are also rushing to book holidays before the prices go up, as the effect of even a small 2.5 percent increase on the cost of more expensive items can make a big difference.

Bearing in mind that VAT is set to increase by 2.5 percent at the start of the year it is a good idea to determine whether you are going to be making any big ticket purchases in the early part of next year, and then bringing the purchase forward if possible. This could save you the cost of the additional 2.5 percent, which on higher priced items can make a difference.

If you time it right you could get a bargain on your big ticket items. Directly after Christmas the price of many items is slashed by retailers, and the VAT increase is not set to come in until the start of January. This means that if you purchase your items between Christmas and New Yearn you could benefit from the lower prices from the sale, and you can avoid the VAT hike, which means that you could get a bargain.

In order to make the biggest savings plan you sales shopping, and try and work out which retailers are holding sales between Christmas and New Year so that you can plan your sales shopping accordingly. You should also consider planning ahead, and if you are considering anything such as booking a holiday make the booking early to avoid the VAT increase so that you pay less for your holiday.

Tags: consumers, increase, chancellor of the exchequer, time, additional 2.5 percent, New Year's Day, cash strapped consumers, budget

Mortgage rates cut by HSBC to help consumers

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

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

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

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

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

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

Consumers want warmer approach from insurance firms

According to a recent report insurance customers in the UK are looking for a warmer, friendlier approach from insurance companies, with many stating that they would show more loyalty to insurance firms who demonstrated that they knew who they were and knew something of their insurance related history.

The survey was carried out by YouGov and was performed on behalf of Pegasystems. A number of areas of insurance were looked at as part of the survey including how consumers felt about their insurance companies and how consumers tended to contact insurance firms. The results of the survey showed that many insurance customers were looking for what was described as a ‘corner shop’ approach from their insurance providers, making them feel more like a valued customer rather than another number on a long list of clients.

The results also showed that the most common and popular way for consumers to contact their insurance firm was to contact them by telephone. The figures showed that 42 percent contacted their insurance providers by telephone. The survey also showed that there appeared to be growing confidence in using the internet to make contact with such firms, with 22 percent stating that they used email to contact their insurance provider, making this the second most popular method of contact.

The third popular means of contacting an insurance company amongst consumers in the UK was to go and see someone at the insurance firm face to face, but the results showed that most people prefer phone or email to communicate with these companies.

Jeremy Payne, senior director of international marketing at Pegasystems, said: “The Pegasystems research confirms the view that, in a world of increasing commoditisation and mass marketing, many consumers want a return to a ‘corner shop’ approach in which the provider knows who they are, the challenges they face and can provide an individualised solution that demonstrably meets their needs.”

Tags: Business and Economy, Pegasystems, view, insurance customers, consumers, Insurance, loyalty, insurance providers

Billions accrued in debt during downturn

It has been claimed in a recent report that Brits have managed to accrue billions of pounds in debt during the economic downturn as a result of their shopping addictions. Despite the money worries and concerns over job security that have been experienced by many consumers many have continued indulging in their shopping addiction, and accruing huge debts into the bargain.

The comparison website uSwitch claims that British shoppers have managed to accrue £24 billion worth of debt as a result of their recession shopaholism, which is a term that the website uses to describe those that have built up more than half of their debt through purchases of fashion items.

The breakdown provided by the website showed that there were more women than men that were classed as shopping addicts, with three million men and four million women. However, the average debt accrued was higher amongst men, coming to £3425 compared with £3353 for women. Unsecured debt for women in Britain came to £13 billion and this compared to £10 billion for men.

An official from uSwitch said that although finances have been strained for many people many women had continued to follow their idols and buy a range of expensive fashion items including clothes, handbags, and shoes rather than curbing their spending on fashion shopping in order to save money and ease the financial strain. In some cases those that have accrued debt by shopping for non-essentials during the downturn have said that the recession and economic downturn has been the cause of their spending, as they have shopped to cheer themselves up.

uSwitch officials said: “Despite the financial constraints, women have carried on copying the lifestyles and shopping habits of their idols and ignoring the debt they are racking up in the process.”

Tags: credit, finance, Financial services, Brits, uswitch, debt, report, consumers

Villages being affected by bank closures

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

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

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

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

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

Tags: branch, bank branches, derek french, consumers, Branch (banking), bank closures, bank

Holidaymakers could benefit from credit cards

Many holidaymakers in the UK that head off on holiday each year use credit cards to make payments for purchases, and one recent report has suggested that this could prove to be an ideal solution for holidaymakers. Read more

Tags: rate, Credit card, consumers, recent report, Debit card

Treasury gets involved in controversy over cheques

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

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

Dormancy fees could affect customers trying not to use their credit cards

Whilst credit cards have certainly come in useful for many people in the current financial climate, overstretched finances and the threat of job losses has resulted in many consumers trying to avoid using their credit cards other than in dire emergencies, preferring instead to keep the card to one side and only use it if and when it is really needed. Read more

Tags: consumers, creditcard fees, credit card provider, month, dormant credit card charges

How younger drivers can save money on car insurance

For younger drivers the cost of insuring a car can be high at the best of times, but in the current financial and economic climate, when money is tight for everyone including younger consumers, many may be hoping more than ever to try and save money on the cost of this expensive insurance cover. Read more

Tags: claim, young drivers, vehicle, climate, consumers, car insurance, younger drivers, Driving test

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

Will banking industry reforms results in higher loan and mortgage costs?

In the current financial climate most people are already struggling to keep on top of their borrowing costs, and most can ill afford to cope with even higher borrowing and mortgage costs. Read more

Tags: banking reforms, consumers, billions, mortgage costs, loan costs

Huge depreciation in new cars in three years

Industry officials have recently said that the depreciation seen in new cars in the space of just three years could mean that for many consumers the £2000 car scrappage scheme introduced by the government may actually leave them worse off. Read more

Tags: consumers, scrap cars, Business and Economy, car depreciation, Honda Jazz, industry officials

Mortgage rescue plan gets rolled out

The government has recently decided to roll a mortgage rescue scheme designed to try and help struggling homeowners to avoid repossession out across England. Read more

Tags: Mortgages, scotland, rescue, consumers, United Kingdom, remainder, mortgage rescue plan

Progress with PPI not fast enough

Senior officials from the UK’s financial regulator, the Financial Services Authority, have said that progress is not being made quickly enough in the crackdown on the mis-selling of PPI. Payment Protection Insurance has been at the centre of investigations and controversy for some time after investigations revealed that it was commonly mis-sold by lenders and providers. Read more

Tags: payment protection insurance, Insurance, controversy, fsa, relation, mystery, consumers, lenders

Will the rock bottom base rate help homeowners?

Over the past few months the Bank of England has been taking radical action with regards to the base interest rate. With the economy really suffering and heading for recession, and with consumer confidence at really low levels, the central bank was forced to do something to try and ease the difficulties that both consumers and businesses in the UK were facing. To the relief of many industry groups and consumers the Bank of England has taken unprecedented action recently to try and ease the situation, but this does not guarantee that consumers will actually be any better off. Read more

Tags: interest rate, Macroeconomics, rapid decline, consumers, Mortgages, bank of england, base rate, committee

7 percent fall expected in Christmas spending overall

According to recently released figures an overall fall of around 7 percent is expected in Christmas spending for this year, as consumers continue to try and cut back on their expenditure. The cutbacks will be made in a range of areas, such as gifts, food, clothes, entertainment, and socialising. The survey was carried out by research group Deloitte, and showed the different areas in which people were planning to cut back on their Christmas spending. Read more

Tags: financial situation, consumers, Deloitte, holidays, Opinions, research, Verdict Research, Business Finance

Will you be shopping or saving this Christmas?

The turmoil that has hit the financial markets over the past year have affected many of us in a number of ways, and tighter credit conditions coupled with soaring inflation, rocketing bills and petrol costs, high mortgage repayments, and other rising costs has left many of us with very little money to blow on spending, which has in turn affected the economy sending the nation spiralling towards recession. Read more

Tags: consumers, industry, financial, finance, Healthcare reform in the United States, rising, christmas

Frightened banks pull mortgage deals

Recent figures have shown that since the start of October hundreds of mortgage deals have been pulled off the shelves by lenders who are becoming increasingly nervous in the current difficult financial market. Over the past year thousands of mortgage products have been taken off the shelves as lenders have become more and more concerned about lending money out. Read more

Tags: shop around, mortgage deals, bradford & bingley, consumers, Mortgages

Good news for those with Post Office savings accounts

Many people in the UK have Post Office savings accounts, with many preferring these accounts because they are part of a trusted name. According to recent reports those with Post Office savings accounts will now be able to enjoy greater peace of mind than ever, and this is as a result of changes to the banking system in Ireland. Read more

Tags: savings accounts, News, post office, savings, peace of mind, consumers, greater safety net

Homeowners flock to try and sell homes

According to a recent report many homeowners are panicking because of the ongoing drop in property values in the UK, and this has resulted in a million homes being up for sale recently. Property values have been falling for some months, and many industry officials believe that they could fall by in excess of 10% by the end of the year. Many homeowners are worried that if they wait to sell their homes they could end up losing thousand of pounds more on the value of the property. Read more

Tags: report, Real estate appraisal, property, homeowners, remortgage, May, consumers, Business and Economy

Record deposits in banks for April

According to recent reports April saw consumers in the UK deposit record savings in high street banks, with many rushing to take advantage of higher returns on deposits. Reports show that there was a surge in the level of deposits made by savers in the UK, with many trying to put money aside in order to try and combat the increases in living costs. However, the report also showed that only 50% of consumers see the need to put money aside in savings. Read more

Tags: consumers, high street banks, bank deposits, ISAs, savers, record, Financial institutions

Credit squeeze hitting savers

Consumers are increasingly feeling that they are unable to save as much as they might like to due to the current economic downturn, according to Nationwide Building Society.

Matthew Carter, Nationwide director for savings, said that although three in four people believe it is important to put money away in a savings account, some do not feel “they can afford to save as much as they need to” because their finances are being squeezed by the credit crunch.

New research from the building society has revealed that 57 per cent of people would like to be able to save more than they are currently doing.

Mr Carter pointed out that it is a good time to save at the moment because there are a number of accounts with attractive rates.

“The products available mean it’s a good time for savers so it’s incredibly unfortunate that would-be savers haven’t the spare money to put aside.”

Meanwhile uSwitch.com has said that the credit crunch and rising inflation are making life “tougher” for many people.

Tags: Business Finance, time, economics, moment, Business and Economy, matthew carter

Are premium bank accounts worth the cost?

Banking in the UK has come a long way over the years, and these days consumers in the UK can enjoy a choice of bank accounts offering a range of perks. In the past the average consumer had a standard bank account and very little in the way of benefits of perks. However, most consumers in the UK can now select from a choice of bank accounts from both the high street and from Internet banks. Read more

Tags: bank accounts, cheque, free travel insurance, consumers, premium bank accounts, facility, Internet banks, Financial services

New credit cards can ‘ease the pinch’

The global credit crunch may be prompting both consumers and lender to tighten their belts, but a number of new credit cards have recently been launched which could help ‘ease the pinch’, it has been reported.

According to the online resource Thrifty Scot, a number of credit card companies have brought out new products which could benefit consumers.

The website highlighted the Halifax all in one product, the Saga credit card, the American Express card and Abbey’s Zero credit option.

However, the news provider also pointed out that an industry official remarked Abbey’s card is not necessarily the best option around:

“Around 80 per cent of credit cards offer a lower standard APR on purchases compared to Abbey’s Zero card…its standard balance transfer rate of 18.9 per cent is among the highest go-to rates on the market.”

Meanwhile, recent research by Fairinvestment.co.uk revealed that 21 per cent of people surveyed say zero per cent balance transfer is the most important feature of a credit card.

Tags: transfer, zero card, consumers, crunch, belts, Saga credit card, online resource

Tighten your belts as household costs rise, says expert

Consumers are being told to be careful with their money and ‘tighten their belts’ because of the rising costs of many essential household items and bills.

Money education charity Credit Action has said people have grown accustomed to relatively low food and petrol prices but they will now have to adjust their budgets as these costs are increasing.

According to Capital Economics, food inflation is expected to remain at its current rate of six per cent for the next few months, while water and council tax bills are set to rise.

Gas bills are predicted to increase by around ten per cent and electricity by eight per cent in the second half of the year.

“For most families and people trying to manage their money and trying to budget carefully, that’s going to become much harder because there’s going to be far more cost associated with just the basic day to day living expenses,” said Chris Tapp, director of Credit Action.

Tags: belts, consumers, charity, Tighten, water, tax

National Debtline: Fewer balance transfer deals affects other personal finances

The drop in the availability of cheap interest-free balance transfers that have been popular in recent years could have a knock-on effect on other aspects of people’s personal finances, according to National Debtline.

Consumers are finding it increasingly difficult to find cheap balance transfer deals for their credit card debt, which is impacting the number of mortgage arrears as people stop paying their mortgage to counterbalance the problem.

In the past many borrowers would transfer their debt to another near-nought per cent deal, however such cheap, accessible credit is now harder to come by, although the organisation said that some reasonably good deals are still available for those with a clean credit rating.

Commenting on the future outlook for consumers, Beccy Boden-Wilks, a debt adviser and spokesperson for National Debtline, said: “Those cheap credit, nought per cent balance transfers are going to be very hard to come by, if not non-existent.”


Despite the current difficulty of managing large amounts of debt, around 716,600 people will try and transfer around £1.1 billion a month between credit cards this year, according to Sainsbury’s Finance.

Tags: Beccy Boden-Wilks, debt, Money Management, accessible credit, Sainsbury's Finance, consumers, cent deal, national debtline

More savers in the north and spenders in the south

More consumers in the south were in the mood to spend than those in the north, reveals the findings from a new financial study.

Research from Legal & General showed that 31 per cent of Londoners quizzed were up for spending their money compared with only 21 per cent of those in the north.

However, 70 per cent of northerners were concerned about putting money away to save with while this appealed to just 57 of London-based respondents.

Julia Clayworth, Legal & General’s Wealth Management head of marketing, said: “Whilst the overall spending and savings patterns havent changed dramatically this month, what we have noticed is a growing regional difference in spending and savings habits.”

Meanwhile, when questioned about their ability to meet monthly bills, nearly one in five people from the north claimed to be spending more on paying bills and debts than they earned.

Recent research from Legal & General showed that in January, there was a split in spending habits between those in their 20s and those over-45.

The older generation were in less of a mood to spend than their younger counterparts.

Tags: research, law, respondents, regional difference, quizzed, Julia Clayworth, london, consumers

New bank code introduced

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

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

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

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

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

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

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

Holiday dangers for credit card users

Holidaymakers are at a growing risk of credit card fraud when they are out of the UK, new research has warned.

Data published by Apacs this week shows that using credit cards in countries with less secure identity verification than the UK – particularly those which have not adopted Chip and PIN technology – puts consumers at greater risk of fraud.

“The Apacs figures show a staggering £90.5million rise in fraud abroad with UK cards being targeted in countries where Chip and PIN hasn’t yet been adopted”, said Neil Munroe, external affairs director at Equifax.

Cloning is a particular risk, Equifax claims, advising travellers to take as few cards away on holiday with them as possible, and never to let someone process a card payment out of their sight.

“ID and credit card fraud is a very real threat for consumers, making it essential that they take sensible precautions to protect themselves. Armed with the right knowledge, consumers can help minimise the risk of fraud and take fast action if they do become victims,” Mr Munroe added.

Tags: card, Credit card, Travellers, credit card fraud, chip and pin, consumers, staggering £90.5million rise

Interest rate cuts ‘cannot be banked on’

Despite consumers anticipating that interest-rate cuts will take place throughout the year, it is likely that if further cuts are made they will be done so cautiously, one financial expert has claimed.

According to the Fairinvestment.co.uk, up to 29 per cent of consumers expect the rate to fall from the current 5.25 per cent to 4.75 per cent by the year end, while a further 27 per cent are anticipating a rate of 4.5 per cent or below.

James Caldwell, fairinvestment.co.uk director, said that consumers see the interest rate cuts as necessary to ease pressure on household budgets.

However, he said that making the decision to cut rates is not straightforward with various factors having to be taken into consideration.

“Therefore, it is likely that rates will be cut with an air of caution if there are to be further reductions this year,” Mr Caldwell concluded.

The Bank of England’s Monetary Policy Committee last voted to reduce the interest rate, from 5.5 per cent to 5.25 per cent, in February 2008.

Tags: household budgets, cent, Bank of England's Monetary Policy Committee, committee, consumers, rate cuts, interest rate cuts, money

Consumers need to do a ’shopping list’ before choosing a bank account

Consumers need to create a “shopping list” to help them choose a bank account which suits them best, one financial expert has claimed.

The British Bankers Association (BBA) recommends that spenders need to look beyond the headline rate when examining the pros and cons of various bank accounts to ensure that they are aware of any conditions or limitations that apply.

Brain Capon, a spokesperson for the BBA, said: “When opening any account, regardless of who it is with – a British bank or a bank that is based abroad, you need to really decide what it is that you want from that bank overall.”

He added that the fact increasing numbers of banks from abroad are offering accounts in the UK is a good thing as competition between providers can enable consumers to get better deals.

According to the latest figures released for Britain’s high street banks, personal deposits have shown stronger growth than past months. The figures, from January 2008, show that the net change was up by £2.9 billion.

Tags: Bachelor of Business Administration, finance, high street banks, street, Financial services, consumers, Deposit account

Number of credit cards offering capped transfers falling

The number of credit cards with capped balance transfer fees is falling, according to financial experts.

MoneyExpert.com said that 12 months ago consumers could choose from 18 different credit cards with capped balance transfer fees, compared with the seven which are now available through five different providers.

Sean Gardner, chief executive of MoneyExpert.com, said: “Credit card switching is big business. Someone switches a credit card every two seconds and there are very few cards out there that still do not charge a fee for the privilege.”

He warned that those consumers looking to move their credit card provider could be “in for a shock” if they do not choose a card with a capped balance transfer fee.

According to MoneyExpert.com, the average balance transfer fee is 2.8 per cent of the amount transferred, meaning the typical cost of a balance transfer is some £74.65.

Customers with higher balances could incur much larger fees – a £5,000 balance transfer could cost as much as £150 with a three per cent fee.

Meanwhile, recent figures from MoneyExpert.com revealed that up to 5.9 customers switched credit card providers in the past six months.

Tags: consumers, finance, offering, personal finance, balance transfer

Government needs to rebuild consumer trust

The Northern Rock crisis has eroded customer confidence with one in five admitting they have lost trust in banks, according to new research.

Findings from Fool.co.uk reveals that up to one in thirty consumers have considered moving their investments in the wake of the financial turmoil caused by the collapse of the bank.

David Kuo, head of personal Finance at Fool.co.uk, said that it was not only trust in Northern Rock which had been damaged by the upset.

“The ability of the Treasury, the Bank of England and the Financial Services Authority to regulate banks has also been called into question,” he stated.

He concluded that the government should ensure that the bank is returned to private ownership to prevent distortion of the banking market and ensure “healthy competition” remains to give customers the best deals.

Meanwhile, Ron Sandler, appointed as the new chairman of Northern Rock, has informed staff that the bank will remain in the hands of the state for several years to ensure stabilization.

An unspecified number of job cuts are also expected among the 6,000 strong staff.

Tags: financial turmoil, consumers, stabilization, treasury, competition, Ron Sandler, Fool.co.uk, Employment Change

Homeowners ‘can’t afford to be passive’ about energy deal

As energy prices rise homeowners “can’t afford to be passive” about the tariffs they are charged by their electricity suppliers, according to an industry watchdog.

Energywatch said that despite the rising prices, consumers should certainly shop around for the best tariffs, particularly those who are still with their existing provider as new customers receive more competitive deals.

Georgina Walsh, spokesperson for energywatch, said: “It’s well worth switching because you can probably save at least £100, even if you change to another supplier on the same tariff.”

If increasing numbers of consumers switched it would encourage providers to become more competitive, she added.

With combined household bills for electricity and gas reaching an estimated £1,000 per year, Ms Walsh called for more consumers to be more proactive.

Last week E.ON became the fifth of the ‘big six’ energy suppliers to raise its prices in response to reported price rises on wholesale gas and electricity.

Npower, British Gas, EDF Energy and Scottish Power have all raised their prices by over ten per cent this year.

Tags: power, Npower, Ms Walsh, energywatch, industry watchdog, consumers, gas, energy

Housing market ‘in worst slump since 1992′

The housing market in the UK has fallen to its worst economic slump since 1992 when it last came out of a financial recession, according to the Royal Institute of Chartered Surveyors (RICS).

With the balance dropping for the sixth month in succession, 54.7 per cent more chartered surveyors reported a fall rather than a rise in house prices, the highest number for 15 years.

Jeremy Leaf, a spokesman for the RICS, said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown.”

He added that tightening mortgage lending criteria is a block to many who are keen to take the “housing market plunge” while sellers are struggling to market properties to consumers content to “watch the current economic theatre from the wings”.

According to surveyors, the only part of the UK where prices continue to rise is Scotland with the net balance of surveyors in that country reporting price rises edging up from three per cent to seven per cent.

Meanwhile, a man who did not make any mortgage repayments for 15 years has had his debt erased by judge in an appeal court.

Tags: Real estate, Surveying, property, market, consumers, Mortgage loan, RICS

January – the most popular month for taking out loans

January is the most popular month in the year for consumers to take out an unsecured personal loan, claims one financial expert.

Findings from Halifax reveal that, compared with other months, almost double the number of loans are taken out during the first few weeks of the year.

According to Halifax, the percentage of loans taken out for debt consolidation also increases during January.

Neil Chandler, head of Halifax Unsecured Personal Loans, said: “For many people, the start of the year is a time to get personal finances in order – transferring debt from more expensive products such as store cards or other loans.”

The research showed that men are more likely to apply for a debt consolidation loan than women regardless of the time of year.

Consumers aged between 20 and 29 years old are the most likely to take a loan for debt consolidation purposes closely followed by those aged 30-39 years old.

Meanwhile, Halifax is working with Experian in an attempt to re-unite customers with funds held in dormant banking and saving accounts.

At the start of the campaign, in March 2007, 110,000 accounts were identified as being dormant.

Tags: finance, Unsecured loan, taken out, consumers, March

Consumers switch mortgages to save money

Nearly 1.4 million consumers have switched their mortgage provider in order to secure a better deal, one financial expert has claimed.

Research from MoneyExpert.com has revealed that an estimated three per cent of the adult population has changed mortgage supplier since June last year, a figure which is thought to represent 11 per cent of all UK mortgage holders.

Sean Gardner, chief executive of MoneyExpert.com, said: “The uncertain financial climate of the past six months has forced many people to reassess their household budget with the mortgage top of the list of priorities.”

He added that swapping mortgage supplier will cost more with rising application fees and most are now uncapped, meaning you’re likely to pay a proportion of the total amount you borrow

People aged 35 to 44 are the most likely to have switched mortgage provider, while people living in the South of England are least likely to have done so.

Meanwhile, further research from MoneyExpert.com revealed that four out of five consumers are overpaying for financial products.

Tags: order, household budget, list, consumers, cent, mortgage supplier

Consumers need “rainy day emergency cash”

All consumers should aim to save up to six months worth of salary in an Isa as a “‘rainy day’ emergency cash”, according to financial experts.

However, Harsgreave Lansdown said that for those who have already used their Isa’s maximum deposit allowance of £3,000 during this tax year “there aren’t really that many options” open to them other than premium bonds or building societies.

Ben Yearsley, investment manager with the asset management provider, said: “A lot of people do hold stocks and shares in their Isa, they like the excitement of holding individual shares. When you get big winners you can make big tax free gains in the Isa.”

As of April 2008 a series of changes are expected to be made to Isa. These changes include an increase in the annual subscription limit for cash Isas by 20 per cent, from £3,000 to £3,600.

The limit for stocks and shares Isas will also go up by 3 per cent, from £7,000 to £7,200.

Tags: day, series, individual savings account, tax, rainy day emergency, consumers

New Year is “absolutely the right time” to manage debt

The New Year is “absolutely the right time” for consumers to start managing their debt and personal finances, according to a debt consultancy firm.

Thomas Charles has said that while taking control of money worries is difficult in December, the New Year is a good time to turn over a new leaf when it comes to saving.

James Falla, director of Thomas Charles, said: “The first thing people have to do is to understand their budget.”

“It’s quite a simple thing but understand what money is coming in and what money is coming out, so you can work out yourself what you should be spending,” he advised.

The latest research from the firm, which was carried out in conjunction with YouGov, revealed that 15 per cent of Britons are in ’serious’ debt to the tune of £10,000.

Men are thought to be more in debt than women although this is an attitude which is changing.

Tags: finance, control, research, time, consumers

Consumers need to spend carefully at Christmas

Consumers should be careful with their Christmas spending and ensure they do not put more than they can afford to pay back on credit, warn financial experts.

The Consumer Credit Counselling Service has said, that despite it being the festive season, people still need to remember that money spent on credit has to be repaid over the course of the year.

James Ketchell, spokesperson for CCCS, said: “The amounts you put on for Christmas spending might be done in good faith and for good reasons, but they do have to be measured by common sense too.”

CreditExpert.co.uk has predicted that, despite recent interest rates rises and the credit crunch, the majority of Christmas consumers will not be reducing their spending.

The news comes even though 29 per cent of respondents admit money is tighter this year.

According to statistics from Credit Action, the total personal UK debt stood at £1,380 billion at the end of September.

Tags: respondents admit money, consumers, News, economics, sense, year, spending, statistics

Consumers advised to increase contents cover at Christmas

Generous Brits are reminded that, over Christmas, a significant increase in the value of their home contents will impact upon their insurance.

Rural insurer NFU Mutual reported that a recent online poll found 39 per cent of Brits reporting they would spend between £150 and £300 on presents over the festive season this year.

Meanwhile, 20 per cent said they would be spending in excess of £500 pounds on gifts for friends and family at Christmas.

A spokesperson for NFU Mutual, Laura Wood, said, “People do not consider the cumulative value of the gifts which they store or bring into their home during the festive season and it is vital that they remember that the value of these presents will impact on their home contents insurance.”

NFU Mutual set out a series of precautions that could help people prevent thefts at this time of year.

It states that, rather than hiding presents in cupboards, they should be stored in the loft, gifts should not be on display by an open or exposed window and radio and lighting timers could be set to create the appearance of occupancy while residents are out of the house.

Tags: consumers, Insurance, Generous Brits, window, series

Bank charges could mean many consumers switch bank

A recent survey has been carried out by the consumer campaign group Which?, and the results reveal that there could be a rush of consumers flocking to switch banks in the event that standard monthly bank charges are brought in, effectively bringing free banking in the UK to an end.
Read more

Tags: rush, bank accounts, consumers, government intervention, switch bank a, banks

Credit card Christmas spending likely to soar

Consumers are planning to splash out this Christmas on credit, and could find themselves in financial difficulties as a result.

Having studied the latest Bank of England consumer credit data, credit reference agency Callcredit found that last Christmas, vast amounts were borrowed on cards.

60 per cent of the whole of 2006’s credit card lending took place in December last year, and Callcredit has warned that this is likely to be repeated this year.

Indeed, with many experts warning that unsecured personal loans are getting harder and harder to get hold of, thanks to the impending credit crunch, this year’s figure could be even higher.

Head of consumer finance at Callcredit, Mark Ward, warned: “From our review of these statistics, and in spite of the widely reported credit crunch, we’re still anticipating that many consumers will turn to credit at Christmas in order to fund their spending.”

“Worryingly, it could be these people who may find it more difficult or expensive to borrow on credit,” he added.

Tags: consumer credit data, christmas, callcredit, head, consumers, crunch

Bank holds interest rates

The Bank of England has held interest rates at 5.75 per cent for the fourth month in a row.

The decision, announced at noon on Thursday, comes as no surprise with many analysts predicting such a freeze well in advance.

Ongoing uncertainty in world financial markets and the rising price of oil led members of the Bank’s Monetary Policy Committee (MPC) to keep rates at their current peak.

That will mean prolonged misery for many homeowners, struggling to cope with high mortgage payments.

Chief executive of the National Association of Estate Agents (NAEA), Peter Bolton King, was critical.

He said: “I would have hoped that the Bank of England would have considered this month’s rate movement carefully as confidence in the market needs to be restored and a relaxation of interest rates would do just this.

“The last 12 months has been an extremely busy period for the housing market and consumers are crying out for reassurance.”

Tags: market, consumers, Monetary policy, economics, confidence

Defaqto: Cash in on cash back credit cards

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

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

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

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

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

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

Tags: finance, industry, Defaqto, consumers, Electronic commerce, advantage, product, card

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

Fraudsters using bank charges to commit crimes

A warning has recently been issued by the Office of Fair Trading after it was discovered that some fraudsters are using the bank charges situation in order to try and obtain personal details from vulnerable and naïve consumers and then commit a crime through the use of these details.

The fraudsters are actually pretending to be officials from the Office of Fair Trading when they call consumers and try and obtain their details.

According to recent reports the fraudsters are calling consumers and stating that they intend to help them to reclaim their bank charges. They are then asking for account and card information stating that this is necessary, and in some cases have managed to retrieve this from the consumer. This information is then used to fraudulently order items, steal, or commit other crimes.

Officials from the Office of Fair Trading have confirmed that this is a scam, and that no official from the agency would ever phone and ask for personal details in this way. Consumers are warned never to give out card or account information to anyone on the phone unless the call was initiated by themselves. Such sensitive information should not be given in response to an email either, and consumers should avoid accessing what looks to be their bank’s website via an email link.

Officials have urged consumers that receive such phone calls to avoid passing on any details, to treat the call with suspicion, and to contact the OFT and report details of the call. This appears to be the latest scam used by fraudsters across the UK due to the OFT’s involvement with the controversy over bank charges, which has erupted over the last year or so.

Tom Smith
9th October 2007

Tags: officials, claims, calls, telephone, bank, fraud, crime

Bank to waive mortgage fees until end of September

One of the UK’s leading high street banks, HSBC, has announced earlier this month that it plans to waiver all mortgage fees for new and existing customers until the end of September.

The bank has already agreed that it will be axing mortgage exit fees, as have many other lenders, following a call for action from UK regulators and campaigners who stated that mortgage exit fees has rocketed for no apparent reason over the past few years.

According to reports the mortgages offered by HSBC will be totally fee free for existing and new customers until the end of September. However, the bank is offering its best rates as mortgage specials, and for these customers will still need to pay arrangement fees. According to some officials, the bank has set rates higher than many of its competitors, and this, along with the arrangement fee charged on the best deals, could mean that customers could still be better off going elsewhere despite the fee free offer.

One official from HSBC stated: ‘With some lenders recently bowing to pressure to scrap their exit fees, HSBC has decided to stay one step ahead by removing all fees on its standard mortgage range until the end of September. This will enhance HSBC’s reputation for providing transparently priced mortgages which offer real long-term value. Sadly some lenders will simply look to rename their exit charge or bump up fees elsewhere, however HSBC customers can rest assured, the rate they see is all they will pay.’

The bank does offer a range of mortgages, but consumers are urged to do some research and compare rates from other lenders, as even if they have to pay a fee with another lender it could still work out cheaper due to the lower rates of interest offered.

Tom Smith
28th September 2007

Tags: exit, fixed, rate, cost, bank, Mortgages, consumers, hsbc, fees

Could supermarkets soon take over current accounts market?

There was a time when supermarkets were only used for the purchase of groceries and household goods, but all of this has changed over recent years.

Many leading supermarkets in the UK have really branched out over recent years, and have started offering an array of financial products and services, such as insurance services, loans, and credit cards, amongst others. Many offer savings accounts as well as banking services, providing the consumer with far more choice when it comes to finding the best financial products and services.

A recent survey has revealed just how popular supermarket financial services have become in the UK, indicating that one in every ten consumers has a supermarket savings account, and one in every five shoppers holds a supermarket credit card. The figures show just how much business supermarket giants such as Asda, Tesco, and Sainsbury’s have taken away from the major banks in the UK. Figures also indicate that if supermarkets decide to branch out further they could take away far more business from banks.

According to the results of the survey around half of consumers in the UK would like to see supermarkets branch out and offer more in the way of financial products, as most think that supermarkets can offer far better value and service on such services and products. Current accounts seemed to be of particular interest, and although only one in every two hundred consumers has a supermarket current account at present, if more supermarkets offer this facility they could end up with close to half of the 40 million current accounts in operation in the UK today.

One industry expert stated: “This is a massive unpicked cherry for supermarkets to target. With their low running costs, supermarkets can easily undercut other providers. They are already pinching customers from banks and in time could steal even more.”

Tom Smith
25th September 2007

Tags: consumers, Insurance, financial, products, current, savings, accounts, supermarkets

Consumers should be careful about sale and rent back companies

Consumers, and in particular pensioners, are being urged by campaigners and authorities to be extremely careful when it comes to sale and rent back companies, which focus on buying up properties from homeowners and then renting them back to the homeowner.

A number of sale and rent back companies have come into operation over recent years, targeting those that have assets worth substantial amounts of money but have little in the way of disposable cash.

The concern is over unregulated companies, which are often set up by buy to let landlords that want to buy property at below market price and then sell on at a profit. Often, these unregulated firms offer only a short guarantee of tenure to the homeowner after purchasing the property, after which the homeowner could well find himself or herself without a home and facing eviction so that the landlord can sell the property on and make a tidy profit.

If the firm is unregulated there is little in the way of protection for the consumer, and this is something that homeowners need to be very careful of, state experts.

One equity release specialist stated: ‘People should be aware they face losing their homes if they sign up to a sale-and-rent scheme.  There are safer alternatives. Bona fide regulated equity release plans offer retired homeowners the chance to release cash against their homes but have complete security of tenure.’

He added: ‘Sale-and-rent may seem attractive to those weighed down by debt and mortgage repayments, but with no regulator to oversee their activities; there is now a new type of landlord trying to take advantage of customers’ circumstances.’

Tom Smith
14th September 2007

Tags: sale, careful, properties, consumers, rent

Consumers still failing to get best rates on their savings

According to a recent study many consumers in the UK are still failing to make the most of their savings by finding an account that pays a competitive interest rate.

The news comes despite the five interest rate rises that have been applied to the base rate by the Bank of England over the past year, taking the base rate from 4.5% to 5.75%. Experts state that consumer apathy is resulting in many savers losing out on significant amounts of interest each year.

Many banks have come under fire over the past year for failing to apply interest rate rises in full, or at all in some cases, to their savings accounts. Even those that do pass the rate rises on have been under fire for taking their time to do this, whilst moving much more quickly when it comes to applying the rate rise to borrowing.

Although many savings accounts have let their interest rates stagnate, and some pay very low rates of interest, there are also some account that have passed on all interest rate rises in full, and are now paying above and beyond the base rate.

Amongst the savings account that are now paying well over 6% in interest to savers are ICICI, Sainsbury’s online savings account, and IceSave. However, despite the availability of higher rate savings account research shows that many consumers are allowing their savings to snooze in low rate account where they are earning very little in interest.

Many consumers don’t bother to research higher interest rate alternatives, and some simply feel that they don’t have the time to switch. However, for many – particularly those with substantial savings – switching to a higher rate account could mean a significant difference in the amount of interest earned.

One industry professional stated: “I guess it’s just clients are looking for reliability and consistency; they don’t always want to be chopping and changing their bank accounts. So I think people are aware of it, it’s just a matter of priority. You don’t want to be changing your bank account every couple of months.”

Tom Smith
28th August 2007

Tags: earn, charges, cost, consumers, savings, interest, higher

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: Insurance, british, consumers, companies, claim, damage, cost, home, weather, car

Charge Claimants Can Ask For Strike Outs

The campaign for people to reclaim excessive charges from banks has been hit by banks “playing the game” and stringing customers’ claims along until they are taken to court. More often than not, the banks then don’t turn up to court. Read more

Tags: lloyds, strike, consumers, system, fight, fair, banks, abuse, claim

Direct Line launches campaign against price comparison services

One of the UK’s best known car insurance companies, Direct Line Insurance, has launched a campaign against price comparison websites that help consumers to find that they claim is the cheapest insurance for their needs.

Price comparison websites require consumers to input a number of details, and then use these details to find the cheapest deal on car insurance cover. However, this is only from their database of insurers and not from every major insurance company in the UK.

According to research carried out by Direct Line over 40 percent of consumers that had used price comparison services to find cheaper vehicle insurance had thought that all major insurance companies would be included in the search.

The research also goes on to indicate that over 90 percent of those that have bought their vehicle insurance cover through a price comparison site feel that there should be some sort of warning so that consumers know right away that not all insurance companies are part of the database.

The Royal Bank of Scotland owns Direct Line, as well as Churchill and Privilege, and will not provide any quotes for customers through price comparison websites. An advertising campaign has now been launched by Direct Line to make consumers aware that price comparison sites do not represent all leading insurance companies in the UK.

One Direct Line spokesperson stated: ‘Consumers are confused about price comparison websites and our research shows many believe they provide an independent, public service designed to ensure consumers get the best deal on their insurance. Unfortunately this is not the case, as these websites are really just on-line middlemen who make money out of commissions on insurance sales, just like a traditional high street broker.’

Tom Smith
1st July 2007

Tags: quotes, comparison, cheaper, consumers, market, online, sites, all, prices, home

Don’t let ‘money fear’ take grip

Sainsbury’s Bank is encouraging Britons not to put their heads in a financial sandpit and to face the reality of their banking problems.

Research carried out by the group suggests that some 2.8 million consumers, or six per cent of the adult population, purposefully ignore the state of their financial situation.

According to Kevin Barrett, head of channels at Sainsbury’s Bank, almost two million Britons refrain from divulging their financial positions with partners because they are worried about the potential reaction.

Over one in ten people also claim to have left credit card and bank account statements unopened as a means of procrastinating over financial matters.

Mr Barrett said: “Our advice to people suffering from this condition is not to put your financial management off, problems can arise if you don’t keep an eye on things.”

He added: “For example, without regularly monitoring your statements you won’t be able to identify issues such as identity theft. Take control of your finances now, look at your expenditure, plan your budget and by all means, seek advice or counselling if you need to.”

To avoid getting into the situation of ‘money fear’, Sainsbury’s Bank calls for consumers to face up to their financial situation, to prioritise debts and to plan a budget and stick to it, among others.

Tags: state, account, situation, head of channels, potential reaction.Over, money, identity, consumers

Bank charges investigation to be widened by Office of Fair Trading

The investigation into illegal and unlawful charges imposed by banks has been going on for some time, with regulatory bodies in the UK looking into the amounts that banks have been charging customers that exceed their overdraft limit or in cases where cheques bounce or direct debits are returned. Read more

Tags: trading, consumers, bank charges going, bank charges, office of fair trading, overdraft, ongoing investigation

Brits demand stamp duty changes

The majority of Brits want to see Gordon Brown change the stamp duty bands to bring them in line with current house prices.

A poll, carried out by GE Money Lending, has found that 71 per cent of us want Mr Brown to announce changes during the upcoming Budget statement.

Many people, 32 per cent of those asked, believe that the stamp duty exclusion band, which currently includes homes costing less than £125,000, should be increased to regional average prices.

However, one in four people accept that this is unlikely to happen and simply want Mr Brown to link the exemption band to house price increases moving forward.

Although most Brits are unified when it comes to increasing the stamp duty exemption band, we are more divided when it comes to helping first-time buyers to get onto the property ladder.

A majority 58 per cent want the Chancellor to increase the stamp duty exemption band for first-time buyers only and most want to see them given help in one way or another.

In contrast, 38 per cent believe that helping first-time buyers too much is unfair on those who have already paid.

“What is… interesting is the polarised levels of empathy consumers have when it comes to the plight of first time buyers,” commented Duncan Berry, director of mortgage sales at GE Money Lending.

“It is important that lenders continue to understand the difficulties faced by this group, developing new and innovative ways of helping them to get onto the housing ladder.”

If you are a first-time buyer who is looking to take out a mortgage make sure you shop around to find the best deal for you.

Tags: shop, make, budget, is… interesting, consumers, Budget statement.Many people, polarised levels

PPI market faces scrutiny

The Office of Fair Trading (OFT) has decided to refer the UK payment protection insurance (PPI) market to the Competition Commission (CC).

A public consultation was held following an original proposition by the OFT for the referral back in October.

Businesses, consumer organisations and trade associations were asked to give their views on the market and the responses confirmed the OFT’s prior concerns.

“Our examination of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition to the detriment of consumers,” said John Fingleton, chief executive of the OFT.

“Despite some evidence of a degree of consumer satisfaction with aspects of the product, the evidence as a whole suggests consumers get a poor deal.”

The organisation says that the CC can now carry out a thorough investigation of the market, offering the chance for a solution to be reached.

The Financial Services Authority is currently working to remedy some of the problems present in the market in terms of selling practices. However, the OFT feels that this alone will not fix the current problems.

Those of you considering a loan may find that you are better off getting PPI, but should shop around for the best deal.

Tags: evidence, commission, public consultation, United Kingdom, consumers

Debt problems to continue in 2007?

The Citizens Advice Bureau has voiced concerns that 2007 will lead to more debt for consumers.

The warning comes on the back of figures released by the British Bankers’ Association which show that mortgage lending rose during December 2006.

Statistics show that there was a £5.8 billion increase during December, slightly down on the record £6.7 billion growth seen in November, but still very high.

Citizens Advice says that during 2006, housing debt was one of the fastest growing problem areas and the figures from the BBA mean that this trend may well continue.

“The increase in loans and overdraft borrowing reflects the evidence from Citizens Advice bureaux that debt enquiries continue to rise in 2007 and will exceed the 1.4 million debt enquires we dealt with in the last financial year,” said Sue Edwards, senior policy officer at Citizens Advice.

BBA’s data also shows that credit card lending fell in 2006, in stark contrast to the huge growth seen in 2005. However, Ms Edwards does not believe that this is anything to get too excited about.

“The decrease in credit card borrowing simply indicates that people are borrowing in different ways,” she stated.

Consumer debt, which includes credit cards and other unsecured personal loans, was the biggest problem area for people seeking help from Citizens Advice.

Tags: ms edwards, Sue Edwards, year, housing, policy, senior policy officer, consumer, consumers

FSA launches payment insurance crackdown

The Financial Services Authority (FSA) is launching a crackdown on the payment protection insurance industry.

FSA officials have expressed concern that some consumers may not be getting the best deal and the group intends to investigate.

Mystery shoppers will put firms to the test, with those who fail being reprimanded.

“Improving sales standards in the payment protection insurance market remains a key priority for us and we see it as an indicator of whether firms are treating their customers fairly,” said FSA managing director Clive Briault.

“Customers should come away from the sale having been given the best possible chance of understanding that payment protection insurance is almost always optional, what the policy will and will not cover, and how much it costs.”

Around 200 firms will come under scrutiny as part of the crackdown, with a number of companies having already been put under the microscope.

In total, ten of those have been “referred to enforcement” and some have been hit with heavy fines.

Tags: consumers, best possible chance, priority, heavy fines, barclays, Managing director, business, protection insurance market

UK lending figures rise

Lending to individuals in the UK rose again in November, according to the Bank of England.

Figures show that there was an increase in all types of loans of £10.9 billion between October and November.

Credit cards, personal loans and overdrafts increased by £0.2 billion, while mortgages saw the biggest increases.

In total, November saw a £9.8 billion increase in mortgage lending compared to October, signalling a rise of 0.9 per cent.

“This is a very strong set of mortgage data. Mortgage approvals amounted to a near three-year high of 129,000 in November, while lending secured on dwellings amounted to a three-year high of £9.8 billion,” said Howard Archer of financial consultancy Global Insight.

Mr Archer said that unsecured borrowing “eased back” between October and November as consumers become more concerned abut their future financial situation.

“Elevated debt levels, higher interest rates, rising unemployment and increasing pension concerns mean that there is an increased need for many consumers to try and improve their finances,” he added.

He said that more and more people are switching to secured borrowing to finance their spending.

Tags: consumers, mortgage, abut, overdrafts, november

Helpful hints for Christmas recovery

Consumers are being offered advice on how to overcome the financial difficulties that we all inevitably experience during January.

Which? says there are a few simple steps which can be taken to avoid allowing a debt molehill to turn into a mountain.

One piece of advice is to buy things on a credit card which charges zero per cent on new purchases, but ensure the balance is paid back before standard interest rates kick in.

Which? also says it may be a good idea to transfer debt from one credit card to another, taking advantage of a new interest-free period, but the firm urges caution when moving money in this way.

“Many of us will have overspent over the festive period, or be planning large purchases in the January sales, so it’s a good time to sort out our finances,” said Malcolm Coles, editor at which.co.uk.

“It’s really important to shop around to make sure that you get the best deal on credit.

“For those who already owe money it’s very easy to transfer existing card balances to a credit card with a lower interest rate, but consumers should check the terms and look out for transfer fees to make sure that they know how much it will really cost them,” he added.

Which? also advises consumers that they should only ever secure a loan against their home as a last resort.

Tags: Credit card, credit, interest rate, simple steps, finance, firm urges caution, consumers, molehill

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

Consumers could accrue bank charges over the Christmas and New Year period

According to recent data released by the consumer group Which? a large percentage of consumers in the UK could be at risk of accruing hefty bank charges by using their overdraft facilities to fund the expense of the Christmas and New Year period. Read more

Tags: consumers, accrue, christmas, customers, accounts, banks, cost, charges

UK Credit Card Consumers Should Be Watchful

The latest scam to defraud vulnerable credit cards holders in the UK has come to light in the Worcestershire area, where thieves pretending to be police officers or bank workers managed to steal credit cards with which they then took cash from consumers’ accounts. In the recent incidents the thieves managed to get away with thousands of pounds after obtaining the credit card PIN numbers fraudulently from consumers that thought that they were talking to professionals and officials.

According to police officials, the thieves had acted very convincingly, and had actually called consumers to tell them that they were in danger of being defrauded and that they were trying to stop this from happening. The thieves posed as officers and bank officials in order to convince the victim that they were acting in their best interest, and as a result obtained personal banking and financial details from consumers.

Officials have now warned that consumers need to ensure that they don’t give out any information of this sort over the phone. One officer stated: “Banks, building societies and the police will never ask for PIN numbers over the phone or even face-to-face.” He added: “They are a matter for the individual only. If someone does ask, no matter the circumstances, suspicions should be immediately aroused and the incident reported to police.”

Consumers have always had to remain vigilant for different types of credit card fraud, and this is one of a long line of different scams that have seen consumer conned out of thousand of pounds in the UK. Police have asked card holders to challenge anyone that they are suspicious of ‘firmly but politely’ in order to try and verity their identity. Officers have also issued local and national numbers for anyone to report suspicious activity of this sort.

Tags: credit, uk, fraud, types, cards