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

House price falls worse than last crash

In the 1990s, many people will remember that there was a house price crash that plunged many homeowners into negative equity, and a lot of people will have concerned memories of this time following the past year, when house prices have been tumbling month on month. However, according to officials from the Halifax, its records show that based on a peak to trough bases the current situation has already outstripped the 1990s crash. Read more

Tags: halifax, situation, past year, house prices, prices, finance

Saving guarantee safety net increased

The government has recently announced that saving guarantee safety net in the UK is to be increased to £50,000. Previously the 100% guarantee on savings applied to only the first £35,000 of savings with most financial institutions, and this compensation comes from the Financial Services Compensation Scheme. Prior to the Northern Rock fiasco last year the savings guarantee was far lower. Read more

Tags: Financial Services Authority, Northern Rock fiasco, hector sants, finance, banking sector, Financial institutions, savings guarantee

Rate cut could benefit many homeowners

The latest interest rate cut, which was announced after the February 2008 Monetary Policy Committee meeting, could benefit many homeowners according to recent reports. This comes after nine out of the ten top mortgage providers in the UK announced that they would be passing on the full 0.25% rate cut to consumers. Many lenders rushed to announce their intention of passing on the full rate cut following the Bank of England’s announcement. Read more

Tags: mortgage repayments, finance, rate mortgages, borrowers, variable rate mortgage, recent reports, mortgage

Widow fined £800 by Northern Rock

A woman who previously had tens of thousands of pounds worth of savings with ailing bank Northern Rock was outraged when she was hit with an £800 fine from the bank for withdrawing her savings, even though she had followed the procedure required in order to avoid these charges. The elderly widow, Mrs Heather, had savings of £173,000 with Northern Rock, but like many other customers decided that she wanted to withdraw her money when Northern Rock ran into problems in September 2007. Read more

Tags: interest, finance, account mrs, fine, worth, savings, error, face financial penalties

Massive fine for insurance broker over cancelled policies

A well known insurance company has been accused of treating customers unfairly, and as a result has been fined £735,000 by the Financial Services Authority, the UK’s financial regulatory body. The insurance firm, Hastings Insurance Services Ltd, was found to have cancelled the policies of customers after finding that the cover had been sold to the customers too cheaply due to a computer error. Read more

Tags: insurance firm, new car, Insurance, finance, error, watchdog, Hastings Insurance Services Ltd, industry watchdog

Rate Matcher customers charged increased arrangement fees

Back in April of this year the high street lender HSBC announced the launch of a new mortgage product designed to help homeowners who were on cheap fixed rate mortgages that were due to come to an end. The bank promised to match the current interest rate of those on low rate fixed mortgages with any other lenders, which meant that homeowners whose cheap fixed rate mortgages were due to end would not have to worry about going onto a high standard variable rate. Read more

Tags: finance, idea, Mortgages, arrangement fees, Matcher, lender

What the experts think of falling house prices

It has now become pretty clear to most industry professionals and consumers that house prices in the UK have already dropped significantly compared to last year, and are set to keep falling over the course of this year. Some officials think that house prices could fall in excess of 20% whereas other think the house price falls are more likely to be around 5-10%. A number of officials have already expressed their opinions on recently released figures relating to falling house prices. Read more

Tags: house prices, department of communities, consumer confidence, latent, finance, Payday, support

Young Adults And Car Insurance

As young drivers enter into their twenties they may become eligible for better insurance rates. However, many drivers who were once on the same policy as their parents stick with the same insurance company when it comes time to carry their own policy. This is unfortunate since there is a very good possibility that another company may offer young drivers a far better deal. Read more

Tags: rate, play, decrease rates, offer, Financial services

A regular savings habit is “good housekeeping”

Making a regular habit of putting some money aside in a savings account each month is “just good housekeeping”, the chief executive of Moneynet.co.uk has said.

Richard Brown emphasised the importance of saving money, saying that it is a “brilliant habit”.

He pointed out that even a small amount can make a difference.

“We looked at several accounts and if, for example, you save £25 a month with Halifax, that’s £330 with your ten per cent…It gets you in a habit for when you are in a position of earning more money,” he explained.

Although three-quarters (74 per cent) of people recognise the importance of saving, only 50 per cent make an effort to save regularly, according to figures from Nationwide.

Furthermore, nearly 57 per cent of Brits said they are not saving as much as they think they should and just 41 per cent believe they will in a position to save what they think they should in six months’ time.

Tags: importance of saving money, savings account, regular habit, Abraham Lincoln, finance, Brits, habit

Mortgage approvals reach ‘record low’ in May

The number of mortgage approvals for house purchases reached a record low last month, according to an industry body.

Figures for May show that remortgaging levels held up, accounting for a record 53 per cent of all mortgages approved, reported the British Bankers’ Association (BBA).

It also found that consumers spent more on their credit cards last month but repayment levels on credit cards were lower.

BBA statistics director David Dooks suggested mortgage activity was lower in May as a result of tighter lending criteria and economic pressures on households.

He added: “Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders.”

Separate research released last week by the housing charity Shelter suggests that more than four million households used credit cards to help meet rent or mortgage costs in the past 12 months.

It also found that over two million households are spending in excess of half their income on rent or mortgage payments.

Tags: BBA, result, economic pressures, finance, number, lending, repayment, mortgage payments

Improve your credit rating, advises expert

People who do not have a very good credit rating should make an effort to improve it, an expert has advised.

Richard Brown, the chief executive of Moneynet.co.uk, has said that lenders will not want to give out loans to consumers who have poor credit ratings, regardless of their job or earnings.

“At the moment, lenders are only really lending money to people who are demonstrating that they can repay it, so the ground rules have changed dramatically in the last 12 months or so,” Mr Brown commented.

He advised people with poor credit ratings to make an effort to improve them by making regular repayments on loans every month and trying to pay off more than just the minimum amount.

According to Credit Action, the average amount of interest paid by each household on their total debt is about £3,790 a year, which is up by £343 from a year ago.

Tags: ground, credit rating, credit, Loans, finance, Credit Action, repayments, debt

Consumers must curb borrowing, says Osborne

The shadow chancellor George Osborne has said that people need to make an effort to curb their borrowing and take out fewer loans.

Speaking on Channel 4’s ‘News at Noon’, Mr Osborne said that in order to get inflation under control, people must cut their spending.

“People have to be cautious about entering into long-term financial commitments. For example, looking at how much they’re borrowing and watching the pennies basically,” he commented.

This comes just as MGM Advantage has revealed that 55 per cent of Brits are putting their money into savings accounts, although one in five of those in debt still prefer to keep their money at home than in the bank.

According to a recent survey by the company, at the other end of the scale, one in four of those who have more than £1 million in assets also shun savings accounts in favour of stashing their cash at home.

Tags: borrowing, Business Finance, cash, shun, inflation, Brits

Doing DIY? Tell your insurer, says expert

People carrying out DIY projects at home could risk invalidating their home insurance if they neglect to tell their insurance provider about it, Sainsbury’s Finance has said.

Neil Laird, home insurance manager of Sainsbury’s Finance, said people can make small changes to their homes, such as replacing doors or decorating the interior without informing their home insurer first, but they should let them know about any major changes.

Mr Laird noted that structural changes would warrant telling the insurance policy provider beforehand.

“We want to make sure that homeowners are aware that they could be left underinsured or even invalidate their insurance entirely in the event of an incident during or after works if they have not informed their insurer.”

According to figures from the UK home insurance company Zurich, nearly half of all homeowners fail to inform their home insurer of major DIY changes they make to their properties.

Tags: neil laird, finance, small changes, Laird, UK home insurance

High court case appeal should not delay case by a year

According to the judge presiding at the recent High Court test case into bank charges, the decision by the UK banks to appeal against the ruling should not result in as serious a delay as some reports have indicated. Recent reports claimed that if banks appealed against the judge’s decision to allow the Office of Fair Trading to assess banks’ terms and conditions for fairness the case could be further delayed by over a year. However, Justice Andrew Smith has stated that this is not the case. Read more

Tags: commence, Court test case, finance, monthly bank, court case appeal

Repayment Vs Interest Only Mortgage

If you are on the lookout for a mortgage to purchase a property in the UK you could find yourself in something of a minefield, with a wide range of mortgages to select from, each offering a range of benefits to suit different needs and circumstances. However, all of these mortgages come under the umbrellas of either repayment mortgages or interest only mortgages. Read more

Tags: debt, repayment mortgages, interest only mortgage, original mortgage, account, interest only mortgages, investment, finance

Benefiting from credit cards as a student

As a student in the UK it can be very difficult to maintain a healthy cash flow, and often students need a little flexibility and assistance when it comes to finances, whether it is for books, entertainment, or just general purchases such as travel costs or groceries. This is particularly true for students that are living away from home, who often aren’t able to get financial support as readily as those living at home with parents and who also have the added cost of bills and rent to deal with.

Read more

Tags: added cost, uk, debt, balance, student credit cards, financial products, finance, financial need

It’s ‘always worth’ comparing mortgages, says expert

Independent website Your Mortgage has told consumers not to be content with their current mortgages deals because it is “always worth” comparing mortgages from different lenders to try to get a better one. Read more

Tags: different lenders, compare mortgages, Super jumbo mortgage, Association, finance, council of mortgage lenders, Mortgage loan

Cover yourself on a stag do, advises expert

People heading abroad on a stag do which may involve dangerous activities need to check that their insurance policy covers them in the event of something going wrong, Designaventure has said.

The stag and hen weekend specialist said that Britons going to a friend’s pre-wedding do need to closely inspect the clauses included in their policies so that they know whether they will be covered for taking part in dangerous activities such as machine gun shooting.

Anna Makin Made, project manager of Designaventure, said: “We advise everyone to take out their own insurance and check that they are covered for the activities that they’re doing.”

Figures from the Foreign and Commonwealth Office from 2005 revealed that 70 per cent of young British people go abroad for their stag or hen weekends and 57 per cent of them left the travel details down to the organiser, with nearly half of all them travelling without valid insurance.

Tags: office, valid insurance, finance, Anna Makin Made, Types of insurance, Exmoor, cent, machine gun

People who lie on insurance claims ‘will be found out’

People who try to make fraudulent claims on their insurance are likely to be caught out, according to a financial expert. Read more

Tags: finance, insurance claims, fool, Aviva Canada, insurance fraud, financial expert

Many UK workers at ‘financial tipping point’

New research commissioned by Callcredit has revealed that 40 per cent of people in the UK would not be able to live off their savings for more than a month, rising to 53 per cent among people aged between 25 and 34-years-old.

One in four people have been forced to reduce their savings or stopped saving altogether because of the financial pressures they are facing due to the credit crunch.

Head of the credit reference agency Owen Roberts said: “Many of the UK’s workforce are at what could be described as a financial tipping point where just one unexpected unfortunate incident could have dire financial consequences.”

Mr Roberts advised people who are struggling financially to take an “active role” in sorting out their debts by reviewing their credit reports and bank statements to get a clear idea of how much they owe.

Credit Action recently warned people not to become too reliant on paying their essential household bills with credit cards.

Tags: credit reports, month, credit, reference, Roberts advised people

Debt cycle ‘carries on’ with payday loans

Regularly using payday loans to get through until the next paycheque can lead people into a spiral of debt, National Debtline has warned.

Spokesperson Beccy Boden Wilks said that payday loans can have high interest rates and consumers can often find cheaper borrowing options.

Ms Boden Wilks warned that people using payday loans on a regular basis may have a more serious underlying debt problem and advised them to have a close look at their budgets as well as to possibly seek advice on how to deal with their debts.

“If you’ve run out of money [ahead of your next paycheque], so you feel that you need to use these sorts of services, then there’s obviously a problem,” she commented.

Ms Boden Wilks added that people using these services should review their spending and budgets.

The take-up of short-term payday loans has risen by 55.4 per cent since last September, according to Moneysupermarket.com.

Tags: Financial services, Business Finance, spending, Boden Wilks, problem, debt, national debtline

HSBC: Rate matcher offer extended

HSBC has announced that all UK homeowners who are due to come off their fixed-rate mortgage deals before August 31st will now be able to apply for the bank’s rate matcher mortgage offer. Read more

Tags: hsbc ratematcher, finance, lending, head, mortgage repayments, fixed rate mortgages, Financial services

Holidaying without insurance “incredibly irresponsible”

Going on an adventurous holiday and risking serious injury without travel insurance is “incredibly irresponsible”, the Association of British Travel Agents (ABTA) has said.

A recent survey for the Foreign Office revealed that 20 per cent of people aged over 55 took risks on holiday that they would not have taken at home.

Furthermore, it was found that almost two-thirds (65 per cent) of over 55-year-olds did not take out travel insurance for their last holiday.

Sean Tipton, press officer at the ABTA, said it is “extremely foolish” for people to travel uninsured, particularly on an adventurous holiday such as skiing.

By not taking out travel insurance, holidaymakers could save “£30 or £40″, but in the event of a serious accident they “run the risk of having to sell [their] house to pay the bill and travelling uninsured is just a very foolish thing to do to”, says Mr Tipton.

Tags: injury, tipton, finance, holiday, bill, risk

“Shop around online” for discounts, advises expert

A personal finance writer has advised consumers to avoid spontaneous shopping trips and impulse buys, instead saying people should “try and shop around online” to find the best discounts on a range of products.

With more people finding themselves in financial difficulty as a result of the global credit crunch, Cliff D’Arcy says they should use the internet to find bargains and “get more bang for [their] bucks”.

The comments follow research from Monolink, which found that British consumers aged between 16 to 34 years old are struggling to pay off their credit card debts as they try to keep up with their friends and lead a fashionable lifestyle.

According to the survey, 14 per cent of respondents have bought clothes on a credit card which they are still trying to clear and 13 per cent have bought a car when they still have debt on their credit card.

Shopping online can result in discounts of between 30 and 50 per cent, says Mr D’Arcy.

Tags: internet, global credit crunch, finance, credit, credit card debt

Uninsured drivers “think they can get away with it”

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

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

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

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

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

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

Private accounts taken up for package rather than rate

Premier private bank accounts do not have a very high interest rate compared to high street banks and are often taken out for the additional benefits they provide, says an expert.

Samantha Owens, head of personal finance at Moneyfacts, said customers must have high balances to receive any credit interest, which would not be particularly high compared to other accounts.

However, she noted that people open premier private bank accounts because of the benefits they offer, such as investment advice and access to bank managers.

Commenting on who might find this type of account most useful, Ms Owens said: “People who are worth a lot of money, basically… They’re not really for people to just walk in off the street.”

Yet such accounts appear to be gaining in popularity, with Schroders reporting earlier this month that its private banking pre-tax profits were up 54 per cent with a net income rise of 11 per cent.

Ms Owens said that Coutts pays 0.15 per cent on a balance of £5,000 and offers free banking for customers who have over £2,500 in their accounts.

Tags: investment, bank accounts, finance, Private accounts, bank account, high street banks, Private banking, people open premier

Home insurance is an “important consideration”

Home insurance may seem expensive for low-income households, however it should be an “important consideration,” according to insurance comparison website Confused.com.

Weekly payment schemes such as the one recently launched by Zurich Municipal can make home insurance more accessible to those on a low income, Debra Williams, managing director at the website commented.

Zurich Municipal launched a new scheme to help increase access to home contents insurance for social housing residents by helping them to insure based on what they need rather than what they can afford.

“We would hope the ability to spread the cost will encourage people to consider home contents insurance as a way of protecting their treasured possessions,” Ms Williams said.

The latest AA British Insurance Premium Index reveals that the widely-predicted price increases in home insurance following last year’s flooding are not being realised.

Andrew Strong of the AA said this could be explained by a rise in the number of risks not being quoted by some insurers, indicating a sensitivity to the risk of floods.

Tags: ms williams, Types of insurance, finance, Weekly, com, aa, Managing director

Credit card users hit with default charges

All credit card borrowers are being hit with increasing interest rates in response to lenders cutting penalties for users who default on their payments.

In April 2006 the Office of Fair Trading said that default charges on credit cards were excessive and suggested that the fees should not be higher than £12.

However, lenders made up the lost revenue by increasing rates and charges for other customers.

The Bank of England base rate of five per cent is a third of the average interest rate of 16.4 per cent, leaving a substantial profit for lenders.

Customers who are most likely to be affected are those who repay the minimum on their cards, according to Moneyfacts.co.uk analyst Michelle Slade.

Ms Slade commented: “Anyone with a balance of £5,000 repaying just 2.5 per cent per month will end up paying an additional £755 in interest from the 1.5 per cent increase in purchase rates.”

However, she concluded that borrowers with a good credit history could still find good deals.

Tags: Subprime lending, finance, lenders cutting penalties, default charges, analyst michelle slade, cent increase, April, michelle slade

Chancellor to press lenders to pass on interest rate cuts to borrowers

Chancellor Alistair Darling is expected to tell mortgage lenders to pass on interest rate cuts to borrowers during a meeting with representatives from the Council of Mortgage Lenders next Tuesday (April 22nd), according to Bloomberg.

The Bank of England cut its base rate by 0.25 per cent last week and by three-quarters of a point since December, however many lenders failed to drop their mortgage rates.

Rates on the most popular mortgages rose to the highest level in eight years last month.

“We do need to make sure that people with mortgages see the benefits,” Mr Darling said in an interview in China today.

Following a meeting with banks on Tuesday, the government was warned that under the current credit crunch many smaller lenders could be forced to stop offering new mortgages, forcing consumers to turn to large providers.

The Bank is reportedly working on a plan to intervene in the UK mortgage market, according to The Financial Times.

Tags: Alistair Darling, Mortgage loan, china today, financial, Council, rate, interview, finance

Credit crunch shouldn’t affect responsible credit card users, claims expert

Credit card users who have not had difficulty in managing their finances in the past can continue using their cards despite the current economic downturn

Financial information provider Moneyfacts said that so long as people have a sensible approach to their finances, they could continue to take out personal loans, however the company also warned that transferring debts to new credit cards is becoming more difficult to do as lenders tighten their criteria.

Samantha Owens, head of personal finance at Moneyfacts, commented: “We haven’t seen the rates rising on credit cards like we have across other products just because the margins on them are so big already,” but the company calculated that they nevertheless went up by 0.2 per cent over the past year.

A Nationwide report released this month found that consumer confidence was at its lowest level since records began and a survey by YouGov revealed that six per cent of people have taken time off work as a result of worrying about their debts.

Ms Owens advises consumers to consider various options for managing their finances, including taking out a structured personal loan.

Tags: report, YouGov, business, worrying, responsible credit card

Personal loan costs on the up

The worsening credit crisis is pushing up the cost of taking out a ce.co.uk/loans/” target=”_self”>loan, despite cuts in the Bank of England base rate.

Moneyfacts, a financial data provider, claims that the average rate on a three year £5,000 unsecured personal loan has risen by 1.7 per cent in the past year, adding an extra £300 to the bill.

Nearly a third of personal loans taken out in the past year were for debt consolidation. A quarter of those borrowers ran into further debt, and 85 per cent of all those taking out loans were not asked to pay off existing debts by their lenders.

Worryingly, 70 per cent of loan applicants were not asked for proof of income, according to price comparison service uSwitch.com.

Mike Naylor of uSwitch.com commented: “With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders had learnt their lesson.”

Figures released by the Bank of England last week showed that new consumer credit rose by £2.4 billion in February, compared to an increase £900 million in January.

Tags: cent, year, crisis, credit, comparison

One in seven drivers admit to getting behind the wheel with no insurance

Up to 15 per cent of motorists admit to driving a car without being covered by insurance, according to new research.

The findings from moneysupermarket.com show that nine per cent broke the law while behind the wheel of someone else’s vehicle and a further six per cent said they had driven their own cars without having any cover in place.

Richard Mason, director of insurance at moneysupermarket.com, said that anyone who drives without insurance, no matter the length of the distance and whether it is their car or not, is breaking the law.

“Not only that, but it costs the insurance industry over £500 million each year in claims, which drives up the cost of insurance for responsible motorists,” he continued.

Men are more than twice as likely as women to drive while uninsured, with 21 per cent admitting doing so according to the results of the study.

Meanwhile, a study conducted by confused.com revealed that men are officially worse drivers than women.

Tags: research, Confused.com, distance, Business Finance, finance, Insurance

Drivers urged to tell the truth when applying for insurance

Despite car insurance being at highest recorded levels, drivers need to avoid the temptation to lie to acquire cheaper premiums, one financial expert has urged.

According to Gocompare.com, some drivers will look to cut insurance costs by withholding information to insurers which, if they get caught out, could increase costs later on.

Providing incorrect information is a “false economy” as it can invalidate a policy and mean it is more difficult to get insurance in the future.

Hayley Parsons, Gocompare’s managing director, said that insurance represents a large proportion of the money drivers spend on their vehicles so they are always on the lookout for savings.

“One of the best ways to save money on your insurance is not to just accept your renewal quote, the best company for you 12 months ago, may not be the best today,” she added.

Meanwhile, research from uSwitch revealed that UK motorists pay £333 million per year in fees to car insurers to make changes to amendments to their policy.

Tags: renewal, Insurance, finance, Vehicle insurance, business, uswitch, research, GBP

Consumers should “research the market” when looking for a mortgage

It is important for consumers to shop around when looking for a mortgage, one property expert has claimed.

According to the Council of Mortgage Lenders (CML), buyers should do all the “obvious things” when looking for a mortgage with researching the market being one of them.

Sue Anderson, a spokesperson for CML, said: “Knowing the product range that is out there is obviously important for borrowers so that they can assess whether the person who is advising them is pushing them towards a product that looks suitable for them.”

Ms Anderson added that there are a number of ways that allow you to do this, such as checking the Financial Service Authority’s comparative tables, and the range of published sources on the web from various commercial providers”

In February 2008, the CML reported that there had been a move-away from fixed-rate products as consumers became increasingly attracted to tracker products.

Meanwhile, the mortgage market has been badly affected by the credit squeeze. In October last year, Moneyfacts reported that 40 per cent of mortgage products had “disappeared”.

Tags: credit squeeze, mortgage, October, fixed rate, finance, credit, year

Female savers set to miss out on Isa benefits, say experts

Many female consumers are not preparing for their financial future with 20 million set to miss out on investing in the individual savings accounts (Isas), one financial expert has claimed.

According to new research from the Co-operative Bank, two thirds of women in the UK are without an Isa.

Of the third that do hold one, less than a third intend to invest ahead of this season’s deadline in comparison to more than a half of male spenders who possess one.

Scott McPhail, savings product manager at the Co-operative Bank, said that financial planning is essential for women and not a maybe.

“Women can often retire earlier, and live longer than men, but many are simply not making enough provision for their futures and are failing to take advantage of tax-free savings,” he said.

Despite this, the research showed that women are more likely to be concerned about the state of their finances than men.

Meanwhile, the Association of Investment Companies has warned consumers to take care in researching the various Isa products on offer before making a purchase.

Tags: advantage, half, finance, future, United Kingdom

Inflation ‘four times higher’ than official figures

The real rate of inflation is around four times what official figures say it is, according to a new survey.

A poll by Fool.co.uk suggests that 93 per cent of people “feel” inflation as being much higher than the current 2.2 per cent claimed by the government.

In fact, the survey puts the average “felt” level of inflation at 8.1 per cent, with five per cent of people putting the figure at 15 per cent.

People in their 40s are the hardest hit age group, experiencing inflation at an average of 8.8 per cent.

David Kuo, head of personal finance at Fool.co.uk warned: “The government can boast as much as it wants about its success over controlling inflation. However, people feel inflation through the shrinking pound in their pockets; they don’t experience it through a theoretical government shopping basket.”

In particular, the basket of goods used by the government to calculate inflation omits the cost of housing and mortgages.

The effect of inflation is being felt hardest by people in the West Midlands, where the average for all people was found to be 8.8 per cent. Northern Ireland has the lowest rate of “felt” inflation, at 6.8 per cent.

Tags: finance, pockets, David Kuo, basket, age group, inflation, cent, fool

Under 35s facing credit card and loan debt

A new study has found that people under the age of 35 in Yorkshire are having to spend £160 a month servicing their debts.

Skipton Building Society reports that after paying rent and mortgage costs, the single largest outgoing for people within this group is paying off credit card bills and loan repayments.

The firm’s research also revealed that 73 per cent of people under the age of 35 in Yorkshire have some form of debt, with the average person owing £8,477.

However, a further 11 per cent were found to owe more than £20,000.

Jennifer Holloway, head of media relations at Skipton, said that it is “definitely time for a wake up call” for many people, given that they may have to work longer and earn more to be able to retire comfortably.

“And even though it may seem daunting, it could be easy for those in the red to join those in the black,” she commented.

In related news, Abbey recently reported that millions of people were looking to take advantage of balance transfer deals and switch money owed on one credit card to another during the first three months of 2008.

Tags: North Yorkshire, loan, credit card bills, personal finance, finance, abbey, month, 35s facing credit

Look to remortgage in advance

With conditions within the financial markets currently volatile, one expert has suggested that homeowners looking to remortgage ought to review their options months before their existing deal runs out.

Ray Boulger of John Charcol said that lenders are choosing to change their mortgage rates “increasingly quickly” and most new rates tend to be “higher than the ones they replace”.

The expert advised borrowers wanting to remortgage to “investigate their options as much as six or seven months before their current deal ends, because some mortgage offers are valid for six months, although others only last three months”.

Mr Boulger also suggested that people seeking to buy a new home ought to speak to a broker first to find out what mortgages are currently available, given increasingly tighter lending criteria.

Commenting on the decision taken by the Bank of England to keep the base rate of interest at 5.25 per cent, David Kuo, head of personal finance at Fool.co.uk, said that the news will be “disappointing” for homeowners.

Tags: interest, remortgage, advance, tighter lending, decision, homeowners, head

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, Deposit account, spenders, street, finance, Financial services, high street banks, consumers

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: shock, cent, finance, provider, offering, personal finance, consumers, balance transfer

Bridging finance has an ‘important role’ when credit is hard to get

Bridging loans can play an “important role” during tough financial times, one financial expert has claimed.

Business Moneyfacts said that bridging finance is “ideal” for any situation where funds are required quickly and for short periods.

Bridging loans can benefit property professionals looking to acquire property quickly at a time when the number of repossessions is increasing due to the amount of properties going to auction, claims the firm.

Lee Tillcock, editor of Business Moneyfacts said: “Investors buying at auction have often used bridging because they are required to complete within a few weeks of a successful bid when conventional mortgages are sometimes unworkable.”

He added that in a financial environment where credit is difficult to secure, the bridging option can provide a short term solution while that “ever-more-elusive long-term mortgage” is finalised.

Meanwhile, figures recently released by the Council of Mortgage Lenders show that in 27,100 homes were repossessed last year.

This is the highest figure since 1999 and a 21 per cent increase on the number in 2006.

Tags: personal finance, cent, Bridge loan, figure, finance, Council, loan

New programme in personal finance to be launched

The Association of Investment Companies (AIC), Finance and Leasing association (FLA) and APACS, the UK payments Association have all offered their backing to a new educational programme designed to help consumers make informed financial decisions.

A new ‘ Programme in Personal Financial Planning (PPFP) is to be launched by the ifs School of Finance to ensure that future generations understand how best to use their money, as well as adults lacking those skills too.

Daniel Godfrey, director general with the AIC, said: “The AIC has always argued that financial education should be moved up the political agenda.

“Whilst real and significant progress has been made in the classroom, it is encouraging to see this extended to adult education initiatives.”

The programme arrives as recent research from AIC showed that an estimated 90 per cent of parents did not have any financial education while they were at school.

According to the figures, 65 per cent of those want to receive personal finance training as an adult.

Tags: personal finance, AIC, political agenda, agenda, finance, Personal Financial Planning, Institute of Bankers, School of Finance

InterRailers should take out adequate travel insurance

InterRailers should ensure they have adequate travel insurance when exploring Europe, an financial expert has warned.

STA Travel said that insurance should be part of the essential preparation a traveller undertakes before setting out on an interRailing trip.

A spokesperson for the company said: “Take insurance. With all your possessions in one bag, it is advisory to take adequate travel insurance. Also, make sure your insurance also covers the loss/theft of your InterRail pass.”

She added that those embarking on a journey could save themselves money by booking accommodation in advance of arriving at their destination, or travelling by night which could completely remove the cost of hotels.

Recent statistics from gapyear.com showed that a quarter of young travellers go abroad uninsured or underinsured, which puts their parents’ homes and financial security at risk.

According to an article on guardian.co.uk, the number of people taking a gap year continues to rise.

The market was last valued at £5 billion in a Mintel report of 2005, but is predicted to rise to £20 billion by 2010.

Tags: journey, com, parents, gapyear, europe, finance, risk, taking a gap year

Up to 70% of credit card holders did not shop around, says report

A new report has revealed that up to 70 per cent of credit card holders did not shop around before selecting their current card.

The findings from the Office of Fair Trading (OFT) indicate that this could put these spenders at a financial disadvantage.

Research for the report looked at issues surrounding the comparative costs of using various cards for purchases, cash advances, introductory offers and payment allocation.

John Fingleton, OFT chief executive, said: “No-one wants to throw money away, but consumers who don’t shop around for credit cards are doing just that.”

He added that it is essential that consumers are now given the right tools to make comparisons between credit cards more easily.

The report recommended that an independent comparison tool for credit cards needs to be introduced by the Financial Services Authority as well as improvements in how card providers show how information to consumers.

Meanwhile, Reuters has reported that the OFT is considering launching an enquiry into internet bank, Egg.

The news comes following the company writing to 161,000 customers to cancel their credit cards.

Tags: John Fingleton, cash, information, fair, internet, finance, Fair Trading

More first time buyers purchasing homes together

Increasing numbers of first time buyers are opting to buy homes as a couple rather than individually, claim independent mortgage experts.

John Charcol said that in the past, lifestyle choice and affordability have meant that there are more single first time buyers, but this figure was reversed last year with joint buyers making up half the home purchases compared with 45 per cent the previous year.

Katie Tucker, technical manager for John Charcol, said: “Buying together is a very sensible choice in terms of affordability. Not only for splitting the mortgage and the bills, but more cuddling up should save you on the heating!”

She added that increases in property value and mortgage payments with incomes remaining the same are all factors which have contributed to the buying trends.

Ms Tucker also said that more women are buying property jointly with more men taking the decision to settle down with a partner for their first home.

Meanwhile, research from MoneyExpert.com showed that as many as 1.39 million homeowners have switched their mortgage provider in the past six months.

Tags: finance, manager, Ms Tucker, john charcol, year, six months, business, Moneyexpert

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: Unsecured loan, January, personal finances, finance, expensive products, consumers, March, taken out

Men ‘take care of finances during move’

Nearly half of men in a relationship will manage the finances for moving compared with 34 per cent of women, according to a new survey.

The findings from Halifax show that 65 per cent of couples will make a joint decision when to move or sell their property while couples are less likely to consult with each other the older they get.

Up to 72 per cent of those aged between 16 and 24 consult each other while only 58 per cent of the over-65s will involve their spouse in a decision surrounding moving house.

Gordon Edwards, managing director, Halifax Estate Agents, said: “Buying a house is the biggest purchase most of us are likely to make.”

“If you are deciding to sell your home, purchase a new property or sorting the finances for a move, it’s important to involve your partner in the decision-making process,” he said.

Meanwhile, more research from Halifax shows that County Armagh has the fastest house price growth in the UK with a rise of 331 per cent over the past ten years.

Tags: Estate agent, relationship, new property, cent, house price, decision-making, finance, director

Switching loans could save consumers money

Consumers with unsecured personal loans could save up to £1.25 billion in interest by switching to a different provider, according to new research.

Findings from uSwitch.com reveals that those borrowers with an £8,000 loan over five years could save £166 by switching to the current best buy interest rate of 6.5 per cent.

Mike Naylor, personal finance expert at uSwitch.com, blamed “confusion and apathy” for holding consumers back from making savings on their existing loans.

“2.5 million people think the savings from switching a loan mid-term are too small. 1.6 million loan customers said it’s too much hassle and the most the discouraging news is that 14 per cent wouldn’t even consider doing it,” he said.

uSwitch urged consumers to consider changing their loan provider while they still can as many providers are now operating personal pricing, an option which prevents customers comparing prices.

Meanwhile, figures from the Office of National Statistics revealed that disposable income is at its lowest level in a decade.

Tags: com, finance, personal finance expert, debt, Switching, best buy, GBP, current best buy

UK private housing market valued at £4tn

UK homes are worth a total of £4 trillion, according to new research from the Halifax.

The findings revealed that the value of the UK’s private housing stock rose by 9 per cent (nearly £320 billion) in 2007.

Martin Ellis, chief economist at Halifax, said: “UK home owners have collectively accumulated an extra £2 trillion of equity in their homes over the past decade as property prices have risen.

“This has significantly strengthened the household balance sheet. Mortgage debt accounts for only 30 per cent of the value of the UK’s £4 trillion worth of housing assets,” he added.

The value of the housing stock has more than tripled over the past decade, rising by 208 per cent from £1.3 trillion in 1997.

By comparison, the headline retail price index (RPI) has risen by 31 per cent over the past ten years.

Meanwhile, the Bank of England’s decision to hold interest rates at 5.5 per cent is “not all doom and gloom” for home buyers, according to the Leeds Building Society.

Tags: england, finance, interest rates, housing market, price, halifax, economics

Using life insurance to pay inheritance tax is too expensive

Attempting to use life insurance to cover inheritance tax (IHT) bills is risky and expensive, according to financial experts.

Calculis said that the type of IHT the company offers is all about preserving an estate while, with life insurance, a premium is paid to take advantage of benefits.

Alex Pegley, director for Calculis, said: “If you can, through the use of trusts and specific types of investments actually reduce the inheritance tax bill, why use life insurance?

He added: “I don’t like life insurance for inheritance tax planning; it’s just pouring money down the drain.”

Mr Pegley also stated that the “nature of life insurance contracts” is that as one gets older and closer to needing to claim on them, the premiums go up.

Inheritance tax is paid on death at 40 per cent on all individual estates worth more than £300,000.

On 9 October 2007 the Chancellor of the Exchequer Alistair Darling raised the tax-free threshold to £600,000 for spouses and civil partners.

Tags: IHT, finance, Alex Pegley, company, law, Social Issues, Insurance, 9 october

BOE warns mortgage defaults to increase

Defaults on mortgage payments are expected to increase this year, according to the latest research from the Bank of England.

The Bank’s Credit Conditions survey revealed that borrowers and small-to-medium-enterprises are expected to find it increasingly difficult to source loans after the tightening of lenders’ belts due to the effects of the credit crunch.

The Council of Mortgage Lenders said that the findings increase the likelihood of a further cut in interest rates.

Bob Pannell, head of research at the CML, said: “This survey corroborates other evidence of worsening market sentiment. This may increase the chances of interest rate cuts sooner rather than later if inflation remains subdued.”

He recommended that consumers should re-evaluate their finances to avoid coming financially unstuck.

The number of borrowers who default on their payments is expected to the rise as a number of fixed rate mortgages expire over the next few months.

The Bank cut interest rates to 5.5 per cent last month, the first cut for two years.

Tags: Financial crisis of 2007–2009, head, belts, economics, loan

Shop around for credit card bargains, customers urged

Credit card customers should be prepared to shop around for the best card deals this month, just as they would for anything else in the January sales.

According to Sainsbury’s Bank, credit card users need to take the new start offered by the New Year to review their finances and make sure they are getting the best deal.

“Look around and see whether there are better deals than what you’re currently getting from your provider and that may well offer you an opportunity to reassess your costs,” urged head of cards Donald MacLeod.

He urged customers to pay off more than the monthly minimum amount on their cards in order to avoid going further into debt.

Figures released by UK payments association Apacs last month suggested that 64.3 per cent of the £53 billion spent in the run up to Christmas would be put onto credit cards, with the amounts put onto plastic accelerating in the last few days.

Tags: January, New Year, deal, best card deals, card, finance, Christmas and holiday season

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: director, control, consumers, finance, time, conjunction, thing, research

Pensioners increasingly in debt

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

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

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

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

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

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

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

Tags: finance, Banking, 1 million, United Kingdom, Labor

Lending to get tighter in the New Year

The effects of the credit crunch will see lenders “tightening up” and looking at minor misdemeanours which may well have been ignored in the past, claim financial experts.

Equifax has said there could be an increase in the number of loan applications in the New Year, as lenders look more carefully at a person’s payment history.

Neil Munroe, external affairs director for Equifax, said: “Any negativity that might not have been a problem in the past might rise in prominence.”

He also warned consumers that an increase in the number of applications within a short space of time can look suspect.

Repeated searches on a consumer’s history have the potential to affect a person’s credit rating.

The latest figures from Credit Action show that total consumer credit lending to individuals in October 2007 was £222 billion. This has increased 5.8 per cent in the last 12 month.

Total lending in October 2007 grew by £8.8 billion.

Tags: finance, Credit Action, time, economics, equifax, claim financial experts, personal finance, credit

Low levels of fraud with life insurance

“There are very low levels of fraud in the life insurance arena,” according to the Association of British Insurers (ABI).

Jonathan French, spokesperson for ABI, said: “Life insurance companies have a number of checks and balances in place to minimise fraud and there are very low levels of fraud in the life insurance arena.”

He added that the ABI have yet to make any official comments on the circumstances surrounding the Anne and John Darwin case, but it is “safe to say it is very unusual”.

In large scale incidents or natural disasters some insurance companies will pay out for life insurance policies even when there was neither a body nor formal death certificate.

This would occur when there was sufficient and substantial evidence for the presence of the individual in an area that was very badly affected, said Mr French.

According to research from the ABI, 40 per cent of households have life insurance. In 2006, the UK insurance industry paid out £17 million per day in death benefits.

Tags: Life insurance companies, life insurance arena, Ethics, finance, Financial economics, Insurance, insurance fraud, area

Tips on getting a loan with bad credit

It is nothing unusual these days to have damaged credit, and in fact and increasing number of us are finding out just how difficult life can be with poor credit. Read more

Tags: legwork, personal loans, bad credit loans, finance, Loans, major problems, debt, climate

Student finances not ‘greatly’ affected by credit crunch

The National Union of Students (NUS) has announced that finances for this year’s intake of students were not ‘greatly’ affected by the credit crunch.

A spokesman for the NUS said that there has been little evidence to suggest that banks are overly worried about students.

He said: “The risk outlay on students is that much less than for giving out a mortgage and they also take the view that a graduate is likely to be a customer for the rest of their life and they are willing to take that risk.”

HSBC’s adding of interest to graduate accounts is the only evidence of a tightening of credit he commented.

Statistics published by the Office for National Statistics show that the maximum amounts available to new students in 2007-8 are 76 to 85 per cent higher than they were ten years ago.

The NUS is a voluntary membership organisation comprised from student representative organisations in colleges and universities from across the UK and Northern Ireland.

Tags: life, economics, voluntary membership organisation, National Statistics, evidence

Christmas credit card shoppers urged ’spend sensibly’

Shoppers using their credit cards to fund purchases over the festive season are advised to be cautious.

Samantha Owens, head of personal finance at Moneyfacts said that consumers should consider taking out a nought per cent purchase card if they do not have the means to pay of their balance straight away.

Meanwhile, she said, shoppers should avoid withdrawing cash on their credit cards as this will make them subject to hefty rates, adding that buying gift vouchers can sometimes count as a cash withdrawal.

“People should check with their credit card provider, because there aren’t any hard and fast rules about what is considered cash. Foreign currency, gambling and gift vouchers, some [lenders] do consider to be cash.”

She continued, saying that if shopping online and using a card, transactions will always be regarded as purchases.

Earlier this month Moneyfacts revealed that there had be 125 increases on various credit card rates and fees, with 69 cards increasing fees for cash withdrawals.

Tags: finance, credit, withdrawal, christmas credit, credit card rates, Payment card, shoppers, Gift

Foreign currency mortgages: Long-term debt solution

Investors in the UK could find that taking out a foreign currency mortgage will clear their debt in the long term, it has emerged.

According to David Alexander, chief executive at Alexander Associates Group, the best option for those hoping to rely on the strengthening sterling to reduce their debt is a multi-currency mortgage.

“You would hope over a period of 25 years that you would clear your whole mortgage if you’re managing it via a multi-currency mortgage… You would hope that on an annual basis you would average five per cent reduction in your debt,” he said.

He added that those going into a multi-currency mortgage must understand the fact that it is always a long term investment, “just as a mortgage is a long-term debt”.

Reuters reported the pound reaching a four and a half year low against the euro this week, which is also currently enjoying an all-time high against the US dollar.

Tags: fact, finance, David Alexander, Financial services, uk

Payment Protection Insurance Cover

Anyone that takes out finance likes to have the peace of mind that they are protected against situations that could render them unable to make repayments, and payment protection insurance cover is an effective way to do this. Read more

Tags: protection, accident, finance, payment, ppi, interest, illness, cards, cost

Polite Brits avoid money talk

Brits shy away from the “rude” topic of money in conversation, according to Fool.co.uk.

The website ran a study called Let’s Talk About Money, which showed 30 per cent on the 1,500 UK adults asked, stating that taking about money is rude as it is a personal subject that should be kept private.

As many as one in seven Brits say they are worried about what people might think of their financial situation while 16 per cent are embarrassed about their levels of debt.

Other figures show 33 per cent of respondents feeling uncomfortable about let slip how much they earn with 49 per cent thinking that nobody would be interested to know about their monetary affairs.

David Kuo, head of personal finance at Fool.co.uk, commented: “It’s a shame that when it comes to money, Brits are still stuck in the dark ages, too proud to talk about their financial situation which conforms to the typical British stereotype.

“Talking openly about money, especially with close friends and family has many benefits. Money matters can often spiral out of control if you don’t seek advice from others.”

Tags: fool, topic, Talk, David Kuo, finance, Polite, respondents, money matters

Charity credit cards ‘help children in need all year round’

Consumers are advised that charity credit cards can help them reach children in need every day of the year.

Today, Children in Need is celebrated around the UK with nationwide collections in expected to reach into the millions.

However, according to the Fair Investment Company, charity credit cards allow a donation to be made each time the card is used with no extra cost to the user.

There are many options, with a variety of children’s charities available at which consumers can effortlessly direct their generosity.

The Co-op offers The Children’s Society Card, which donates £5 with every account opened, with further donations when the card is used.

Meanwhile, Halifax supports two children’s charities through card offers, Save the Children and the NSPCC. Halifax donates at least £20 on the first use of the card and after that 0.25 per cent of any spending on the card.

Director at Fair Investment Company, James Caldwell, commented: “If you want to support a charity, a charitable credit card will allow you to donate every time you make a purchase.

“Charity credit cards can also make a real statement; each time you use the card it is good publicity for the charity.”

Tags: card it, CardHub.com, finance, use, user, time, Credit Cards

Financial regulators are ’sleeping on the job’

A debt charity in the UK has accused financial regulators of being ‘asleep on the job’ stating that many consumers in the UK are being pushed into soaring levels of debt by irresponsible lender but that regulators are failing to take the necessary action.

According to officials from the Citizen’s Advice Bureau, which deals with many debt related issues, there have been over 1.7 million debt related issues to be dealt with by the bureau over the past year, which reflects a rise of 20% on the previous year.

Officials state that although the CAB is doing all that it can to help consumers deal with their debt related issues, it is up to financial regulators to try and tackle irresponsible lending in order to tackle soaring debt levels. The charity is currently embarking upon a conference to help consumers to deal more effectively with money issues, and this problem has been highlighted as part of the conference.

One CAB official stated: “Time and time again, we come across people in desperate straits who need not be there if the firm who lent them money had acted responsibly on day one. And while some regulators have taken action on scandals like the mis-selling of payment protection insurance, others seem to be asleep on the job.”

The Cab says that rising debt is one of the major issues facing the economy and that action must be taken by the financial services industry to combat the problem.

According to recent data spending on plastic has rocketed by nearly 50% since 2002, and in 2006 Brits spent around £511 billion on credit, debit, and store cards. However, figures from the Bank of England show that there has been a steady decline in the amount owed on credit cards since the start of 2006.

Alan Wright
14th November 2007

Tags: cards, debt, finance, credit, plastic

Competition Commission still investigating PPI

The controversy over payment protection insurance has been going on for some time now, and regulators have been investigating the problems surrounding the sale of PPI after it was found that many consumers were being mis-sold this insurance, and that in some cases the cost of PPI was higher than the interest costs on a loan.

The Competition Commission has stated that its investigation into PPI is still ongoing as no conclusions have yet been reached.

The Competition Commission has stated that the issues that are being considered are complex and therefore more time and consideration is required. The Competition Commission plans to publish its provisional findings in May of next year. The chairman of the inquiry stated that the Competition Commission had already reviewed a substantial amount of evidence, but added that there were areas that needed to be looked into further.

The chairman stated: “We are far from making up our minds. But we are focussing on the amount of competition for PPI that distributors face at the retail level.”

He added that the Competition Commission was aiming to complete the inquiry as soon as possible but had to take into consideration areas that needed to be looked at further. He said: “…we are also conscious that the issues we are deciding upon are by no means simple and it is vital that we carry out our work thoroughly, ensuring that all parties receive a fair hearing.”

A number of issues relating to PPI are being looked into by the Competition Commission. This form of cover is designed to protect against falling behind on repayments on loans, credit cards, and other forms of finance.

Alan Wright
13th November 2007

Tags: cards, competition, commission, payment, Loans

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

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

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

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

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

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

Tom Smith
13th November 2007

Tags: interest, businesses, growth, bank, rate, finance

Using the Internet to find affordable finance

There are many different types of finance available these days for those with good credit and those that own their own homes. Read more

Tags: credit, finance, internet, cards, good, borrow, Loans

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

Credit card providers making a killing

Small adjustments to charging and fees over the past years have added up to credit card providers making a mint on their customers.

According to uswitch.com, the credit card companies will make a staggering £459 million this year on balance transfer fees alone.

It explains that the “stealth charges” racking up the money also include cash withdrawal fees, zero per cent deals and negative payments hierarchy among other things.

“It’s no great surprise that every zero per cent balance transfer credit card now levies a charge. Historically, fee free deals fuelled the switching market and marked the birth of the rate tart, quickly turning into a huge financial drain on the industry, to the tune of around £600 million,” said Mike Naylor, personal finance expert at the website.

Furthermore, the company found that £71 million is made by providers from people withdrawing money on their credit cards.

Tags: people withdrawing money, birth, credit card companies, GBP, finance, fee, financial drain

‘Simple steps’ to save money on premiums

There are simple ways of reducing the money paid out on insurance premiums, an industry expert has explained.

According to LifeSearch, there are five principal steps in cutting back on unnecessary spending on life cover.

It lists these as, shopping around, switching existing insurer, acting early, quitting smoking and considering family income benefit.

LifeSearch suggests that now is an excellent time to buy life insurance, as premiums are at their lowest for several years, with the price of cover falling by over 40 per cent in the past five years.

“If you can decide which product you should have on the grounds of one factor, such as price, then websites which compare that factor must be a good thing…So if you know exactly what you want, and you are right, comparison sites and aggregators can be useful, ” said Tom Baigrie, managing director of LifeSearch.

One particularly useful piece of advice for those considering life cover could be to buy it as soon as possible, as the price goes up the older you are.

Tags: life insurance, unnecessary spending, product, Insurance, Financial services, economics, finance

FSA to publish new PPI guidelines

The UK’s financial regulator, the Financial Services Authority, is to publish new guidelines in relation to Payment Protection Insurance on its website next year.

Payment Protection Insurance, or PPI, has been at the centre of controversy over the past year, with many claims that this type of insurance was being forced onto borrowers, mis-sold, and in some cases added onto finance deals without the consumers even knowing about it. Banks and lenders make a lot of profit on the sale of PPI, but in many cases customers end up with expensive policies that they cannot even benefit from.

Payment Protection Insurance is designed to help those taking out finance, such as credit cards, loans, and other forms of credit. The idea behind the cover is that consumers will be covered for a specified period in the event that they are unable to work and therefore make repayments due to redundancy, illness, or accidents. However, research was carried out by various agencies, and the industry came under severe criticism for the inappropriate sale of policies amongst other things.

Many people have ended up purchasing PPI that is not suited to their needs as a result of this mis-selling, and the FSA aims to steer customers towards suitable plans based on their needs via the website. Customers will be asked a number of questions on the site, and will then be able to view a choice of suitable policies so that they do not end up purchasing inappropriate PPI.

In addition to helping consumers to find the right PPI policies for their needs, the FSA has also promised that it will be taking far more stringent action and imposing far higher fines on companies that are found to be mis-selling Payment Protection Insurance in the future.

Tom Smith
4th November 2007

Tags: credit, investigation, Insurance, finance, cards, fsa, misselling

Old people ’struggling’ to get insurance

Ageism is rife when it comes to f”>insurance, according to a spokesperson from Age Concern.

The spokesperson said that many people from the older generation who are still healthy are turned away by insurers.

She explained that one third of people have experiencing age discrimination from insurance companies, with 92 per cent of travel insurance policies imposing upper age limits.

“Someone’s age should not determine whether they are fit to travel. When older people themselves see no barriers to travelling and there are no relevant medical issues then companies should not restrict their activities,” she said.

Furthermore, she continued, insurance companies should be responsive to those who could negatively impact upon their business by looking elsewhere for cover.

Saga claims that the rise in the number of over-50s travelling is proven by the fact their long-haul business has doubled over the last 11 years.

Tags: saga, business, age discrimination, fact, number, finance

A fall in consumer confidence in banking

A recent survey has shown that there has been a significant fall in consumer confidence when it comes to banking in the UK, with much of this decrease being blamed on the recent turmoil and chaos with Northern Rock.

As a result of this overall, confidence in banking and finance in the UK has taken a tumble state researchers from Teamspirit, which carried out the survey. According to the results most sectors of the banking and finance industry have been affected by this fall in consumer confidence.

One industry professional stated that the recent Northern Rock situation had had a profound effect on consumer confidence in banking and finance, stating: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

The survey involved polling around 2500 people, and showed that fewer than half of consumers trusted banks and building societies, and just a quarter now trusted online banking. The number of people that still trusted building societies was slightly higher than banks, with around 48% stating that they still had trust in building societies. Around 46% now have confidence in high street banks, and just 25% are confident when it comes to online banking.

The recent credit crunch that has spread from the sub-prime sector of the United States has also affected the level of consumer confidence in banking and finance, according to officials, with financial markets in the UK and around the world facing turmoil as a result of repercussions of the credit crisis sparked in the United States. Banks and lenders have now had to raise interest rates on many areas of lending, which has further affected both confidence and affordability in terms of finance.

Tom Smith
3rd November 2007

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

Benefits to paying off debts with personal loans

The main reason people take out personal loans is for debt consolidation, which is no harm, an industry expert has said.

Steve Baillie, head of loans at Sainsbury’s Bank, explained that doing so can be a positive way for someone to start to bring their finances under control.

He said that there are three big financial issues for people, getting out of debt, paying for a new car, and home improvements.

“What you’ll probably find is, anybody that’s doing debt consolidation will probably be doing an element of a purchase at the same time,” he added.

“So there’s a trigger to sorting things out, whether they’re sorting out the house, or putting a new bathroom in or whether they’re getting a second car for the family et cetera.”

Total lending was up by £11.2 billion in September this year, according to research by Credit Action. Meanwhile secured lending saw growth of £9.8 billion during the month.

Tags: house, finance, home, personal loans, harm, new car, main reason people

Financial fraud sees continued upwards trend

Recent data for the end of the third quarter shows that fraud is still on the increase.

According to CIFAS fraud prevention service, there has been a rise in the majority of the different areas of financial fraud.

Cases of application fraud for the aquiring of credit, insurance or other products, was up by 23 per cent with a total of 57,321 cases uncovered members of CIFAS.

Asset conversion and facility takeover cases showed sharp increases in the first three quarters of this year compared to the same period in 2006, at 24 per cent and 34 per cent.

Meanwhile, false insurance claims rose by nearly nine per cent in the same period.

Chief executive of CIFAS, Peter Hurst, commented on the findings: “Our statistics for the first three quarters of the year show a clear and worrying trend. Fraudulent activity is at an all-time high.

“Fraudsters are becoming more sophisticated and fraud departments are working harder than ever to protect their organisations from the onslaught.”

CIFAS members prevented financial losses valued at £1,900 per minute this year, compared with £1,400 per minute last year in the same period.

Tags: finance, prevention service, rise, identity theft, insurance claims, chief executive

Consumer confidence in banking falls

According to a recent survey the levels of consumer confidence in banking have fallen recently, and experts state that much of this reduction in confidence has been fuelled by the recent turmoil and chaos faced by Northern Rock.

The survey was carried out by Teamspirit, and showed that levels of confidence in banking and the finance industry as a whole have taken a real knock over recent weeks, affecting many sectors of the finance and banking industry.

Almost 2500 people were polled as part of the survey, and the results showed that only 46% of consumers now had trust in high street banks. A slightly higher number of consumers expressed confidence in building societies, with 48% stating that they trusted building societies. Online banking also took a hit, with just 25% of consumers stating that they trusted inline banking – experts state that this could be partly due to severe problems that Northern Rock customers experienced over the past couple of weeks.

One official that was involved in the survey stated that the whole Northern Rock situation had resulted in a damaging effect in terms of consumer confidence in finance and financial institutions.

She said: “The Northern Rock situation has contributed to the low levels of trust that the British public has in companies that look after their money.”

Another factor that has also affected levels of consumer confidence according to many experts is the turmoil that has hit the financial markets over the past month, which was sparked by the credit crunch in the United States. This has had global repercussions, affecting many areas of the financial sector in the UK as well as in other countries.

Tom Smith
25th October 2007

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

CML: Bridging loans “useful” despite reputation

Despite their bad reputation, bridging loans remain the “obvious choice”, said the Council of Mortgage Lenders (CML) today.

Loans used to cover the period between buying a new property and selling your old one are not well respected due to their expensive entry and exit fees and high interest rates.

However, a spokesperson for CML explained that, while they do not offer long term solutions, bridging loans are the “main and obvious route where there is a mismatch”.

She added: “Because bridging is an expensive form of property finance, it is ideally the case that the borrower and the finance company should have a clear view as to what the exit strategy from that bridging finance deal is.

“It shouldn’t necessarily be seen as a long term solution to any property-related transaction.”

Additionally, she warned that entering this type of agreement “does not make any sense” for people who do not know what their “subsequent rollover strategy” will be.

The CML is the trade body for mortgage lenders. Members make up 98 per cent of total mortgage lending in Britain.

Tags: Britain, trade body, reputation, Loans, finance

Banking ’smart’ could make a big difference to your love life

The right choice as to where to do your banking and in which accounts could even affect your love life, according to research from Abbey.

In a survey conducted among its current account holders it was revealed that arguments over how much money is spent on gifts had actually caused three quarters of a million of them to split up with their partners.

Some 5.9 million savers complained their partners did not spend enough on them and Abbey argues that banking with an account paying more interest could keep couples together, as it would enable them to buy each other more gifts.

Steve Shore, head of banking at Abbey, said: “Love doesn’t come cheap … we estimate it costs over £1,500 a year to be in a relationship.”

Its data shows average amount spent on presents for a partner is £95 on birthdays, £133 at Christmas and £97 on other gifts through the year.

Day to day expenses such as drinking and eating (£1,044) both in and outside the house and entertainment such as going to the cinema (£224) also eat into savings, according to the report.

Tags: amount, finance, research, account, right choice

Travel insurance a must for holidaymakers

Travel insurance is an absolute must when taking holiday time overseas, specialists have claimed.

InsureandGo, an online broker, claim that trips abroad without the necessary cover are incredibly risky and should be avoided.

Strongly urging all travellers to invest in some sort of cover, Perry Wilson, a spokesperson for InsureandGo, said: “Travel insurance should not be considered a luxury – it is essential for anyone going on holiday.

“We know people lead busy lives and sometimes things are left to the last minute and that’s why we have tried to make travel insurance as easy to buy as possible.”

He added: “Travelling without insurance simply isn’t worth the risk and we hope there is no excuse for not getting round to it.”

Meanwhile Sainsbury’s Bank, also concerned by holidaymakers shunning overseas cover, claimed that the situation was worsened by the strong surge in last minute deals.

Tags: claim, Insurance, finance, sainsburys, Perry Wilson, overseas cover, Types of insurance, travel insurance

Supermarkets branch out to car insurance

Over recent years supermarket giants in the UK have branched out enormously and in addition to offering groceries and household goods many have also been offering a wide range of financial products, such as loans, credit cards, insurance products and even banking facilities.

According to a recent report, Tesco has now gone a step further and has launched a price comparison website for those looking for deals on car insurance in the UK.

There are already a rising number of price comparison websites in operation for car insurance, and Tesco will be joining this long line of comparison sites with its news venture Tesco Compare.com, which has been launched in conjunction with the Royal Bank of Scotland. The site will be launched in mid-September, but consumers should be aware that there will be a limited number of insurance companies that are used in the comparison, which totals around twenty in all.

As has been the trend in other sectors, this move by Tesco could result in other supermarket giants also setting up similar sites, which means that the huge number of price comparison sites could balloon even further in the near future. As with other price comparison sites customers will be able to enter their details into the Tesco website in order to search for the best deal on car insurance, but this will be from between the companies listed by Tesco.

Amongst the insurance companies that will be listed are some RBS ones, including Churchill, and consumers are reminded that because of the limited number of insurance companies that will be listed there could be better deals available from other insurance companies that are not listed on the Tesco site. 

Tom Smith
20th September 2007

Tags: site, brokers, tesco, Insurance, comparisons, price, finance, car

Younger drivers ‘pay more for insurance’

Revealing that one in three male drivers writes off a car in the first year after passing their test, car insurance provider Direct Line has warned young males that they will always have to pay higher premiums because they pose a greater risk.

A spokeswoman for the insurer explained: “Young drivers present a greater risk than experienced drivers, and, as insurance is based on risk, they will pay a higher premium. They are much more likely to have an accident. Those who present higher risk pay a higher premium.”

She explained that newer drivers would always suffer higher premiums because of their inexperience on the road, but advised those looking to minimise the financial damages to invest in a smaller car and take advantage of the Pass Plus advanced driving scheme.

“It is a government run initiative and it is six one-hour sessions and it costs around £100 to take and you can do this and get 35 per cent off,” she added.

A recent survey from Churchill Car Insurance revealed it is not just new drivers who pose a risk on the roads. More than one million infrequent drivers suffer from “rusty driver syndrome” and forget basic rules of the road, the insurer found.

Tags: finance, Types of insurance, risk, insurer, insurance provider, government run initiative, greater risk.A spokeswoman, Insurance

Lenders ‘must be responsible’ under code

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

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

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

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

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

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

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

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

Mortgage holders in for a ‘rate shock’

Mortgage provider Nationwide has warned homeowners coming off of two year fixed rate deals this autumn that they could be in for a nasty shock as their monthly repayments jump up by £200.

Two years ago, the average fixed rate for a homeowner loan was just 4.56 per cent, but 250,000 homeowners will be seeing their mortgage revert to standard variable rate, which now is an average of 7.65 per cent, more than three per cent what they are currently paying.

Although Nationwide is urging customers to negotiate a remortgage as soon as possible and preferably before their existing deal expires, the average fixed rate is also a lot higher today than it was in 2005. In fact, the increase from 4.56 per cent to 6.41 per cent will still cost customers £110 a month on a £100,000 loan.

“For some borrowers it will come as quite a fright to see their mortgage payments increase dramatically,” said Matthew Carter, director of mortgages at Nationwide. To absorb some of this shock, borrowers need to consider remortgaging as soon as their deal ends, or beforehand if their lender allows it.”

He also noted that there has been growing interest in the bank’s 25 year fixed rate mortgage since the last Bank of England base rate rise.

According to a recent survey by Abbey Mortgages however, less than one in four Britons would consider taking out a 25 year fixed rate homeowner loan.

Tags: bank, finance, monthly repayments, average, today, average fixed rate, UK mortgage terminology, provider

Inheritance tax spreading as house prices rise

Inheritance tax, traditionally thought of as the exclusive preserve of the super-rich, is affecting more and more Britons as house prices rise.

This is the claim made today by Calculis Ltd, an independent financial advisor.

Currently, UK tax laws have 40 per cent in every pound of assets left by a deceased person over £300,000 being made payable to HM Revenue and Customs.

Director of Calculis Alex Pegley said: “The tax is hitting people it’s not supposed to be hitting; it’s hitting people with bog-standard houses in the south.”

According to the latest Halifax House Price Index, average property prices are 11.2 per cent up on the equivalent month in 2006.

Furthermore, a recent report from the National House Price Federation claimed that house prices would rise by a further 40 per cent in the next five years.

Tags: independent financial advisor, assets, Index, month, uk, finance

Student debt rises again

Student debt levels are being ramped up still further, a worrying new survey claims today.

Run in conjunction with high street bank Lloyds TSB, the Push annual survey says that those who started at university last year can expect to owe nearly £17,500 by the time they leave.

Even more worrying is the report’s claim that this year’s freshers face a £20,000 bill for studying.

Furthermore, while the national average student debt lies at £13,000, the £20,000 barrier has already been breached at nine elite campuses.

Catherine McGrath at Lloyds TSB said: “Students face higher levels of debt than ever before and with the added pressures of escalating house prices and increased competition for graduate jobs, it’s essential that they find ways to keep their student debt to a minimum.”

Johnny Rich at Push added: “This increase is not just another rise. Some students are facing real financial hardship. Even so, the advantages of having a degree still vastly outweigh the costs.”

The Push survey was the largest ever conducted on the subject of student finance.

Face-to-face interviews were conducted by its pollsters with over 2,000 students at 130 faculties around the UK.

Tags: finance, worrying, survey, Johnny Rich, lloyds tsb, debt levels

Barclays share prices fall

Rumours surrounding emergency loans allegedly taken out by Barclays Bank from the Bank of England have resulted in the bank’s shares taking a tumble. The UK banking giant recently saw its shares fall to their lowest level in two and a half years. In August rumours began when the bank is said to have taken two emergency overnight loans from the Bank of England. The bank has defended its actions, stating that the loans were due to technical difficulties, but with the crisis that hit Northern Rock still fresh in the minds of many it was inevitable that Barclay’s actions would eventually affect its share prices. Read more

Tags: worth, head of global retail and commercial banking, point, United Kingdom, bank of england, finance

Debt “completely out of hand”

Levels of debt in the UK have been labelled “completely out of hand” by financial advisors Chase De Vere.

Customers were advised to be “totally sensible” when purchasing credit cards, and to moderate their spending once receiving them.

Chase De Vere savings manager Susan Hannums also warned consumers not to fall for lenders’ advertising ploys, saying that “you can try and drum home the message – and we play a big part in doing that – but in a lot of cases people only really pay attention when they absolutely have to act.”

There are several ways in which credit providers can sell their products by making attractive headline offers, and recouping on them by ‘hidden’ costs.

A prime example of this comes with the “zero per cent” cards, which charge transfer fees to offset their attractive interest deal. This financial sleight of hand has netted banks £240 million in transfer fees last year, according to This Is Money.

Tags: De Vere savings, credit providers, finance, Chase, financial sleight, Business Finance, uk

Being added to electoral roll boosts credit rating, expert says

Performing simple tasks such as registering to vote for elections can boost customers’ credit scores, a financial expert said today.

Financial services advisors Experian recommended that customers add themselves to electoral rolls, so that companies can more easily verify their identity.

Consumer affairs manager James Jones said that being added to the roll particularly when you move is important, because “lenders use [the information] to check your name and address”.

“It will affect your credit score if you’re not on there,” he claimed.

Mr Jones offered more general advice to prospective credit card holders saying that “it’s a good idea, for a start, to actually look at your credit score and make sure it’s accurate and up to date and that you’re happy with it.

“Just use credit wisely”, he counselled. “Make at least the minimum repayments on your credits every month so that you don’t have any arrears recorded on your credit report.”

According to statistics from Checkmyfile, 1.6 million Britons are not currently registered on electoral rolls.

Tags: finance, James Jones, Credit card holders, credit rating, Credit report monitoring, TransUnion, use

ABI survey urges insurers to “come clean” on customer comments

An independent panel has urged insurers to give “warts and all” accounts of their performance, as they publish results from Britain’s first nationwide insurers’ survey.

Run by the Association of British Insurers (ABI), the Customer Impact study – currently in its first year – asked 18,000 insurance holders to rate their provider on products, sales and service.

Many major insurers have already published their first reports on how customers have rated them.

The Consumer Impact Panel, however, has expressed concern as to whether results have been especially selected to cast the insurer in as favourable a light as possible.

Chairman of the panel, former Scottish Widows boss Mike Ross, said: “Firms should present a balanced assessment of what customers think, with no cherry picking and should have a comparison of their performance against the industry average.

“Companies should be honest about their areas of weakness and show what action they are taking to address these weaknesses.”

Tags: consumer, mike ross, finance, widows boss mike, service.Many major insurers, insurer, action

Holidaymakers pay extra in credit card fees

British holidaymakers will pay up to £258 million in fees over the summer as their credit card companies charge them for making transactions abroad, a new study has found.

According to the report from the Post Office, Britons will collectively spend around £9.4 billion, though many are unaware that they will incur extra costs for borrowing while overseas.

Of those people questioned, nearly half said that they had no idea that such extra charges would apply, while 37 per cent believed that their lender did not levy an additional fee, despite research showing that the vast majority of firms charge on average 2.75 per cent per transaction made.

In addition, 26 per cent of people admitted to failing to budget for their holidays before they went away, meaning that they left themselves vulnerable to having to borrow and get into debt.
“We are now four times more likely to spend on plastic abroad than 10 years ago,” said the PO’s Gary Fitton.
“It’s shocking not only to see how much people are being penalised to use their cards on holiday, but how few are aware of this.”
The findings come soon after the UK payments association Apacs revealed that fraud committed abroad on UK-issued cards totaled £118.2 million last year, an increase of £36 million.

Tags: United Kingdom, plastic, summer, finance, apacs, london, fee, idea

International medical insurance growing

Demand for international medical insurance is strengthening, according to the private healthcare company Bupa.

With more and more Brits flush with cash from selling their houses in the current UK house price boom and choosing to retire abroad, private healthcare can prove an affordable option for many.

Coupled with the growing number of “internationally mobile” employees working for businesses relocating to the strengthening economies of Russia and India, for example, the market is expanding.

Bupa spokesperson Thomas Flygare said: “We have done research that shows that the number of internationally mobile employees will continue to grow over the next five years. Add to this an extra 2.3 million Brits who are set to retire abroad and by 2020, one in five older people who will be living outside the UK.

“So, naturally the number of companies providing international medical insurance has increased.”

He also advised that customers research the market place to find the insurance that best meets their needs.

“Experience has shown that peace of mind wins when choosing a provider”, Mr Flygare concluded.

Tags: Russia, next five years, house, finance, choosing

FSA forces change on online PPI sales

The Financial Services Authority (FSA) has announced that customers are to receive protection over how they are sold payment protection insurance (PPI) over the internet.

Some online insurance providers were adjudged to have been railroading customers into taking out PPI along with their loan purchase, using techniques such as a pre-ticked box committing them to the cover at point of purchase.

While PPI might prove a safety net against consumer debt, the FSA’s concern was with customers’ being offered an optional service, which costs extra money, as the ‘default’ choice.

Vernon Everitt, a director at the FSA, said: “Naturally, many customers are focussed on getting the loan itself, but it is just as important that they also think about whether or not they want to protect their loan repayments by taking out PPI cover.

“This change means that it will be up to the customer to actively choose to buy PPI rather than it being sold automatically.”

PPI provides insurance for customers taking out credit cards, loans and mortgages, which covers monthly payments should the customer be unable to work at one point of the repayment schedule.

Tags: Loans, internet, director, choice, hsbc, repayment schedule

Savings rate war sparked by interest rate rise

Last week’s rise in interest rates to 5.75 per cent has caused consternation among both mortgage holders and first time house buyers.

However, savings accounts have also been made potentially more lucrative from the rise, which has in turn sparked a rate war between providers.

One internet savings account – ICICI Uk – is now paying a full 0.55 per cent above the base rate by offering 6.3 per cent. Supermarket banks Sainsbury’s and Icesave are also now offering 6.25 and 6.2 per cent respectively.

All three carried the Bank of England’s 0.25 per cent rise to customers, and will offer the new rates on the same day as it comes into effect: August 1st.

Currently, Icesave offers the longest guarantee to remain 0.25 per cent above the base rate – extending until October 2009.

This follows more good news for savers, as National Savings & Investments also raised the interest rate on its popular ‘children’s bonds’ to a fixed rate of 5.1 per cent late last month. This followed rises in gilt yields (returns from government bonds).

Tags: first time house buyers, interest, government, finance, rate rise, england, supermarket banks sainsbury, Mathematical finance

Financial advisers now under scrutiny

UK regulators have been cracking down on all sorts of services and sectors over the past year, from bank and credit card charges to travel insurance and payment protection cover. Read more

Tags: finance, personal. mortgages, advice, charge, Insurance, products, recommend, advisers, free

Government to crackdown on insurance cover from travel agents

According to a recent report the government in the UK plans to crackdown on travel insurance cover purchased from travel agents in a bid to provide consumers with higher levels of protection when they purchase this insurance.

The government has announced plans to regulate the sector, and this means that travellers could look forward to increased levels of protection when they purchase their travel cover from travel agents.

The government has announced that the Financial Services Authority will now be regulating travel insurance sold alongside holidays by travel agents. Travel agents that plan to sell this type of insurance with holidays will therefore have to make sure that it is designed to fit the needs of customers.

Customers will have to be treated fairly in line with Financial Services Authority regulations when buying these policies, and in the even that the customer of dissatisfied with an aspect of the sale of the policy he or she can go through the Financial Ombudsman Service.

Ed Balls, economic secretary to the Treasury, stated: ‘Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.’

The crackdown results from complaints from consumers groups with regards to unsuitable and expensive policies being sold to customers in the past – a problem that this move will help to reduce. The new regulations are set to come into force in 2009, although many officials from the travel agents industry are not happy about the move.

The travel agency industry had asked for the opportunity to make changes without these new regulations being put in place, but were not granted this opportunity.

Tom Smith
4th July 2007

Tags: cover, agency, options, Insurance, crackdown, price, travel, changes, holiday

Financial etiquette ‘needs tightening’

British consumers need to tighten up their financial etiquette, according to a new survey carried out by CreditExpert.co.uk.

A survey of 1,500 adults shows that over two-fifths of Britons would lend as much money as possible to a friend in financial difficulties.

CreditExpert’s research shows that Londoners display the greatest generosity to their friends, with nearly half (47 per cent) indicating that they would help out a friend in need.

When buying drinks at social occasions, almost half of people also say they would buy an entire group a round of drinks.

Dating Britons also appear reluctant for someone else to take care of a dinner bill, with four-fifths contending that the person who invited the date should pick up the bill.

Jim Hodgkins, managing director of Credit Expert.co.uk, said: “We’re regularly faced with financial etiquette dilemmas and as well as being important from a social standpoint, they’re also significant financially.”

He added: “It’s all well and good buying drinks for everyone at the bar – but it doesn’t always pay to be generous. If you’re running up debts that you can’t pay off, you could be damaging your credit rating.”

Tags: group, good, date, cent, credit, buying drinks, finance, social occasions

Joint accounts driving wedge between couples

Almost a quarter of people who share a joint bank account with their partner suspect that their other half is using it to make selfish purchases.

Research by Abbey shows that 24 per cent of joint account holders are suspicious of their partner’s use of the account and they may have good reason to be.

The study also highlights that 20 per cent of joint account holders do use the money held in it to by things for themselves.

With all this suspicion and dishonesty, it is hardly surprising that 25 per cent of couples have argued over the use of their joint account and this may be down to an aversion to setting ground rules.

Abbey found that nine per cent of joint account holders have never set any ground rules for the use of the money, while ten per cent had only done so after having the account for between two to six months.

“Money has always been a common source of dispute between couples and joint accounts are proving to be no exception,” commented Steve Shore, head of banking at Abbey.

“It’s important that couples are open and honest with each other from the start and discuss exactly what the joint account rules are, to avoid arguments at a later date.”

The majority of couples (93 per cent) open a joint bank account to pay for household bills such as gas and mortgage payments, while 83 per cent use it for supermarket shopping.

Tags: couples, common source, partner suspect, dishonesty, steve shore, good reason

Holidaymakers – accommodation top gripe

Holidaying Brits are more likely to complain about their accommodation than anything else.

New research by Halifax Travel Insurance shows that 82 per cent of complaints from Brits abroad concern accommodation.

Holiday reps across Europe were asked to disclose what the most common complaints are and following accommodation, noise pollution was the next most popular.

This was followed by problems concerning nearby building work, complaints about the quality of food and gripes with organised excursions.

The research also highlighted that many holidaymakers are unsure of what to do if they are the victim of theft while abroad.

According to the reps, 20 per cent of British tourists do not know that a police report is needed before an insurance claim can be made.

Shockingly, 3.5 million Brits in the last five years have failed to obtain a report following a theft and £1.5 billion worth of items were not properly covered.

“Halifax Travel Insurance would advise all holidaymakers to research their destination thoroughly before travelling, completing the appropriate medical forms and establishing what to do if they become a victim of crime,” said Paul Birkhead, underwriting manager at the insurance firm.

“It is important when holidaymakers take out insurance that they read the terms and conditions carefully, so they know the correct procedure for making a claim.”

Tags: Types of insurance, finance, Holidaying, food, procedure, PRWEB, insurance policy

Support for bank switching within EU

Banks in the UK have given their support to plans which would see customers able to move freely between banks within the European Union.

However, despite supporting the idea of allowing people to switch banks, concern has been raised about the way in which it is done.

Proposals have been put forward which would mean people have a single bank account number which they keep for life and can move to different banks.

Angela Knight, chief executive of the British Bankers’ Association (BBA) says that this would not be ideal and said that the BBA supports mobility but not portability.

“UK banks support EU initiatives to give customers greater choice and freedom. I believe the UK already leads the way in helping people move from bank to bank. We have a model here which would help cut out unnecessary red tape and give customers a fast, safe and effective way to move their account,” said Ms Knight.

“Proposals for one single account number from cradle to grave across the whole of the EU won’t work and could lead to less customer choice. Every country has its own way of doing things which would make it a nightmare to dovetail systems across all member states.

“It also fails to take into account the way people want to bank – for example having one account for the bills and another for saving,” she added.

Ms Knight said that she believes the current UK system of switching banks leads the way across Europe.

Tags: ideal, BBA, cradle, member states, finance, banks in the uk

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