Increase in number of rewards based credit cards

Over the years, many people who enjoy the ease and convenience of using credit cards have benefitted from rewards based credit cards, which have enabled them to earn various rewards for using their credit cards. There are a number of rewards that are offered by these cards, such as discounts, travel rewards, cash back, air miles, etc. and consumers have been able to enjoy the benefits of choosing the one that best suits their needs.

However, since the global financial crisis, which saw the number of rewards based cards fall through the floor, consumers have found it increasingly difficult to find and be accepted for a suitable credit card. Lenders have not only dropped the number of rewards based cards that they offer but have also made it more difficult to get these cards, which has left consumers with far less choice.

However, according to a recent report, the number of rewards based credit cards are on the up again, which means that consumers can now start looking forward to increased choice and availability again. Those who repay their balance in full each month are the ones that will benefit from these cards as these are the people who will not be hit with interest charges. Those who do not repay their balance in full will fare better with a low interest or interest free credit card than a rewards based one.

The figures, released by Sainsbury’s Finance, showed that 42 percent of credit cards now offer some sort of reward, which is from just 27.4 percent two years ago.

An official from Sainsbury’s Finance said that customer should choose their rewards wisely: “As the cost of living increases, people are increasingly looking to get more for their money and also be rewarded for being loyal customers. However, the financial value of rewards is worthless if it is difficult to redeem them.”

Tags: cost of living increases, loyal customers, free credit card, Financial services, customer, cash, air miles, report

Debt affecting the lives of many students

There is little doubt that the high levels of debt that students have to get into in order to get an advanced education have affected their abilities to do many things in life. For many people that leave university with high levels of debt the next decade or more could be spent focusing on repaying the debt, with everything else having to be put onto the back burner.

A study that was recently carried out has revealed the extent to which many students are having to put their lives on hold in order to focus on their student debt after leaving university. As a double whammy, many now not only face the prospect of having to spend over a decade repaying their student debt but also face very bleak prospects of getting a high paid job because of the current climate.

Uswitch.com carried out research to show how many students are having to put their lives on hold in order to repay their student debt. Over 30 percent had been unable to start a pension when they wanted to according to the reports and nearly 50 percent had been forced to put off buying a home. Nearly 60 percent of students had been unable to save money because of their debts and close to 30 percent had delayed plans for marriage.

One industry official said: “The fact that graduates have to put their life on hold because they are knee deep in student debt is a sorry state of affairs. And as fees go up, students risk running up even bigger debts. But without a degree, getting a job in today’s stagnant market may be even harder.”

He added: “Going to university used to be the norm, but it is now becoming a catch 22. It is also worrying that students are going to university blind to the financial implications. Higher fees and lack of job prospects may be out of your control, but if university is right for you it’s more important than ever that you are as financially prepared as possible.”

Tags: official, Higher fees, fact, Student loan, life, Financial services, study

Airlines dragging their feet over ash cloud insurance payout

The Icelandic volcanic ash cloud that swept across UK airspace earlier this year caused havoc for many travellers, leaving many stranded abroad and many others unable to set off on their travels. UK airspace had to be closed towards the end of April this year for around a week, and many people that were stranded abroad had to pay for food, accommodation, and to contact people at home.

Thousands of travellers had to put in claims as a result of the chaos and the money that they had to pay out to stay abroad until UK airspace was opened again. However, it has emerged that eight months later many are still waiting for their claims to be sorted out, with some airlines dragging their feet over payment on claims.

A number of unscrupulous practices are said to be going on amongst some airlines, which includes capping payouts to consumers, only paying a fraction of the amount being claimed by consumers, delaying claims until early next year or beyond in some cases, making consumers contact foreign compensation schemes and pay for translators, failing to respond to emails forcing consumers to contact them via expensive phone numbers.

Industry official have expressed concern that many consumers with travel insurance who were trying to claim for the disaster are being directed to foreign complaints bodies that do not provide translation services.

One official said: ‘This has meant travellers have had to pay for translators to get their complaint put in to the local language. They would not have to do this if the airlines just met their obligations. For example, they cannot limit claims, and we have seen that happening. We are in constant discussions with the airlines about their responsibilities.’

Tags: translation services, food, Volcanic ash, Financial services, contact, year, phone numbers, compensation schemes

Study being performed into behaviour of insurance fraudsters

A study is being carried out into the way in which people behave when committing insurance related fraud. A researcher at the University of Portsmouth, Sharon Leal, has been awarded a grant of £112,000 by an insurance fraud investigation firm to carry out studies into the way that people behave when they are committing insurance fraud.

The findings so far have suggested that many people that are committing insurance fraud give themselves away by thinking too much and too hard about their stories and about what they say. Leal said that those that were lying to insurers went into far too much detail because they planned their story beforehand whereas those telling the truth did not do any forward planning about what to say to the insurance company.

The fact that those committing fraud have to focus more on their story and think more carefully about what they are saying affects the way in which they behave according to the researcher, who is said to be an expert in detecting deception. Leal also said that it was these changes in behaviour that would most likely form a basis for new methods of detecting insurance fraudsters. Investigations into claims could be triggered by various factors such as an overly large claim being made or suspicion on behalf of the insurance employee that first deals with the claim.

Leal stated: ‘There is a real need to use evidence-based methods that are scientifically proven to work to stop wasting insurance companies’ time and money and to stop innocent people being treated as suspects while the guilty get away’ She added: ‘There is a saying, ‘when needs must, the devil rides’, which basically means that when times are tough, people are more likely to break the rules. Insurance fraud has been on the rise since the recession began and insurance companies are very keen to find a way of beating those who cheat.’

Tags: basis, telling the truth, time, Financial services, various factors, researcher, study, insurance fraudsters

Billions accrued in debt during downturn

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

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

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

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

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

Tags: report, debt, Brits, finance, Financial services

Retail giant may move into banking

Over recent years a number of well known retailers and supermarket giants have started offering various financial services, such as insurance services, credit cards, and even loans. Marks and Spencer, for example, has its own M&S Money sector and supermarkets such as Sainsbury’s and Tesco have been offering financial products for some time. One supermarket giant, Tesco, has recently announced that it is moving into the banking sector through offering full banking services, which will be rolled out over the course of this year. Read more

Tags: financial products, car insurance, Sainsbury, tesco, Financial services, supermarket giants, insurance services

Green insurance on offer from M&S

High Street giant Mars & Spencer has branched out into a number of different areas over the years, including financial services and insurance. It has been reported recently that those thinking of taking out cover with M&S insurance services will be able to do their bit for the environment as the retail giant is now offering green insurance cover. Read more

Tags: M&S Money, Mars & Spencer, energy bills, Types of insurance, energy efficiency rating, energy saving, Insurance, Financial services

FSA slated over its treatment of lenders

According to recent reports the Council of Mortgage Lenders has accused the UK’s financial regulator, the Financial Services Authority, of treating banks and other lenders like ‘drug dealers at the school gates’. Read more

Tags: council of mortgage lenders, Economy of the United Kingdom, mortgage, Financial services, Financial Services Authority, Matthew Wyles

Savers Can Enjoy Increased Interest Rates

In an effort to fund new mortgages, building societies and banks have started to raise the interest they pay on savings accounts in an effort to raise the monies they need to be able to offer new mortgages to their customers. Read more

Tags: wholesale funds, Financial services, repay mortgage, funding, length of time

Faster compensation in place for savers

There has been some good news for worried savers in the UK recently, after financial services authorities announced that the speed at which compensation is paid out to those that lose their savings following the collapse of a financial institution is to be increased. Read more

Tags: savers, saving compensation, thousand pounds, financial crisis, Financial Services Compensation Scheme, Financial services

Are banks becoming more generous with their lending?

A number of reports that have been released recently have suggested that mortgage lending amongst banks in the UK has been increasing, and whilst the past couple of years has seen lending becoming increasingly restricted recent figures have indicated that mortgage lending levels have increased to their highest in around fourteen or fifteen months. Read more

Tags: Mortgages, Financial services, fifteen months, state, banks, mortgage lending, anyone, mortgage market

More job cuts at Lloyds TSB

Despite becoming what was described as a super-bank following its takeover of troubles banking group HBOS, Lloyds TSB has announced a fresh round of job cuts earlier this month, with the announcement that it would be closing all of its Cheltenham & Gloucester branches. Read more

Tags: Financial services, lloyds, unemployment, job cuts, unrest, branch

More Help Needed for Elderly UK Residents

Rising fuel prices is causing financial difficulty for many of the elderly residents of the UK. According to Age Concern and Help the Aged, it is time for the government to sit up and take notice of the problems that this sector of the population is encountering in trying to cope with the current recession. Read more

Tags: old age, personal finance, proper meals, retirement, type of food, Financial services

Record lows on cost of life insurance

According to recent reports the cost of taking out life insurance are falling, and over the past decade has fallen by around 30 percent. Read more

Tags: Financial services, smokers, lifesearch, life insurance, number, best cover, past decade, independent broker lifesearch

Five year low on savings rates

Following the series of base interest rate cuts that have been applied over recent months figures have shown that the interest rates on savings accounts have fallen to their lowest levels in five years. Read more

Tags: savings accounts, GBP, good returns, interest rates, base rate, Financial services, finance, bank

£22 million in fines from FSA over 2008

Recently released figures have indicated that over the course of 2008 the Financial Services Authority handed down around £22 million in fines as it continued its crackdown against the mis-selling of payment protection insurance cover and tried to curb rising levels of mortgage related fraud. The UK’s financial regulator has been handing down record fines over the course of the year according to industry officials. Read more

Tags: financial, disappointment, payment protection insurance, fsa, time, mortgage

Interest only mortgages being affected by price falls

The house price falls that have been ongoing for over twelve months have had many adverse effects, and according to recent reports these price falls could result in real problems for those that have interest only mortgages. These are mortgages where the monthly repayments are all put towards the interest owed on the loan with the actual loan balance remaining the same until the end of the mortgage term, at which point it needs to be paid off. Read more

Tags: Loans, actual loan balance, money, official, house prices, property, Financial services, interest only mortgages

Burglary levels set to rise

According to recent predictions the number of burglaries taking place across the UK is set to rise as a result of the economic downturn and reports show that burglary is set to become a growth industry in the current climate. Officials have said that during the last recession in the late 1980s and early 1990s the number of domestic burglaries increased by around a third, and figures suggest that by the end of this year the number of burglaries in the UK may have risen by 7 percent. Read more

Tags: growth, comparison website, valuable items, christmas, Financial services, phone call, number, call

Rows erupt over energy bills increases

According to recent report a number of rows have erupted over direct debit payments on energy bills, with many concerned that people are being charged way over the odds on their direct debits by the energy giants, which is resulting in increased profits for the energy firms but leaving many consumers unable to keep on top of their monthly direct debits for their energy bills. Read more

Tags: energy bills, debit payments, use, hiking, Financial services, Consumer Focus, energy giants, scale

Another bank gets nationalised

Earlier this year the financial headlines were filled with news about the government taking over the stricken bank Northern Rock. Over the past few days the government has used the same legislation that was used in the Northern Rock takeover to rush through the nationalisation of another troubled bank, Bradford & Bingley. According to reports the government will be taking on the £50 billion loan book of the troubled bank, much of which has been lent to buy to let investors, whilst the Spanish owned bank Santander, which also owns Abbey, takes on the savings account side of the business, said to be value at £20 billion. Read more

Tags: largest level, bank, bradford & bingley, Financial services, savings, northern rock, stability, fact

RBS announced higher number of branches to open on Saturday

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

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

Fully comprehensive insurance is no longer fully comp

Motorists in the UK have always enjoyed a choice of insurance policies to match their needs and their pockets, and those able to afford higher premiums and who want increased protection have often opted for fully comprehensive insurance cover, which provides the highest level of protection and cover. However, according to a recent report fully comprehensive cover has been modified and changed so much over recent years that it is now fully comprehensive in name only, and consumers are often not getting the protection that they may think they are. Read more

Tags: party, arrangement fees, insurance policies, comprehensive insurance, Vehicle insurance, car insurance, motorists, Financial services

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: rating, offer, decrease rates, rate, finance, Financial services

Equifax: Be ‘cautious’ about ID fraud

Consumers should be more wary of people trying to steal their identity details, an expert at Equifax has advised.

Neil Munroe, external affairs director at Equifax, said that an individual’s personal credit profile could be worth “several times more” than their maximum limit on their credit card.

According to CIFAS, the total number of fraud cases the organisation received by the end of the first quarter of 2008 was 52,286, which represented an increase of ten per cent compared with the same period in 2007.

The number of occurrences which involved a fraudster impersonating someone in order to takeover their bank account were up by 146 per cent.

Mr Monroe commented that the authorities should also make an effort to combat the issue: “There is a list of precautions that individuals should take but it’s not just an individual’s fight, it is a combined fight and the government need to be doing more around it and so do companies.”

Tags: credit, first quarter, quarter, Financial services, authorities, end, Cifas

Fewer mortgage lenders willing to offer £1m deals, says expert

Homebuyers looking to spend in excess of £1 million on a property may have difficulty finding a large mortgage to fund their purchase, according to Bestinvest. Read more

Tags: economic downturn, Financial services, mortgage lenders, Mortgages, Mortgage loan, loan

Are you looking to refinance your mortgage?

People in the UK have become far more savvy about finances over the years, and when it comes to mortgages many people have realized that there are some great deals out there that could save them a fortune in interest as well as reducing their monthly repayments. However, for many consumers simple apathy or misguided loyalty has resulted in them staying with the same mortgage provider through thick and thin without giving any thought to just how much they could save by simply refinancing the mortgage, whether with the same lender or with another one.
Read more

Tags: extra money, Mortgages, Financial services, refinance mortgage, loan, amount

Are premium bank accounts worth the cost?

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

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

Pensioners likely to ‘rely more on savings’

Pensioners are expected to increasingly rely on their savings as their as pensions are gradually offering lower payouts, the director of Churchouse Financial Planning has said.

Keith Churchouse said that it is likely to become more common for people to dip into their savings as they become older and retire as they will probably be unable to rely on their pensions.

He noted that some people are hesitant about paying money into a pension scheme and those who choose not to have a personal account may find themselves dependent on the government in the future.

Mr Churchouse went on to say: “However, I don’t know whether the government has the view that if you actively opt out of the scheme, there is going to be a caveat to say that you can’t pop back to the state later.”

According to the Fidelity Retirement Index, the average household can expect to live off 42 per cent of their current income when they stop working full-time, which is far below the two-thirds that the Pensions Commission is proposing.

Tags: saving, state, Household, cent, Labor, Financial services, Fidelity Retirement Index

New credit cards can ‘ease the pinch’

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

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

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

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

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

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

Tags: Financial services, consumers, transfer, crunch, belts

‘Fixed-rates offer peace of mind’

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

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

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

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

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

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

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

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: Boden Wilks, debt, Business Finance, spending, finance

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

Shoppers choosing cash rather than credit

Consumers are cutting back on their credit card spending and increasingly using cash to pay for their purchases, it has been claimed.

A survey of 17,000 shops conducted by the British Retail Consortium (BRC) revealed that cash was used for 60 per cent of transactions last year, up from 54 per cent in 2006.

The BRC said this shows people are concerned about spending money they do not have and want to keep tight control of their finances.

Another issue raised by the BRC is the cost that credit card companies charge retailers, which is four times the amount of a cash transaction.

Consumers are forced to pay for the extra charges as retailers pass them on through increased prices.

“There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks,” said BRC director general Stephen Robertson.

Savings expert at Scottish Widows, Anne Young, recently said that young people get into trouble due to the “proliferation of credit” that is now available to them, adding that more should be done to educate people on managing their credit.

Tags: amount, Business Finance, young people, credit, Payment systems, scottish widows

More women responsible for household finances than men

Women are more likely than men to be responsible for financial decisions in UK households, according to new research.

A study by Family Investments, a Child Trust Fund (CTF) provider, found that 59 per cent of women are in charge of decision-making regarding family money.

These findings corroborate research by Norwich & Peterborough Building Society released last month which showed that although 74 per cent of men are still the primary earners within a family, most financial decisions are either made together or by women.

In particular, women were found to take control of day-to-day spending on their children and homes.

“Indeed, this puts the myth of the father as the financial head of the family to rest,” commented Gary Lacey, group product manager at Norwich & Peterborough.

Two-thirds of women prefer to do their banking over the internet, even though only 20 per cent open their online bank account via the internet, according to the study.

Women also seemed more knowledgeable about children’s savings products than men, with over 60 per cent identifying that CTFs are a tax-efficient savings option.

Tags: head, investments, household finances, Financial services, month

Building societies still lending despite the credit crunch

Building societies are still in a good position to offer funds for mortgages despite some announcing they were restricting lending, one financial expert has claimed.

According to the Building Societies Association (BSA), action taken last week by certain building societies was not an indication that these providers were struggling in the wake of the credit crunch.

With certain larger lenders withdrawing from the marketplace, many smaller firms were inundated with applicants which required a re-adjustment of service levels to ensure customers were still dealt with, said the firm.

Neil Johnson, PR and policy manager for the BSA, said: “Building societies are largely funded by retail deposits rather than wholesale markets. So the problems in the wholesale markets haven’t affected them in the same way that they’ve affected banks.”

Earlier this month, the BBC reported that five building societies – the Bath, the Earl Shilton, the Newbury, Melton Mowbray and the Tipton & Coseley – had restricted or halted new mortgage lending due to an influx of new customers.

Tags: good position, business, economics, bank of england, Financial services, month, Social economy

Half British spenders financially overweight

Almost half of British consumers are financially overweight, according to the results of a new survey.

Findings from Lloyds TSB Body Mass Index (BMI) reveal that four out of every ten spenders admit they have no savings while those between 18 and 24 years-old are the most financially obese.

Those aged over-55 are financially fitter compared with their younger counterparts.

Ian Larkin, managing director, consumer banking, Lloyds TSB said that physical health is something that the nation is taking increasingly seriously.

However, “most of us know our BMI, but our financial health seems to be less of a priority and often people have misapprehensions about the real state of their money,” he said.

According to the figures, the financially fittest regions in the UK are south-west and Wales compared with the Scots who are the biggest over-spenders when it comes to their finances.

Meanwhile, further research from Lloyds TSB shows that more than nine out of ten UK adults are not using their full tax-free savings allowance.

Tags: Mass Index, obese, Financial services, uk adults, Medical education, Body shape, scots, body mass index bmi

Calls for saving scheme to be extended

The expansion of a government scheme for matching the amount of money saved by lower-income Britons could provide a real boost to the nation’s savings, it has been claimed.

The Tax Incentivised Savings Association (TISA) said that the Saving Gateway initiative, which was introduced to encourage saving in households that are not engaged with mainstream financial services, could provide valuable incentives if it is rolled out on a national level.

Tony Vine-Lott, director general of TISA, said that Saving Gateway is “the next logical step” on a path begun by individual savings accounts and child trust funds.

“By targeting those who aren’t saving and providing new, simple incentives, we believe that we can realise nearly two million new savers,” he commented.

TISA said that it has been taking “a leading role” to help the government create and trial the scheme.

The government began piloting Saving Gateway in 2001.

Tags: mainstream financial services, child, Lisp, Financial services, logical step, saving, Lott, lower-income britons

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

Home insurance ’second most important insurance you can buy’

Homeowners are being urged to take out insurance for their homes if they have not already, as it is the “second most important insurance you can buy”, one expert claims.

The British Insurance Brokers’ Association (BIBA) said only car insurance, which is a legal requirement, is more important than home insurance.

According to the organisation, insurance premiums for buildings and contents insurance are still low as they have “hardly changed” in the past ten years.

Graeme Trudgill, technical and corporate affairs executive of BIBA, said: “Look at the flooding that we have had – 75 per cent of people have contents insurance which means 25 per cent don’t.”

“This means that if something happens, they have lost everything,” he added.

According to BIBA, a mortgage holder could also be breaking part of a contract between themselves and a mortgage lender if home insurance is not in place.

Meanwhile, figures from the Association of British Insurers (ABI) have shown that the UK insurance industry paid out £9.0 million to householders in 2006 for property damage or the loss of possessions.

Tags: Association, Financial services, Graeme Trudgill, buildings and contents, British Insurance Brokers, BIBA, British Insurance Brokers Association, buildings and contents insurance

Failing to take out insurance puts homes at risk

Failing to take out building insurance can put your home at “real risk”, according to one expert.

Nationwide said that consumers avoided building and home contents insurance due to the supposed ‘complexity’ involved in the contracts, but stated that it is not complicated at all.

Charlotte Sjoberg, campaigns manager for Nationwide, said the need for insurance had not necessarily increased since the spate of bad weather.

“Whether you are in a flood risk area or not, it is really important to protect your home against unexpected events. You really don’t know what could happen,” she said.

She also said that is it important for homeowners to have the right amount of insurance cover and to be aware that home contents and building insurance protect consumers in different ways.

Research conducted by the building society has found that one in five of home owners do not have buildings insurance, and that one in four do not know what is included in their policy.

Furthermore, 14 per cent of those surveyed had also failed to take out home contents insurance.

Tags: flood risk, Title insurance in the United States, weather, Financial services, building and home contents insurance, manager, real risk, insurance policy

One in 20 do not tell the truth in insurance applications

One in 20 consumers admit to having lied when filling out a life insurance application, according to new research.

Findings from a survey by Friends Provident showed that 95 per cent of people said they always tell the truth when completing forms for insurance.

Mark Jones, protection products and actuarial manager at Friends Provident, said: “It’s good to see many people recognise the importance of advice when buying insurance, and they take the time to answer all questions truthfully when applying for insurance.”

Over half of the respondents said that those who did not tell the truth deliberately on the forms should be punished by not being allowed any benefits

Under half said they would do research online before taking out insurance while 20 per cent would take advice from a financial expert and a further 15 per cent would rely on information from family and friends.

A further one in five admit to not reading the terms and conditions in a policy before signing up.

Meanwhile, research from Nationwide has revealed that a fifth of homeowners do not have buildings insurance.

Tags: respondents, actuarial manager, benefitsUnder half, Provident, Financial services, family, Types of insurance, policy

Homeowners ‘do not have adequate insurance’

Up to one in five of Brits have no home insurance while a quarter do not know what their policy covers, according to a recent poll.

Findings from the Nationwide showed that many respondents are at the risk of being underinsured with 14 per cent of people admit to not have any contents insurance.

This is despite the average homeowner having home contents worth between £14,000 and £21,000.

Nationwide’s insurance director, Robin Bailey, said: “It is surprising that so many people are prepared to take such a gamble on their homes and personal belongings when you consider how much time and money we all invest in our homes.

He added that as consumers never know “what is round the corner”, they would benefit from being prepared by having adequate insurance.

However, the survey also showed that those aged 45 and over are more likely to have both buildings and contents insurance and claim to possess full knowledge of what is covered.

Meanwhile increasing numbers of homes are at risk from dangerous weather, Abbey Home Insurance has stated.

Tags: Insurance, Brits, covered.Meanwhile increasing numbers, Windloss Inspection, Financial services, contents insurance, home contents, quarter

Over 9m Brits have no pension provision

Over 9 million Brits have no pension provision yet expect to retire when they reach the age of 62 according to new findings.

Research from Baring Asset Management found that of those adults yet to retire, 24 per cent have no pension provision at all.

The target age of retirement for those between 18 and 34 is 61, in spite of government recommendations stating that it is set to rise to 68 by 2044.

Rob Lay, Barings’ head of European sales, said; “People have to start taking a more proactive approach to planning for their retirement.

“These figures reveal a worrying trend of UK adults assuming that they will be in a position to retire without having made the necessary arrangements for funding that retirement,” he added.

The research also showed that 21 per cent of people expect to be able to retire before 50 with a defined contribution scheme, and 17 per cent expect to be able to retire on a defined benefit.

According to figures from the Government Actuary’s Department, life expectancy for men and women is set to rise to 86 years and 89 years respectively by 2050.

Tags: contribution, Department, funding, personal finance, government, position, Financial services, Pension

A quarter of home refit projects go over budget say experts

Up to one in four of home makeover projects end up going over budget, according to figures from Halifax Home Insurance.

An estimated million under-budgeters have to find an extra £4,690 to afford £10,000 which is the average cost of completing a home improvement project.

This works out at a total annual budgeting shortfall of approximately £4.7 billion.

Martyn Foulds, senior claims manager at Halifax Home Insurance, said: “It’s interesting to see that the major reason for spiraling costs is often due to homeowners adding extras to a project half way through.”

He added: “Clearly it is all too easy to get carried away with adding more expensive fixtures and fittings as the project unfolds.”

The most commonly cited reason for escalating costs, from over half of the survey’s respondents, was upgrading to higher specification fixtures and fittings.

A further 20 per cent said costs had risen after building works had unearthed problems with their house that needed urgent attention.

Meanwhile, more research from Halifax has found that over two thirds of respondents believe the government could be doing more about the number of vacant properties in the UK.

Tags: home insurance, Financial services, specification, Real estate economics, home makeover projects, expensive fixtures, house, respondents

Personal debt soars

Britons are paying a whopping £93 billion a year in interest on borrowing, it has been reported this week.

That is an increase of £12.7 billion on the figure for the same time last year, raising widespread concerns that many people are going to be unable to manage their levels of debt.

Increasing domestic fuel bills combined with tightening borrowing conditions – and the short-term effect of Christmas spending – have led to a particularly tough environment.

The average household now pays £3,744 per year in interest on borrowing alone – an increase of £517 compared to last year.

According to uSwitch, which carried out the research, around one in four people acknowledge that repayments on their debts are not manageable.

Accountants KPMG have also warned that personal bankruptcies are likely to increase to 130,000 in 2008.

Spokesperson Mark Sands told the Daily Mail: “Those in difficulty will find that their options are becoming limited.”

Tags: Financial services, repayments, week, debt, Christmas spending, spokesperson, spending, personal debt

Frost increases theft as cars left unattended

“When the icy mornings start” theft claims increase, as drivers leave their cars unattended while defrosting, say insurance experts.

The British Insurance Brokers’ Association (BIBA) says that car owners should stay with their vehicles to avoid becoming victims of this new type of car theft – “frosting”.

Graeme Trudgill, technical and corporate affairs executive at BIBA, said: “Unfortunately, gone are the days when you can leave your door open…and the same goes with your car. You do need to take security measures there.”

He added that drivers are being sensible by defrosting in the first place, as it would be dangerous to drive with only a small gap in the windscreen through which to see.

However, it could be contentious when making an insurance claim in a situation where a driver has left a vehicle unattended as insurers will argue “you haven’t taken reasonable care,” warned Mr Trudgill.

In January 2007, Sainsbury’s Bank estimated that between 2000 and 2005 as many as 121,730 households may have become victims of “frosting”.

Tags: theft claims, Financial services, Sainsbury, January, theft

Brits turning on into small hours

A large proportion of the UK population are banking online late into the night, according to recent research.

With 17 per cent of respondents to a survey by Abbey putting banking off until bedtime, millions of Brits are literally losing sleep over their finances.

Meanwhile, it was found that over half of online bankers log on every other day or more to keep their finances in check, with 38 per cent believing they save more now that they can bank online.

Reza Attar-Zadeh, head of savings at Abbey, commented: “For a long time we’ve observed a growing preference for the online channel but for the first time we are seeing evidence that people really are enjoying the online banking experience and claiming that it makes them better with managing and saving money.

“There is real satisfaction in watching savings grow and the Internet enables us to do this with real ease.”

Furthermore, there has been a 39 per cent decrease in the number and frequency of people visiting their bank’s branches.

Tags: losing sleep, Financial services, Reza Attar-Zadeh, number, online bankers, bedtime

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: finance, David Alexander, alexander associates, high, long term investment, uk, fact, Financial services

Majority prefer printed bank statements

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

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

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

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

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

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

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

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

Possession insurance more common than life insurance

More Britons insure their possessions than their own life, according to recent research from Legal & General.

A full 66 per cent of those surveyed said they had house insurance, but just 41 per cent said that they had taken out life insurance, the survey found.

Additionally, while 22 per cent of respondents reported having insurance for their mobile phones, 17 per cent had critical illness cover.

Bonnie Burns, Legal & General’s protection product marketing director said: “The nation’s priorities seem misguided, with people more worried about losing their mobile than about how they would cope financially if they had a critical illness.

“We all know that it is difficult to face up to our own mortality, but when insuring possessions is prioritised above insuring lives, then something has to be done.”

In 2005-06, a total of 212 workers were killed in accidents, according to the Royal Society for the Prevention of Accidents.

Tags: legal, business, percentage, critical illness, Possession insurance, mobile phones, Financial services, total

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

Insurance switching gains momentum

There has been a marked increase in insurance switching, an industry expert has said.

According to MoneyExpert.com, the car and home insurance markets have seen a dramatic rise in people changing policy.

In the last six months, insurance customers for these sectors have abandoned in excess of 9.2 million uncompetitive policies.

The website’s Switching Index shows that, in the same period ten per cent have switched home insurance policy while 15 per cent have changed motor insurance policy.

In total, 9.27 million policies have been swapped in the last six months, which represents a staggering increase of 1.6 million from the previous quarter this year.

Sean Gardner, chief executive of MoneyExpert.com, said: “The good news is there are plenty of excellent offers out there and many product sectors are incredibly competitive – insurance being a prime example.

“It will almost certainly be the case that everyone can save money by switching and we would urge consumers to continue to seek out the best deals.”

Tags: Financial services, best deals, economics, momentum, insurance policy, home insurance, home insurance markets

‘Whole range’ of green mortgage options

Borrowers have been advised that there are many approaches to finding a “green” mortgage.

The Co-operative Bank has said the there is no specific framework for a green mortgage, but that options vary from lender to lender.

A spokesperson for the bank said: “As part of the Co-operative Bank’s established ethical policy, we are committed to tackling climate change and [are] supportive of government efforts to increase awareness of energy efficiency.”

She added that the company makes a “contribution” to a climate change action organisation Climate Care, for each mortgage taken out with them. This is then put towards worldwide carbon-cutting measures.

The Council of Mortgage Lenders explains that it is down to individual lenders whether or not they offer green products.

Some offers include benefits for those borrowing to invest in energy efficiency or for an energy efficient home. Others are carbon offsetting their “mortgage footprint” by donating to the Carbon Trust or planting trees.

Tags: government efforts, efficiency, climate change action, carbon-cutting measures.the council, bank, green mortgage options, Financial services

Floods put insurance premiums ‘on the increase’

Claims made due to extreme weather conditions this summer have pushed home insurance premiums up.

According to the AA’s British Insurance Premium Index, flood claims are blamed for a three per cent year-on-year rise in home buildings insurance which represents the biggest increase since 1994.

The flooding in July this year is estimated to have cost the insurance industry £3 billion, according the Association of British Insurers.

John Close, insurer relations director at AA Insurance, said: “Some predictions that premiums would rise by 15 per cent were overly pessimistic and, although I believe premiums will continue to rise as insurers dip into their reserves, I expect competitive pressure will keep increases affordable.”

He added that one advantage of the flooding was that people with no contents insurance are realising that it is a necessity leading to “many insurers reporting increasing business”.

Furthermore, he advised, there are variation in prices and “deals to be done” when organising cover. He emphasised the importance of comparing cover charges before deciding on an insurer.

Tags: contents insurance, Financial services, extreme weather conditions, floods, Types of insurance, Service industries

Parents forking out for offspring debt

Some 7.5 million parents are having to financially support their adult children, new research has found.

A MoneyExpert survey found that 40 per cent of parents with adult children have to help out with debt problems, with some £2,540 being paid per family on average.

Mobile phone bills and car finance were the most popular debt types that 24 per cent of parents have helped to cover the cost of, closely followed on 23 per cent by credit card bills.

Overdraft finances on 20 per cent and student loan debts on 15 per cent also featured as the fourth and fifth most common types of debt.

MoneyExpert chief executive Sean Gardner commented that the figures reveal that child expenditure is now a financial burden for many parents even when their kids reach adulthood.

“With the cost of living so high at the moment and with so many people living a buy-now-pay-later lifestyle, parents are often forced to help out with their children financially in later life,” he added.

Recent statistics from the debt charity Credit Action reveal that the average graduate debt for adults under the age of 30 is £12,363, but the figure represents both a decrease of £889 on 2006 and the first drop in graduate debt for six years.

Tags: Student loan, Financial services, adult children, Credit card, graduate debt, credit, Parent, adult

Customer service top for bank customers

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

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

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

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

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

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

Tags: concern, quality, new study.Research, britons, rate."The research findings

Loans to family ‘may be counterproductive’

People who lend money to friends and family may only be a short-term fix for those in debt, according to one expert.

Stephen Rose, the director of the not-for-profit information provider Debt Advice Bureau, argues that issuing loans to people who are in debt may only mask an underlying financial issue.

“We have seen a minority of cases where people have wracked up debts and – usually a parent – has bailed them out and paid off their credit cards.”

“And in no short space of time debts are being wracked up again,” he adds.

As such, Mr Rose argues that if someone is tempted to loan money to a loved one they could instead work with the person to establish where their money is going.

The directors’ comments follow research from DebtSmart found that out of the 59 per cent of people who had leant money to a friend, just over one in four had been repaid.

Tags: loan, advice, comments follow research, loan money, Credit Cards, money, Financial services, Mr Rose

Pensioner hit by £100k debt

A disabled 93-year old Cornishman has been hit by interest on a loan of almost £100,000.

The astonishing sum comes from an original £17,000 loan taken out by Clifford Taylor, of Liskeard, nine years ago at high street lender Barclays.

Mr Taylor has fallen victim, like many other British OAPs, to a shared application mortgage – a type of loan offered by Barclays and other banks in the 1990s.

Designed to allow customers to borrow up to 25 per cent of their home’s value, customers were obliged to pay back the loan when their property was sold, along with a proportion of any increase for the remainder of the house’s price in the interim.

Recent soaring house prices have led to the astronomical rates of interest faced by Mr Taylor and others.

Mr Taylor had originally taken out the 25 per cent loan to pay for double glazing to be installed, along with new carpets. Deteriorating health led him to sell the property last year.

Barclays then took 75 per cent of the price difference as well as the original loan – a total of £116,000.

Mr Taylor’s daughter, Sandra McGee, told the Guardian last week that, while she accepts that the loan is legally binding, “it’s the moral aspect I’m thinking of.

“It’s just so unfair on someone who is disabled.”

According to latest financial reports released last week, Barclays’ profits hit £4.1 billion in the first six months of 2007.

Tags: Clifford Taylor, original loan, latest financial reports, astronomical rates, Financial services, someone, 93-year old cornishman, guardian

Card companies spark debt fears with repayment reductions

Minimum repayment levels of some leading credit cards are set to be reduced.

Cards providers have heavily advertised the reductions recently.

However, many in the industry are criticising the new offers, saying that the card providers might be exacerbating the UK’s debt problem.

To take an example from today’s Minimum Repayment Index from price comparison website uSwitch, M&S is reducing its repayment level from three per cent to 2.5 per cent, which might well appeal most to the ’spend today and worry tomorrow’ consumers who are currently racking up debts.

Barclaycard has also recently announced that its rate will be cut from 2.5 per cent to 2.25 per cent.

Lowest of all are lenders such as Bank of Scotland and Egg, who offer a tiny two per cent repayment rate.

Research released by Alliance & Leicester last week showed that the overall level of debt in the UK stands at an enormous £1.3 trillion, with those on lower incomes being particularly badly hit.

Tags: Index, Financial services, uswitch, lower incomes, today, debts

Car insurance increases

Car insurance premiums are higher than ever before, according to the AA’s British Insurance Premium Index.

However, home and contents insurance premiums have fallen in the past quarter.

AA says that the average car insurance premium is now £822, a rise of 2.5 per cent in the last three months.

The firm points out that this is more than double the amount quoted in the first ever index back in July 1994.

Despite this, home and contents insurance premiums have fallen slightly in the same period of time.

Buildings cover is down almost two per cent, with the average quote being £207, while contents insurance has fallen by a little over one per cent to £147.

“Home insurance represents particularly good value having changed little over the past decade and while the trend of car insurance is firmly upward, there are still deals to be had,” said Kevin Sinclair, managing director of AA Insurance.

“Things have never been better for customers in terms of choice but make sure you’re comparing like for like and not just price for price.”

Tags: Social Issues, insurance premiums, Financial services, rise, three months, car insurance premiums, amount, decade

Customers should enjoy ‘positive payments’ order

Nationwide is calling for credit card customers to enjoy a positive order of payments.

Research carried out by the group indicates that over two-thirds of consumers do not know which order their payments are allocated to their account.

Almost a fifth believe that the longest outstanding debt is paid off first, while over one in ten believe that that the highest interest items are paid off first.

Nationwide claims that less than a third of Britons know how their repayments are allocated; that is, with the lowest interest items being paid off first.

Although the group has welcomed government action which mean that from October next year all credit card providers will have to draw attention to the order of payments they use, it worries that the practice is not well understood by consumers.

Nationwide is calling upon the industry to make changes now and to treat their credit card customers fairly by adopting a positive approach to their order of payments.

Tags: order, britons, Electronic commerce, Financial services, interest, attention, positive order, government action

Where have all the fivers gone?

You may have noticed in recent months that the humble £5 is in short supply.

It may not seem like a particularly pressing issue but the lack of fivers in circulation at the moment is causing a headache for many people.

When it comes to banking, a £5 note can be particularly useful and shoppers in particular like them so that they are not carrying around too much change.

However, the Bank of England claims that it has a large surplus of the notes in storage but is having difficulty dishing them out to banks which prefer not to store them in their ATMs.

Bank of England governor Mervyn King revealed in a speech to City bosses that banks find it more economical to have £10 and £20 notes in their cash machines and this has led to the lifetime of an average £5 note doubling.

He described how many fivers are “noticeably soiled and scruffy” and revealed that he would be seeking urgent talks with banks over the issue.

“There is a need for an adequate supply of low denomination notes that can be used for small transactions where cash is the predominant means of payment,” he said.

“Such mutual convenience is a public good and may not correspond to the private interest of commercial banks.”

Mr King hinted that incentives may need to be put in place so that banks store more £5 notes in their cash machines.

Tags: low denomination notes, urgent talks, fivers, private interest, Financial services, New York

Youngsters have big ambitions

A generation of financially ambitious youngsters are heading into the world and they have grand plans for where they want to be in the coming years.

Research by Alliance & Leicester shows that around 24 per cent of today’s 16-21 year olds who currently work expect to be earning £40,000 within the next ten years.

That would mean they would be earning almost double the national average wage which currently sits at £23,244.

The ambition to earn more means that the majority of people in this age group (81 per cent) expect to have a mortgage and own a property by the time they reach 30.

A recent survey by National Savings & Investments labelled many British savers as fantasists but today’s 16-21-year-old working population has reason to feel confident.

Figures show that 26 per cent of people who chose to go straight into fulltime employment are now debt free and can begin thinking about saving up some money for their future plans.

“These days, young people have high financial and lifestyle aspirations and getting on the career ladder early can be the quickest way to achieve their goals for many,” said Helen Palmer from Alliance & Leicester.

“As a group they recognise the growing trends of graduate debt and, in contrast, the potential advantages of going straight into employment – especially climbing the first rung of the property ladder and earning substantial amounts of money.

“It is important for this group to maximize the potential of their hard earned cash and this isn’t about clever investment choices or making timely and strategic financial decisions – it’s about basic management of money in a current account,” she added.

Tags: recent survey, year, youngsters, Financial services, age group, helen palmer, basic management

Important documents ‘left languishing in drawers’

Brits are leaving their home insurance documents unread and have no idea of what they are covered for or the terms of their contract, according to new research.

Tesco Home Insurance has found that a third of homeowners in the UK leave their insurance documents languishing in a drawer with 41 per cent of them saying they have no idea of their content cover limit, despite this having massive repercussions in the case of a theft.

You should always make sure that any precious articles in your home are specified in your contract if they are above your insurer’s individual article limit. And always tot up how much all your possessions are worth so you do not become underinsured.

“We would urge all homeowners to read through their documents to familiarise themselves with the terms and conditions of the policy they have purchased. If they are unsure of any points, they should contact their insurer for clarification,” said Allan Burns, from Tesco Home Insurance.

He said another thing Brits may want to consider is family legal protection cover and accidental damage cover for any accident-prone people.

Tags: Financial services, clarification, tesco, content cover limit, home, theft, drawer, allan burns

Brits expect rates rise

The majority of Brits are expecting interest rates to rise again this year.

Lloyds TSB has published its Consumer barometer in which it revealed that most of us (77 per cent) are fully expecting another increase.

This is bad news for those with a mortgage, loan or credit card, however, the fact that most borrowers are expecting a rise may help them to be properly prepared.

Confidence in job prospects and job security fell during May, with more people believing that their position is vulnerable compared to the month previous.

“Last month’s interest rate rise did little to convince consumers that rates had reached a peak,” said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.

“In line with the prevailing opinion of the financial markets, consumers believe rates will increase further this year.

“We’re just beginning to see the impact of May’s rate rise on consumers with sentiment on job security and prices starting to cool.

“Even so, there is still some way to go before the Bank of England will be reassured – they have emphasised that for inflation to stay low, inflation expectations must be anchored at low levels,” he added.

Borrowers concerned that interest rates are likely to increase in the coming months should try to account for a rise in repayments when budgeting.

Tags: majority, Brits, interest rate rise, Financial services, Brits expect rates, cent, lloyds tsb

Bad credit doesn’t mean bad mortgage

It is something that occupies the minds of many young adults today but a leading mortgage broker claims that bad credit need not mean higher mortgage rates.

London and Country (L&C) claims that 71 per cent of people with credit problems who have visited them have walked away with a mainstream mortgage deal.

This is despite the borrower’s belief that he or she will be hit hard for a previous bad record.

L&C admits that most lenders will not deal with people who have recent defaults and County Court Judgements but points out that the situation is never black and white.

It is possible that some lenders will be more lenient than others and the broker claims that many people with only minor blemishes may be surprised by the kind of deals available to them.

“All too often, people assume that because they’ve had some credit problems in the past, they will have to pay a much higher interest rate and in some cases, high broker fees,” said James Cotton, mortgage specialist at L&C.

“In fact, our research shows that by getting whole of market advice from L&C, borrowers can seek out the best deal for their circumstances and can often secure a better rate than they thought possible.”

The news will be welcomed by first-time buyers, many of whom are of the belief that they will have to wait years until they can get a mortgage.

Tags: specialist, situation, interest rate, advice, Financial services, circumstances, Mortgage broker

Keep claiming those bank charges

Customers should continue to trying to claim back unauthorised overdraft charges from their banks despite a recent court ruling.

Birmingham County Court found in favour of Lloyds TSB in a case against Kevin Berwick in which he was trying to claim back £2,545 in charges.

The case does not affect other rulings as County Courts cannot set precedents, however, the fear is that banks will become more confident in turning down people who seek compensation.

Despite this, Which? says that people should not be put off from claiming and should remain confident that they will get some money back.

“This news must not deter people from reclaiming their bank charges,” said Emma Bandey, personal finance campaigner at Which?

“People shouldn’t be scared or worried about continuing with their claim or indeed starting one. We have now had over 387,000 downloads of template letters from the Which? website.

“It’s such a simple process. Keep reclaiming those charges and if you experience any problems, go to the Financial Ombudsman Service,” she added.

Some industry figures have warned that we could be about to see the end of free banking as banks look to recover the money lost through charges.

Tags: Lloyds Banking Group, business, Economy of the United Kingdom, Business Finance, fear, court, Bank charge, Financial services

Another interest rate rise

Interest rates are the highest they have been since April 2001 after the bank of England announced yet another rise.

The 0.25 per cent increase is the fourth rise since last August and is bad news for borrowers up and down the country.

Many experts had been predicting the Monetary Policy Committee’s (MPC’s) decision and some had even forecast a bigger increase of 0.5 per cent.

The rate rise was brought in to keep inflation in check and recent figures show that inflation is currently at record levels.

People with a mortgage, credit card or loan will be disappointed with the decision and will need to keep an eye on their finances to ensure that they can keep up repayments.

Someone with an £80,000 mortgage can expect to see their monthly payments increase by around £12, while those with a £200,000 mortgage will see payments rise by £30.

Experts are also warning that this is unlikely to be the last interest rate rise, with economists predicting more to come in the months ahead.

Tags: Financial services, Credit card, loan, business, bigger increase

Over 55s not ready for retirement

Millions of Britons aged 55 or over have not even begun to think about life after retirement.

That is according to new research by Abbey which found that around two million people in this age group have given it no thought at all.

In addition, 4.5 million people have not made plans for what they will do once they stop working.

This statistic is worrying many observers who say that many people are going to head into retirement and face a financial crisis due to their wayward banking.

The next generation is not looking much better either, with 1.8 million people between the ages of 45 and 54 not having considered retirement.

“This research shows the potential retirement time bomb that the 50 plus generation are facing,” warned Reza Attar-Zadeh, head of savings at Abbey.

According to Abbey’s study, one million people over the age of 55 feel that they will have to work through their retirement as they have little money put aside.

Added to this, 1.5 million in the same generation say that their home is their only form of financial insurance to see them through their twilight years.

Tags: retirement, group, one million, Social Issues, head, crisis

Consumers using bonuses to ‘pay off’ mortgage

Almost one in ten diligent Britons are using their annual bonus to pay off chunks of their mortgage, new research carried out by Birmingham and Midshires shows.

Figures released by the financial provider indicate that Britons are proving to be particularly savvy when using their bonuses, with nearly two-fifths having saved all or most of their bonus over the past year.

With regard to their mortgage, people from the Midlands and Wales are found to be the most financially astute, with nearly two-thirds paying off their mortgage.

In total, Britons collected more than £24 billion in bonuses last year, with the average employee receiving £1,758 from grateful employees, allowing many to invest in other avenues than their mortgage.

While some saved their payouts, over one in ten splashed their hard-earned cash on holidays and electrical items.

Jason Robinson, director of savings operations for Birmingham Midshires, said: “It’s easy to be tempted to splurge when we get paid a bonus so the fact that more than half are using their extra cash sensibly is great news.

“You don’t need a huge amount to save or invest so lucky bonus recipients should try to find a healthy balance between rewarding themselves for a year of hard work and squirreling their cash away,” he added.

Tags: Financial services, two thirds, holidays, jason robinson, new research

Banks extend credit card cash advance charges

Customers are being urged to be as savvy as possible when using their credit card, with many providers believed to have extended the remit of cash advances.

Such an action could be tough on consumers, with the interest rate on purchases such as gift vouchers and online betting often being double that of usual cash transactions.

Nick White, director of financial services at price comparison site uSwitch, has described the way in which cardholders are being “bamboozled” by the banks’ tactics.

“They don’t know whether they will be charged at the much higher cash withdrawal rates on a whole raft of credit card transactions unless they scour the small print in their terms and conditions,” he told This is Money.

The measures are believed to have been implemented by many financial providers to recoup finances as a result of an Office of Fair Trading decision last year, which compelled banks to cap penalty fees at £12.

According to the Association for Payment Clearing Services, cash withdrawals on credit cards in the UK totalled £8.22 billion last year.

Tags: Association, Clearing, uswitch, Financial services, Credit card, advance, action, penalty

Homeowners urged to combat subsidence

With subsidence claims having risen by 50 per cent since 2002, according to the Association of British Insurers, homeowners are being urged to take measures to reduce the risk of subsidence in their property.

“People don’t knowingly cause subsidence, but there are ways homeowners can help to reduce the risk of such damage to their home to avoid the costs, inconvenience and inevitable worry that subsidence damage brings,” said Neil Curling, senior structural claims manager for Halifax Home Insurance.

Halifax recommends that to avoid or combat subsidence homeowners should check for historical activity of mining in the area, get a survey of the property’s drainage, trim back or remove large trees near a property and get the local water authority to check the incoming mains supply for faults.

And they should definitely double check the small print in their home insurance documents, or shop around for a cheap deal if they don’t have any.

The improving weather conditions make the risk ever greater as vegetation takes up more moisture as it grows just as the heat makes moisture scarce.

This can cause some types of ground, such as clay subsoil, to shrink as it dries out, which can undermine property foundations and crack walls – one of the first signs of subsidence.

Tags: measures, Financial services, authority, weather conditions, home, Association, check, water authority

‘Review home insurance after wedding’

The British Insurance Brokers’ Association (Biba) has today revealed that re-thinking home insurance after a wedding is vital.

According to Biba, couples are putting many items at risk by not ensuring that they are properly covered and that newlyweds should consider getting in touch with an independent financial advisor.

Wedding presents are becoming more and more valuable and friends and family lavish gifts on their loved ones – making it all the more vital to ensure items have home insurance policies.

Graeme Trudgill, manager of technical services at Biba, said: “The key thing here is to make sure that all your items are covered.

“Before you got married, you probably had £20,000 worth of stuff and one toaster. But after you get married you receive lots of wedding presents, jewellery, and seven toasters, so it’s very likely that you’ll just need to review what cover you have.”

His comment come as research from Direct Line Home Insurance has revealed that same-sex couples have paid out more than £62 million on civil partnership ceremonies in the UK since they became available in December 2005.

Tags: same-sex couples, newlyweds, financial advisor.Wedding presents, Financial services, british insurance, family, home, today

Rental Car Insurance

More and more these days we are leaving the car at home and are picking up a rental when we arrive at our holiday destination. If this is exactly what you are planning on doing, and you have never rented a car before, then the following are a couple of hints you should keep in mind when arranging your rental car insurance: Read more

Tags: personal accident insurance events, car insurance provider, rented car insurance, Financial services, death, liability insurance

Is Travel Insurance Needed?

In the last five years, more and more people are travelling to further distant regions and not buying travel insurance. Is travel insurance needed? The lust for adventure and need for a challenging life may be strong, but insurance is still necessary. Every year in the UK and overseas, natural disasters have occurred where lives ended in tragedy. Read more

Tags: Expatriate insurance, challenging life, life, types of personalities, Financial services

The Cost of Travel Insurance

The big decision concerning travel insurance is the question of what happens if the traveller only goes away for a few days at a time for business or pleasure, but has to pay for the policy for an entire year. Since the price per day ends up being more expensive, the yearly option is usually more affordable. Most policies require a certain amount of days, like a one day plan or a fourteen day plan, nothing in between. If a traveller is away for four days, they have to buy the nine day plan and the extra money spent is a waste for days they weren’t travelling. Read more

Tags: travel insurance costs, answer, trend, travel insurance, few days, nothing, traveller, Financial services

FSA launches crackdown on insurance fraud

The Financial Services Authority (FSA) is working to reduce the amount of financial crime in the insurance industry.

As part of a drive to crackdown on the crime it has launched a reporting system which will see insurance firms alerting the FSA whenever they suspect foul play.

From there the FSA will make a decision as to whether or not it will investigate the case further.

“We are looking to all insurance firms to participate in this scheme and help us beat criminal financial activity in their industry,” said Stephen Bland, director of small firms at the FSA.

“We want to know when a firm has suspicion or evidence of malpractice so that we can act on it where appropriate.

“We hope that by sharing intelligence in this way, we can work together to reduce financial crime,” he added.

Mr Bland went on to say that the new system is similar to the one introduced to combat mortgage fraud and he hopes that it will be just as successful.

The introduction of the system has been welcomed by the Association of British Insurers, praising it for providing a “simple point of contact to raise concerns”.

Tags: Stephen Bland, point of contact, Financial services, insurance fraud, Insurance, introduction, intelligence, suspicion

Travel insurance industry slammed in report

Millions of us could be going on holiday without adequate travel insurance due to hidden clauses in our policies.

That is according to the Treasury Select Committee (TSC) which carried out a report and found that many people are not being told exactly what they are buying when they take out insurance.

The TSC highlighted that there is “insufficient awareness” among consumers about clauses in travel insurance policies.

“All too often, exclusions are buried in the small print of insurance policies,” said John McFall, chairman of the TSC.

“Holidaymakers are risking damage to their health or considerable financial loss if they require treatment while abroad or repatriation to the UK.”

The report has caused a stir within the industry, with Which? calling it “damning” and saying that it reiterates “the urgent need for consistent regulation of travel insurance”.

“Which? research shows that travel insurance is being mis-sold and consumers aren’t being given the appropriate information,” said Mike Naylor from Which?.

“There is no reason why travel agents should be excluded from regulation.”

People planning a trip abroad are advised to take out travel insurance and Which? has compiled a list of tips to ensure that you get the right cover.

Declaring any information that may lead to a claim, checking cover limits and exclusions, looking out for excesses, reading the small print and informing the insurer of any medical conditions are all advised.

Tags: trip, report, Financial services, travel agents, adequate travel insurance, exclusions, Types of insurance

Lloyds TSB’s annual credit card charge

People with a Lloyds TSB credit card that they do not use regularly face being charged for the pleasure of owning one.

It is the first sign that banks may be seeking to recoup the money they are likely to lose as a result of pressure to cut penalty charges, as predicted by research firm Defaqto this week.

The bank has announced that people who do not use their credit cards will be hit with an annual charge of £35.

However, Lloyds has failed to reveal what they define as low-usage, meaning many people may find themselves in a state of limbo.

People who have a card but do not use it at all have been told in no uncertain terms that they will be charged and are being advised to cancel the card and destroy it.

“It costs the bank money to issue cards to customers who are not using them. This is intended to get them to start to do so,” a spokesperson from the bank told the Guardian.

In a bid to tempt consumers into using their cards more often, Lloyds is offering zero per cent interest on all purchases until May this year.

Earlier this week Defaqto’s head of banking, David Black, said that he would be “very surprised” if free banking was still available in the UK in two years time.

“The first major provider to introduce charges for all customers is going to take a lot of flak but it is likely that the majority of the main providers will then follow the lead,” he said.

If you have an unused credit card with Lloyds TSB make sure that you cancel it and, for security reasons, cut it up before throwing it away.

Tags: interest, majority, Credit Cards, provider, limbo, Financial services, penalty, research

Burns night warning

Scots have been warned to be careful as they celebrate Burns Night.

Zurich Insurance says that a large number of claims are made following the celebrations, as partygoers become slightly over zealous and cause damage to their homes.

According to the firm, 32 per cent of Scottish parents who celebrate the night suffer domestic damage.

With the annual claim reaching more than £100, Zurich says that it is vital people take out adequate insurance to cover any mishaps.

“If people are planning to celebrate Burns Night with a party at home, it’s worth taking a few minutes to check their insurance policies – possibly even considering extending the protection for their contents to include accidental damage,” said Martin Hall from Zurich.

The firm says that stained carpets and damaged furniture are the most common casualties of such parties and it believes that people should be free to celebrate without the concern of having to pay for any damage.

“By making sure they have the right policy in place, they can let their hair down, and have a worry free Burns Night,” added Mr Hall.

Burns Night is a celebration of the poet Robert Burns, the man who wrote Auld Lang Syne.

Tags: GBP, party, common casualties, warning, Hall, Financial services

‘Misleading’ insurance firms slammed

A number of insurance firms have been slammed by the Financial Services Authority (FSA) for misleading customers.

A number of high-profile firms have been told that they must stop using savings claims in their advertising that could be misleading.

The FSA has threatened companies with regulatory action if the practice continues and it comes after a large-scale investigation into press advertisements from insurance firms.

It was found that more than half of all press advertisements from motor insurance companies were misleading or unclear.

Home insurance firms did not perform much better, with over a quarter said to be misleading, while travel insurance advertisements were found to be of a higher standard.

“Most people rely on some form of insurance to protect them and advertising is a major influence on what they choose to buy,” said Vernon Everitt, FSA’s retail themes director.

“So it must be clear, fair and not misleading, leaving people with a balanced picture of what’s on offer. This work demonstrates that firms in the home, travel and car insurance markets must shape up and ensure that the claims they make don’t mislead.

“We will be back in three months to assess progress and will then decide whether further regulatory action is needed,” he added.

The FSA says it has contacted the senior management of offending firms, but some industry experts are calling for the companies to be named and shamed.

Tags: high-profile firms, Financial services, unclear.Home insurance firms, FSA's retail themes, home

Separation must be financial too

January is the peak month for couples splitting up and those who find themselves in this situation are being warned to remember that financial ties remain long after the love has gone.

Research shows that couples are most likely to go their separate ways during January as the pressures of the Christmas period act as the straw that breaks the camel’s back in a relationship which is failing.

However, many people forget that although they may no longer be in an emotional relationship with their former partner, they may still be in a financial one.

MyCallcredit is warning those who have split that they should break these ties, or risk their ex having an impact on their credit file and future creditworthiness.

“Any joint credit arrangements need to be transferred into single names and joint accounts closed before an individual can disassociate themselves from their former spouse,” said Melanie Mitchley from MyCallcredit.

“If people aren’t proactive they can find their own finances affected by their ex’s future partners. And that’s something to be avoided at all costs.”

The firm says it is important that any joint credit commitments are brought to an end, which may involve taking out a new loan to pay off a previous debt.

Once this is done, the credit reference agencies should be contacted and informed that there should be no more association between you and your former partner.

“Splitting up is always difficult but it pays to take the initiative and disassociate yourself from your ex and their borrowings as soon as possible – otherwise you could be in for a nasty surprise,” added Ms Mitchley.

Tags: straw, commitments, Financial services, credit reference agencies, relationship, January, joint credit arrangements, Separation