Tighten your spending for next year

With all the uncertainty over the economy and job losses many people will be stressing over their finances and for many people sorting out their finances for the New Year will be a priority. It is always a good idea to start the New Year with a streamlined budget, as it means that you can focus on your finances and try to get them into some sort of order over the course of the year.

With this in mind it is a good idea to start now when it comes to trying to sort out your finances, and there are a few simple steps that you can take, which could help you to organise your finances more effectively, make your budget more manageable, and even reduce the amount of money that you pay each month.

The first step is to go through your finances with a fine toothcomb. You need to make a list of all of your income and all of your outgoings so that you know exactly what is going into your account and exactly what is coming out of it each month. This will allow you to see where you can make cutbacks and what changes you can make to benefit you in terms of your financial situation.

Many people have a variety of payment that they make for things that they do not even use, such as gym memberships even though they never get time to go, magazine subscriptions for magazines they no longer read, and various other payments that they may have forgotten about. Take the time to cancel anything like this, as it could mean big savings each month.

Once you have gone through your finances with a fine tooth comb it is time to see whether there is anything that you can reduce payments on by switching. Many people switch services such as their utilities, broadband, insurance, credit cards, and even mortgage in order to save money, and shopping around for a better deal could make a big difference to the amount that you have to pay out each month by reducing the cost.

Finally, look at any debt that you have and consider whether consolidation might reduce your repayments and get you a better deal. You could consolidate all of your debt such as credit cards, overdraft, and loans, into one, which would save you time and hassle each month and reduce your monthly repayment.

Tags: overdraft, uncertainty, credit, month, broadband, amount

Shake up of employment laws needed

It has recently been claimed that some employers in the UK are abusing employment legislation by ignoring regulations in order to get rid of employees without going through the property procedures. Read more

Tags: employment legislation, credit crunch, jobs, MPs, redundancy, fine, employments laws, Germany

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: error, finance, account mrs, interest, fine

Tax-payers face millions in fines this year

New research has revealed that taxpayers are expected to pay the tax-man £463 million in fines during 2008.

Findings from UnBiased.co.uk reveal that the fines will be generated by late returns, miscalculations and surcharges on unpaid tax.

It is though that £89 million will be paid out for forms returned past the January 31st deadline, £302 million in fines for mis-calculations made on tax forms and £72 million will be administered in surcharges for unpaid tax from previous years.

David Elms, chief executive of Unbiased.co.uk, said, “The rules on self-assessment forms remain unforgiving towards those who return their forms late or incorrectly, so now is the time to take action!”

He added that missing the deadline for returning the form would certainly result in a fine and urged consumers to return them on time and in order.

In 2006, it was estimated that 876,000 self-assessment forms were received after the January 31st deadline, which the majority incurred a penalty of £100 for.

Meanwhile, the Association of British Insurers has urged those who are self employed to take out life insurance as they are now “responsible for all their own benefits”.

Tags: Tax-payers face millions, fine, IRS tax forms, self-assessment forms, David Elms, self, Form 4868, tax

HIPs In Place For Three Bedrooms

Estate agents are warning that the new Home Information Packs (HIPs) are going to cause a shortage of larger properties on the market. One agency reported that the number of large homes on offer for sale is down by 40% over the last 12 months, and experts in the industry are blaming the packs for the problems. Each pack costs around £500, and they have been compulsory for homes with four bedrooms and more since 1 August.

The Government says that the packs will shorten the time of the buying process, but agents claim that they are actually putting off sellers and pushing up prices as they try to cover costs. Each pack must include an energy performance certificate and standard searches.

Estate agency Chancellors said that it had seen a fall of 42% in the number of large homes being brought to market since 1 August when compared directly with the same period in 2006.

Many sellers are unhappy with the process. Some say that it verges on interrogation, with questions on construction dates, central heating, loft insulation and the use of low-energy light bulbs, and multiple photographs throughout the property. Some people have seen the process through to sale, but many more have not. The Royal Institution of Chartered Surveyors (RICS) said that 53% of its members reported a drop in the number of four bedroom homes put on the market since 1 August, compared with the same period last year – worse even than the Chancellors figure. This fall has not been in line with expectations, despite rising interest rates, stock market turmoil and the credit squeeze, and HIPs are being blamed.

Now, since Monday 10 September, HIPs are required for homes with three bedrooms, despite warnings from those within the housing market.

Jeremy Leaf, housing spokesman for RICS, is unhappy with the way the government has handled the implementation. He said: “I have never known legislation so badly introduced. Homeowners clearly have no faith in the packs or the policy, which have only brought more bureaucracy and mass uncertainty to an already paralysed market. Before they are heaped on the rest of homeowners, we need to see some evidence-based justification that this policy benefits consumers. At the moment it doesn’t exist.”

Nick Salmon, an estate agent and founder of the campaign group Splinta (Seller’s Pack Law is not the Answer), said: “I cannot think of any [benefits consumers have seen from HIPs]. There is a great deal of anger among homeowners who do not see the point of these packs and consider them another stealth tax. HIPs have simply heaped more expense at the wrong end of the transaction, and sellers have nothing but contempt for the new law.” The Government stands to boost its coffers by the VAT applied to the Packs.

There are still loopholes in the law. Sellers can avoid a HIP by 1) converting a bedroom to a study, 2) cancelling a pack after it has been ordered, as it only need to be ordered, not actually purchased, 3) pay the £200 fine for not having a HIP – much cheaper than the £500 a HIP costs. In fact, getting caught is unlikely as trading standards officials admit they don’t have the resources to enforce the packs.

Mr Salmon believes the government is running the risk of drying up the housing market by introducing HIPs for three bedroom properties. Gordon Brown, he claimed, may rue the day he passed up the chance to kill of HIPs.

Tom Smith
29th September 2007

Tags: fine, government, surveyors, information, house, hips, bedroom

Capital One fined by watchdog

Credit card provider Capital One has been fined £175,000 by the Financial Services Authority (FSA).

The fine comes as the industry watchdog found that the bank had inadequate controls regarding selling Payment Protection Insurance (PPI) to customers.

PPI is taken out approximately 7 million times each year, and covers debt repayments in case of an accident, sickness or unemployment.

While PPI can prove useful to those in debt, the FSA had found earlier this month as part of its ongoing investigation into the cover that some financial services companies were making its purchase a “default” choice for customers, using techniques such as a pre-checked box purchasing the cover on online application forms.

The regulator ruled that, in the period January 2005 to April 2006, Capital One did not provide adequate information about the policy to 50,000 of its customers, leaving its terms unclear.

The FSA conceded, however, that the bank did implement remedial measures before its ruling, which included compensating inadequately informed customers to the tune of around £3 million.

Tags: fine, investigation, british bankers association, purchase, application forms.The regulator

Motor Insurance – What Is A No Claims Bonus?

It’s a term you hear bounded about often in the world of motor insurance, but it is also one of the least understood: the ‘no claims bonus‘. So, what is a ‘no claims bonus’ and how can it help me?

The basics

As you can probably work out, a no claims bonus is ‘gift’ given to a policyholder if they do not claim on their insurance during the period of the insurance. In effect what this means is that if you reinsure your motor car with the same car insurance provider, you’ll be given a good conduct discount on what would otherwise have been a full premium insurance policy.

The misconception

There are two fundamental flaws with the no claims bonus: one, the understanding that you are going to reinsure with the same car insurance provider. In effect, what the insurance provider is saying to you is “don’t look elsewhere for your car insurance, because we are giving you a discount for being a good driver”. Fine; however, this works on the assumption that you cannot find cheaper motor insurance elsewhere – such as on the internet. Unfortunately, this assumption can often be wrong, and in most cases motorists are reluctant to change motor car insurance provider because they have fallen into the trap of believing they cannot get a better deal elsewhere.

Second, there is a fundamental understanding that your renewal policy with a no claims bonus will be cheaper than your previous policy. Actually, considering you have made no claim on your insurance, not an unreasonable concept to arrive at. However, not always the case – although you may be given a no claims bonus, the premium is set by the amount of claims that were made, which you have no say in as you didn’t make a claim! So, it is very possible to have a good conduct no claims bonus and still be paying higher premiums in year two than you were in year one!

The 5-year limitation

Naturally with every year that you didn’t make a claim against your motor insurance provider you would expect to get an additional no claims bonus. In reality this is not the case. Most motor insurance policy providers limit the period of no claims bonuses to 5 years of no claims. Thereafter, not making a claim is not helping to reduce your insurance premium.

As such, although you can surely make substantial savings with a no claims bonus, don’t let this lull you into thinking you cannot find motor insurance cheaper elsewhere and check out some of the online car insurance quotes to find out if you can get a cheaper car insurance quote than you are currently getting – even with your no claims bonus. You never know, you might actually be pleasantly surprised.

Tags: claim, fine, Social Issues, claims bonus, motor insurance policy, no claims discount

Nationwide is fined

The Nationwide Building Society has received a huge fine after security flaws at the firm were exposed.

A laptop, belonging to a Nationwide employee, was stolen last year, potentially exposing around eleven million customers’ details.

The Financial Services Authority (FSA) says that the bank did not act quickly enough, not launching an investigation until three weeks after the laptop was taken.

The firm even allowed the employee to go away on holiday without asking what information was contained on the hard drive.

In response, the FSA has fined Nationwide for £980,000, even though no money was lost by any customer as a result of the theft.

“We have extensive security procedures in place, but in this isolated incident our systems of control were found wanting,” said Philip Williamson, Nationwide’s chief executive.

“We have made changes to fill the gap and improve our procedures further.”

Both the police and the FSA have said that they believe the laptop was stolen purely for computing reasons and the thieves were probably unaware of the information that it contained.

We can at least ensure that we do our bit to ensure we are banking safely by shredding any unwanted documents which have our details on them.

Tags: Gap, money, holiday, exposed.A laptop, year, fine, hard drive