Interest rates stay at all time low

The base rate is to stay on hold at its record low level of 0.5 percent for another month, following the announcement from the Bank of England after the March Monetary Policy Committee meeting. The base rate was lowered to the all time of 0.5 percent in March 2008 when the Labour party was still in power, and with the recession taking its toll on the economy has remained at this level ever since.

In the run up to the latest MPC meeting some industry officials believed that the MPC would increase the base rate because of the soaring rate of inflation. The government’s target for inflation is just 2 percent by the rate of inflation has now soared to double this at 4 percent. Increasing interest rates would help to bring the rate of inflation down, hence the MPC had been under increasing pressure to increase the interest rate.

Whilst many people were calling for a base rate increase in order to try and keep a lid on inflation there will also be many people that are relieved that the base interest rate has been kept on hold, especially homeowners with variable rate mortgages. This means that they can enjoy one more month of avoiding increases in their monthly repayments.

Speculation has already arisen about when the base rate will now be increased, with some believing that it will be later on in the year. However, one official said that it can depend on a lot of things including the mood of the MPC.

He said: ‘It is possible that, despite today’s vote to leave policy unchanged, the hawks gained the support of another member. Accordingly, a rate rise within the next few months would hardly come as a shock. But raising rates now would just mean that it will take even longer for them to get back to “normal” levels. If rates do rise, I expect the move to be a small one – and if I am right about the economic outlook, even this might later be reversed.’

Tags: target, Business Finance, inflation, order, government, base interest rate, record low level

Interest rates and government intervention helped repossession levels

According to figures that were recently published there was a significant drop in the number of repossession in the UK in the final three months of last year. Read more

Tags: Subprime lending, economics, government, finance, mortgage, Labour, United Kingdom, general election

Savers group hoping for support

A savers group that was set up by a retired Surrey entrepreneur is looking for support in the hope of accumulating one million signatures so that it can petition Downing Street. The group is called Save our Savers, and it is hoping to fight the cause on behalf of around thirty million savers across the UK. It was set up by seventy year old Peter Duckworth, who invested around half a million pounds of his own cash to found the company. Read more

Tags: Surrey, Peter Duckworth, Surrey entrepreneur, voice, savings, government, savers

Mortgage defaults are yet to peak

A recent report has suggested that whilst many people may already have fallen behind with their mortgage repayments the level of mortgage defaults in the UK has not yet peaked, and that it could be some time before the level of defaults hits its worst. Read more

Tags: Mortgages, crunch, government, mortgage arrears, recent report, england, United States

Are no frills airlines really as cheap as they seem?

In the current economic and financial climate more and more of us are having to think twice about taking a holiday abroad, but for many an annual vacation is a necessity to help cope with the stresses of everyday life and take some time out with loved ones. Read more

Tags: government taxes, airlines, airline, vacation, cheap airlines

Information about the Car Scrapping Scheme

The 2009 budget announced an initiative by the government to get as many old cars off the roads and highways of the UK in what they termed a car scrapping scheme. In this plan, anyone who trades in an older model car and purchases a new one could receive a £2000 discount towards the purchase. This “bangers for cars” scheme, as it has been called, is an attempt to bolster the ailing automotive industry that has been hit with heavy losses in the recession. Read more

Tags: government, car scrapping, anyone, government car scrap, age, discounts, beat, cash

Cash may run dry for those interested in scrapping their old cars

Following the budget last month, the Chancellor of the Exchequer, Alistair Darling, announced the launch of a car scrappage scheme. The scheme was designed to encourage motorists to get rid of older, environmentally unfriendly vehicles and buy new vehicles that were greener and more reliable. Read more

Tags: scrap old cars, buying, flagging motor industry, government, one million

Ban on age discrimination could cost drivers and travellers

According to a recent report both drivers and holidaymakers could find that the cost of getting insurance will soar as a result of a government initiative to try and ban age discrimination in these industries. Read more

Tags: whilst, travel insurance, car insurance, Association of British Insurers, government

Buyers attracted to property market due to low interest rates

A recent report has shown that a rising number of potential property buyers are being attracted to the property market recently as a result of the historically low interest rates. Read more

Tags: low interest rates, Royal Institute of Chartered Surveyors, government, latest cut, Mortgages, survey, Banking, buyers

Repossession schemes will only help small numbers

In a recent report it has been claimed that initiatives launched to try and minimise on repossessions will only help a small number of people. Read more

Tags: government, shadow, homeowners, Impact, policy studies, repossession scheme, personal finance, job

No impact from VAT cut

Last year saw the government introduce a number of different measures to try and ease the effects of the financial and economic crisis on consumers, and one of the measures that was introduced was a cut in VAT, which was cut from 17.5 percent to 15 percent before Christmas. Read more

Tags: christmas, Federation of Small Businesses, government, crisis, vat cut

Energy bills need to fall in line with oil prices

Officials from a consumer watchdog group have become involved in a row over energy prices, after insisting that the price of energy usage needs to be falling in line with crude oil prices. Since the summer the price of a barrel of crude oil has plummeted by around 50%, but energy prices have gone up twice this year and not come back down. Energy giants have said that the price of wholesale energy is still high, hence the price of usage has not come down. Read more

Tags: summer, July, consumer, government, energy prices

Local authorities have lost hundreds of millions of pounds

News about the failure of Icelandic banks that have recently collapsed has been dominating the headlines, and the government has confirmed that local authorities have invested a total of over £840 million with these Icelandic banks. This has caused outrage amongst consumers, but government officials have said that councils were not being reckless with the cash by investing it in these Icelandic banks. Read more

Tags: guarantee, basis, government, recklessness, LGA, bank losses

Measures announced to rescue banks

The Prime Minister recently called a press conference where he not only announced a surprise 0.5% cut in interest rates a day ahead of the scheduled Monetary Policy Committee meeting, but also unveiled a package of measures aimed at rescuing the British banking system. It is thought that around £400 billion will have to be injected by the government to put the rescue plan into place, and this will come from the public purse – something that has resulted in mixed reactions from members of the public. Read more

Tags: government, GBP, banking crisis, cut, Central bank, uk, Alistair Darling, Lloyds Banking Group

Sixteen year high for inflation in UK

According to recently released figures the level of inflation in the UK has now reached a sixteen year high, with inflation for September registering at 5.2%. The high cost of food, oil, and energy has been blamed for pushing inflation levels up to such a high figure, and the level of inflation is now way more than the 2% target set by the government. Inflation has been soaring for some months, and as a result of this the Bank of England has been unable to cut the base rate as quickly as had been expected at the start of the year, although it did apply a surprise 0.5% cut recently. Read more

Tags: key issue, sixteen, surprise 0.5% cut, September, deflation, inflation

Warning about Iceland banks was ignored by UK

According to a recent report warnings that were issued about Icelandic banks were ignored by the UK government, resulting in officials being accused of complacency. It is alleges that warnings over the possible collapse of Icelandic banks were given as far back as July, but the government paid no heed to these warnings. The issue was raised with government ministers on two separate occasions according to reports, and this was by Lib Dem peer Lord Oakeshott and Tory MP Michael Fallon. Read more

Tags: lib, MP Michael Fallon, retail depositors, iceland banks, Kaupthing Bank, government, Michael Fallon, europe

Northern Rock benefits from HBOS takeover

This time last year Northern Rock was fast becoming known as one of the first major victims of the global credit crunch in the UK, with rumours that it was on the verge of collapse and savers rushing to withdraw billions of pounds in savings within a few days. The bank became the victim of the first run on a British bank in nearly one hundred and fifty years. Earlier this year Northern Rock was nationalised as a result of the problems that it had experienced. Read more

Tags: government, lloyds tsb, immediate fears, hbos, billions, government owned bank, place, northern rock

Government suspends stamp duty on homes up to £175,000

Early last week the government announced that it was suspending stamp duty for twelve months on homes up to the value of £175,000. Stamp duty is not applicable on homes up to £125,000 anyway, but the recent move increased the threshold by £50,000 for twelve months in order to try and ease affordability issues for potential buyers. The announcement came after several weeks of speculation with regards to whether any action would be taken over stamp duty. Read more

Tags: government, certain value, money, Real estate economics, Taxation in Hong Kong, number

What does the HBOS takeover mean?

Earlier this week Lloyds TSB, the high street banking giant, announced that it was taking over HBOS in a £12.2 billion rescue operation. The takeover has been rushed through, and officials have said that the government has all but ripped up the rule book with regards to competition so that the takeover could go ahead. Alistair Darling stated: ‘We have made a decision that we will waive the competition requirements in relation to these two banks. That is not going to get revisited,’ Read more

Tags: tsb, annual costs, Royal Bank of Scotland, government, one billion pounds, cost, hbos, lloyds tsb

Impact on Northern Rock could have been softened

In a recent report the chairman of the Financial Services Authority, Callum McCarthy, has stated that the impact on stricken lender Northern Rock could have been softened had consumers been made more aware of the savings guarantee that was in place from the government. Mr McCarthy stated that many consumers had not been aware of the savings guarantee that was in place, and had they been more aware of this it could have made a big difference to the level of trouble that Northern Rock found itself in. Read more

Tags: flock, nose, fsa, bank of england, government, bank charges

Increase in deposit protection planned by government

According to a recent report the government is hoping to provide the nation’s savers with increased security and peace of mind by increasing protection on deposits that are made into financial institutions. Until last summer only a couple of thousand pounds of consumers’ savings benefited from the government’s 100% guarantee. However, after the Northern Rick crisis, where savers withdrew billions of pounds worth of savings amidst fears that the bank was on the verge of collapse, the government raised this 100% deposit to the first £35,000. Read more

Tags: british, appropriate coverage, level, recent reports, government, poorest brits, financial struggles, deposit protection

Euro Doing Better Than Expected

The European Union witnessed a not insignificant amount of economic growth during the first fiscal quarter of 2008. Experts predicted dismal growth for the Euro, in light of the recent slowdown in the global economy. Yet, the vigorous gross domestic product (GDP) figures in European Union countries kept the value of the Euro relatively high, constituting “a last hurrah for the eurozone econonmy,” in the words of economist Nick Kounis.  Read more

Tags: light, first three months, government, rate, country, economy

Uninsured drivers “think they can get away with it”

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

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

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

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

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

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

Postgrads could be hit by credit crunch

Postgraduate students and those taking their second undergraduate degree may face financial problems due to the credit crunch as a number of lenders are withdrawing from the professional studies loan market, the National Union of Students (NUS) has warned.

There is very little state funding for postgraduate students and some of them take out loans to fund their studies, according to Directgov.

Speaking on students’ financial situations, the NUS said US bank Sallie Mae has already stopped providing new professional study loans and other banks may do the same.

Banks offering the equivalent of professional study loans in the UK may discontinue them if they want to reduce their exposure to risk.

Commenting on professional study loans, David Malcolm, head of social policy at NUS, said: “They are much bigger amounts of money and there is more opportunity to default on that. The types of students we are talking about are postgraduates and second undergraduate degree students.”

However, Mr Malcolm offered hope, saying that career development loans are likely to be protected as they are government backed and will not be as exposed to the global credit crunch.

Tags: financial problems, crunch, professional studies, government, undergraduate, Financial aid

Mortgage finance working group launched to advise government

A group of industry experts has been established to provide advice to the government on how to improve the function of mortgage finance markets.

The group has been formed in response to the complex issues raised about the functioning of the mortgage-backed securities markets due to the ongoing crisis affecting global financial markets.

Its first job will be to assess the current state of the mortgage finance market.

Led by former HBOS chief executive Sir James Crosby, the working group will draw on the experience of lenders, investors the Treasury, the Bank of England and the Financial Services Authority.

Chancellor Alistair Darling said that the group’s “work will be an important contribution to stabilising the cost and supply of UK mortgages”.

Earlier this week, the news editor of moneywise.co.uk said that although there is still demand for new mortgages at the moment, it is difficult to tell whether it will last.

Rebecca Atkinson said that First Direct’s decision to stop selling mortgages to new customers shows that mortgage lenders are suffering from liquidity problems and also trying to attract good-quality borrowers rather than a high quantity of customers.

Tags: job, hbos, good-quality borrowers, mortgage, government, First Direct decision, liquidity

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

Consumers better barometer of inflation than statistics

Spenders maybe “a better barometer of inflation” than statistics from the government’s Office for National Statistics claim financial experts.

Findings from research conducted among Fool.co.uk’s readers reveals that many believe inflation to be between six and seven per cent rather than the two per cent stated by the government.

David Kuo, head of personal finance at Fool.co.uk, said: “We are slowly beginning to see that these inflation figures are slowly beginning to feed through.”

He added that although at the moment interest rates are seen to be coming down because the Bank of England is very worried about a recession, “we do honestly believe that there is inflation within the economy”.

This time last year, the BBC reported that inflation was at an 11 – year high as higher fuel costs helped to push up the consumer price index (CPI) to 2.7 per cent in November.

On January 10th, the Bank of England voted to maintain the Bank’s rate at 5.5 per cent, having cut the rate by 0.25 per cent back in December.

Tags: government, bbc, research, inflation, head, Fool.co.uk's readers

House prices tumble at fastest pace since 1995

According to recent figures released by the Nationwide Building Society house prices across the UK took the biggest tumble since June 1995 in November.

The figures from the mortgage lender showed that house prices had fallen by 0.8%, which was the first fall since February last year and the biggest fall in twelve years. The annual rate of inflation on homes has also tumbled, falling from 9.7% in October to 6.9%.

The fall of 0.8% equates to an average £1500 drop in house prices, and this means that the average house price now stands at £184,099. However, this still means that the average house price is around £12000 more than just one year ago. In addition to the house price fall, the Bank of England has confirmed that mortgage approval levels have also slumped, with 88,000 new mortgage approvals in October, which was 12% lower than the previous month and 31% lower than October last year.

Nationwide officials confirmed that the housing market was facing a cooling off period, stating: “Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market.”

The Council of Mortgage Lenders added that the effects of the credit crunch and turmoil in the financial markets were affecting the housing market, and that the government needed to invest more money in the financial markets.

Michael Coogan from the Council of Mortgage Lenders stated: “We would like the government and the Bank of England to consider how best to unblock the funding log-jam that some UK lenders are experiencing, so that they can continue to fully meet consumer demand.”

Tom Smith
5th December 2007

Tags: Mortgages, approvals, lenders, prices, government, fall, house

Stamp duty shows record increase

The total value of stamp duty generated by the sale of residential property rose by a record level during the year 2006 to 2007, a new report has said.

According to Halifax, HMRC figures reveal that stamp duty revenue rose by 40 per cent over the year to hit £6.4 billion.

The bank also claimed that the last five years have seen a 140 per cent increase in this revenue, up from £2.7 billion in 2001 to 2002.

It is the south of England that has contributed most to stamp duty revenue, the report said, accounting for 73 per cent of the total.

In addition, the higher bands for the tax – three per cent for properties over £250,000 and four per cent for those over £500,000 – contributed 79 per cent of revenue.

“The revenue generated from stamp duty on property purchases has soared as governments of both political parties have failed to link thresholds to house price inflation,” Martin Ellis, chief economist at Halifax, commented.

Addressing the Conservative Party conference in Blackpool the shadow chancellor George Osbourne pledged to increase the stamp duty threshold if they are elected, meaning only properties worth £250,000 or more would qualify.

Currently, homes with a value of between £125,000 and £250,000 are subject to a one per cent stamp duty levy.

Tags: cent, Blackpool, house price, price, Conservative, price inflation, government, addition

Three bed homes to be covered by HIPs

The controversial Home Information Packs, also known simply as HIPs, have so far been used on properties that are being sold and have four or more bedrooms.

These HIPs were designed to cover all homes being sold, but lack of training of relevant assessors meant that there were not enough resources to cover this, and as a result only houses with four or more bedrooms were covered when the scheme was finally launched earlier this year. However, the government promised that as further staff members were trained the scheme would be rolled out to cover all properties.

It seems as though the government is quickly ensuring that it keeps its word, after an earlier announcement this week that HIPs would now also cover three bedroom homes. The plan is to continue rolling out the scheme to smaller properties as time goes on a more staff are trained, until eventually all homes will be covered with the Home Information Packs. These packs will provide a range of details such as energy information, property deeds, and more.

The HIPs have been at the centre of controversy for some months, with many experts stating that they will have a negative impact on the housing market, and that they will prove too costly for sellers. Although these packs provide information for the buyer of a property, and can save them time and money, they will cost the seller, and could prove troublesome for sellers according to some professionals.

According to the Communities Minister Baroness Andrews: ‘We are now ready to start rolling out Hips and EPCs to the next part of the market as promised, and improve the home buying and selling process which currently is not working for consumers or the environment.’

Tom Smith
1st October 2007

Tags: information, hips, property, packs, government

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: packs, bedroom, surveyors, government, home, information, hips, house, fine

Money education ‘needed to reduce debt’

More education on money management and borrowing is required to help young adults in the UK avoid getting into debt, it is claimed.

According to Credit Action deputy manager Chris Tapp, Britons need more advice on the pitfalls of building up debt but stops short of calling for increased regulation on financial lending.

Too many Britons have “been educated into debt but not about debt”, he believes, calling for better advice to be provided by the government through the education system.

Sufficiently knowledge on the risks involved should be enough to help the UK’s younger adults to think more carefully about their financial management, Mr Tapp added, while the recent credit crunch, although not a good thing, could have provided a necessary wake up call to prompt people to think seriously about their money.

He concluded: “If people were better educated to the risks and people were able to manage their money more carefully … that would be more effective than further regulation.”

The National Union of Students has recently speculated that graduate debt in the UK could rise to £33,708 by 2011 because of the impact of top-up fees and recent increases to the cost of living.

Tags: government, financial management, deputy manager, graduate debt, United States public debt, education, lending, money education

Abbey says 10% would fail personal finance exam

Research by Abbey Current Accounts released today reveals that 4.7 million British adults – around one-tenth of the total – would score less than 40 per cent in a simple financial exam.

On the day in which Britain’s 16-year-olds recorded record GCSE results, this group would achieve less than a grade C if the Abbey exam was graded according to GCSE standards.

It was not all bad news, however: 25 per cent of those who sat the exam scored the top “A-star” grade, with 30 per cent gaining an “A”. The remaining 60 per cent gained a “B”.

Commenting on the findings, head of banking at Abbey Steve Shore said: “While most people are in the realms of a GCSE pass, almost five million British adults would fail a simple personal finance exam. Quite worrying given we selected questions that we felt everyone with a bank account should know.

“Abbey certainly welcomes the government’s plans to introduce a much-needed personal finance element into the curriculum. We would also urge anyone who doesn’t understand something on their bank statement to contact their branch or a financial adviser.”

The survey polled 1031 British adults, who were each asked ten financial questions taken from past GCSE papers.

Questions included how long is given for users to pay back a credit card before interest is accrued, and what negative equity is.

Tags: record gcse results, Evaluation, General Certificate of Secondary Education, past gcse papers.Questions, Bank statement, pass, government, simple financial exam.On

Lloyds TSB loans help start-ups

Recent reforms to the Small Firm Loans Guarantee (SFLG) have led to the possibility of more focussed funding to small businesses, high street bank Lloyds TSB said today.

SFLG is a government promise against default in certain circumstances.

Whereas previously available to all businesses, it is now on offer exclusively to those companies in their first five years of trading, which Lloyds head of communications Stephen Pegge said was “where it is most needed”.

The maximum amount which could be claimed was previously £100,000 for start-ups. Now, as a result of the sharper focus, they can claim £250,000.

Mr Pegge said: “It’s not that there were exclusions of start-ups that have suddenly been lifted; it’s mainly that the long-established businesses can no longer borrow. There’s more of an emphasis on start-ups. And perhaps some bigger start-ups can get more money than they previously could have got.

“I think it’s true to say that where businesses need it most – and are least likely to have security to support their applications – are in the early years,” he added.

Tags: Royal Bank of Scotland, lloyds tsb, government, high street bank, first five years, Uninterruptible power supply, circumstances, focussed funding

ISA reforms to allow customers to “mix and match”

Proposed government reforms to ISAs will encourage more people to save, financial experts said today.

A director at Tax Incentivised Savings Association (TISA), a trade association representing the financial services industry, added that customers would now be able to “mix and match” their ISAs, under the reforms announced last month.

The government will set new limits for cash ISAs at £3,600 and stocks and shares ISAs at £7,200, effective from next April.

Peter Shipp, technical director of TISA, said: “If [customers] have a cash ISA with the bank or building society and they have a stocks and shares ISA with another firm, they can mix and match as long as they don’t go over £7,200 overall.”

He recommended that savers take out ISAs, as they “encourage…people to save” and that people “will get their interest without a deduction of tax” by using them, unlike ordinary savings accounts which deduct the basic rate.

Stocks and shares ISAs were also a good way of avoiding capital gains tax if shares go up, he added.

Around 18 million Britons currently hold ISAs, with Mr Shipp confirming that latest statistics showed uptake levels at their “highest ever”.

Tags: government, avoiding capital gains, government reforms, ISA, ISAs, director, cash, building

Nationwide house price report shows slowdown

Nationwide house price report shows slowdown

Further evidence for a rapidly-cooling house price market comes today, with the release of the monthly report from lenders Nationwide.

Seasonally adjusted, house prices made a gain of 0.1 per cent for July – the slowest growth for over a year, and a negation of the gains from the last set of results in June.

The annual rate of inflation is also down, currently standing at 9.9 per cent: numbers had been in the double digits for the last three months.

Nationwide starkly stated that the “risk of monetary overkill” looms large over the housing market.

The lender also welcomed the government’s housing green paper, which proposes that more affordable homes be built; yet “as the recent flooding shows, the challenges ahead are substantial”, it adds.

Many analysts will be surprised by the results, with Reuters reporting that a 0.5 per cent gain and an annual reading of 10.6 per cent had been predicted.

Tags: housing market, Toronto, Nationwide house price, Real estate, slowdown, government, growth, evidence

Savings rate war sparked by interest rate rise

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

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

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

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

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

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

Tags: england, finance, Mathematical finance, first time house buyers, government

UK banks asked to ’share branches’ to help rural customers

Banks in the UK are being urged to share their branches in an effort to provide the required financial services to those in rural parts of the country.

It has been claimed that sharing branches would allow banks to significantly reduce costs and therefore enable them to provide essential services to rural communities without having to run them at a loss.

According to Derek French, director of the Campaign for Community Banking Services lobby group, as much as £500 million could be saved every year by banks if they shared their branches in more remote parts of the country.

The government is putting increasing pressure on banks not to close their rural services because of the damage this will do to village economies. However, many banks are concerned that their current arrangements in rural parts of Britain are causing them to lose money because there are simply not enough people to support the services on offer.

Although Mr French admitted that banks have in the past been against such proposals, his organisation believes that the pressure now being placed on banks from the government could mean that they are reconsidering these schemes.

Unless something is done soon, Mr French warned that banks could disappear from rural communities within five years.

Tags: bank, lobby, country.The government, government, State Bank of India, something, derek french

Over six billion in premium bond sales

With a number of juicy million pound jackpots up for grabs next month, there has been a massive boost of six billion pounds in premium bond sales.

Savers are ploughing in billions into Premium Bonds in the hope of becoming one of the lucky few that become a millionaire when the draw takes place in June. The million pound jackpots are part of the fiftieth birthday celebration for Premium Bonds. Five people will be drawn as million pound jackpot winners next month as part of the celebration.

Last October saw sales of over two billion pounds worth of premium bonds, which was the highest monthly total on record. Since the start of the celebrations, over six and a half billion has been invested in premium bonds by savers. Half a million new savers have also jumped on board during this period, which gives Premium Bonds a customer base of nearly twenty four million savers.

June’s draw will see a record number of bonds, and there is now over thirty six billion invested in Premium Bonds in all. One draw has already been completed in December, which was also part of the celebrations and also saw five bondholders become millionaires. And with the forthcoming draw record number of bondholders can look forward to the chance to become very wealthy.

A spokesman for Premium Bonds stated: ‘The past eight months have seen a huge surge of interest in Premium Bonds. Despite being launched 50 years ago, they continue to attract new customers. In just the last eight months, over half a million people have begun saving in Premium Bonds for the first time. The anniversary draws, combined with the ease of investing online have appealed to old and new customers alike.’

Tom Smith
7th June 2007

Tags: interest, bonds, savings, government, invest, premium, draw, online, savers, popular

Drivers swapping points to avoid ban

British motorists are prepared to go to extreme lengths in order to avoid the possibility of losing their licence and paying higher car insurance premiums.

With more and more speed cameras cropping up across the UK, drivers are willingly swapping penalty points with their loved ones to avoid having ‘too many’ on one licence.

Insurance firm Churchill has found that 495,000 people have swapped points in the past and a further 9.5 million (29 per cent) would be prepared to do so.

Aside from having to pay increased car insurance premiums, most drivers admitted that they simply could not bear for their loved one to lose his or her licence.

The reasons for this vary, with 21 per cent claiming it would prevent their partner from working, nine per cent saying it would make getting the children to school too difficult and ten per cent not wanting to be the only driver in the house.

Most of the drivers questioned said that they were aware that swapping points is illegal but nine per cent think that it is acceptable.

“This research shows the lengths that some drivers will go to in order to stay on the roads despite committing driving offences such as speeding,” said Frances Browning from Churchill.

“Trying to escape convictions by swapping points with another person is highly illegal and can lead to prosecution. The way to avoid a speeding ban in the first place is simple – drive responsibly.”

Churchill has given its support to government proposals which would see driving convictions graduated, meaning someone who drives only a little over the speed limit receives fewer points than someone who drives well over the limit.

Tags: drivers, uk drivers, uk, limit, 5 million, government, churchill

Govt in Hips U-turn

The government yesterday (May 22nd) announced that the introduction of Home Information Packs (Hips) will be delayed.

In what has been described by Tory MPs as a “humiliating climb-down”, communities secretary Ruth Kelly told the House of Commons that Hips would not come into force on June 1st as previously promised.

She was jeered and laughed at by opposition MPs as she confessed that the training of people to carry out Energy Performance Certificate inspections had not gone to plan and would fall woefully short of the target number by June 1st.

This came despite promises to the contrary just days earlier and led Liberal Democrat spokesman Andrew Stunell to lambaste the government for its “complete incompetence”.

“This piecemeal implementation of this jinxed scheme will result in yet more confusion for buyers and sellers,” he added.

Ms Kelly said that Hips would eventually be phased in from August 1st but would initially only apply to houses with four or more bedrooms.

The minister also claimed that the new measures would give “clarity to everyone about the next steps” and remove uncertainty for mortgage holders.

The government back down also comes on the back of a legal challenge by the Royal Institute of Chartered Surveyors (Rics) which said its Judicial Review had been ’stayed’ but could be reactivated.

“We will be examining the new proposals in detail and will continue to work in the public interest on home buying reform and climate change,” said Jeremy Leaf Rics housing spokesman.

Tags: august 1st, Performance Certificate inspections, judicial review, number, back, government, Review

Hips legal challenge “groundless”

Home Information Packs (Hips) continue to cause a storm within the housing market but it seems that they will be given the go-ahead.

Communities and Local Government (CLG) has pledged that it will continue with the planned introduction of the packs and has reacted angrily to threats of legal action.

The Royal Institute of Chartered Surveyors (Rics) this week commenced Judicial Review proceedings against CLG over a ‘failure to carry out proper consultation prior to implementing new legislation to bring in Hips’.

CLG has slammed the legal challenge and promised that Hips will become a part of the home-selling process.

“This challenge is groundless, and we will proceed with the packs being introduced on June 1st,” said a spokesman for CLG.

“This is a shocking example of a vested interest wanting to water down important environmental information.”

Meanwhile a debate in the House of Commons over the introduction of Hips ended in victory for the government and housing minister Yvette Cooper sang the praises of Hips and in particular Energy Performance Certificates.

“The certificates will give people’s homes an energy rating for the first time,” she told MPs.

“They will give people not only the rating on their home but information on what they can do about it – what their fuel bills are likely to be and how they can cut them.”

Tags: Commons, Yvette Cooper, MPs, government, June

Hips will put off sellers

The introduction of home information packs (Hips) to the UK housing market is likely to reduce the number of properties sold.

That is according to the National Association of Estate Agents (NAEA) which says the ’see what happens’ seller is likely to become a thing of the past.

Research shows that around 20 per cent of homeowners, who were not even considering selling their home, have been tempted to put their house on the market after seeing their neighbour get a good price for theirs.

However, the NAEA believes that with Hips set to become a mandatory part of any sale from 1st June this year, this type of seller will be put off – adversely affecting those trying to get a mortgage on a property.

It is going to cost up to £500 to obtain a Hip and this may prove to be too costly for a homeowner who is merely interested in finding out how much their home is worth.

“A significant percentage of sales that go through start with a seller testing the water,” explained Peter King, the NAEA’s chief executive.

“The lack of ability to do this without paying for a Hip first is likely to put many sellers off.

“This will reduce the supply of houses available, cause the market to slow down and lead to additional house price inflation. Both these factors could adversely affect the economy,” he added.

The NAEA is calling upon the government to back down over the introduction of Hips.

Tags: National Association of Estate Agents, NAEA, government, introduction, price, cent, house

NI bankers may get interest-free overdrafts

People who do their banking in Northern Ireland (NI) may soon benefit from interest-free overdrafts.

That is after a report released by the Competition Commission which has been looking at ways of increasing competition and lowering charges in the NI personal current account market.

A list of “proposed final remedies” has been published by the commission and one of them is to force banks to give customers interest-free overdrafts.

Some banks in the province have admitted that the charges they impose on some customers are not directly derived from costs and it has also been found that many are being subjected to charges which are not present elsewhere in the UK.

All of this was discovered by the Office of Fair Trading two years ago and now the commission has come up with its remedies.

Among the ideas are calls for the provision of easy-to-understand descriptions of account services, clear explanations about charges and increased amounts of information on statements.

The Competition Commission would also like to see customers being provided with an annual breakdown of charges and interest charged, an annual reminder that they have the right to close or switch their current account and improvements to the switching process.

Tags: provision, competition, reminder, trading, Competition Commission, office, government

Bailiffs may be given greater powers

Bailiffs may be given the power to break into your home for as little as an unpaid credit card bill.

At present only certain bailiffs are allowed to do this but the tribunals, courts and enforcement bill is set to get its second reading in the house of commons today (March 5th).

If it becomes law, all bailiffs will be able to enter your home to collect a debt but fears are growing that this may lead to an increase in cases of bailiffs abusing their powers.

Citizens Advice is pushing for an independent regulator to be included in the bill, ensuring that bailiffs are acting within the rules.

The organisation also wants to see safeguards brought in that will guarantee bailiffs are only forcibly entering a property as a last resort.

“This Bill should have been the perfect opportunity to modernise the law and end abuse once and for all,” said chief executive at Citizens Advice David Harker.

“Instead it gives bailiffs greater powers without any proper regulation – a recipe for abuse on an unprecedented scale.

“It is a scandal and a disgrace that six years after the government made a commitment to bring in independent regulation, the misery and abuse continues. It has to stop,” he added.

Research by Citizens Advice shows that 64 per cent of bailiffs were guilty of harassment and intimidation in England and Wales since October 2006.

It also found that 40 per cent had misrepresented their powers, while 42 per cent charged debtors excessive fees.

Tags: Reuters, england, Citizens Advice, government, power, safeguards, card, credit

Travel insurance shake-up receives backing

A proposed shake-up in the way that travel insurance is sold to holidaymakers is being backed by a large majority of us.

That is according to the British Insurance Brokers’ Association (Biba), which published a survey on the subject.

Government proposals to revolutionise the market will focus on protecting consumers from travel agents who fail to explain the full details of the policies they sell.

According to the survey, 72 per cent of travel insurance customers were not advised whether terrorism cover was included in their policy.

It is situations like this that have led to widespread support for the government’s plans, with 97 per cent of those asked saying that they agree completely with the proposed crackdown.

“It is essential that consumers are fully protected,” said Biba chief executive Eric Galbraith.

“Travel insurance is vital when we jet off on our holidays and it is the role of the provider to ensure that consumers are both fully covered and understand the limits of their policies.

“Biba brokers and the rest of the regulated industry have been fulfilling this commitment for years and the government’s proposals would ensure that travel agents and tour operators fall into line,” he added.

The research also found that 56 per cent of agents failed to inform customers of how to make a complaint, while only 47 per cent of customers said that they read the small print on their policies.

If you are taking out travel insurance make sure that you take the time to read the small print and ask for clarification on anything which you are unsure of.

Tags: Financial economics, executive, Fashion, Travel insurance shake-up, Eric Galbraith, british insurance, revolutionise, government

Rics urges Hips postponement

The Royal Institution of Chartered Surveyors (Rics) has called for the introduction of home information packs (Hips) to be postponed.

The information packs, due to launch in 100 days, will give future buyers information estate agents might not see fit to disclose at the point of sale, such as local searches, sales statements and leasehold documentation as well as an energy performance certificate revealing their future home’s level of energy efficiency.

They are intended to encourage greater transparency in the selling process and slash the high number of sales which fall through each year.

Under current government plans, the information packs will become mandatory from June.

But Rics spokesman Jeremy Leaf insists comprehensive reform measures are needed to “sweep up all the problems with home buying and selling”, not just stop-gap solutions.

More seriously, Hips in their current form are irredeemably “depleted”, with “most of the stuffing removed”, he claims.

Meanwhile, the director general of the Association of Home Information Pack Providers (AHIPP) Mike Ockenden has staunchly defended the information packs, arguing that they would “greatly reduce the needless stress associated with buying and selling homes in this country”.

Tags: sale, government, home buying, country, future buyers information, buying, year.Under current government, point

£44m sitting in unused accounts

A campaign is being launched to reunite customers with their unused bank and savings accounts.

Halifax is attempting to bring people back together with their accounts and the money that is idly sitting in them.

According to the bank, there are around 110,000 unused Halifax accounts in the UK, holding a combined £44 million.

The majority of people who have a forgotten account are said to have less than £100 sitting in them, but some have much more.

Halifax has employed a third party to search for those with accounts containing more than £1,000, but it is calling for other bankers to make themselves known.

“Our job is to reunite as many of our customers as is possible with their cash,” said Mike Regnier from Halifax and Bank of Scotland.

“We are using every means at our disposal to do so – mailings, advertising and the internet. We are also employing search agents where appropriate.”

The move comes as government plans to change the rules regarding unused accounts appear likely to come into force in the next few years.

It was announced in the 2005 pre-budget report that if an account is unused for 15 years it will be officially tagged as dormant.

This means the money can be given by the government to good causes, although the cash will always remain the account holder’s property and he or she can reclaim it at any time.

If you have an account which you have not used for some time it may be worth checking to make sure there is no money in it.

Tags: report, hbos, Mike Regnier, government, savings accounts, unused accounts, property, holder

Banks “mugging” customers with charges

Banks have been accused of “mugging” their own customers through penalty charges, according to a Liberal Democrat MP.

Matthew Taylor voiced his opinions during a debate on the subject of bank charges which was held in parliament.

Mr Taylor said that the charges were regularly hitting the vulnerable hardest, with single parents and those on benefits the most likely to be charged.

“It is the biggest bank robbery in Britain and it involves the banks robbing their own customers, especially their poorest customers,” said the MP.

The Liberal Democrat’s social exclusion spokesman went on to say that the charges are illegal and that banks are avoiding the law by never allowing a case against them to go to court.

Mr Taylor said that the banks would rather settle out of court so that a definitive ruling on whether the case is illegal or not cannot be reached.

“Every time court action is threatened, the banks refuse to defend themselves. The only possible reason has been that they know they will lose,” he added.

“I believe they are clearly illegal and if there was any doubt about it the banks would have the courage to fight a single case in the courts – which they do not.

“Meanwhile, frankly the OFT [Office of Fair Trading] has been limp, the banks are dodging the courts and the government is turning a blind eye,” he concluded.

Tags: court.mr taylor, parliament, reason, bank robbery, government, Liberal Democrat, liberal democrat mp