Christmas borrowers: have a plan for payback

With Christmas nearly upon us, keeping the costs down to a reasonable level is an important part of enjoying the festive season in a way that won’t lead to worry and anxiety in the New Year. If anyone’s plan involves borrowing to meet the costs of Christmas, it’s important they first figure out a realistic repayment plan.

So says Think Money, which has issued a warning for people who are thinking of borrowing to help them meet the costs of Christmas.

It advises them to plan their finances out carefully before they actually borrow any more. Without a good repayment plan in place, they’re running the risk that they won’t be able to repay it as quickly as planned (or, potentially, at all).

As you might expect, this could lead to all kinds of problems, from higher-than-expected interest costs to late payment charges. Depending on the individual’s situation, it could even lead to more serious consequences, such as a CCJ (County Court Judgment).

“[…] some people might be making a New Year’s resolution to get their finances in order,” a spokesperson for the financial services company commented.

“For some, that might involve taking out a debt consolidation loan to simplify their finances and set out a clear plan for repaying their debts. This can be a good way of managing debt, but borrowers still need to make sure their repayments fit in with the rest of their budget.”

Tags: level, Christmas borrowers, New Year, repayment, court, anxiety, year, County Court Judgment

Shapps wants more help for first time buyers

Since the onset of the global financial crisis banks have become increasingly cautious over their lending levels, and many people hoping to purchase a home have suffered as a result, particularly first time buyers who are being told they have to pay huge deposits to even stand a chance of getting a mortgage. Ministers are now concerned that the High Street banking giants are failing to offer loans to first time buyers even if they have excellent credit ratings and history.

In fact, concerns have become so bad that a meeting is being arranged for next month, where senior officials from major lenders will have to answer to ministers with regards to why lending levels are so high. Recent figures released by the British Banker’s Association have shown that mortgage approvals for 2010 fell to their second lowest level in eleven years, with the lowest number of approvals being seen in 2008.

It has been revealed that the Housing Minister, Grant Shapps, will be demanding answers from lenders with regards to why their lending levels are so low, and why they are no lending to first time buyers even if they have perfect credentials. There are concerns that this failure to lend to first time buyers, who are needed to keep the property market buoyant, could have a serious negative impact on the property market in the UK.

Shapps said: “We have to avoid pulling up the housing ladder and cutting off a whole generation of young people who want to buy their own home. We want to do more to help aspiring first-time buyers – the average age of the first-time buyer with no support from their family is now 37, and there are 1.4m households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. So I’m calling together key figures from across industry to discuss how we can tackle this problem. “This cannot be achieved simply by top-down diktats from Government – there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market.”

Tags: first time buyers, uk, Loans, chance, Association

Insurance fraud costing millions

According to a recent report insurance fraud in the UK is costing the industry tens of millions of pounds a year, with fake insurance claims becoming more and more prevalent, particularly in the current financial climate. The cost of investigating, repairing, and even paying out on fraudulent claims has resulted in a surge in costs for the insurance sector, and unfortunately these costs are then being passed on to the honest consumer.

It is thought that insurance fraud is costing the industry around £800 million a year, and officials from the Association of British Insurers have said that the most common type of fraud is in relation to home insurance. Figures indicate that in the UK around 170 homeowners file a false insurance claim every day, showing just how the value of fraudulent claims has soared to such a high level.

Whilst the insurance industry has become far more stringent with regards to running checks on claims that are made, particularly if there is something that does not seem to gel, many of these false claims still slip through the net, often because there is no way of proving that the claimant is not telling the truth. This level of fraud is costing not only the insurance industry a fortune, but also honest policyholders who have to pay more for their cover in order to cover the losses that are resulting from fraudulent claims.

An official from the Association of British Insurers said: ‘Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record. The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.’ 

Tags: financial climate, homeowners, recent report insurance fraud, claim, uk

Some drivers wasting money on wrong insurance cover

Having vehicle insurance cover in place is a legal requirement in the UK for drivers that intend to operate a vehicle or take their own vehicle out on the road. However, the cost of vehicle insurance can be expensive, and increases in premiums have left many people struggling to afford this cover.

However, in their bid to save money on the cost of insurance cover some drivers could simply be wasting money according to a recent report. It is claimed that many people are taking out vehicle insurance cover that offers them little to no protection simply because it is the cheapest they can get. This means that they are paying out money for insurance cover, but if they need to make a claim it could turn out that they are not adequately covered.

Many of those that are taking out the cheapest car insurance even though it may not be suitable are using price comparison sites to find their cover. Price comparison sites often give consumers the impression that they are getting a very good deal on their insurance cover, when they may actually just be getting the cheapest cover without the level of cover that they need.

Officials have said that many of those that simply opt for the cheapest cover without really thinking about the level of cover that they need are taking a huge risk, as they may find themselves with real problems in the event that they have to make a claim.

Consumers who are looking for cover are advised to make sure that they compare the features and coverage levels of the plans that they are considering rather than focusing their attention on the price of the cover, as this could turn out to be a false economy that will cost them far more in the long run.

Tags: finance, wrong insurance cover, level, United Kingdom, focusing, insurance cover, Financial economics

Older women pay far more for car insurance

A recent report has highlighted how women can suddenly see the cost of their car insurance rocket when they hit the age of sixty, with a study revealing that once they hit this age they can end up pay around £80 a year more than men for their cover. Younger women generally get charged less than men for their vehicle insurance cover because they are considered to be safer drivers.

According to reports insurance firms believe that the abilities of women decline faster than those of men as they grow older, and because of this they are seen as a higher risk when it comes to driving. This means that as women get older they can see their insurance premiums increase, and once they hit sixty they will find that they may be paying considerably more than men.

The study was carried out by the consumer watchdog group Which?, and officials from the group said that sixty seemed to be the point at which women started paying more than men rather than the other way around. The officials involved on the research used a price comparison service and obtained quotes from five difference vehicle insurance companies to work out what the cost differences would be.

The research showed that after the age of sixty a woman could end up paying around 28 percent more than a man for the same policy with the same car and the same personal circumstances. The group said that of the insurance firms that were looked at only one gave a similar price for men and women after the age of sixty.

A spokesperson from Which? stated: ‘Gender is one of the factors that has an influence on the premium we offer. The difference is correct based on our estimates of the level of risk the two customers would represent to us as an insurer.’

Tags: research, risk, level, men and women, officials, insurance premiums increase, price comparison service, way

Why you need to shop around for car insurance

It has always been important for drivers to ensure that they shopped around for their car insurance. With so many insurance companies saturating the market competition in the vehicle insurance industry has always been very stiff, and for consumes this has meant that there are some very affordable deals available from insurance firms that are looking to provide the best deals in order to gain increased custom. Read more

Tags: result, car insurance, compare car insurance, cheap car insurance, company, car

Card fraud goes down whilst banking fraud increases

Recently released figures have shown that whilst credit card fraud in the UK has been going down, which will come as a relief to the many cardholders that have been fearful about becoming victims of this sort of crime, the level of online banking fraud has been increasing. Read more

Tags: pin technology, banking fraud, level, business, losses, Credit card, credit card fraud

Slowdown in rate of firms going bust

A recently released report has shown that the rate of firms that are going bust in the UK has been slowing down. Read more

Tags: cash, company liquidations, credit, british companies, company, level, uk, crisis

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: thousand pounds, level, savings accounts, financial crisis, saving compensation, Financial Services Compensation Scheme, Financial services, savers

Banks try to recover by making customers pay

It has been suggested that many banks and building societies in the UK are trying to rebuild their financial portfolios and profits by making customers pay, according to a recent report. Read more

Tags: banks, change, percent, fixed rate, borrowing, level, cost of borrowing, margin

No change in base rate for third month

For the past couple of months the base interest rate in the UK has been kept at its record low of 0.5 percent, and following this month’s Monetary Policy Committee meeting the Bank of England has announced that the rate will remain on hold for a third month. Read more

Tags: money, October, interest rates, base rate, bank of england, level, security

Banks decides to look at quantitative easing to assist economy

Over the past six months the nation has seen the UK’s base interest rate drop dramatically from 5 percent in October of last year to just 0.5 percent by March of this year. This came after a series of six interest rate cuts from the Bank of England in as many months, taking the base rate to its lowest level in the three hundred and fifteen year history of the Bank of England. Read more

Tags: industry, series, access, bank of england, Central bank, interest rates, Mortgages, level

Greater security could come from mobile payments compared to credit card ones

A recent report has suggested that consumers could enjoy a greater level of security through making mobile payments for transactions compared to credit card transactions. Read more

Tags: credit card payments, encrypted, popularity, mobile payments, mda, level

Savers disappointed by low returns

Since October of last year the base interest rate in the UK has plunged from 5 percent to just 1 percent, which has come as a blessing for many borrowers who were struggling to keep up with rising borrowing costs, such as mortgage repayments. Read more

Tags: instant access, bonds, interest rates, lenders, level, base interest rate, savings returns, savings accounts

Increase in burst pipe claims due to colder weather

Recent reports have shown that the colder weather that has been seen in areas of the UK over recent weeks is resulting in a double whammy for many consumers. Read more

Tags: level, insurance claims, surprise, cold weather, insurance providers

UK interest rates make history

Over the past week the interest rate in the UK has made history by falling to an all time low of just 1.5 percent, which is its lowest since the Bank of England was founded over three hundred years ago. Read more

Tags: level, Monetary Policy Committee, aggressive cuts, monetary, interest rate, interest rates, rates, percent mark

Credit crunch affect charities

According to recent reports around 25% of charities in the UK have seen the level of money coming in from consumers drop over the past twelve months, as cash strapped households rein in their spending in a bid to try and weather the effects of the global credit crunch. Many people are apparently unable to give to charities in the same way as before because money is so tight due to higher living costs, tighter credit conditions, and soaring inflation. Read more

Tags: meeting, bid, uk, charity, higher demands, level, credit crunch, homeless charity

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. Read more

Tags: nationalisation, barclays, level, Minister, FTSE

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: poorest brits, deposit protection, british, government, appropriate coverage, level

Fraudulent motor insurance claims come to five million a week

According to a recent report motor insurance bodies have discovered fraudulent motor insurance claims that are amounting to around £5 million a week in terms of value. Officials from the Association of British Insurers said that last year around twenty four thousand fraudulent motor insurance claims were uncovered, and these amounted to £260 million, which equates to £5 million a week. This reflects the level of the problem when it comes to fraudulent insurance claims, both in the motor insurance sector and other insurance sectors. Read more

Tags: motor, fraud, risk, insurance industry faces, criminal record, Business and Economy, vehicle

Insurance firms could face huge losses

According to a recent report the insurance industry could be facing huge losses as a result of the global credit crunch, with tighter household finances forcing many consumers to either downgrade or cancel their insurance cover in order to make ends meet each month. A survey was carried out by officials at Deloitte, and showed that around one if every four consumers were planning to either cut or cancel insurance cover in order to save money at what has become a very financially turbulent time. Read more

Tags: savings insurance, housing, Insurance, level, payment, global credit crunch, party, poll

Debt consolidation ‘an option’ for those in debt

People who are looking for a way to deal with their debt may want to consider debt consolidation, Experian has said.

James Jones, consumer education manager at the company, advised people who are struggling with their finances to seek advice from a free advice agency, citizen’s advice bureaus or the national debt line.

“Debt consolidation is one of a range of options,” Mr Jones commented.

“I would encourage people to always speak to their lenders if they are struggling to make payments,” he added, saying that they can help people find solutions to their debt problems.

According to research from CreditExpert.co.uk, 20 per cent of people plan their finances every six months or less.

Commenting on this, Mr Jones recommended that people get into the habit of doing this every month or every three months.

The research also found that one in ten of people are completely clueless about their level of debt.

Tags: consolidation, citizen's advice bureaus, advice agency, level, experian, three months, company, consumer education manager

Getting a great deal on insurance

In the UK there are many different types of insurance cover available, and this is designed to provide us with protection and peace of mind against a myriad of possible situations and eventualities. You can get insurance to cover everything from your car and your home to your pets and your life, and there are many different companies offering insurance deals to suit a wide range of needs and circumstances. Read more

Tags: Insurance, doesn, different types, Admiral Group, level, financial losses, hassle, peace

Thoresen Review set to give consumers financial guidance

The government has announced details of new guidance designed to help consumers make more financially aware decisions.

According to the British Bankers Association (BBA), the proposals are designed to deal with the core problems of a public lack of understanding and awareness of financial services and how banks can help.

Otto Thoresen has been appointed by the economic secretary to the Treasury to undertake the review.

Angela Knight, BBA chief executive, said: “The BBA believes better financial education is key to ensuring people can make sensible plans for the future and provides us with the best hope of addressing the problem of financial literacy at a national level.”

She added that the Thoresen Review has identified a real gap in the financial knowledge among the population.

The recommendations included the implementation of a national money guidance service to be governed by the principles of impartiality, supportiveness, crisis prevention and universality.

Budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits are some of the topics covered by the new guidance.

Tags: level, real gap, proposals, economic secretary, money, financial, Alumni of the University of Bristol, Gap

Local financial firms more suitable than big banks

The standard of service and level of understanding offered by smaller building societies makes them more user-friendly than their larger counterparts, it has been suggested.

According to the Building Societies Association (BSA), the fact that regionalised companies will have a better knowledge of local markets is clearly to their advantage.

Commenting on the differences between the types, Adrian Coles, the director-general of the BSA said: “We’ve got a really good mixture in the building society sector, but if you’re locally based you really do understand the local market better than the branch manager of a national institution.”

He added: “What are the incentives? High levels of service, better levels of service than banks, understanding of local markets which they’re clearly good at, tailor-made products [and] knowing their customers.”

Recent BSA statistics reveal that 15 million adults have building society saving accounts with the 59 different institutions across the country.

Tags: director general, Canoeing, standard, market, Adrian Coles, business, level, sector

Debt “now outweighs GDP” in UK

The debt mountain in the UK has now grown so high that it is now bigger than the country’s entire gross domestic product (GDP).

This is the shocking new claim from consultants Grant Morgan, whose research on debt, published today, lays bare the true scale of the problem in Britain.

The figures show a total debt – made up of mortgages and unsecured loans, among other debts – of £1,345 billion, which slightly outweighs a national GDP of £1,330 billion.

Stephen Gifford, chief economist at Grant Thornton, said: “Britain’s huge level of consumer debt is symptomatic of the country’s well established ‘buy now, pay later’ culture.”

He added: “Fortunately, most consumer debt is secured and can be repaid over several years otherwise we would be technically bankrupt.”

The implications of the research is stark. Extrapolating from national consumer debt as it currently stands, 2007 debt levels would now take until January 5th next year to be covered by GDP.

By contrast, just ten years ago, debt would already have been swallowed up by August.

Tags: level, Gross domestic product, product, Grant Morgan, country, shocking new claim, consultants grant morgan

Interest rates rise

Credit card and mortgage holders and those with loans have been hit with yet another interest rate rise.

The Bank of England’s Monetry Policy Committee (MPC) has decided to increase the base rate to its highest level for six years.

It now stands at 5.75 per cent and some industry experts have been warning of big financial repercussions for many people.

The decision by the MPC is the fifth rate rise in a year and many borrowers simply would not have been prepared.

Industry figures have been predicting rises for some time and this latest one came as no surprise, but those who borrowed money a few years ago had no idea that things would change so much.

The MPC took the decision in an attempt to bring inflation under control.

“The committee judged that, relative to the two per cent target, the balance of risks to the outlook for inflation in the medium term continued to lie to the upside,” the MPC said in a statement.

“Against that background, it further judged that an increase in Bank Rate of 0.25 percentage points to 5.75 per cent was necessary to meet the two per cent target for CPI [Consumer Price Index] inflation in the medium term.”

Tags: highest level, policy committee, rise, money, term interest, level, Monetry

How Do Insurance Companies Work Out Premiums?

The winning number is…

As you wait for the insurance sales person on the other end of the phone or over the counter to come back to you with how much your insurance premium is going to be it’s rather like entering an unfortunate lottery. Quite how they work out the cost of insurance sometimes seems like anybody’s guess. Read more

Tags: level, accident, charge, home, car, premiums

Rental market is growing

The demand for rented accommodation in the UK is reaching record levels.

That is according to Paragon Mortgages, which carried out research and found that a huge majority of landlords are seeing demand for their properties grow.

In total, 92 per cent of respondents say that demand is stable, growing or booming and Paragon claims that this is the second highest level on record.

The mortgage provider says that these results point to a changing housing market with people opting to rent instead of buy due to its affordability and flexibility.

In addition to these figures, Paragon also discovered that landlords’ properties are now empty for less time than previous years, with the average property being without a tenant for just 2.96 weeks per year – a fall of two per cent compared to the last quarter.

“We have been running this survey for five years and have seen a very strong trend of growing tenant demand throughout this period,” commented John Heron, director of Paragon Mortgages.

“But recently, in both our own research and that of others, we’ve seen demand for private rented accommodation hit new peaks.

“Demographic influences that underpin the private rented sector are all continuing to rise, which bodes well for continued healthy growth of the buy-to-let sector,” he added.

If you are interested in buying a property and then renting it out make sure that you shop around for the mortgage that best suits your needs.

Tags: rent, new peaks, john heron, market, buy-to-let sector, sector

Every town has average house price above £100k

The latest proof that house prices in the UK are less affordable than ever before has been provided by Halifax.

The bank’s House Price Index shows that for the first time ever, the average house price in every UK town is above £100,000.

At the end of 2006 the average price in Lochgelly, Fife, was below this threshold but the latest figures put the average home in the region at £104,738.

Despite this, the town remains the cheapest in the UK, however, the same cannot be said for towns in Northern Ireland.

The province completely dominates the top ten biggest house price increases of the last 12 months, with the average price sitting at £206,495.

It has been a rapid rise for Northern Ireland to being the fourth most expensive part of the UK from being the second cheapest just two years ago.

Despite the rising prices throughout the UK, Halifax bank remains confident that we will soon see the market slowing.

“Overall, [UK] house prices increased by 2.8 per cent in 2007 Q1, well below the 4.2 per cent rise in 2006 Q4,” said Martin Ellis, Halifax’s chief economist. “There is also evidence of reduced market activity.

“We expect the higher level of interest rates, negative real earnings growth and above inflation council tax bill increases to lead to slower house price growth over the coming months.”

Tags: real earnings growth, cent, earnings growth, Council Tax, House price index, end, level, q1

Homeowners anxiously await MPC’s decision

The Bank of England’s monetary policy committee (MPC) is to announce on Thursday whether it will raise, lower or maintain the base rate of interest.

While most analysts have predicted that the interest rate will have to rise another quarter point before this summer, analysts are in disagreement about whether or not April will see a rate rise to 5.5 per cent.

Stephen Smith, director of housing at Legal & General, said: “Borrowers will be waiting to see if they are going to be in the red or the black in the base rate roulette next week.

“Rates are still at a relatively low level compared to 70s and 80s and many people would struggle with today’s debts at yesterday’s prices. Whilst the boom and bust has flattened out since the turn of the Millennium, borrowers are still facing a probable hike in rates in the near future.”

Mr Smith warned that June and August were likely to hit those with mortgages hardest, since they were the most likely months for a base rate rise. He compared them to Park Lane and Mayfair on a Monopoly board as “you just want to get through them without having to pay out more money!”

The Council of Mortgage Lenders predicted that recent interest rate rises would start to have an affect on the value of homes and that while prices would still go up by seven per cent, this would be a marked deceleration compared to previous years.

Fionnuala Earley, Nationwide’s chief economist, also predicted that a rate rise would not curb the rising level of value in the property market, adding: “The UK housing market will remain fairly firm in the short term, partly because of the momentum built up in the market that will take a few months to work through, but also because of supply constraints.”

If an interest rate rise does occur on Thursday, homeowners with a £100,000 mortgage would find themselves £15 worse off per month.

Tags: point, quarter point, bank of england, base rate rise, Fionnuala Earley, level, rise, Nationwide's chief economist