A third of cardholders hit by fraudsters

According to recent figures one third of cardholders have been hit by card fraud in the past five years. The figures show that around fifteen million Brits have fallen victim to card fraud over the past five years, which reflects a sharp increase on the figure eighteen months ago, where the number of cardholders hit by card fraud stood at 27 percent.

According to ACI Worldwide a greater number of Brits have been defrauded on their cards than in any other major country apart from China. However, despite this there was a greater level of consumer satisfaction amongst British consumers with regards to how banks dealt with their claims than there was in other countries.

Around 80 percent of customers said that they were satisfied with how their fraud case had been dealt with by their bank, and this compared to 75 percent in 2009. Around 40 percent of these said that the main reason for this high level of satisfaction was the speed at which they received their money back after falling victim to card fraud.

It is estimated that card fraud in the UK costs the economy around £30 billion a year, and with fraudsters using a range of sophisticated methods and hunting grounds to commit their crimes this is a figure that could easily increase.

David Divitt, from ACI Worldwide, said: ‘Fraud is constantly changing and, looking forward, the industry will need to increase focus on identifying identity theft and assisting victims to maintain this improvement in customer experience.’

However, the UK Cards Association has stated: ‘The most recent card fraud figures for the UK, which are based on actual losses and not on research, show that card fraud is falling – a 28% fall in 2009 and a further 20% fall in the first half of last year.’

Tags: money, increase, aci worldwide, focus, show, satisfaction, GBP, greater number

Competition increases in personal loans market

The start of this year has marked a change in the personal loans market that has seen a variety of well known lenders reducing the rates on some of their personal loans, and this has resulted in the average rate of interest being charged on loans of between £7500 and £15000 falling to their lowest level since November 2008.

Many consumers who have been considering a loan will welcome the news, as it means that they will pay far less for their borrowing as lenders compete with one another to offer the best deals and entice consumers away from their competitors. High Street banking giant Santander is offering a personal loan between these amounts at just 7.3 percent, and others are also offering similar rates.

However, those that are after a loan of £5000 or less will find themselves paying far more in the way of interest, as the rate of interest on smaller loans has actually increased during this period. Sainsbury’s, Tesco, and M&S Money are amongst the other lenders that have decided to reduce their interest rates on larger loans, but some are only offering the most competitive deals to existing customers rather than both existing and new customers, which may cause some disappointment amongst both consumers and industry officials.

A financial expert stated: ‘It’s welcome news for customers to see loan rates falling at long last and from some of the largest providers in the market. It’s a shame that the rate cutting has, apart from Tesco and M&S Money, been targeted at existing customers only. The other downside is that lower interest rates are not on offer for smaller borrowings, so for anyone looking to borrow a sum of say £2,000 to £3,000, the interest rate will be well into double figures and in some cases pushing 20% APR.’

Tags: new customers, expert, apr, money, loan rates, year, downside, customer

How you can save money in the New Year

At this time of year, with 2011 almost upon us, there will be many people working out what they want to do for their New Year’s resolution. Of course, there are some resolutions that are more common than others, and this includes saving money over the coming year. With finances tight for many people it is likely that a huge number of people will be making a promise to save money next year.

However, making a resolution to save money is easy enough but actually saving money is a different matter altogether. You need to be able to find the means to save cash, and this involves going through your income and outgoings to see where cutbacks can be made.

Often, people overlook the fact that they can quite easily cut back on the cost of their bills and shopping simply by making a few changes. With so many people in debt now officials are urging consumers to focus on putting any spare money towards paying off debts, and by cutting back on the amount that you spend you can get more disposable cash to put towards things like credit cards, catalogues, store cards, and other types of debt.

One thing that is well worth doing in the New Year is checking whether you can find better deals on services such as insurance, energy bills, and broadband. By seeking out more competitive deals you could save a fair amount of cash each month, which could be put to better use clearing off your debts – or if you are lucky enough not to have any debt to put into savings for emergencies or for a rainy day.

Going online and comparing prices of services such as these couldn’t be easier these days thanks to the Internet, and you will find that switching involves nothing more than the click of a button and maybe a phone call. Competition in the market means that you could get some great deals on your services, and you can compare them with ease when you go online.

Also, it is worth taking a look at your shopping habits to see if you can cut back on the amount that you spend. Resist the temptation to go shopping without a list, as otherwise you end up buying stuff you didn’t really need, and go a little further afield to find discount supermarkets that offer a range of goods at far lower prices than the supermarket giants. Also, consider shopping online – although there is a delivery charge you are less likely to start buying things randomly even though you don’t need them just because they are displayed temptingly in front of you.

Tags: New Year, money, Business Finance, disposable cash, savings, outgoings, store cards, saving

Mortgage rationing to continue next year

Officials from the Council of Mortgage Lenders have stated in a recent report that mortgage rationing is set to continue next year, and consumers that are hoping to get mortgage finance in order to get onto the property ladder may still face disappointment as banks continue to slash their lending.

One of the problems facing the banking industry is repayment of some of the bailout money that they took at the height of the global financial crisis, which needs to be repaid. Sadly, it is likely to be consumers that pay the price once again, as this will result in further restrictions on mortgage and other types of lending, making things more difficult for those that need to take out finance.

The CML has also said that repossession numbers are likely to increase next year, although the increase is likely to be modest. There are a number of factors that may affect repossession numbers, and this includes the government Spending Review and cuts, which could affect people’s jobs. Buyers are also likely to be put off from taking out mortgage finance even if they are able to get it, and this is due to the fragile state of the economy.

The CML said: “Given the continuing economic uncertainties, there is little to encourage buyers. First-time buyers will continue to find it difficult to get into the market. With funding in short supply, the availability of mortgages for first-time buyers will remain limited.”

The Council of Mortgage Lenders concluded: “Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.”

Tags: money, report, mortgage, bank, cml

Saving money on foreign currency

Whilst the traditional summer holiday period is now over there may be many people that are planning a winter break. For those that do not have children and do not have to take holidays at certain times of the year it is often cheaper and more relaxing to go away out of the typical summer months, and there are still some great places to go to get winter sun without the crowds.

Anyone that is thinking of going away over the colder months will need to get their finances sorted, and this includes ensuring that they have the currency that they need for when they go. These days there are many different ways in which to get foreign currency for your holiday, and it is important to try and get the most for your pound so that you have plenty of spending money whilst away.

There are now many ways in which you can get commission free foreign currency but the amount that you get per pound can vary depending on where you go. Often those with packaged bank accounts may find that they are able to get special deals on their foreign currency so it is always worth checking with your own bank to see what they can do for you.

The Internet provides a very effective way of finding the best deals on foreign currency as you can compare and browse the different rates paid from the comfort of your own home, and you can place your order online once you have decided which is the best deal for your needs. If you want the money delivered to your door you can often order it for delivery the next day if your order in time, but there is usually a delivery charge for this, although it will come by special delivery for your safety.

It is also advisable to purchase a combination of foreign currency and traveller cheques, especially if you are going away for more than a few days. Having traveller’s cheques will provide you with additional security in case your money goes missing, as you can get these replaced quickly and easily in most cases.

Some people leave getting their foreign currency until they get to the airport but this can be a costly mistake. If you want to collect it at the airport some foreign currency providers can arrange this, so you can order and pay in advance and collect when you get to your departure airport.

Tags: travel, Currency, Numismatics, foreign currency, finance

Making money from your home

These days many people are finding it difficult to sell their homes, largely because there is a shortage of buyers fuelled by lack of mortgage availability and low consumer confidence amongst would be buyers. The scrapping of the controversial Home Information Packs by the coalition government resulted in more people wanting to put their properties up for sale, but the low level of interest from buyers may have put many sellers in a difficult position.

Whilst it may be difficult for sellers to actually get their properties sold in the current climate there are ways in which it may be possible to make some money from the property if a decision is made to take it off the market until conditions improve. For some people this could be a viable way to clear some more of the mortgage whilst the property market improves.

Hiring out a room to a friend

Many people probably know of a friend, colleague, or even a family member who may be looking for a place to live, and offering a room out to such a person could help out the friend or family member and bring in some more money to pay the bills and mortgage. For many this is a great solution because they are sharing with someone that they know rather than a complete stranger but at the same time will still be able to make some money to make the mortgage and bill payments each month.

Taking in a lodger

In the current climate many people are struggling to afford a mortgage or even to rent a property of their own, and this has resulted in many looking for just a room to rent. If you do not have a problem offering up a room to someone that you do not know personally then taking in a lodger could be a good way to make money on your property. You could advertise your room, or you may find that there are people that place adverts to say that they are looking for a room.

Look at local amenities

It is a good idea to look at local amenities in your area, as you may find that there are colleges, universities, schools, or hospitals nearby where students, teachers, or doctors and nurses may be looking for local accommodation close to their work. Again, it may be a good idea to advertise if you are willing to rent out a room or you may find that those looking for accommodation place adverts themselves, enabling you to contact them.

Tags: mortgage, property, month, money, scrapping, accommodation, position

Trust still shrinking in UK banks

It has been claimed that the level of trust in UK banks is continuing to shrink amongst consumers following the chaos that followed the global financial crisis. The boss of Co-op said that as a result of lack of trust amongst consumers in the banking sector many were continuing to shun traditional banks.

Peter Marks, the Co-op chief, said that banks had been through a tough time since the onset of the global credit crisis, but he added that most had deserved it because they did not always act ethically. His comments came after the Co-op Bank released its performance and profits figures recently.

The bank’s first half pre-tax profits came to £260 million, which was a hike of 17 percent. Current account openings were said to have increased by 30 percent, and lending to small businesses apparently nearly doubled from £600 million to over £1 billion.

However, confidence levels in the banking sector have been sliding since the chaos that occurred with Northern Rock, which became the first official financial victim of the credit crisis in the UK. Since then various reports ranging from huge banking bonuses to senior staff to security breaches and lack of lending have seen consumer confidence take a further battering.

At one point following the credit crisis many were too nervous even to put money in the bank, and many were keeping their savings at home or in alternative places because of their lack of confidence in banks to keep their money safe.

One industry expert said: “Some banks do deserve the battering they have taken when it comes to customer confidence levels, as many have not acted ethically. It doesn’t help when all consumers see in the papers and on the internet is reports of bosses being paid huge bonuses whilst consumers are left earning little to nothing by way of interest.”

Tags: financial crisis, lack of trust, Co-op Bank, customer, bank, money, economics, Cooperative

Boost your chances of getting a mortgage as a first time buyer

As many people are already aware getting a mortgage can be difficult for anyone these days, with the banks exercising extreme caution over who they lend to and putting a range of restrictions in place with regards to mortgage loans. However, one of the groups most likely to experience difficulties when it comes to mortgage loans is first time buyers.

There are many first time buyers that are desperate to get onto the property ladder, and have been for some time. However, for many years these potential buyers have faced difficulties when it comes to getting a property. Until the global credit crisis swept the nation first time buyers could get mortgages without even having to put down a deposit in most cases, but many could not afford the extortionate house prices that resulted from the many years of house price inflation.

Once the credit crunch hit property prices began to tumble, which is what many first time buyers may have been waiting for. However, at the same time as this the banks started to really rein in their lending, wiping out the 0 percent deposit that so many first time buyers had come to rely on and demanding huge sums up money upfront before even considering granting a mortgage loan. This has left first time buyers out in the cold once again, albeit for different reasons.

Whilst there is no doubt that first time buyers still face many challenges when it comes to getting a property there are some steps that they can take to try and improve the chances of getting onto the property ladder. One important thing to remember is that lenders are being very cautious over who they lend to, so it is advisable for first time buyers to be prepared and be aware of their credit rating. Before applying for a mortgage buyers are advised to order a copy of their credit report and check how good the rating is, as this will provide an idea of how likely it is that a mortgage will be granted.

Another think to consider is the level of deposit that the lender will want. Before wasting time looking at properties and applying for mortgages first time buyers should plan their budgets and spend time saving as much as possible, as the higher the deposit the more likely it is that an affordable mortgage will be granted by lenders.

Finally, more and more first time buyers are now turning to shared equity schemes, where they get a mortgage out to purchase a percentage of a property and rent the remainder from a housing association until they can also afford to buy the remaining share, which can be done in stages. This is a more effective and affordable way for first time buyers to get onto the property ladder these days, and it is possible to get a brand new house without having to take out a huge mortgage by using this option.

Tags: potential buyers, mortgage, ladder, money, check, first time buyer

BT changes times for free calls

Many people that are with the communications giant BT have packages that allow them to make free evening calls so that they can get better value for money depending on when they tend to make most of their calls. Read more

Tags: British Telecom, BT Total Broadband, announcement, bt, money, 6pm, provider, call

More millionaires created from house price boom than from lottery

It has been revealed that a greater number of millionaires have been created in Britain as a result of the house price boom than as a result of the National Lottery. In fact, according to reports over the past decade and a half twenty times more millionaires have been spawned from the boom in property prices than through the luck of the draw in the National Lottery. The study was carried out by High Street bank HSBC as the nationwide prize draw celebrated its fifteenth year. Read more

Tags: Millionaire, property prices, Lottery, National Lottery, property consultant, money, london, housing market

Smaller packets offer better value in shops

According to a recent report shops in the UK are aiming to offer customers with better value for money by offering smaller packaged items for a lower price rather than forcing customers to purchase unnecessarily large items for a more expensive price. Read more

Tags: Tesco Value chocolate, cheaper shopping, IPhone, move, discount stores, Retailing

More people putting money towards funerals instead of savings

According to a recent report an increasing number of consumers are now putting money towards their funeral costs rather than putting it into savings. It appears that the recession has caused a new trend to emerge, and rather than leaving their loved ones to foot the bill should the worst happen many people are already putting money aside for their funeral rather than putting their spare money into a savings account. Read more

Tags: service, report, year, money, savings, space

Millions of RBS customers to benefit from bank charge cuts

Starting from next month around twelve and a half million RBS current account holders are set to benefit from bank charge cuts, with the bank announcing that it is going to be cutting charges on millions of accounts. Read more

Tags: Banking, cut, money, account holders, rbs bank charges, bank fees, bank charges, Bank charge

Economy benefits from an additional cash injection

The economy is to benefit from an additional £50 billion, which is to be ploughed into the economy through the government’s quantitative easing programme. Read more

Tags: uk economy, output, recession, injection, surprise, money, bank of england, better surveys

Survey shows many not putting money into pension

A recent study has shown that a worrying number of people in the UK are failing to put any money into a pension for their futures, thus running the risk of being left with inadequate funds to retiring comfortably in the future. Read more

Tags: Employment compensation, uk, savings, Personal Accounts, reason, study, pensions, money

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

Average family could lose hundreds in holiday spending money

It has recently been claimed that the average family in the UK could lose hundreds of pounds worth of holiday spending money when they go away because of a combination of the weak pound and the extortionate charges imposed by credit card companies when consumers use their credit cards abroad. Read more

Tags: weak pound, money, family holiday, Business Finance, holiday spending

Interest rates remain on hold after May meeting

After the May Monetary Policy Committee meeting the Bank of England announced that the base interest rate was to be kept on hold at its all time low of 0.5 percent. Read more

Tags: money, bank of england, Economic policy, interest rates, lowest level, base rate, interest rate, Central bank

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, money, government, one million, flagging motor industry, amount, old cars, buying

National Savings & Investments sees record deposit levels

According to a recent report the level of savings being deposited into National Savings & Investments by consumers in the UK has hit record levels, and more and more worried consumers look for a safe place in which to place their hard earned cash. Read more

Tags: National Savings, National, savings accounts, Banking, money, National Savings & Investments, investments

Branson not happy about bailouts for other firms

Successful and world renowned businessman Sir Richard Branson has recently expressed his views on the topic of the government using taxpayer’s money to bail out other businesses in addition to the financial industry. Read more

Tags: money, British people, Politics, richard branson, government bailout, recession, Bailout, Economic history

Improvement seen in consumer confidence levels

Over the past year consumer confidence in the UK has plummeted, with soaring inflation, rising living costs, rocketing petrol and food costs, and the effects of the global credit crunch on the housing and financial markets all impacting upon confidence levels and leading to the ongoing economic downturn. However, officials have suggested that there has been an increase in consumer confidence levels for the second month in a row. Read more

Tags: consumer confidence, increase, money, confidence levels, improvement, VAT reduction

Interest only mortgages being affected by price falls

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

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

Abbey applies charges to accounts in credit

The High Street Spanish owned bank, Abbey, has found itself in trouble after a number of customers complained about having various charges applied to their account even when they were within their credit limits. According to reports a number of customers have found different charges applied to their bank accounts, ranging from a few pence to pounds, and none of the charges have been justified. Read more

Tags: letter, abbey, pence, issue, Debit card

Questions to ask before taking a secured loan

When an individual is taking out a secured loan, there are many questions to ask before taking the loan. Before you take that secured loan out, you should not be afraid to ask the lender questions. Within this article, we are going to tell you some questions that you may want to put on the list to ask the lenders of thatsecured loan. Read more

Tags: high points, way, mortgage, money, Hard money loan, percent, secured loans, good credit

Will you be cutting back on your heating this year?

With energy prices having rocketed twice over the course of this year, it seems that an increasing number of us will have to cut back on our energy usage in order to cope with rising bills. Many elderly people will be doing just that, and recent surveys have revealed that millions of elderly people will be heating up just one room in their homes or even staying in bed in order to try and keep warm over the winter months. For many the colder months are set to be miserable ones. Read more

Tags: money, heating costs, christmas, order, home, whilst, energy bills, Household

25% of the nation could face fuel poverty

Energy prices have been at the centre of heated controversy over the course of this year. At the start of the year the big energy firms in the UK cheerfully announced that because the price of wholesale energy had risen the cost of energy usage for customers would be going up, and just weeks later, true to their word, they increased energy usage costs quite significantly, leaving already struggling household to cope with more financial worry and strain. Read more

Tags: GBP, fuel, report, money, situation

Supermarkets try to win back customers from discount stores

Over the past year households have been facing a tough time in relation to their finances, with soaring inflation and bills coupled with tighter credit conditions impacting hugely on household budgets. Amongst the products that have seen prices rocket are food products, and for many households the cost of the weekly or monthly shop has gone through the roof, making it even more difficult to make ends meet financially. Read more

Tags: Asda, discount stores, supermarkets, money, measures, Commerce

What happens if your airline goes bust?

Over recent weeks two airlines have spectacularly gone bust, leaving many passengers stranded and many others wondering whether they will ever see the money that they forked out for their holiday again. The global credit crunch and the soaring cost of fuel has left many budget airlines really struggling, and over recent weeks both airline Zoom and holiday firm XL have had to call it a day. Read more

Tags: credit, GBP, airlines, money, member, chalk, day, date

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: number, Real estate economics, stamp duty, government, Taxation in Hong Kong, money, affordability problems, certain value

Savings accounts suffering due to high inflation

Soaring inflation levels, high food prices, rocketing energy bills, high petrol costs, and increased borrowing costs have been impacting on household finances in the UK for some months now, and a recent report has shown that many people are now having to raid their savings in order to try and keep afloat financially. Officials have stated that with the economy heading downwards and inflation spiralling upwards Brits are left with little choice but to raid their savings. Read more

Tags: Mortgage loan, doom and gloom, savings accounts, quarter, money, Brits, savings, consumers took money

Your 100% savings guarantee could cover the first £50,000

Until late last year the government operated a savings guarantee of 100% on only the first couple of thousand pounds of a savers’ money deposited in a bank or savings account. However, the crisis surrounding the stricken bank Northern Rock changed all this. Following the onset of the global credit crunch Northern Rock, which was then the fifth largest mortgage lender in the nation, ran into massive funding problems and had to take an emergency loan of billions of pounds from the Bank of England. Read more

Tags: good news, lender, relief, money, savings, uk

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: government, nose, money, bank charges, flock, half, fsa

Brits ‘failing to save for old age’

Britons are not making adequate savings for their retirement, an expert has warned.

Donna Bradshaw, a financial planning strategist with IFG Financial Services, a firm of independent financial advisers, stated that people in Britain are simply not saving enough money.

This could be partly down to house prices, she continued.

Britons have developed a “national obsession” with property which has skewed people’s focus from saving for their retirement, Ms Bradshaw asserted.

“Over the years we’ve made pensions unattractive with maybe too much legislation but we need to focus people through an education process,” she added.

However, Britons are making some savings; figures released by the Building Societies Association show that during April, such financial institutions received record savings inflow of £1.8 billion.

Adrian Coles, director-general of the body, remarked that savers are increasingly aware that building societies offer good accounts for savers during such “uncertain economic times”.

Tags: GBP, Association, education, financial planning strategist, enough money, money, Brits, billion.adrian coles

Richest and poorest Brits hit by credit crunch

People at extreme ends of the wealth scale are being affected the most by the current economic turmoil, according to MGM Advantage.

The richest and poorest people in the UK are feeling the pinch from the credit crunch the most, the retirement income specialist has said.

According to research commissioned by the company, 20 per cent of people who are in debt and 25 per cent of those who have assets worth more than £1 million prefer to stash their cash at home rather than putting it in a savings account.

In the survey of more than 3,000 people round the country, it was found that women tend to be more likely to put their hard-earned cash in a savings account than men – 60 per cent of women said they used savings accounts compared to 48 per cent of men.

The Post Office recently reported that people who leave their money in accounts that pay a low level of interest are losing a total of about £8 billion every year.

Tags: money, GBP, post, poorest people, uk, post office

Seek advice on insurance, urges Biba

Consumers have been urged to seek advice from an insurance broker before taking out a policy by the British Insurance Brokers’ Association (Biba).

Graeme Trudgill, technical and corporate affairs executive at Biba, has said that many insurance policies have become over-complicated and could be confusing for customers.

He advises people looking for insurance to consult a broker in order to avoid over-insuring and wasting money on “too many frills”.

Mr Trudgill commented: “The broker would be the best person to advise individual customers [on what cover they need] depending on individual circumstance.”

He added that over the past few years many insurers have made their policies more comprehensive and have tried to “include too many frills rather than sticking to the basics”.

Earlier this month, financial advice website Fool.co.uk reported that the average consumer takes out six different types of insurance on an annual basis costing £1,500 per year, yet is unaware of how much they are actually covered for.

Tags: Social Issues, financial advice, British Insurance Brokers Association, money, GBP, homeinsurance, year, wasting money

Make your money work hard for you, advises expert

Newcastle Building Society has urged consumers to ensure that “their money is working as hard as possible for them”. Read more

Tags: Banking, last september, Newcastle Building Society, Steve Urwin, Financial economics, Cooperatives, demand, money

‘Fixed-rates offer peace of mind’

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

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

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

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

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

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

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

Cash stashed at home will ‘drop in value’

Savers who prefer to keep their money stashed away at home rather than in a savings account are missing out on interest and will only see their funds drop in value over time, the Newcastle Building Society has said.

The senior marketing executive at the building society, Steve Urwin, noted that not only will people not be earning interest on their savings but that the effects of inflation mean that money sitting at home will continue to “decrease in terms of relative value”.

Mr Urwin also pointed out the security risks of leaving money at home, since it is a prime target for burglars.

According to the Daily Mail building societies saw deposits hit a record high last September, with the biggest demand being for savings accounts and cash Isas.

The Newcastle Building Society said that this trend is an indication that people are becoming more cautious with their savings as they start to feel the effects of the credit crunch.

Tags: mean, ISAs, inflation, prime target, money, relative value".mr urwin, Steve Urwin, indication

Debtors should not “hide the problems”

People facing serious financial difficulties should not try to “hide the problems” or assume that they can solve them themselves by using their credit cards even more, says an expert.

A recent report has found that 400,000 people took out new solutions for unsecured debt in 2007, with over half (58 per cent) deciding to refinance or remortgage.

David Kuo, head of personal finance at Fool.co.uk, has advised people to ask their lenders for help to try to solve the initial problem of having borrowed too much money, which they cannot repay in the time period stipulated by the lender.

A possible solution is to extend the length of a mortgage which will lower monthly repayments making it more affordable in the short-term and giving the borrower “breathing space,” although the total amount to be repaid will be higher.

However Mr Kuo advises against taking out secured and unsecured loans, since they may compound the problem.

“Sometimes people are a little misguided about how they solve their problems and they try and throw money at them,” Mr Kuo concluded.

As debt problems increase for many people and lenders tighten their criteria, a survey has found that 18,000 applications for credit cards are being rejected each day, according to MoneyExpert.com.

Tags: money, David Kuo, breathing space, space, possible solution, time, expert, half

UreLife promotes “earn before you spend” mentality

Consumers should be careful with their finances and manage their money sensibly during the current credit crisis, advises UreLife.

The Urelife card, which combines prepay Visa debit with proof of age and a colour photo of the cardholder, encourages an “earn before you spend” mentality, according to Mark Dalton, a spokesperson for the company.

Since the market is moving away from credit facilities, consumers should be looking to set a monthly budget which they do not exceed.

“Increasingly, people have been maxing out their credit cards and the prepay debit card is the ideal product for people who want to take full responsibility for their finances,” Mr Dalton comments.

Credit Action recently said that although credit card spending is still a “very popular” form of borrowing, the growth rate has slowed over the past year.

This is partly due to banks tightening their lending criteria, however it also suggested that consumers are becoming more aware of the importance of managing their finances in a sensible way.

Tags: money, Visa Debit, Debit cards, borrowing, rate, age, action

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

Interest rate cuts ‘cannot be banked on’

Despite consumers anticipating that interest-rate cuts will take place throughout the year, it is likely that if further cuts are made they will be done so cautiously, one financial expert has claimed.

According to the Fairinvestment.co.uk, up to 29 per cent of consumers expect the rate to fall from the current 5.25 per cent to 4.75 per cent by the year end, while a further 27 per cent are anticipating a rate of 4.5 per cent or below.

James Caldwell, fairinvestment.co.uk director, said that consumers see the interest rate cuts as necessary to ease pressure on household budgets.

However, he said that making the decision to cut rates is not straightforward with various factors having to be taken into consideration.

“Therefore, it is likely that rates will be cut with an air of caution if there are to be further reductions this year,” Mr Caldwell concluded.

The Bank of England’s Monetary Policy Committee last voted to reduce the interest rate, from 5.5 per cent to 5.25 per cent, in February 2008.

Tags: cent, committee, interest rate cuts, Bank of England's Monetary Policy Committee, rate cuts, consumers, household budgets

Credit unions offer more controlled borrowing

Credit unions can offer a more controlled borrowing system compared with other financial institution claims the Church of England.

The institution said that many financial organisations are in place to make money and although some are more sympathetic than others, the main goal is to make a profit.

However, credit unions supposedly differ as they allow consumers to borrow in line with their ability to save which creates sensible boundaries within the borrowing system.

“A credit union is not just there to make a profit; it’s there to serve people, to help people borrow money…its more controlled,” said a spokesperson.

If a credit union does make any profit out of lending, then “quite often” it will re-distribute this amongst it’s membership.

Recently the Church has set up the life and debt matters section on their website which it speaks on the rising problem of debt and financial strain.

It was launched at the beginning of the year and offers a “post Christmas debt check” and “three action steps” to better finances.

Tags: boundaries, money, beginning, ability, Business Finance, Website, life and debt

Balance transfers make Christmas debt manageable

Balance transfers and consolidation loans are a “manageable way” of tackling post-Christmas debt, according to industry experts.

Thomas Charles, a financial firm that offers a free confidential debt counselling service, has advised that consumers who overspend in the festive season should explore all the options available to them.

James Falla, director of Thomas Charles, said: “If you do find that you have overspent, there is nothing wrong with doing a balance transfer and transferring the balance onto a new credit card.

“But the key piece of information which is not discussed after doing that is that you must make sure that you cancel the previous card and cut it up so you don’t have the temptation to use it again.”

He added that it is the consumers who have done balance transfers and explored the consolidation loan route but not changed their attitude to spending that will “get themselves into trouble”.

Recent research published by Thompson found that consumers were still intending to spend more money this Christmas than they did in 2006, regardless of the credit crunch.

Tags: overspent, christmas debt, them.james falla, credit crunch, money, christmas, temptation, overspend

How well do you monitor your savings account?

A recent report has suggested that many Brits with savings fail to monitor their savings accounts to the degree where many would not even notice right away if there was £1000 was missing from the account.

The report suggests that around 10% of those with savings would not immediately realize if £1000 went missing from their accounts. The survey was carried out by the mobile banking service Monilink, and comes at a time when many people may be at risk of fraudulent transactions following the loss of 25 million account details by HM Revenue and Customs.

It is thought that the reason why so many people are so lax about checking their bank accounts is a condition known as finance phobia, which is a condition where people are afraid to look at their accounts in case the balance is lower than expected. Officials from Monilink state that many people would simply prefer to ignore their accounts than risk looking at them and finding that their account balance was lower than they expected it to be. It is thought that around 20% of those that do not check their accounts blame finance phobia.

On a national basis there is over £43 billion pounds stored away in accounts that are not monitored by account holders. Around 50% of the British public do check their bank account balances on a weekly basis, but a further 25% only check their savings accounts once a month. Around 25% of those that were polled said that checking their accounts would materially affect their lives because they suffered sleepless nights as a result of their finances.

‘These findings suggest consumers need all the help they can get to keep tabs on their money. Poor money management and existence of “finance-phobia” in Britain is worrying considering the rising levels of debt problems Britons face.’

Tom Smith
1st December 2007

Tags: bank, savings, accounts, balance, lose

Organising your spending money when going abroad

When you are jetting off abroad there is a great deal to try and think about and organise – it can be easy to forget about something as simple yet important as sorting out your spending money.

However, it is important to organise your spending money properly when going abroad, otherwise you could face security issues or costly charges that could put the dampeners on your holiday. It is best not to rely on any one particular source for your spending, and there are a number of options that you should look at to fund your spending whilst on holiday.

Most people benefit from taking a combination of cash and traveller’s cheques when going on holiday in order to ensure that they increase security for themselves. It is a good idea to take a credit card along as well for emergencies. If you take just cash on holiday with you and your money then gets lost or stolen, you could find yourself without any comeback, and you could be stranded without any money of means of paying for anything. This is why it is important to take a smaller amount of cash rather than relying solely on cash for your holiday spending.

Of course it is important to take a small amount of cash. This includes English currency for when you are travelling to and from the airport or departure point, and for any purchases you may want to make whilst at the airport/ferry port/departure point. You should also take a small amount of cash in the currency used in the destination to which you are travelling for things such as cab fares when you arrive and any smaller purchases you may wish to make on your first day before you have got yourself organized.

Most people prefer to take the bulk of their spending money in the form of traveller’s cheques, which are available from banks, post offices, and other foreign currency providers. You can get traveller’s cheques in Sterling as well as in other currencies. Although it can take a little longer to make a purchase using a traveller’s cheque instead of cash, you have the added security that you can quickly get your cheques replaced in the event that they are stolen or lost, although you should remember to note down the cheque numbers and the contact details for replacement sot that you have these details to hand whilst you are away.

Taking a credit card along for emergencies is another good idea. However, if possible you should avoid using your card unless you really have to, as you could find that the charges imposed by credit card companies for each transaction made can quickly add up, and you could have a shock when your statement comes through. In particular you should avoid using your card to make cash withdrawals whilst abroad, as the combined charges for making even one withdrawal a day can be very high.

Be careful about becoming the victim of credit card or debit card fraud whilst abroad, as recent reports have suggested that Brits have seen a rise in card fraud whilst abroad. Always be vigilant when you do use your card, and if your card goes missing make sure that you report it right away so that the account can be frozen to minimise on any fraudulent transactions or theft carried out using your card.

Tags: cash, money, transactions, travel, cards

International cheque scam foiled

An international scam involving fake cheques and postal orders that were destined for London has been foiled by the government’s Serious Organised Crime Agency.

Investigations have been on-going for a month in Nigeria, and as a result £8 million worth of fake cheques and postal orders have been seized. The scam has been described as sophisticated by officials, and a number of people in Britain have been arrested for their involvement in the fraud.

According to reports around sixty arrests have been made in countries around the world in connection with the scam, including arrests in Spain, Canada, Nigeria, the United States, and the Netherlands. During the operation fake passports were also discovered in addition to the fake cheques and postal orders. Around three thousand forged cheques that were due to go to an address in London were seized, along with an additional fifteen hundred forged cheques going to other London addresses.

UK residents have to pay out billions of pounds each year because of fake cheques that are used to purchase goods or get cash, and then bounce. Some of the cheques that were seized as part of the operation were already filled in for amounts ranging between three and seven thousand pounds. One of the scams in which such fake cheques are used in where consumes are told that they have won money or inherited money, and are asked to send in a fee to make their claim. They then receive a fake cheque, which then bounces once the bank discovers that it is fake.

Another scam involves consumers being told that the cheques are work processing cheques, and they send in the amount of money to cover the cheque and then bank the cheque, which later bounces.

Tom Smith
11th November 2007

Tags: order, money, cheques, postal, fraud, scam, international

Banks must keep customer more informed states BBA

The British Banker’s Association has recently stated that UK banks need to do more to keep their customers informed on all levels when it comes to the services and product that they offer, as well as when it comes to any changes.

A senior official from the British Bankers’ Association stated that banks need to buck up their ideas in terms of keeping customers informed. This comes at a time when reports indicate that consumer confidence in the banking and financial sectors has plummeted.

 According to the Chief Executive of the British Bankers’ Association, Angela Knight, banks in the UK need to keep their customers far more informed in terms of banking issues. Ms Knight stated that the increasing complexity of the banking industry as a whole meant that banks needed to be far more informative with their customers. She said that banks needed to be more open and informative in terms of their procedures, and that better explanations and increased security was required from banks.

Although one recent report is said to have shown that many consumers are satisfied with their bank, another study has shown that the confidence of consumers in banks and building societies, as well as other areas of the finance sector, has taken a real hit as the result of chaos and turmoil in the money markets and the recent problems seen at Northern Rock, where many savers were in fear of losing their money resulting in the mass withdrawal of over £2 billion.

Another issue that has affected consumer confidence and satisfaction when it comes to banks is the recent controversy over bank charges, which is due to come to a head early next year when the Office of Fair Trading takes the banks to court in a test case to determine what can be construed as a fair fee.

Tom Smith
4th November 2007

Tags: information, consumers, Banking, societies, money

Independent school loss of earnings cover ‘not comprehensive’

Loss of earnings cover provided by independent schools may prove to be “value for money”, but they are often “very basic”, an industry expert has said.

According to Steve Danson, a chartered financial planner at Elementum, the insurance would not cover sickness absence or death in some cases.

“People should definitely get a plan for their particular circumstances, and quite often the plans we would recommend would be the same types of plans we would recommend to anyone with a big commitment,” he said.

He added that many companies will sell school fees insurance as a specialist product, when in fact it is a combination of normal insurance covers.

The Independent Schools Council (ISC) recently claimed that 620,000 children are educated in around 2,500 independent schools, which represents an estimated seven per cent of the total number of British schoolchildren.

Of the ISC’s member schools, 31.43 per cent of pupils received financial support with their fees this year, valued at a total of £300 million.

Tags: combination, money, Financial economics, number, Council

Figures show increase in bankrupt pensioners

Recent figures have shown that the number of pensioners in the UK that are going bankrupt has doubled in the space of five years.

There are now twice as many pensioners declaring themselves bankrupt as there were five years ago according to the figures. In the past year around 7% of bankruptcies were made up of pensioners, but in 2002 the number of pensioners that made up total bankruptcy figures equated to just 2% according to records.

Some experts have stated that it is increased life expectancy that has had an impact on the finances and savings of pensioners, tipping many over the financial edge and resulting in bankruptcy. This, state experts, has been made worse by the rises in the cost of living, fuel, and other areas, which has put further strain on pensioners’ finances. The research also shows that there appear to be more pensioners going bankrupt in rural areas compared to urban areas.

One insolvency expert stated: “More and more pensioners are going bankrupt as they struggle to repay debts when their pension is their sole source of income. Although attitudes towards bankruptcy have changed dramatically since the days of debtors’ prisons, the older generation still feel the stigma of bankruptcy and are reluctant to ask for help until it’s too late.”

Around 1250 bankrupts around the UK took part in the research. It is thought that the reason for the higher concentration of bankrupt pensioners in rural areas is the result of fewer work opportunities and higher transportation costs.

Some industry officials state that the cost of food – on which many pensioners spend a large proportion of their income – is contributing to the financial strain faced by many in this age group. Food price inflation rose from 2.5%in July to 2.8% in August according to figures.

Tom Smith
3rd November 2007

Tags: plan, life, bankruptcy, longer, money, pensioners, finances, costs, bankrupt

Negative payment ‘fiddling’ widespread

Recent research shows that a staggering 296 out of 300 credit card providers use a negative payment hierarchy.

According to Fool.co.uk, 99 per cent of people with a regular balance on credit cards with varying interest rates on debts are being ripped off by their provider.

“It is not illegal to fiddle with the order in which payments are allocated on credit cards. But negative payment hierarchy is a devious way to exploit customers’ inexperience,” said David Kuo, head of personal finance at the finance site.

“Our study shows that whilst the vast majority of card providers employ this sly practice, Nationwide and Saga should be applauded for their use of ‘positive’ payment hierarchy,” he added.

Those particularly at risk from negative equity payments are people using zero per cent credit cards for balance transfer as well as purchases and cash withdrawals.

Repayments made on the card will then go towards pay off debts with the cheapest interest first, while debts with heavier interest are left to stack up interest charges and earn the provider money at the cost of the card holder.

Nationwide have revealed that consumers could pay an estimated £500 million on interest without knowing before banks are required to outline the order in which payments are made next year.

Tags: repayments, money, negative equity payments, credit, pay, hierarchy, inexperience

Careful product choice can save money

Making shrewd financial decisions can still save people money, even in times of tightening credit markets, according to Moneyextra.

The company has revealed that consumers can save a total of £4,225.46 every year by replacing near-worst with near-best financial product, representing a £250 increase in savings available from last year.

Mortgages were among the areas where savings could be made, despite seeing a decrease after global credit crunch, with potential annual savings at £2,586.

Robert Amlot at Moneyextra, commented: “Choosing the right mortgage can help keep your wallet healthy and make the difference between running up other debts and remaining solvent.

“The potential savings on your mortgage account for more than 61 per cent of the total savings to be made.”

He added that while personal loan rates are competitive, lenders are increasingly strict and good deals are generally only available to people with excellent credit history.

“Shopping around for the right savings products can pay dividends,” he said.

Tags: Robert Amlot, Mortgage loan, debts, potential savings, product, Mortgages, near-best financial product

Chiltern: Men heavier in debt than women

Men trying to get their finances under control are further in debt than their female counterparts.

According to research by Chiltern Debt Management, men have 20 per cent more debt than women and are less able to repay money borrowed each month as a percentage of contractual debt repayments.

Data showed that a woman on an informal debt management plan would take 22 less months to become debt free than a man.

Furthermore, men on these types of plan owe an average of £29,914 to 7.8 creditors while the female equivalent owes £23,946 to around 8.1 creditors.

Joanne Gill of Chiltern commented: “People who use a debt management plan aren’t trying to avoid repaying their debts, or get a large percentage of them written off by creditors, they’re fulfilling their responsibility to pay what they can and communicate with creditors to ensure both parties are being treated fairly.”

Personal debt totalled £1,363 in August this year according to statistics from Credit Action.

Tags: female equivalent, Joanne Gill, August, Debt management plan, GBP, responsibility

Students urged to cover contents

A significant number of the UK’s students could be starting the year’s learning with inadequate home contents insurance, putting them at risk of financial loss.

That is according to new research from Abbey, which found that around 30 per cent of undergraduates will probably start the academic year without protecting their belongings.

Despite the fact that 95 per cent own a computer, some 14 per cent of students have not thought about insuring their possessions or think they are not of a high enough value to warrant cover.

Some seven per cent said they would not afford the cost, while nine per cent didn’t get around to arranging it or spent the money for it on something else.

“Over 60,000 students believe the value of their belongings does not justify buying insurance, but we find many people are shocked with how much their belongings are actually worth,” said Abbey’s head of insurance marketing, Prasad Shastri.

The study also found that students will take around £3,300 on average worth of items with them to university this year.

A separate report from Cornhill Direct encouraged parents recently to check their own home insurance policies to ensure they cover student offspring’s belongings.

Tags: university, Business and Economy, student, risk, home, money, belongings, home insurance

‘Risk element’ to interest only mortgages

Customers choosing to invest in an interest-only mortgage risk falling into negative equity if housing prices drop after they have secured the loan, a finance expert has warned.

Re – Financial Planning explained that clients taking out insurance-only mortgages, which allow them to just pay back the interest on the sum borrowed and repay the original capital debt upon the sale of a property, would lose less money each month through mortgage repayments but face extra risk.

Not only would they still have the original loan repayment hanging over their heads, but they could be left owing their mortgage provider money after the sale of their property if house prices had fallen instead of climbed, explained David Higgins, director of Re – Financial Plannign.

“Any client taking on an interest only mortgage is adding an extra dimension of risk over and above what they would normally have with a capital repayment mortgage,” he said.

“I think mortgage lenders are more lax than they’ve ever been. The high property prices have lulled them into a false sense of security. They know that even if the person doesn’t have the means to pay off the mortgage that they have adequate security.”

According to MoneyFacts.co.uk, the recent credit crunch is starting to effect the buy-to-let sector, as providers begin to tighten credit criteria, raise fees and a withdraw products from the market.

Tags: Real estate, Interest-only loan, security, extra dimension, Real estate pricing, mortgage repayments, money

Britons saving at record levels

Savings among British consumers has reached record-breaking highs, new research indicates.

According to research by Unbiased, savings in the second quarter topped £47 billion, which has been attributed to an increasing number of people taking advantage of the recent rise in interest rates.

Commenting on the figures, David Elms, chief executive of Unbiased said: “It is extremely encouraging to see that savvy consumers are taking advantage of the recent rate hikes with previously unseen record levels of savings now taking place!

“Plus it’s even better that Britons appear to have tightened their belts and are approaching borrowing far more cautiously than in previous months.”

The research, which also analyses the rate of borrowing, claims that £4 billion was loaned during the quarter, almost £13 billion less for the same three months of 2006.

In addition the saving to borrowing ratio has also decreased for 32 pence borrowed against every pound saved to eight pence borrowed against every pound.

Tags: money, british consumers, Business Finance, GBP, pound

London’s ’stingy’ parents best at saving for kids’ futures

New research of parents’ spending habits by Engage Mutual suggests there is a direct trade-off between giving children generous pocket money allowances and saving for their future.

The study reveals that London is the bottom of England’s pocket money league – with just a third of the capital’s parents giving their children an allowance – but conversely it is the region where parents are most likely to save for their children’s future, with four out of ten doing so.

By comparison, in the East Midlands fewer than a fifth of parents make such provisions and yet they are the most generous on the pocket money front, with 55 per cent dishing out regular allowances.

Scottish parents, meanwhile, scored consistently low on both fronts, with only 37 per cent handing out pocket money and 40 per cent setting aside savings.

On a national level the proportion of parents saving for their child’s future stands at 32 per cent, its highest level for over a year.

Karl Elliott, 3GB spokesperson for Engage Mutual, commented: “In a credit card society that is driven by a have-it-now culture, it is pleasing that so many parents are saving for their kid’s future”.

He added: “Those children in areas where parents are the tightest on pocket money will thank them in years to come when they enjoy the benefits of a healthy, matured savings fund.”

Tags: london, child, highest level, league, Allowance (money)

Interest-only mortgages ‘can help lower costs’

Interest-only mortgages can be beneficial to people looking to lower the overall cost of borrowing to buy property.

That’s according to Bernard Clarke, spokesperson for the Council of Mortgage Lenders, who said that certain buyers can find this type of loan a good option.

“It’s a clearly an option for buy-to-let investors who usually want to minimise their borrowing costs and are not interested in acquiring ownership of the property outright,” he said.

But for homeowners who would like to start repaying the bulk of their loan, an interest-only mortgage should be reviewed somewhere down the line.

“If they take an interest-only option to reduce their initial costs but do want to eventually own the property outright then they do need to think about transferring to an interest and capital repayment mortgage,” said Mr Clarke.

Alternatively, buyers can utilise separate savings or investment plans in order to save up the money to repay the capital.

“People are free – if they are taking out an interest-only mortgage – to choose alternative repayments vehicles,” Mr Clarke explained.

Tags: money, interest-only option, capital repayment mortgage, interest, investors, Council, order, option

Loans to family ‘may be counterproductive’

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

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

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

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

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

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

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

High income mortgage basket to become “more sophisticated”

The mortgage market for those on high incomes will become “more sophisticated” to match the increasingly varying ways that people earn money, a bank said today.

Private bank and mortgage lender Investec said that high-earning clients were increasingly seeking out more flexible and adjustable mortgages.

Indeed, so great has demand been that they have launched more personalised services such as multi-currency mortgages, limited to those who earn more than £150,000 per year and looking to borrow at least £500,000.

Spokesperson Wayne Preston commented: “Multi-currency mortgages aren’t for everybody…They need to understand markets. They need to understand interest rates… It’s really a more sophisticated type of individual or investor who understands that type of market.

“What clients are looking for is some alternatives in the market today”, he surmised.

Investec also revealed research which suggests that more than 100,000 Britons bring home over £200,000 each year.

Analysing Land Registry data, the bank also says that the number of £1 million homes increased by 48 per cent last year.

Tags: money, research, Britons bring home, Spokesperson Wayne Preston, Land

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: money, policy committee, term interest, rise, Andrew Sentance, level

Bank paid out saver’s money to wrong family

A bank has faced major embarrassment after paying out the savings of a pensioner to another customer’s family – under the assumption that the customer was dead.

The pensioner, who had £3000 in savings with the Abbey, discovered when she visited the bank that her savings had been paid out and her account closed because her records stated that she was dead.

The 77 year old customer stated that she visited the bank after her statements stopped arriving in the post. She stated: ‘I took the matter up with my local branch in Telford and they asked me if my husband had perhaps closed it.

I replied it was unlikely because he passed away 25 years ago. The young lady serving me began typing away on her computer but all of a sudden looked puzzled and told me that according to their records, I was dead. She went a bit pale, either because she was embarrassed at such a mistake or she thought she was seeing a ghost.’

After investigating the bank discovered that a customer with a similar name and of the same age had died. However, in error the wrong account had been closed and the £3000 had been paid out to the family of the deceased customer. The customer has been told that she will be getting back her money along with some compensation.

She stated: ‘Abbey have told me they have reclaimed my savings and have pledged to give me some compensation as a result of all the fuss caused. But I’m 77 and a widow, so it doesn’t do my health any good when I’m told my £3,000 has disappeared because I’m dead. It has taken a lot of time, effort and money, what with phone bills and bus fares to Abbey and my local library to process all the paperwork.’

Tom Smith
3rd July 2007

Tags: mistake, abbey, accounts, savings, money

Don’t let ‘money fear’ take grip

Sainsbury’s Bank is encouraging Britons not to put their heads in a financial sandpit and to face the reality of their banking problems.

Research carried out by the group suggests that some 2.8 million consumers, or six per cent of the adult population, purposefully ignore the state of their financial situation.

According to Kevin Barrett, head of channels at Sainsbury’s Bank, almost two million Britons refrain from divulging their financial positions with partners because they are worried about the potential reaction.

Over one in ten people also claim to have left credit card and bank account statements unopened as a means of procrastinating over financial matters.

Mr Barrett said: “Our advice to people suffering from this condition is not to put your financial management off, problems can arise if you don’t keep an eye on things.”

He added: “For example, without regularly monitoring your statements you won’t be able to identify issues such as identity theft. Take control of your finances now, look at your expenditure, plan your budget and by all means, seek advice or counselling if you need to.”

To avoid getting into the situation of ‘money fear’, Sainsbury’s Bank calls for consumers to face up to their financial situation, to prioritise debts and to plan a budget and stick to it, among others.

Tags: account, identity, money, head of channels, potential reaction.Over, state, consumers, situation

Unexpected bills catching us out

We are regularly being hit with a bill or expense that we have not budgeted for.

That is according to new research by Abbey which shows that in the last 12 months, 79 per cent of us have had to fork out an average of £1,375 on an unexpected outgoing.

Abbey calculates that we have spent a combined £48.7 billion in this way in the past year and says that home repairs are the most expensive unexpected cost.

Around 36 per cent of Brits spent £1,206 on home repairs, 42 per cent had to stump up for surprise bills and 29 per cent spent £447 in the last year on unanticipated travel expenses.

Most of us might feel pretty hard done by if we were hit by an unexpected cost but Abbey points out that if we kept control of our banking situation, we would be prepared to deal with the surprise expenses.

“You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a ‘buffer savings fund’ to help deal with these shock events,” said Reza Attar-Zadeh, head of savings at Abbey.

“Most experts recommend that you build up a fund of at least three months salary in an instant access cash account.”

The research also found that people living in Wales were the best budgeters, while those in the south-east were the worst.

Tags: travel, Building Types, surprise, salary, money, Banking, Business Finance, shock events

Debt considered acceptable because of student loans

According to a recent report the popularity of student loans has made debt in the UK seem even more acceptable.

According to the financial education charity Credit Action student loans have become such a norm that being in debt has become something of a fact of life. And according to officials from Credit Action these student loans have nothing to do with a need for money, but more to do with the easy access to student loans.

One official from Credit Action described student loans as ‘government endorsed debt on a massive scale’. Of course, students can find themselves in need of financial aid at some point during their education, but the easy access to student loans has resulted in many students just taking out loans for the sake of it rather than through real need, placing them on a downward debt spiral that could lead to problems later in life.

According to Chris Tapp from Credit Action there is not enough caution exercised with student loans, and the easy access to this type of finance has made debt appear to be acceptable even for the younger generation. With consumers levels in the UK at sky high levels this has raised concern amongst some charities and campaign groups, as those in their late teens and early twenties begin a debt ridden life before they have even completed their education.

According to Mr Tapp student loans enable students to live lifestyles that are beyond their means – something that they then become used to, and something that many have to continue funding through further finance, as their initial jobs after leaving college or university is unlikely to be a high paying one.

Tom Smith
17th June 2007

Tags: debt, money, Loans, action, cheap, student, rate, cash

Savers missing out on interest

The Bank of England yesterday (June 7th) froze interest rates at 5.5 per cent but many savers would not have seen any benefit if the rate had risen anyway.

Despite there having been four rate rises since August 2006, the Post Office says that many high street savings providers have not been passing on the benefits.

Interest rate rises are generally viewed as having a negative impact on most people, as those with a loan, mortgage or credit card see their repayments increase.

However, people with savings benefit from a rise in the base rate but only if the provider passes on the new rate.

“Banks and building societies are quick to raise mortgage rates in line with base rate increases, but less inclined to pass on the benefits to their savings customers,” said Richard Norman, head of savings at the Post Office.

“There have been four base rate rises in the last year and the majority of savers have missed out on the full benefit of these.

“Although the Bank of England decided to hold rates today, further rate rises are expected. To make the most of their money, savers need to ensure they check which accounts will consistently pass on rate rises and switch,” he added.

Much like a mortgage with a fixed-rate period, many savings providers offer customers a guarantee that the interest they earn will increase in line with inflation for a specified period of time.

Tags: Financial institutions, Post Office."There, money, england, mortgage, rate period, period

Holidays put Brits in debt

Millions of Brits are happy to put themselves in debt in order to go on holiday.

New research shows that as many as 12 million people borrow money in order to take a break abroad and they end up paying for it well after returning.

CreditExpert.co.uk, an online credit monitoring service, carried out research which found that credit cards, loans and overdrafts are the most popular ways of getting together the money for a trip.

Shockingly, six per cent of respondents admitted to going into debt most or every time they go on holiday, with 18 per cent believing that an annual holiday is so important that they do not think about the money until they return.

Once on holiday things do not get any better, with 22 per cent revealing that they lose track of how much they are spending.

“It’s worrying that, as a nation, many of us have a ‘me now, debt later’ attitude to our finances. Most of us work hard and need a well-earned break, but it’s important that we plan ahead and ensure our bank balance can handle the large outgoings that holidays and other expenses entail,” said Jim Hodgkins, managing director at CreditExpert.co.uk.

“Keeping a budget for the cost of the vacation as well as day-to-day holiday expenses will help you avoid going into debt.

“Missed credit repayments are likely to have a negative impact on your credit report, which means lenders may not want to offer you credit in future,” he added.

People aged between 25 and 34 are most likely to lose track of their holiday spending and 37 per cent say that this is the cause of their debt.

Tags: CreditExpert, money, CreditExpert.co.uk, vacation, budget, online, bank, order

20yrs of debit cards

Barclays will soon be celebrating 20 years of debit cards after it launched the UK’s first on June 3rd 1987.

The bank broke the mould when it introduced the Barclays Connect card and changed the face of banking forever.

Within nine months of its launch, one million people had a Connect card in their pocket and the debit card has gone from strength to strength ever since.

Today, around 68 million debit cards are in circulation, with many people owning more than one.

A total of 143 debit card purchases are made every second, 6.8 billion transactions take place each year and debit cards out number credit cards.

“Plastic has revolutionised the way people spend money over the last 40 years,” said Brian Cunnington, head of debit cards at Barclays.

“Ever since Barclaycard became the first credit card in Europe in 1966 the nation’s spending habits have changed.

“The introduction of debit cards 20 years later gave consumers even more flexibility allowing them to withdraw cash from ATMs as well as to have payments deducted directly from their current accounts when they paid in shops,” he added.

Debit cards have remained popular through slight changes that keep them up to date, such as the introduction of Chip and PIN technology.

Tags: banking forever.Within, pin technology, Banking, uk, Product Release, card

Over one fifth of Brits do not save

Over twenty percent of Brits do not put aside any money in the form of savings according to a recent report. Research has shown that twenty one percent of Brits fail to put aside any money in savings.

The savings survey was carried out by Nationwide in a bid to try and determine how best to tempt consumers into opening and running a savings account. The survey also showed other facts and figures relating to Brits and the way that they save – if at all.

According to the survey, over one in five Brits saved nothing at all. However, the results also showed that thirty five percent of Brits do save money on a regular basis. In addition to this the survey revealed that nearly forty five percent of Brits tended to save on an ‘as and when’ basis, putting money aside into savings whenever they had some spare but otherwise using it for day to day cost of living.

Seventy seven percent of those interviewed as part of the survey stated that their most important consideration when it came to a savings account was a good, long term interest rate. Eight four percent also stated that the account needed to allow withdrawals without any form of penalty being imposed. Nearly sixty percent stated that they would only open a savings account with a well known provider.

Shockingly, the survey also showed that some people still use the most primitive methods of trying to save money, such as stashing their cash in various places around the home – including under the mattress. Those interested in savings accounts are advised to shop around and find an account that offers a good interest rate that reflects the rising interest rate in the UK.

Tom Smith
26th May 2007

Tags: bank, cash, interest, income, accounts, money, uk

Record mortgage lending figures

New figures from the Council of Mortgage Lenders (CML) show that we borrowed a record amount of money in March 2007.

In total, £31.3 billion was leant to people who took out a mortgage on a house, representing an all-time record for lending figures in March.

It is the most amount of money that has ever been borrowed during the month of March and shows that the housing market is still very strong.

The figure for March represents a 22 per cent increase on the amount borrowed in February and a 10 per cent rise on the £28.3 billion which was leant in March 2006.

“This is the highest-ever March lending figure,” said Michael Coogan, director general of the CML.

“It is clear that many borrowers are taking sensible steps to shelter against higher mortgage costs.”

Despite the increasing figures, the CML says that the high levels of mortgage lending may not continue for much longer.

“There is still a question mark over just how strong mortgage lending will be over the coming months as the prospect of higher interest rates takes its toll on demand,” added Mr Coogan.

“But, we continue to expect mortgage lending to reach a record £360 billion this year.”

Tags: house, money, sensible steps, question mark, shelter, economics, Mr Coogan, director general

Bank of mum and dad calls in its debts

University graduates are still reliant on their parents to help them get onto the property ladder but the bank of mum and dad is getting stricter.

According to new research, 39 per cent of graduates rely on money from their parents to get a deposit on a new home.

However, more and more parents now expect their children to pay them back rather than simply offering the money as a gift.

Scottish Widows Bank says that in 1996 38 per cent of parents gave their graduate children the money for a deposit as a gift but this has fallen to just 32 per cent today.

The reduction in charity from parents may be a symptom of poorer finances for most people and this is supported by the fact that the number graduates needing a loan has also increased.

In 1996, nine per cent needed to turn to their parents for money, while today that figure stands at 18 per cent.

Another contributing factor is high rental costs which Scottish Widows says are forcing many graduates to turn to their parents for financial help.

“Rental rates are so high for some that it is very difficult to put enough money aside to save for a deposit meaning many graduates have to rely on their parents to fund that first step onto the property ladder,” said Richard Clark from the bank.

“House prices and affordability are huge barriers for first time buyers but they should be aware that there are other options available to them – both lenders and the government need to keep working on ways to solve this ever growing problem.”

Tags: Parent, money, poorer finances, University graduates, house prices, charity, Business Finance

Savers are short-sighted

Millions of consumers are only saving money to achieve their short-term goals, new research has indicated.

An estimated 7.5 million Britons save cash just to meet their immediate needs, according to a report by website Unbiased.co.uk.

A further 3.8 million are thought to be “frivolous” spenders, driven to part with their cash because of their desire to acquire certain purchases, rather than their ability to afford them, according to the study.

The report, commissioned by IFA Promotion and based on official data and a YouGov survey of consumers, concludes that there are two frivolous spenders for every Briton who is financially aware.

Dividing the nation into five categories according to their spending habits, the study also suggests that even one in ten “bargain” spenders do not have any savings.

“This year’s research into the nation’s propensity to save shows some improvement, but it is disappointing that we still define ourselves as a nation of spenders rather than a nation of savers,” said Unbiased.co.uk chief executive David Elms.

News that many Britons are failing to save for a rainy day follows research published yesterday indicating that the majority of the nation’s wealth is now tied up in property rather than traditional financial assets such as savings.

Some 55 per cent of the UK’s wealth is now linked to equity in properties, the study commissioned by the insurer Prudential found.

Tags: property, rainy day, money, year, United Kingdom

Brits unprepared for money crisis

Millions of us are not handling our banking very well, meaning that we are not prepared for a financial crisis.

According to Birmingham Midshires, a large majority of us are not putting money aside in preparation for a change in out circumstances.

The firm carried out research into the matter and found that a staggering 95 per cent of us fear we would be financially crippled if we had to care for an elderly relative in old age.

The unexpected birth of a child would also leave many of us struggling, with 86 per cent saying that they would not be able to afford to bring up a child.

Redundancy is another area of concern, with 80 per cent admitting to being financially unprepared should the worst happen.

London is the region that would be most affected by redundancy as 82 per cent claim that they could not support their family in the short-term without their regular wage.

“It is alarming that so many people could struggle if hit by a financial emergency or unforeseen cost,” warned Jason Robinson from Birmingham Midshires.

“We are concerned about people’s liquid wealth – the money that should be available to them in a financial emergency.

“Much is talked about the need for saving for the long-term, but without an accessible savings pot set aside for that rainy day, short-term financial costs can leave families with severe difficulties,” he added.

The best advice for building up your liquid finances is to put a little aside from each pay cheque and do not use it until necessary.

Tags: Birmingham, crisis, pot, money, accessible savings pot, need, Pound sterling, Business Finance

February increases saving mood

We all begin February with a good financial attitude, a desire to carry out sensible banking and a mood to save.

That is according to Legal & General which has published its Money Mood Survey for 2007.

In it, the firm tries to gauge the mood of the nation when it comes to saving and 2007 has proved to be the third year of growth.

According to Legal & General, 64 per cent of British adults were in the mood to save at the end of February.

This signals a rise of eight per cent compared to the same period in 2005. In addition, the mood to spend has fallen.

The study claims that 2007 saw the lowest mood to spend in February figures ever, with just 24 per cent of adults wanting to splash the cash.

“These latest figures show the Money Mood of the nation is firmly in save mode as we enter the Isa market this year,” remarked Claire Stacey, director of Legal & General.

“Money Mood also found that the percentage of households who said they have money to spend after paying bills and debt payments has not changed over the three years.

“That’s good news as it shows that the majority of households (58 per cent) are in a position to save rather than struggling to make ends meet,” she added.

This year’s Isa deadline is April 5th so if you are considering saving your money in a high-interest account you had better hurry.

Tags: addition, year, fallen.The study, growth, money, firm, sensible banking, ISA

Isa limits grow but not enough

People who are looking to invest money in a cash Independent Savings Account (Isa) have been given a welcome boost in Gordon Brown’s 11th Budget.

The Chancellor of the Exchequer announced that investors can now save an additional £600 in an Isa and will be free from paying tax on that money.

When cash Isas were first introduced in 1999 the maximum tax-free savings amount was £3,000. This figure has never changed until now.

Despite the increase being well received by many, Mr Brown has been criticised for only raising the total Isa limit by £200 to £7,200.

Critics argue that while the £3,600 limit is in line with inflation, the £7,200 limit falls well short.

“While the increase in the cash Isa allowance is a welcome move, we believe more should be done to encourage long-term savings,” commented Mike Regnier, head of savings at Halifax.

“If the total ISA allowance had risen in line with inflation, savers would now be able to invest around £8,500 per year, free of tax.”

The increase on total Isa limits has been labelled “meagre” by the Association of British Insurers, which called for the government to continue increasing limits in the years to come.

Gordon Brown’s new Isa limits will come into effect from April 2008.

Tags: increase, total isa, long-term savings, inflation, money, stock, tax

Tenancy deposit shake up

A new scheme is being introduced which could change the face of property renting in England and Wales.

From April 6th many landlords will be required to protect the deposits of tenants by putting the money in one of three schemes.

The move has been made after homeless charity Shelter warned that too many people are not getting their money back with the landlord failing to provide a good reason.

With the average deposit now sitting at around £700, the withholding of the money can cause serious financial hardship for many and can leave people unable to get a mortgage, or forced to get a loan just to pay another deposit on a rented property.

“This money represents a sizeable chunk of cash for many tenants and losing it unfairly not only leaves thousands of people out of pocket but can lead to homelessness,” said Adam Sampson, chief executive of Shelter.

“The tenancy deposit protection schemes provide a vital safety net for both tenants and responsible landlords, making the private rental sector more professional and fairer for everyone.”

One of the available schemes will physically hold the deposits until the tenancy agreement reaches its conclusion, while the other two will provide insurance cover if a landlord does not return the money.

Tags: tenancy, shake, Leasehold estate, mortgage, deposit, money, homeless charity, Wales

PPI complaints set to soar

The number of complaints concerning payment protection insurance (PPI) could run into the tens of thousands.

According to financial research company Defaqto there may be a huge surge in complaints, but the firm warns that consumers may not be better off as a result.

A report by Defaqto highlights that lenders may increase rates and charges on money borrowed in order to make up for the loss of PPI income.

The firm also warns that bank charges may be imposed for some customers, spelling the end of free banking and, potentially, putting many consumers in a worse situation than they are currently in.

Defaqto is calling upon lenders to work hard to increase public confidence in the PPI market by becoming more open.

“Too many customers do not realise that they have the right to shop around for payment protection insurance,” said Brian Brown, head of insurance at Defaqto and author of the report.

“Therefore the industry must widen public understanding of PPI through greater transparency if the market is to be seen to be operating competitively and in the best interest of consumers.”

Mr Brown says that consumers should be made aware that they can get a loan from one bank, yet get PPI cover from another.

If you are considering taking out a loan it may be worthwhile getting PPI in order to protect yourself should your personal circumstances change and you are unable to keep up repayments.

The important thing to remember is that you are able to shop around for the policy that best suits your needs.

Tags: worse situation, consumers."mr brown, research company defaqto, head, Mr Brown, public confidence, realise, money

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: exposed.A laptop, Gap, money, year, holiday, fine, executive

Idle homes making rich richer

A new breed of home-buyers is sweeping the nation, and particularly London, with the sole intention of making as much money as possible.

Super-rich investors are increasingly snapping up properties even though they have absolutely no intention of living in them. The idea is that they leave the house empty and wait for it to increase in value, before selling it on at a profit.

They have been labelled as buy-to-sitters and they tend to purchase homes at the high end of the market in order to see the biggest profits.

Lulu Egerton, from estate agents Lane Fox, says that many wealthy people see investing in property as something of a hobby.

“The super-rich acquire property in the same way as they buy fine art or fine wine – it almost turns into a kind of international collection,” Ms Egerton told the Evening Standard.

“It can happen over several years. Sometimes it’s no more than a whim, in other cases as families grow they move to a bigger property but the previous homes are neither sold nor let but held as assets.”

Becoming a buy-to-sitter is certainly a hobby which can only be indulged in by the very rich and is hardly helpful to first-time-buyers who are struggling to get a mortgage and buy a house.

“They have the right to hang on to what is undoubtedly a good investment but it does contribute to a real shortage of big houses at the very top of the market and does nothing to help London’s housing crisis,” said Richard Cotton from Cluttons estate agent.

For many Londoners the prospect of owning two homes is a distant dream, however a growing number of people find that they may be able to afford two properties if they leave the capital.

Tags: end, nothing, Cluttons, money, Idle homes, wine, biggest profits.lulu egerton, sweeping the nation

Brits optimistic for 2007

January 22nd 2007 has been labelled Blue Monday, with experts calling it the unhappiest day of the year.

However, despite the bleak predictions, a major psychological study says that most Britons are optimistic about the year ahead.

The reason may surprise many, but our sense of optimism is down to a firm resolve to get a grip on our finances.

According to the Freestyle Happiness Index, which looks at the top ten ways to be happier people, Britons rate managing money above marriage, children and retirement.

“The research shows a really positive shift in attitudes towards financial management,” said Ashley Ramsay, marketing manager at Standard Life Bank.

“Whereas previously it ranked pretty low on people’s agendas, people are recognising that financial security would make them feel happier.

“While people acknowledge that money won’t buy happiness, they’re realising that it can get in the way. In fact, 70 per cent of people say that its money, not time, that’s the biggest obstacle to happiness for them,” she added.

Clearing debts was ranked as the third best way to improve our happiness, while achieving financial security was voted fourth and paying off the mortgage came in at sixth.

The number one method of improving happiness was voted as beginning a new hobby, followed by having more fun at work.

Tags: Positive mental attitude, method, January, money, blue monday

Leave out the banks

Following a stinging attack on banks over penalty charges, consumers are being told that they can avoid contact with banks altogether if they wish.

Zopa, an online market place where people meet to lend and borrow money, says customers need to be made aware that they are no longer limited to simply switching between banks.

During a parliamentary debate on January 16th, many banks were accused of “ripping off” their own customers and penalty charges were labelled “illegal” by Liberal Democrat MP Matthew Taylor.

The people at Zopa say that by borrowing from other members of the public it is possible to get some of the lowest interest rates around.

“There is simply no need for people to continue to suffer at the hands of the big banks anymore,” said James Alexander from Zopa.

“They are no longer restricted to just switching to an apparently less greedy bank either.

“They can cut them all out by borrowing and lending between fellow individuals to get not just a better deal, but also the pleasure of no longer contributing to the banks’ truly staggering profits,” he added.

Tags: online, MP Matthew Taylor, less greedy bank, Matthew Taylor.The people, MP, money

Rate of inflation to be held?

It appears probable that the Bank of England’s monetary policy committee (MPC) will decide to leave interest rates on hold following its meeting on January 12th.

However, the rates are likely to be raised to 5.25 per cent next month, meaning more bad news for mortgage holders.

The raise has been predicted by economists for some time and it comes after the cost of borrowing was increased twice towards the end of 2006.

Inflation is currently at 2.7 per cent, the highest it has ever been under this Labour government, and policymakers are concerned about inflationary wage deals as a result of living costs.

“A rate hike this week is not out of the question but given we still know nothing about January wage settlements, I think the bank is more likely to wait,” Alan Castle, economist at Lehman Brothers, told Reuters.

A recent poll carried out by Reuters found that 49 out of 50 economists asked expected rates to remain on hold, while almost 50 per cent thought there would be a rise by March.

Tags: alan castle, economist, hold, quantitative easing, policymakers, money, bank

Time is money

The majority of us are not putting enough time aside to work out our finances.

That is according to Axa, which found that one in three British adults refuse to pay any attention to their finances at all.

Of those who do spend time looking over their money, the majority allocate just five minutes each week to the process.

Despite these slightly worrying figures, Axa insists that all is not lost and says that by giving ourselves just 15 minutes each week to sort through our finances, we could each save thousands of pounds in reduced debt.

Based upon this period of time being set aside, Axa insists that as much as a quarter of personal debt can be reduced, while savings can increase by 40 per cent in just 12 months.

“There is a direct correlation between the amount of time people spend on their finances and how much they save,” said Steve Folkard of Axa.

“Our research shows that it’s not until people start to spend around an hour a month on planning and reviewing their money issues that they really see their savings pot grow – people who spend more than an hour saved an average £1,532 last year, compared to just £576 saved by people who don’t review their finances on a monthly basis at all.”

Axa offers advice to people such as simplifying your money into two columns (money in and money out), clearing debts before saving and looking at the situation positively.

Tags: amount of time, money issues, money, majority allocate, savings pot grow, time is money

Credit Building Tactics

Your Credit Rating and you

There are two main credit rating agencies in the UK: Experian and Equifax.

When credit card companies receive an application for a card they will more than likely run the person’s details past one of these two agencies. It’s the job of these agencies and others like them, to keep on file all applications for credit, whether or not you were successful and details of how you conducted your dealings with debtors when you had that credit.

This information includes your mortgage payments, sometimes it includes utility bills and it can even take into account the area in which you live and whether you are on the electoral roll. The lender will compare the data it receives back from the rating agency with its selection criteria to build up a points profile of you as a potential risk. If you don’t score enough points you are considered to be a bad risk or have a low credit rating.

Don’t Panic

If you are turned down by a lender it’s possible to find out what your credit rating is by writing to the agency enclosing payment for £2.00 and asking to see a copy of your file. Or apply online at one of the numerous websites offering the service.

If you do have a low rating, don’t panic! You can improve it. Here’s how.

Start slowly

By initially getting a credit card designed of people with a poor credit rating you can start to make regular payments into it. These payments should be fairly large and the best thing is to pay them off in full each month.

If you can and you feel like playing the credit ratings agencies at the top of the game, then you can go one stage further. Sometimes loan companies will refuse you credit if it appears from your history that they won’t be able to make money out of you. So for the hell of it you might want to leave a bit in the card for them to nibble at with their interest charges. But whatever you do, don’t leave too much in there as the APR could be soon become crippling.

And remember, you don’t need to do this every month – clear the balance more often than you leave a little for them. What you are doing is demonstrating that you can look after your finances by working the credit card.

Careful does it

The above method should really be called the kamikaze school of credit improvement and it’s not guaranteed to make a difference with all lenders. It requires you to be very self disciplined and if you’re the sort of person that might get carried away with spending or be just too lazy to control your repayments you probably shouldn’t go near this approach.

The building blocks of credit

Instead you could start to build up your credit rating by co-signing with a family member or a good friend on a small loan or credit card. But be aware of

the potential pitfalls of signing up to a joint debt if you fall out with your

co-signee! This is a good building block for young people who are starting out on their journey into credit.

It’s all over

Once it’s all over and your credit rating improves you will quickly get another card. When it arrives, play the game the usual way and give the credit card companies as little as possible!

Whatever you do don’t forget to meet your monthly repayments on any bills you have or your rating will go sliding again. If you do find you’ve forgotten a repayment, contact the company, get them to make a note that you have contacted them and pay it as soon as possible.

If you move house, tell all financial institutions you are involved with and make sure you register on the electoral roll of the new area.

Applications

Every time you make an enquiry about credit it’s recorded on your rating file. So if you are turned down by a company it will be shown. For this reason it is a good idea to avoid making several applications to different companies if you are turned down by one. Given that it only costs around £2 to find out how your rating stands it would be better to get a copy of your rating from the agency before filling in more applications.

Alternatively simply phone the company before applying and ask them if you fit the credit profile they will want; are you the sort of person they will accept? A quick conversation could do you and your credit history a world of good.

Buying time

A little patience is needed before your credit rating gets going, but while you’re waiting for things to start moving you can help them along by getting a few scorecards, but always pay off the balance on a regular basis as these are usually the most expensive type of credit facilities out there. So don’t go grabbing scorecards for things that you don’t already buy, or you’ll end up in a financial nightmare of spiralling debt.

And finally…

Whatever you do, when you get the credit card that you really want, don’t go over your credit limit. You’ll be charged an outrageous sum for the privilege and you guessed it, it will go on your credit rating file.

Be safe, follow good practice and get rid of all those scorecards and close down your original credit account at least until you have got used to handling credit again or if it’s for the first time until you can recognise how you might respond to the temptation of the card!

More Information:

• Credit Card Advice – CreditCards121 advice section
• Credit Reports
  Every time a customer applies for a financial product such as a credit card, the credit company will consult that customer’s credit file. This file records all their financial activity in terms of credit applications and banking activity.
• CCCS – Free non profit association advice
• APACS information page

Tags: credit it, agency enclosing payment, money, original credit account, Credit card, t score, business, poor credit rating

Cash Back or Rewards – What’s Your Preference?

In their bid to retain customers credit card companies have resorted to many different marketing ploys, or ‘incentives’. Cashback cards have proved popular, as have cards offering rewards points. But which is better?

Interesting

The interest on most cards offering cash back is accrued throughout the year and the totals shown on your monthly statement. The annual cashback is then allocated to your account once the twelve months are up.

One exception to this is the EGG card that gives you instant cash back if you visit different stores online such as Virgin wines and ASOS, the online gift and fashion store.

Inspecting the small print

Typical restrictions applied to the annual cashback cards are that it’s restricted to 2% of spend as an introductory offer. You need to look for what it then reduces to as it will go to a lower rate when the honeymoon is over. For example, 1% with the Morgan Stanley card. The American Express Platinum card goes as low as 0.5% on amounts up to £3,000, but fortunately increases to 1% on spend between £3,000 – £7,500 and 2% on spend in excess of £7,501.

So, that’s one card where the cashback is clearly designed to encourage you to spend, spend, spend!

Robbing Peter to pay Paul – the annual fee

Although there are less of them around these days it’s always worth remembering to check whether you cashback card charges you an annual fee. If it does, get rid of it. There is no point in giving the company money on the one hand only to receive some back on the other. You can do better.

Is it worth it?

An example of the value of a cashback card being reduced is the HSBC Platinum Visa card, which charges a £35 annual fee. The cashback vouchers are worth 44p for every £100 spent, so that means you would have to spend £8,000 to actually earn cashback in real terms.

No small change

Averaged out over the year that HSBC card spend would be only £666.67 each month. But if you put £1,000 on the card and pay it off each month so you don’t get charged interest, that would mean you have the grand sum of very roughly £17.50 cashback for the year’s spend.

You can see why the card companies are keen to use the cashback incentive.

So what about reward schemes?

Reward schemes usually offer points that can then be redeemed against goods, usually only from selected outlets.

The Goldfish card has proved to be one of Britain’s most popular credit cards, helped largely by a well targeted and conceived Television advertising campaign featuring Billy Connolly.

A million people can’t be wrong, can they?

There are over a million customers with Goldfish cards and every pound you spend online or in the high street with your golden friend will earn points that can be redeemed at popular shops such as John Lewis, Marks and Spencer, Asda, Dixons, Boots, and WH Smith and many, many more.

Come fly with me

Air Miles has proved a very popular incentive scheme and is offered by several different card providers, including the illustrious Coutts and Co. Air Miles credit gives one Air Miles point for every £20 spend and as much as one point for every £5 spent at a participating Air Miles Travel Agency. So they can mount up.

I’m Morgan Stanley fly me

Morgan Stanley are an investment Bank, so if you are a high earning individual or couple, then you could benefit from the travel and holiday offers associated with one of their cards. Collect points on your card and if you spend £25,000 you will have earned enough points to fly from London to New York return.

General Motors

The GM card gives users rebate points at 3% of spend towards money off a new Vauxhall or Saab car. They even offer 100 free rebate points for the first time you use your card and that provides you with the instant equivalent of £100 off that shiny new motor!

Which type of card?

As with all these decisions it really comes down to how you use your card and your own particular lifestyle as to which one you should choose. Bear in mind that card reward schemes in general have been heavily criticised by Which? magazine in the past because they don’t offer very good value for money.

The choice is yours

In general cashback schemes offer more flexibility for the consumer to buy what they want, but if you have a particular lifestyle then you may well see a credit card provider with a particular offer to suit that lifestyle, like the GM card or the Suite card which offers points redeemable at over 16,000 hotels around the world.

Ultimately, the choice is yours.

Tags: annual cashback cards, money, Suite card, goldfish cards, Payment systems