Older people likely to cut back on spending before younger consumers

It has been claimed that older people in the UK are more likely to curb their spending on things such as credit cards and current accounts than younger consumers. With many people struggling financially, and with rising living costs, increasing VAT levels, and rising unemployment levels likely to further affect spending power amongst consumers, cutting back has become a necessity for many people.

An official from Lovemoney.com claims that it is the older members of society that are likely to react to economic changes before younger ones, and older people are more likely to reduce their spending on credit cards and via their current accounts. Older people are also more likely to start putting money aside in savings than younger people.

Ed Bowsher, the official from Lovemoney.com, said that with interest rates still at a record low younger people are more likely to continue spending in the short to medium term and less likely to think about reining their spending in or trying to save any money. However, he said that older people would not have that ‘feel good’ factor.

Bowsher’s prediction comes after the publication of a recent report, which showed that since the start of the recession around 75 percent of consumers in Britain had altered their spending habits, with many having to make huge changes to their spending levels because of the financial strains that have come about from the recession and the global financial crisis.

However, many people have turned to credit cards and overdrafts in order to keep up with their financial commitment or continue with a particular lifestyle, and this has led to rising debt levels amongst households in the UK.

Tags: necessity, United Kingdom, debt levels, overdrafts, consumer, factor

Uninsured drivers “think they can get away with it”

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

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

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

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

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

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

National Grid fined £41.8m by Ofgem

Power distributor the National Grid has been fined £41.8 million by energy watchdog Ofgem for breaching competition law and harming customers.

The fine is the largest ever imposed by the regulator for behaviour which allegedly prevented suppliers from contracting with other companies for cheaper metering deals.

Sir John Moog, Ofgem chairman, said: “National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.

According to the watchdog, the National Grid made a number of long-term contracts with five of the six main energy suppliers to supply and maintain gas meters.

The contracts included financial penalties imposed on suppliers if they replaced more than the small number of meters allowed under the contract by National Grid.

Ofgem said that this has severely restricted the rate at which suppliers can replace even National Grid’s older meters with cheaper or more advanced meters from rival operators.

Meanwhile, the National Grid has launched an appeal against the verdict, insisting that it has not harmed any of its competitors.

Tags: competition law, term contracts, Grid, gas, power, energy, Sir John Moog

Homeowners ‘can’t afford to be passive’ about energy deal

As energy prices rise homeowners “can’t afford to be passive” about the tariffs they are charged by their electricity suppliers, according to an industry watchdog.

Energywatch said that despite the rising prices, consumers should certainly shop around for the best tariffs, particularly those who are still with their existing provider as new customers receive more competitive deals.

Georgina Walsh, spokesperson for energywatch, said: “It’s well worth switching because you can probably save at least £100, even if you change to another supplier on the same tariff.”

If increasing numbers of consumers switched it would encourage providers to become more competitive, she added.

With combined household bills for electricity and gas reaching an estimated £1,000 per year, Ms Walsh called for more consumers to be more proactive.

Last week E.ON became the fifth of the ‘big six’ energy suppliers to raise its prices in response to reported price rises on wholesale gas and electricity.

Npower, British Gas, EDF Energy and Scottish Power have all raised their prices by over ten per cent this year.

Tags: Npower, power, Ms Walsh, energy, industry watchdog

Britons ‘banking billions’ at home

UK consumers have managed to hide a whopping £4.6 billion worth of cash around their homes, with the average Brit stashing £127 and an affluent eight per cent sitting on anything between £300 and £1,000 in cold hard currency.

That is according to new research from home insurance provider Cornhill Direct. The company found that 40 per cent of homeowners believe it is a good idea to keep money in the house, while 45 per cent believe that the recent Northern Rock situation could result in more people keeping hold of their own money.

Interestingly, Brits were not put off by feelings of uneasiness about keeping cash at home (one third), nor by the fact that one in ten have had funds go missing.

Mark Bishop, a representative for Cornhill Direct, commented: “Our home contents policy provides protection for money kept in the house, but it is never a good idea to keep large sums in the house.”

Back in May, Virgin Money estimated that Brits were keeping £3.5 billion in cash at home. Based on a forecast of future inflation, it predicted this money would lose around £200 million in purchasing power by 2010.

Tags: power, Northern Rock situation, new research, cent, home contents policy, fact, northern rock, Cornhill Direct

UK’s top banks revealed

Nationwide has been ranked as the best bank for customer service, according to a new survey.

The banks scored 742 points out of 1,000 while second place went to Royal Bank of Scotland with 689.

Alliance & Leicester (667), HSBC (660) and Halifax and NatWest (659 each) followed next in the list, compiled by JD Power for its 2007 UK retail banking customer satisfaction study.

Recommendations by family members outstripped the performance of offers and the latest mobile and internet banking services, according to the study’s fundings.

Caspar Tearle at JD Power and Associates said: “Despite growing public scrutiny of banks for overcharging practices and account fees, it’s interesting to note that nearly 75 per cent of customers would still recommend their bank to others.”

Figures showed that 45 per cent of these customers had recommended their bank in the past 12 months, he added.

A recent This is Money poll revealed that 65 per cent of respondents said that they were happy with their bank.

Tags: scotland, power, new survey, Money poll, best bank, bank, uk, place

Brits hide billions in the home

Millions of Brits are storing billions of pounds in their homes and missing out on the benefits of banking.

That is according to Virgin Money, which says we have a combined £3.5 billion worth of cash stashed away.

The firm has labelled it the ‘biscuit tin bank’ and says that we should all take that money and put it into a bank account as quickly as possible.

With the money just sitting in our homes, Virgin points out that we are missing out on interest which would be earned if it was in a bank account.

The £3.5 billion would earn a combined total of £174 million in interest every year if it was in an account and, based on future interest rates, our cash is set to lose £200 million in spending power by 2010.

Virgin discovered that 15 per cent of Brits have up to £1,000 in their home, while two per cent have around £5,000.

It may seem crazy to keep this amount of cash in the house but apparently we have our reasons.

Despite the massive risks associated, such as theft, six per cent say they keep the money in the house to hide it from their partner, four per cent do not trust banks and one per cent want to keep it tax-free.

Tags: power, trust banks, future interest rates, Virgin, total, The, Banks and Institutions, cent

The Great British insurance scam

Con-artists are costing the UK insurance industry £1.6 billion per year and we are suffering as a result.

The Association of British Insurers (ABI) claims that fraudulent insurance claims are rife in the country and innocent people are being penalised through increased premiums.

Research by the organisation shows that the average policy holder’s premium is £40 higher than it should be because £4 million worth of false claims are made every day.

The ABI carried out a survey which found that ten per cent of people have cheated their insurance company, either by completely fabricating a claim or exaggerating it.

Nick Starling, director of general insurance and health at the ABI, wants to see greater power given to the authorities to deal with the crime.

“Honest customers should not have to pay for cheats. These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud,” he said.

“This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness it deserves.”

The ABI says that around 50 per cent of all fraudulent claims centre on home contents and building insurance.

Tags: fraudulent insurance claims, premium, average policy holder, power, day, seriousness, Insurance

Bailiffs may be given greater powers

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

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

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

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

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

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

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

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

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

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

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

Working to clear card debt

The average Briton slaving his or her way through January, struggling to clear the Christmas debt hangover, gets meagre returns for their pains, Unbiased.co.uk has claimed.

If we worked for 31 days solidly, we could clear the interest on our credit card and loan debts, but not the debt itself, the financial advice service reveals.

Since average UK earnings total £23,556 per annum, a January pay cheque would be just enough to clear the £2,012 interest gathered on the average British consumer’s total personal debt.

But Unbiased.co.uk has declared February 1st ‘Debt Freedom Day’, hoping to inspire consumers to work on eliminating the debt itself in the coming year.

This date should serve as “a wake up call to those who carry personal debt”, Unbiased’s chief executive David Elms emphasised.

“The real headline will come when official figures show people controlling their spending behaviour and increasing their saving power,” Mr Elms added.

For every pound saved, Britons are still borrowing 49 pence to fund their lifestyles.

Average household debt in the UK at the start of 2007 stood at £8,765 excluding mortgages, according to Credit Action statistics.

Tags: January pay cheque, Christmas debt hangover, spending, power, loan