More compensation payouts to be issued by Halifax

High Street banking giant, Halifax, has recently admitted that it may have to pay out more compensation to customers over a mix up with its mortgage rates. Earlier this year the lender identified around 600,000 customers who may be eligible for compensation over confusion about mortgage rates, about half of whom ended up receiving compensation payouts. The lender has now stated that there could be another 250,000 people who may be eligible with around half of them expected to actually receive compensation.

The compensation that the lender pays out could be up to £4500 per person based on a mortgage of £150,000 where the borrower has been affected for three years. The payouts will equate to either 1 percent of the mortgage interest for each year that the borrower has been affected or will be a fixed compensation payout. With tens of thousands of borrowers potentially set to receive compensation, Halifax could have another huge bill on its hands.

The confusion has arisen over Halifax increased the cap on its standard variable rate mortgages from 2 percent above the Bank of England base rate to 3 percent above. The UK’s financial regulator, the Financial Services Authority, expressed concern that wording on documentation may have led borrowers to believe that they would receive advance warning of any such changes. Halifax subsequently came to an agreement with the FSA over paying compensation to customers who were affected.

A Halifax official said: “In February 2011, we agreed a voluntary agreement with the FSA in relation to a customer contact and goodwill payment programme with specific Halifax mortgage customers. We have subsequently identified a further group of customers that are eligible for inclusion within the programme. We are now in the process of writing to these borrowers explaining what this means for them.”

Tags: concern, year, standard, Mortgage loan, uk, Mortgages, payout, compensation payouts

Interest rates unlikely to increase this year

A recent poll has suggested that the base interest rate is unlikely to be increased over the course of this year, which is something that will bring relief to many homeowners and borrowers who are already struggling to make ends meet due to soaring costs and bills. The data comes from the latest Reuters poll of economists, which reveal that there is now only a 30 percent chance that the Monetary Policy Committee will increase the base rate from its current record low of just 0.5 percent where it has been for well over two years.

However, economists are predicting that there will be a base rate increase in the first quarter of next year although some believe that the next rate hike could be at least one year away, perhaps even longer. One industry official welcomed the news of the unlikelihood of a rate rise, stating that there were many households and individuals that would not be able to cope with a rate increase in the current climate due to overstretched finances, soaring living costs and rocketing bills.

He said: “Given that many people in the UK are currently struggling to make ends meet, an interest rate rise which will push up mortgage payments will cause a huge increase in families facing financial difficulty. The longer that interest rates are left unchanged the better from a personal debt point of view.”

The MPC has faced a difficult decision over recent months when it comes to increase interest rates, as members have been under pressure to vote for an increase due to soaring inflation levels but have also been under pressure to keep the rate on hold because of the concerns about the economy and affordability.

Tags: Business Finance, uk, committee, quarter, course, reuters poll

Reducing car insurance costs

Recent reports and figures have recently shown how the cost of vehicle insurance cover in the UK is soaring, with premiums now thought to be a massive 30.8 percent higher than they were a year ago. This is especially troubling for drivers in the current climate because of the soaring cost of fuel, which is already financially crippling many drivers. The rocketing cost of insurance is an added problem to the many drivers who are now struggling to keep their cars on the road.

For many people these costs are unavoidable, because they need to use their cars to get to and from work in order to earn money but at the same time they are struggling to earn enough money to pay for the cost of running their cars. With many having their pay frozen and having to cope with other living cost increases too the financial pressure it getting too tough to handle.

For those that have seen their car insurance costs soar there are a number steps that they can take to try and reduce these costs. This includes:

Comparing cover: The key part of getting cheaper cover for your insurance is to compare cover from a range of providers as the cost of cover can vary from one provider to another. Get online and see what sorts of prices the different providers can offer – you can use an insurance price comparison site but do bear in mind that not all insurance providers will be included on these sites.

Drop you level cover: Of course you do need to have insurance cover in place in order to legally be able to drive your car on the road. However, there are different levels of cover available so you may want to consider dropping the level of cover that you have if there is a big difference between your current level of cover and the next one down.

Change your car: If you have a car that is eating petrol and costs more in tax then it may be worth considering changing your car to a more economical model to cut costs in a range of areas, which would include lower insurance bracket, less petrol, and lower tax. Some people have vehicles that are much larger than they actually need so now might be a good time to trade this in and opt for a cheaper, more economical model.

 

Tags: part, order, big difference, Driving, vehicle, Vehicle insurance

Are you considering a fixed rate mortgage?

There are many people at the moment who are considering switching to a fixed rate mortgage amidst fears that the base interest rate could increase over the next few months, leading to a rate rise on variable rate mortgages and resulting in higher mortgage repayments. Over recent months many homeowners have waited with bated breath each time a Monetary Policy Committee meeting takes place to see whether the base rate is set to increase.

The speculation with regards to whether the base rate will increase over the next few months has continued to increase. Many believe that the base rate will stay at its record low of 0.5 percent for some time to come because of concerns about the continued fragility of the UK economy. With the rate setters still having to consider the effects a rate increase could have on the economy at what is still a very difficult time some believe that it would be irresponsible for the MPC to increase the rate at this stage.

At the same time many believe that the fact that inflation has soared to way over the 2 percent target set by the government means that the MPC will have to increase the base rate in order to bring inflation down and then keep a lid on it. If this is the case then the base rate may increase sooner rather than later, which could result in homeowners with variable rate mortgages seeing their interest rates and repayments go up.

Anyone that is considering whether or not to switch to a fixed rate mortgage needs to do a little research. It is important to look at the fixed rates that lenders are offering to determine what sort of rate you will be able to get if you do decide to switch. It is also important to work out whether you would be able to afford any increases in repayments if the base rate was to rise.

In this particular climate, with so many differences in opinion with regards to future interest rate movement it is difficult for people to decide whether to switch to a fixed rate deal or just continue with a variable rate one and hope for the best. Some people have already taken action and switch to a fixed rate before the rates go any higher in anticipation of a base rate rise.

One official said: “The stand-out trend in the mortgage market at present is the increase in the number of rate-wary borrowers remortgaging onto fixed rates. People know that rate rises are coming and they are locking in now before fixed rates move higher. Essentially, borrowers are running for cover.”

Tags: fact, interest rate, rate increase, speculation, increase, committee meeting

Broadband speeds could swing decisions on home buying

Many people that are looking to buy a home look at a range of different factors in order to help them to decide which home is going to be most suited to their needs. There are many things that people will look for in a property, such as local amenities and facilities, road and transport links, neighbours, etc. However, more and more people are also looking at the broadband access in the area before making their minds up.

This trend has resulted in broadband becoming an important selling point for estate agents, and some are now using the availability of high speed broadband as a valuable selling point for properties. Property website Rightmove and communications giant BT are two companies have teamed up to provide information on broadband for over one million properties that are up for sale on the Rightmove site.

The importance of broadband has increase because nowadays people require higher speed broadband for a range of things such as entertainment and shopping, education, communication, and business use.

An official from Rightmove said: “Broadband is becoming one of the most, if not the most, important considerations for prospective buyers. Many people fall in love with a home only to find out it can only get really slow internet. By listing broadband speed with all the other property details buyers will be able to weed out homes that don’t have high-speed access.”

Another official said: “As a leading UK website services like superfast broadband obviously interest us and we have recently looked into how it can benefit us, although we are not currently in any form of partnership with BT.”

Tags: speed, Technology Internet, importance, estate, uk, Estate agent

Shapps wants more help for first time buyers

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

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

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

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

Tags: Recent figures, Association, history, first time buyers, Loans, level

Consumers could be paying for their banking services

One consumer watchdog official has recently said that the idea of free banking in the UK is nothing more than an illusion, and that more and more of us are ending up paying for our banking services in one way or another. The spokesperson, Oliver Morgans, who is from Consumer Focus, said that banks were managing to extract money from current account customers in one way or another, so even if the account is advertised as being a fee free account the average consumer will still end up paying.

Morgans said that in addition to having to pay for our current accounts in one way or another, consumers in the UK were also putting up with poor service and performance standards. He said that whilst people liked the idea of getting something for nothing, most were not getting this, and were in fact compromising on the service that they were receiving to boot.

A number of practices have been highlighted as providing banks with the ability to make cash from their customers for having a credit account. Overdraft charges are one way in which banks are making their money, and many charge huge fees when the accountholder goes over the limit. Another way in which banks make money from current account holders includes having a packaged account, which can be quite expensive each month.

Another consideration that consumers will have think about is interest on their current accounts – or lack thereof. A rising number of banks have now stopped paying interest on debit balances for accountholders, and this means that accountholders are missing out on this money.

Figures have shown that in the last four or five years the interest on overdraft charges has increase, the number of packaged accounts that are active has doubled, and a rising number of banks now pay nothing at all in interest on customers’ current accounts.

Tags: huge fees, consumer watchdog official, poor service, official, uk, cash, credit account, money figures

Huge fine for Barclay’s over investments

High Street banking giant Barclay’s Bank has been fined a fortune by the financial services regulator, the Financial Services Authority. The bank has been ordered to repay customers around £60 million, and has been fined £7.7 million on top of this, resulting in total fines of nearly £70 million.

The fines have been imposed as a result of investments that were mis-sold by the bank. The FSA carried out an investigation that revealed ‘serious failings’ in the way in which the bank had sold the two investments, which were Aviva’s Global Balanced Income fund and Global Cautious Income fund. The two funds were sold between July 2006 and November 2008, and the total value of the investments came to nearly £700 million.

According to the FSA the investments were mis-sold because the bank did not take into account a number of crucial factors when selling the funds. The regulator said that the funds were sold to over twelve thousand customers in total, but that the FSA did not consider important factors such as the financial circumstances of the customers, their investment knowledge and experience, or their investment objectives.

An official from the FSA said: “The FSA requires firms to have robust procedures in place to ensure any advice given to customers is suitable. Therefore, when recommending investment products, firms should take account of a customer’s financial circumstances, their attitude to risk and what they hope to achieve by investing. On this occasion however, Barclays failed to do this and thousands of investors, many of whom were seeking to invest their retirement savings, have suffered. To compound matters, Barclays failed to take effective action when it detected the failings at an early stage. “

She added: “Because of this, and given Barclays’ position as one of the UK’s major retail banks, we view these breaches as particularly serious and fully deserving of what is a very substantial fine.”

Tags: financial services regulator, funds, compound matters, advice, substantial fine

Insurance fraud costing millions

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

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

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

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

Tags: recent report insurance fraud, financial climate, honest customers, net, level, homeowners, uk, claim

Doorstep lenders can cause huge problems for consumers

It has been claimed in a recent report that doorstep lenders in the UK often cause huge problems for consumers because the loans that they offer can put borrowers in a cycle of debt that is difficult to escape. The OFT is now on a mission to try and protect vulnerable consumers from getting into financial hot water with these doorstep loans by making lenders prove that they are adhering to the Consumer Credit Act.

 

In the past eighteen months over 100 applications for licenses from doorstep lenders have been turned down by the Office of Fair Trading, and according to reports the watchdog has now written to around half of these companies asking for proof that they are adhering to the regulations and rules of the Consumer Credit Act. Companies have three months to provide this information.

 

Some doorstep lenders have been accused of misleading customers by failing to provide details about things such as their right to cancel, which makes some borrowers think that they are stuck in the credit agreement when in fact they are still within the time period where they can cancel. Others were accused of turning up at people’s houses without any prior notification or arrangement.

 

The crippling rates of interest charged by doorstep lenders have also been highlighted as a problem, and whilst the loans are only meant to be short term ones the APR that is charged by these lenders can be extortionate. This can quickly lead to already vulnerable consumers falling into even more severe problems with their finances. The OFT said that at this time of year in particular, with many people desperate for money to spend on Christmas purchases, tackling this issue was a priority in order to help people to avoid further debt problems and issues.

Tags: mission, severe problems, doorstep lenders, recent report, uk, notification

Energy customers could pay price for leaving fixed rate deal

Over the past couple of years many energy customers in the UK have decided to opt for a fixed price deal with their energy firm in the hope of avoiding soaring energy costs. These fixed price deals are set for a specified period of time, but in some cases when the deal expires the energy provider rolls the customer onto another fixed price deal automatically if they do not hear from the customer to say otherwise.

Officials are now concerned that customers who want to get out of a fixed rate deal with their energy supplier in order to switch to another provider could face crippling financial penalties with some facing fees as high as £200 simply for wanting to get out of the fixed rate deal that they are locked into. The Fixed Price 2015 tariff from energy giant EDF is the one that comes with the highest penalty, with customers being charged up to £200 for leaving the deal earlier than the expiry.

Experts are now urging consumers to make sure that they keep an eye on their fixed rate deals, and to make the switch when they get the chance rather than risking being rolled over to yet another contract and then getting stuck on another deal for even longer. British Gas charges up to £100 for exiting these deals early, Scottish and Southern Energy charges up to £75, and Scottish Power charged up to £50.

One official said: “This is a trap that people really should be aware of. If you are on a fixed rate deal, make sure you know when it comes to an end and switch accordingly. If you forget to do this in time, you will either end up stuck on a tariff that may not suit you and find yourself spending hundreds of pounds to get out of it. This is yet another reason to compare energy prices and tariffs on a regular basis, and make sure you switch as and when is necessary.”

Tags: fixed price deal, energy supplier, contract, uk, customer, tariff, Price 2015 tariff, provider

Many fail to take out travel insurance cover

It has been reported that many people who are setting off on their travels do not bother to take out any form of travel insurance cover, putting themselves at risk of crippling financial costs in the event of accidents, illness, theft, loss or theft of belongings. Figures were released by the travel association ABTA, showing just how many people do not bother about taking out travel insurance.

The company claims that nearly 20 percent of travellers do not take out travel insurance cover, with nearly one in five British travellers said to have not bothered with this important cover. The company also said that many travellers have real misconceptions when it comes to travel insurance cover.

The travel firm carried out a survey and found that around 16 percent of those polled thought that in the event of a medical emergency the government would pick up the tab if there was no travel insurance cover in place. The results showed that 26 percent of younger travellers thought that any medical and related expenses would be funded by the Foreign Office if there was no medical cover in place.

The number of people failing to take out any insurance cover whilst holidaying in the UK was particularly high, coming in at 55 percent. The survey also found that 17 percent of consumers did not consider travel insurance to be important. However, officials have said that this sort of cover is vital for travellers, as it covers things such as medical expenses, treatment, replacement of lost cash, cancellations, delays, damage to belongings, theft, and a myriad of other things.

One industry official said: “It’s amazing how many people go off on their travels without taking any insurance out. However, it’s only when something bad happens that they realise just how expensive a mistake this can be, and how avoiding paying a few pounds for cover can end up potentially costing them hundreds or even thousands of pounds.”

Tags: abta, sort, travel insurance, office, uk

Record low base rate remains static

For the past eighteen months the base interest rate in the UK has stood at a record low of 0.5 percent, which is the lowest it has ever been in the history of the Bank of England, which spans over three hundred years. It has now been announced that the base rate will remain at this record low for a nineteenth month, with a decision to keep the base rate at 0.5 percent being made after the October Monetary Policy Committee.

Although one member of the MPC has been calling for the base rate to be increased for the past four months according to the meeting minutes the fragility of the economy has been taken into consideration, hence the decision to keep the base rate at 0.5 percent. Andrew Sentance, the MPC member that wanted to increase rates, said that this was necessary in order to keep a lid on inflation.

For homeowners that are on variable rate mortgages the decision to keep the base rate static will come as good news, as it will help them to avoid costly repayment increases, which many may struggle to keep up with in the current financial climate.

The Bank of England said that it is vital to stimulate the economy by encouraging spending, and this is why the interest rate needs to be kept low. The central bank said that this had to be a priority over inflation, which is currently 1.1 percent over the 2 percent target set by the government.

The Bank of England also said that it would not be extending the quantitative easing scheme, which has already seen £200 billion ploughed into the economy.

One economist said: ‘So far the effects of QE in stimulating the wider economy have not been impressive. The bank sector remains weak and unable to increase lending to companies. There are dangers that further QE could lead to major new problems rather than leading to economic recovery.’

Tags: interest rates, uk, interest, monetary, Monetary Policy Committee, bank of england, record, Monetary policy

Lloyds Banking Group retains position in UK mortgage lending market

Figures that have recently been released have shown that banking giant Lloyds Banking Group has managed to retain its position in the UK market when it comes to mortgage lending levels. This comes despite the problems that the mortgage markets have experienced since the onset of the global financial crisis and the recession.

The figures show that Lloyds Banking Group managed to retain a 23 percent share of the gross mortgage market in the UK, despite the fact that the markets have remained subdued. The large market share of the mortgage market that has been taken by the group means that it remains as one of the leading mortgage lenders in the UK.

Lloyds Banking Group has also enjoyed success when it comes to profits, having announced profits of £1.6 billion for the first six months of this year. For the same period a year ago the bank reported losses of £4 billion, which means that the banking group’s fortunes have really turned around, as have those of a number of other banks in the UK. The money that Lloyds Banking Group has set aside to cover bad debt is also said to have fallen, and has gone from £13.4 billion to £6.5 billion.

Despite the profits that Lloyds and other banks have reported industry groups have expressed concern that mortgage lending is still restricted, as banks are still being cautious and many are still demanding high deposit from those looking to take out a mortgage.

Mortgage brokers have a more optimistic view, and many have predicted that they will be doing increased levels of business as the year goes on, as more and more mortgage products become available on the market.

Tags: bank, uk, percent, Mortgage loan, Mortgage broker, Lloyds Banking Group, mortgage

Lack of mortgages and increase in buy to let investors leads to increase in private renting

Over the past few years the mortgage lending market in the UK has become increasingly subdued, and whilst the recession may now be over and the economy on its way to recovery many people are still struggling to get a mortgage loan unless they have a very sizeable deposit to put down. At the same time the number of buy to let investors is said to have increased, which means that there is a rising number of buy to let properties on the market.

A combination of these factors is said to be affecting the number of people that are in private rented accommodation, and according to recent reports the number of people that are privately renting is set to rise, as more and more private investors come on to the market, making it increasingly easy for people to get a private rent accommodation compared to social housing, which involves going onto a waiting list or bidding on properties through council websites via the Choice Based Lettings system.

A study was recently carried out by the Building and Social Housing Foundation, and the results of the study indicated that one in five households could be living in private rented accommodation by the end of the decade. The foundation believes that there is going to be a boom in the number of people that are living in private rented accommodation, and this will make up one fifth of households by the end of the decade in ten years time.

One industry official said: “This research shows significant changes are taking place in the UK housing system. More and more of us are becoming private renters – 1m households since 2005 – some of them through choice, but many because they have no other option.”

Tags: Private rented sector, Financial economics, uk, finance, buy-to-let, economics, Renting, United Kingdom

Number of JSA claimants soars

According to recent figures the number of people that are now seeking Jobseeker’s Allowance has soared, going up to 1.64 million in January. This reflected an increase of 23,500. Read more

Tags: Bad news, failure, summer, uk, Employment law, unemployment

Charity ideas – great ways to give in the recession

With the recession still in full swing in the UK most households are trying to make cutbacks, and this includes having to try and save money on everything from going out and entertainment to grocery bills, utilities, holidays, and more. Read more

Tags: swing, charity recession, charirty, charity credit card, event, donate during recession

No luck over challenge for UK retirement age

It has recently been announced that a law that enables employers in the UK to make employees retire at the age of sixty five is to be upheld, at least for the near future. The decision was made by the High Court, and means that workers in the UK may be forced to retire at that age whether they want to or not, and without any sort of payout from the company. Read more

Tags: finance, Superannuation in Australia, year, uk, future, court, retirement

Slowdown in rate of firms going bust

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

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

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

Half the Population of the UK Don’t Have Funds Set Aside for Retirement

The BBC recently revealed that about half of all the people living in the UK aged 20 to 60 have not been putting aside any funds for their retirement years. This does not mean that they do not have any savings for such purpose, but they haven’t been paying into a pension fund. Read more

Tags: wife's situation, way, Gfk, retirement, uk

Middle aged and near retired people feel effects of recession most

It has been claimed that the age groups that are most likely to feel the pinch from the ongoing recession in the UK are those that are in middle age and those that are nearing retirement age. Read more

Tags: unemployment, economic slump, late, Labor economics, analysis

Santander to take over High Street banking names

It has been revealed that a number of well known financial names will disappear from the High Streets in the UK from next year, when they are rebranded in the name of the Spanish financial institution that owns them. Read more

Tags: rebranded, uk, santander, Street banking names, bradford & bingley, spanish bank santander, abbey, individual brands

Refuse jobs attracting applications in the hundreds

With unemployment levels rising in the UK, and many people finding themselves with a sudden loss of income in what has become a very difficult financial climate, it has been reported that even the most menial of positions are now attracting job applications in the hundreds from desperate people that will take any job in order to get an income. One job for a binman recently attracted nearly two hundred and forty applications from unemployed people desperate to start earning money again. Read more

Tags: Labour, unemployment, uk, Website, earning money, desperate people, job losses, time

Some savings accounts increase interest rates

Some savers in the UK are set to benefit from increased interest rates on their savings, with a number of financial institutions increasing the rates that they will pay savers even though the base interest rate has remained static at 0.5 percent, which is its lowest level in the three hundred and fifteen year history of the Bank of England. Read more

Tags: high, uk, savings accounts, largest competitor, high interest debt, cash, year, good news

Save By Using Cash When on Holiday

Most people use credit cards when they are traveling on vacation because they feel that it is a safer way of handling their money than using cash for their needs. They feel that there is a greater chance of having the cash lost or stolen and then they are left stranded. By using a credit card, they can report it lost or stolen and not have to worry about losing any money as a result. Read more

Tags: save holiday money, save cash on holiday, currency exchange cards, June, account

Deposit free mortgages were a bad idea

City Minister, Lord Myners, has recently stated that the 100 percent and 125 percent mortgages that many lenders used to offer to borrowers in the UK were a bad idea. Myners described these mortgages as ‘foolish’, adding that banks should never have offered these mega mortgages. Read more

Tags: free mortgages, result, deposit free mortgages, huge deposit, Banking, accountability, uk

Credit crunch alters eating habits of Brits

A major credit card provider has recently carried out a study, and claims that the results of the research show that the global credit crunch, which continues to take a hold in the UK, has had a dramatic effect on the eating habits of Brits. Read more

Tags: eating habits, eating out, uk, official, credit crunch, abbey credit cards, british eating habits, crunch

Is chancellor too optimistic about recovery of the nation?

Most people in the UK are now well aware that the UK is going through a very rocky period, with the global financial crisis still taking effect and the recession further impacting on the economy. Read more

Tags: credit crunch, chancellor of the exchequer, course, couple, opposition party members, growth

Slump in equity release sector in 2008

A recently released report has shown that there was a slump in the equity release sector last year, and this slump stemmed from the Northern Rock crisis, which saw the building society becoming nationalised after falling victim to the global credit crunch. Read more

Tags: bank, Mortgages, uk, retirement, equity release market, equity release, homeowners, Key Retirement Solutions

More needs to be done to aid the financial sector

According to recent reports city analysts have said that despite the various measures and the billions of pounds that the government has invested in trying to assist the struggling financial sector in the UK the steps being taken do not go far enough and more needs to be done to aid the struggling sector. Read more

Tags: job, bank rescue, financial sector, establishment, uk, bank of england

Homeowners could be paying over £100 extra a year on mortgage

According to a recent report the average homeowner in the UK could end up paying over £100 a year extra on their mortgage as a result of the bailout of failed Icelandic banks and the Bradford & Bingley. One finance expert said that the bailout had resulted in homeowners being charged around an extra £108 a year because of home loan rates being pushed up as a result of the bailout. These figures come from John Goodfellow, who is the chairman of the Building Societies’ Association. Read more

Tags: Financial Services Compensation Scheme, average homeowner, building, Mortgages, uk, john goodfellow, homeowners

Watchdog wants bills cut in winter

A consumer watchdog has stated that energy bills must be cut by the UK’s energy giants for the winter, stating that the fall in oil prices over recent months warrants a fall in energy prices.

Both the government and consumer campaigners have said that energy companies need to start reducing the cost of gas and electricity usage over the coming weeks, as the cost per barrel of oil has fallen by close to 50% since the summer. Petrol companies have already slashed petrol prices since the price of oil came down, although the price cuts did take some time to filter through. Read more

Tags: wholesale price rises, uk, energy bills, electricity, affordable prices, barrel, energy companies

Did Darling know about the Icelandic bank collapse?

Earlier this month UK consumers were shocked after the collapse of Icelandic bank Landsbanki left many fearing for the savings that they had placed in UK branches of the bank. Many had been persuaded to put their cash in Icelandic accounts such as Icesave over the past couple of years due to the high rates of interest that were being offered. In fact Icesave spent a considerable amount of time at the top of the best buy tables because of the interest rates offered. Read more

Tags: banks, amount of time, Icelandic financial crisis, iceland banks, uk, deal

Compensation process begins for Icesave customers

Earlier this month there was widespread panic amongst consumers, charities, local authorities, and businesses when the Icelandic bank Landsbanki collapsed, leaving many people, firms, and agencies that had put money into high interest Icesave accounts wondering whether they had lost all of their money. The panic became worse after it was revealed that the Icelandic authorities were failing to honour obligations with regards to compensating UK consumers. Read more

Tags: banking crisis, BACS, interest, result, icesave, uk

Measures announced to rescue banks

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

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

Credit crunch affect charities

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

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

Taking care of your savings

With all that has happened in the banking industry over the past year it is little wonder that consumers are so nervous about where to put their hard earned money when it comes to savings accounts. This time last year saw Northern Rock go through its crisis, and many people flocked to withdraw billions of pounds worth of savings from the bank before it was eventually nationalised. Many other building societies and banks benefited from this situation, as consumers tried to find alternative places to put their savings. Read more

Tags: uk consumers, something, lloyds, thing, safe place, haven, savings, uk

Many savers could move their money into Irish banks and Post Office

Following a change in the Irish banking industry it seems that many consumers in the UK could be looking at shifting their savings into UK branches of Irish banks or into the Post Office in order to increase the security of their heard earned money. Earlier this month the Irish government changed regulations so that all of its banks offered a 100% guarantee on all savings. The Post Office savings account is run by the Bank of Ireland, so this too will benefit from the increased safety net. Read more

Tags: bank of ireland, underwritten banks, pressure, uk, post office, Brewin Dolphin, Brewin, irish government

A great way to save money on your holidays

For most households in the UK money is tight due to the effects of the global credit crunch, higher living costs, soaring inflation, and rocketing bills. However, even when finances are looking a bit sorry for themselves many of us still want to try and find a way to get away from it all by booking a holiday, especially with things as stressful as they are in the current climate. Read more

Tags: travel, official, uk, description, flexibility, person, holiday, holiday costs

Rise in the supply of rental properties coming onto market

Homeowners that have been keen to sell their homes before house prices plummet further have found themselves hitting a brick wall over recent months, as a number of factors have contributed to the housing market facing its worse slump in decades. Estate agents have reported very poor sales figures for properties, and many homeowners have found that they simply cannot sell their properties. Read more

Tags: uk, rental property, demand, slump, duty, purchase, first time buyers, Royal Institute of Chartered Surveyors

OFT wants review of bank accounts market

The government watchdog, the Office of Fair Trading, has been calling for a review of the bank account system in the UK, claiming that consumers are often getting a raw deal because arrangement that are currently in existence when it comes to the eight billion pound bank account market were simply not adequate. The OFT went on to state that banks were not clear enough about the charges that were applied to customers’ accounts, which makes things confusing for accountholders. Read more

Tags: space, bank accounts, bank fees, year, rocket, trading, number, uk

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: Nationalisation of Northern Rock, good news, money, uk, relief, savings, deposit, lender

Supermarkets cut fuel prices

Consumers in the UK have been hit with soaring petrol prices over recent months, with the cost of oil per barrel rocketing and higher petrol costs putting additional strain on already struggling household finances. Households have also had to cope with increased food prices, higher borrowing costs, and hiked up bills, all of which have left many unable to stretch their month budgets as far as they need to. Read more

Tags: fuel prices, recent peak, uk, uk families, cost

Price of oil and food could remain high for some years

Consumers have been given a stark warning over the past couple of weeks, with officials stating that the cost of food and oil in the UK could remain high for years, which means that household finances will continue to remain strained. The warning came in a report from the government, with officials from the Treasury warning that shortage of supplies couples with growth in both population and world economy could result in many years of higher oil and food prices. Read more

Tags: credit, higher borrowing costs, higher bills, Brits Food prices, whilst, uk, today, holidays

UK asking prices getting lower

A recent report has shown how asking prices on properties in the UK are getting lower with a fall of an average 3.2% in asking prices over recent weeks. The data comes from property experts Right Move. Many experts have already predicted that the housing market will continue to cool down over the coming year, and there has already been much evidence that the housing market is far more subdued than it was earlier in the year, with a number of factors dampening the housing and mortgage sectors.

One of the factors that is thought to have affected the housing market is the roll out of Home Information Packs, which were rolled out to all residential properties being marketed for sale in England and Wales from the middle of December 2007. This has caused “further confusion at a sensitive time for the property market” according to some experts. However, experts from Right Move have added that there is always a slowdown at this time of year.

Asking price averages have also fallen because there are now more smaller, lower prices properties coming onto the market rather than larger, more expensive properties, state experts. There was an average fall in asking prices of 6.8% in the London area according to figures, and this has also been partly blamed on the level of smaller properties coming on the market rather than larger houses and apartments.

One Right Move expert stated that over the coming year house prices are more likely to stagnate than actually crash. He also said: “New listings are low at this time of year so the artificial wave of ‘low-end’ sellers has really distorted the average prices of properties new to the market.”

Recent Additions:

• 100% mortgage customers should watch out for negative equity
• Homeowners are not as well off as tenants
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace
• Unions angry over insurance job cuts

Tags: first time buyer, uk, United States housing bubble, mortgage, property price, evidence, housing market

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, cent, poorest people, post office, post, credit crunch, uk

High court case appeal should not delay case by a year

According to the judge presiding at the recent High Court test case into bank charges, the decision by the UK banks to appeal against the ruling should not result in as serious a delay as some reports have indicated. Recent reports claimed that if banks appealed against the judge’s decision to allow the Office of Fair Trading to assess banks’ terms and conditions for fairness the case could be further delayed by over a year. However, Justice Andrew Smith has stated that this is not the case. Read more

Tags: monthly bank, finance, bank charges, commence, uk, court case appeal

Benefiting from credit cards as a student

As a student in the UK it can be very difficult to maintain a healthy cash flow, and often students need a little flexibility and assistance when it comes to finances, whether it is for books, entertainment, or just general purchases such as travel costs or groceries. This is particularly true for students that are living away from home, who often aren’t able to get financial support as readily as those living at home with parents and who also have the added cost of bills and rent to deal with.

Read more

Tags: financial products, finance, financial need, added cost, balance, student credit cards, uk

Apacs: Never reveal Pin

Apacs, the UK payments association, has emphasised the importance of credit card security and advised consumers to keep their Pin private.

A spokesperson for the association said people should make their Pins as complex as possible to avoid would-be fraudsters getting their hands on their cash.

However, she added that this can lead to confusion, adding that people can avoid this by selecting a familiar pattern.

“It is better not to use the same Pin number and, if you can, familiarise a sequence of codes; a number of a house that you know in combination with a good friend’s birthday.”

Finally, she emphasised the importance of never disclosing information regarding Pins or writing them down and storing them with the cards in question.

Recent research by Which? highlighted that one in three Brits have been a victim of credit card fraud in the past.

A previous CPP poll found that Londoners were the most likely to have their plastic stolen or fraudulently used, with 20 per cent and 28 per cent of the capital’s residents being a victim of such crimes respectively.

Tags: Association, credit card fraud, credit card security, pins, uk, combination

Weight and smoking can influence life insurance premium

People’s weight and smoking are two factors which can have a major influence over their life insurance premiums, according to insurance information advisor Life Direct.

Insurance companies tend not to consider a customer’s level of fitness by performing stamina or fitness tests, but rather they look at their height and weight and whether or not they smoke when determining the cost of life insurance.

The company will calculate a person’s body mass index, which Life Direct advises to keep below 30.

Kieran Platt, director of Life Direct, also says people should avoid smoking as this may also increase their premiums.

However, Cancer Research UK recently reported that around 12 million people aged over 16 in the UK are smokers, representing 24 per cent of the total population.

Mr Platt says: “Weight and smoking are the two major factors where you can have a great influence over your life insurance premium.”

Tags: Tobacco, Tobacco smoking, life insurance premium, major influence, director of Life Direct, company

UK mortgage market worst in 30 years, warns expert

British home buyers are facing the toughest conditions in the mortgage market the country has seen for 30 years, the UK’s largest house builder, Persimmon, has warned. Read more

Tags: Mortgages, uk, Merrill, mortgage market, Darling revealed plans, property market, council of mortgage lenders, house

Applications for credit reports rise as customers are refused loans

Twice as many customers are applying for credit reports as six months ago in an effort to understand why they are being refused credit on loans, credit cards and mortgages, according to Experian, the UK’s biggest credit scoring company.

Consumers are becoming increasingly “proactive” in their approach to their finances as they try to maintain a good credit history.

James Taylor from Experian told Fairinvestment.co.uk that “up to 20 per cent of people now check their credit report before applying for credit”, with the majority making use of the internet to do so.

UK consumers’ personal debt now stands at £1.4 trillion, yet many people are ignoring the credit crisis and continuing to acquire more debt as they spend more than they can afford, according to research by CreditExpert.co.uk.

With lenders restricting their criteria, consumers are advised to regularly check their credit reports to help them stay on top of their finances.

Tags: Business Finance, Loans, company, credit crisis, uk, Credit score

Credit crisis may force people to use more expensive lenders

The global credit crunch and more restrictive borrowing terms that many lenders have implemented may force consumers to go to higher-cost lenders, an expert from Equifax has said.

According to Credit Action, personal debt in the UK stood at £1,421 billion at the end of February 2008.

Total lending in February was up by £9.8 billion on the previous month, of which secured lending accounted for £7.4 billion and consumer credit was £2.4 billion.

Neil Munroe, external affairs director for Equifax, said that if banks reject more loan applications people “may be forced into more high-cost borrowing, so forced down into the subprime or near-prime market, whereas before they might not have considered going there”.

However, he also pointed out that banks have an “appetite” to lend people money, they will simply be more cautious when deciding whether to lend to people who they believe may not be in a position to repay the loan.

Tags: External Commercial Borrowing, credit crisis, consumer credit, equifax, loan applications people, Neil Munroe, uk

Over £9 bn wasted by UK spenders in tax payments

Almost £9.3 billion is wasted by UK consumers through unnecessary tax payments, one financial expert has claimed.

The amount wasted in tax will increase by almost £1.4 billion compared to 2007 shows research from Unbiased.co.uk.

Up to 82 per cent of consumers admit to do nothing to reduce their payments, despite over 34 million people expressing dissatisfaction with the extra costs.

David Elms, chief executive of Unbiased.co.uk, said that tax payers are wasting record sums.

“We estimate that each UK tax payer will waste an average of over £290 in tax payments this year,” he stated.

The findings shows that unnecessary Inheritance Tax (IHT) payments are set to rise by over £360 million in 2008, resulting in a predicted total waste of over £1.9 billion.

This is despite IHT being named the most resented tax by one in five UK adults said the survey.

Further research from the company showed that 70 days of an average consumers annual wage is spent on clearing interest on credit card and loan debts.

Tags: dissatisfaction, Inheritance tax, consumers annual wage, Credit card, card, Unbiased.co.uk, uk, executive

“There are lots of good offers” on the market for bank accounts, say experts

Due to the effects of the credit crunch meaning banks are having difficulty finding funds, “there are lots of good offers” on the market for bank accounts for UK consumers, one expert has said.

Fool.co.uk said there are differences to be found between bank accounts but to spot them consumers will have to keep their eyes peeled.

David Kuo, head of personal finance at fool.co.uk, said: “There are no ‘one size fits all’ when it comes to current accounts. So thanks to the plethora of choices, consumers can find one account that most suits their lifestyle.”

He added, as an example, if you regularly go overdrawn then a current account that provides an overdraft buffer will probably be best.

Meanwhile, a survey by Mintel has previously found that British people are more likely to get divorced than to change their bank accounts.

Up to one in two respondents were rated as being either ‘dissatisfied or extremely dissatisfied’ with their bank’s service, according to the survey.

Tags: suits, United Kingdom, uk, bank, Mintel

Brits spend record amount of £4.5bn online

British consumers have broken the record for the amount spent over the internet in January – with £4.5 billion being used to purchase goods online.

Findings from the Interactive Media in Retail Group (IMRG) reveal that the figure was a 75 per cent increase on figures from last year’s January.

Anthoula Madden, vice president of consumer products and retail at Capgemini UK, said: “The index shows that January sales are as large a phenomenon online as they are on the high street, with the overall online market continuing to show strong growth.”

He added that the high growth in the sales of electrical goods and clothing suggests that consumers are treating themselves to items missed from Christmas stocking lists.

According to the results of the survey, consumers spent 38 per cent more on electrical goods over the internet last month compared to January 2007, while clothing figures increased by 32 per cent.

The figures from January contrast with findings from those compiled by the Office for National Statistics which showed that spending in December dropped by 0.4 per cent compared.

Tags: clothing, Interactive, Capgemini, uk, Brits spend record, record

Spenders need to work out their budgets

Sitting down and working out your personal budget is the best way to begin reassessing your money, according to financial experts.

The Consumer Credit Counselling Service (CCCS) said that the most accurate way of accounting for spending is to make an annual budget and then divide it by 12.

Frances Walker, spokesperson for CCCS, said: “It is also a good time to look at income maximisation; making sure you are getting all the benefits and tax credits you are entitled to. There is lots of help out there, particularly online.”

She added that consumers in need of financial advice would be better off going to a debt advice charity rather than a bank.

“With banks they may just say ‘we’ll just give you one consolidatory loan‘”, she concluded.

According to Credit Action statistics updated on January 4th 2008, the total debt for the UK stands at £1,400 billion with the average household owing £56,234.

Tags: CCCS, consolidatory, January, Credit counseling, credit

Economists give views on where interest rates will go next

There was a sigh of relief across the UK earlier this week when the Bank of England announced that interest rates had been cut by 0.25% from 5.75% to 5.5%.

There are now mixed predictions with regards to what will happen with the interest rate next, with some predicting that 2008 will see another one or two interest rate cuts and others believing that the interest rate could fall as low as 4% in 2008. Financial experts from This is Money interviewed some economists to get their views.

An official from Investec stated: ‘Evidently the MPC is taking much more note of recent signs of a slowdown in the economy and its fears over the possible effects of the credit squeeze have begun to crystallize. The question obviously now is whether rates come down again and if so how quickly. The outlook is very uncertain. We are pencilling two further 25 basis-point cuts over the first half of next year.’

Roger Bootle from Deloitte and Touche stated: ‘Today’s decision by the MPC to cut interest rates from 5.75% to 5.5% is the first step in a prolonged period of monetary easing that could see rates fall very sharply. I previously thought that rates would drop to 5%, but I now think that they could eventually be cut all the way to 4%. Inflation is likely to rise further in the coming months. However, the rise in interbank interest rates means that the risk of a very sharp and prolonged economic downturn is growing by the day.’

A spokesman from Bear Stearns said: ‘We expect another cut in January, with rates to target 5% by the second quarter. UK rates should be at 4.5% by the end of 2008, possibly even lower if the downturn is more severe. This has been a cut to alleviate the credit crunch and provide a rescue remedy for growth. Lower rates should help to put a prop under the UK housing market.’

Tom Smith
10t December 2007

Tags: england, interest, propert, credit, uk, crunch, bank, housing, rates

Majority of first time buyers will not benefit from credit crunch

Recent falls in house prices are unlikely to benefit the majority of first-time buyers, says real estate provider Savills.

The company said a slowdown in the housing market will “provide some opportunities” for first-time buyers.

However, Lucian Cook, director of research at Savills, said it was unlikely to help most as they would still be reliant upon mortgage finance.

Mortgage finance is expected to be harder to acquire as a result of the credit squeeze.

“The first-time buyers who [price falls] will help are those who have accumulated relatively high levels of cash reserves, and who are well placed to buy,” he continued.

There will be less “brochure collectors” and “serial viewers” and thus less competition for property.

“The people who are going to be in the market to buy are really going to be in the market to buy,” said Mr Cook.

The November Halifax House Price Index, released today, found a 1.1 per cent monthly fall in house prices.

This is the third successive month it has reported a fall with the average UK house price now standing at £194,895.

Tags: estate provider savills, mortgage finance, uk, Mr Cook, property, serial viewers, house

Investigation launched into online sale of bank account details

An investigation has been launched by the Information Commissioner after it was revealed bank account details could be purchased online.

The Times discovered more than 100 websites were selling the details of British bankers while an e-passport was also found to be on sale online.

A trafficker was also reportedly selling 30,000 credit card numbers for less than one pound each.

Richard Thomas, the Information Commissioner, has announced that an investigation will be launched into the findings by the newspaper.

He said: “We can take action against UK-based organisations that flout the Data Protection Act. If some of these websites are not UK-based we will work with our counterparts in the relevant country.”

The findings come as confidence in the government’s handling of personal data increases to ebb.

This latest furore follows the loss of two discs in the post last month of the banking details of 25 million individuals.

Tags: banking details, account, personal data, relevant country."The findings, handling, credit, uk, bank

‘Tis the season to avoid store cards

As Christmas continued to get nearer and nearer experts have been warning consumers across the UK to avoid the temptation as taking out a store card, as this could lead to high levels of debt and real financial difficulties once the festive season is over.

With December upon us millions of shoppers are hitting the high streets and shopping malls to get their gift, clothes, and other Christmas goodies, and many retail staff are just waiting to pounce and talk vulnerable consumers into taking out a store card.

Store cards are fine for those that will repay their balance in full each month, thus avoiding any interest charges, but many experts state that consumers would be far better off with a rewards based credit card, as you can still avoid paying interest by repaying the balance in full each month, you can still enjoy benefits in the form of rewards, and you have the luxury of choice, as you can use the card in any shop rather than only at a specific shop.

However, the real problem is with those that do not repay their balance in full, as store cards charge very high rates of interest, and the interest that you will pay on any outstanding balance will by far exceed any rewards and discounts that you receive. Therefore those that wish to spread repayments on their Christmas spending are strongly advised to opt for a 0% purchase credit card in order to avoid paying interest rather than an expensive and restrictive store card.

One industry official stated: ‘With storecards the advice is simple: Don’t use them, avoid the gimmicks, don’t be lured in. Invariably people forget about spending on their plastic, or they use credit precisely because they know they won’t be able to repay the debt immediately. Under those circumstances there is no more expensive form of borrowing than a storecard. The discounts can be attractive, and some storecards offer 0% deals if you spend a lot of money in-store. So if you’re adamant you need a storecard, ensure you make the most of it by keeping up to speed on all the incentives on offer.’

Tom Smith
1st December 2007

Tags: interest, credit, incentives, store, uk, cards, cost, purchases, high

HIPs rolled out to all homes from December

The controversial Home Information Packs that are currently required for homes of three bedrooms or more that are being marketed for sale in England and Wales will not be rolled out to all other properties, according to reports.

When Home Information Packs or HIPs were brought in earlier this year they were applied to homes of four bedrooms or more. This was then switched to homes of three bedrooms or more several months ago. And now, according to the report, the government has announced that HIPs will be required for all properties being marketed for sale in England and Wales.

The HIPs will come into force for all properties going up for sale from December 14th, which means that any residential property in England or Wales that goes up for sale from this date will need to have a Home Information Pack. However, various statistics have revealed that HIPs may not be having the impact that the government had hoped, and for the first time since they were introduced the government has admitted that these packs may have adversely affected the housing market.

According to a report released by the Housing Minister Yvette Cooper HIPs had impacted on people putting their properties up for sale, causing delays in people deciding to sell their homes. Another report from Europe Economics showed that HIPs had not sped up home purchase transactions by providing more required information to buyers, which is something that ministers had claimed that HIPs would do.

A statement following this study read: ‘Hips may have had an additional modest-but-material effect on listings activity but no discernable impact on transactions, mortgages or prices.’ Surveyors now state that the introduction of HIPs for all properties may results in a drop in the number of starter homes coming onto the market for sale.

Tom Smith
30th November 2007

Tags: sell, december, packs, uk, information, home, property

Christmas costs falling

The real cost of Christmas is falling steadily after taking inflation into account.

According to recent research by Halifax Unsecured Personal Loans, the price of the UK’s favourite gifts has continued to fall.

The study found that the price of games and toys has fallen most in the last year, dropping by six per cent, with woolly jumpers and socks falling in price by four per cent.

Indeed, in the past decade, the price of toys has gone down in real terms by 45 per cent, with spirits down by 26 per cent and brussel sprouts by 18 per cent.

“Our research shows that the cost of traditional Christmas favourites has actually fallen – good news for Christmas shoppers.

“However, just because the real price of items such as toys, CDs and Christmas cake has fallen, doesn’t mean we don’t need to budget and organize our finances.”

Halifax states that Christmas is as good a time as any to sort out finances, adding that it should not need to take up more time than decoration a Christmas tree.

Tags: Christmas lights, cent, Agriculture and Forestry, budget, price, christmas cake

CML: FSA findings a ‘wake-up call’

The Council of Mortgage Lenders (CML) has responded to the Financial Services Authority’s (FSA) publication of case studies of good and bad practise in mortgage brokers’ treatment of consumers.

It welcomed the publication, saying that it would act to help improve the quality of overall service.

The CML will support any action against brokers who fall short of targets outlined by the FSA and brought to their attention.

It states that good brokers’ practise is undermined by those who fail to meet industry standards.

Director general of the CML, Michael Coogan, commented: “After three years of regulation, the FSA is right to expect its regulatory standards to be in place across the whole market. These findings are a wake-up call to those brokers who are behind the pace.”

He added that the FSA must ensure its expectations are explained with clarity, a stipulation especially important for small broking firms.

Banks, building societies and other lenders make up the membership of the CML, which supervises 98 per cent of all residential mortgage lending in the UK.

Tags: council of mortgage lenders, industry, Mortgages, practise, uk, bad practise

Foreign currency mortgages: Long-term debt solution

Investors in the UK could find that taking out a foreign currency mortgage will clear their debt in the long term, it has emerged.

According to David Alexander, chief executive at Alexander Associates Group, the best option for those hoping to rely on the strengthening sterling to reduce their debt is a multi-currency mortgage.

“You would hope over a period of 25 years that you would clear your whole mortgage if you’re managing it via a multi-currency mortgage… You would hope that on an annual basis you would average five per cent reduction in your debt,” he said.

He added that those going into a multi-currency mortgage must understand the fact that it is always a long term investment, “just as a mortgage is a long-term debt”.

Reuters reported the pound reaching a four and a half year low against the euro this week, which is also currently enjoying an all-time high against the US dollar.

Tags: uk, Financial services, fact, David Alexander, alexander associates, long term investment, finance, high

‘Viligence’ advised to avoid identity theft

Consumers are advised to exercise “vigilance” in face of identity theft risk, rather than rushing to buy insurance.

An industry expert has said that after news that the personal information relating to 25 million people in the UK has been stolen, consumers must think about the options available to them for protection.

Peter Gerraud, head of insurance research at moneysupermarket.com, explained that while there are products on offer that cater specifically for this type of cover, “many of these products are dubious value for money”.

“Most will cover losses if fraudulent transactions take place. However, if consumers are vigilant and report any unusual activity to their bank or card provider these losses will be covered by the provider as a matter of course anyway,” he continued.

He added that consumers should be sure to check statements on a regular basis to avoid the “time, stress and effort” involved in resolving the problems identity theft can cause.

Tags: vigilance, identity theft, identity theft risk, dubious value, provider, business, uk

House prices fell by 0.5 per cent in October

More evidence that the housing market is slowing down was published yesterday.

Halifax’s monthly housing market report, published on Thursday, found that average prices fell by 0.5 per cent in October.

Although this contradicts figures published by Nationwide late last month, it is the second consecutive month in which Halifax – the country’s biggest mortgage lender – has recorded a drop.

Halifax reported that house prices fell by 0.6 per cent in September.

Nevertheless, the lender was confident about the long-term strength of the housing market and the economy.

Chief economist Martin Ellis said: “The UK economy is in a strong position. High levels of employment and a shortage in the number of properties available for sale will continue to support house prices.”

A recent study of the market by PriceWaterhouseCoopers claimed that houses in the UK are 10 per cent overpriced compared to average salaries.

Halifax’s study comes as the Bank of England held interest rates at 5.75 per cent for the fourth month in a row.

Tags: england, uk, interest rates, halifax, position, martin ellis, Economic history

CML: House prices not affected by mortgage shortage

The reduction in the availability of mortgage products is unlikely to affect house prices.

According to the Council of Mortgage Lenders (CML), the sub-prime sector is most likely to be affected and this would have only a minimal impact on the housing market in the UK.

Bernard Clarke, a spokesperson for the CML, explained: “The housing market continues to be underpinned by consumer demand for owner occupation, strong aspirations for owner occupation and there’s a shortage of supply.

“Those fundamentals will continue to underpin the market to a much greater extent than any shortage of mortgage products to customers.”

He added that despite fluctuations, uncertainty and speculations over a possible collapse, there remains confidence in the market.

Moneyfacts has recently revealed that the availability of buy-to-let and residential mortgage products has reduced by 40 per cent in the last few months.

Furthermore, 72 per cent of bad buy-to-let mortgage products were taken off the market as well as 54 per cent of bad credit residential mortgage products.

Tags: economics, Mortgage loan, supply, uk, housing market, confidence, sub-prime sector, shortage

Tories call for limit as ‘immigrants push up house prices’

The Tories have called for a cap on yearly immigration as it is blamed as one reason for the increase in UK house prices.

Research by property finder.com revealed that one in five people feel that restricting the influx of foreigners to Britain was the best way to bring down inflated prices and demand.

The second biggest cause of higher housing costs was attributed to property investors.

However, chief executive of propertyfinder.com, Warren Bright, expressed concern of the general public’s “poor” understanding of the real causes of the high prices.

Speaking on the subject he said: “10 years of low interest rates have brought about Britain’s high house prices, but this is poorly understood by most people.

“Restrictive planning policy enthusiastically enforced by local councils has severely constrained the ability of developers to provide the number of homes needed by Britain’s rising number of households, and has exacerbated the rise in property values.”

He added that immigrants and property investors could not alone be blamed as they were “too small in number”.

The news comes as Yorkshire Bank research found 43 per cent of Brits considering buying property abroad.

Tags: limit, Yorkshire Bank research, house prices, property values, low interest rates

Overseas credit card fraud increases

An increase in the amount lost as a result of credit card fraud has been driven by fraud on UK cards used abroad. Read more

Tags: soil, result, losses, UK cards, card details, uk, period, debit

Car owners leaving ‘paradise’ on display

One in five British drivers are leaving their cars unattended with valuables on display worth more than £200, it has emerged.

Zurich research has discovered that 85 per cent of car owners are leaving belongings in their cars with an average value of £145, representing a total of £3.9 billion worth of gadgets on display to potential thieves.

The study also found that younger drivers between 18 and 24 years old are the worst offenders for leaving their possessions visible to thieves, while popular items left include car stereos, polling 51 per cent, and CD collections, which were left by 44 per cent of drivers.

With many Britons not taking adequate precautions to protect their vehicles from thieves with 18 per cent of having no security measures in place, Zurich has commented that UK cars are a “thief’s paradise”.

“Harried, time-poor drivers often fail to realise just how valuable the possessions they leave in their cars are and are not taking the right precautions,” Zurich Insurance head of motor underwriting Roy Seeds said.

A Direct Line spokesperson has recently advised younger drivers that taking part in the government’s Pass Plus training initiative, at a cost of about £100, could help to reduce the cost of their insurance premium by up to 35 per cent.

Tags: security, poor drivers, britons, uk, potential thieves, Business Finance

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

Lenders ‘must be responsible’ under code

Under the terms of the Banking Code, lenders must ensure they are extending credit to people in a responsible way.

Adrian Lloyd, spokesperson for the Banking Code, said that lenders are committed to ensuring that people can only borrow money if they are realistically able to repay it.

“What the code actually says is: ‘We will assess whether we feel you will be able to repay the borrowing’,” he said.

“It’s something we do take seriously, ensuring that lenders under our code do dually go through a proper credit assessment and not necessarily get into difficulties.”

Mr Lloyd added that should borrowers find they are struggling with repayments, the code also includes guidance for how lenders should deal with it.

“If things do go wrong and people get into financial difficulties then our code also says quite a lot about how to handle cases of financial difficulties under the general heading that people must be treated sympathetically and positively,” he explained.

According to figures from CreditAction each adult in the UK owes an average of £28,550, including mortgages.

Tags: guidance, Mr Lloyd, uk, difficulties."mr lloyd, Lloyds Banking Group, finance, Banking

Have you lost track of your account?

The government and the British Banker’s Association are working together to try and deal with the issue of dormant bank accounts, where banks are unable to trace the owners of account, which have been left dormant for years with no transactions being made on them.

Accounts that have not bee touched for three years or more are generally classed as dormant, and both the government and the BBA have been looking at ways to try and deal with this issue.

The priority is to try and reunite these dormant bank accounts with the account holders, as even though the account is classed as dormant the money in it is still the account holders. Many accounts have just a few pounds in them, and there are also many dating back ten years or more when many people were opening a number of accounts with £100 deposit in order to cash in with a windfall in the event that the building society became a bank or there was some sort of merger.

So far a number of accountholders have been successfully reunited with their lost accounts. One BBA spokesperson stated: ‘Already this year, we’ve processed 6,000 claims. This compares with 7,000 for the whole of last year.’ Those that think that they have a dormant account are being encouraged to contact the British Bankers Association for further information and to make a claim to the account either by phone or via the BBA website, which is www.bba.org.uk

The government is also looking into options for the use of money from accounts that are not claimed by any consumer. A commission was set up 18 months ago to deal with this, and it is likely that monies from unclaimed accounts will be used towards a number of worthy causes.

Tom Smith
27th August 2007

Tags: charges, costs, personal, current, bank, claim, uk, interest, accounts, savings

Insurers advised on risk models

With Hurricane Dean having caused havoc across the Caribbean in the past week, along with forest fires caused by the Mediterranean heatwave – not to mention the two disastrous floods in southern England last month and in June – this summer has been marked by an unusually high amount of natural disasters.

Insurance companies have been left to count the costs, with the two UK floods alone estimated to set them back £2.5 billion, according to figures from the Association of British Insurers (ABI).

Today, investments company F&C warned insurers that, with the seemingly higher incidences of natural disasters, they will need to adjust their risk models accordingly.

Associate director in the firm’s governance and sustainable investment team Vicki Bakhshi said: “The good news is that the sector is starting to wake up, and some risk models are now beginning to be amended. But the question is: which will change faster, the way the insurance sector operates or the weather?

“Despite the change in climate conditions, the risk models used by insurers are almost entirely based on historical patterns, not on climate science, and they do not take into account this upward shift in the risks,” she added.

“This means insurers might be underpricing risk. And some may also be underestimating the amount of capital they need to survive the kind of mega-catastrophes that are more likely to occur as a result of climate change.”

F&C also announced today that it has been conducting research into how insurance companies are responding to climate change, and will be publishing a report on it soon.

Tags: firm, uk, insurers, Financial institutions, UK floods

Inheritance tax spreading as house prices rise

Inheritance tax, traditionally thought of as the exclusive preserve of the super-rich, is affecting more and more Britons as house prices rise.

This is the claim made today by Calculis Ltd, an independent financial advisor.

Currently, UK tax laws have 40 per cent in every pound of assets left by a deceased person over £300,000 being made payable to HM Revenue and Customs.

Director of Calculis Alex Pegley said: “The tax is hitting people it’s not supposed to be hitting; it’s hitting people with bog-standard houses in the south.”

According to the latest Halifax House Price Index, average property prices are 11.2 per cent up on the equivalent month in 2006.

Furthermore, a recent report from the National House Price Federation claimed that house prices would rise by a further 40 per cent in the next five years.

Tags: assets, Index, Calculis Alex Pegley, finance, independent financial advisor, Calculis Ltd, uk

Debt “completely out of hand”

Levels of debt in the UK have been labelled “completely out of hand” by financial advisors Chase De Vere.

Customers were advised to be “totally sensible” when purchasing credit cards, and to moderate their spending once receiving them.

Chase De Vere savings manager Susan Hannums also warned consumers not to fall for lenders’ advertising ploys, saying that “you can try and drum home the message – and we play a big part in doing that – but in a lot of cases people only really pay attention when they absolutely have to act.”

There are several ways in which credit providers can sell their products by making attractive headline offers, and recouping on them by ‘hidden’ costs.

A prime example of this comes with the “zero per cent” cards, which charge transfer fees to offset their attractive interest deal. This financial sleight of hand has netted banks £240 million in transfer fees last year, according to This Is Money.

Tags: finance, credit providers, Chase, interest rates, financial sleight

Is your caravan insured for your holiday?

If you are planning to take a caravanning holiday this year, as many Brits tend to do, it is important to ensure that you have adequate insurance cover in place, state experts.

According to many industry professionals many consumers forget to insure their caravan and contents before heading off on their holidays, and although not compulsory as with car insurance, not having caravan insurance in place could cost some holiday makers a fortune in the event of unforeseen circumstances or accidents.

According to recent figures just over 25% of caravan owners have taken out adequate insurance cover, and with around two million Brits likely to be heading off on caravanning holidays over the next couple of months this reflects a serious deficit in the number of consumers that have protection for their caravans. A good caravan can be a costly investment, and without the benefit of insurance cover can end up costing the owners a fortune.

Many people with lower value caravans fail to take out cover because they may feel that it is not worth it. Reports suggest that the same goes for those that have caravans but rarely use them. However, insurance experts are warning caravan owners of the serious financial implications that can stem from lack of adequate insurance on their caravan, no matter what the age of the caravan or now much it is used.

One industry expert stated: “We were alarmed to see from our research how many people were not taking out insurance. Not only can some of the top of the range caravans set you back well over £20,000 if they are stolen, the damage you can cause to third parties can be enormous.”

Tom Smith
1st August 2007

Tags: damage, cover, holiday, car, countryside, accident, uk, Insurance, claim, caravan

BCC warns Bank of England against rate rise

The British Chambers of Commerce (BCC) has claimed that “economic damage” will be done in the UK if interest rates go up again.

The Bank of England’s monetary policy committee (MPC) will meet later this week to decide whether to put rates up or not.

According to the BCC’s chief economic adviser David Kern, the MPC should wait for previous rate rises to avert potential damage – and there have been five in the past twelve months – to take full effect before putting another increase on: “There are already signs that the housing market may have started to soften”, he said.

Mr Kern’s position is backed up by the latest monthly house price figures from mortgage lenders Nationwide, which show a seasonally adjusted gain in inflation of just 0.1 per cent for July, dragging down the overall inflation rate for 2007 to 9.9 per cent, well down on previous double digit showings.

A Reuters poll has also previously shown a comfortable majority of city analysts agreeing that rates are scheduled to go up to six per cent by the end of the year.

Tags: inflation rate, digit, price, interest, majority, uk, bank of england, signs

FTBs saving longer for their deposits

First-time buyers (FTBs) are saving for “around five years” to put down a deposit for their home, Your Mortgage said yesterday.

FTBs are also relying on loans from parents more and more, as house prices increase and interest rates rise.

Editor of Your Mortgage Paula John said that the average savings time had increased by a full 11 months in the past year alone.

“Of course, in the light of recent interest rate increases houses are even less affordable for first-time buyers so they are being kicked out of the market altogether”, she said.

Ms John also stated that house prices in London, which have increased by 15 per cent on average in the last year alone, have led FTBs to “lower their sights” and “buy a lot further out”.

According to HousePriceCrash.co.uk, in the last decade numbers of FTBs have shrunk from 55 to 29 per cent of the market.

The Office of National Statistics has also stated that the average price paid by FTBs in the UK has risen by 204 per cent over the same period.

Tags: Ms John, National, average savings time, first time buyer, uk

House fire risk of smoking ban

Homeowners are being warned of a potential rise in the number of house fires when the smoking ban is introduced in England from July 1st.

Smoking in public places such as pubs and bars will become illegal from this date and Abbey is concerned that fires will become ore commonplace as people choose to stay in rather than go to the pub.

The bank believes that many people may opt to host house parties as an alternative to going out so that they can smoke while drinking.

However, this can pose a danger as drunken smokers could inadvertently set something alight, leading to a costly home insurance claim for the mortgage holder.

Figures show that around £11 billion worth of damage is caused by fires started by cigarettes each year in the UK but recent statistics display a downward trend in the past ten years.

Abbey, however, is concerned that this will begin to change as more and more people choose to spend their nights indoors.

“The landscape of social behaviour is going to change quite dramatically following the smoking ban and we anticipate that people are likely to spend more time entertaining at home rather than going out,” said Prasad Shastri from Abbey.

“This could well have an adverse effect on the number of fires started in the home and we would ask everyone to be extra careful and take simple precautions to protect their homes and the people in them.”

Research from the Department for Communities and Local Government has found that nearly a third of households have a smoker living in them.

Tags: Local, Department for Communities, house fires, risk of smoking, Everyone, uk, GBP, costly home insurance claim

Debit Card – It Was Twenty Years Ago Today

It may be hard to believe, but 3 June 2007 marked the twentieth anniversary of the first ever debit card to be launched. It was the Barclays Connect Card. It wasn’t long before the cards became popular with users, and within just nine months, the bank had issued a million debit cards. In the UK in 2007 there are around 68 million debit cards in issue, on which are made 143 purchases a second, totalling 6.8 billion transactions every year.

There are now more debit cards in circulation than credit cards, and there are 85% of adults who own one, compared with 66% who own a credit or charge card.

Debit cards haven’t stood still in twenty years, and they are now moving into the world of prepaid debit cards and ‘wave and pay’ technology. The former enables customers to out a positive balance onto the card before they begin to use it when on holiday or a shopping spree, and the latter technology lets consumers make relatively small purchases by simply waving their cards in front of the terminal.

Barclays’ own figures suggest that an average customer will make 210 debit card transactions in a year, with a total spend of very nearly £10,000 on the card. Apparently the biggest spenders come from Battersea who spent an average of £15,840 on their cards in 2006. At the other end of the scale, the lowest spenders were from Small Heath in Birmingham who use their cards only 92 times in a year average, with a spend of less than £5,000.

Other figures tell us that women use their cards a quarter as much again as men who actually spend 33% less than women, the figures being £52 for women and £39 for men, per transaction.

The frequency of debit card use is increasing year by year. They are most frequently used in supermarkets, where a third of all debit card transactions occur. This is followed by petrol stations where one in nine transactions take place, and departments stores take one in nineteen of all debit card transactions. Between these three destinations, they take more than half of all debit card transactions. There is a challenge, though, because the fastest growing purchase area is going to be, inevitably, from internet purchases.

Even popular games manufacturers have to move with the tide. Parkers, the makers of the Monopoly game board, have phased out cash in favour of debit cards in a new version. Instead of the garishly coloured bank notes, players will use Visa debit card instead to keep track of their money coming in and going out. There is an electronic machine which takes the card and the banker enters the details of the transaction.

Parker said it has to move with the times and its change to the game reflects the nature of society and technology advancements. Adults now use cash 70% less frequently than they did ten years ago. The electronic game is more expensive than the standard version, but if you’re short of cash…

Tom Smith
16th June 2007

Tags: spree, Debit card, Credit Cards, barclays, small heath

Homebuyers told beware hidden costs

The average British household will spend an additional £23,800 in hidden costs when moving home.

Research by the Co-operative Bank shows that we fork out this amount during our lifetime while moving and few of us have a contingency plan in place to do so.

The figure is greater than the average salary in the UK and Co-op warns that those moving home should be prepared for the additional costs.

Only 56 per cent of those asked said that they had a fund in place to meet these costs, while 15 per cent sink further into debt by taking out a loan to cover the expenditure.

The hidden costs include solicitors’ fees, stamp duty, removal costs and estate agents fees and Co-op is concerned that many buyers are getting into financial trouble by not being properly prepared.

“As house prices have continued to increase it is important for people to look at the bigger picture in terms of costs,” said John Barker, head of mortgages at the bank.

“Hidden costs that are not budgeted for can soon mount up and by having a contingency fund in place it will enable people to be fully prepared for any eventuality.”

The study also found that Brits are happy to sacrifice a number of things in order to get onto the property ladder.

Around 28 per cent said that they do not go on holiday so that they can afford a house, 21 per cent give up eating out and 18 per cent do not buy new clothes.

Tags: Opportunity cost, business, Homebuyers, average salary, co operative bank, research, uk, eventuality."The study

Drivers swapping points to avoid ban

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

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

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

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

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

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

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

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

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

Tags: limit, uk, government, drivers, 5 million, car insurance premiums, uk drivers, churchill

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: Payment systems, money, pin technology, Product Release, Banking, uk

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: accounts, savings, money, bank, interest, spend, earn, cash

Scottish house prices grow

Those of you considering taking out a mortgage on a property in Scotland may want to act quickly after prices in the country recently spiked.

Figures from Lloyds TSB Scotland show that house prices in Aberdeen, Edinburgh and Dundee increased in the last quarter.

The reasons behind this are varied, with Lloyds putting it down to a rise in mortgage transactions, a low number of homes on the market and a rush to take advantage of fixed-rate deals as interest rates rise.

The average property price in Scotland rose by 6.8 per cent in the three months to April 30th, putting the average price at £154,344.

“Average prices [in Scotland] are some three quarters of the UK level and continue to be propelled by a combination of favourable economic background and demand for houses exceeding the supply,” commented professor Donald MacRae, chief economist at Lloyds TSB Scotland.

“Recent rises in interest rates will have a slowing effect on these house price increases. This latest surge is expected to moderate and may be followed by a decrease in the next quarter.

“This latest increase in Scottish prices may well be the last surge before the much forecasted slowdown,” he added.

The biggest house price increases were seen in Aberdeen where the year-on-year rise was 25 per cent.

Tags: uk, professor donald macrae, lloyds tsb, aberdeen, £154, edinburgh, Economic history

Thieves get on your bike

Britain’s shift towards being a nation of green-minded individuals is being exploited by thieves.

That is according to new research which shows that bicycle thefts have grown by ten per cent in the last 12 months.

As more and more of us try to do our bit for the environment by ditching the car and peddling to and from work, thieves are capitalising.

Halifax Home Insurance has revealed that a bike is stolen every 71 seconds in the UK, with their being a total of 439,000 bike thefts every year.

Bike owners are now being advised to check their home insurance policy to ensure that their wheels are covered should they be stolen from a public place.

Figures from Halifax show that in 2006, 89 per cent of bike thefts occurred in a public place when the bike had been locked up.

“One bicycle theft occurring every 71 seconds is an astounding figure and should certainly make cyclists think more carefully about the level of security they use to keep their bike safe,” said Vicky Emmott from Halifax Home Insurance.

“With the majority of thefts coming from bikes that have been placed under lock and key, it may be worth considering spending a little more money for a high security lock that might stand a better chance of deterring a thief.”

London has been named as the UK’s bike theft hotspot and the average claim in the capital is for around £340.

Tags: bicycle theft, United Kingdom, green-minded individuals, bike theft, bicycle, policy, lock and key, uk

Homeowner demographics are changing

The UK’s demographics are changing and as a result our living habits are developing too.

According to new research by Alliance and Leicester in conjunction with the think tank Centre of Future Studies, our changing social landscape means that people are staying at certain life stages longer than before.

A decreasing rate of mortality and fertility have changed the way we pigeonhole people and the study says that most of us live in more houses in our life times than we would have in previous years.

The report suggests that the adkid demographic will be prevalent in the coming years, with around 80 per cent of people falling into the category by 2026.

This points to people who prolong the length of time they spend living with their parents, therefore gaining the title of adult children (adkid).

Adkids are said to be more susceptible to having a Peter Pan attitude – the desire to not grow up – and according to the report means that leaving home, getting married and having children are put off until later in life.

Overall, the study predicts that household numbers will increase in the future with a number of factors having an impact.

It anticipates that more people will live alone due to increased divorce rates, while marital homes will become less common.

“Changing demographics and social attitudes will inevitably have an effect on the housing market in the future, for example, the number of times that people move in their lifetime, or the increase or decrease in the type of household they live in,” commented director of mortgages at Alliance and Leicester Stephen Leonard.

“These trends are predicted to change dramatically in the next 20 years.”

Tags: leaving home, number, alliance, report, before.A decreasing rate, uk, director

Chip and PIN in the home

Online banking may be about to change forever after Barclays Bank revealed that it will be sending Chip and PIN card readers to people’s homes.

The initiative is designed to reduce the cases of online fraud and beef up security for those who choose to bank over the internet.

Customers who use their Barclays online account to make payments to a third party will receive their PINsentry device later this year.

It is hoped that by introducing the new devices, customers will no longer be required to remember a user name and password to make transactions and can instead simply punch in their PIN number.

“Barclays is constantly working to help protect customers and their money and that is why we have invested in this system,” said Barnaby Davis, director for electronic banking at Barclays.

“PINsentry is the next generation of fraud prevention technology and Barclays is proud to be the first organisation in the UK to roll it out to its customers.

“The popularity of Barclays online banking service comes down to convenience and security and the introduction of PINsentry will enhance both of these features,” he added.

Barclays plans to roll out the new service to half a million customers across the UK by 2008, with this number increasing in time.

Tags: fraud, uk, barclays online banking, year, online banking, online fraud

Consumers accustomed to taking on debt

Consumers have grown increasingly used to taking on debt in recent years, according to the head of a website which offers advice about individual voluntary arrangements (IVAs).

As the agreements become increasingly popular with borrowers who are struggling to make debt repayments, Phillip Beck of Freeivaadvice.co.uk said: “I think it is a problem that has built up over many years and that is that people have got used to taking on debt.

“The amount of consumer debt in the UK has steadily increased over the years and it is finally getting to the point where people have so much debt which they simply cannot repay.”

However Mr Beck, commenting ahead of new research which will examine the increasing number of county court judgements granted in the UK, also acknowledged that “lax lending policies” by some loan providers and lenders was also part of the problem.

According to the Department of Trade and Industry (DTI) some 12,228 people entered into IVAs with lenders in the third quarter of 2006, an increase of 117.9 per cent on the same period in the previous year.

Tags: Department of Trade and Industry, Freeivaadvice, individual voluntary arrangements, consumer debt, loan, court

Unnecessary vet visits cost £19m

Up to 49 per cent of emergency trips to the vet are unnecessary and British businesses are losing out on £19 million as a result.

According to insurance firm More Than, 37 per cent of all pet owners in the UK have taken time of work to take their animal to the vet.

The majority lied to their employer about what they were doing, with 58 per cent taking annual leave, while many said that they were ill.

However, More Than has discovered that almost half of these cases did not require an emergency visit to the vet, costing a combined £118 million.

In response to this, the insurer is launching a new service which it says is based on the successful NHS Direct.

The service is called Vetfone and it is hoped it will save pet owners time, money and worry.

“Pets are an important part of the family so when a pet becomes ill, many people don’t hesitate to take time off from work to rush them to the vet,” said Mike Holliday-Williams from More Than.

“MORE TH>N’s Vetfone will provide worried pet owners with 24 hour access to a qualified veterinary nurse who can advise them on the best course of action.

“We anticipate that Vetfone will save pet owners valuable time and money in unnecessary vet visits, and it will enable vets to focus time on the serious cases that need their expert skills,” he added.

Tags: expert, uk, time and money, GBP, time, owners valuable time, pet

Buy-to-let market set for growth

More and more people are choosing not to get a mortgage and are instead renting property.

According to Alliance & Leicester, the buy-to-let market is growing rapidly and the firm expects that it will have ballooned by 40 per cent within ten years.

The company has released its Changing UK Household Market report in which it states how the market will grow and what will be the factors affecting it.

Three main drivers for the market were identified, the first of which is a rise in the renting market, with more students and single people looking for places to live.

A change in attitude among the younger generations was also named as a key factor, with it now being more socially acceptable not to own a home.

Finally, Alliance & Leicester said that larger numbers of people are now using rented property to ensure they have flexibility.

“Demand for rented property has been growing steadily in recent years and returns on buy-to-let have increased,” said Stephen Leonard, director of mortgages at the firm.

“This growth is expected to continue – as the number of renters rises further and buy-to-let becomes even more attractive to both existing and potential landlords.”

Tags: market, home, landlords, Stephen Leonard, flexibility, uk, change, london

Brits think of retirement first

The majority of Brits are more concerned about their pension than getting a mortgage.

New research shows that the average person in the UK begins putting money towards their retirement before taking their first step onto the property ladder.

A report released by Axa shows that the average person starts planning their retirement at the age of 28 but does not buy a house until the age of 29.

Britain, in fact, is a world leader when it comes to planning for retirement, beating off competition from the US, Canada and Australia.

Although the British attitude is commendable, some industry experts are warning that too many people (one third) are relying on property to secure a retirement income.

“Homeowners have limited options for generating earnings from the property they live in,” said Steve Folkard from Axa.

“Many people don’t take into account how emotionally attached they can become to a family home.

“By the time they retire, people are often loathed to move away from their friends and family or rob their children of their inheritance by handing over their home to an equity release company. This can scupper plans to take an income from the equity in their home,” he added.

Tags: CAC 40, mortgage.New research, folkard, uk, ladder

Kids’ rooms are worth £14bn

The average child in the UK is now worth around £1,260 due to the number of gadgets present in his or her bedroom.

In total, the UK’s children have £14 billion worth of goods in their rooms, with one in ten parents admitting they have spent £2,500 on keeping their youngsters entertained.

Co-operative Insurance (CIS) carried out research into the matter and found that although parents are keen to keep giving their children the latest gadgets, very few update their insurance policy at the same rate.

“Many parents simply do not realise just how valuable the contents of their children’s rooms are,” said David Neave from CIS.

“It is important for people to regularly review the value of their home contents and if necessary increase the level of cover to ensure that it is adequate.”

The most common electrical item to be found in a child’s bedroom is a TV, with 21 per cent of parents saying they allow their child to have one so that they can watch their own programmes undisturbed.

The CIS research also reveals portable gadgets are becoming more popular among children. Around 60 per cent now carry a mobile telephone.

Mr Neave said that this too should lead to parents reconsidering their insurance policies.

“Parents should also ensure that they have personal possessions cover for those items which their children take out of the home; such cover can be provided simply, by adding it to the contents cover,” he added.

Tags: uk, child's bedroom, realise, kids, child

Shoppers spend Xmas savings

Christmas savings were plundered by UK shoppers at the end of 2006, according to findings from Birmingham Midshires’ Saving Britain campaign.

Although on average Brits saved a total of £2,246 during the year, more than half of this was spent during the final few months.

The study also found that Brits were more able to save during the final three months of the year than at any other time.

Birmingham Midshires’ director of savings, Jason Robinson, said: “Our research shows that gifts and impulse purchases were the reasons for raiding our savings accounts.”

He continued: “Whilst this is to be expected during the festive season, we would urge people to think carefully about a realistic amount they can set aside each month so they avoid regularly plundering their account.”

There was a marked difference between regions in the willingness of people to plunder their savings over Christmas. People in the Midlands and Wales raided the most, a worrying £2,697, while those in the north took out a more restrained £926.

Tags: jason robinson, whilst, Midshires, shoppers spend xmas, christmas savings, Midlands, uk shoppers

HSBC offers new 5-year mortgage

A new 5.55 per cent, five-year fixed rate mortgage plan has been launched by HSBC.

Following the base interest rate rise to 5.25 per cent last week, the package replaces HSBC’s Green Sale mortgage with a fixed rate of 5.17 per cent, which has sold out.

The new plan offers the incentive of no booking or exit fees, with interest charged daily.

Rob Chesters, head of mortgages at HSBC, said: “Following the recent increase in interest rates, we are pleased to be able to announce immediately our new five-year fixed rate mortgage, which comes with a very competitive rate and no booking fee.

“Our Green Sale mortgage proved to be very popular with the many homeowners spring cleaning their finances this January, selling-out in the first two weeks of the sale.”

The fixed rate reverts to 6.25 per cent variable once the five-year fixed rate period has expired.

HSBC serves 15.6 million customers in the UK and over 125 million customers worldwide.

Tags: uk, green, cent, United Kingdom, rise, Green Sale mortgage, rate rise, rate

Will Barclays going to be taken over by Bank of America?

Speculation is rife over whether the Bank of America may be planning to put in a bid for the UK bank Barclays, which is a household name in banking in the UK. Analysts at Merrill Lynch have voiced suspicions that this bid seems imminent based on recent goings on and speculation. By market capitalization, Barclays is the third largest bank in the UK and the Bank of America the second largest in the world.

According to Merrill Lynch: “Bank of America has previously indicated that the next phase of its expansion is to become a leading global commercial and investment bank. In order to achieve that goal, we believe Bank of America is very interested in acquiring Barclays.” The analyst added: “We think Barclays is the perfect fit for Bank of America, given our understanding of Bank of America’s international aspirations.”

So far this appears to be simply speculation, and officials from Barclays and from he Bank of America have refused to make any comment regarding the situation. However, according to Merrill Lynch the recent resignation of the Chief Financial Officer at the Bank of America is a little suspicious: “While we believe de Molina resigned of his own accord to pursue a CEO role at another company, or a more entrepreneurial career, the timing of his resignation is suspect to us.”

Furthermore analysts predict that the takeover could save the Bank of America around one and a half billion pounds due to reduced corporate and staffing costs, as well as increasing chare prices to generate more in the way of profit. The analysts added: “Furthermore, we think the acquisition of Barclays would enhance Bank of America’s long-term growth rate because it would provide numerous avenues for Bank of America to continue to grow on an international scale.”

Tags: america, Banking, ceo, bank, takeover, barclays

Home credit lenders must make it easier to compare deals

Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes to comparing deals and repayments on finance offered by home credit companies. The commission also added that the industry needed to ensure that consumers that repaid the loan earlier than arranged received some form of rebate. However, the commission has decided not to enforce a price cap, as officials state that this could hit some consumers hard.

Research showed that the average sum borrowed by UK consumers in the form of home credit was £300, with loans starting from around £100. The home credit industry has nearly two and a half million customers in the UK, and the majority of these borrow under five hundred pounds in the form of home credit. The Competition Commission, however, has decided not to place any price cap as more vulnerable consumers that may need more could otherwise find themselves in difficulties.

After it came to light that a small number of home credit companies were controlling the market when it came to this type of finance, the commission was said to be ‘opening the market’ when it came to home credit. The commission is in the stages of doing this, and has stated that lenders in this industry will need to publish their data on a website, so that consumers can then easily compare terms and costs in order to get the best deals.

With regards to its decision not to enforce price caps, the chairman of the commission said that he thought that capping might have “…reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit. We also felt that price caps could prove to be extremely difficult to apply and enforce in this industry.”

Tags: lenders, credit, deals, commission, offers, competition, comparison, compare

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