Remember that loan you got out years ago that allowed you to buy Blastaways, fags and occasionally pay the rent on that condemned basement you lived in with the Bob Marley poster and the rats? Did you pay it off yet? Or did you change your name, move house and pretend it never happened?
Well plenty of people have done just that, it would seem, and the amount of outstanding student loans is set to reach £200 billion by 2042. At the moment, according to the National Audit Office, the total amount borrowed is £46bn, and the Student Loan Company is sitting on a mountain of unaccounted for loans totalling £5bn. A further 368000 had no employment record in the UK, and if they then started work, they had failed to tell Student Loans tax or information about earnings.
The Department of Business, Innovation and Skills assumed 35% of loans that would go unpaid but now that figure is closer to 40%. They also miscalculated how many students could pay back the new higher rate student loans. And as you can imagine that’s left a little hole in the budget, to the tune of £600m.
Labour MP Liam Byrne said: ‘In May, the Universities Minister was boasting of the governments ‘text book reforms.’ Now, we learn that blundering, out-of-touch ministers got their sums so badly wrong that there’s a £600m hole in the budget. We need to know how ministers got it so wrong, and how they’re going to fix it without putting Britain’s scientists, schools and colleges under threat.’
God, chill out, man. Be more like an ageing student. Make a bong out of a bottle of White Lightning and watch Betty Blue on DVD or something. It’ll get paid back. (Maybe.)
When you pay online you always have to have your card details to hand – unless you pay through Paypal – but from today, Visa are launching V.me, a payment service that lets you buy online using just a password and a username. Also, you can attach your V.me account to several credit cards, so you’ll never have to input those boring long numbers again.
Ok, so ‘V.me’ sounds like a filthy proposition, and it’s not available everywhere just yet, but it’s hoped that thousands of retailers will take it on. And it does sound like a more convenient way to blow all your wages on meaningless crap off the internet.
Visa have called it a ‘digital wallet’ and it’s now live in Europe, with 1400 online retailers on board – while Nationwide are the first financial organization to support it in Britain. Steve Perry from Visa Europe said:
‘V.me by Visa gives merchants and issuers an acceptance mark that will work across Europe. Mobile phones, tablets and the use of digital payments have changed the nature of commerce: consumers want to be able to buy from the merchant of their choice via any device without sharing their card details.’
By January, 4000 new retailers are expected to start using it, and there’ll be a full, bells and whistles commercial launch of the service next year, when everyone will be saying ‘Hey, just V.me’ and ‘Yeah, I V.me’d it.’
Nah, they won’t. It’s a terrible name.
Ok, so it’s not a very catchy title for a Christmas song, but online sales are forecast to hit a jingle janglin’ £5bn this year, says Deloitte, while overall, we’ll be spending £40 billion on Furby Booms and comedy reindeer onesies. And it seems that all we want for Christmas is quick, flexible delivery or click and collect.
Considering we’re all supposed to be arduously climbing out of the recession like an overweight old man out of a swimming pool, these festive projections sound pretty healthy. Indeed, Ian Geddes of Deloitte sounded positively cheery.
‘The forecast will provide some Christmas cheer for retailers. Shoppers are expected to loosen purse strings off the back of rising consumer confidence and improving economic conditions. After last year’s click-and-collect Christmas, consumers’ expectations around flexible delivery over the coming festive period are higher than ever before.’ he said, wearing a Noddy Holder glittery top hat.
With Black Friday and Super Stupid Saturday just around the corner, shoppers are all set to click and collect themselves senseless this weekend. Royal Mail is predicting that Saturday will be the busiest day of the year for online sales.
You know how it is – you stumble through life, thinking you’ll never get old, drinking fizzy pop and not bothering to wash your socks because your Mum isn’t there to tell you what to do, and then BOOM – suddenly you’re 48 years old and staring into the abyss of your own mortality, and you have no nest egg for the future. *Macauley Culkin in Home Alone face*
This is according to a report by NFU Mutual which has identified the hitherto unknown and entirely made up concept of ‘retirement reality.’ This yawn-inducing buzzword, which will probably feature in a David Cameron speech soon, refers to the moment we realize that we never bothered with a pension, and we’re screwed.
‘Only [at the age of 48] do they truly appreciate what savings they need for retirement and when they will realistically be able to stop work.’ lectured NFU Mutual, slowly pushing NFU Mutual pension plan literature across the metaphorical table. ‘For some, the realisation has more dramatic consequences. One in ten of those still working past the age of 55 say they now don’t ever expect to be able to retire.’
The report, which surveyed 2001 adults, said that people who only start to save at the age of 48 have ‘left it too late’ and many who have already started saving are having to push back their retirement plans by about 4 years, in order to have enough income.
If you don’t start saving in your twenties, you’ve basically had it, and you can never retire. Which is just as well, because retirement is boring and you’d be better off contributing to society until you die, rather than pruning your azaleas and staring suspiciously through net curtains at passers by.
Reports state that roughly 19% of mortgage holders are overpaying every month, according to Santander Mortgages. 6% overpay once a year, while another 9% pay more than they need to on an ad hoc basis.
It seems people are taking advantage of low interest rates as this is a rather recent trend among homeowners.
CML chief economist Bob Pannell said: “Housing activity is set to strengthen further in the short-term, and to contribute materially to overall economic growth. Combined with the Bank of England’s recent optimism about the economy, this has led some commentators to speculate that an early rate rise may be on the cards. We do not currently share this view.”
Why overpay on your mortgage?
If you overpay on your mortgage, you’ll end up paying less interest overall. It seems that, if you have some cash to spare, it is better to pay more toward your mortgage rather than paying into savings, seeing as the rates on the latter aren’t great at the moment.
Mortgage rates have been steadily falling throughout 2013 which has allowed people to get cheaper mortgage deals, be it for a new buy or a remortgage. They can opt to use some of the savings they would have made to overpay on their usual monthly payments, thereby reducing the loan. You could reduce your mortgage term and save thousands.
According to one repayment calculator, if you overpay £181 per month on a £200,000 mortgage at 3.5%, you’d end up saving £24,118 over the mortgage lifetime, reducing the mortgage term by over five years. So if you have any spare cash, this is certainly worth thinking about.
Heard of Coin? Some bright spark has come up with a novel solution to having too many cards in your wallet. You add all your cards onto a single Coin card with a phone app and with a little button on the Coin card itself, you choose which card you want to use.
It looks like a good thing, but of course, if it gets stolen, that’s someone running off with all your cards at the same time (and the smartphone alarm that tells you it is too far away from you going mad in your pocket while you work out which one to cancel first).
Anyway, have a look at it here.
Good idea? Bad idea? You can pre-order a Coin card here.
If you’ve been getting into waving your credit card around near the machine, rather than having to type in that timewastingly long 4 digit pin number, be warned – engineers from the University of Surrey have found that contactless payments are relatively easy for others to intercept.
According to them, they managed to ‘successfully receive contactless transmission from distances of 45-80cm using inconspicuous equipment.’
The banking industry, who have issued millions of contactless cards, insists that’s not true. They say: “The technology is extremely robust, has been thoroughly tested and is working as expected. Payments can only take place where the card is placed within 5cm (2 inches) of the terminal.’
But the researchers have proved them wrong. Using easily available shop bought electronics, the researchers rigged up a looped antenna, which successfully swiped the information from a contactless card from 45cm away. The device, which could easily be concealed in a backpack, was mainly made of cheap components. The most expensive part was a computer card costing £1500, but they said it could be easily replaced with a lower cost version.
(Way to go University of Surrey, giving people ideas.)
The UK Cards association said that contactless fraud card was still extremely rare. But with this and the Marks and Spencer’s debacle, where customers recently paid for things by mistake, contactless payments might just prove to be more trouble than they’re worth…
If you’re saving for your old age, it pays to shop around, because it seems that Prudential are leaving tens of thousands of pensioners out of pocket. The financial giant is currently offering incomes from lump sums that are about 20% lower than other companies, such as Canada Life and Aviva.
If you’re on a £100,000 pension, the difference amounts to £1,000 less income a year for life – which in retirement terms averages out at about 20 years. The best income available from a £100,000 pension plan is £6102 (offered by Legal and General). But if you’re with the Prudential, you’ll only get a piddling £5011. Not nearly enough to keep you in Steradent and big slippers.
This is bad news, especially as a recent survey shows that currently, over half of the UK workforce is over 50. And 71% of them are dealing with the very real possibility that they’ll have to work during their dotage to supplement their crappy pensions.
Pensions expert Ros Altman said: ‘Anyone buying from the Pru at those rates is giving up a fifth of the income they could get – no one in their right mind would do that knowingly. Every other provider is offering much more’.
Even a spokesman for the Prudential has said it’s important to shop around for the best deal. So maybe do that, now, before you end up wrapped in a sack and on living on beans until you’re 90.
We are a nation of malingerers, according to yet another new survey, this time from LV=. And we’re not just talking a head cold here and there -we’re talking an entire YEAR of absence in the average working Briton’s life.
The National Sickness Report surveyed 2000 full time skivers, I mean workers, and found that stress and depression were the top two reasons for absence. The sheer misery of working full time in an office full of annoying dickheads doing the Herbalife diet required an average of 81 days recovery time. Add the usual viruses, plagues and diseases that ricochet around in the conditioning system, and Britain is losing 131 million days to sickness.
Employees are losing out too – with every snotty tissue and attempted suicide, we could be losing £4671 of our wages over our working life, thanks to the paltry Statutory Sick Pay of just £86.20 a week.
Mark Jones, from LV= said: ‘Often when we talk about workplace absence we look at the cost to businesses. However, we wanted to highlight the impact that being off sick can have on an individual’s finances and lifestyle.The fact that one in three would only receive Statutory Sick Pay indicates that many would be out of pocket and struggling financially.’
Here’s an idea. How about making work not so awful? Few bean bags here and there, tellies, free biscuits…?
Aside from earning less money than men, there’s a pension gender gap, too. A study has revealed that one in 3 women haven’t put any money into a pension, and the ones that have are putting aside £1000 a year less than men.
Career breaks and going part-time after having children are often to blame for this shortfall, giving women no real option to save for a pension. Also, generations of women have never been offered a pension by their employers. The women who do pay into a personal pension scheme are putting aside an average of £182 a month, compared to a £260 contribution from men.
Pensions adviser Malcolm McLean, from Barnett Waddingham said: ‘The situation where women are in some way treated almost as second-class citizens belongs in the past and certainly should not exist in the 21st century. Greater equality in pension provision is an important part of the change that we need to achieve as soon as possible.’
So basically, women are being punished for their gender and ability to have children with poverty in old age. And we’ll all have to work until we’re 70. GREAT! Anyone want to swap their knob for a pair of ovaries (used)?
It’s not just payday loans that are due an overhaul – other forms of credit such as overdrafts can be just as expensive, says Which! They’re launching a campaign today to clean up the filthy credit market, where extortionate charges and fees abound even from some the high street’s biggest names.
If you have an unauthorised overdraft with the Halifax or Santander, for example, and you borrow £100 for 31 days, it can cost you between £20 and £30 in fees. Borrow it from your local Wonga using your William Hill loyalty card as ID, and you will pay a very similar amount – between £20 and £37. AND, both the Halifax Reward Account and Santander Everyday Account charge £100 a month for going into an unauthorised overdraft of just £100. Which is just lunacy.
And although the Financial Conduct Authority plans to crack down on payday lenders, there’s no action being taken about the penalty and default fees on payday loans or unauthorised overdrafts.
Which! ain’t sitting back and having that. Their Clean Up Credit Campaign will put pressure on the FCA to crack down on irresponsible lending across the board. So if your bank charges through the nose if you dip into your overdraft, let them know.
Richard Lloyd – do you by any chance have a quote for us?
‘High street bank overdraft fees can be just as eye-watering as payday loans. Consumers need the credit market to work competitively. It’s time to clamp down on excessive charges and irresponsible lending, and to make sure borrowers are being treated fairly whatever form of credit they’re using.’
Ah, he never lets us down.
British banks have been sloth-like in their response to paying people what they’re owed after being mis-sold products. A fraction of the £3 billion has gone out, drawing criticism from businesses and the financial watchdog.
“Progress to this point has been slower than expected. Many customers have been waiting too long to find out if they were mis-sold, some for more than six months,” said the Financial Conduct Authority.
The review of interest rate swap mis-selling, set up by the FCA, initially said that firms would be compensated within 6 to 12 months, however, the process is now slower than the Eurovision vote.
The lack of progress is angering small businesses, who are still looking at crippling monthly repayments and more, in a bid to get themselves out of these arrangements. ”The fact that only 22 SMEs accepted offers last month shows the unacceptably slow performance of the banks providing satisfactory redress to those mis-sold,” said Abhishek Sachdev, managing director of Vedanta Hedging, which advises companies on the products. “We are aware of some SMEs that have been waiting for 12 months since their review meeting with the bank.”
The FCA expects things to ramp up and soon, saying that the banks are aiming to send out more than 1,000 offers of compensation in October, with that number increasing month on month.
For the first time in 4 years, everyone is once again merrily getting into credit card debt, according to the British Bankers Association. The amount of people putting things on the never never rose, with a 6.7% rise in card borrowing, and a 5.1% increase in overdrafts and personal loans.
Home loans are also on the up, with mortgage approvals hitting a 4 year high. Net consumer credit grew by £100m to £80.1bn – most of which was from credit cards – showing a significant rise in consumer spending.
So have we learned nothing from the recession? Well, we’re becoming a bit more prudent about paying off debt, rather than splurging millions on gold plated handbags then breaking down in tears on the Wonga man. Net mortgage lending was zero in August, with borrowers paying off as much as the banks doled out. And we’ve paid off £200m of mortgage debt every month. Which surely means we deserve to stick the odd mini-break in the Lake District on our Visas.
David Dooks, the statistics director of BBA said: ‘The figures suggest that consumer confidence is growing.’
So come on, get out your Mastercards and live a little. Who wants to go to Mauritius on a YACHT?
Is your pension hopeless? Are you destined to spend your dotage eating tinned stew out of an old hobnail boot? Well the Office of Fair Trading has ordered a crackdown on bad value pensions– after discovering that £40bn of savers money is stuck in schemes that will pay out piddling amounts.
Out of that 40 billion, £30 bn is in antiquated schemes with high charges, while £10bn resides in smaller schemes that are just as poor value for money.
5 million workers are paying into defined contribution plans, which are cheaper to run than traditional salary based schemes and are becoming increasingly popular amongst cash-strapped employers. The OFT also found that many employers don’t have the incentive to offer better value for money schemes to their workers.
The Department of Work and Pensions has agreed to look into whether new laws are needed to tackle the issue – with increased transparency top of the agenda.
Steve Webb, minister for pensions, said: “In particular, we need to ensure those already in pension schemes are getting good value for money, and will be actively involved in the audit of pension schemes sold prior to 2001.’
So knows, when you hit retirement age, you might be able to afford some stale bread to go with your tinned stew. It’s the little things that count. *cough, splutter, die penniless*
300,000 Barclays customers are set to get a little bonus after the bank admitted to making mistakes on the paperwork for thousands of personal loans. If there are errors in the paperwork, it’s the law that all interest should be paid back.
It’s going to cost Barclays around £100m to recify the mistakes, which go all the way back to 2008. The errors were mentioned in the bank’s annual results in February, and again in a recent prospectus, which stated that their ‘income declined 4% to £1,086m primarily due to provisions taken to remedy historical interest charges incorrectly applied to customers.’
A quivering guy in a suit from Barclays said:
‘Whilst no-one has been mis-sold to, customers are entitled to have their interest payments returned. No customer will pay more than they were ever contractually expected to.’
It’s the latest in a catalogue of catastrophic errors from the bank. As well as this, they did some dirty secret double dealing with investors from Qatar, and are facing a £50 million fine after making secret, under the table payments that didn’t appear on the books. They’re also paying back £290m for trying to manipulate Libor and doling out millions in compensation for mis-sold PPI and credit card insurance.
BAD BANK. GO TO YOUR ROOM.