The next £20 note that Britain gets will be printed on plastic. This will be the third note going to polymer, after the Bank of England had a 10-week public consultation which showed that 87% of those surveyed said they were in favour of this change. Or they said ‘not really arsed’.
Either way, it is happening and should be in circulation by the close of the decade.
You’ll remember that the £5 and £10 notes are already planned to go plastic, with the new fiver – starring Winston Churchill – being issued in Autumn 2016. The polymer £10 note will be in circulation some time in 2017.
Victoria Cleland, the Bank’s chief cashier, said that this switch to plastic is going to help to reduce fraud and make banknotes much more durable.
She added: “Experience from central banks that have issued polymer banknotes has been positive. Canada, for example, has seen a real reduction in counterfeit levels since launching its polymer series a few years ago. Polymer is also cleaner and more durable, leading to better quality notes in circulation.”
Will there be £50 polymer notes? We just don’t know. So few us get £50 in our hands, there’s a good chance we don’t care, too.
The next big question is from Mark Carney, the Bank of England’s governor, who wants to know who should be the next face of the £20 note. It should be a historical figure, who should “celebrate Britain’s achievements in the visual arts”. We’re hoping for Roy Race from Melchester Rovers or Max Headroom.
We told you before about contactless payments going up to £30 before, and understandably, many of you probably thought it was too good to be true. You couldn’t imagine a world where such a beautiful thing could exist.
Well, it has finally happened! The single payment limit for a contactless card transaction has been bumped up to £30 from £20! This is our moon landing. This is everything we’d ever wanted. Human endeavour has peaked. We might as well give up on all projects now, as this won’t be topped.
This increase also affects smartphone payments like Apple Pay, and the rest, which lets you buy stuff by wafting stuff at a machine without entering a PIN number. PIN numbers eh? They’re like the dark ages.
Of course, with such a glorious development, some places won’t be able to offer the new limit because they haven’t updated their software. Go easy on them. Such huge life-changing events can take time to form in people’s minds.
The UK Cards Association said there’s 58 million contactless cards in the country, and last year, over £2.5bn was spent using them. The places that are accepting these payments are growing too. It is like living in a science fiction film. Corner shops will sell lazer guns next, and Boots will probably have suicide booths or something.
Richard Koch, who has a name that has been tittered at since he was born, is the head of policy at the UK Cards Association, and he said: “Contactless payments are fast, easy and secure and use the same robust encryption technology as chip and PIN. Consumers are increasingly choosing contactless as a way to pay and the new £30 limit will give shoppers and retailers even more opportunities.”
According to the Financial Ombudsman, packaged bank accounts – those that offer additional things like cheaper overdrafts and insurance for a subscription or fee – are being complained about more and more, with official complaints shooting up lately.
Around 25,500 people complained about these in the first six months of the year, which is more than 2014 as a whole.
Many customers have complained that they were sold these accounts unwittingly, or that they didn’t need the insurance in the first place. Looks like we might have another PPI-esque scandal on our hands here.
These accounts are usually sold as ‘premium’ accounts or something to do with the word ‘gold’, with customers paying somewhere between £5 and £25 every month. Of course, these are nice little earners for banks, so they’ve been pushing them hard.
The complaints that the ombudsman has been receiving concern three categories – those who say they never wanted the accounts in the first place and were signed up to one without permission; those who asked their bank to cancel these accounts, but the banks didn’t; people who opened these accounts and found them to be absolutely useless and worthless.
The figures show that, regarding new cases received, NatWest, RBS, Santander, Lloyds, HSBC, Bank of Scotland, Barclays and MBNA are swimming in new complaints.
Seeing as people are paying, on average, £150 per year for these accounts, the compensation bill for banks could be massive. If you want to see all the data regarding these complaints, click here.
When Barclays hired the axeman who sends everyone scurrying to the job centre website, he wasted little time in banning jeans and flip-flops from the company. Now, John McFarlane is at it again, this time, axing Barclays’ fleet of black executive cars.
That’s not because he wants the top brass to catch the bus – he just doesn’t like black cars. He’s ordered a load of silver limousines in their place. Why? Because he’s bang into feng shui. He sounds a bit crackers, doesn’t he?
It would appear that McFarlane wants everyone’s chi to be in good order and that silver or grey vehicles are a sure fire way of bringing harmony to all.
Now, it would appear that Barclays renew the lease on its executive cars every few years, so this isn’t totally cuckoo, but the introduction of an entirely silver fleet of executive cars is something that the chairman wished for.
McFarlane has previous of course. A former, irritated executive at ANZ in Australia said: “He loved that sort of stuff. I guess I am a different person. It worked for him but it wasn’t for me,” said Steve Targett. ”I didn’t need to see the feng shui consultant come around and put little elephants in the corner of my office and tell me to give money to 10 beggars in 10 days and the like, otherwise I would have bad luck. I’m not that sort of person.”
Isn’t it comforting to know that people at the top of the finance world are so eccentric?
The Co-operative Bank have been having a lousy time, beset by scandals and financial losses. Concerning the latter, those losses just won’t go away and the bank themselves have said that they won’t make a profit for at least another two years.
Their losses have nearly trebled in the first half of the year as the bank trundles on through their restructuring. The net-losses went up to £204m in the first six months of the year, up from £77m in the same period last year.
In a statement, they said that these losses are thanks to “the issues that came to light during 2013″ which “continue to dominate the financial performance of the business”. ”The required remediation and strategic investment together … [are] expected to drive losses in the bank for at least the next two years,” they continued.
Chief exec Niall Booker is overseeing the slow turnaround, and saw the bank narrowly avoiding a £120m fine from a pair of financial regulators.
“It is a campaign as opposed to a skirmish,” the chief executive said. “We have made some progress, but there is still a lot to do. The challenge is, we’ve got to keep the customer empathy and ethics, but change the other bits.”
There’s £270 each up for grabs for customers from RBS, Lloyds, AIB banks, Barclays, Capital One, HSBC, Santander, Clydesdale Bank, Danske Bank, Tesco Personal Finance and The Co-operative Bank.
So what’s the craic? Well, Affinion International Limited sold six different products, which were meant to offer protection if their card was nicked or subject to fraud. However, this was completely unnecessary because your bank would already reimburse you if your card gets reported lost or stolen, regarding unauthorised transactions above £50, once you’ve reported it.
Since customers may have been paying for this for five years, plus interest, that’s a compo payment of £270 for your troubles. It looks like the first compensation payments will be doled out some time next month.
If you’re eligible, you should receive a claim form within the next few weeks. You must return it no later than March 18th 2016.
When you get the form, fill it in, sign it and date it and return it in the envelope provided by AI Scheme Ltd. If you send a photocopy of it, it’ll be rejected, so no mucking about it. This is a claim you can do yourself, so if you get any claims management companies sniffing around you, they’re only after a cut, so bin all correspondence from them.
If you think that you’ve had one of the products, and haven’t received a form, then ring the AI Scheme helpline on 0800 678 1930 (or if you’re outside the UK, call +44 208 475 3103).
Claim as soon as you get the form and do not wait until the end of the seven month claim period, okay? Good.
There’s a lot of changes going on in the world of tax, with shops saying new rules mean that ATMs may not be free any more. Now, Nationwide are saying that recent tax changes could cost them £300m over five years, which could well hit lending.
They say that changes to banking taxes which were announced in the Budget are going to cost them the equivalent of the capital needed to support £10bn of lending. Big talk indeed.
And then, passive aggressively, Nationwide told everyone how well they were doing, basically winking at the Chancellor with a ‘…and we won’t be able to help the country’s growth if you start playing silly buggers…‘.
In the first quarter, profit before tax increased to £379m, up from £253m the year before. Chief exec Graham Beale said: ”Nationwide accounted for more than a quarter of total net lending to the UK housing market.”
However, thanks to changes to the bank levy, and the addition of an introduction of a tax surcharge on banks, could hit Nationwide’s lending over five years. What are these changes? Well, George Osborne announced that the annual levy that banks pay on their balance sheets is going to be reduced from 0.21% to 0.1%, with the introduction of an 8% surcharge on banks’ profits.
Beale reckons that this stance will be useful to international banks in the UK, but detrimental to building societies.
“This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy, and the housing market in particular,” he said.
The Association of Convenience Stores (ACS) are asking the government to exempt ATMs from business rates, which cost shops up to £15,000 per machine. And now, some shops are being asked to cough up for one off bills which are running into tens of thousands, because charges have been backdated to 2010 by the Valuation Office Agency (VOA).
The ACS, who rep independent traders, said: “We believe ATMs are a high street enabler providing shared benefits to a range of traders, allowing consumers to access their cash and spend it within their local communities.”
So what to the VOA have to say about this? A spokesperson says: ”We are currently reviewing ATM sites to ensure all sites that should be assessed are correctly rated. This treats all businesses equally, and ensures they pay their fair share of the overall business rates bill.”
“We will continue to consult with the machine operators who will be affected by this exercise.”
The scandal of banks diddling the foreign exchange rate is a thing that just won’t go away, and the nine major banks that have been accused of doing it have agreed to pay $2bn (that’s £1.28bn to you) to investors in settlements, according to a law firm that are involved in the case.
Plaintiffs have “reached settlements totaling more than $2bn with Bank of America, Barclays, BNP Paribas, Citi, Goldman Sachs, HSBC, JPMorgan, RBS and UBS,” say the Hausfeld firm in a statement. They represent the investors.
While there’s no official word on how that money will be split up, rumour has it that Barclays will have to pay $375m, HSBC $285m, BNP Paribas around $100m, and Goldman Sachs about $130m. They’ve probably got that money as loose change in their old jackets.
This follows other banks who have already agreed to make payments, with JPMorgan Chase coughing up $99.5m, the Bank of America paying $180m, Citigroup $394m and Swiss UBS at $135m.
Barclays, JPMorgan Chase, Citigroup and RBS all pleaded guilty to US Justice Department relating to charges of conspiring to manipulate the massive currency market.
Thomson’s parent company, the TUI group, have stated that their profits have dropped by £7m in the three months to the end of June, thanks to the Tunisia terrorist attack which saw 38 victims after a gunman opened fire on tourists.
Group chief executives Friedrich Joussen and Peter Long said: “This quarter was marked by the tragic events in Tunisia at the end of June. Supporting our customers, their families and our colleagues through this sad time remains our highest priority.”
Tunisia is a popular destination for those booking through Thomson, but all holidays to the country have been stopped in the wake of the tragedy.
The company are adamant that holidays will happen again in Tunisia, just as soon as they get the green light from the Foreign Office. As well as Britain, Belgium and the Netherlands are advising against all unnecessary travel to Tunisia.
The group also pointed out that the situation in Greece has also hampered their profitability.
TUI remain optimistic: “In spite of the tragic events in Tunisia and economic uncertainty in Greece, we have delivered strong underlying EBITA [earnings] growth in the quarter and summer 2015 trading remains robust.”
If you have concerns about Tunisia, here are some useful numbers for you.
The regulators decided that hitting the Co-op with a load of financial penalties would undermine the bank’s ability to recover. Basically, they don’t want to kick them while they’re down, which seems uncharacteristically charitable of them.
Dennis Holt, chairman of the Co-op Bank, said: “On behalf of the bank, I would like to apologise again to customers for these past failings and reassure them that the bank is a significantly stronger organisation today under the leadership of the current senior management team.”
That said, regulators haven’t finished with the bank, confirming that they’re continuing with enforcement investigations, including looking into the former chairman Paul Flowers. The inquiries are targeting the period dating back to 2008, when the Co-op’s banking wing and Britannia Building Society got together to merge into a “super-mutual”.
Sadly, the toxic loans on the combined balance sheet weren’t addressed and everything went tits up, which saw a £1.5bn black hole of money emerging. And you’ll remember that Flowers had some ‘personal issues’ too, which were emblematic of the bank’s problems.
The Treasury is promising to hold their own inquiry into this onmishambles that is Co-op Bank, but they won’t start until the PRA and FCA have finished with their investigations.
There’s going to be a bit of chatter about bank rates today. The Bank of England’s interest rate has been down at 0.5% since 2009, and it looks like it’ll soon go up. As a result, so might your mortgage.
In addition to the interest rate, there’s a whole bunch of other factors that will mean your mortgage will increase. Bank funding costs are going to play a role, as ever, as lenders weigh up how much interest they’re going to charge on new fixed-rate mortgages and floating-rate mortgages.
Of course, in finance, when a butterfly flaps its wings in the US or Chinese stock markets, a hurricane can hit Britain. The Bank of England’s economists recent found that American swap rates were responsible for a number of movements in UK mortgage rates.
And while UK mortgage rates might be at a low level, the Bank of England have said: “Banks’ funding costs, an important influence on mortgage rates, had risen since May and it was possible that mortgage rates would shortly begin to rise”.
With the US Federal Reserve expected to raise its interest rates before we do in the UK, you can see what is going to happen. Even though the interest rate is going to stay at a similar level for the next 6 months, it doesn’t mean other factors won’t put up the price of a mortgage.
The banking bailout in the UK has been a controversial one… and it is about to get more annoying for everyone, as the government have got rid of around 5.4% of its stake in Royal Bank of Scotland for £2.1bn. Nice to have that money back, obviously – but not at a loss of roughly £1bn to taxpayers.
Today’s sale of 333,000 shares at 330p each is well short of the average ‘in-price’ of 502p, which was paid by our blessed government went they originally bailed out RBS. So, after being forced into ‘investing’ into RBS, we’ve all lost £1.72 on every share sold.
Of course, the Chancellor – George Osborne – isn’t going to hear anyone’s complaints, as he’s argued that the Royal Bank of Scotland wasn’t ever bailed out with the idea of making a profit. You see, what he thought he’d mentioned was that it was only bailed out to look after the UK’s financial security.
It looks like George is in a rush to offload the RBS stake. Of course, some people are wondering why that is. The Shadow Chancellor Chris Leslie (who he?) thinks that it isn’t impossible to recoup the £45bn investment. He said: ”Why this rush to sell when the share price is so far below that paid at the time of the rescue? RBS had to be bailed out urgently, but it doesn’t have to be sold off at the same speed.”
The government also said that they’d be getting rid of more Lloyds shares this week, to lower their stake in the bank even further.
However, in this instance, the taxpayer stands to make a £1.9bn profit from the Lloyds sell-off. That’s assuming that Osborne would be able to flog the rest of the shares at the current market prices.
This rate sees Sainsbury’s undercutting Nationwide, M&S Bank, Cahoot, and First Direct, which were all the previous best-buys at 3.6%.
There is a caveat of course, but it could well suit some of you. You can borrow a 3.5% rate on loans of up to £19,999 if you agree that you’ll pay back what you owe within two and three years. If it transpires that you need more time to pay, the rate rises to 3.6% for 3-5 years to repay. If you need 5-7 years to pay back your loan, then that’ll come in a 5.6%.
There’s no penalties for those of you who would like to make overpayments, but if you’re going to clear what you owe early, you will be charged up to 58 days interest on the final balance.
Now, this is for those of you who already have a Nectar card. If you don’t have one, Sainsbury’s bank are charging a slightly higher rate of 3.6% for amounts between £7,500 and £15,000 (taken out over 1-5 years). If you don’t have a loyalty card, and are repaying over 5 or more years, then you get a rate of 5.6%.
So if you’re serious about getting a Sainsbury’s loan, then it would be wise to get yourself a Nectar card, which you can do online for free. Make sure you use your loyalty card in store or online within six months of applying for the loan, or you won’t get the discount.
Check out the Sainsbury’s Bank loan situation here.