The Autumn Statement- what might affect you?

November 25th, 2015 No Comments By Thewlis

autumn 300x200 The Autumn Statement  what might affect you?When we had a Labour government, the Autumn Statement was an exciting mini-Budget event, with surprise announcements and new legislation. George always promised his Statements would not be any such thing and would merely update the country on his fiscal and economic progress and that’s largely what he has done. No shock announcements (unless the scrapping of the widely unpopular tax credit cuts comes as a surprise to you) but a few little tweaks and adjustments to existing policies to (in most cases) offer a reasonably warming Statement as we head into winter…

So what might you need to know from the Chancellor’s musings earlier today?

No more whiplash cash-for-crash

It seems the government has looked upon the practice of earning a living claiming whiplash quite sternly. Currently those complaining of a non-existent sore neck (at the less horrible end) or those filling cars with non-existent relatives or worse, causing a crash can claim for personal injury from someone’s insurance company and get a cash payout. To try and make it at least a little bit harder for people to claim compensation for exaggerated or fraudulent whiplash claims, the government is ending the right to cash compensation.

However, there is still redress for those genuinely imjured, as instead you will be able to take your case to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000.

This is, obviously, going to be an inconvenience, and possibly mean that those genuinely affected by whiplash (which really does hurt) don’t get a payout along with the fraudsters, but on the up side the government predict that annual insurance costs for drivers could fall by between £40 to £50 a year. Or they would, if insurance companies were to pass on their cost savings to customers…

More money back for delayed trains and flexible tickets

We’ve told you about how to claim for delayed trains before, but until this summer’s announcement that you will be able to get compo in cash, it was strictly a vouchers-only experience. Now, the Chancellor has announced that in future, commuters will also soon be able to claim compensation from their rail tickets if their train is more than just 15 minutes late, down from an interminable and cold hour-long wait or more.

Also, new flexible season tickets, which would permit part-time season tickets for example, will soon be available on certain lines across the country, including C2C between London and Essex, and the Great Northern Route on Thameslink.


From April 2016, the basic state pension will rise to £119.30 per week, an increase of £3.35. This will be “the highest real terms increase to the state pension for 15 years” and the government are hoping you won’t notice all the current articles about people missing out over the new pension changes…

Property changes

From 1 April 2016 people purchasing additional properties in which they don’t actually need to love, such as buy to let properties and second/holiday homes will pay an extra 3% in stamp duty. That’s 3% on top of current rates, so if you own a couple of mansions, you will be paying quite a lot of stamp duty from now on.

Money raised from second home stamp duty will be used to help those struggling to buy their first home- like the new Help to Buy equity loan scheme for London which will give buyers 40% of the home value from early 2016, as opposed to 20%, as the current scheme offers.

Apprentice Tax?

It is now illegal for young people to be NEETs (Not in Education, Employment or Training) and the Chancellor has previously announced that three million new apprenticeships will be created by 2020, paid for by charging large employers.

The new apprenticeship levy (tax) will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill, but only where the apprentice tax would come to more than £15,000. This means that it is only really ginormous employers who will have to factor this extra cost, along with the new living wage rates of course, into their wage bill, as it will only be employers whose wage bills are over £3 million; less than 2% of UK employers will therefore have to cough up.

Tampon Tax- a happy compromise?

Last but definitely not least, the Chancellor has decided to appease the little lady, by wading into the tampon tax argument. Around £15 million in VAT is collected each year on sanitary products, just on sanitary products at 5% VAT, and, as we explained to you last month, the the government cannot legally remove all VAT on sanitary products. So instead, they have decided to donate this controversial VAT, or its annual equivalent into a fund that will be donated to women’s charities over this parliament, or until the UK can remove the tax from sanitary products under EU rules. Nice job.

green houses 300x225 Are you paying sneaky home insurance admin fees?Home insurance is one of those necessary evil type things, but sometimes getting a quote isn’t all the information you need. Our friends over at Which!!! have undertaken an investigative foray into the sneaky admin charges some insurers levy on your policy after you’ve signed on the dotted line.

Which!!! analysed the sneaky fees of 36 major insurers and found that half charge an ‘adjustment fee’ for making changes to your policy, such as updating your address. The smallest of these fees (where charged) was £8.48 with Aviva and went up to £25 with Castle Cover and Rias.

Which!!! gave each insurer marks out of 100, and two companies actually got full marks- both Barclays and Lloyds Banking Group don’t charge any fees and also pay generous switching fees – an amount a provider pays towards any charges you face for switching to it before your current policy ends- and neither levy an interest charge for paying by monthly instalments.

Endsleigh came bottom with a score of 43%, and Admiral followed closely with 44%. Both these insurers charge hefty fees- Endsleigh charges 39.7& APR for monthly payments and £20 for practically everything else- the highest fee for a duplicate document. Admiral is one of only four insurers who charge a fee if you pay for your insurance by credit card; consumer rights regulations state that these fees must be no more than it costs the company to process that payment type, but at a flat rate of £5.95, Which!!! think this is unlikely to be reflective of Admiral’s costs.

Which!!! also found it’s not always easy to check what fees you might be charged in advance. Most insurers include their fees in the policy documents on their websites or in a FAQs section, but Bradford & Bingley, Endsleigh, Nationwide, the Post Office and Prudential all required a full quote before setting out their fees. Which seems a little more than sneaky to us.

The top and bottom ten insurers, as rated by Which!!! are as follows:

Top Ten

1= Barclays

1= Lloyds

3   Age UK

4   RBS/Natwest

5   Santander

6   M&S Bank

7   NFU Mutual

8   HSBC

9   Nationwide

10 Insure 4 Retirement


Bottom Ten

1   Endsleigh

2   Admiral

3   Allianz

4   LV

5   Bradford and Bingley

6   Co-operative Insurance

7   Budget

8   The AA

9   Post Office Insurance

10 Esure/Sheila’s Wheels

Millions can get free access to their credit score

November 20th, 2015 1 Comment By Mof Gimmers

barclaycard bespoke 300x200 Millions can get free access to their credit scoreMillions of customers at Barclaycard and Tesco Bank are going to be given access to their credit report for free!

Barclaycard customers will be able to look at their Experian credit score online, through the Barclaycard mobile app, which will be a thing early next year. You’ll also be able to get hints and tips at how to fix your credit score, and the access will be unrestricted.

Tesco Bank, meanwhile, are teaming up with Noddle, who are part of Callcredit, as they look to give customers access to their score. Existing customers can check it from today, while new customers will have to wait until December 11th.

Things like missing bill payments, being in your overdraft frequently, and applying for a lot of credit at the same time are among the things that can harm your credit score.

The ability to check your score means you can decide whether or not to apply for something, as it’ll give you an indication of how likely or not you are to be successful with an application. With two banking services jumping in on this, it looks likely that the other financial institutions will join in too.

Justin Basini, co-founder and CEO of ClearScore, said: “The fact that some lenders are giving customer access to their credit scores for free is a step in the right direction, but today’s announcements will only affect a relatively small group. Credit reports and scores are like a person’s financial CV and impact their lives in a myriad of ways. They help determine whether somebody gets the best deals on financial products, whether they can buy or rent property, and can affect their ability to get a mobile phone contract or even a job.”

“It’s encouraging that others are following our lead to give people access to their credit information.”

HBOS report points to formal investigation

November 19th, 2015 No Comments By Mof Gimmers

1312161 hbos300 HBOS report points to formal investigationThe report about the complete mess at HBOS has indeed, shoved a load of blame at the feet of the bank’s former board, calling for formal investigations. In short, the investigation has called for another investigation.

The huge report (400 thrilling pages) was published, looking at banning orders against former chairman Lord Stevenson, and former chief executives Andy Hornby and James Crosby. Other people who used to be at HBOS like Mike Ellis, current chairman of Skipton building society, Colin Matthew from the international division, and Lindsay Mackay who ran the treasury, have also been named.

“Ultimately responsibility for the failure of HBOS rests with its board,” said the report. It also points a finger at the former heads of the now-defunct Financial Services Authority. The boardroom at HBOS has been described as lacking in banking nous, and creating a culture that wanted growth at all costs. The FSA meanwhile, have been described as making mistakes, and having an investigation that was too narrow, with particular emphasis on their decision to only investigate one former HBOS executive, Peter Cummings.

Cummings who was banned and fined £500,000 back in 2012, but the report says there were clear indications that others should’ve been looked at.

“It is my view appropriate that the FCA and/or the PRA should now take the opportunity to give proper consideration to the investigation of individuals other than Mr Cummings and thereby do that which their predecessor failed to do. There is plainly a public interest in the FCA and/or the PRA giving proper consideration as to whether to investigate any other former members of HBOS’s senior management in the light of the failure of this systemically important bank,” said Andrew Green QC, who did the FSA review.

The report quotes Clive Adamson, who used to be the FSA director of enforcement, saying that “the people most culpable were let off.”

Green continued: “It appears that because enforcement could not be certain of winning disciplinary proceedings against Mr Hornby, the decision was taken not to investigate him. This was a misguided approach in that placed excessive weight on a view of the prospects of success formed at such an early stage.”

The report says: “The FSA’s approach was too trusting of firms’ management and insufficiently challenging. The FSA executives management, led by chief executive John Tiner, designed (and failed to redesign) this deficient approach to supervision. Further the oversight of the executive by the FSA board, led by the chairman Sir Callum McCarthy, was insufficient.” It added that the regulators at the time were guilty of only employing a “light touch” when it came to controlling the City.

Regulators will now conduct their own review into whether enforcement action on the strength of this report, with decisions being made on that “as early as possible next year”.

Barclays looking at another massive fine

November 18th, 2015 No Comments By Mof Gimmers

barclays bank limited 300x300 Barclays looking at another massive fineBarclays are looking at another huge fine of $100 million (£65.7 million) as they in a settlement with the New York financial regulator, as they try to sort out the mess they made after they rigged foreign exchange markets.

Now, this is from a ‘person familiar with the matter’, so we can’t say this is definitely happening, but Barclays could be making this settlement with the New York Department of Financial Services in the next few weeks.

The bank already agreed to pay $120 million earlier in the month to settle private American litigation case, which had accused Barclays of conspiring rig Libor rates with their rivals. Back in May, they also agreed to fork out $650 million relating to forex trading.

According to Moody’s, the total cost of litigation faced by banks since the 2008 financial crisis is somewhere in the region of $219bn, which is a staggering amount of money. The majority of fines has been slapped over American banks, but now, they’re hitting European banks hard. The whole thing is a complete mess.

David Fanger, Moody’s senior vice-president, said: “At this point, probably, European banks are more vulnerable because US banks have [already] taken more of the provisions.”

Credit Card Debt Collectors 300x200 FCA finds credit card market working well but wants extra protection for minimum repayment borrowersConsumer champions the FCA have been looking into the (fairly sizeable) UK credit card market to make sure it still provides a sterling service to consumers, and  last November it detailed exactly what it was going to do. The regulator has now published interim findings, and even come up with some helpful suggestions on how the market could be improved further.

The interim findings of the FCA’s credit card market study have, perhaps surprisingly, found that the industry is working ‘reasonably well’ for most consumers. However, the FCA still have concerns over the approximately two million people who are in arrears or have defaulted on their card payments and the 1.6 million who are repeatedly making just the minimum repayment each month- but they have actually come up with suggestions on how to help them, too.

The report’s interim findings, in line with its stated aims, came up with the following main issues:

Firms compete strongly for custom on some features, offer a range of products to meet consumers’ needs and there have been new entrants in the market in recent years- the FCA had been worried that barriers to entry may allow established providers to run roughshod over consumers.

Consumers shop around, switch and value the flexibility offered by credit cards, although the interim report does offer additional ways in which comparability on comparison sites could be improved.

Firms were not targeting particular groups of consumers to cross-subsidise other groups- the worry was that vulnerable (and therefore lucrative) customers were targeted in order to subsidise the less profitable borrowing habits of others

However, the interim report does focus on the fact that while consumers in default are unprofitable, meaning firms are active in contacting these consumers, those with persistent levels of debt or who make minimum payments are profitable for the provider, and firms do not routinely intervene to address this behaviour. The FCA wants more done on this, and on preventing ‘over-borrowing’, which often leads to defaulting behaviour.

Their specific recommendations on these points were, in relation to under-repayment, that firms could  disclose  in  each  monthly statement (i) how long it will take the consumer to repay the current balance and/or (ii) the saving in total cost from repaying more than the minimum and/or (iii) the repayment amount needed to pay off the balance within, say, one year. The idea is that being presented with the cold hard facts of your minimum repayment plan will spur you into action.

The FCA also suggest that card providers could offer different pre-set payment options for regular automated payments, for example, reflecting target time to repay. This would help consumers in choosing what is the right amount to pay and counteract the potential ‘anchoring’ effect of making the minimum repayment- i.e. that it’s a safe and easy amount to pay and that you don’t need to think about it any more than that. In fact, in some cases the FCA would rather see the term ‘minimum amount’ disappear altogether, by removing the minimum amount from the range of pre-set payment options but with a default setting to ensure that at least the minimum is repaid. This seems a better alternative than simply increasing the minimum repayment across the board, i.e. forcing consumers to pay a much higher amount than the rules currently require, which has been suggested to the FCA from some quarters.

To try and counteract over-borrowing, theFCA would like to see card companies providing timely information to remind consumers to consider how much they are borrowing as some consumers discovered they had spent more on their credit cards than they expected to when they took out their credit card.

Some credit card firms already provide proactive warnings to consumers using through text alerts, mobile applications, and/or email to remind them how much credit they have used at certain trigger points, e.g. half their credit limit and the FCA will look at these to see how effective they are before considering making them mandatory.

Another bugbear for many is the automatic and eternal inflation of credit limits. While firms currently have to let consumers opt-out of credit limit increases, the FCA is looking at whether forcing increases to be an opt-in Giving consumers more control during the lifetime of the credit card on variations, such as an opt-in would help prevent over-borrowing where the affordability of the monthly repayments may then trigger defaults or missed payments.

Christopher Woolard, director of strategy and competition at the FCA, said: ‘This is a really important market in the UK. Around 60% of adults have at least one credit card, and there is an estimated £61bn in outstanding balances.

‘Our study suggests that the market is working reasonably well for most consumers, with a range of cards on offer. However, for a significant minority who are in persistent levels of debt, the market could potentially work better.’

snapchat 300x300 What you need to know about Snapchats privacy updateAny mention of Snapchat makes elderly people roll their eyes and sigh, mainly because they don’t understand what it is, or they don’t like they idea of people using something that they don’t want to use. For the rest of humanity, there’s been a lot of chatter about the company’s privacy policy.

There were angry rants, as people were under the impression that Snapchat had decided to keep your photos and videos FOREVER and use them as they pleased. Of course, seeing as a load of people have sent photos of their junk through the service, people started getting a bit jumpy.

What is the truth of the matter though?

After a number of respected publications ran these stories, Snapchat felt the need to put a statement out. It was to the point: “The Snaps and Chats you send your friends remain as private today as they were before the update.”

Of course, like they’ve been saying for ages, the company have zero control over those who screengrab your photos and the like, but they’re very clear about that when you sign-up. Basically, if you know someone who is rather screengrabby, don’t send them anything private or, indeed, make sure you’re able to blackmail them back if they’re acting like dicks.

Snapchat’s terms of service say: “When you do that, you retain whatever ownership rights in that content you had to begin with.” In fact, unlike a bunch of other social platforms, Snapchat has a policy of not sharing messages with advertisers or other business partners. However, there is a few things to look out for.

In the terms of service, they do give up some rights. It says: “We need that license when it comes to, for example, Snaps submitted to Live Stories, where we have to be able to show those Stories around the world—and even replay them or syndicate them.” Again, that’s rather clear when you join in with that particular element of the app.

Basically, the recent update was done to change the language of the terms, so they were easier to understand. Seems they were easier to misconstrue too.

Either way, if you want to read Snapchat’s statement, and see what they’re up to, click here.

insurance def 300x199 Quick  buy your insurance now to save yourself £13You’d better get your skates on as changes to Insurance Premium Tax (IPT) announced as a surprise in the summer Budget will add £13 to the cost of running a car and £10 for a pet’s medical cover from Sunday, being the 1st of November.

IPT is currently charged at 6.5% but will soon be going up to 9%, an increase which isn’t actually going to hit insurance companies at all, just us poor consumers, as insurers freely admit the additional cost will be directly passed on to customers.

That’s not great news for those insuring the 7.3 million cars, 4.7 million households and 3 million pets who will be affected, according to ABI estimates.

Although the increase will affect most types of insurance, including medical insurance and motorbike insurance, if you ever need to insure your spacecraft or lifeboat equipment, you can breathe easy as these are actually completely exempt from IPT. Travel insurance and insurance of warranties will also escape an IPT rise- but only because these products are already charged at a premium rate of 20%

So is it worth buying your policy now? Well if you buy a policy effective immediately either today or tomorrow you will escape the charge, but the increase will affect any policy starting from 1 November regardless of when a customer bought the policy, so it’s no use trying to buy in advance. If you don’t need insurance until after 1 November, buying now to beat the rise is unlikely to be cheaper than the additional cost of being insured twice for the overlap period. And even if you do beat the deadline now, you will have to pay the increased amount on your next renewal.

So what does the 2.5% price rise look like in cash terms? The average annual car policy will go up to £392 from £379 today, an increase of £13. It’s worse news for younger drivers though, who could see premiums increase by £42 a year, according to the AA, as they already get stung pay the highest premiums of any age group. Their new average premium will now be £1,319, up from £1,278. In fact, some insurers have lobbied the Treasury to exempt younger drivers from insurance premium tax for at least the first year of their first car insurance policy. A mere drop in the ocean perhaps.

But still, when it’s a tax on a compulsory insurance, it’s pretty much a compulsory tax rise for all car owners, like it or not. “Millions of people across the country face being hit in the pocket by this rise,” said James Dalton of the Association of British Insurers (ABI).

“Whether it’s a legal requirement or you want to buy extra cover, insurance is a financial safety net, not a luxury,” he finished, folding his arms.

RBS third quarter profits fall 99.8%

October 30th, 2015 4 Comments By Mof Gimmers

rbs RBS third quarter profits fall 99.8%The Royal Bank of Scotland pretty much saw all their profits wiped in the third quarter, making a paltry £2 million. That doesn’t even buy a decent League One footballer these days. The bank, now state-owned, was hammered by the cost of misconducts of the past, and the price of restructuring.

Get this – this operating profit (before tax) is 99.8% lower than the £1.1bn reported in the same period last year. That’s a remarkable drop. The main costs saw RBS coughing up £129m in litigation and conduct costs, and £847m for restructuring.

Chief executive Ross McEwan said: “These results show that we are making really good progress against the targets we have set ourselves and we are becoming a much stronger bank.”

Of course, RBS are creating a new (old) bank called Williams & Glyn, with 314 branches in the North West of England, which will be – in part – backed by the Church of England. They vow to uphold “the highest ethical standards”, which hopefully means they won’t be making another mess like they have recently.

RBS is still 73% owned by the taxpayer, after being bailed out during the financial crisis, and have had to concede that past misconduct problems still aren’t resolved, as costs continue to rise and become “substantially greater” than they initially thought.

Tampon Tax. Are you outraged?

October 29th, 2015 5 Comments By Thewlis

VAT 300x199 Tampon Tax. Are you outraged?Politics has never been so exciting. Not only do we have unconstitutional Lords, but we also have erstwhile Payday loans campaigner Stella Creasy delivering heartfelt pleas to ministers comparing sanitary products to jaffa cakes. So what is her beef and is it going to get sorted?

Over 250,000 people signed a petition calling for the Government to stop treating women’s sanitary products as ‘a luxury’ and to scrap the VAT on them. It sounds a reasonable request and yet the Government (this one nor its predecessors) has consistently failed to do anything about it. Why deliberately nark half the electorate? The answer, as ever, is to do with the EU.

The problem is that the UK zero rate of VAT is actually illegal under EU law. We aren’t allowed to have it- member states may only have a main rate of 15-20% ish and a reduced rate of 3-5% ish. However, back in 1972 when we joined our Euro friends, a compromise was reached whereby the UK was allowed to keep the things which had been zero rated as zero rated, but no new items could be so designated. This is why ebooks (never even dreamt of in 1972) are standard rated at 20% yet books are zero rated. And tax cases have found ebooks to be sufficiently different that it would constitute a new item being classed as zero rated which we can’t do. Jaffa cakes won an exciting VAT case (yes, really) by being designated as a cake instead of a biscuit, as cakes are zero rated but chocolate covered biscuits are standard rated.

Currently in the UK, sanitary ware is charged the reduced rate of VAT as that is as low as we can legally do so- to make them standard rated would theoretically require all member states to vote on a resolution on just this issue. However, there may be some hope on the horizon as the European Commission has responded to the current flare up by saying that a review of the VAT rules will take place in 2016. Perhaps they will allow us out of 1972 for a few minutes to reassess what is crucial for VAT charging purposes.

Tax Credits cuts now uncertain

October 27th, 2015 No Comments By Thewlis

fight club soap 300x267 Tax Credits cuts now uncertainThe tax credit argument has been rumbling on for some time, with everyone except MPs it seems having some issue with the plans to cut tax credits put forward by Chancellor George Osborne in his summer budget. In a shock move the House of Lords have now forced George to “lessen” the impact of tax credit cuts on families and to provide some kind of “transitional help” for those affected.

Mr Osborne, during Treasury questions, said: “We will continue to reform tax credits and save the money needed so that Britain lives within its means, while at the same time lessening the impact on families during the transition.”

The savings from his plans totalled £4.4bn, so he’s going to have to find a more palatable way to save the cash when announced revised and softened plans in his Autumn Statement due at the end of November.

How will it affect me?

Under George’s plans, the income threshold for receiving Working Tax Credits and Child Tax Credit was due to be dramatically cut from April next year, along with a sharper rate of reduction in credits once the income threshold was reached.

Plans were criticised as they affected mainly those working but at low rates and the plans were such that low-income workers were facing losing £1,300 a year, which is a considerable sum when you don’t actually earn very much.

While the Chancellor would have time to draft new legislation to accompany his Autumn statement, and get it passed into law (assuming the Lords do not intercede again) ahead of the scheduled April 2016 date for changes, it is likely that anyone affected will see at least a softening of the severity of the changes, together with some kind of transitional help to protect those for whom tax credits are crucial- at least until the new living wage has its intended effect for lower income workers.

Why is it such a big deal?

As part of a gentlemen’s agreement, established as a principle in 1911 during the constitutional gridlock that followed a decision by peers to block the Liberal Party’s “people’s budget”, the Lords do not interfere with financial matters that have been agreed by MPs. The tax credit changes have been approved by the commons three times, owing to the Government’s majority, which is sorely lacking in the House of Lords. However, a gentlemen’s agreement only works if both parties believe the other to be acting in a gentlemanly manner. Here, the government was convinced the Lords would sit quietly and the Lords felt the government had not duly considered all the relevant impacts.

Part of the problem is that the Tax Credit changes were not included in a Finance Bill, which gets debated and allows time and opportunity for tweaking of legislation, but was instead pushed through as an unamendable take-it-or-leave-it statutory instrument. And the Lords left it, with two motions passed which will force the Government to delay the cuts until an assessment of their financial impact is carried out, as well as implementing provisions that will provide financial redress to the millions of tax credit claimants who will be affected when their entitlements are reduced.

Now, of course, the Government is livid with the Lords, claiming that is is unconstitutional for an unelected body to overturn decisions of the elected body of MPs. No comment was made on the constitutionality of electoral promises that are subsequently welched on. In any case, both David Cameron and George Osborne are of the opinion that the Lords need to be “dealt with” for daring to overturn their decision.

But what do you think? Are the delay and adjustments to the cuts a good thing or a bad thing?

savings 300x235 Will you save more in ISAs or out of ISAs in 2016?As October draws to a close and we brace ourselves for the downhill slalom towards Christmas, this might be a good time to think about saving, at least, according to Yorkshire Building Society is it, who have surveyed a load of people to ask them about their savings habits, particularly around cash ISAs.

The point is that, in just over five months’ time, ISAs will be undergoing some changes. Not only will investors now be able to invest in peer-to-peer (P2P) lending- which has increased massively in popularity owing to the shoddy returns available in more traditional savings accounts- but also savers will be allowed to withdraw cash from their ISA and later reinvest it, provided the total net amount contributed does not exceed the annual limit (currently £15,240). This flexibility has been hailed as long overdue and that these important changes will encourage more people to put savings inside an ISA wrapper.

Yorkshire’s research suggests that around 405,000 ISA savers will choose to invest in peer-to-peer lending when it becomes part of the tax-free ISA scheme next year. P2P is a sizeable and growing market with UK investment now totalling about £3.5bn, around 0.2% of the total £1.7tr savings market, according to Yorkshire’s figures. However, despite the large numbers of people investing in the market, research has shown a lack of understanding of P2P lending among consumers. Just 42% claimed to be familiar with the term and, of those, 60% were unaware that they had no protection under the Financial Service Compensation Scheme.

The Yorkshire’s study also revealed that more people are likely to save, with one in five (19%) of those who do not already save in an ISA expected to open one, and almost one in four (23%) of those who already have an ISA planning to increase their deposit amounts. Just one in ten (11%) of those questioned said they definitely will not take advantage of the changes.

Overall, investors expect on average to contribute £95 a month into savings – more than £1,100 a year – with the majority planning to save into cash ISAs and bank and building society saving accounts. However, the research also suggests that some savers are starting to look at putting their money into more traditional types of investment, with 1.1m planning to invest directly into the stock market and 1.5m considering bond investments.

Part of the reason for this change might be the changes to savings income taxation announced last year, that will also take effect from April next year. From the start of the new tax year, savings income of £1,000 for basic rate taxpayers, or £500 for higher rate taxpayers (additional rate taxpayers get nothing), will now be taxed at 0%, changes it has been suggested will make cash ISAs obsolete.

While you can save £15,240 annually into an ISA, on the current best buy easy access savings rate of 1.65% means that you would need a savings pot of over £60,000 before you started paying tax, and most people save way less than the maximum into their ISA- based on the estimated £1,100 a year above, it would take over 50 years to accrue that sum. So why would you save in a cash ISA?

It remains to be seen whether cash ISA rates will be better than standard savings rates, but all interest on savings will now be paid out gross (i.e. before deduction of 20% as is currently the case) so there is no cashflow advantage of investing in an ISA. However, some experts suggest that, particularly if you are looking to pile up a larger sum, that ISA investing still makes sense given that Governments can change income tax rates at the whim of a budget, but it will likely be harder and require transitional provisions to reverse the tax-free status of established nest eggs held in an ISA.

So what do you think? Will the new ISA rules make you more inclined to invest there? Or will you not bother and just use your tax-free savings allowance?

money shop 300x199 The Money Shop owner looking at £15.4m customer payoutThe owner of The Money Shop is going to be refunding £15.4m to 147,000 customers after the lender was investigated by the Financial Conduct Authority (FCA). It is owned by Dollar Financial UK, who as trade as Paydday UK, Payday Express and Ladder Loans.

They are going to reimburse customers who have fallen foul of the way affordability checks were handled, as well as system errors and debt collection mistakes.

The investigation found that many customers were lent more than they could afford to repay, and as a result, the company has agreed to change their lending criteria.

Jonathan Davidson, director of supervision for retail and authorisations at the FCA, said: “The FCA expects all credit providers to carry out proper checks to ensure that borrowers don’t take on more than they can afford to pay back. We are encouraged that Dollar is committed to putting things right for its customers.”

The FCA said 65,000 customers are going to be contacted and will receive a cash refund, while 67,000 would see their current loan balance reduced. 15,000 customers will see both. Those affected will not need to do anything, as the FCA is making Dollar Finance do all the donkey work. The money will start to go out early next year.

Dollar chief executive Stuart Howard said: ”It is proper that we put things right where they have gone wrong and I have gone further than the review in reforming the way our business operates to reflect the company aim of being the most responsible lender in its market place.”

The good thing about living in a democracy, even one run by politicians, is that there is some scope for people power, and burning issues dear to the hearts of the electorate can become pressing issues for parliament. Take the current debate on cutting tax credits- rumour has it that the House of Lords is set to step outside its accepted jurisdiction in order to stand up for the people.

In modern electronic times, getting the Government’s attention has never been so easy- with the online petition system, you just need to find 9,999 like-minded people to get a response from government or 999,999 other people to get a motion tabled in parliament. Easy peasy. And you would think that a petition calling for a reduction in tax rate would be incredibly popular, racing to those 10,000 signatures within hours and 100,000 in a matter of days right? Er no.

A new petition calling for a reduction in tax rate for those earning over £100,000 a year has attracted the whopping sum of 11 signatures. Not 1100 or 11,000, but the petitioner and ten of his friends.

telegraph tax petition 500x312 Petition to save tax for £100k+ earners fall flatThe specific issue William Mahony, the founder of the petition, is disgruntled about is the so-called 62% tax rate applied to those earning between £100,000 and (currently) £121,200. At this point you may be scratching your head in confusion, as you probably understood that there were three rates of income tax, 20% (between £10,600 personal allowance and £42,385), 40% (between £42,385 and £150,000) and 45% (for income over £150,000). None of these rates are 62% so what is the guy talking about?

While he may be ranting, however, he is not raving. The “62%” applies only to that very narrow band of income as it is here that the personal allowance is tapered away, meaning that, proportionately, there is more tax paid in this band. As the rate of taper is £1 reduction in allowance for every £2 of income, that essentially adds 50% of the actual tax rate (40% at those income levels) on to the effective tax rate, making 60%. He then bungs on the 2% Class 1 national insurance cost paid by employees for good measure, to get to 62%.

However the petition, which was started on October 12th, only received 11 supporters, leaving it a long way to go to get to even the first milestone within its six-month validity period.

Mahony, a chartered surveyor from London, said: “I am happy to pay my share within a progressive tax system, but that it’s not right that people in this bracket pay a higher marginal rate than those earning above £150,000 a year.”

But is this true? The constructed 62% rate only applies to £21,200 worth of income, that falling between £100,000 and £121,200; the rest is taxed at 20% or 40% (plus any national insurance, as appropriate, which is also payable in exactly the same amounts by even higher earners). Those earning over £150,000 do not get the benefit of the personal allowance either, so claiming these people are paying more tax is, essentially, a fallacy.

Mahony continued, endearing himself to the majority of the UK electorate:

“Nobody should pay over half of their income in tax. I also think it’s unfortunate that most people will think that earning £100,000 a year is a lot. They would probably be rather surprised at London house prices. We are not rich.”

In case you have any sympathy left, or you just have a morbid curiosity, the petition can be accessed here . Note that since the petition was reported in the Telegraph, it has been deluged with a swathe of new signatories. It might even reach 300 before the end of the month…

Which companies aren’t paying minimum wage?

October 23rd, 2015 No Comments By Mof Gimmers

Accessorize 300x227 Which companies arent paying minimum wage?The government are naming and shaming companies that don’t pay minimum wage, and the biggest name on the list is Monsoon/Accessorize, who clearly make enough profit to do so. According to the powers that be, the fashion retailer owes its 1,438 staff £104,507.83, which is not to be sniffed at.

Also on the list is the Tyne & Wear Riding for the Disabled Association, which should be giving staff £27,151.79 extra.

Nick Boles the Business Minister, says: ”Employers that fail to pay the minimum wage hurt the living standards of the lowest paid and their families. As a one nation government on the side of working people we are determined that everyone who is entitled to the National Minimum Wage receives it.”

“Next April we will introduce a new National Living Wage which will mean a £900-a-year pay rise for someone working full time on the minimum wage and we will enforce this equally robustly.”

So far, the government have doled out £513,000 in penalties to firms that aren’t paying their workers fairly. And the government don’t care how big or small your company is – they’ll name you.

Top 10 minimum wage offenders:

1. Monsoon Accessorize Ltd – didn’t pay £104,507.83 to 1,438 workers
2. Tyne & Wear Riding for the Disabled Association (trading as Washington Riding Centre) didn’t pay £27,151.79 to 6 workers
3. Project Security UK Ltd, Doncaster, failed to pay £23,857.11 to 18 workers
4. Carl Keith Salons Ltd, Prescot, neglected to pay £20,535.03 to 5 staff members
5. Cornwall Glass & Glazing Ltd, trading as Exeter & MacKenzie Glass Centre, who underpaid £14,253.66 to 9 employees
6. Mr Gholam Ghiassi, Chaigley, neglected to pay £14,208.40 to 2 staff
7. Helen Woodend, trading as New Brooms, Burton-in-Kendal, didn’t pay £13,447.01 to 14 employees
8. Stoke College Educational Trust Ltd, trading as Stoke College, Sudbury, neglected to pay £12,094.83 to 7 staff
9. Village Garage Engineers Ltd, trading as Village Garage, Plean, underpaid £9,159.80 to 3 workers
10. Aspect Plumbing & Heating Ltd, trading as Aspect Plumbing & Heating, Liverpool, failed to pay £8,280.45 to 1 person (they’ll be gutted today)