green houses 300x225 Low and middle income Londoners need to earn £50k to get in on shared ownership scheme?Remember the good old days when things other than creosote did exactly what it said on the tin? The latest Mayor of London scheme to help the little people on to the property ladder is under fire from critics who claim that the very people the scheme has been set up to benefit are being excluding from taking part.

The London scheme is run by First Steps and offers those unable to afford a whole property in the capital (which is pretty much everyone who isn’t a Russian oligarch) the chance to buy a slice of a property, to (potentially) reduce their monthly outgoings and to benefit from any increase in property values. However, in practice, it seems that many of the properties are still dangling just out of reach of the average nurse, teacher or policeman the scheme was designed to look out for.

Take the case of Joanne Pearson. The 36 year old nurse profiled in the Guardian lives Southwark, south London, and earns around £26,500. She had hoped to buy a 25% share in a one-bed flat but has been disappointed by the First Steps offering: “Many of the one-bedroom flats advertised on the website require an income of above £50,000 a year, while for others you must earn above £33,000,” she says. “I wonder how many nurses, teachers or other workers on low or modest incomes actually earn £50,000?” Under current NHS bandings nurses earn between £21,388 and £34,530, although there is a London weighting added as appropriate.

Ms Pearson also claims that the mortgage payments would be cheaper than the £1,000 rent she is currently paying. She is not a happy bunny. “As a person who provides an essential public service, I feel disheartened and let down that I’m locked out of this scheme.” A report by Green party member of the London Assembly, Darren Johnson, found that the average minimum income required (where this was stated by housing associations) through First Steps was £38,452.

A spokesperson for the Mayor of London said that, of the 50,000 low and middle-income Londoners buying their own home through First Steps, “some” are on salaries of around £25,000 a year, with the average household income of those accessing the scheme at £33,000. However, with “affordable” properties on the site reaching as much as £712,000 (Blandford Street, Marylebone), and requiring an income of £128,000, perhaps the mayor’s office is just a little out of touch…

Wonga ad banned for glossing over 5,853% APR

April 9th, 2014 No Comments By Lucy Sweet

Wonga is in hot water again, this time for an ad that claimed that their flabberghastingly high APR of 5853% wasn’t really that important and you should just forget about it – la la la.

wonga ladies 300x282 Wonga ad banned for glossing over 5,853% APR

The rubbery puppets of doom are shown ‘simplifying’ the terms of Wonga loans, thus: ‘Right, we’re going to explain the costs of a Wonga short-term loan. Some people think they will pay thousands of per cent of interest. They won’t of course – that’s just the way annual rates are calculated. Say you borrowed £150 for 18 days, it would cost you £33.49.’

BUT, 31 people complained to the ASA, saying that they were misleading customers with a confusing message which encouraged them to disregard their insane interest rates.

Wonga said that they were only trying to give a transparent example of a typical Wonga loan but they regretted confusing customers.

However, the ASA said they understood that APR did not apply for the time period for a short term loan, but banned it anyway, because it irresponsibly encouraged people to take out loans without considering the APR. They said:

‘We considered that, though it attempted to clarify the costs associated with a Wonga loan, the ad created confusion as to the rates that would apply. On that basis, we concluded that the ad was misleading.’

Maybe if Wonga are looking for an example of a representative loan, they could show the puppets struggling to make ends meet and turning to rubbery prostitution to pay it back?

Sainsbury’s on the slide

April 9th, 2014 7 Comments By Ian Wade

sainsburys local 300x200 Sainsburys on the slideSainsbury’s share of the UK grocery market has fallen by the largest amount in a decade.

The supermarket had long been the best performing of the big four supermarkets, but stiff competition from the likes of Lidl and Aldi, and shoppers no longer sticking to one brand of supermarket due to better bargains elsewhere.

This drop is the latest in a long line of supermarket woes, with the main four suffering cuts and lower profits.

Analysts at Deutsche Bank said: “These numbers will raise questions as to whether Sainsbury’s is participating sufficiently in recent price investments to maintain its competitiveness.”

Tesco’s sales also fell 3%, and saw its market share reduced to 28.6% after a tricky period which has led to an overhaul in its price promise and marketing spend.

In the 12 weeks to March 30, Morrisons sales also fell 3.8%. The best performer out of the “big four” was Asda, whose sales still fell 0.5%. Meanwhile, Aldi and Lidl grew at a record pace in the last 12 weeks, and now have an overall combined share of 8%.

If you’ve been in any of these shops lately, not one bit of it will surprise you. The big guns really need to look at the way they do business.

money 300x168 FCA say financial advisors are pulling a fast oneA financial advisor’s job, is to advise you about your money, and which ways are best to maximise it, right? Well, looks like this might not be the case as it transpires that customers may well be getting misled by around three-quarters of financial advisors who are failing to give the necessary information about the cost of advice.

This is according to the regulator, the Financial Conduct Authority (FCA), who note that new rules say that advisers must quote fees up-front and explain charges to customers.

These reforms are known as the Retail Distribution Review, which also state that advisors and sales staff aren’t allowed to be paid commission by the firms whose policies they were flogging and that businesses must be honest about whether they’re really independent or restricted to only selling policies from certain financial groups.

The investigation shows that 58% of companies failed to give clear information on the cost of advice, with 50% of advisors not giving clear confirmation of how much advice would cost. Meanwhile, 58% did not explain extra details about charges and 31% of firms sold a restricted range of products without telling the customer. 34% of businesses weren’t clear with their explanation about the service they offered for a fee and customers’ right to cancel.

Private banks and wealth managers were the worst according to the FCA.

“While we have seen a lot of positive progress and willingness by advisors to adapt to the new environment, I am disappointed with the results of our latest review,” said Clive Adamson, director of supervision at the FCA. ”These results are a wake-up call and we expect the industry to respond.”

Credit Card Debt Collectors 300x200 FCA attack credit cards for being plastic payday loansThe Financial Conduct Authority is going after the UK credit card market, concerned that some providers are allowing customers who are already in debt to get in further financial trouble.

The FCA said that they’re going to be paying special attention to the ways providers do their business with customers who are borrowing money to survive and will investigate cards issued with low credit limits of a couple of hundred pounds and high interest rates.

Speaking at a credit summit the FCA chief executive Martin Wheatley said: “The key priority here has to be those in the most vulnerable circumstances. Many of whom are struggling to manage their credit card commitments, as well as other bills.”

“Is there sufficient debate at the margins of the industry, particularly where we see cards issued with low credit limits of a couple of hundred pounds and high APRs – payday loans with plastic, if you will?”

Apparently, the investigation won’t follow a specific agenda, but said a vital question to ask the industry is: ‘Why are card issuers providing the means, in some cases, for the most indebted consumers to escalate their way into further debt?’

With research showing that nearly a third of Britons having unsecured borrowing, and many of those paying for day-to-day costs with their cards, there needs to be some conversations in a bid to break people’s habits and ensure that finance companies aren’t exploiting the situation.

Richard Koch, head of policy at the UK Cards Association, said: ‘We have been working with the FCA as the new regulator comes into existence, and it’s no surprise that officials want to explore how a market as important to consumers as this one is working. The industry has a long-standing commitment to responsible lending and transparency, with a number of recent changes on credit limits and repricing of debt, improved transparency, and forbearance for those who find themselves missing repayments.”

“That said, we are not complacent about the small number of customers who find that changed circumstances, such as illness or redundancy, mean they need more support with managing their debts, and we welcome all conversations about how we can ensure we are doing everything possible to support these cardholders.”

State pensioners can now top-up

April 3rd, 2014 No Comments By Thewlis

pensions 300x187 State pensioners can now top upLast December, the Chancellor announced a new scheme to allow those people who will not benefit from the increased flat rate amount of state pension, set at around £155 a week, to pay some cash now, to get an improved pension. A new microsite has now been launched at www.gov.uk/state-pension-topup which includes a calculator to see just how much an extra £1 of state pension will cost you.

Under the scheme, eligible pensioners already in receipt of a state pension, or those retiring within two years can purchase up to an extra £25 a week of extra state pension, which would life the full “basic” state pension of £110.15 a week to £135.15 a week. Although this is still short of the new flat-rate amount. All amounts will increase with inflation.

The cost of the extra cash will vary depending on a person’s age. For example, for a 65-year-old, each additional £1 a week will cost £890, the Department for Work & Pensions said. The maximum £25 addition will cost £22,250.

However, there will only be a short window for pensioners to take advantage of the offer, running for 18 months from October 2015. The Government will allow the top-ups to be inherited by a surviving spouse or civil partner, who will be entitled to at least a 50% survivor pension.

But is it worth it? Ignoring the spouse benefit for a moment, the figures suggest you would have to live for just over 17 years from the date of retirement (or top-up if later) in order to get your money back in absolute terms. Given rising life expectancies, making it to 82 is perhaps not as high a mountain as it might previously have been, but there’s still no guarantee.

However, figures from broker Hargreaves Lansdown suggest that the Government might actually be offering a good deal. The cost is generous compared with the rates on equivalent annuities, where an inflation-linked £52 a year would cost nearly £1,500.

Additionally, state pension income is taxable (although someone receiving only the state pension would not have income exceeding the personal allowance), so if pensioners do have other income that meant any top-up would be taxable, they might consider investing the cash in an ISA instead, where amounts can be drawn free of tax. Although you might outlive your ISA pot.

People who think they might be interested can register their interest at gov.uk/state-pension-topup or call 0845 600 4270 or 0345 600 4270.

savings 300x235 ISAs  a practical guide to what happens between now and the 1 July NISAsNew ISAs (or NISAs, as they are ‘nicer’ than the old ones) come into effect on 1 July 2014. The delay between last month’s announcement and introduction will allow providers to get their systems and processes in order before the new rules kick in, but where does that leave you if you have an ISA wedge burning a hole in your pocket, ready for 6 April when the new tax year starts?

So how much can I pay into my ISA on 6 April 2014?

On 6 April, the old rules will still apply. This means the maximum amount that can be contributed to a stocks and shares ISA is £11,880 and £5,940 into a cash ISA. However, on 1 July the limit will increase to £15,000 for both stock and cash ISAs, so you can then whack  in the extra £3,120/£9,060 on that date.

But I pay into my ISA monthly?

A few years ago the ISA limit was adjusted so it always fit roundly into a monthly figure, and from 6 April the monthly figure works out at £990. You could contribute £990 for three months and then pay £1,366 to reach the £15,000 contribution limit, or you could just start paying the new monthly figure of £1,250 from this month, as you would not exceed the old annual limit before the limit was increased in July.

Am I still limited to one provider?

You are still limited to one provider per tax year, for each of a cash and stocks ISA, but as before you can transfer previous ISA balances to another provider- something that has been particularly useful for cash ISA holders who found  themselves lumped with a rubbish rate of interest. Note that you can now transfer both current and old stock ISA balances into new cash NISAs- if you have found the stock market too volatile for your delicate risk/reward balance for example.

As always, remember that you must always complete the required ISA transfer forms when moving ISA cash- as otherwise it will count as a new contribution.

Anything else?

Many of the stocks and shares ISA supermarkets have announced new charges following the changes to platform charges and commission – even if your previous provider has been good value it may be worth looking at alternatives to make sure it is still the best one for your circumstances. There are some comparisons out there- like this one- and the best choice will depend on how much you have to invest, your choice of investment, how many trades you are likely to make and how much pretty apps mean to you.

stressed doctor Proposed new £10 per month charge for the NHS...Some people say the NHS is what makes Britain great, and the principle of free healthcare for all is one cherished by many. Now, however, a Labour peer is calling for NHS treatment to be limited to those contributing a monthly fee in order to become NHS members.

In a report published by think-tank Reform, Lord Warner, who was in charge of health service reform under the Blair government, is calling for a combination of membership fees and ringfenced taxes to protect the NHS and guard it against collapse under the weight of chronic illnesses.

Currently NHS spending is protected in Governmental budgets, but Lord Warner argues that this “risks seriously damaging other public services” as a consequence.

In addition to earmarking sin taxes as going directly to the NHS and increasing inheritance tax, the report also suggests that “some form of social care tax” could be introduced in middle age. Whenever that is. Lord Warner cites the case of  Japan, which introduced a such a compulsory levy in 2000, which “helped considerably to fund the care costs of their ageing population”.

An NHS “membership fee”, which would be gathered along with the council tax, of around £10 per month should also become compulsory and would fund preventative care but would also entitle each “member” of working age to a health “MOT”.  Groups entitled to free prescriptions would be exempted.

A spokesman for the Department of Health said: “The founding principles of the NHS make it universally free at point of use and we are clear that it will continue to be so. This government doesn’t support the introduction of membership fees or anything like them.

“But we know that with an ageing population there’s more pressure on the NHS, which is why we need changes to services that focus far more on health prevention out of hospitals.”

So is it just a matter of time until we all have to dig into our pockets? Or is there a better alternative?

Banking at the counter is a thing of the past

March 31st, 2014 2 Comments By Lucy Sweet

Going into your local branch and chatting away the morning with a nice lady called Linda is going the way of housekeeping money and writing cheques made out to ‘Cash’. Increasingly we’re choosing to do our banking on our phones, rather than experience face to face service.

bank 300x203 Banking at the counter is a thing of the past

The British Bankers Association say the amount of mobile transactions has doubled in a year. Now there are 1800 transactions a minute through banking apps on smartphones, with 12.4 million of us downloading banking apps to check balances and do banking on the move.

The BBA called the shift to mobile banking ‘mind boggling’. Its CEO Anthony Browne said:

‘Several senior bankers I have spoken to say they are astonished by the strength of take-up of this technology, which has already led to a noticeable dip in customers contacting call centres. If you grew up in the Seventies or before you have every right to be astonished by how much change there has already been.’

(Ooh, it used to be all fields and branch transactions when I were a lad. And aren’t the policeman looking younger these days? Do you remember Spangles?)

So will the popularity of mobile banking apps mean the death of the high street bank? Well, although Browne says there’s been a ‘seismic decline’ in branch transactions, he thinks there’s still a place for the traditional counter. He said they will become places for ‘big moments’, such as sorting out a mortgage or getting a credit card.

But with big banks like Barclays doing away with counter staff left right and centre, it might only be a matter of time before Linda at your local branch is replaced by a hologram.

Do you know how much you’re worth?

March 28th, 2014 No Comments By Lucy Sweet

How much money do you think you’re worth? 25p and a piece of fluff? Well, according to a survey by solicitors Irwin Mitchell, the average Briton is worth quite a healthy £150,000. But half of us have no idea about the sum total of our assets, with 42% saying that they’re probably worth less than the price of a packet of Wotsits.
last will and testament Do you know how much you’re worth?

But. When you add up pension pots, mortgage equity, current account balances, cars and home contents, the figure comes to £147,134. That’s assuming that on average we have a £30,000 pension, £75,000 mortgage equity, £1,348.16 in our current accounts (HAHAHAHA), £5608.98 in a savings account (LOLZ) and £3,712.65 in an ISA. (You are JOKING.) When you add on the average worth of your car (£6706.55) and your home contents (£15,077.90), then you’re worth a pretty penny.

However, out of the 2000 people surveyed, six in ten didn’t even have a will, while a third had no plans to make one.

Still, although we’re gung ho about our personal assets, someone out there must be doing very well indeed to make those the average figures. Because when we die, surely quite a few people will be leaving behind overdrafts, credit card bills, Wonga loans, a 1990 Mazda and a rented hovel with black mould on the ceiling…

Do you have an overdraft with Barclays? Well, watch out for their new charges, introduced in June, which could see some customers paying up to £93 a month just for using their authorised overdrafts.

barclays bank limited 300x300 Dont go in the red with Barclays or you might be shafted

Under Barclays new charges – which will replace interest – if you spend most of the month in your overdraft but don’t exceed your limit, you could be a lot worse off than if you regularly go over your overdraft limit. Because that makes sense, eh?

Barclays say that 70% of its customers will benefit from the changes, but an estimated 5.5million customers will be worse off. If you have an overdraft of over £1000 which you’re regularly in, (because you’re SKINT and Barclays happily gave you an overdraft in the first place), you could find yourself penalised with charges of between 75p and £3 a day.

At the moment if you’re overdrawn by £1200 during 10 days a month you pay £76.14 over a year. But with the new charges, that will go up to a whopping £180.

Barclays say they’re giving the customer what they want – more transparency on charges. They say that customers prefer a fixed fee rather than complicated interest charges. But many people will be worse off. And although they’re being nice and upfront about it, and introducing text alerts to keep you out of the red, if you’re already IN the red with no chance of getting out, it seems that it’s a case of the hand that once giveth is now taking away-eth, leaving us in the bleedin’ lurch.

So if you’re a Barclays customer, please note- other banks are available.

Santander has been fined over 12 million by the Financial Conduct Authority for giving customers bad advice on investments, which is the largest fine ever given for this particular kind of incompetence.

santander g Santander gets a £12.4m slap on the wrist from the FCA

The FCA said that Santander had ‘let customers down badly’ by giving customers duff advice. It claimed that the bank had not considered the risks customers were prepared to take with their investments, and gave them unclear advice.

They also rapped them for failing to train their new advisers properly, and not making the necessary checks to ensure they gave the correct advice.

Santander stopped giving in branch investment advice in 2012, and when confronted, the bank tried to make it sound like it all happened hundreds of years ago, under the reign of Henry V.

‘We regret that elements of Santander UK’s historic branch-based investment sales processes did not meet the required regulatory standards and apologise to any customers who have concerns.’ A spokesman said.

Tracy McDermott from the FCA countered: ‘Customers trusted Santander to help them manage their money wisely, but it failed to live up to that responsibility. If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need.’

NAUGHTY SANTANDER.

dogs cash machine As Microsoft Windows XP ends support, ATMs could be at riskMicrosoft will be ending their support for Windows XP next month, but warned that a number of ATMs are still using the OS and they’ll need upgrading or become vulnerable to attacks.

Even though XP is over a decade old, the operating system powers 95% of the world’s cash machines and even though Microsoft has been warning everyone for years about the support deadline, the ATM industry has been very slow to react.

It is concerning to think that ATMs will be running out-dated, unsupported systems.

Some quarters think that there’s going to be a migration over to LINUX. David Tente of the ATM Industry Association (ATMIA) says: ”There is some heartburn in the industry,” over Microsoft’s control over when and how software is updated and that ”some are looking at the possibility of using a non-Microsoft operating system to synch up their hardware and software upgrades.”

“This isn’t a Y2K thing, where we’re expecting the financial system to shut down. But it’s fairly serious,” said Kurtis Johnson, an ATM expert.

If banks don’t upgrade their ATMs customers could well be at risk as hackers search for new flaws which will end up going unnoticed and not addressed by the banks and Microsoft.

If you’re feeling a bit jumpy about all this, then call your bank and see if they’ve updated their system and keep an eye on your bank statement just in case. As we’ve got little choice other than to use the ATMs, we can only hope British banks have taken all this seriously so we don’t end up stung.

Downloads to cost more

March 24th, 2014 4 Comments By Ian Wade

george osborne 300x300 Downloads to cost moreThe 99p-a-tune download may be at an end.

The problem-haired joybringer George Osborne is bringing in new laws making sure that internet downloads are taxed in the country they are purchased.

This means, that Apple and Amazon will have to charge the UK’s 20% rate of VAT. The current situation they are allowed to sell digital downloads via places like Luxembourg, where the tax rate is as low as 3%.

This will affect books, music and apps and comes in from January 1 2015.

His budget document said:

“As announced at budget 2013, the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.”

2013 saw singles ales at their highest for years, so after 2015 consumers are going to go the extra to obtain their music. Or maybe they’ll not bother and riot instead.

Students are choosing books over booze?

March 20th, 2014 No Comments By Thewlis

beer 300x2251 Students are choosing books over booze?Students eh? All they do all day is sleep in, watch Teletubbies* and Countdown and go out drinking. Right? Apparently not. A new survey suggests that today’s students are eschewing booze in an effort to save money and to successfully juggle their studies and work commitments.

The Sodexo survey included 140 UK universities and found that 33% of respondents say they have cut out alcohol completely owing to money worries, up from 26% three years ago. A full 40% of students also say they only drink once a week, with 76% spending £20 or less each week on drinking.

The survey suggests that “added pressures have contributed to the observed trend over the past six years of students focusing more firmly than ever on their studies, rather than enjoying active social lives.”

However, 10% are still managing to spend more than five hours socialising every day, though – but this is down from 33% in 2006.

A big source of stress for students is apparently balancing academic, social and work commitments, with 69% identifying this as a major issue – up from 41% in 2004.

Peter Taylor, Strategic Development Director at Sodexo, says: “With greater challenges facing the students of tomorrow, universities need to be aware that living as a student, for three or more years, is a bigger decision to undertake than it was in the past.

“Not only must universities work harder to attract students, they must also accommodate dramatic changes in lifestyle and provide the best environment possible, to prepare students for the challenges they may face after they graduate.” Like needing more than £20 for a night out, perhaps…

* showing my age