Posts Tagged ‘money’
I know we shouldn’t be encouraging you lot to breed, but if any of you do have kids, you’d better get them into the money saving habit early, or they are destined to be crap with their cash forever.
Current Government-oracle-of-the-month on all things financial, the Money Advice Service has released a new report that “highlights the power which parents and caregivers possess to shape the money habits of their children”. In simple terms, if you haven’t encouraged them save up their pocket money for something by age 7, you may as well give up now.
Authored by behaviour experts at Cambridge University, the report reveals ‘key findings’ about how and when core behaviours and habits are formed in young children, for example:
- by the age of seven most children have grasped how to recognise the value of money and to count it out; and by this age they will also have come to understand that money can be exchanged for goods, as well as what it means to earn money and what income is;
- by the age of seven, most children in the UK are capable of complex functions such as planning ahead, delaying a decision until later and understanding that some choices are irreversible; but children under eight years old have not developed an understanding of the difference between ‘luxuries’ and ‘necessities’.
The report urges parents not to underestimate the effect their own money habits will have on their children. Clearly Bitterwallet readers’ offspring will all have excellent money management skills, while all those bad parents with bad habits will end up with financially idiotic children. Not that they are thrusting their sticky beak in, but the Money Advice Service thinks “simple and playful parenting… is required in order for children to develop good money management skills, which are essential to help them become financially capable adults.” Hard cheese if you are not simple nor playful then.
Caroline Rookes, CEO of the Money Advice Service said, ominously:
“This study really demonstrates the power of parental influences, and illustrates how much of what you learn and absorb when you are young, both consciously and subconsciously, affects the choices you make throughout the rest of your life.
Co-author of the new study, Dr David Whitebread, of Cambridge University was similarly cheery, saying:
“The ‘habits of mind’… including financial ones, are largely determined in the first few years of life,” and adding that “simply imparting information is now recognised as being ineffective in this area.”
As a result, the Money Advice service plans to create products and services for parents to use to help children understand money skills. Look out for their fun ‘financial education’ picture story book coming your way soon.
Despite making £4.2bn in sales, Amazon are getting grants. And it just so happens that those grants amount to more than the amount of UK corporation tax they’re paying, which is bound to anger people as yet another huge company manages to sidestep their tax obligations.
Their corporation tax bill was £2.44m while the company received £2.5m from the Scottish Government to build a new distribution warehouse in glamorous Dunfermline.
“Amazon’s behaviour is not only unfair, it is anti-competitive, putting British businesses that do pay their proper tax at a disadvantage,” said Margaret Hodge, chairman of the Public Accounts Committee (PAC).
“Paying £2.4m in tax on £4.2bn of sales is just a joke. What people will find particularly galling is that the amount Amazon is paying in tax is actually less than they are taking from UK taxpayers’ pockets in the form of government grants.”
Amazon manage this tax-diddle because all sales to British customers are put through a Luxembourg affiliate, Amazon EU Sarl. It is funded by fees it receives from Amazon EU and, as these just cover operating costs, there isn’t much for HMRC to tax. So, they’re not breaking the law.
Apple, Starbucks, Google and Microsoft are also doing similar schemes, which is flummoxing MPs who like moaning about it, but not solving it. Amazon are unrepentant, saying: “Amazon pays all applicable taxes in every jurisdiction that it operates within.”
Don’t worry about Lloyds feelings though as they’ve just announced that they’ve made a pre-tax profit of £2.04bn in the first quarter of this year. Great.
We’ve already given Lloyds £17bn and now own 39% of it, but y’know, it isn’t like they have to buck up their ideas and start being value for money or anything.
Because of all this, the Treasury is looking at dumping Lloyds back into the market, provided their shares reach 61p (they’re currently 55p). Of course, if the government sell Lloyds off, it’d be foolish to think that we’d see any of the money, but there are politicians hoping that this will be the case.
The Morning Star say that a “re-privatised Lloyds would leave a trail of economic ruin. The bank posted losses of £570m for 2012, with £4bn burned away compensating ripped-off customers for missold PPI and interest rate swaps,” which is cheerful.
The whole thing is a farce isn’t it? We should all draw our money out and hide it under our mattresses and let the banks whistle.
He thinks he’s found a solution to Britain’s financial woes, and that is for us all to have local banks. Break up the nationals and go for local lenders! That’s what Jesus would do.
Speaking just days before key GDP data is expected to show the economy remains stalled, His Archbishopness told a Westminster discussion on the financial crisis organised by the Bible Society: “Economic crises are a major problem when they are severe. When they are accompanied by a financial crisis and a breakdown in confidence then they become a generational problem.”
He added: “Historically, the great failures in banking have led to very, very long periods of recession at best. I would argue that what we are in at the moment is not a recession but essentially some kind of depression. It therefore takes something very, very major to get us out of it in the same way as it took something very major to get us into it.”
The Archbishop is actually a former oil executive, so he might know a thing or two about money. He thinks that people should no longer be able to “drift” into senior banking positions and that there will always be problems when banks became distant from the communities they serve. With that idea in mind, he thinks the simplest solution would be to create a local banking system was “recapitalising at least one of our major banks and breaking it up into regional banks”.
The Archbishop also added that he was disappointed to discover that “bankers are not nearly as bad as one hoped that they would be”. “They do not come in with horns and a tail burning £50 notes to light large cigars, and involved in casino banking and arcane and complex structure projects, so much as coming in and having to admit – or showing – that what they had done was the slightly unsophisticated error … essentially was to borrow short and lend long – one classic error – and secondly they lent very, very large amounts of money to people who could not pay them back.”
The cost of Britain’s railways fell by 2.1%, even though inflation pushed the network’s expenses up by 2.9%. Passengers were spending 8.7% more, which means that us idiots are contributing 58% of running costs through fares according to the Office of Rail Regulation.
The government chipped in £4bn (32%) and infrastructure spending fell 1.8% while Network Rail threw £1.5bn around to maintain their £28bn debts.
ORR statistics show that rail subsidies aren’t evenly spread throughout the country, with the East Coast the least subsidised.
Routes in mostly rural areas such as the Northern franchise, or those subject to major upgrade work like the London Overground, required up to 69% of their costs to be met by the state.
All in all, it is shit catching trains.
The Post Office is going to turn itself into a bank because no-one sends letters anymore! Of course, everyone hates banks at the minute which means they’ll join a chorus of hate or they’ll try and become a friendly face amongst the ogres.
They’ll be introducing a small number of branches in the next couple of weeks and they have their work cut out for them. New entrants have struggled to worry the big five, thanks to the economic crisis, a lack of consumer confidence and regulatory restrictions.
However, the Post Office already have financial services and partnerships and a large branch network, so they may just have a leg-up on others who have thus far failed to make an impact on the financial world. There have been changes which will make it much easier for people to switch current accounts, which will come into play in September, which may also work in the Post Office’s favour.
Nick Kennett, director of financial services at Post Office said: “The introduction of the Post Office current account is the logical next step towards meeting the needs of our customers and becoming one of the key players in the financial services market.”
“We have been offering financial services for over 10 years and our announcement today means we will now offer everything from travel money to mortgages. The launch of the current account is part of our plans to improve customer experience and develop new products to bring in new business as we continue to build a profitable and modern network.”
If you’re interested, you can go and register your intent at the Post Office’s website.
I have to admit, I thought bitcoins were those gold coins you get in Super Mario. But it turns out they’re a virtual online currency that you can use to pay for things and absolutely nothing to do with Princess Peach or Bowser. Who knew?
Actually, nobody knows who originally created the bitcoin, and nobody really knows whether it’s a lot of toss, but let’s assume it’s going to stand up against real currency because that’s not really worth anything either.
A bitcoin is a complex piece of code that you can buy from a bitcoin provider online, for real money. There are 11m bitcoins in existence right now, and a set limit of 21 million that can be mined (ie, created).
When you buy bitcoins, you can keep them in a ‘virtual wallet’ and use them to buy anything you want online. But get this. Because of the collapse of the Cypriot banks and the miserable state of the global economy in general, bitcoins have been skyrocketing in value from $10 a coin to a high of $147. Which makes them as valuable as GOLD. In fact, some investors are turning to bitcoins instead of the shiny stuff.
With Bitcoins, you don’t need banks or bankers either, which is great news for those with a low tolerance for besuited City bastards called Sebastian with second homes in Gstaad.
If money is just a nebulous series of zeroes on a spreadsheet and crumpled paper IOUs, technically there’s no reason why it shouldn’t become a genuine global currency. But is there really electronic gold in them thar Internet hills, or are bitcoins a flash in the pan?
Once again, the Royal Bank of Scotland has fallen foul of yet another IT failure, affecting over two million of the group’s customers just in time for a busy Easter weekend.
Customers of the NatWest, RBS and Ulster Bank mobile app are finding that they have been locked out of the service from this morning, with some bugs still not fixed at the time of writing.
Naturally, RBS have apologised and assure everyone that they’re working hard to fix the glitch, however, with this becoming a regular occurrence, this just might be the thing for people to start switching who they bank with.
Customers vented on Twitter, with one customer shrieking: “No access to my iPhone app think it’s time to change banks!”
A statement from RBS Group said: “We are aware of a technical problem this morning which is preventing customers from logging in to our mobile banking applications. We are working to fix the problem and apologise to customers for the inconvenience caused. No other systems are affected.”
With outages in online banking and a hardware fault stopping RBS Group customers from using cash machines, not to mention the IT farce last year which saw RBS paying out £175m in apologies and the whole bringing the economy to its knees, RBS are not exactly winning any hearts and minds.
The OFT have taken away the licence of a payday lender for the first time as they crack down on people getting stung when they’re broke.
MCO Capital, who operated under online names Help Loan and Balance Loan, have been banned after systematically failing to carry out identity checks and didn’t have nearly enough knowledge needed to run a consumer credit business, according to the Office of Fair Trading.
OFT officials said that MCO acted unfairly and caused “unnecessary distress” by writing to people to chase the debts, even though it knew they might not have borrowed any money.
Last August, the OFT took action against MCO, hitting them with a £544,505 penalty and revoked their consumer credit licence. Yesterday, MCO dropped an appeal against this move, making it the first time a payday lender has been squashed by the OFT’s new crackdown.
A statement issued by MCO Capital said: “Following discussions with the Office of Fair Trading, MCO Capital has decided to relinquish its consumer credit licence. There remains the issue of the significant historic debt that remains to be recovered and consideration is being given to the most appropriate way of dealing with this matter.”
The watchdog is continuing to gun for the payday sector after finding evidence of “widespread irresponsible lending” and have given the top 50 payday loan companies 3 months to prove that they’re trading fairly.
Those numbskulls at HMRC have announced plans to close 281 tax inquiry centres which means their service is going to worsen considerably. Bearing in mind that a watchdog for MPs already called their phone service “disgraceful”, this is bleak news.
HMRC have already been slammed for costing callers £136 million a year through delays in answering calls, and a quarter of the 79million calls made to the tax office were not even answered, despite the fact the government has spent £900m in trying to improve the service.
The Commons public accounts committee slated a “woefully inadequate and unambitious” new target to answer 80% of calls within five minutes (way below industry standards) and getting rid of 1,300 staff isn’t likely to make things better.
Lin Homer, HMRC’s chief executive, defended the move, saying: “HMRC will provide a more modern and accessible service that will target the right support to customers who need it, where and when they want it.”
However, Jane Moore from the Institute of Chartered Accountants of England & Wales, said: “We can see why the Revenue need to use their resources efficiently but we are concerned about the closure of Enquiry Centres. There are lots of reasons why people like to drop into a tax office and see a person.”
In the UK, average earnings are now at 2003 levels, thanks to a lack of pay rises, the rising cost of living and increasing reliance on loans to try and get out of the mess, according to data from the Office for National Statistics.
And worse still, is that millions of families may never see their finances recover.
The Resolution Foundation said it could take as long as 15 years for living standards to recover to what they were pre-downturn. If things are to turn around, incomes would have to grow by a rate of 3.3 per cent, per year, which is never going to happen. While living standards worsen, the government is tightening our belts for us by reducing support for tax credits and benefits.
Families in the middle-to-low income bracket, according to figures, are not able to keep up with bills, with seven per cent behind on at least one bill and over half having no savings at all. With that in mind, if anyone is wanting the security of getting onto the property ladder, figures show that it would now take an average of 22 years to save for a deposit on a first home.
Matthew Whittaker, senior economist at the Resolution Foundation, said: “There is a long road to travel just to get back to where living standards stood before the crisis – and the prospects of actually recovering the ground lost over recent years appear vanishingly thin. Every extra month of falling household incomes is harder to take than the last as household budgets get closer to the edge.”
A Which!!! survey has shown similar results. They showed that more than a third of people have increased their total level of debt in the past month, with six million households using their savings to cover bills or buy food.
EasyJet passengers are paying 33% more for tickets than they were four years ago, and founder Stelios Haji-Ioannou says that everyone may rebel against any further increases.
Stelios sent his warning in a circular to other investors before the easyJet AGM in 11 days’ time, which is just the latest in a series of warning shots sent to management against expansion plans.
Haji-Ioannou said: “The company is doing better now because the prices have gone up but so have the costs. The unit costs have risen by 24% since 2008 and the average customer is now paying 33% more than they were paying four years ago. What happens if the consumers refuse to pay the even higher fares next year? We are then stuck with a higher cost base.”
Stelios also thinks that easyJet are the “overpaying” directors at the company.
“The CEO and CFO made £5m and £3m respectively for FY [full year] 2012 alone. It is an unjustifiable salary advance of about 10 times on what they were earning at their previous employers only two years ago.”
Surely, if easyJet just remain cheaper than most of the competition, they’ll be fine?
Royal Bank of Scotland are once again looking at massive fines, this time warning the stock market that they could well be coughing-up £400m for their role in rigging Libor. The bank will also admit to criminal charges too, and seeing as we own them, it makes criminals of us all.
“RBS confirms that it is in late-stage settlement discussions with these authorities. Although the settlements remain to be agreed, RBS expects they will include the payment of significant penalties as well as certain other sanctions,” said RBS.
As the taxpayer owns 80% of the banking group, will we all be responsible for the debt? Vince Cable and Gideon Osborne are asking RBS to ensure that a portion of the fine will come from the pay of RBS bankers.
Furthermore, Cable wants to look at the future of ownership of RBS Group: “For the existing semi-state-owned companies, there is a range of options, from reprivatisation at a later stage to continued public ownership or mutualisation through public share distribution, as advocated by the Liberal Democrats. We should keep all of these options in play.”
RBS will be the third bank to be fined for Libor rigging after Barclays were slapped with a £290m fine and Swiss bank UBS got hit with an eye-watering £940m.
Britain’s banks are, quite possibly, the most hated people in history. They’re worse than Nazis and Manchester United fans. And things are going to get worse for them as they’ve been collectively told that they are facing yet more massive compensation bills after a review of products sold to small businesses found more than 90% had been mis-sold.
The FSA said that a significant number of cases were likely to result in payouts being handed out to customers, with as many as 40,000 of the interest rate swaps being mis-sold to small businesses since the end of 2001.
The FSA today said the UK’s big four banks (Barclays, HSBC, Lloyds and RBS) have already agreed to start reviewing individual sales and providing compo. And how much will this cost? It could reach the nosebleed heights of £1.5 billion across the sector.
Interest rate swaps were sold as protection against interest rate rises, however, small businesses soon found they were being lumbered with huge bills after the financial crisis.
Martin Wheatley, chief executive designate of the Financial Conduct Authority, said he hoped the FSA’s actions will ensure a fair and reasonable outcome, adding: “Small businesses will now see the result of the review as the banks look at their individual cases. Where redress is due, businesses will be put back into the position they should have been without the mis-sale. But it is important to remember that this review is firmly focused on the particular circumstances of each sale. These will determine whether there were failings in the sales process and, if so, whether redress is due.”
The Office of Fair Trading have said that British banks need to simplify charges for overdrafts to help make the chequing account market more competitive, because that will allow people to decide who offers the best value in a much easier way.
The OFT haven’t gone as far as getting the Competition Commission involved thanks to an imminent account-switching service which lands in September.
However, the consumer watchdog found in that their review of the £9 billion market showed that banks had increased market share since its last assessment and that consumers still don’t have much confidence in the switching process, and end up sticking with the bank they’ve got regardless.
Naturally, the British Bankers’ Association is thrilled that this hasn’t been referred to the Competition Commission.
The OFT has vowed to keep tabs on the situation, saying that improvements have already been made, with customers now saving £928 million annually from a fall in unauthorised overdraft charges.
“Overall, a combination of a lack of competition, low levels of innovation, and customer apathy in the face of unclear costs and a lack of diversity in the choices of current accounts available mean that this market is not working well for consumers or the wider economy,” the OFT said.