Posts Tagged ‘money’
Avid BW readers will know that Wonga is in a complete mess at the moment, and some fear that it could actually go under.
They made a £37.3m loss in 2014.
However, the payday lender might have a trick up their sleeve as they are weighing up a name-change as they look to replace their toxic brand. With a new name will come a new range of products, according to bosses.
“With the cap on interest rates and lower fees, the margins have shrunk for individual profits,” said chief finance officer Paul Miles. “If we were setting up from scratch, we could build a sustainably profitable business. But we have the issue of our legacy, and how we manage our cost base.”
Wonga’s UK gaffer, Tara Kneafsey added: “We have worked hard to repair our position with the short-term loan product, and coming out of that we have 600,000 loyal customers who like the brand and use the product in the right way. But in the wider 13m market, we have to ask how far the brand travels. There are different customers with different needs.”
So with that, comes a rebranding: “No puppets will feature, nor anything that looks like a puppet,” confirmed Kneafsey. Not surprising as the ad company that came up with the puppets won’t have anything to do with Wonga.
It seems we’re a nation of ditherers. While we take less than two minutes to decide what we want from our friendly local barkeep, making bigger decisions on how to spend or save our money takes us a little longer, with bigger purchases like a new car taking over two weeks’ worth of thinking time.
The survey of 2,000 people commissioned by Skipton Building Society also found that people had missed out on a bargain, extra money or even a job because they took too long making a decision.
Stacey Stothard, from Skipton Building Society, which commissioned the research, said: “People who don’t over think those day-to-day smaller decisions, but consciously allocate themselves time and space to think through the important ones enjoy a balance that many overlook.
“While some seem happy to make snap decisions within seconds, most like to take their time and consider their options, especially on more important decisions.”
However, taking too long to consider their options means almost two thirds have ended up having to rush a decision. A sizeable 62% have taken so long to decide, they missed a bargain or cheap deal, a quarter have lost out on tickets to an event and 22% have missed out on extra money.
Ms Stothard added: “It might not matter if you take an age deciding what to have for lunch, but choosing how much money you want to put into savings each month or your pension contributions will directly affect your and your family’s financial future.”
So how do you size up against the surveyed decision making times below? At least you’re more likely to be wed to your energy supplier than your significant other though eh…
What drink to order in a pub or bar - 1 minute 53 seconds
What to have for lunch - 3 minutes 13 seconds
What to have for dinner - 4 minutes 55 seconds
What outfit to wear that day - 5 minutes 37 seconds
Which bottle of wine to buy - 5 minutes 40 seconds
What film to watch at the cinema - 6 minutes 25 seconds
How much money to put into savings - 7 minutes 52 seconds
Where to go on a date - 8 minutes 58 seconds
Whether to buy a new item of clothing or outfit - 10 minutes 8 seconds
How to spend your spare income - 4 days 2 hours
Who to vote for in an election - 5 days 18 hours
Whether to increase your monthly pension contributions - 5 days 19 hours
Where to go on holiday - 7 days 13 hours
Whether to get married - 8 days 12 hours
Whether to have children - 8 days 12 hours
Whether to switch your gas/electric supplier - 8 days 13 hours
Whether to go on holiday - 9 days 10 hours
What to buy your spouse/partner for their birthday - 10 days 6 hours
What to buy your spouse/partner for Christmas - 10 days 11 hours
Which school to send your children to - 11 days 1 hour
Which car to buy - 15 days 5 hours
These costs relate to Payment Protection Insurance (PPI) and interest rate hedging products, which cost our banks £9.9bn last year.
The businesses have been repaying money to people who were sold PPI who hadn’t had the whole thing explained to them or in some cases, didn’t even want PPI but were hoodwinked into getting it. Nine banks have doled out £1.8bn to business customers after selling them deals on interest rates that they didn’t understand and were costing more than regular loans.
A number of banks, including HSBC and Royal Bank of Scotland were all fined by UK and US regulators for trying to rig foreign exchange rates too.
Banks have a lot to worry about. Another thing they’ll be concerned about is their return on equity, which is a profitability measure which shows how much dough they make for their investors. Basically, at the moment, it is below their cost of capital, and the cost of capital is what investors demand for the risk in investing in these dicky financial institutions.
However, things are looking up for the banks thanks to tighter regulations and a healthier capital base.
Fashion-flingers, ASOS, are in a spot of financial bother with the company reporting a 10% drop in pre-tax profit in the six months to the end of February. This is down from the same period last year, but you have to remember that they were hammered by the huge warehouse fire they suffered last year.
They said that their balance sheet included “business interruption reimbursements of £6.3m in respect of a warehouse fire in the prior financial year”.
You may recall that the fire at their Barnsley warehouse damaged 20% of the stock it held.
Remarkably at the time, ASOS managed to start taking and shipping orders a mere 48 hours after the fire had happened and then kicked off a sale which 50% discounts and the like.
Despite the drop in profits, the fashion retailer has seen a 14% rise in overall retail sales for the six-month period compared to the previous year.
Chief executive Nick Robertson says: “Our customer engagement remains high, with growth in visits, average order frequency, average basket size and conversion all improving. Our active customers grew by 13%, exceeding the nine million mark for the first time.”
“With our continued investment in our international rice competitiveness gaining traction, momentum in the business is building. This gives us confidence in the outlook for the second half and that full year profit and margin will be in line with expectations.”
And now, in stating the obvious news, we have Dame Colette Bowe of the Banking Standards Review Council, who says that banks must “raise their game” to regain the public’s trust after a string of scandals.
Dame Bowe (Dame Bowe, Dame, Dry Bones) of the BS Review Council, warned everyone that the trust in the banking industry had been “badly damaged”, thanks to PPI misselling, the manipulation of Libor and… well… all the other bad things they’ve done.
Bowe unveiled a 14-member board who have been tasked with supporting and encouraging change in the UK’s lenders and said: “A healthy society and a vibrant economy like the UK needs well-run banks and building societies that understand and serve the needs of people and businesses.”
“From paying household bills to growth finance for business, millions of us rely on the banking system every day. And some 500,000 people across the UK work in this industry. But trust in the system has been badly damaged and it’s no surprise that the public expects change after everything that has happened.”
“Banks recognise the urgent need to raise their game and build the necessary momentum for change. It won’t happen overnight and it will be an uncomfortable journey but the time has come to win back trust.”
So who has been roped in, to sort everything out? A load of bankers! On the team, there’s Craig Donaldson (chief executive of Metro Bank), Alison Robb (group director of Nationwide), Antonio Simoes (UK CEO of HSBC), Clare Woodman (chief operating officer at Morgan Stanley) and James Bardrick (chief country officer for the UK at Citibank).
That’s not all! We’ve also got some trustworthy politicians as well, such as Lord McFall (used to be a member of the Parliamentary Commission on Banking Standards) and Alison Cottrell (another former Treasury director). There’s also some bishops and someone from Citizens Advice too.
The Dame added: “Through concerted, collective action, the board will support and encourage sustained change for banks operating in all areas of the market – retail, investment and commercial. That change will be equally relevant to incumbents and challengers, to banks and building societies.”
The next government, whoever that might be, need to commit to energy efficiency, and not muck about by being weak wristed, like we’ve seen thus far, in a bid to stop UK homes from losing money, needlessly.
That’s according to a new Which!!! report, which says that the UK’s housing stock continues to be among Europe’s least energy-efficient thanks to poor insulation. In ‘A Local Approach to Energy Efficiency’, the watchdog says that Government figures from December show (up to) 5.4 million homes still don’t have their cavities filled and up to 7.4 million still need their lofts sorted out.
On top of this, Age UK reckon that the NHS spends £1.36 billion every year on treating illnesses caused by – and made worse by – cold houses.
Which!!! would like to see the country adopting a long-term approach, which would be funded in part by a levy on energy suppliers, and then put into a pot where funds can be allocated to local authorities. The report also calls for an overhaul of the Green Deal, after it transpired that only 399 plans had been taken on (on average) per month since the launch of the project.
Bigwig at Which!!!, Richard Lloyd, said: “With millions of homes still not insulated, energy efficiency is a collective failure of successive governments. The next Government must grab this issue by the scruff of the neck and commit to an aggressive energy efficiency strategy as soon as it takes power.”
“We want to see radical improvements to the roll out, funding and take-up of energy efficiency measures so people can enjoy warmer homes, lower bills and better health.”
Are you feeling confident? Do you have more purpose in your stride and feel like you could shove a mountain over? Well, it isn’t surprising seeing as consumer confidence in the UK is at its highest level for nearly 13 years, according to the stat crunchers at GfK.
Look at you spending money on onions and socks like you’re Rick James!
Gfk’s Consumer Confidence Index rose three points to +4 in March, and over the last three months, there’s been an eight point rise. Good eh? There’s been a nine point increase from March 2014. That’s livin’ alright.
All five of Gfk’s index’s key indicators saw monthly and yearly increases this month, with confidence over the general economic situation over the last 12 months being the strongest climber up the charts. It is now at +1 when, last year, it was at -15!
Sounds like we’re all getting our swagger back too, as the survey showed that consumers are more confident about the economy in the coming year, as well as getting rather cocky about our collective personal financial situation for the coming 12 months. Basically, that means people are starting to look at spending money on bigger purchases like sofas or new TVs.
Nick Moon, Managing Director of Social Research at GfK, says: “Reaction to the budget has thus far been muted, but if people warm to it over the next few weeks then we may well see a further increase in the Index next month. A consistently rising Index in the run-up to the election is likely to be good news for the government.”
An investigation has been kicked off by the Information Commissioner’s Office (ICO) after claims were made that the data of millions of people’s pensions are being sold to cold-calling firms and shady fraud types. The ICO have said that the rumours they’ve heard are “very worrying” and they will be talking to regulators and the police.
As you’ll know, there’s been changes which means that, from next month, people can cash-in their savings when they retire, rather than buying an annuity. These changes have seen increased concern about an upswing in fraud.
According to reports, people’s pension details are being sold off for as little as 5p without consent. Over at the Daily Mail, reporters said they were offered information about 15,000 pensions without checks being made. This backs up previous ICO warnings that these reforms could lead to more scamming.
Steve Eckersley, the head of enforcement at the ICO, said: “It suggests a frequent disregard of laws that are in place specifically to protect consumers. We will be launching an investigation immediately. We’re aware of allegations raised against several companies involved in the cold-calling sector, and will be making inquiries to establish whether there have been any breaches of the Data Protection Act or Privacy and Electronic Communications Regulations.”
If any company is found guilty, there could be fines of £500,000 dished out and criminal prosecutions could be brought forward to anyone found obtaining personal data.
Eckersley added: “The information we’ve been shown supports the work we’ve been doing to target the shady industry that operates behind the nuisance of cold calls and spam texts. We’re already aware of the potential for a huge spike in the number of scam texts and calls linked to pensions when the law changes in April, and have already taken action against a company that was sending out misleading messages.”
“What we’ve seen here confirms those fears. Personal data is such a valuable asset, particularly financial information. The worst case scenario here is this information getting into the wrong hands and being used to target individuals at a critical point in their financial lives.”
From now on, people selling you pensions will have to tell you if they’re ripping you off. More accurately, they’ll have to tell you if their rivals offer better deals and such, according to the Financial Conduct Authority.
Businesses will now have to advertise what their competitors are offering and how much more you could earn if you switched to a different provider. This will happen every time a customer is sent a quote for an annuity. The FCA reckon that this will “prompt customers to consider the benefits of shopping around and switching”.
FCA director Christopher Woolard said: “The retirement income market is set for the biggest change in a generation. We want to ensure it is fit for purpose.”
The idea is that pensioners will not have blindly accepted any old rubbish thrown their way, and now, people looking at their retirement will start shopping around and looking for a better deal, rather than just accepting a poor-value annuity offered by the first firm to flutter their eyelashes at them.
The FCA also said that pension documents now have to contain a lot less jargon. People can’t be bothered reading 20-odd pages of finance-babble, so companies need to do more to make it clear what they’re offering. The watchdog is also looking at the idea of people being sent a simple statement by pension companies, which outlines how much money they’ve saved and what type of pension they have.
Good news, oldsters!
The banks of Britain have asked everyone not worry, regarding the fact that they’ve just signed an agreement where they can close branches, even if it is the last one in a community. They’re collectively saying that they will be investing in branches for ”for decades to come”.
And of course, we all unreservedly trust the people who run banks, don’t we?
Anyway, Sky News, have got their hands on a report called the ‘Access To Banking Protocol’ which will be released tomorrow. Banks are going to have to provide 12 weeks worth of notice if they are to close a branch, as well as publishing an assessment of what they expect the impact to be on their customers.
“Banks will publish the results of their engagement and impact assessment, and the considerations taken into account in assessing the impact of the branch closure, subject to the removal of commercially sensitive information,” the document says. ”The results will be made public before the closure of the branch.”
Will this stop banks from closing down branches where they’re not making much money? Not likely. In fact, the document alludes to that, saying: ”While ensuring that customers are treated fairly, decisions on branch closures are ultimately commercial decisions for banks to take.”
With lenders closing branches all over the country, this will concern many. However, it is hoped that there’ll be provisions where smaller communities can be served by the Post Office and credit unions: ”Banks will… engage at an early stage with the Post Office to coordinate communications, operational planning and use of brand.”
While some will just focus on internet banking, “banks will take into account the local availability of broadband and access to alternative ways to bank for vulnerable customers.”
The thing we’re wondering about, is what will happen to banks if they don’t play fair or stick to the new protocol? There’s no talk of any repercussions or penalties for those that don’t comply.
According to statistics, consumers in the UK are borrowing more than ever. Some think this is a good thing as it shows the economy is improving and temping a good number to reach for the plastic again. Some will think this is a sign that everyone is still skint.
This latest PwC study (in partnership with YouGov) found that the average household now owes more than £9,000 on their credit cards, overdrafts and personal loans. They’ve not covered mortgage debts. This is a 10% increase in the size of the typical debt and means that, what’s happening now is that the average British home that is in the red is now at pre-recession levels.
“Underlying this significant growth in overall unsecured borrowing, we also saw changes in the way people borrow,” noted Simon Westcott, a director at PwC. ”Old favourites such as credit cards are staging something of a revival, while newer forms of borrowing such as peer-to-peer lending are starting to gain ground.”
The positive spin is that it looks like people are borrowing because they want nice things and are confident about the security of the future, rather than borrowing money out of desperation. We can almost hear some BW readers shouting at their screens about people learning nothing about getting into debt and the delicate nature of the economy.
While there’s historically-low interest rates, the Bank of England could put rates up over the next few months which means some folk will find themselves struggling again.
In short, don’t get carried away if you’re thinking of flexing the plastic.
The whole idea behind cryptocurrency , from what we can tell, is that it is border-free and not centralised. It sprung out of a dissatisfaction of trad. arr. banks and wants those pesky politicians and bankers to stay away.
We also know that cryptocurrency is referred to as ‘Bitcoin’, like most people call all vacuum cleaners, hoovers.
With all that in mind, HM Treasury has announced that they’d like to regulate and centralise digital currencies, thereby taking it from cryptocurrency to plain ol’ currency, which they already look after. Their goal, according to a very tedious 28-page document, is to prevent criminals misusing it and to support innovation.
The Bank of England are also really interested in it, saying that they wanted to release their own version of Bitcoin, which again, seems a bit odd, seeing as they already have actual money to play with, which has served them well.
Either way, the suits are circling and this document is in response to a public call for input on the development of digital currency regulations. The report itself looks at what the government can do next, what benefits there are and the risks of cryptocurrency.
Government says: “The government considers that digital currencies represent an interesting development in payments technology, with distributed, peer-to-peer networks and the use of cryptographic techniques making possible the efficient and secure transfer of digital currency funds between users. The government notes that the potential advantages are clearest for purposes such as micro-payments and cross-border transactions.”
So there you have it – Bitcoin et al is being taken seriously by the people from the halls of power.
The Financial Conduct Authority have hit on an idea though! Why don’t we treat bankers like children and make them sit a test every year? The new banking rulebook from the FCA reckons that bank staff should sit an annual test to see if they’re fit to do their jobs.
This is all going to be announced by FCA gaffer Martin Wheatley, before the whole thing goes to a period of consultation, at which point someone will make sure it is turned down or made so flimsy that the high ranking bankers who caused the financial crash won’t have to bother doing any tests.
It seems like this has come about from a recommendation from a Parliamentary Commission on Banking Standards, which in 2013, said: ”The (Banking Reform) Act has introduced… the requirement for firms to certify certain employees as being fit and proper to perform certain functions.”
“This originated from the PCBS’s recommendation that a ‘licensing regime’ be introduced to address concerns that the existing Approved Persons Regime brought too narrow a set of individuals within the scope of regulation, and that firms took insufficient responsibility for the fitness and propriety of their staff.”
Maybe someone should bring in detentions and bogwashing for bankers too?
Of course, we’re being sarcastic and whiplash claims have, according to a report from one insurer, hit record levels.
The result of all this is that on average, motorists are getting £93 added to their motor insurance premium. So, thanks to people with no neck ache, everyone else is paying for it. Nothing new, but galling all the same.
So what’s brought these new levels about? Well, once again, we can thank the no-win no-fee law firms who have been drumming up business on daytime TV and doing very well for themselves.
Aviva reckons that, despite the best efforts of the government to sort out compensation culture and lower motor insurance costs, more needs to be done if there’s going to be any reduction in whiplash claims. According to their figures, whiplash is costing drivers as a whole, £2.5bn a year. Their research also showed that the UK is on course to bring in advance of 840,000 motor injury claims to the Claims Portal, which allows insurers to submit claims, for the year ending April 2015.
Last year, 80% of motor injury claims included whiplash. Compare that to France where it only makes up 3% of injury claims, and you can see that something’s awry.