Posts Tagged ‘money’
The FCA are going to tell insurers that add-ons for things like mobiles, holidays and home emergencies aren’t currently competitive, so therefore, not at all working in the best interest of consumers.
This means that the regulator is all set to announce new rules after they investigated competition rules around insurance companies. For us, as well as cheaper offers (you’d hope), this means these add-ons will now be explicitly explained to us and up-front, rather than tucked away behind vagueness.
These new rules may seem like small fry, but if you consider that some motor insurers generate around a third of their profits from add-ons, this will change the way they do business for fear of big fines. Of course, last year, Swinton was fined by the FCA to the tune of £7.4m fine, with a further £11m paid out to customers who had been mis-sold add-ons.
Unveiling the initial review, the FCA said: “People are being made to feel they have to have these products when they don’t really need them. Our concern is that the products are generally poor value, and, by and large, people don’t pay too much attention to the terms and conditions. We are saying there could be anti-competitive behaviour.”
M&S, when it’s not designing unattractive middle aged lady clothes and selling prawn sandwiches, is now hoping to compete with the banking big guns with a new free current account.
Up until now, M&S Bank, which is owned by HSBC, has only offered premium access accounts which offer a variety of cosy middle class perks, like coffee vouchers, travel insurance and access to a nice savings account with a 6% rate.
Free current account customers will have to buy their own coffee, but the deal isn’t half bad. You get an automatic £100 M&S gift card for switching, and account holders can earn M&S loyalty points when they use their debit card in store. There’s also a £500 overdraft, the first £100 of which is interest free.
M&S bank chief Colin Kearsley said: ‘Our premium current accounts, developed specifically for the regular M&S shopper, have proven popular with this audience and following the launch of the current account switch service, which has made switching faster and easier, we want to offer the same transparent banking and great service to a broader audience with the launch of the M&S current account.’
Initially, the account will be offered to M&S Bank’s existing customers, but will be available to us plebs very soon. So even if you’re not a regular M&S junkie with a thing about ready meals and wide fitting shoes, you can get a decent deal with the high quality M&S cache.
Well, it beats an account at Costcutters.
The Financial Conduct Authority are very please with themselves, saying that all the major banks on British high streets have made great improvements when it comes to the hard-sell, either replacing or substantially changing the financial incentive schemes which were the cause of mis-selling huge numbers of products.
A number of fines doled out to banks have been influential in changing their cultures – in December, Lloyds were hit with a £28million penalty by FCA after the bank were found to be pushing staff to hard, which resulted in the selling of unsuitable products to customers.
In the latest review, the FCA says that they have found significant improvements at many finance firms and they’re going to keep at them, to ensure that the work they’ve done doesn’t come unstuck and so that further improvements can be made.
Martin Wheatley, chief executive of the FCA said: “Eighteen months ago we gave the industry a wake-up call and it recognised that a poor incentive culture had helped push bad sales practice, which led to mis-selling. We’ve seen some good progress but it is going to take time to see whether the changes firms have made to incentive schemes and their controls stick, and whether good beginnings are part of genuine cultural change.”
“Consumers can be assured that this remains an area that we will be watching closely to ensure poor practice doesn’t return.”
The FCA has identified the areas where banks can better manage incentive schemes, such as checking for increased trends in individual’s sales patterns, or by doing more to correct poor sales behaviour in face-to-face conversations. Importantly, banks are advised that staff should be told that sales bonuses can also be affected negatively by mis-selling, so it isn’t worth staff members simply trying to flog as much as possible without proper conduct.
The watchdog have also warned banks that they shouldn’t replace bonus schemes with other performance management measures which put the same amount and type of pressure on staff. And, it seems to be working with a number of firms changing the way they sell. Barclays, for example, have stopped sales incentives altogether.
However, while the public are still receiving cold calls and emails from branches, there’s still loads to be done. Could this possibly be the end of the hard-sell, or are the banks just playing nicely until the FCA leave them alone?
Either way, this new currency is becoming quite the thing for web-crusties who look at it like it is our saviour from the banks, despite having to shut down recently, thanks to a massive loss. In Britain, it is all set to grow as HMRC rules that they’re not at all interested in charging VAT on Bitcoin transactions.
The Tax People held talks with UK Bitcoin traders last week and decided that they would not charge the 20 per cent VAT tax on trades, and, on top of that, wouldn’t be charging the tax on entrepreneurs’ Bitcoin margins either.
Suddenly, shark-eyed business sorts are thinking of getting on-board with the Hippie Money now that Britain will be one of the most tax-friendly places for this cryptocurrency. And they’re right to keep an eye on it. At the moment, there’s around $6.9bn worth of Bitcoins in circulation.
As Bitcoins are not traceable, this could be an excellent area for criminals and tax-dodgers to get involved in. Your dealer might start dealing solely in Bitcoins. Vodafone and Chris Moyles might start getting on it too.
Jonathan Harrison, someone looking to bring Bitcoin ATMs to the UK, thinks this is good news, saying: “If they had added VAT that would have destroyed us, there would have been no point in starting this business at all. It’s great that the UK authorities are seeing Bitcoin as an innovative technology that can help the economy.”
Is this the money of the future? We all know how well the babyboomer hippies did when it came to making money, don’t we?
It turns out that one in five of us missed an important bill payment last year, and one in 10 have received a court summons as a result. This cheering news comes from research commissioned by Moneysupermarket.com for their far-too-jauntily named ‘Bill Barometer’, which showed that we’ve missed a total of 15 million bill payments.
And when you examine our monthly outgoings compared to our piffling and paltry wages, you’ll see why we’re ‘accidentally’ losing that gas bill down the back of the sofa. The average household spends £1360 on essential bills like rent, mortgages and utilities.
So what are we neglecting to pay? Well, we’re most frequently failing to pay credit cards, loan repayments, and often childcare costs. And even more worryingly, one in five people say that their outgoings would only have to rise by £50 a month to make them completely unmanageable.
‘Many households are precariously juggling their bill payments, choosing which to pay and which to ignore.’ Says Claire Francis from Moneysupermarket. ‘It’s a balancing act that can’t continue long-term without significant implications. Given interest rates are likely to start rising next year, leading to increases in the cost of borrowing, it is a real concern that many people won’t be able to cope.’
Excuse me, Mr Osborne – before the Bank of England puts up interest rates – please can we have some more?
The RBS, after announcing an £8.2bn mega loss, has decided to turn into a nice, cosy, manageable British bank, ‘with the needs of its customers at its core.’
While you may be excused for approaching this new way of thinking with the same skepticism you might apply to the Big Bad Wolf dressed up as granny, the question is – what will RBS’ proposed changes mean for us?
For borrowers, RBS propose to cut 0% balance transfer deals on credit cards to stop the current practice of people borrowing from elsewhere and then moving their debts around from bank to bank. Instead they’re offering a range of credit card deals with initial interest free periods, including a platinum card which is interest free for the first 28 months.
Hmm, ok. Except, according to financial expert Andrew Hagger: ‘People are quite happy to shop around for these deals, they don’t necessarily take a credit card from the bank their current account is with, so if they want a 0% deal they will look elsewhere.”
They’re also going to stop offering online customers different interest rates, giving savers a less confusing range of products. But unfortunately the rates aren’t very competitive.
The problem is, other banks are also scrapping 0% balance transfer deals and simplifying their range of savings accounts, too. Got anything else up your sleeve, RBS? Well, their final promise is to improve customer service, but we’ll believe THAT when we see it.
So why would you trust RBS? Perhaps they need to offer something more exciting. Like free biscuits? Offer me some free biscuits, and we’ll talk.
If you put any trust in Bitcoin as a valuable commodity, rather than made up money generated by spods and sold on eBay, you may find yourself out of pocket. In the real world, this is like Barclays going bust, or something. It’s big, anyway.
It’s not the first time Mt.Gox has been hacked – it happened way back in 2011 when 400,000 Bitcoins were lost. But back then they were only worth $9m and the company was able to reimburse its customers. Now, it’s well and truly in Bits, with an estimated 1 million customers having lost the lot. And because it’s not a bank, and the whole thing is ephemeral internet money, customers have nothing to fall back on. No insurance, no account protection – nothing.
So does this mean the end of Bitcoin? Will this most unpredictable of currencies go on to fight another day, or will we all start trading Monopoly money, pebbles or groats instead? Well, there are still plenty of Bitcoin companies out there, who vow to thrive after what they call ‘this tragic violation’ of Mt.Gox. So it depends whether the Bitcoin community still has confidence in these unregulated sites.
Most of us though, will probably remain unaffected. Because we still have no idea what Bitcoin is.
Hurray! Good energy news at last! Actually, you might want to sit down for this one. We’re so used to getting mightily shafted by energy companies that the idea of them giving our money back to us seems very strange indeed, but unbelievably, it’s actually happening.
Yes, after EDF energy’s decision to refund credit balances if you pay by Direct Debit, five out of the Big Six have agreed to follow suit. So if you’ve got a credit balance of £5 or more, they’ll refund you automatically. British Gas, E-On, EDF, NPower and SSE are all on board. Only the tight wads at Scottish Power are reluctant to lower the threshold for automatic refunds.
Of course, your energy supplier will still try to ‘suggest’ that you roll it over to your next bill, and you’ll need to provide a meter reading before your annual energy review. But it sure beats having to make formal requests to claw back any excess you’ve paid. And it means your hard earned cash will no longer languish in the bulging coffers of the Big Six, racking up interest.
Which! calculate that 55% of energy customers pay by Direct Debit, and that 56% are in credit to the tune of an average of £161. Which means a nice Spring pay out for quite a lot of people.
But although it’s tempting to go and spend it on new clothes, or a slap up meal at the Harvester, maybe we should put it towards something useful – like next winter’s astronomical energy bills…
Would you believe it – the Bank of England says it has ‘no power’ over the massive property bubble at the higher end of the housing market, bringing a return to outrageous prices in London.
Speaking on the Andrew Marr show, Mark Carney, the guv’nor, played down the idea that there actually WAS any bubble, and mumbled something positive about recovery and the Help to Buy scheme.
Carney explained that as massively rich people were buying properties in London with cash, there was little it could do but ‘watch’ as prices soared.
‘It’s driven in many cases by foreign buyers’ he said. ‘We as the central bank can’t influence that. We change underwriting standards – it doesn’t matter, there’s not a mortgage. We change interest rates – it doesn’t matter, there’s not a mortgage, etc. But we watch and we watch the knock-on effect.’
This comes as the most expensive property in London went on the market last week in Mayfair, a 21 bedroom mansion priced at £90m.
So soon we’ll all be living in ditches, priced out of the market, while the oligarchs fiddle around in their home cinemas and underground swimming pools. But you know, everyone’s hands are tied – sorry!
Still, while all that lovely foreign money rolls right in, the Tories would be delighted to give all you ‘hardworking families’ a 95% mortgage on a terraced hovel in Rotherham. Will that do?
Some have already set-up special funds to cope with emergencies and others are offering you repayment holidays while you get yourself sorted. Most banks are offering a three month repayment holiday for mortgage borrowers.
Other than that, who is offering what?
HSBC are offering increased financial flexibility to customers. That means fast-tracked credit acceptance, loan and overdraft extensions and waiving fees on loans and overdrafts. They’re also going to get rid of limits on emergency payments.
HSBC are also working with mapping technologies while they try and identify which properties and areas are at the worst risk of flooding so they can make contact first.
RBS and NatWest are sending specialist business support teams to flooded areas this week and next, in a bid to help small and medium-sized business with short-term money problems as they priorities repair work and such, and of course, try and cope with their loss of income.
RBS/NatWest set up a £250 million UK Storm Business Fund which can provide short-term, interest-free financing and is available to all businesses, not just customers of RBS and NatWest. You can get three-months interest free and fee-free loans.
Ulster Bank have set up a support package of £10 million to help businesses that have been hit by the weather. The bank will help out customers with short-term cash commitments, such as repairs or managing a working capital. As Ulster Bank are part of the RBS Group, it’d be worth asking if they have the same provisions as RBS and NatWest also.
Nationwide current account customers will be able to ask for a temporary overdraft or an increase to cover emergencies brought on by the averse weather. The building society said: “We realise that not all customers may have the relevant documentation to hand and so, in such cases, we will find alternative ways to securely identify and assist our members.”
Santander are offering a loan payment holiday or giving you the opportunity to change your mortgage to an interest-only one, so you can reduce your monthly cost. Credit facilities will be extended for 12 months for farmers (6 months for small businesses). They are also paying £100,000 into a recovery fund.
The Association of British Insurers
The ABI have issued an emergency guide for households so they can be better prepared when dealing with insurance companies. You can read that here.
Things have been tough for most people recently, and if you’re currently underwater, probably tougher still. At least we know that things are on the up- only last month Chancellor George Osborne assured us that disposable incomes started rising in 2012/13, so if you haven’t personally felt the benefit, it’s bound to be just around the corner. However, a new think tank has suggested that maybe, just maybe, the Treasury figures aren’t all they’re cracked up to be.
The Resolution Foundation’s comprehensive review of household incomes concluded incomes will only start to rise above inflation in 2015, although this will be “barely positive”, with a no more than 1% rise in each of the next three years. And even despite 2015 showing the first rise in five years, the think tank predicts the disposable income will still be lower than in 2008:
“The living standards of the typical household will still be 3.5% lower in 2018-19 than they were at the start of the financial crisis of 2008, only just inching above the level they were last at in 2005-06.”
However, a recent Treasury study used by George Osborne clearly said that disposable incomes started improving in 2012/13, something completely contradicted by this report. George said that tax relief from a higher personal allowance had pushed up disposable incomes in the 2012/13 financial year, offsetting depressed wages and rising prices, especially gas and electricity hikes. Assuming the Treasury and Government ministers are not out-and-out lying, how can this be?
The answer, it appears, depends on how you measure income. Specifically falling income levels. Treasury officials have been criticised for admitting to excluding swingeing cuts in tax credits and benefits from their sums and ignoring a recent trend for falling wages. So long as you assume people’s income remains static even though it is falling, rises in disposable income come around much quicker, it seems.
But whether disposable income makes a comeback this year, last year or next year, don’t get too excited about splashing the cash. Gavin Kelly, the Resolution Foundation’s chief executive, said: “Our evidence suggests that the fall in living standards is bottoming out and should start to rise again next year. That’s the good news and given year after year of decline it will come as a relief. But as things stand the recovery for families looks like being painfully slow – by 2018 we expect the typical household to still be worse off than they were before the crisis.”
If you’re not drowning in thousands of pounds of unsecured personal debt, then consider yourself a king, because most of us are deep in the hole of borrowing – with young people owing the most.
This depressing news comes from a Moneysupermarket survey, which found that two thirds of us have credit cards, store cards, personal loans or whopping overdrafts up the wazoo. The average Joe owes about 4 and a half grand – but those crazy young people between the ages of 18-24 are practically living on credit, owing an average of £5,446. (#yolo)
Overall the survey puts our unsecured debt total at £139 billion, but the Bank of England say the amount is even higher – in December, personal debt was estimated to be £158.2billion. OUCH.
The Moneysupermarket survey asked 2000 people about their debts and spending habits, and apparently we have 25% less unsecured debt than we used to have. But this was cancelled out by the fact that 43% said they owed even more.
So is this much-vaunted financial recovery just a big fat credit bubble in disguise? Looks like it, eh?
So no-one told you things were gonna be this way…dum dum dum..your jobs a joke, you’re broke, but NATIONWIDE IS GIVING AWAY FREE MONEY, so get yourself down there now, because if you recommend it to a friend they’ll give you and your pal £50! Result!
Yes, the building society has just launched their Refer a Friend scheme, which will give you £50 for every mate who switches their current account to Nationwide. You can refer up to 10 friends, which means that you could be £500 better off, which will make you more popular, and then maybe girls will talk to you.
The scheme comes 6 months after the new switching rules that made it easier and quicker to change banks – intended to end the monopoly of the big high street behemoths. But Nationwide aren’t the only place to offer a new incentive. At the moment, if you switch to the beleaguered Co-op, you’ll get £100 and £25 to a charity of your choice.
But Nationwide are the first financial services business to offer a refer a friend scheme. Nationwide’s head of current accounts, Phil Smith, said:
‘Word of mouth is valuable to us as it shows that our customers are pleased with the products and service we offer and that they are willing to recommend us to their friends and family. There are a number of switching offers on the market, but ours is the only one that rewards existing customers as well as new customers.’
Just one question, though. If you haven’t got any friends, will they accept imaginary ones?
High-end retailers will have NEIGH worries this month, thanks to an influx of Chinese shoppers spending their New Year holiday at the shops. Luxury brands such as Burberry, Omega and Fortnum and Mason are set to hear the sound of galloping Chinese tourists, eager to snap up some bargains.
Chinese visitors to Britain were responsible for a 14% rise in UK spending over Chinese New Year in 2013, and they’re not going to New Look, either. Designer handbags, jewellery and watches are the big draw, with Chinese visitors last year spending a whopping £741 per transaction last year.
Fortnum and Mason have even prepared their sales team by organising cultural training, and recruiting staff that can speak Mandarin.
Meanwhile, stores in the London Luxury Quarter (which incorporates 42 streets and 70 shops in Central London) are using special displays, installing Union pay payment services and hiring staff to specifically target the Chinese market.
So retailers can saddle up and watch all that money from the East flow right in, while domestic customers can only afford to stand outside, gaping at all those lovely handbags and eating a Chow Mein Pot Noodle in the rain.
If you’re a TSB customer, you might still be fuming about the IT debacle that left thousands unable to use ATMs and make debit card purchases the other week. But the good news is it won’t cost you the equivalent of the gross national debt of The Congo to phone and shout at them anymore – after pressure from Which! they’re changing their premium rate 0845 numbers to the much cheaper local rate number, 0345.
Meanwhile, Barclays, RBS and Barclaycard have already agreed to ditch high rate numbers after good ole Which! found that 177 out of 242 customer service/complaint lines were raking in the cash by using premium numbers. But other banks have still to address the problem, leaving customers unwilling to call and wary of them. According to a Which! survey, 80% of us believe that businesses and banks that use premium numbers don’t have our best interests at heart. (no s***!)
Anyway, TSB are introducing 0345 numbers for customer service, retail and business banking, and local branches. They’re keeping 0800 if you’ve got a complaint or have been a victim of fraud, but the say they won’t make any money from their 0345 numbers and the calls will cost the same for landlines and mobiles.
Other banks are keeping characteristically quiet about their premium rate lines, but soon everyone might have to get rid of them. The government has already made a move to stop public sector businesses using steep 084 and 087 numbers, and it’ll soon extend to airlines, train companies and high street and online stores.
So if you’re a TSB, RBS or Barclaycard customer, go forth and call the bank. Hell, stay on the line all day if you want, playing musak at them and asking them to hold the line. Then call them again at 3am, crying about how things aren’t really working out for you since you lost your job and the wife left.
They love that kind of thing.