Posts Tagged ‘money’
Many older people don’t bother with new pension schemes, thinking that they’re too old to get the benefits. But new pension reforms mean that they can up their contributions by 258% in just a few years and take out all their money without paying any tax. Woohoo!
Here’s how it works. In the last 2 years companies started automatically putting their employees on a pension scheme. Once you’re enrolled, your contributions are deducted from your payslip, your employer contributes something and you get tax relief from the government.
But people who were over 50 tended not to bother with it. WRONG.
If you do it, under the new reforms you can take all your wonga out of these schemes when you retire, rather than bothering with boring, stifling annuities.
Here’s the maths. (Theoretically.)
If you earn £24,000 a year this year, make an increase in contributions in 2018, and get a small pay rise every year – and there is a rate of 5 per cent annual growth – a 55-year-old could make £14,134 by the age of 65.
So get on it, silver foxes! That cruise ship buffet is waiting…
Britain’s big four high street banks – Lloyds, HSBC, Barclays and Royal Bank of Scotland – could be broken up in to little pieces after the Competition and Markets Authority announced they’ll be launching an 18 month investigation into them all.
The big four currently control 77% of current accounts and 85% of small business (SME) current accounts, but customer satisfaction is low and the banks themselves are seemingly reluctant to change the way they do business.
The CMA was launched in April to replace other competition watchdogs.
“Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy. However, our studies have found that despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks,” said Alex Chisholm, chief executive of the CMA.
This is a political hot potato (catch!) with all parties promising to do something about it all.
Ed Miliband, bless ‘im, has said that he’ll launch a competition investigation if elected next May. Meanwhile, his pal and shadow chancellor, Ed Balls, added: “As we said earlier this year, in the next parliament we need to see at least two new challenger banks and a market-share test to ensure the market stays competitive for the long term.”
The coalition themselves have also looked at ways of bolstering competition, including ideas to make it is easier for people to set new banks up.
No-one’s happy though.
“We note, in particular, that the larger banks, with relatively lower satisfaction levels, have not significantly lost market share, while banks with higher satisfaction levels have not been able to gain significant market share, which is not what one would normally expect to find in well functioning, competitive markets,” the CMA said.
However, there’s been loads of analysis into the market. When Gordon Brown was chancellor in ’99, he ordered an investigation into the banking sector. This will be the 10th occasion, and you have to wonder if anything will happen with this, given that nothing ever seems to get corrected.
Are the CMA going to be robust enough with our financial institutions? Don’t hold your breath.
No, he didn’t call Step Change, or email the Money Advice Service. Instead he went to the flagship branch of Barclays in Piccadilly, kicked over a security screen and stole a piffling £910.
While yelling ‘Robbery! Robbery! Ha ha ha, I’ve got all the money!’ packets of dye he’d also accidentally pocketed went off in his rucksack – and he ran down Shaftsbury Avenue in a cloud of fetching red smoke.
Before he kicked down the screen and made his rather fabulous ‘getaway’, unemployed Adedibu had tried and failed to get money out over the counter because he was in thousands of pounds of debt.
So, thinking up a novel way to pay off his overdraft, he turned up five minutes later and demanded £10,000. He was caught the next day after his details were traced from his original (failed) transaction.
‘I’m sorry,’ said a now subdued Adedibu, as he was escorted to jail for 18 months. Bless him.
A survey says that one in four of us would use a purely digital bank. No ‘banking ambassadors’, no counters, no humans. Apparently, we don’t care. A large percentage of us wants everyone to leave us alone and shuffle numbers about on a screen and then forget about it.
Unsurprisingly, the survey, by Accenture, found that folks between the ages of 25 and 34 are the ones most in favour of digital only banking, and are happy to only access their bank via the internet. And 80% of the 3600 current account holders surveyed are using internet banking regularly – however, the figure using mobile banking is just 27%.
BUT, there’s a bit of paradoxical confusion going on, too. It also found that there was a rise in customers using branches – up to 52% from 45% in 2012. And the biggest rise of all was between 18-25 year olds – the people you might assume would be all over digital banking like a rash.
‘This year’s survey underscores the growing complexity in how consumers want to interact with banks in the digital age,’ said Peter Kirk, from Accenture’s financial services group.
So what do we want? People or machines? Or both? Or do we just want that thing that seems so elusive – a bank that doesn’t annoy the crap out of us?
We’ve all been thinking it. We’ve all been worried about British Telecom not being wealthy enough. Well worry no more, because BT are going to get a “multimillion pound windfall” from mobile operators following a UK Supreme Court victory over phone call charges.
We can finally throw that nationwide street party in celebration of BT’s coffers! The orphans will be delighted.
So what happened? Well, the UK Supreme Court ruled in favour of BT following a dispute between the phone co. and mobile operators regarding extra payments for calls to 0800 and 0845 numbers.
EE, Telefonica, Three and Vodafone made an appeal, where they were trying to block charges for these non-geographic numbers, saying that BT’s wholesale costs (or ”ladder costs” if you like) were ”unreasonable.”
The court dismissed them outright and furthermore, the companies would have to make back payments to BT dating back to 2009. In plain English, that’s tens of millions of pounds straight into BT’s pocket.
“Clause 12 of BT’s Standard Interconnect Agreement confers a discretion on BT to unilaterally fix or vary its charges,” the UK Supreme court said in its ruling.
BT said in a statement, “We will now start proceedings to recover the money that has been refunded to the mobile operators since the Court of Appeal ruling. We will also be pursuing claims for further termination charges subsequent to that ruling. Such pricing was designed to benefit UK consumers by incentivising the mobile operators to lower their retail prices.”
Maybe they should invent some firms and send threatening letters to all the companies that owe them money?
According to a survey by ESurv, in June there were was ‘glut’ of teeny tiny 15% mortgage deals (hello, Help to Buy!) which has pushed the number of at-risk homeowners to levels not seen since the financial crisis.
The number of households with a high Loan to Value rate is now 10,898, which now accounts for 1 in 5 new mortgages, compared to 1 in 9 a year ago.
There’s also a regional divide – the majority of high LTV mortgages are in the North, where more than a quarter of people have them. Meanwhile, in That London, only 7% of mortgages have a high LTV. That’s probably because in the North, you’ll be lucky to earn enough to feed the whippet, fill the tin bath and have enough left over for a latte – let alone save up an enormous deposit for a house.
All this means that if house prices suffer any kind of slump in the future, that these householders will be plunged into a graveyard of negative equity, because their mortgage will cost more than the house is worth.
Seem to remember that happening back in 2008…
If you’re between these ages, you can open both a junior ISA and an adult ISA thanks to an anomaly in the system. The adult ISA limit has increased from £5940 to £15,000 today, while the junior ISA limit rises from £3840 to £5000.
And then when you turn 18, your junior ISA will be put in a separate adult ISA, which means your savings will still stay tax-free.
So perhaps if you’re a rich parent who is looking for a place to squirrel away Tarquin’s inheritance, or you’ve just got a REALLY BLOODY WELL PAID PAPER ROUND, then take advantage of it while you’re still young enough to get tax free savings.
Although you’re probably on Snapchat right now asking your mates if anyone wants to chip in for a Subway meal deal before you go to the job centre.
He SHAT IN THE BANK.
Staff and customers in Barclays in Andover, Hants, had to break out the Febreze after a ‘well-to-do’ man in his 40s entered the branch and er, made a deposit. Several large ones actually, all over the floor.
Customer Garreth McCarthy painted a vivid, yet amusing picture of the scene.
‘I wasn’t really paying attention until I noticed a foul, but unmistakable smell. I looked at the guy and he was just calmly walking around the bank – going to all the areas he could.
It’s quite clear what he was doing – he just had this calm but angry look on his face, as he walked around leaving special deposits on the floor. And then as calmly as he walked in he left. Staff didn’t know what on earth had just happened. The stench was unreal.’
An unreal dump strikes at the foul, rotten heart of commerce. Perfect. If anyone knows this man, send us an email, because we’d like to shake him by the hand. (After he’s washed them, obviously.)
The Daily Mirror have a darling little gallery of all the faeces, here.
Ever wondered why you’re walking around in a knackered daze with moths flying out of your pocket, wondering how to make ends meet AND keep up with the endless demands of children, who want things like water, food and new shoes?
Well that’s because the amount of money required for an acceptable standard of family living has gone up by 46% since 2008, according to the Joseph Rowntree Foundation. And we’re not talking about trips to Legoland or booze and hookers for Dad. We’re talking BASIC NEEDS.
Despite the fact that the amount of money needed for staying alive has risen by almost half, wages have gone up by a piffling, paltry, perfunctory 9%.
The JRF have said that even if wages start to rise, the gulf between income and cost of living is so huge that families still couldn’t hope to catch up.
‘People have talked a lot about wages falling behind the cost of living but this really lays bare the challenge to make up lost ground.’ Said Katie Schmuecker from the JRF. ‘This isn’t just falling short, it’s falling behind.’
So that’s why you feel like you’re running to stand still ALL THE TIME. No wonder our heartless moneybags overlords call us ‘hardworking families’, eh?
The clampdown on payday lenders starts tomorrow, which means they won’t be able roll over loans more than twice – plus there’ll be tighter restrictions to your bank account, so Wonga won’t be able to drain all your wonga.
July 1st will also be the day they’ll have to start being more transparent in their advertising. They’ll have to slap warnings all over the big rubbery face of Earl and his old lady friends, telling people about the risks of late repayment, with a link to the Money Advisory Service in case people need help.
The exact wording? This:
‘Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk.‘
Things are looking a bit shaky for the payday loans industry as a whole. A massive investigation is currently being conducted by the Competition and Markets Authority, following the billions of complaints and debt from its customers and critics. The FCA is also looking into capping the overall cost of a payday loan.
So could these new regulations mean that payday loans will soon be a thing of the past? Or are we all so skint and desperate that we’ll do anything to borrow a quick buck?
Looking forward to interest rate rises? No? Well, you’ll want to bury your head in the nearest bucket of gin when you hear that – potentially – homeowners might have to pay more than £1000 more a year than they do now.
That’s according to a report by estate agents Savills, who calculated that if the base rate went up from 0.5% to 1.5%, that means cash strapped homeowners on an interest only mortgage will have to find an average of £1,312 for the pot.
And if you’ve got a capital repayment loan, you will have to magic an extra £872 from the back of the sofa.
Interest rates might go up by the end of the year, although the Bank of England has promised that the rise will be ‘gradual.’ But if it does go up by 1%, or even to 2%, it will push affordability to the limit and your mortgage alone will constitute over 20% of your earnings. That was the exact situation in 2007, before THE CRASH.
So when will interest rates rise? When do we have to prepare our nooses? Only Mark Carney knows. But for homeowners, it is written in the wind – Winter Is Coming. Better start your dodgy webcam business now and earn some £££s from home.
Most people don’t pay by cheque any more, but even so, they often show up, as if BACS was never invented. And it’s a drag to go into branches to cash them.
Soon, though, you’ll be able to take a picture of your cheque on your smartphone and pay it in either via email or your mobile banking app. It’s called ‘cheque imaging’ and next week the government is expected to give the go-ahead for legislation allowing banks and building societies to use it.
It’s great news for us, because electronic cheques will speed up the interminable clearing process involved with all those bits of paper. At the moment you have to wait up to a week for a cheque to clear because it has to go from your bank to a clearing centre. But cheque imaging bypasses all that antiquated messing around, and it will only take 2 working days for your money to appear in your account.
However, it’s bad news for branches. Take away the need to cash a cheque, and you could see nothing but tumbleweed and unemployment. But, the hardy paper cheque might not be phased out entirely. Even if the legislation goes ahead, the Cheque and Credit Clearing Company says: ‘Customers wouldn’t have to do anything different if they don’t want to. They would still be able to pay cheques into their accounts at branches.’
But if it only takes 2 working days to clear a photo of your cheque, what’s the betting that we’ll all be doing it via email instead?
What was so bad about these investments? They had pretty much zero chance of achieving maximum returns.
The YBS (we’re not typing the full name out all the time) were selling a product called Cliquet which was put together by Credit Suisse International (CSI) and flogged to almost 84,000 customers who between them, stumped up somewhere in the region of £797 million.
The Financial Conduct Authority said that Cliquet was aimed at “unsophisticated investors with limited investment experience” through distributors like YBS and offered a guaranteed minimum return plus the potential for significantly more if the FTSE 100 performed well.
However, the regulators said that the probability of achieving only the minimum return was 40-50% and there was slim-to-piss all chance of the maximum return being achieved and that the maximum return figure was given “undue prominence” in both CSI’s product brochures, which YBS approved and showed to clients.
YBS was fined £1.4 million and CSI £2.4 million.
Tracey McDermott, of the FCA, said: “CSI and YBS knew that the chances of receiving the maximum return were close to zero but they nevertheless highlighted this as a key promotional feature of the product.”
YBS said customers affected by this will be given the option to exit their account and receive an “appropriate rate of interest”. How about that for a crappy apology?
Tesco, a company that likes making money, is now launching their first current account.
Around 17 million Tesco customers will be offered bonus shopping discounts if they open an account. If you have a Clubcard too, Tesco will know what you’re buying with them AND they’ll know where you’re spending your money elsewhere.
You may as well give them your fingerprints while you’re at it.
They’re not the only supermarket joining the current account carnival. Marks and Spencer launched an account last month. TSB, Virgin Money and The Post Office are all offering new current accounts too.
With the Tesco account, you’ll get 3% interest and, with your overdraft, there’ll be no fixed monthly fee, but an 18.9% interest rate. There’s a £5 monthly charge, which will put a good number of you off (the account will be free if you promise to put at least £750 in per month). You’ll also get one extra Clubcard point if you spend £4 with a Tesco debit card at a Tesco till, while getting Clubcard points if you use it at other shops.
Benny Higgins, the chief executive of Tesco Bank, says: “Customers tell us they are very tired of the smoke and mirrors and the need to pay attention to the small print. We are setting out to be very clear and transparent.”
As for an onslaught of new customers, he continued: “I don’t think it’s likely that it’s an impulse buy and that we would have high levels of switching overnight. But I hope, in time, this will become a very good product for very many Tesco customers and beyond.”
Now, hands up if you fancy doing all your banking with Tesco.