Finance Matters

• 28Nov

  Keeping pensions safe – improving scheme governance and administration

  Pensions No Comments

  From The Pensions Regulator:

  The regulator today launches a campaign aimed at encouraging good governance and administration and better management of pension scheme risks. A statement published alongside results of the 2009 pension scheme governance survey outlines the regulator’s key focus areas.

  The regulator makes clear that trustees responsible for running pension schemes need to be sure that:

  Pensions Regulator chief executive Tony Hobman said:

  “Good governance underpins secure pensions.

  “Scheme members entrust their pension savings into the hands of others to a total estimate of more than £1 trillion in assets, often for decades of their working lives.

  “The scale of the market and the importance of the task of managing people’s life savings to secure their income in retirement require robust standards of…

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• 28Nov

  Regulator’s 2009 recovery plan report shows how schemes are coping in the downturn

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  From The Pensions Regulator:

  The Pensions Regulator today published the latest edition of its annual

  Pensions Regulator chair, David Norgrove said: “The three tranches of scheme valuations have been conducted in very different economic circumstances and this analysis explores some of the effects that the downturn, and other factors such as longevity improvements, have had on scheme funding.

  “We urge trustees to continue to take a prudent approach to assessing schemes’ technical provisions, to maintain an honest and open dialogue with employers, and to remain aware of the changing economic situation as they focus on the long term interests of scheme members. The regulator will continue to focus on this shared goal.”

  Some of the key findings are:…

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• 28Nov

  Crackdown on dodgy debt firms

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  From IVANews:

  clampdown on firms which promise to help struggling borrowers repay debts could lead to unscrupulous companies being banned.
  The Office of Fair Trading is launching a probe into debt management firms following fears that consumers who are already in distress are being left worse off. Misleading advertising and poor advice can result in borrowers signing up to costly and inappropriate plans.
  There are about 150 debt management companies which claim to put borrowers with several debts on to repayment plans. They negotiate with debt collectors and credit firms to get interest payments frozen and repayments lowered.
  However, some firms falsely claim to be charities or government-backed. Others have made unlawful, unsolicited calls and sent mailings about repayment plans to customers already laden with debt.
  The companies make their money from commission paid by credit firms. However, many also sell insurance alongside the debts.
  In particular, the OFT will probe online advertising.
  Source…

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• 28Nov

  BBA: Mortgage lending double 2008 levels

  Mortgages No Comments

  From This is Money:

  Net lending, which strips out redemptions and repayments, also held firm at £3.1bn, slightly higher than the £2.8bn figure recorded in August.

  Both spending and repayments on credit cards were unchanged from the previous month at £5.7bn and £6bn respectively.

  David Dooks, BBA statistics director, said: ‘The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution.

  Remortgaging levels also remained subdued during the month, as low interest rates mean many people are better off staying on their lender’s standard variable rate when their existing deal comes to an end.

  The low levels of remortgaging meant total mortgage advances also remained depressed during October at £9bn, slightly ahead of the previous month’s figure but still 20% lower than a year ago….

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• 28Nov

  House prices – ‘five years to recover’

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  From This is Money:

  The average estimate suggests it will take five years for the market to recover. One group, Capital Economics, claimed it could take until 2019, while others said it would be any time between 2012 and 2016.

  ‘Prices need to fall a further 20% to 25% to get back their long-term trend.

  Others including Fitch and Savills are predicting a fall of between six and 8%.
  But the Bloomberg survey also showed the Centre for Economics and Business Research forecasting a 4% rise, while Citigroup say it could be anything from five to 10%.

  The UK’s third biggest mortgage lender said the value of new loans agreed for the six months to the end of September was down 47% to £70.5bn….

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• 28Nov

  House prices 4.6% higher close to good schools

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  From This is Money:

  The building society looked at the impact on house prices of the local primary school having 10% more 11-year-olds who achieved a level four or above in their key stage 2 Standard Assessment Tests than surrounding schools.

  House prices in all regions of England were higher if they were in the catchment area for a good school, with properties in Yorkshire and Humberside seeing the biggest increase in percentage terms of 4.6%, while those in the South-West saw the smallest rise at 2.6%.

  The group said in the vast majority of primary schools in England, at least 70% of pupils achieved at least a level four in their SATs, while 30% of schools had an average attainment rate of between 90% and 100%.

  Nationwide chief economist Martin Gahbauer said: ‘Following recent revelations around the lengths that some parents are prepared to go to get their child a place at a good school, we have revisited our research examining how property prices are influenced by the performance of local sch…

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• 28Nov

  Check the fees before switching mortgage

  Mortgages No Comments

  From This is Money:

  Bank and building society standard variable rates have plunged to historically low levels.
  New fixed, tracker and discount deals have recently been slashed as banks and building societies seek to compete with Northern Rock, which itself is desperate to lend to homeowners.
  However, borrowers should look beyond the headline interest rate and add in all the fees before deciding whether to switch.
  Start by checking what you are being charged. Lloyds TSB and Nationwide have the lowest SVRs at 2.5%.
  Mortgage repayments on a typical £150,000 would be £673 a month – total £16,128 over the next two years if rates remain unchanged.
  Bristol & West charges 2.99%; Halifax/Bank of Scotland 3.5%; HSBC 3.94%, and Abbey 4.24%.
  Most building societies charge more with Chesham BS the highest at 6.45%. This puts monthly payments at £1,008 on a £150,000 loan; £24,192 over two years.
  Weigh up the total cost of the deals. For example, First Direct’s tw…

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• 28Nov

  Skipton raises SVR to 5% for new borrowers

  Mortgages No Comments

  From This is Money:

  Some new borrowers with Britain’s fourth-biggest society will be charged a minimum of 5% if they move to SVR. Others will be charged a minimum of 4.5%.
  But existing customers will still be allowed to pay its actual SVR of 3.5% – one of the lowest on the market.
  This confusing mix of charges is to help the society fund new home loans.
  By imposing floors on the SVR it prevents new customers from moving on to a deal that is unaffordable for the building society.
  But the difference in repayments for customers can be huge. For a typical £150,000 loan those on 3.5% would pay £751 per month, those on 4.5% will pay £834 and those on 5% £877.
  David Hollingworth from brokers London & Country says: ‘You will need to check the small print of your deal very carefully to see which rate you qualify for.’
  Meanwhile, borrowers with Accord, part of Yorkshire BS, will see a hike in their repayments after the lender hiked its standard variable rate.
  Around 14,0…

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• 28Nov

  Home-buy scheme is £115m flop

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  From This is Money:

  Around £115m has gone on Rent to Homebuy since it was launched in July last year. It pays part of people’s rent for up to five years while they save for a deposit.
  But nobody who signed up has actually managed to buy their own home yet.
  The Tories, who published the official figures, attacked the scheme as ‘incompetent’ and ‘a complete and utter failure’.

  What is Homebuy Direct?

  HomeBuy Direct is a shared equity scheme that the Government said would help first-time buyers and house builders.
  It operates on specific new build properties from developers. Buyers borrow at least 70% of the properties value on a mortgage with a further equity loan of up to 30% of the purchase price, split between the Government and developer.
  There is no charge on the equity loan for the first five years, after which the developer charges a 1.75% annual fee on its portion of the loan.
  Buyers can buy out the extra equity in instalments. If they do not buy the rest of their equity and sell…

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• 28Nov

  Lenders stay tough on loan to value deals

  Mortgages No Comments

  From This is Money:

  But the cost of mortgages is still high for those without a large deposit.
  Saffron Building Society last week launched a two-year fixed rate at 5.89% that is available to borrowers with at least a 10% deposit.
  Cheltenham & Gloucester, part of Lloyds TSB Group, also introduced a two-year tracker loan and a two-year fix for borrowers with a 10% deposit or more.
  But the rates are high at 6.99% to fix and a starting pay rate of 5.99% on the tracker.
  The deals are not available for those who want to remortgage their homes.
  There are other new deals that are aimed at borrowers with little equity in their homes who need to remortgage.
  Abbey, owned by Spanish bank Santander, has said it will offer lower rates to Abbey and Alliance & Leicester current account customers who have held an account for more than six months.
  The deals go up to 90% loan to value (LTV) for those taking fixed rates. Nationwide, which last week reported a sharp plunge in half-year profits, has als…

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