Finance Matters

• 17Oct

  London travel fares to increase

  Money No Comments

  From The BBC:

  Bus and Tube fares will both rise by above-inflation rates in 2010, London Mayor Boris Johnson has announced.Bus fares are to go up by 12.7% and Tube fares will rise by 3.9%. Oyster card pay-as-you-go bus journeys are to rise from £1 to £1.20. The Congestion Charge is rising to £10, while Mr Johnson said a £9 charge for those using a new account system would be operational next year. The London Labour group said it was a “kick in the teeth” for passengers. The mayor said the price of a seven-day bus pass will also jump from £13.80 to £16.60 but London Travelcard prices will be frozen in the vast majority of cases. Last year Mr Johnson raised prices by 6%, blaming the former administration for creating an £80m financial hole. Mr Johnson said on Thursday: “Nobody wants to make an announcement like this, especially when Londoners are feeling the effects of the recession.”
  He added: “The mistakes of the past and the current economic climate have c…

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• 16Oct

  Blow to insurance restrictions

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  From The BBC:

  Plans to restrict the sale of the controversial payment protection insurance (PPI) have been dealt a blow.The Competition Appeal Tribunal has told the Competition Commission to change its plan to restrict PPI sales at the point when loans are granted. The appeal against this impending restriction was made by Barclays bank. The Commission said it would study the judgement “closely” before deciding what to do next, but pointed out it affected just one part of its plan. “The appeal was upheld on one ground which relates to our assessment of the remedy prohibiting the sale of PPI at the point of sale of credit,” said the Competition Commission. “The Commission has been asked to reconsider the loss of convenience for consumers of not being able to buy PPI at the same time as taking out credit.” Forthcoming restrictionsIn January 2009 the Commission outlined a range of limitations on the sale of PPI, which is supposed to enable people to pay off their loans, such as credit card bills or mort…

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• 24Sep

  Pensions ‘quality mark’ unveiled

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  From The BBC:

  A scheme aimed at rebuilding confidence in workplace pensions and making them understandable and attractive to employees is being unveiled.The Pension Quality Mark will be awarded to employers meeting a list of criteria, including having a minimum 6% employer contribution rate. Marks & Spencer and Standard Life will be among the first recipients later. The scheme is being run by the National Association of Pension Funds (NAPF), which represents 1,200 UK funds. The scheme comes amid a tough climate for pensions with a number of companies having closed final-salary schemes in recent times. SignalEmployers have closed most final-salary schemes to new joiners and replaced them with money purchase or defined contribution versions. In these, the eventual pension depends directly on the amount of cash built up through investment, with no direct relationship to the number of years for which members have been contributing or their final salary at retirement. The Pension Quality Mark is desi…

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• 24Sep

  Car repairs ‘get more expensive’

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  From The BBC:

  UK garages have increased the average price they charge to repair vehicles in the past year, despite the economic downturn, a survey has suggested.The average price per hour of a mechanic’s time rose from £75.17 to £75.85, said insurer Warranty Direct. There was an almost 5% fall in labour rates charged by franchised dealers, however cheaper independent workshops raised prices by 0.8%. Average rates varied from £94.44 an hour in London, to £61.65 in Cornwall. The overall UK average franchised garage charged £90.16 an hour, while the typical price for an independent firm was £56.10. The survey of 5,000 premises uncovered rates peaking at £190.35, however this was considerably below the high of £198.86 seen a year ago. Motorists should shop around to “avoid being stung badly”, said Duncan McClure of Warranty Direct. He added that the prices charged by franchised dealers had become “unsustainable” and so had begun to fall. “The way some work…

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• 24Sep

  ‘Shoes not booze’ selling online

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  From The BBC:

  UK online spending fell by 10% in August compared with July with alcohol sales down but footwear purchases up, according to a survey.Total online sales dropped to £3.8bn, although this was still 16% higher than August 2008, according to retail research group IMRG Capgemini. Sales of shoes rose by 3% as parents bought back-to-school footwear for their children. However, online spending on beer, wine and lingerie has dropped in 2009. SalesNearly all sectors showed a dip in online spending in August compared with the previous month. Alcohol sales have fallen year-on-year in five of the past six months, and annual growth of lingerie sales was negative in each of the past six months. IMRG said that this was evidence of consumers cutting back on luxuries during the recession. There was a slight rise in month-on-month spending on gifts, electrical items and shoes, the report found. Tina Spooner, of IMRG, said that the August dip was a seasonal trend which had also been seen in recent ye…

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• 24Sep

  House sales ‘stalled in August’

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  From The BBC:

  UK house sales fell in August from July, the first drop this year, according to HM Revenue & Customs.Figures from HMRC show that 83,000 homes were sold last month, down from 87,000 in July. House sales had been rising steadily this year, with the property market reviving from the sudden slump triggered by the credit crunch in 2007. However, sales in August were still double the number sold in January, and 19% higher than in August last year. The figures chime with those from the Council of Mortgage Lenders (CML) , which last week reported that total mortgage lending, both for house buyers and people re-mortgaging, dropped by 13% in August from July. The CML attributed this to the effect of the summer holidays but said lending would probably be subdued in the next few months. Some commentators have predicted that the revival of sales and house prices this year would soon run out of steam. Parental cashThere has been some evidence that much of the new house buying, particularly by fi…

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• 24Sep

  Banking fees ‘incomprehensible’

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  From The BBC:

  Information given to some banks’ customers was “incomprehensible” and fees were “opaque”, a scathing report on banks has suggested.An EU-wide price comparison website should be set up for current accounts, the European Commission report said. Only 9% of EU consumers switched accounts in 2007 and 2008, compared with 25% of car insurance customers. The report mirrors a UK review which said that current accounts were not working. “Retail bankers are letting consumers down,” said EU consumer commissioner Meglena Kuneva. “There is widespread evidence that basic consumer principles are being violated with problems from complex pricing to hidden charges and information that is unclear and incomplete. “Banks need to put their house in order with a culture change in the way they treat customers.” FindingsThe Commission studied the pricing of accounts offered by 224 banks across the EU. Its findings included: Experts needed more explanation from banks about their fees in 66% of cases. One in 10…

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• 24Sep

  Court approval for Aviva payout

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  From The BBC:

  The High Court has approved the offer by the Aviva insurance company to pay out about £500m to one million savers in two of its with-profits funds.It means most payments should be made by the end of the year. So far about 850,000 savers have voted to accept the deal, which will see most receive between £200 and £1,000 each. Under the “re-attribution” process, policyholders have been asked to accept money to relinquish any future claim to the surplus cash in the funds. “Today’s decision by the High Court is an important step towards completing the reattribution,” said Mark Hodges of Aviva. “We believe the offer represents good value for 99% of our customers and the High Court’s approval brings individuals closer to receiving their tax-free payments.” Derisory?The vote is not a ballot requiring a majority decision.
  Instead, each policyholder in the two funds – CGNU Life and CULAC – is being asked to make an individual decision. Consumers’ association Which? had describ…

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• 24Sep

  Charge students more, say bosses

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  From The BBC:

  Please turn on JavaScript. Media requires JavaScript to play.
  ‘It might change my decision to study’
  University students in the UK should pay more for their loans and accept higher tuition fees as “inevitable”, says a report from business leaders.The Confederation of British Industry says the extra money needed to fund universities should come from savings in the student support system. It also calls for more sponsorship and bursaries from businesses. The National Union of Students attacked the report as “gross hypocrisy” from the “fat cats at the CBI”. In England, the government is set to launch a major review of the funding of higher education and student fees. Higher education minister for England, David Lammy, said the government still wanted 50% of young people to go to university. “We should continue to widen access, not only because it’s socially just, but also because our future economy will depend on having more people with higher level skills,” he said. The CBI says the aim…

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• 24Sep

  ‘Years needed’ to rebuild wealth

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  From The BBC:

  Years of saving would be needed to return household wealth to pre-recession levels, a report by the Bank of England suggests.If households saved 10% of their income, it would take nine years to bring wealth back up to the average of the last 20 years. The Bank’s quarterly review reported that householders’ decisions on saving could affect the economic outlook. However, history provides no “clear guide” as to how they will react. “It is difficult to assess how much, if at all, households might seek to rebuild their wealth,” the report said. Saving habitThe largely theoretical report found that the ratio of household saving to spending fell between 1995 and 2007 to historical low levels.
  Falling interest rates, easy access to credit, rising asset prices – such as property values – and economic stability meant people were more tempted to spend than save. But the financial upheaval of recent times has reversed many of these trends, as well as making people’s jobs less secure. There might…

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