Finance Matters

• 07Sep

  Liechtenstein deal ‘to net £1bn’

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  From The BBC:

  A breakthrough deal to recover lost tax from Britons holding bank accounts in Liechtenstein will net £1bn, Chancellor Alistair Darling has said.HM Revenue & Customs struck an agreement last month with the Alpine tax haven to exchange information. Up to 5,000 British investors are thought to have funds in secret accounts in the country – which would mean an average pay-back of £200,000. The Revenue has requested details of 100,000 offshore accounts worldwide. Tackling offshore evasion tax evasion and tax havens was “not only fair” but “particularly important… especially at a time when we expect public spending in the period ahead to be tighter”, Mr Darling told the CBI Scotland annual dinner. PressureUnder the Liechtenstein arrangement, investors will be offered the chance to volunteer details of their deposits in return for penalties, capped at 10% of tax evaded over the past 10 years. HMRC said that those who failed to make a full disclosure would have their accounts…

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• 07Sep

  Students warned on flat ad scams

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  From The BBC:

  Students looking for accommodation are being warned to beware of bogus landlords advertising on the internet.Scotland Yard is telling would-be tenants of the dangers of sending money before seeing a property. The scam typically involves bargain properties in adverts posted on free listing websites in student cities. The “landlord” tells victims that the property can only be viewed if they give their bank account details. The money is then stolen. The Metropolitan Police’s Fraud Prevention Team has been monitoring the scams. In a review of a recent week’s worth of reports on internet-related crime, it found almost a third involved this type of housing scam. “Things to watch out for are adverts where there are no telephone numbers or where the only e-mail address is a free one – a Hotmail or Google e-mail address – where you’re not sure really who you are dealing with,” said Det Sgt Chris Felton.
  Raj Singh, who recently came from Canada to London to start a law degree, was the victim of…

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• 07Sep

  Millions make finance complaints

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  From The BBC:

  More than nine million individual complaints were made to firms in the financial services industry in the 2006-2008 period, figures have shown.Banking and loans accounted for more than half the formal complaints made to financial companies in that period. The Financial Services Authority (FSA) has published the complaints figures for the first time. During the second half of 2008, 40% were being settled in the customers’ favour. The figures have been driven by huge numbers of complaints about bank overdraft charges, and the mis-selling of payment protection insurance and mortgage endowments. “Publishing this information will mean that consumers and firms can now see how many complaints the industry receives and how it deals with them,” said FSA director Dan Waters. Individual companies will start to publish their own complaints data from July 2010. ‘Unhappy customers’The total number of complaints rose from 2,727,000 in 2006 to 3,411,000 in 2007 before dropping back last year to 2,903,…

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• 07Sep

  Loan insurance limits challenged

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  From The BBC:

  A legal challenge to threatened limits on the sale of the controversial payment protection insurance (PPI) will be heard on Monday.PPI is supposed to repay people’s loans if they fall ill or become unemployed. In January, the Competition Commission recommended that next year lenders be stopped selling PPI when granting a loan, or for seven days afterwards. But Barclays bank lodged an appeal with the Competition Appeal’s Tribunal (CAT) in March. The consumers association Which? said Barclays should back off. “PPI has been widely discredited, so it’s important that it’s sold separately from other financial products to help consumers make informed choices about how best to protect their finances,” said Which? chief executive, Peter Vicary-Smith. “Rather than appealing [against] the Competition Commission’s decision, Barclays should concentrate its efforts on developing protection products that offer better cover and value for money to its customers,” he added. Barclays said it was only ch…

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• 02Sep

  Personal debt dips for first time

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  From The BBC:

  The total amount of personal debt in the UK has fallen for the first time since records began in 1993, the Bank of England has said.Personal borrowing fell by £600m in July, taking the total owed by individuals down to £1.457 trillion. There was a drop in both mortgage debt and other forms of borrowing such as bank loans. The number of mortgages approved in July rose again to 50,123, suggesting property sales will continue to rise. “Total net lending to individuals fell by £0.6bn in July, showing a net repayment for the first time in the series,” the Bank said. The amount outstanding on mortgages fell by £400m as people repaid more than they borrowed during July.
  According to the Bank of England, the number of monthly mortgage approvals has crept up slowly this year, suggesting the appetite for lending is picking up a bit. But that seems to be outweighed by homeowners who want to reduce their mortgage borrowing. Anyone on a tracker or variable rate mortgage h…

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• 01Sep

  Bond prizes worth £35m unclaimed

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  From The BBC:

  Some 599,000 Premium Bond prizes remain unclaimed with a total value of more than £35m, according to National Savings and Investments (NS&I).The number – which has risen by 50,000 in six months – includes two prizes of £100,000, the savings group said. London residents hold the biggest proportion of the unclaimed tax-free prizes, which start at £25. Winners are sent cheques to the address held on file by NS&I, and prizes often go unclaimed because people move house. Others who fail to update details are members of the family of Premium Bond holders who have died. Prize fundThere is no time limit for claiming prizes, and details of winning numbers are available on the NS&I website or by writing to the organisers. Nearly £7m of prizes are unclaimed among London Bond holders, with another £4.7m unclaimed in the South East of England, and £2.9m in the North West of England. Just £817,175 has been unclaimed in the North East of England….

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• 01Sep

  Debt burden of retirees ‘growing’

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  From The BBC:

  The debt burden of retired people in the UK is growing with a third in the red on loans and credit cards, according to a poll by Scottish Widows.Retirees with outstanding non-mortgage debt owed an average of £7,344, up from £6,732 in the same poll a year ago. Some 15% of retired people were also still paying off a home loan, with an average debt of £50,100, up £8,000. Some grown-up children are still financially reliant on their older parents, the poll also found. It suggested that 7% of retirees were still paying towards the upkeep of the children who have reached adulthood. ‘Alarming'”The situation for retirees in debt is not getting any better, and an increase of £8,000 in the average amount of mortgage debt is alarming,” said Ian Naismith, head of pensions market development at Scottish Widows. “The recession has seemingly done nothing to encourage retirees to cut their debt, and with the possibility of the value of their property dwindling, they could…

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• 01Sep

  House prices ‘continue to rise’

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  From The BBC:

  UK house prices rose for the fourth month in a row during August, the Nationwide has said, climbing by 1.6%.According to the Nationwide, the average price of a home is now £160,224, up from £158,871 in July. While prices are still lower than last year, the annual rate of decline in property values slowed sharply to 2.7%, compared with July’s 6.2% fall. The Nationwide said a key factor in lifting prices was “the exceptionally low level of interest rates”. Rates have been kept on hold at 0.5% by the Bank of England since March. ‘Bumpier’ road aheadThe three-month on three-month comparison of property prices – considered a less volatile measure than the monthly data – showed a rise of 3.3% in August, up from 2.7% in July.
  Nationwide’s chief economist Martin Gahbauer said lower interest rates had given existing homeowners with tracker or standard variable mortgages a welcome breathing space. “The fall in debt serving costs has meant that fewer homeowners are under immediate fi…

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• 01Sep

  Iceland to pay back Icesave cash

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  From The BBC:

  The Icelandic parliament has voted in favour of repaying more than $5bn (£3bn) to the governments of the UK and the Netherlands.The so-called Icesave bill will reimburse funds paid by the governments to compensate those who lost money in the Icelandic online bank Icesave. About 400,000 savers lost their money when its owner Landsbanki collapsed last year. The bill has enraged many in Iceland, who fear it might bankrupt the nation. The deal was agreed in June, but was only passed after an amendment was added setting various limits to the payments. ‘Fairness’The Icesave bill’s passage means that the Icelandic government has agreed to guarantee the repayment of the £2.3bn loan the UK government made last year to ensure that none of its savers lost money. The amendments will now have to be agreed by the UK and the Netherlands. “It is my sincere hope after this vote, that the UK and Holland will show us understanding and fairness in this matter,” Iceland’s Prime Minister Johanna…

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• 01Sep

  Middle earners ‘cut energy use’

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  From The BBC:

  Middle earning pensioners cut back on energy use the most as prices increased in recent years, research suggests.This group reduced their energy use by 12% when prices leapt between 2004 and 2007, according to the Institute for Fiscal Studies (IFS). The wide-ranging report found that overall household spending reached a peak when people were in their late 50s before falling rapidly. The report said the young were more likely to be paying for new technology. Energy billsThe research found that older households saw domestic bills increase by 55% for gas and 36% for electricity over the two-year period.
  This meant that on average households spent between around 21% or 22% more on energy, while cutting their fuel consumption by 10%. Middle earners cut consumption (by 12%) at a higher rate than the poorest (down 7%) and the richest (down 8%). Charity Age Concern and Help the Aged, which funded the research, claimed that this added weight to their existing view that some older people were t…

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