Although your bank manager will tell you that he or she is your friend, and that they have your best interest at heart when they cut your overdraft or credit card levels, don’t believe them. The truth is that banks thrive on people who are in financial trouble and know exactly how to play on your weakened situations to continue to feed their insatiable drive for profit.

More so, that when you go to them on your knees asking for just a little more leeway, they will already have made sure that you will find it difficult if not impossible to find alternative finance elsewhere, and will take full advantage by providing you with additional finance at horrendously high interest rates.

The UK public must surely have learned one expensive and painful lesson from the current financial crisis and that is to keep the credit under control, and to try to do so by achieving and maintaining a credit rating that is as pure and white as the first snows of winter.

And believe it or not, despite prodigious efforts by the FSA to prevent this from happening, lenders, be they banks, building societies or credit card companies, are pooling their efforts to make sure that people who have fallen into debt in the past will find it very difficult to improve their credit rating.

There is, and always has been, a great anomaly about how finance providers look upon a potential client. If someone has money, why should they need to borrow it? Yet in many cases it is sensible to borrow money, particularly for a mortgage, or to buy a new car or even some major household appliance. Banks carry out tens of thousands of transactions every month, although secured loans are much less attractive to them than unsecured loans, where they can make more than twice the interest.

The sad truth of the matter is that if people are in severe financial trouble the last place they should set foot in is a bank, building society or credit card company, except to ask for an extended agreement on the same terms. Under no circumstances should they agree to accept a new refinancing agreement which will certainly be on prohibitive terms.

Only time will cure most people’s problems, and eventually better times will come. In the meantime it is everyone’s interest to keep the head down, draw in the belt even tighter, and repair each credit status. Learning to be less credit dependent will be a challenge for all of us, but it will be justified by never having to bend your knees to your bank manager again.

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Tags: bank manager, Banking, Building Society, Credit, Credit Card, Credit Crunch, credit rating, Current Account, Debt, extended agreement, Finance, finance providers, financial trouble, FSA, Interest Rates, Loans, Money, Money Management, Mortgage, Mortgages, negative equity, Savings, UK Banks, UK Credit Cards, unsecured loans

Harrogate in the North of England is almost a nice place to spend a few days. Their stay  might be slightly less than pleasant for  the chief executives of the UK’s building society sector who are due to gather there for their annual industry conference in Harrogate. 2008 was, to say the least, a difficult year for UK building societies, and 2009 liiks already that it will be just as challenging. Cracks are beginning to show at the West Bromwich Building Society amid speculation that the finacilly challenged society are on the lookout for a buyer.  Its an open secret that many building societies have found themselves on shaky ground having diversified into issuing commercial property and subprime mortgages.

U.K.’s recession is beginning to make its mark on the online clothing market, where it was reported that sales are down for the first time in nearly a decade.

Web-based clothing sales dropped by two percent compared with the previous month, recent reports have it. Possibly distractions might have been Easter shopping, as well as mother’s day. Overall online retail sales in the UK were still on the rise in April, up 14 per cent from March, with online beer, wine and spirit purchases being the pacemakers, up by ten percent as warmer weather and Darling’s unwelcome two percent tax pushing sales figures upwards.,

The world of banking was shaken but not stirred by the news that the chairman of Lloyds Banking Group (LBG), Sir Victor Blank is to call it a day in June 2010.  Sir Victor announced to the LBG board that he felt it was “the right time for the Group to appoint a new chairman”.
 
Sir Victor had faced considerable shareholder  criticism for their decision last year to buy HBOS, the troubled owner of Halifax. These day. the UK Treasury is the principal shareholder holding a  43% in LBG.

On the news of  chairman Blank ’s intended step down  shares  in LBG  rose 1.6 percent    (1.4 pence to 89.2)

The Competition Commission and the Financial Services Authority have apparently begun a crackdown on a controversial form of insurance , that has been  costing banks and insurance companies  hundreds of millions of pounds. Among those affected are Lloyds Banking Group, Royal Bank of Scotland by concerted efforts to reform payment protection insurance.

High street retail giant, Marks and Spencer  are reported to be on the verge of announcing a dividend cut this week, with some analysts saying that it could be  by as much as half. Expectation are that the full year payout per share will be 11.3 pence down from 22.5 in 2008.  M&S are expected to announce their results on Tuesday.

On the FTSE ON Friday, property companies were again under the sword. The U.K.’s second-largest real estate investment British Land Plc trust declined 1.3 percent (5.25 pence to 391.75)  Eurasian Natural Resources Corp.  also followed suit , down  1.8 percent  (10.5 pence to 592.5) while Carnival Plc  on news that they are likely to cut dividends fell 2.4 percent  (42 pence to 1702) .

The world’s largest mobile- phone company Vodafone Group Plc (are expected to announce any day now their eagerly awaited plan  to speed up their one billion pound cost-cutting program. Shares  fell 2.3 percent  (2.9 pence to 123.2)
 
U.K. yellow pages provider , the Yell Group Plc are expected to announce a  one billion pounds write-down on its Spanish subsidiary, which has been severely affected  by the country’s severe economic  Yell shares dropped by 6.9 percent (3 pence to 40.5)

U.K. stocks fell backwards slightly on close of business on Friday. The FTSE 100 Index fell 14.47 to close on 4,348.11.37, while the FTSE 250 settled down for the weekend on 7427.87.

The pound receded slightly against the dollar and rose strongly against the Euro on currency markets yesterday.
· Pound/US dollar 1.5144
· Pound/Euro 1.259
· Pound/Japanese Yen 143.767
· Pound/Swiss Franc 1.703
On Wall Street, the Dow Jones closed on Friday down 62.68 points to 8268.64, while the Nasdaq held its ground more or less, down 9.07 points to 1680.14.

The US Treasury Department  announced that  they will make federal bailout funds available to a number of companies in the life insurance sector, after impassioned pleas  to receive much needed government help.

The Treasury plan  to inject up to $22 under last Autumn’s  Troubled Asset Relief Program.  On the news, shares of U.S. life insurers rose sharply on Friday.  The  life insurance companies who are eligible to receive aid  have been on hold  for weeks with some applications going back as far as November 2008.

The economies of the 16  Eurozone countries  have declined by 2.5% in the first three months of 2009,  according to a recent report. Forecast were for a drop of only 2%, with the sharp fall in German exports acting as a key factor in the decline.
GDP in the Eurozone has fallen by  fell 4.6% annually up to the end of March 2009/

Commodity prices were huffing and puffing over the weekend, Crude oil was up 5 cents a barrel at an average of $56.15, Gold dropped by 7 cents an ounce to $930.60. Copper continued its recent steady decline finishing at $200. 25 down $2.55

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Tags: Building Society, Financial News, Lloyds TSB, Retail, Sir Victor Blank

If you have money to spare out of your wages after paying your bills, consider saving some as a cushion for unexpected bills, like repairs to your house or car.

Savings accounts come in lots of packages. The main ones are:

· Bank and building society accounts
· National Savings and Investments
· Credit union accounts
· Individual Savings Accounts (ISAs)
· Christmas club and hamper accounts

Money in a savings account generally earns a higher rate of interest than excess cash in a current account.
Points to watch

Savings accounts are a good way of earning interest on any small cash surplus in the short term – say up to five years.

Also consider inflation may eat in to the buying power of your savings.

If you want longer-term savings, then look at alternative investments like a pension or unit trust. The best way to do this is to talk to an independent financial advisor.
Also beware of some potential pitfalls to savings accounts:

Regulation and compensation
The Financial Services Authority (FSA) regulates banks, building societies and credit unions. This means your money is safer if the account provider collapses because the FSA operates a compensation scheme for savers with less than £35,000 on deposit with any single lender.

Risks
Christmas clubs set up by companies or individuals do not pay interest on your savings and are not protected with a compensation scheme if they fail. Savers in these schemes are often limited to spending their money with the shop or hamper running the savings account.

Tax
Income tax is deducted at source on savings at 20% – but some accounts, like ISAs and National Savings are tax-free. If you pay tax at a higher rate (40%) you may have to complete a tax return and pay additional income tax.

Penalties
Some savings accounts may offer a higher rate of interest than others, but to get this rate you may have to tie up a minimum amount of cash in your investment or pay a fee if you take your money out.
Despite these points, savings accounts are low risk investments, provided you steer away from unregulated providers who can go bust and leave you with no way to claim any money back.

Opening an account
Don’t forget many savings accounts offer better rates if you deposit money by post or over the internet.
Many money comparison web sites show the current best deals to make shopping around easier.

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Tags: Bank, Building Society, FSA, Penalties, savings accounts, Tax, UK Bank Accounts