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

UK families who have just lost a loved one seem likely to be penalized if they are late in paying inheritance tax on their estate. It’s a move that is difficult to take on board even for the most cynical and which, at its best, will earn the Treasury a mere £10 million annually. One wonders if Brown and Darling’s public relations people are aware of this forthcoming legislation; if passed, it will do even more damage to their already tarnished reputation – and this with a general election looking increasingly likely for the spring of 2010.

Reports have it that the UK Government is set to levy a 3 per cent annual interest charge on inheritance taxes that are submitted later than a certain time scale after a person passes away and the estate has been dissolved. Additionally, the tax man will be living up to his heartless image by reducing the rate of interest traditionally paid when any overpayment of inheritance tax is returned to the estate.

Government critics were forming a line to condemn what they described as a desperate, heartless move by Brown’s obviously hard-pressed government. Currently the laws pertaining to inheritance tax stipulate that where estates have a value of £325,000 or more, the trustees must submit the inheritance tax within six months of the death, on the taxable residue. If they fail to do so, the estate is charged a minimal interest of 1% annually until the tax was remitted. The Labour government even displayed some unusual compassion by cutting the rate to zero, and as recently as March of this year, showed an understanding that most estates are based around properties which were and still are difficult to dispose of under the prevailing market conditions.

From the coming September, late payments are to be charged at 2.5 percentage points above the Bank of England base, which is now sitting on the historic low rate of 0.5 per cent, with the interest that HM Revenue & Customs due to pay on refunds scheduled to be one point below the Bank‘s rate, although it cannot go below the 0.5 percent level. It seems likely that many executors will find themselves with no option but to pay the interest rather than offload a property at below-market prices, which will be, for many, a bitter pill to swallow.

In the most recent figures available the Treasury announced that it expects to collect around £2.2 billion in inheritance tax for the current tax year, with late payment interest amounting to a mere £10 million.

What next, a nation asks, of Gordon and Alastair?

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Tags: Alastair Darling, Bank of England, British Economy, Economy, Financial News, Gordon Brown, HM Revenue & Customs, inheritance tax, Interest Rates, Money, Savings, Tax, UK government

Business Secretary Peter Mandelson pointed out recently that the advantages of a weak pound for the UK economy far outweigh it disadvantages. Mandelson went on to explain that because of the pounds “competitiveness” since the beginning of 2009 , U.K. manufacturers are winning valuable export orders and help to soften the blow of the recession domestically.

“Exchange rates move up and down. At competitive levels that we have seen last year, we have seen growth.” Mandelson explained

The pound is currently trading against the dollar at 1.6524, almost sixteen percent less than a year ago. When sterling was at its peak in November 2007 it was being traded as high as $2.116, and in January of this year it had reached a low of $1.3503.

However the pound remains relatively strong against the Euro, which according to Government sources makes it more difficult to do business in Europe, which has always been a valuable export market for the UK. Overall exports fell by 17 percent in the quarter up to end May 2009, compared to the previous year, according to information from the Office for National Statistics.

While this figure is less than inspiring, it could have been so much worse if not for the weak pound.

So for the meantime, a weak pound that will continue to increase the competitiveness of British exporters and boosts UK exports sales is to be encouraged. With the US economy beginning to recover, the possibility to increase UK exports will become increasingly stronger. The problem is that importing raw materials with a weak pound can be problematic. One area where a weak pound is a real cash bonanza is in incoming tourism. And this year with better weather to help it along, tourists are flocking to the UK and keeping their currencies flowing into our cash registers.

So if the production lines can be kept rolling, and sun keeps shining, the weak pound will begin to pay for itself.

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Tags: Banking, British Economy, British Pound, Financial News, Mandelson, Money, Money Management, Peter Mandelson, Pound, Savings

We must all remember with some shock and horror when the UK treasury announced that they would be cutting bank interest rates to next to nothing to help the business community and keep the major banks from going “belly up.”

If you were one of these people who were fortunate of unfortunate enough to have money on deposit and even more so if you were dependant on the interest earned on a day to day basis, you had no option but to sit back in horror and disarray and watch the interest rates that you were earning on your deposits fall from three of even four percent to less than one.

Although there is a return to optimism that the financial crisis has at least bottomed out and that the economy is now in cautious recovery mode, there are little signs in general that interest rates on deposits are beginning to climb.

When the rates paid out on deposits first began to plummet, the best move that anyone could make was to stay put, dig in and be patient. Especially as the likelihood of finding another bank or building society that were paying out more than one percent was very slim.

However there now indications that higher interest rates on deposits are now available, under certain terms circumstances, For example, both the Abbey and Newcastle Building Societies have recently announced increases in lending rates that, while being far from spectacular, do allow the possibility of actually seeing your savings begin to accumulate for the first time since late last year.

The significance of the interest rate not only strengthens the general feeling that the recession is slowly dwindling and for the families and individuals who had refused to panic the time has come to begin to reorganize their finances and have them work for you once again.

Trends in finance are generally consistent, and mean that if one or two building societies or even the banks begin to offer improved deposit rates it is only a matter of time before they all do. So take the time to check out which deals are likely to be worth your while, and for the long term

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Tags: Bank, Bank of England, Banking, Intrest Rates, Money, Money Management, Savings, UK Banks

With 50% tax bands hanging over their heads, 1% interest being paid on any money that they may be lucky to have left on deposit in the banks in which they may be reluctant shareholders, is it any wonder that the UK public might feel hard done to. Yet we Brits are an uncomplaining lot, and it doesn’t take much to put a smile on our faces.
And just to prove that someone up there likes us, the weather seems to have taken a turn for the better, and cautious forecasts say that the weather in the UK for the summer months will be much warmer than it has been for the last few years.

Last weekend witnessed very pleasant weather throughout the UK and certainly put smiles back on the faces of those who had passed through a particularly cold and wet winter. If the weather holds up to expectations, it means that considerable and much welcome savings will be made in the cost of heating and electricity. And who can blame anyone who goes out and spends the money saved on having a good time. Outdoors.

For many UK citizens who had considered it prudent to do without their foreign holiday this year, the thought of holidaying in the UK has suddenly become much more bearable. The fact that their money is staying in the UK will also mean a major boost for the UK tourist industry and for the economy in general, with signs of a major increase in job vacancies in the service industries showing that they are gearing up to meet the demand. Retail sales in the last few weeks have also been encouraging.
Let’s hope that the weather forecasts don’t let us down and that Britain will enjoy a warm summer and pleasant autumn. We deserve it.

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Tags: British Economy, Credit Crunch, Financial News, Recession, Savings

…a malfunctioning pension scheme
Something that was hovering in the air for a long time, and has been swept under the carpet a little as a result of the ongoing credit crunch is the fact that most UK citizens can afford to become old or worse still, to retire.

A recent report issued jointly by the Help the Aged and Age Concern charities has discovered that around two thirds of the baby boomers are no looking at a normal retirement as at best a forlorn hope, and have come to grips with the reality that their “golden years” will be a lot tougher than they worked for and in the majority of cases also deserved.

Families who have always been savers are seeing their nest eggs deflated by low interest rates, property prices devaluing at a pace and intensity that they may never recover from for at least the next decade or so. To make matters worse, their pension scheme has been knocked very hard by the decline in stock market share values, on which their pension plans were based.

Worrying but typical statistics that are coming out of the crisis, as unemployment begins to sore, is that percentage wise, the number of people in their fifties upwards who are being laid off is very high.

According to official figures released by the Office for National Statistics unemployment among people aged 50 or above has risen by 47% within the last twelve months, with the chances of these people returning to the job market looking extremely bleak for the foreseeable future. This means either retraining which takes time or money or digging into the already rapidly devaluing family next egg.

Those fortunate to stay in work face an uncertain future, especially those without a well funded pension plan. They will be forced to live the rest of their lives walking a financial tight rope, in fear of redundancy and hoping that they can continue to work for as long as possible, even well into the years when they should have been sitting in the park, feeding the pigeons.
While the pension shortfall problem exists all over the Western World, financial analysts state that it is especially acute in the UK.

A recent report from the National Institute of Economic and Social Research found that accumulated wealth, pension levels and assets if realized will still be too low on average to allow a quality of life equivalent to current standards for most UK retirees, and there is little that can be done to change the situation for most people who will reach retiral age over the next two decades.

For those of us who are in that trap it appears that the only solution appears to work longer. If the UK government would raise the retirement age to 70 for men and 65 for women it would be realistic and would allow an increase in retirement income by around 30%, most financial analysts estimate.

For those people who see that retirement is still a long way off, the news is that setting money aside for pensions should begin as early as possible, no matter how far off it seems.

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Tags: Pensions, Savings, Tax, Taxpayers, UK government, Unemployment

• Young people believe UK living standards won’t recover for a decade
• Next generation to reform borrowing habits

Young people look set to bear the scars of the current recession for years to come judging by their pessimistic outlook for economic recovery, new research published today by Post Office Financial Services reveals.

However, having been forced to learn financial lessons the hard way, the next generation of adults believe they are far more likely to take on a more responsible approach to credit and spending.

Almost a quarter (24 per cent) of 18 to 24 year-olds believe that living standards will take over a decade to return to pre-recession levels. A further third (34 per cent) predict that economic recovery is more than five years away.

These results reveal a younger generation more pessimistic about the timescale for economic recovery than any other age group. By contrast, just five per cent of 45-54 year-olds thought that recession would last longer than a decade; perhaps indicative of those who have lived through the last recession feeling more optimistic about recovery from the current downturn.

Credit-crunched young people have also learned some serious financial lessons as a result of the recession, and to a much greater extent than in older age groups. This is particularly apparent when it comes to borrowing:
· Half of young people (48 per cent) believe they will reduce their usage of credit as a result of the crunch
· This trend is less apparent among older age groups, with a significantly lower 28 per cent of 35-44 year-olds planning to reform their use of credit

Doug Strachan, head of consumer insight at Post Office Financial Services said: “These findings demonstrate that the recession is already causing a marked change in the attitudes and the potential behaviour of the younger generation in particular.

“Younger age groups have only ever known relative economic good times during their adult lives, so the change in economic climate is therefore likely to hit these groups the hardest, contributing to this overwhelming sense of pessimism. One positive result of this appears to be indications of a desire to change financial habits drastically in the long term.”

The credit crunch has also impacted young adults (18-24s) in the following ways:
· More than twice as likely to have borrowed money from a friend (12 per cent) than older age groups;
· 11 per cent cite the decision to put off getting married or starting a family as a direct result of the current economic climate, more than twice the level of any other age group;
· Their greatest fear is the risk of losing their job, this is in line with older age groups; for a third (32 per cent) losing their job is something they are extremely concerned about. Overall, 70 per cent of under-24s are concerned about becoming unemployed.

Notes to Editors:

For further information or additional data from the Post Office Financial Services People’s Panel, please contact:

Blue Rubicon Post Office Press Office
Helen Searle/ Kate Cozens Hayley Fowell
020 7260 2700 020 7250 2417
helen.searle@bluerubicon.com  hayley.fowell@royalmail.com
kate.cozens@bluerubicon.com

About the Post Office Financial Services People’s Panel:

Research conducted by T-Poll on behalf of the Post Office People’s Panel during late March 2009. A nationally representative sample of the UK was used. In total, 1,541 consumers were surveyed online.

Research conducted by T-Poll on behalf of the Post Office People’s Panel during September 2008. A nationally representative sample of the UK was used. In total, 1,984 consumers were surveyed online.

The Post Office Panel is a specially recruited group of consumers, nearly all of whom are Post Office customers. They provide regular and in-depth consumer insight into spending patterns and trends within the UK to the Post Office. The Post Office Panel is comprised, in part, of some of the 24 million customers who use the Post Office each week and reflects every social demographic within the UK, as Post Office customers do.

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Tags: Financial News, Post Office, Savings, The Post Office

Continuing claims of unfair overcharging is making UK energy suppliers feel hot under the collar. And the people who are making them roast are Ofgem, the UK energy regulator whose role it is to crack down on companies who vary from the tariffs that they are legally obliged to charge the consumer.

A recently code of practice providing a whole new list of conditions designed to protect the interest of consumers and members of the business community will protect against well know “gypping” practices initiated by energy companies, particularly price discrimination against customers in the lower income bracket. These can be either families or occasionally small, usually family run businesses that use prepayment meters to settle their energy bills in advance, instead of the methods preferred by energy suppliers, particularly direct debit.

Under the new legislation, Ofgem end to put a stop to unfair practices against those who prefer to prepay their energy accounts as well as putting a stop to energy company’s insistence on demanding the automatic rollover of fixed-term contracts, regarded as unfair practice,. Ofgem see it is the consumer’s right to be able to shop around for the best energy supply deal before deciding which energy supplier to opt for.

Currently, having prepayment meters installed results in the consumer being charged a fixed one-off fee of at least £90.00 when they sign up with an energy supplier, where direct debit customers are not required to place a deposit. The aim of Ofgem is to stipulate that energy suppliers will be allowed to charge a fixed sum, yet to be established, but considerably lower than that being paid now for this service.

Also under scrutiny are unfair practices being levied on the 12 million households who prefer to pay their energy bills by direct debit. It has long been the practice of energy companies to encourage their customers to pay by monthly direct debit by offering financial incentives, as being paid quarterly effects their cash flow considerably, by making it cheaper than paying quarterly. However, after considerable research was carried out by Ofgem, it was ascertained that as monthly amounts being charged to the customers was an estimate based on previous history and not after the physical reading of their meter, they were often being overcharged, and any inflated charges were not being refunded after the meter was physically read. In answer to claims by some energy companies that energy bills “leveled ” out over the year, Ofgem’s research showed that in many cases, consumers were paying for as much as 13% more for energy than they actually received, against those who paid quarterly after their meter reading was recorded.

In the long term, the new legislation will insist that energy companies will provide their clients with an annual statement, detailing tariff information, written price quotations as well as their clearly stated rights to switch energy suppliers without pre-conditions or penalty clauses.

Energy companies who fail to comply with the conditions of the new legislation, which is due to come into effect by the autumn of this year, run the risk of being reported to the Competition Commission.

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Tags: Energy Company's, Energy Prices, Money, Ofgem, Savings, UK energy suppliers

While most of the not so long ago “upwardly mobile” families are clinging on to logs that seem to be floating rapidly towards a torrent, the baby boomer generation are finding themselves facing an even bleaker future. And one that they might justifiably feel that they don’t deserve.

With the thought of a pleasant retirement looming, bolstered by some money in the bank, a healthy pension and even the thought of “downsizing” their property, one step at a time, they have seen these options dissolve and fade away before their eyes, with an overwhelming feeling of powerless to do anything about it.

Many of the UK’s population in their late fifties and early sixties have been looking forward to their golden years in the knowledge that they had prepared themselves with a “nest egg” that should have been valued at at least

£250,000 , with experts saying that the sum of one million pounds, in a savings, pension and property package not an unreasonable sum to expect after a life time of hard work and relative frugality.

What those approaching retirement age feel that they were entitled to expect was that the UK business and banking communities would provide them was a reasonable framework where their assets and savings would be protected and would also receive a reasonable return. .

What the current situation means now is that most people will be unable to retire at the age of sixty five, and instead will need to continue working and earning an average salary for at eat another two years after their retirement date to have any chance of making up the shortfall in their pension packet.

Recent research now show that, if the current situation prevails, UK citizens will need to accumulate an average of £34billion annually by 2037, in order to maintain their pensions at their current value.

Even more alarming for many , is the warning issued by the National Association of Pension Funds (NAPF) that the Pension Protection Fund, company pension schemes are now showing a shortfall of over two hundred billion pounds, the highest level since the fund was launched.

Savings are also seriously under siege, with interest rates in the last year dropping to a level where they almost non- existent, with very little sign that they are liable to rise to anywhere like a reasonable level anu time soon.

Many soon to be pensioners feel that the UK government hastened to bail out the banks without thinking too long and hard about the welfare of the sector of the senior citizens of the country, and especially those who were about to fall into that category.

Meanwhile Rosie Winterton, UK Minister for Pensions, has defended the government’s actions by saying ” “I certainly have sympathy with people who have saved and have seen interest rates cut. But at the same time what I would say is that remember we have taken swift action to prevent the collapse of the banks, if we hadn’t taken that action then imagine the situation that savers would be facing,” she says.

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Tags: Financial News, Interest Rates, Minister for Pensions, Money Management, Rosie Winterton, Savings, UK

Halifax International has launched a new, informative Expat Focus website www.halifax-international-expats.com, designed to enable expatriates to access breaking news, up to date information and advice from one single source, wherever they are in the world.

Halifax International’s Expat Focus www.halifax-international-expats.com contains all the latest news and stories on emigrating abroad, employment and money management issues for expatriates.

Key features of www.halifax-international-expats.com include:

• Expat Centre – A section dedicated to Halifax International news, including expat case studies, latest press releases, survey results, product launch information and links to other useful websites covering important issues such as education, employment and social events.

• News Categories – All the latest news that is important, relevant and of interest to expatriates. This covers lifestyle issues, the property market, offshore banking, finance, taxation and
employment.

• Latest News – A source of up to date breaking news stories to keep expatriates abreast of any developments that are of interest to them.

• Burning questions – A question and answer section that enables expatriates to email questions to Halifax International’s experts, via the website. The questions and answers will be posted onto the site, where possible, to provide a source of information to others.

• Email bulletins – Expatriates can also sign up to get free monthly email bulletins that will provide them with information on any news as well as new Halifax International products and
services.

James Gairdner, managing director of Halifax International said,
“The new Halifax International Expat Focus website is an informative and interactive tool. Expats or anyone thinking of moving abroad can use the website to get a feel for life overseas and catch up on all the breaking news or views from the expat community from one single source.”

Halifax International is part of the Lloyds Banking Group
Tel: 01422 333829 Fax: 01422 333007
Website: http://www.lloydsbankinggroup.com/media.asp

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Tags: Banking, Expat, expatriates, Halifax, Halifax International, Savings, UK Banks