29 October 2010

Savers Left In The Dark

Many of us feel that we are not getting the most out of our savings. Now, new research actually suggests we are being purposefully left in the dark.

In a new piece of research from Which?, it has been revealed that those people who are putting their money into savings in both banks and building societies are not getting out of the service what they ought to be.

It is reported by the company that savers are missing out on as much as £332 (an average marker) because they are not being properly informed by the banks and building societies in question, about the correct interest rates they should be earning.

What the survey research shows that it is only through consumer ignorance that the correct interest rates are not being paid and that this ignorance is directly equated to the banks withholding information to the consumer.

In what was an enormous downsizing operation, the amount of interest that was paid to savers was cut back by half in the 2008-2009 period, seeing a reduction from £39 billion to just £19.2 billion.

The research firm discovered that almost half of the 1,200 plus savings accounts available in the UK pay just 0.4 pc after tax interest with many paying less than this. In what seems almost a contradiction of terms, an average savings account in the UK would earn you just 80 pence for every £1,000 saved, leaving many asking what the point is in using such an account.

Many banks, it is reported, do not even make their interest rates public-instead they choose to withhold any fluctuations, crediting the saving consumer with an interest rate that they decide and that is in their hands to manoeuvre if they so wish.

It is thought that only a handful of banks (which include Yorkshire BS, Skipton BS, Barclays and HSBC) actually print their rates.

25 October 2010

One Size Fits All-New Pension Scheme

In what is set to be one of the biggest changes in the cut-back process, the government has decided to stop varying pensions and to install a ‘one size fits all’ alternative that will entirely disregard individual personal financial situations or circumstance.

The change is being made in order to simplify the pensions scheme which was been in action for the last 50 years. What will happen is that all pension payments will be reduced (or increased) to £140 a week so everyone in Britain is receiving the same amount.

The new plans are likely to be announced as the year draws to a close in a Green Paper. One of the benefits of the new scheme will be that people will no longer be ‘means tested’ which is thought to be quite a humiliating process.

Another benefit is that couples whose pension was divided between them in the present scheme (at a basic state rate of £156.15) will now be inflated as each of them receive £140 a week. This would mean that couples could have an annual state income of £14,560 in the new plans.

As well as benefits for couples, the system will benefit single pensioners who receive the basic state pension as they will see their weekly income rise from £132.60 to the new £140 level.

The dominant feature in the change is to account for a number of loop holes in the pension system which often affected women who could not qualify for a full state pension because they had taken time out to raise their children.

Ministers aim to introduce the new pension in Parliament by the end of 2015, wanting it to be firmly installed before the retirement age plans are put in action (which will see the pension age for women rise to 66).

13 October 2010

US Bankers Still Receiving Big Payouts

The myth that bankers are no longer receiving enormous payouts has well and truly been shattered thanks to new research founded by the Wall Street Journal.

The figures which reveal the banking giant JP Morgan salary pay-outs, reveal US bankers are getting record breaking compensation for the second year in a row. In what seems almost inconceivable, the research that studies three dozen banks, hedge funds and money-management firms, shows that these companies will pay out £90 billion in salary and benefits this year alone.

The data flies in the face of new measures that were set to put a cap on bonuses and salaries and it also reveals that top bankers have not suffered in the slightest despite the state of the US economy and its recovery. Far from being negatively affected by the US recovery, salaries have gone up by 4% since this time last year, third-quarter figures reveal.

Charles Elson, director of the Weinberg Centre for Corporate Governance told the Wall Street Journal,
“Until the focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels.”

The research also shows that Goldman and Sachs is expected to raise compensation pay to $16.8 billion which is a rise of 3.7% despite the fact that revenue is set to fall to $39.1 billion.

07 October 2010

Alarm Bells For Homeowners

In one of the quickest declines the UK housing market has ever seen, house prices in the UK have plummeted by 3.6% in a single month, leaving homeowners with their heads in their hands, unable to believe the loss in value of their houses. It is thought that contributing factors could be the number of houses on the market as well as a decline in prospective buyers due to the unstable economy.

Halifax have commented that the decline is set to continue. A spokesperson from the firm commented:"A shortage of properties for sale contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months has reduced the imbalance. At the same time, renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase."

06 October 2010

Millions Of Pounds Missing Because Of Currency Firms

Crown Currency Exchange has potentially let down as many as 13,000 customers. Yesterday, it was announced that the overseas firm had slipped into administration. The effect is that their customers will not receive the money they have pre-ordered, which, in total amounts to £20 million.

This situation came about despite there being serious worries about the companies’ health from over a year ago. Concerns were voiced by the Financial Services Authority but yet, for some reason the issues were overlooked and even the authorities failed to take action against the firm which is based in Cornwall.

Even though this situation has left thousands of people, hundreds of pounds short-in some cases, thousands-the government is unwilling to tighten the regulation of similar currency firms. This is exactly what insiders are saying caused the problem in the first place and understandably, customers are furious today that changes are not being made.

A Treasury spokeswoman comments on the situation:

“Crown Currency Exchange’s business model was exceptional-it involved taking forward exchange risks. It would not be appropriate to crack down on the vast majority of currency exchanges that do not take such risks.”

Tightening up such firms would involve taking appropriate precautions that would leave customers money safe, even in a worse case scenario, with a firm going bust. This could be as simple as enforcing an law that forces currency exchange firms to keep customer cash and business cash separate.