25 February 2011

Will Your Insurer Cover The Damage Done By Household Pets?

According to a recent survey, pets have caused around £690 of damage to average UK household over the past year. It is unlikely that many of these people would be able to claim for damages on their insurance as very few insurers cover damage caused by pets.

Out of insurers surveyed twenty nine (incuding some of the market leaders) did not cover pet damage. The explanation for the lack of insurance for pet damage is that the behaviour of pets depends on whether they are trained or not and if they are trained, to what extent, and are thus impossible to underwrite.

Obviously some pets are more likely to cause damage than others: Dogs and cats are not only the most commonly owned pets, they are also prime candidates for causing domestic damage whereas birds and fish and smaller animals do little damage.

When purchasing insurance check the terms and conditions of your policy to see if it covers pet related damage.

London Stock Exchange Shuts Down For Four Hours Due To Computer Glitch

Trading on the London stock Exchange was suspended this morning after a new computer system broke down. The London Stock exchange blamed market data technology for the problems and said that an investigation would be launched to look into the matter.

Traders will not be best pleased by the stoppages, the current volatility of the markets requires traders to be on their toes, not hanging around twiddling their thumbs.

It would be difficult for the timing of these problems to be any worse; the London Stock Exchange has been negotiating a merger with the TMX (the Canadian stock exchange). No doubt the Canadians were not impressed.

This is not the first mishap the London Stock Exchange has had to face recently, trading was suspended in November for three hours and there are rumours that prices were incorrectly displayed on their system last week.

18 February 2011

The Co-operative Becomes The Pioneer Of ‘Ethical’ Insurance

The Co-operative has implemented a policy of vetting their investments to make sure that they meet the criteria of their ethical code. The Co-operative Insurance now screens the assets that underpin their business.

The Co-operative will not invest in any businesses that are felt to be unethical; Arms manufacturers, tobacco manufacturers, fossil fuel companies and furriers are not approved by the current regulations. This policy not only governs future investments, it is also retroactive. Eighty million pounds of assets that were considered unethical by the Co-operative have been sold off, and the money has been reinvested.

This ‘operating plan’ is the first of its kind implemented by an insurance company although other organizations with large investment portfolios have drafted similar investment codes. Oxford University has pledged to remove some of its assets from arms manufacturers, although these kinds of investment achieve the greatest returns.

17 February 2011

Current Levels of Inflation Result In Savers Losing Money

Official data can be misleading. It is true that the Consumer Price Index has risen to 4.0% this January, and this does not sound disastrous. Take for example, someone paying the basic tax rate with £10,000 deposited in an instant access savings account paying 0.67% interest. He or she earns £53.60 a year: So far so good. However, the saver in fact loses around £400 a year due to inflation.

It is possible to find higher rates of interest than 0.67% but these rates are not increasing at nearly the same rate as inflation. Savers may be relieved by the fact that growing inflation will force the Bank of England to raise interest rates but question is always, when?

Current economic trends hit the elderly hardest. Most pensioners live off a combination of fixed incomes supplemented by savings which are undermined by high inflation and low interest rates.

11 February 2011

Which? Appeals To The Office Of Fair Trading Over Extortionate Card Charges

Which? has accused many well known companies from hoteliers to cinemas of charging inflated processing fees on transactions carried out by debit and credit card. Banks charge around ten pence to businesses for facilitating a debit card transaction; however the low budget airline Ryanair charges a five pound each way surcharge on a ticket purchased by debit card. These rip-off charges have been banned in other European countries such as France and Germany while customers in the UK are still being robbed blind.

Previously, the banks have been blamed for these fees but Which? insists that they are not to blame. The fact is the charges do not reflect the real cost incurred by businesses. Which? has submitted an appeal to the Office of Fair Trading, now they must wait for a decision from the OFT to decide whether regulations or even the law need to be changed.

10 February 2011

Parents Hit By ‘Child Penalty’ When Applying For Mortgages

Mortgage lenders are giving less generous lending terms to parents with young children than to childless couples. Childless couples can borrow up to 50% more than families with children, even if both families take home the same wages. Mortgage companies argue that the cost of raising children can result in parents not paying off their debts whereas childless couples have fewer outgoings and therefore are more likely to pay back their mortgage.

This kind of client analysis carried out by mortgage companies is a far cry from the practice of fifteen years ago when mortgage companies simply lent a couple a multiple of their combined income – usually three times their salary. These ‘affordability checks’ are all part of mortgage companies’ policy, devised to ensure that mortgages are paid back. A further symptom of this intense client scrutiny is that fewer mortgages are handed out: In the UK around 1500 mortgages are agreed per day as opposed to 4000 fifteen years ago.

04 February 2011

House Prices Rise By 0.8% From December

The Halifax House Price Index released this week found that the price of the average home in Britain rose to £164,173 last month. Although this is positive news, Halifax have warned that the 2011 house market is likely to be characterized by consumer caution as the double edged sword of government spending cuts and increasing tax rates will undoubtedly wound consumer confidence.

The prospects of the housing market are inevitably going to reflect the state of the economy at large. The difficult Christmas period is now behind us and there may be a little sunshine just around the corner. Martin Ellis, a Halifax housing economist made a statement that advised that ‘the recent downward trend in prices is causing homeowners to be more reluctant to put their properties on the market. This development should help to relieve downward pressures on prices as long as it is sustained’.

03 February 2011

Tough Times Ahead As Food Prices Are Predicted To Soar

The UN Food and Agriculture Organisation has made a statement predicting that food prices will rise to an all time high as supplies of key crops become stretched. In the UK the average shopping bill has increased by 6.1% but this is just a taste of what is to come. One of the underlying problems is the increasing price of corn which is used in animal feed: As the price of feeding livestock goes up so does the cost of meat.

So far British pig farmers have had to bear the brunt of price increases but they are now demanding higher payments from the supermarkets. The National Pig Association warned: ‘Currently there is a shortage of British pork, bacon and sausages. Farmers cannot afford to keep producing it.

It would seem that supermarket prices are unsustainable and they simply have to rise.