Friday, 11 December 2015

Peak Card

Are we approaching peak card?

Figures from the card providers trade group, UK Cards, show that payments by card have more than doubled in a decade to £566bn a year.

Use in pubs has multiplied 5 times. People seem to be happy to use contactless debit or credit cards to buy sandwiches, coffees and papers.

Some carry no cash their wallets or purses. They can be genuinely flummoxed if a shop doesn't accept payment by card.

So much so that commentators never tire of predicting the death of cash, or at least its long term decline.

However, surely it is much more likely that we will see the death of cards before we see the death of cash?

Any user of Apple Pay, Barclays bPay and a host of upcoming rivals will tell you that it is possible to pay electronically while leaving your cards at home.

For a good while, most people will take several methods of payment with them, including cards.

But the writing is on the wall. The card itself is just a way of carrying a chip - and the chip can easily be mounted on something else or replaced by the wireless capabilities of a mobile phone.

Wednesday, 25 November 2015

Buy to let - extra stamp duty

George Osborne's new 3 per cent stamp duty charge for buy to let landlords will add £5,520 on the price they pay for the average £184,000 buy to let purchase.

The new charge would have hit 160,000 buyers if it had applied last year, or 13 per cent of the total buy to let market.

Commercial property investors, with more than 15 properties, are expected to be exempted from the new charge.

The Chancellor said people snapping up buy to lets and second homes "should not be squeezing out families who can't afford a home to buy".

The 3 per cent charge will be added to each stamp duty rate, so properties costing up to £125,000 -- which are zero-rated at the moment - will incur 3 per cent.

Those costing from £125,000 to £250,000, currently at 2 per cent, will incur 5 per cent duty and so on for the higher rates.

People who buy two homes by mistake, because they are in a chain which breaks apart, will have to pay the extra duty but will be able to claim it back within 18 months if they manage to sell their original home.

Buy to let enthusiasts will not face the charge until April next year, following a consultation on the details.

3% extra stamp duty for buy to let

Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy.
So I am introducing new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.
It will be introduced from April next year and we’ll consult on the details so that corporate property development isn’t affected.
This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership.
The funds we raise will help building the new homes.

Friday, 13 November 2015

TSB cherry picks Northern Rock mortgages

Who are the 34,000 mortgage borrowers who are being moved from Northern Rock to TSB via Cerberus, a US investment firm?

Well we know some of them had the Together mortgage, the Northern Rock product offered just before the financial crisis, which allowed people to borrow 125% of the value of the home they were buying.

Many Together borrowers got into serious trouble, couldn't afford the payments and ended up paying what they thought were very high rates to the rescued rump of Northern Rock.

But we also know that TSB calls the group which they have taken on "real people in their homes who have been managing their mortgages well, with good performing, seasoned loans".

It seems as though TSB managers were able to choose which loans they wanted. I've been told that they:

"Were able to define the parameters for our risk appetite and characteristics of the loans we would be acquiring as part of structuring the transaction.

"The customers were then randomly selected within this....we are comfortable with the risk profile of the portfolio."

To some this will sound like cherry picking.

And, of course, if the government - and in turn Cerberus - want to sell things out of the Northern Rock portfolio, they have to offer items which investors want to buy.

The average interest rate being paid by the 34,000 is 4.49%, well above the typical rate for mortgage borrowers and  potentially a nice earner for TSB.

Tuesday, 10 November 2015

Tax office apology

The chief executive of HM Revenue and Customs has apologised to MPs for the poor performance of tax call centres between April and June, when only half of calls for help from the public were answered successfully.

Lin Homer said she was "very apologetic" after Mark Garnier MP, on the Treasury Select Committee, said the record was "staggeringly bad".

She added that after HMRC struggled to cope during those months, managers introduced a series of changes which resulted in an improvement between July and September when 76 per cent of enquiries by phone were dealt with either by a member of staff or an appropriate recorded message.

She said that performance during the second three month period was "marginally higher than last year".

Mr Garnier responded that it was still "completely unacceptable" that 24 per cent of calls were not being answered.

Lin Homer told MPs that a new telephony system had been introduced which allowed calls to be dropped into any call centre, so that up to 20,000 staff could be deployed to answer the phone at any one time.

And she revealed that more people were being taken on to deal with calls in the evening.

Thursday, 5 November 2015

BA on Sharm help

British Airways confirms that from when customers’ flights out of Sharm are delayed/suspended, European airlines are responsible for providing hotel accommodation, food and the other requirements stipulated until they are able to be flown to their destination.

BA statement today:

We will be providing hotel accommodation to customers in Sharm El Sheikh who were due to fly to Gatwick with us today.
We are working closely with the UK Government to find the best possible solution for our customers who are on holiday in the resort and those due to fly out from the UK.
We understand the current situation is frustrating, however it is out of our control and the safety and security of our customers and crew is always our top priority. 
Following the decision by the UK Government to suspend flights, the British Airways flight (BA 2560) which was due to depart Gatwick this morning has been postponed until Friday.
The BA2561 which was due to depart Sharm El Sheikh this evening will also depart one day later on November 6.  
Customers not wishing to travel on the postponed flights on Friday will be able to claim a full refund or switch to an alternate destination.

Flight delay rights

For independent travellers: your "right to care" if the flight is delayed or cancelled and you are travelling from or to the EU. This on the EU rules as set out by Easyjet...

3. Right to care
Has your flight been delayed for more than 2 hours or cancelled without notice? If so you are entitled to:
a) meals and refreshments in proportion to the waiting time;
b) hotel accommodation and transport between the airport and the hotel, where a stay of one or more nights becomes necessary;
c) two telephone calls, or telex or fax messages, or emails.

Has your flight been delayed or cancelled before you arrive at the airport without notice to you?  You are entitled to a) and c) above.
Have you had to postpone your flight to at least the day after the original flight departure time because of delay or re-routing? If so, you are entitled to b).
In the unlikely event it is not possible for easyJet to arrange care set out in this paragraph, easyJet will reimburse you for reasonable expenses upon application via the website.  You will need to provide us with fully itemised receipts detailing the expense incurred. Please note that re-imbursement for alcohol will not be made.

Tuesday, 13 October 2015

No increase in most benefits

The September Consumer prices index, or CPI, is used to uprate many benefits, but the impact of today's negative rate (an annual fall of 0.1%) will be limited because...

**The legislation allows for uprating but not downrating, so the cash value of benefits will be maintained.

**Many benefits are being subjected to a 4 year freeze anyway.

This is what the Department for Work and Pension says:

The Government is currently taking through legislation to freeze most working age benefits for the next four years from 2016/17, including the main rates of Jobseeker’s Allowance, Income Support, Employment and Support Allowance, Housing Benefit and Universal Credit.

The benefits freeze excludes pensioner benefits, benefits relating to the additional cost of disability and care, and statutory payments. We have protected the incomes of pensioners with the Triple Lock and the basic State Pension will rise by the highest of the growth in earnings, prices or 2.5%.

Public Service Pensions follow CPI, along with the "statutory payments" which are sick pay and maternity pay, paternity pay etc

Pension Credit is not tied to CPI - it tends to rise alongside earnings - but State Second Pension is.

Wednesday, 7 October 2015

Payday loan advert ban consultation

A ban on payday loan adverts placed around children's programmes is being considered by the advertising industry's watchdog body for standards.

The Broadcast Committee of Advertising Practice, known as BCAP, has launched a consultation on "whether it is proportionate and necessary to introduce scheduling restrictions on the television advertising of high-cost short-term credit".

Under consideration is a ban along the lines of the one on gambling adverts, which only allows them before the 9pm watershed if they are around sport programmes and is designed to protect those under the age of 18.

An alternative would be to stop adverts around programmes likely to appeal to under-16s, bringing regulations in line with those for food high in fat, salt or sugar.

The other option open to BCAP would be to do nothing at all and rely on its basic rules that adverts must be socially responsible and not cause harm.

It says it has found little robust evidence of advertising-related harm so far, but it wants to consider all relevant information in relation to a restriction.

Payday lenders say that their TV advertising has shrunk considerably since its peak more than two years ago and that they have jettisoned the cartoons and jingles which were criticised for appealing to children.

Wonga relaunched its TV campaign earlier this year, after abandoning adverts featuring elderly puppets, nicknamed the Wongies, which had come under fire.

It said it would not show its new ads on children's TV, or on channels or programmes with a large audience among younger people.

Tuesday, 6 October 2015

Pensions - how Osborne can have his cake and eat it

Ructions in the world of pensions could see the Chancellor saving billions of pounds for the government, while stripping the rich of their lucrative tax relief, and giving an extra handout to the average saver.

Instead of everyone getting their tax back when they put money in a pension plan, 40% taxpayers would pocket a lot less.

Meanwhile, millions of basic rate payers would receive not just their 20% tax refunded; they would be given a bonus on top.

But now it is becoming clear how George Osborne could exploit such changes to help in his battle to control the deficit.

The pension cards were thrown in the air in the July Budget when Mr Osborne signalled that major reform was on the way. In the last few days calculations have been emerging which show the gigantic sums at stake.

This is how the ground is shifting: millions, 9 million eventually, are beginning to save in workplace pension plans for the first time under the government programme called Automatic Enrolment.

The development will have a dramatic impact on the Treasury's finances because the more money is saved, the more it has to pay out in tax relief.

Plus, it puts into stark relief what many see as the unfairness of giving more tax relief to higher earners, because most of the new pension savers pay the basic rate.

The other factor is that the new savers aren't putting aside nearly enough. The minimum to start with is a combined 2% of pay from both worker and employer, catastrophically less than the 12% or so needed for a decent pension.

So the priorities for reform have been: saving more, making it fair and getting a grip on the bill.

The cost of pension tax relief to the Treasury is considerable, around £27bn a year. With auto-enrolment, it will rise to over £30bn, according to the Pensions Policy Institute.

And the cost rises even further once you start tinkering.

People in the pensions business want a new flat rate of relief, so basic rate taxpayers get more while higher rate payers get less, with the most optimistic arguing for a flat rate of 33%.

The way this works, if you put in £2 the government adds £1, which would be easy to sell as "Buy Two, Get One Free"..

But that would push up the bill for the relief even higher, to more than £34bn.

What is more, the Pensions Policy Institute points out that such a system would encourage people to salt away greater sums in their pensions, earning additional tax relief.

This is a murkier area in which to make forecasts, but projections from the Institute suggest the overall cost could rise to £40bn or more.

More saving is one objective of the reform process, but so is trimming the bill.

In the current climate, George Osborne is unlikely to plump for a rise in the cost of relief from £27bn to £40bn. He would prefer to economise.

Setting the flat rate at a lower level of 25%, sellable to basic rate taxpayers as "Buy Three Get One Free", would do exactly that. It would reduce the cost to less than £25bn, netting the Treasury billions.

Taking the relief down to 20%, refunding tax at just the basic rate to all taxpayers would pull the cost below £20bn.

There are other options. The Chancellor could make a gain by clamping down on the way some pension contributions escape National Insurance, he could put tighter limits on how much you are allowed to put in a pension or he could get rid of pension tax relief completely and replace it with something else.

He could give us an inkling in his Autumn Statement next month.

But leaving the pension system as it is, doing nothing, is looking less and less likely, because the cost of supporting our pensions could just keep on rising.

Tuesday, 29 September 2015

Record low ISAs

Returns on tax-free savings have fallen to record lows, according to the Bank of England.

The average interest rate for a cash ISA, or Individual Savings Account, dropped to 1.43 per cent in August.

It's the smallest reading since the Bank started calculated this average in 2011.

Returns from notice accounts, including ISAs, are at their lowest since records began in 1999.

Interest rates have been at rockbottom levels for 6 years, but banks and building societies have trimmed them even further in recent months.

Two weeks ago 400,000 savers with National Savings & Investments ISAs were told their rates would be cut from November.

Mortgage borrowers are benefiting from the same trend, with their interest costs also at the lowest level in recent records.

Monday, 28 September 2015

North/South house price divide

House prices in the South of England and East Anglia are pulling away from the rest of England and Wales again, according to the latest figures from the Land Registry.

Price increases are being driven forwards by London again, up 6.6 per cent year on year, the South East, up 7.6 per cent, and East Anglia, up 8.4 per cent.

But in the North West and the North East, along with Wales, prices were less than 1 per cent higher over the 12 months to August.

Prices actually fell in the North West, Yorkshire and the Humber and the East Midlands between July and August.

Previous figures from the Registers of Scotland showed that Scottish house prices were 3.5 per cent higher than a year before.

Wednesday, 16 September 2015

FCA unearths pension scams

The financial watchdog, the FCA, says its work monitoring the new pension freedoms has unearthed 5 scams affecting "multiple consumers".

Better-off pensioners appear to be most vulnerable to being scammed.

The watchdog's director of policy, Chris Woolard, told MPs that ten thousand people had filled in an online form asking for details of scam attempts since the freedoms were launched in April.

160 cases were sent for assessment by enforcement officers, of which 5 were now "ongoing operations".

Mr Woolard said the average scam involved losses of between £18,000 and £20,000 per investor.

"So far we've not seen evidence of a spike in scams overall," he added.

But scammers were turning their attention to pensions, now that the over-55s had the right to cash in their funds as and when they chose.

Criminals who had been concentrating on draining their victims bank accounts might now decide to transform themselves into fake pension providers.

Richer pensioners, who had already dabbled in the stockmarket and were more confident about investments, were in most danger of being duped by fraudsters.

Monday, 14 September 2015

Santander price hikes

Changes for Santander customers:

123 Current Account, monthly fee goes to £5 from £2

123 Credit Card annual fee rises to £36 from £24

123 Credit Card cashback reduced...
e.g. 1% on supermarket spend and 2% on department stores limited to £3 a month each

Affects 3.6 million current account customers, and 1.8 million with credit cards

Blow for credit card customers softened by temporary holiday from 2.95% foreign transaction charge

National Savings cuts rate

More than 400,000 National Savings customers will see their interest rates cut from mid-November.

National Savings & Investments will cut the rate on its tax-free ISA account by 0.25% to 1.25%, after finding itself with bumper inflows of cash.

The Direct ISA, with market-leading returns, had been attracting upwards of £800m a year from savers desperate to find a reasonable return, while taking advantage of a 100 per cent government guarantee.

Even more significant was the boost from the highly popular Pensioner Bonds and by the Premium Bond maximum limit going up to £50,000.

Jane Platt, Chief Executive, said it was a "difficult decision" but the institution had to "strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector."

The cut will apply to £3.8 billion of savings from 16th November.

Wednesday, 9 September 2015

Help to Buy jump

Record numbers of buyers snapped up newly built homes in June, using the government's Help to Buy scheme.

The month saw 4,745 taking advantage of a state-provided interest free loan, provided under Help to Buy, to boost their deposits.

More than 3,800 of them were first time buyers, stepping onto the housing ladder.

Housebuilders have been cashing in, with Barratt Developments reporting a 45 per cent jump in profits this morning, to £565m.

Higher prices have been helping the builders as well: the price of the average Barratt home has risen by nearly 9 per cent in a year.

More than 56,000 buyers have completed purchases using Help to Buy Equity Loan scheme since it launched in April, 2013, on £12bn worth of homes.

A similar number have benefited from the scheme to assist buyers of older homes, called Help to Buy Mortgage Guarantee.

The Treasury put the total helped by various programmes so far at 120,000.

Monday, 7 September 2015

More pension scam calls

There's continuing concern about scams from the bodies charged by the government with giving guidance about the new pension freedoms.

The danger is that fraudsters pressurise the over-55s to withdraw cash from their pension schemes and sink it in dodgy investments.

Citizens Advice and The Pensions Advisory Service told MPs today that they were receiving more calls for help from people who said they were being targeted, though there is hope that public warnings are having some effect.

Rachael Badger, Head of Policy Research, Citizens Advice

We have seen a bit more of a growth in problems with scams, particularly around people aged over 55, since April.

And we are seeing more customers who are becoming repeat targets of scams.

And it's things like people are being asked by fraudsters to give access to their pension pots for high promised rates of return, options to invest in property abroad and fine wines, that sort of thing.

Michelle Cracknell, The Pensions Advisory Service (TPAS)

We are receiving more calls on our helpline about investment scams but we are receiving more calls before the event (being scammed) rather than after the that's good news.

Thursday, 20 August 2015

Housing starts down

Shelter has described figures showing showing a drop in new homes started as shocking and worrying.

But the housing minister, Brandon Lewis, said the government had "got the country building again" and was "delivering the homes that hard-working people rightly deserve".

Shelter's concern arose from official housing statistics for England which showed the number of foundations laid down fell to 33,280 in the three months to June, a fall of 14% compared with the previous quarter.

The annual figure, comparing the latest 12 months to the year before, was 1% lower at 136,320.

However, the figures also show that the number of new homes actually completed over the latest 12 month period rose by 15% to 131,060.

The National Housing Federation, which represents housing associations, said the news was encouraging.

Before the election David Cameron predicted that we would be building 200,000 homes a year by 2017.

Tuesday, 18 August 2015

Compensation for 2 million

Two million people who were sold unnecessary card protection policies will be able to claim compensation from later this month.

Some will have paid £25 a year for the policies for as many as ten years. So, including interest, they could receive up to £270 each.

The compensation scheme is being financed by 11 top banks and credit card companies, whose customers bought card protection under a stable of brands from Affinion International Limited - brands including Sentinel, Safe and Secure Plus and Card Protection.

The policies offered protection against fraudulent use of a card if it was lost or stolen. But card providers would normally have covered most or all of the losses in any case.

The millions affected will be sent claim forms from later this month, with the first payments made in September.

The Financial Conduct Authority announced in January that there would be a compensation scheme.

Monday, 13 July 2015

85,000 pension withdrawals

What we now know is that 85,000 people have taken money out of their pension plans using the new pension freedoms, withdrawing £1.3bn.

That's up until 28th June, so it takes in most of the three months since the launch in 6th April.

60,000 had taken out £1bn in the first two months.

So that confirms that the rate of withdrawal has faded a bit since the opening weeks. No doubt many had been waiting for the new regime to begin and moved quickly to cash in.

It also suggests that the average amount being withdrawn is £15,294, down from £16,666.

What the new figures don't tell is what they did with the money.

Summer Budget Red Book p51

Pension and savings flexibilities 

Over 85,000 people have taken advantage of the new flexibilities for accessing pensions that were introduced in April 2015. The government believes it is important that all consumers can access free, high quality guidance on their choices. Following the successful launch of Pension Wise in April 2015, the government is extending access to this free and impartial guidance service to those aged 50 and above, and is launching a comprehensive nationwide marketing campaign to further raise awareness of the service.

1.228 The government also wants to ensure that people can access the new flexibilities easily, and at reasonable cost. The government will consult before the summer on options aimed at making the process for transferring pensions from one scheme to another quicker and smoother, including in relation to any excessive early exit penalties. If there is evidence of such penalties, the government will consider imposing a legislative cap on these charges for those aged 55 or over.

1.229 The government wants existing annuity holders to have the freedom to sell their annuity income. The government will set out plans for a secondary annuities market in the autumn, and agrees with respondents to the recent consultation that implementation should be delayed until 2017 to ensure there is an in-depth package to support consumers in making their decision.

Friday, 3 July 2015

Deposit protection cut

Money guaranteed in bank accounts will drop by £10,000 to £75,000 from the beginning of next year.

The change is the result of the strength of the pound in the currency market.

The deposit guarantee is harmonised across the European Union at €100,000, with a revaluation every 5 years.

But the euro has fallen, with the Greek crisis driving it even lower in recent weeks.

The result is that while bank account holders in the eurozone see no change in their level of protection, UK savers will have to put up with a significant reduction.

The Treasury said the change would have been implemented today but it was delaying it until January next year to give the public a chance to adjust to the lower level of protection.

The guarantee has stood at £85,000 since the end of 2010.

Monday, 29 June 2015

New travel advice for Greece

The government has updated its advice to tourists visiting Greece, reassuring them that they can continue to make withdrawals from cash machines up to their usual amount, despite the €60 daily maximum for Greeks, and that there are no restrictions on taking unspent euros out of Greece.

The new advice adds that "the system for paying with debit and credit cards for retail transactions continues to function".

However, travellers are still warned that banking services, including cash machines and credit card processing, could potentially become limited at short notice.

And the suggestion that visitors should take cash for emergencies is hardened.

The official word is now that it should "cover the duration of your stay" and those carrying cash are now encouraged to "take appropriate security precautions against theft".

Tuesday, 16 June 2015

House prices softening

There is more evidence today that the housing market has softened.

Monthly figures from the Land Registry put the annual rate of house prices increases in England and Wales at 4.6 per cent in May, down from 5.1 per cent.

The price of the average home was virtually unchanged between April and May at just under £180,000.

Earlier, the latest UK-wide house price index from the Office for National Statistics suggested the rate of increase was falling back even faster.

The ONS figures, covering the 12 months to April, showed that the annual rise had fallen to 5.5 per cent from 9.6 per cent.

It added that the average price had actually fallen over April itself, as the London market stalled.

A rapid gain in values earlier last year ran out of steam after the imposition of much tighter rules on how much buyers could borrow.

Meanwhile, the Council of Mortgage Lenders reported that lending to first time buyers had declined.

Tuesday, 9 June 2015

HSBC closing branches

HCBC hasn't provided full details on the number of UK branch closures it plans as part of its cost-cutting programme between now until 2017.

However, the bank says in today's statement that it envisages having 12% fewer branches and 20% less square feet in its top 7 markets.

The UK is one of those top 7.

Currently HSBC has 1,057 UK branches, employing anything from 2 to 50 people in each one.

47 were cut in 2013, 65 last year and 20 so far in 2015. 23 closures are already planned later this year.

So we have already seen 132 closures in little more than a year.

Another 12% would work out at roughly 127 more closures.

How far could it go? All the major retail banks are taking a long hard look at their branch networks.

The boss of the reborn TSB suggested that 700 branches would be a "sweet spot" for British banks.

TSB inherited 631 branches from Lloyds and is actually opening a few.

But if the bigger High Street banks axed branches to get down to TSB's level, the closures would just go on and on.

Thursday, 4 June 2015

Curb on payday ads

The UK's TV advertising watchdog has warned that payday lenders should exercise care when using "animation, catchy upbeat jingles and humorous themes" in their adverts.

The Broadcast Committee of Advertising Practice or BCAP also warns that the high cost lenders will be breaching its guidelines if they suggest loans are a suitable means of addressing ongoing financial concerns, condone frivolous spending or unacceptably distort the serious nature of payday loan products.

Last year the online lender, Wonga, pulled its TV campaign featuring elderly puppets -- known as the Wongies -- playing music, dancing and in comic poses, on the grounds that the ads might appeal to children.

Recently it launched a new TV campaign showing working people, described as acting responsibly.

Thursday, 28 May 2015

Mortgages bouncing back

Banks say an increasing number of mortgages are being give the go-ahead, as the housing market appears to be on the move again following a winter in the doldrums.

They approved more than 42,000 mortgages for house purchases in April up 3 per cent compared with the same month last year and 7 per cent more than in March.

So suggestions that house-hunting stalled during the election campaign see wide of the mark.

Approvals had declined since last summer after lenders were forced to apply much stricter affordability tests to applicants.

A British Bankers Association statement said: "There appears to be broad confidence about the economy, which the banks are supporting through affordable credit, leading to rises in borrowing across the board."

Credit card borrowing was up £375m in April and personal loans saw an increase as well, a sign that shoppers could continue to spur on the recovery.

Tuesday, 26 May 2015

Queen's Speech ticklist

Personal allowance to rise to £12,500

Higher rate threshold moving to £50,000

Ban on increases in main income tax, National Insurance and VAT rates

Scotland set own income tax rates and bands, plus VAT and housing benefit powers

Double free childcare to 30 hrs

Confirm tax break on paid-for childcare

Right to Buy for 1.3m housing association tenants

Reduce benefits cap to £23,000

No housing benefit if under 21

Will the government:

*Mention inheritance tax (the promise to let couples pass on a £1m home)  Benefit cuts
*Give further signals about how benefit cuts will be achieved
*Re-confirm triple lock on state pension increases

Friday, 8 May 2015

Will there be a June Budget?

So what does George Osborne do next, now we know he remains Chancellor?

There's been talk of a mini-Budget in June to lay out his plans for the next five years. But does he even need one? Perhaps not.

"There's no need. He doesn't have to bother," says Patrick Stevens, policy director at the Chartered Institute of Taxation.

The fact is that the Chancellor could decide to stage a quick Budget for political reasons, to whip up excitement and mark the launch of the new Tory programme.

He could even provide more detail about the staging posts to raising the personal allowance for income tax to £12,500. He could map out the route to a £50,000 threshold for 40% tax.

And he could toss in more discussion of his £1m inheritance tax allowance for couples passing on their homes.

On the other hand, it might look distinctly odd to start explaining so soon how his £12bn of further benefit cuts will be implemented.

It would only be weeks after the Conservatives had told voters - before the election - that they didn't know what the measures would be.

Chas Roy-Choudhury from the accountancy body, ACCA,  says Mr Osborne should "Hold fire!" and consult about some of the tax changes he is planning.

He argues there is plenty of time to look carefully at some of the plans, for instance the cuts to the tax relief high earners get on their pension contributions, which are complicated.

The fact is, we already have a list of pre-announced moves, from the March Budget or the manifesto:

£12,500 personal allowance, up from £10,600

£50,000 higher rate tax threshold

£1m inheritance tax allowance for couples (£325,000 each plus £175,000 each for family home)

No change to main VAT, income tax or NI rates

Triple lock promise to uprate pensions maintained

£12bn of further benefit savings,

Including freezing most working age benefits until April 2018, reducing benefit cap to £23,000, removing housing benefit from 18-21s on Job Seekers Allowance.

On pensions, reducing the annual allowance for highest earners, maximum contributions down from £40,000 to £10,000 a year.

And raising £4.6bn from further clampdown on tax evasion and avoidance

Wednesday, 6 May 2015

Capital flight from UK?

Is capital fleeing the country as foreign investors anticipate a period of uncertainty after the election?

Crossborder Capital, which monitors current account balances, foreign exchange trades and other money movements said it picked up a $24bn outflow in March.

The firm's chief executive, Mike Howell, says he "has a hunch money is leaving".

On the other hand, there has been a regular outflow over the last 12 months. The drain is partly the result of Russians taking out funds to make sure they aren't affected by sanctions, so it's a big leap to assume any connection with the vote on Thursday.

What is more, Bank of England figures show a completely opposite flow of money in March.

Foreigners spent £28bn buying UK government bonds or gilts in March, after two months of net sales.

The European Central Bank has been busily buying the bonds of Eurozone governments -- part of its QE programme designed to boost economic growth -- and that's made UK investments more attractive.

The Bank of England's stats also show that deposits by non-residents in UK banks increased between February and March.

I am told by people who advise foreign investors in London that they are, nervously, sitting on their hands, waiting see what the election a a June mini-Budget might bring.

Tuesday, 5 May 2015

HSBC move would involve 250 jobs

HSBC has said that moving its headquarters out of the UK would only involve the transfer of only 250 jobs out of 48,000 employed in the UK.

The bank launched a headquarters review, partly because of the UK bank levy which cost HSBC £730m last year and would be much lower if it moved.

There has been widespread speculation that ultimate control would be transferred to Hong Kong.

HSBC said consideration of shifting its headquarters overseas was not a threat but a result of pressure from shareholders worried about their dividends.

While presenting results for the first three months of the year -- from Hong Kong -- its managers were also questioned about rumours that they were planning to sell the UK High Street bank, perhaps reviving its former name Midland Bank.

They said the uncertainty had arisen because banks here were having to separate their retail operations behind a "ring fence" to protect them against a future financial crisis

However, any future action would depend on how much control HSBC's global operation would be left with, which wouldn't be clear for several years.

Friday, 1 May 2015

You have to spend more for Free Amazon delivery

Amazon has confirmed that it is doubling the amount customers will have to spend to qualify for free delivery in the UK - other than for books.
Until today, you had to buy items costing at least £10 in total to be given Free Super Saver Delivery; now the goods will have to add up to £20.
The perk has been a popular aspect of the giant internet retailer's offering.
But Amazon has been trying to convince more customers to sign on for its Prime service, including free one-day delivery but costing £79 a year.

Here's the info from Amazon:

About Changes to FREE Super Saver Delivery
This change relates specifically to FREE Super Saver Delivery. All other delivery services including Amazon Prime and delivery of digital products remain unchanged.
Our FREE Super Saver Delivery service is changing. From 1 May, 2015, orders including £10 or more of books qualify for FREE Super Saver Delivery. All orders of £20 or more across any product category also qualify for FREE Super Saver Delivery. Previously, a £10 threshold applied for all orders to qualify for FREE Super Saver Delivery.
We continue to work hard every day to improve the delivery services that we offer. For example, we added over 10,000 new Amazon Pickup Locations last year to ensure that our customers can collect their deliveries at a time and place that suits them. Also, millions of Amazon customers have already chosen faster delivery by becoming Amazon Prime members. Amazon Prime is £79 a year and offers unlimited One-Day Delivery on over 9 million items, unlimited streaming of more than 15,000 movies and TV episodes with Prime Instant Video, access to thousands of Kindle titles to borrow for free and unlimited photo storage.
Click here to sign up to Amazon Prime or here for full details of our delivery services.
Please note that this change won't affect any pre-orders or orders for items not in stock placed before 1 May, 2015, where you've already selected FREE Super Saver Delivery.

Thursday, 30 April 2015

House price pressure in North East

House prices in the North East of England dropped by 4% between February and March according to the Land Registry for England and Wales.

Hartlepool, Darlington, Durham and Middlesbrough were all lower over the month and year on year.

Prices in Wales were down nearly 3% in March.

The figures illustrate the patchy nature of the housing market, with London and the South East still rising, most regions stagnant and some areas showing sharp falls.

For example (month on month):

-3.3% Hartlepool
-1.6% Darlington
-3.1% Middlesbrough

-1.9% Gwynedd
-3.3% Rhondda
-2.3% Bridgend

Across England and Wales as a whole, the value of homes was down 0.8% over March, though still 5.3% higher than 12 months ago.

The average price stands at just over £178,000.

In contrast, recent figures from the Registers for Scotland showed Scottish prices up more than 13% in the last year, with East Lothian up 28.6%.

And the most up to date house prices numbers, from Nationwide yesterday, suggested the market was resuming its upward trend, with an overall increase of 1% between March and April.

Wednesday, 29 April 2015

Fewer going bust

Fewer people are going bust and the least nasty form of insolvency, the Individual Voluntary Arrangement or IVA, is now falling along with bankruptcies and Debt Relief Orders.

There were 10,405 IVAs in England and Wales in the first three months of the year, down 24% from the same time last year. This is the route where you make a formal agreement with creditors to pay back an amount you can afford.

Mark Sands from the insolvency firm, Baker Tilly, tells me this is basically as a good as it sounds, a sign that those in the most acute financial trouble after the credit crunch and the recession are working through the system.

Through this period, they avoided "giving up on their debts" through a bankruptcy or DRO -- if they could -- by opting instead for the optimistic route of an IVA and pledging to try to pay money back.

But now fewer are needing to walk down the IVA road either, helped by the recovery and continued forbearance from some lenders.

What next? There are still many more people who go bust than in the dim, distant past before the credit boom of the early years of this century.

And that probably won't change, because we have grown addicted to being able to borrow money when we feel like it.

In fact we could now be close to a low point.

Mark points out that unsecured lending - where you don't have to pledge your home or other assets - is on the rise once again.

Plus interest rates will rise at some stage, even if some forecasters now suggest that stage may not be reached until next year.

So now may be the time to start looking at how we can prevent the number of personal insolvencies starting to bounce back again.

Friday, 27 March 2015

Blow your pension and lose benefits

Here's the Department for Work and Pensions warning about squandering your pension savings and then expecting to be able to fall back on state benefits:

“Means-tested benefits take into account how much income and capital a household has. 

“And if people are found to have deliberately spent their pension in order to get means-tested benefits, then their benefit is reduced accordingly.”

It's understood that if money is released from a pension pot and then spent, these "deprivation rules" may apply regardless of age.

·         Benefits affected include:
·         Pension Credit
·         Housing Benefit
·         Jobseeker’s Allowance (income based)
·         Employment and Support Allowance (income related)
·         Income Support
·         Universal Credit 

Tuesday, 24 March 2015

Pension help phone number

The Chancellor has announced that the telephone number for free guidance on the new pension freedoms is operational from today.

The freedoms, which start on the 6th April, enable savers to dip into their pension pots as they wish from 55 rather than having to use the money to buy a pension annuity.

They can ring the number, 030 0330 1001, between 8am and 10pm to book a guidance session.

Phone sessions will happen from tomorrow, with face-to-face help starting on the Tuesday after Easter, once the reforms have been launched.

45 minutes is being allocated for each guidance session over the phone.

10,000 savers have already pre-registered requests to get help with the freedoms.

Here's the Pension Wise page.

Wednesday, 18 March 2015

Tax free savings

From Budget document...

In a radical reform to the savings tax system, a new Personal Savings Allowance will be created from April 2016, exempting the first £1,000 of savings income from any tax for basic rate taxpayers and the first £500 for higher rate taxpayers, saving up to £200 off an annual tax bill. This will not apply to additional rate taxpayers.

From Treasury:
Banks will stop deducting 20% tax on people’s savings income. 95% of taxpayers (28m people) will benefit. 17m people will be completely removed from tax on their savings income from April 2016.

It's from April 2016

Monday, 16 March 2015

Beware of tax if you free up your pension

How much tax will you pay on your pension?

Tax is a crucial consideration with the pension freedoms being launched in April and the latest idea -- cashing in your annuity -- which might arrive in 2016.

The tax penalty of 55% on taking out your money is being removed, but there will still be tax: 25% will be tax free, then you pay income tax at 20%, 40% or 45%, depending on which threshold you smash through.

It's a point which may have been overlooked in the excitement over the cash-in-your-annuity idea.

A typical pension pot of £20,000 to £30,000 buys a very small annuity, perhaps around £25 a week.

However, for many pensioners, that money could be free of tax, because their incomes will be less than the personal allowance, the amount of income you are allowed to have before income tax kicks in.

On the other hand, taking the money as a cash lump sum would push many of them into 20% tax and there's no tax-free element.

People on slightly higher incomes will need to worry about the 40% tax threshold.

So it will be very important to calculate what might happen to your tax bill, even though you might be very unhappy about the size of your annuity.

Thursday, 5 February 2015

No prosecution for Wonga

The payday lender, Wonga, will not be prosecuted over the fake letters affair, when it emerged that customers owing money were sent demands which appeared to be from legal firms but were actually from Wonga itself.

The financial watchdog, the FCA, fined Wonga £2.6m last summer after finding that 45,000 such letters had been sent out. It then referred the matter to the police.

Today the City of London Police issued a statement saying: "The central allegations were that Wonga had deceived its customers by sending letters falsely purporting to be from lawyers with the aim of recovering outstanding debts from customers.

"After a thorough review of all the material gathered the City of London Police has concluded there is not sufficient evidence to progress a criminal investigation. ​"

Tuesday, 3 February 2015

Switching Commissions

Here's the list of what the price comparison websites make out of you when you switch gas and/or electricity.

The commissions are per fuel, so double if you go for a dual fuel deal.

£29 Moneysupermarket
£30 U-switch
£22 Compare the Market
£22 Go Compare

They revealed these charges to MPs on the Energy and Climate Committee.

Thursday, 29 January 2015

Bankruptcies down

Fewer people went bankrupt last year, leaving the total number of personal insolvencies at its lowest since 2005.

There were 99,196 individual insolvencies in 2014, down 1.8% on the year before, including bankruptcies, debt relief orders and Individual Voluntary Arrangements or IVAs.

Bankruptcies were sharply down, by 17%, while IVAs rose slightly.

Insolvency experts say the economic recovery has helped and creditors have been more willing to enter into informal repayment agreements with people in financial difficulty.

Here are the stats.

Wednesday, 28 January 2015

Tesco closures

Tesco informing staff at 43 stores today that their shops will close.

One is Woodseats in Sheffield, with 50 staff.

In total 2,000 staff are affected.

Express and Home Plus stores will close on 15th March.

Tesco Metros and Superstores will close on 4th April.

Tesco warned earlier this month that 43 stores would be shut as part of plans to cut costs.

Here's the list:


Tuesday, 27 January 2015

Millions of pounds for card users

Two million people are being sent letters to tell them they could qualify for compensation for credit and debit card protection policies sold to them by their banks.

The policies promised to protect customers against losses if thieves used their cards, but such losses were likely to have been covered by the bank anyway.

Customers spent an average of £25 a year on policies including Card Protection, Sentinel and Safe and Secure Plus.

The period covered by the compensation is between January 2005 and August 2013, so it could stretch to nearly 9 years.

The refunds could add up to hundreds of pounds in some cases, including interest at 8 per cent.

The letters are being sent by a special company set up by banks, credit card companies and a US firm called Affinion which provided the insurance.

The Financial Conduct Authority is not accusing them of mis-selling. It says some features of the policies could be useful.

Customers will have to vote on the scheme which will then need High Court approval before payments are sent out in the autumn.

Friday, 23 January 2015

Poorest families lost £1,223 a year

Lower income households have lost the greatest share of their incomes from the austerity years under the Coalition, but the richest households have lost the most in cash terms.

That's what the Institute for Fiscal Studies concludes in its verdict on the Coalition in the run-up to the election.

It's the first time it has measured the impact from May, 2010.

So how much have households lost?

Lower income households have been hit by a squeeze on benefits and some tax changes have affected the better off . The people affected know that already.

The average loss since the Coalition came in is £489 a year, according to the IFS model.

The biggest losers in cash terms are the top 10 per cent. Focusing on families with children on incomes more than about 70,000 pounds, they have lost £5,350.

But at the other end of the scale families with children in the bottom 10 per cent have lost £1,223 on average. They're likely to have incomes less than around 20,000.

In the middle and slightly higher than middle income groups, households have lost a lot less. In fact those those without children have actually gained.

For those who have lost out, what changes are behind that?

Everyone's affected by higher VAT.

But lower income families have less than they might have expected because benefits have been uprated by a lower figure after the switch to the Consumer Prices Index or CPI.

And they have less and because of cuts to housing benefit and council tax benefit. The freeze on child benefit is a factor too.

Big increases in the Personal Allowance (the amount you can earn before you start paying income tax) have helped middle earners a lot.

But households at the top end are paying higher National Insurance. More of them are in the 40 per cent tax bracket. And tax relief on their pension contributions has been restricted.

What if you extend the time frame to before the Coalition came in?

Interesting this - going back to before May 2010.

Including the austerity measures Labour brought in in in April 2010, the losses pile up for the better off.

And taking the time frame bacl to 1997, when Labour got in, the picture looks better for those on the lowest incomes.

Because Labour introduced more generous benefits for the poorest families and those with children, those groups are still better off -- according to the IFS -- than they were before the Blair/Brown era.

Thursday, 22 January 2015

QE? Again? But what is it?

Quantitative Easing - what is it?

Maybe we need to remind ourselves, because the European Central Bank is expected to do it today.

The idea would be to pump more money into the stagnant eurozone economy, to encourage spending, investment and growth.

But how is it done?

Here's my explanation from a while ago when the Bank of England tried it.

And here's the Bank's explanation.

Tuesday, 20 January 2015

New weapon to boost savings rates

The financial watchdog the FCA is barking and growling at banks over the way they let down customers over savings rates.

In too many cases the saver is left languishing on a pitiful rate, given little information on how bad it is and seldom encouraged to shop around for something better.

So the FCA has devised a shiny new weapon to cow savings providers into behaving better. When they write to you with a regular statement they will have to include a "switching box" which shows in a colourful chart how bad your rate is, how much more you could get from the provider's other accounts and what you could earn from the average of the best ten savings accounts on the market.

Here's what the box could look like:

Another innovation is that when you get the account in the first place they'll have to include a warning if the rate is a poor one, saying it pays "interest below the bank of England's base rate".

The watchdog has retreated with a whine and a lowered tail from drastic measures such as banning the introductory bonus rates which makes accounts seem attractive at first but leave you stuck on a measly rate later.

But the switching box could be a big embarrassment for banks and building societies which take advantage of gullible customers.

All the measures are up for consultation.

Thursday, 8 January 2015

Low pay caused low tax revenue

Low wages have been a major factor producing disappointing income tax receipts for the government, according to new analysis of official figures.

The proportion of earners with incomes below £18,000 rose to 44% from 39% in the six years to 2014, after the financial crisis and including the recession.

Behind the trend was an increase in the number of low paid part-time workers and below-inflation wage rises for those working full time.

The Office for National Statistics, which published the figures, adjusted them for the effects of price rises over the period.

Income tax receipts rose by just 0.1% a year, while the economy grew on average by 2.4% annually.

The other significant factor holding back tax revenue was the reduction in the Personal Allowance -- the point at which we start paying income tax.

The Allowance rose from £5,225 six years ago to £9,440 in the 2013-14 tax year and currently stands at £10,000.

The combination of depressed wages and more earners being exempted resulted in weaker tax revenue for the Treasury.

Monday, 5 January 2015

Bank Fashion in trouble

Deloitte statement:

Deloitte appointed administrators to Bank Fashion Limited

Bill Dawson, Daniel Smith and Paul Meadows of Deloitte, the business advisory firm, have today been appointed Joint Administrators to Bank Fashion Limited (Bank).

Bank is a fashion retailer based in Bury, Lancashire.  It operates from 84 stores, primarily in the Midlands, North of England and Scotland and has 1,555 employees.  No redundancies have been made at this time.

Bill Dawson, Joint Administrator and Partner in Deloitte's Restructuring Services practice, said: "Bank has struggled in a highly competitive segment of the retail industry and has been loss-making for a number of years.  A review of the business has determined that a solvent turnaround would not be possible and so its director has sought the appointment of Joint Administrators.  All stores are open as normal, staff have been paid and additional sale discounts will be implemented later this week.  The company has already been approached by several parties who have expressed an interest in the business and the Administrators are trading as a going concern with a view to progressing these options and seeking further interested parties for some or all of the business."

Petrol price war

There is a new spurt in the race between supermarkets to cut fuel prices.

Asda has announced another 2p cut in the cost of unleaded petrol, which falls to 105.7p a litre from tomorrow -- after a similar cut last week.

Tesco followed with a promise that its petrol and diesel prices would drop by 2p a litre this afternoon.

Meanwhile the price of Brent crude oil slipped below $55 in world markets.

There are predictions that some buyers will be able to fill up for £1 a litre or less within the next couple of weeks.