Thursday, 21 September 2017

Blow to Standard Variable Tariffs

E.ON is dealing a blow to the much-criticised Standard Variable Tariff for gas and electricity customers, the one which tends to be much more expensive than other options - yet customers are automatically put on it after their cheaper deals expire.

It'll offer a fixed rate deal which turns into another fixed rate deal at the end of its term - for people who allow smart meters to be installed. So what matters is where they set the price.

Here's the release.

Friday, 15 September 2017

What would a mortgage rate rise cost?

More than half of all residential mortgages are fixed rate loans, so they aren't affected by a rise in the Bank of England's base rate.

That's until, of course, the fixed rate deal ends and the borrower is shoved onto a high Standard Variable Rate.

There are over 4 million property owners with variable rate mortgages, though, according to the banking trade body, UK Finance.

They're the ones anxious to know how they would be affected if the Bank pushes up base rate in November, as many are now speculating.

On average they have £116,000 of the loan outstanding.

A 0.25% increase in the mortgage rate would cost around an extra £15 a month, I'm told by brokers London & Country.

Looking a bit deeper into the crystal ball, imagining a series of rate rises adding up to 1%, and you get to a much heftier monthly increase of £60.

It's worth remembering that people who have bought recently or remortgaged tend to have larger loans, which makes them more vulnerable -- if they've gone for a variable rate deal, which most haven't.

The average new mortgage is £187,000.

Friday, 9 June 2017

DUP Manifesto gutted

The Personal Tax Allowance.  In Parliament, we will support proposals to further increase the personal allowance.

The DUP supports continued increases in the National Living Wage.

The DUP will support the maintenance of the pensions ‘triple lock’; and support an end to the unfair treatment of women pensioners.

We will support efforts to better control energy bills and will seek to ensure any such measure operates in Northern Ireland. 

Some parties have once again placed universal benefits like the winter fuel allowance in their sights. The DUP will resist any assault on these important universal benefits. 

We will also pursue: the abolition of Air Passenger Duty; and a cut in the VAT rate for tourism businesses.

Corporation Tax: reducing Northern Ireland’s Corporation Tax rate to at least 12.5%.

The DUP will fight hard at Westminster for a Budget settlement that allows for real terms increases in health and education spending over the next parliamentary term

On Brexit:
Frictionless border with Irish Republic assisting those working or travelling in the other jurisdiction Progress on new free trade deals with the rest of the world
Comprehensive free trade and customs agreement with the European Union 
Business to retain competiveness and not face additional costs
Jurisdiction of European Court of Justice ended and greater control over our laws restored 

Thursday, 11 May 2017

What is a Flexible State Pension Age?

Anyone seeking to understand what Labour means by a "Flexible Pension Age" needs to look back at what Jeremy Corbyn wrote in the Telegraph in 2015.

It was on plans in train to increase state pension age to 66, 67 and eventually 68. (And now there's talk of 69 and 70...)

"Some people will be happy to work longer, others not. But living longer doesn’t mean we are able to work longer in physically demanding jobs like that of the firefighter, police officer or paramedic. And it’s not just in the emergency services: construction workers, care workers and prison officers cannot be expected to work into their late 60s.
So we need a flexible pension age that allows people to work for as long as they want to, while also recognising that for many people the nature of their work, their health, or their disability may not allow that.
Increasing the state pension age to 68 does not recognise this reality. It will mean that those who have worked in well-paid jobs with good pensions will continue to take early retirement, while lower-paid workers with the least savings will have to work until they drop. It will create a two-tier system in which the fortunate few can retire into long contentment, while increasing numbers retire later in poor health and poverty."

Friday, 5 May 2017

Outrage over shops already rejecting old fivers

Can a shop reject your old paper fiver before it ceases to be legal tender at midnight tonight?
I just heard from an irate shopper who had been given an old fiver as change in a supermarket, then had it rejected in a coffee shop and then rejected again in an organic grocer's.
It looks like there are a few cases of traders not wanting the hassle of dealing with defunct £5 notes now they're on the way out.

Can a traders reject your old fiver already?

The answer is yes! It's up to the shop what they can accept.
They can reject £50 notes if they don't like the look of them.
Equally, they can accept magic beans for currency if they want, or chocolates, or gig tickets - whatever you agree with them.
The acceptability of notes is entirely between the two people involved in the transaction.

So what's the point of saying it's no longer legal tender?

Legal tender is a tricky concept. It means that the money being offered is good for paying a debt.
Someone to whom you owed money could reject magic beans as a payment, but not legal tender.
And a court would back you if you paid with legal tender.
Tonight the old Elizabeth Fry fiver stops having that unassailable legal status.

The Bank of England says, “It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender.” Here's the Bank's brief.

Can stores carry on accepting old £5 notes if they want to?

They certainly can.
Any supermarket, High Street shop or market stall can take an old note from you next week and for the forseeable future, if they are feeling nice.
First of all, it's up to them what they accept.
Second, they are likely to be able to deposit an outdated paper fiver at their bank for months, if not longer.
And the Bank of England will accept old fivers "for all time". Here's how you take them back.

Wednesday, 26 April 2017

Pension cashing in tops £6bn

Nearly 400,000 people took out £6.45bn of their pension cash in year to April, taking advantage of the new pension freedoms, HM Revenue and Customs said.

The figure covers both cash withdrawals and income drawdown, through which pensioners maintain an investment fund and take a regular income.

On average people pulled out more than £16,400 each between April 2016 and March 2017.

It's the second year that pension savers have been able to use their retirement nest eggs as they like, from the age of 55, subject to paying some tax.

It's hard to gauge from the HMRC figure how much more "cashing in" has been going on. The first year saw at least £4.35bn withdrawn - but pension providers weren't forced to submit full records.

Tuesday, 25 April 2017

Energy price hikes disguised as savings

Canny consumers who are coming to the end of year-long fixed rate gas and electricity fixed rate deals are in for a shock.

When you look at the price comparison sites to see what you'll be paying next, it's likely to be £100s more.

But that won't be the only surprise.

The switching services will promise you huge savings, like this:

How is there a saving of nearly £400?

Well, it's compared with what you would be paying if you didn't switch deals and you ended up on your current supplier's Standard Rate (the expensive one).

In fact, in this example your best option would be a near £200 increase in your annual bill.

Of course, if (like most people) you're on the Standard Rate already or have never switched before you are likely to make a substantial saving anyway.

For the rest, make sure you click "What will I pay?" and avoid disappointment...

Friday, 17 March 2017

Mind the gap on house prices

Least and most affordable areas in England and Wales, from ONS, comparing now with 17 years ago...

Thursday, 16 March 2017

ABTA cyber attack

The travel agents organisation ABTA says 43,000 members and travellers may have had their personal information stolen in a cyber attack.

It says the attack was perpetrated by an external infiltrator on its web server on 27th February.

ABTA says most of the information taken is what it calls "low risk", including email addresses and encrypted passwords.

But up to 1,000 holidaymakers who uploaded documents to do with holiday complaints may have been more seriously affected.

In their cases photographs, addresses and phone numbers could have been accessed, although ABTA says banking details would not have been available.

Also, more detailed information about 650 travel agents could have been hacked, along with documents supporting their membership applications.

They are being told to monitor their bank accounts and to be vigilant about online fraud.

ABTA says the vulnerability in its server has been identified and dealt with. It wasn't able to identify the infiltrator was, saying that was now a matter for the police.

Mark Tanzer, ABTA's chief executive, apologised for the anxiety and concern the incident had caused.

Wednesday, 15 March 2017

Self-employed underpaying by £5bn? Really?

What did the Chancellor mean when he said in his Budget speech that...

"The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone"?

Some might have though he was implying that if only the self-employed paid what employed people pay then the Exchequer would be £5bn a year to the good.

But it's not quite like that.

Yes, Mr Hammond is simply totting up what he would get if all the self-employed were employed - and subtracting what he receives from them at the moment.

He reckons he would be £5.1bn a year better off.

Yet most of that large sum would come from the National Insurance paid by employers, the so-called tax on jobs.

Employer NICs are a substantial 13.8% of pay.

That's not money deducted from wage packets, even if employers see it as part of the cost of taking on staff.

The self-employed do contribute less, £2.80 a week and 9% of pay over £8,060, compared with the straight 12% contributed by employees.

But not £5bn less.

In fact some would argue that they are pushed into self-employment by companies who want to avoid having to pay employer NICs.

Even so, it was individuals whom the Chancellor targeted in his short-lived National Insurance hike, not companies trying to trim their tax bills.

Thursday, 26 January 2017

Top cash machine providers

Here's the pecking of the of the biggest operators of free cash machines. It shows how the balance of power has changed. Independent ATM companies occupy two of the top three places. They're the ones outside supermarkets, railway stations and many garages and convenience stores. It means that banks have to pay them 25p a time if their customers find themselves at a shop and want to take out some cash. With so many cash withdrawals now being made at convenient spots where people happen to be shopping or travelling, it means banks are having to pay large sums to other ATM operators - and some bankers don't like it.

10,387 free cash machines - Cardtronics (Independent)
8,127                                     RBS/NatWest
5,821                                     Note Machine (Independent)
4,948                                     Lloyds/Halifax/Bank of Scotland
4,019                                     Barclays

In fact non-bank "independents" operate 2 in every 5 free cash machines.

Tuesday, 24 January 2017