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It also suggests that the average amount being withdrawn is £15,294, down from £16,666.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

1.227
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.

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.

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".

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.

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.

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.

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.