The Financial Blog

According to the price comparison web site Uswitch Npower has announced that it is putting prices up by 17% for gas and 13% for electricity from 1st January, 2008. These are the same increases as announced by British Gas last week.

Head of Home Services at uSwitch.com, Tim Wolfenden, said: “Suppliers are paving the way for across the board price increases. Today’s move can leave consumers in no doubt that prices are heading north again – the return of the £1,000 average energy bill is imminent. The only question now is which supplier is going to break ranks first and put up prices on standard plans.

“The size of the increases being made to wholesale tracker plans may also give an indication of what we can expect when suppliers start to put prices up on their standard plans. It’s increasingly looking like the smart money should be on a 15% increase, which would mean consumers having to find an extra £137 a year to pay their bills.”

This is a staggering amount of money lying unclaimed by parents who’ve yet to open a child trust fund account and claim their free £250 or £500 voucher from the government.

In 2005 the child trust fund initiative was started by the government for any child born from September 2002 onwards to encourage savings for children. Parents cam claim a voucher entitling them to £250 of savings and the same when the child reaches 7 years old. Parents can also contribute to the account and save up to a maximum of £1200 tax free.

Tescos personal finance have recently launched their own child trust fund to help raise awareness of the £12.5 million still available to parents who’ve yet to open an account and claim their free savings cash. Tescos are hoping they can raise awareness by promoting it in-store.

Click here to apply online for the tescos child trust fund…

Halifax are giving new customers the chance to win £1,500 when they buy home insurance online from December 1st to January 4th. Customers will automatically be entered into a prize draw for a chance to win £1,500.

Halifax home insurance offers up to a 35 per cent discount on home buildings and contents cover, you can pay monthly by direct debit at no extra cost and there is unlimited cover for buildings and contents. The winner will be announced on 7th January 2008.

I’m not sure how competitive Halifax are for home insurance but if you need to renew your home insurance in the next few weeks and Halifax come back with a good quote for your circumstances it may well be worth considering, after all someone has to win the £1,500!

To compare home insurance use a comparison web site like Moneysupermarket.com If Halifax are not listed then get an online quote from Halifax and compare it to the top quotes from the comparison web site. Easy, and it only takes minutes if you do it all online.

The Citizens Advice Bureau (CAB) have reported 11 per cent increase in the number of enquiries they receive from people struggling to repay their mortgage or secured loan repayments. The survey by CAB suggests that around 770,000 people have missed either a mortgage or secured loan payment in the last 12 months. This also explains the rise in court action for repossessions, which is now at a level similar to the 1990’s crisis.

The report highlights the simple fact that sub-prime lenders have lent money to people that just cannot afford to repay it. This coupled with aggressive arrears management by the sub-prime lenders means they are making the problem worse.

Here at Thefinancialblog we’ve commented and reported on all the latest debt issues and findings, reports or surveys as they’re released. The media have been reporting, for the last 6 months at least, on people struggling to keep up with their debts, missing mortgage or loan repayments. The problem is a lot of people in debt think that borrowing more money is their best solution when clearly it cannot be – how can you afford more debt if you can’t repay what you already owe? People bury their heads in the sand with this attitude. However the problem is fuelled, it seems, by sub-prime lenders very willing to keep funding the people with this ‘must borrow more’ mentality.

To mention a few of our posts;

October 17th - People struggling to keep up with repayments use their credit cards to make mortgage repayments; http://www.thefinancialblog.co.uk/do-you-use-a-credit-card-to-pay-your-mortgage/

Thursday 8th November – more people could fall behind with their mortgage repayments;
http://www.thefinancialblog.co.uk/more-people-could-fall-behind-with-their-mortgage-payments/

Abbey have released a national survey today revealing the financial fitness across the UK. Wales and the South West are the two fittest areas in the UK today!

The survey looked at the overall competitiveness of each of the financial products a consumer had and then how frequently they shopped around comparing products for a better deal. The products assessed were bank accounts, mortgages, savings, insurance and credit cards.  A score of zero indicates a financially fit consumer and 100 is the financial equivalent of being obese.

Men came out at an average of 41 per cent overweight, while women were worse at 46 per cent average, overweight. Of the women, 25 per cent have not shopped around for insurance products; 31 per cent have not got their mortgage at the most competitive rates; and 70 per cent have either no savings or just enough to get by for around 3 months.  In comparison the men were 26 per cent for mortgages, 17 per cent for insurance and 61 per cent for savings.

Director at Abbey, Sue Hayes, said: “The research suggests that the majority of people are in need of a financial workout to get their finances in peak condition for 2008.  As many gear up to shift the pounds they pile on over the festive period, we would encourage people to review the financial products they hold and shop around to ensure that they are getting the most competitive deal available. Like exercise, a financial workout can take a bit of effort but for most people the rewards are well worth the exertion.”

Other key findings are;

Current accounts

• Forty one per cent of people have had the same bank account for more than ten years.  This figure is highest with the over-55s (61 per cent) and the Scots (48 per cent).
• Seventy four per cent of people have a current account with an in-credit interest rate of less than three per cent.

Credit cards

• Sixteen per cent of people carry a balance on a credit card at their lender’s standard rate.
• Women are significantly more likely than men to be paying through the nose on their plastic with 21 per cent revolving a balance at a standard rate (versus 12 per cent of men).        

Mortgages

• Only 53 per cent of people regularly review their mortgage to get a better deal.
• Twenty nine per cent of homeowners do not have their mortgage at a competitive rate with this proportion.

Insurance

• Twenty one per cent of people renewed their home insurance without shopping around and a worrying four per cent do not have any home insurance at all.
• Those living in the South East were most likely to renew their insurance without shopping around (27 per cent).

Savings

• Only 34 per cent of the population have enough savings to be able to maintain their current standard of living for at least three months. This figure increased to 56 per cent amongst the over 55s.
• Seventy eight per cent of Scots had either no savings at all or not enough to be able to maintain their current standard of living for three months.

Only half of those with a savings account have recently shopped around to get the best rate.

Table one:  The financial fitness of the nation

Score /100 %            of UK population falling into band
1-10                                                   1%
11-20                                                 9%
21-30                                               17%
31-40                                               28%
41-50                                               16%
51-60                                               15%

Insurance forums are an absolute necessity in today’s financial world. Forums have proved to be a vital platform in our lives that allow us to analyze our investments & returns or benefits. Forums do allow us to share our views, our knowledge with the worldly wise as well as the novices & thus results in optimizing our knowledge base as a community. Such communities keep on updating all members all the financial aspects of life. It also empathizes on the gains & loses associated with global insurance from a social point of view. AmPminsure.org is one such community which has evolved with time & sets its own parameters to judge what is beneficial to our society.

There are many debt stricken people out there who are struggling hard to get rid of their messy financial situation. Faced with stacking bills and not nearly enough income to meet their monthly financial obligations, these individuals have no choice but to find the best solution to become debt-free. Amongst many debt solutions availed by the financially crunched people to get rid of the money worries, debt settlement seems to be a popular way out.

Debt settlement can be done through a professional agency; however, debtors can also settle their debts by negotiating with the creditors on their own. However, most of the people seek professional help and advice while settling their debts. That’s probably the reason why the debt settlement industry has grown so rapidly. Every day a new firm crops up with fascinating debt settlement offers and the sad part is that many people fall prey to such false promises and lose hundreds of dollars in fees and find themselves in worse financial shape. I know dealing with mounting bills and scary phone calls from creditors is frightening but getting rid of this mess is not easy. Going in for a debt relief solution is a decision that should be taken by properly considering the pros and cons and not simply hearing a radio commercial or searching on the net.

I was wrong, there have been a few mortgage providers reacting to the Bank of England base rate cut by reducing their rates too. Of course the rate reductions will only come into effect from January 1st 2008.

Halifax was first to react reducing their Standard Variable Rate by 0.25 per cent from 7.75 per cent to 7.50 per cent. Nationwide were next reducing SVR again, by 0.25 per cent, from 7.24 per cent to 6.99 per cent.

If you have a £100,000 mortgage you should see the reduction in rates add an extra £15 to £20 to your pocket every month. If you’re on a fixed rate mortgage of course you’re tied into the lenders rate for the period of the offer.

Two lenders from every UK mortgage provider isn’t exactly a lot but Halifax and Nationwide are amongst some of the biggest lenders in the UK.

We’ve just had the good news about interest rate cuts and now this! It’s no wonder more and more people are struggling to cope with rising costs of living. Petrol is at its highest cost ever and now higher council tax too…
 
Local councils have warned that parts of the UK could face council tax increases because of a reduction in available government cash.

The warning from the LGA (Local Government Association) came before today’s announcements from the government about the latest three-year funding plans for local councils.

However before today’s announcements, which outlined how much cash each local authority will receive, the LGA (Local Government Association) suggested central government funding was not adequate and that local councils would be forced into making “tough choices” because there was not enough cash to provide all the required services.

Things that are likely to put pressure on local councils in the future are the rising cost of putting rubbish in landfill sites, the ever increasing number of elderly people requiring care, the introduction of free England-wide bus travel for the over and the growing immigration levels.
 
LGA chairman Sir Simon Milton said; “In some regions local councils will have to make tough choices between spending cuts and council tax rises above inflation,”

”Many council leaders will be scratching their heads as they try to work out how they will deliver ever better services for local people with less money than in recent years and with greater demands on services,” he added in a statement ahead of this afternoon’s announcement.”

M&S Money have launched new fixed rate savings accounts with the following interest rates;

1 Year term is 5.70 per cent AER/Tax free, 5.70 per cent AER Gross, 4.56 per cent Net rate.
2 Year term is 5.50 per cent AER/Tax free, 5.50 per cent AER/Gross, 4.40 per cent Net rate.
3 Year term is 5.40 per cent AER/Tax free, 5.40 per cent AER/Gross, 4.32 per cent Net rate.

This is a strictly limited period offer. With the ISA there is a minimum deposit of £500 up to a maximum allowance of £3,000 per tax year and you can transfer from other ISA providers.

With the mini cash ISA you can choose from fixed or variable rates, or split the annual allowance between the two. If you’re 16 years old or over you can put up to £3,000 per tax year into a Mini Cash ISA. This is a standard savings account but the interest is all tax free.