The Financial Blog

Price comparison web site http://www.Moneysupermarket.com reveals that 30 per cent of Brits think they are on the brink of financial meltdown. 84 per cent of Brits say they have financial worries following last week’s budget.

With nearly £1.5 trillion owed on credit cards, loans, and overdrafts, the UK’s debt mountain is set to hit recored breaking figures but it seems as though more and more people are not able to cope with their repayments.

Head of loans and debt at moneysupermarket.com, Tim Moss, gave some good advice following the survey: “I am really surprised by the extent of worry out there. Close to a third of Brits have obviously been really spooked by the budget.

“There is little doubt many Brits will find their annual road tax as high as the value of their car as from next year, creating a massive headache for people who are really struggling. These are some of the unintended but very real victims of the budget.

“Just 16 per cent of Brits said they had no financial worries, indicating people from all walks of life and income levels are feeling the pinch from rising bills and taxes.”

“Anyone starting to worry about their financial situation shouldn’t bury their head in the sand – problems are easier to tackle when addressed early.

“People should start by gathering their paperwork and working out the true scale of their problems. From there they must prioritise bills and pay the essentials such as mortgage or rent first. Non-essential items such as magazine subscriptions and pay-TV might have to sacrificed.

“If you feel unable to sort out your money worries yourself, start by getting some free independent advice from organisations such as the Citizens Advice Bureau or the Consumer Credit Counselling Service.“

Tescocompare.com was indpendently named the best price comparison site for car insurance by Consumer Intelligence in December 2007.

Tescocompare.com pride themselves on not only comparing the price of car insurance premiums but also the features available with each policy for that price. Added extra’s like windscreen cover and courtesy cars may or may not be included in each specific car insurance policy so using Tescocompare.com can help you find the right cover for your needs.

You should always shop around when it’s time to renew your car insurance and a comparison web site like Tescocompare.com is the best place to start. You can compare car insurance on a like for like basis so you can really understand the level of cover on offer.

If you consider paying more towards voluntary excess, the amount you are willing to put towards repairs should you have an accident, then it could reduce the price of your insurance policy. Don’t forget that if you do have an accident you will have to pay the voluntary excess you have entered.

You can also choose to protect your no-claims bonus, it may save you money in the long run because if you have an accident you will loose the no-claims bonus. This means future car insurance policies will cost you more.

Other tips to save money on car insurance in clude; keeping you car in a locked garage at night, get an immobiliser fitted, don’t modify your car, buy a lower specification less powerful car and consider taking the advanced driving test especially if you are under 25 years old.

It seems like the whole country is getting ready for this weekend’s bank holiday Easter getaway and Nationwide Building Society are warning people not to fall into the foreign usage fees trap when using their credit cards abroad.

Last Easter more than £650 million was wasted by Brits using their credit cards and debit cards abroad. Using a card is easy and probably the most convenient way to get hold of cash.

Nationwide do not charge a foreign currency fee for it’s customers using any Nationwide cards abroad. So if you’re considering switching credit cards then Nationwide could be one to consider for foreign usage.

Divisional director at Nationwide, Jeremy Wood, said: “Returning from your Easter break to find charges for using your card abroad is enough to drive anyone hopping mad.  People who are planning to go abroad this Easter should be aware of the hidden charges that most card providers impose, which are both costly and unnecessary.  Last year we saved our customers just under £46 million3 in foreign currency loading fees.  Anyone using a Nationwide FlexAccount or credit card will not be charged any foreign currency usage fees on purchases and will therefore have extra money to enjoy while on holiday.”

Of course another option would be to pre-load a card with credit before you go abroad. Pre-Paid cardsare a fast emerging form of payment and are a safe and convenient way to take money abroad. You can top up a pre-paid card just like a pre-pay mobile phone card. Using the card abroad will cost you nothing because it is not a credit card, once the amount you have loaded onto the card is spent you will need to recharge the card with additional funds in order to continue spending.

You can get hold of 500 Tesco Clubcard points if you buy your car insurance through tescocompare.com

This offer is available until 8th April 2008 and all you need to do is enter your Tesco Clubcard number with your other details when buying a policy online.

You can collect Tesco Clubcard points when you buy a car insurance policy from any car insurance provider quoted through the Tescocompare.com search results.

The 500 Tesco Clubcard points will show on your statement by August 2008, if not earlier.

If you are not a Tesco Clubcard holder and you purchase a car insurance policy from Tescocompare.com you can go in store and complete the regisration form. You need to return it via Freepost and get registered within 30 days then your 500 Tesco Clubcard points will be automatically credited to your account.

If you need further information on the Tesco Clubcard points and membership visit tesco.com or call the Clubcard helpline on 0800 59 16 88

Remember you get also earn Tesco Clubcard points if you pay in-store with a Tesco Clubcard Credit Card. 16.9 % Typical APR, variable.

Mervyn King the Governor of the Bank of England will be meeting with UK bank bosses.

UK bank bosses are calling on Mr King to ensure that the central bank will provide funding help if it’s needed. It’s not surprising really that this has happend just one day after the rumours about HBOS funding running low, a rumour which is said to be totally untrue and currently under investigation by The Financial Serives Authority (FSA).

HBOS shares apparantly fell by as much as 17 per cent on Wednesday and it is thought that financial traders are to blame for starting the rumours in order to make profits from trading in HBOS shares This king of activity is called ’short-selling’ where a trader borrows shares, sells them straight away and then trys to buy the shares back in the future, at a lower price. The idea is the trader can then sell the shares back to the lender and profit from the difference. Sneaky…

A banking analyst at financial consultancy and research firm, Tower Group, Ralph Silva, said on BBC Radio Five Live that those people behind the false rumours ought to be flogged and they were no worse than ordinary criminals, stealing money from the market.

He said “They’re putting out rumours, they’re putting out lies, and they’re taking advantage of the lies they put out, they’re just criminals.”

This certainly will not help the credit crunch situation with more banks unwilling to lend each other money. This in turn affects the personal finance ‘high-street’ because it makes credit harder to get and more expensive if you can get it.

Scottish & Southern Energy will increase it’s gas prices by an average of 15.8 per cent and it’s electricity prices by an average of 14.2 per cent.

Npower, British Gas, EDF Energy, E.On and Scottish Power have already increased their prices so Scottish and Southern Energy are the last of these bigger suppliers to do so; the increases will come into effect from 1st April 2008.

Yet again the increasem in prices has been blamed on the rise in wholesale gas and electricity prices. This is more bad news for homeowners having to stretch their monthly finances even further. Because we’re heading into summer it might not be until the winter months of 2008 before we all really get to see the increase in our winter energy bills.

Make sure you compare utilities providers compare utilities providers to get the cheapest gas and electricity deals…

Woolwich have launched a new 10 year fixed rate mortgage with an interest rate of 5.29 per cent.

This product will help steady the mortgage market this year, with over 1.5 million people set to remortgage in 2008. Most of these people remortgaging will have been enjoying lower rates of interest for the last few years but they will be faced with interest rates of 5.25 per cent and more, leaving them with higher monthly repayments.

The Woolwich 10 year fixed rate mortgage has a £995 fee and is only available for 60 per cent Loan to Value customers, so you’ll need to have at least 40 per cent equity in your property. Woolwich are trying to capture people who may have had a mortgage for 10 years or more already, a far ‘lower-risk’ customer for them to lend money to. As I said before lenders are looking to safer lending options rather than the high-risk lending of the past few years which is the reason why the credit crunch has happened.

Head of mortgages for the Woolwich, Andy Gray, said: “The mortgage market is hugely uncertain at the moment and lenders are continually re-pricing products. However, the long term swap market has steadied at lower levels and we have been able to put together a long term product at an historically very competitive rate. With over 1.7 million coming off fixed rates this year, and several hundred thousand of these on rates longer than five years, we expect many consumers will want to fix for the long term to avoid short term volatility.

“We believe this will be the best priced long term product in the market place. With the Government looking to encourage longer term fixes, and with consumers looking to avoid short term volatility, we expect this product to be popular with borrowers. If nothing else it will certainly show whether consumers have an appetite to fix over the longer term, as the rate is hugely competitive.”

Here are the basic mortgage details;

• Fixed for ten years at 5.29 per cent
• Reverts to tracker at base + 0.95 per cent after initial fixed rate period
• Arrangement fee £995 (can be added to the loan)
• Loan to value of 60 per cent
• Borrowers can overpay up to five per cent per annum without any charges during the fixed rate period
• Six per cent early repayment charge during the fixed rate period
• Customers switching from another lender can use Woolwich Switch & Save package with no valuation and legal costs

For full product details and to read the terms and conditions go to woolwich.co.uk or call them on 0845 607 1111.

Confused.com say that 1 in 4 people do not have adequate home insurance. In the high tech era of laptops, ipods, LCD TVs, Xboxes and Playstations our houses are filling up with valuable items. According to Confused.com contents insurance worth £40,000 can cost just £43.98 a year for a family of 4.

Managing director, Debra Williams, Confused.com comments:

“Contents insurance is not a legal requirement, but should really be considered an absolute necessity. Many people decide against contents cover without considering the potential pit- falls involved. Even the most obvious precautions, such as remembering not to ‘advertise’ your new plasma screen TV by leaving the box outside your front door, or remembering to properly lock up when leaving the home, can sometimes fall by the wayside. It is for this reason that belongings need to be adequately covered.

“By failing to insure their home contents, Britons are potentially setting themselves up for a large bill, not to mention emotional turmoil, should they be unfortunate enough to suffer any loss or damage. By shopping around, consumers can end up saving a fortune on home insurance but you can’t put a price on peace of mind.”

Don’t forget shop around and try a few price comparison web sites to get the most competitive home insurance deal for you!

Commenting on rumours of liquidity problems at HBOS, Kevin Mountford, head of savings at price comparison site http://www.moneysupermarket.com, said:

“HBOS has a very strong business – and rumours that it is on its last legs are ridiculous.

“The world of banking has many different business models that differ considerably, and it is just plain wrong to tarnish all banks with the Northern Rock brush.

“Foolish rumours like these could cause panic among savers who should be reassured that HBOS, with its high interest savings and current accounts, is a far better home for your money than under your mattress.”

The FSA has confirmed it wil be investigating the trading in UK financial shares in recent days.

Managing director, wholesale and institutional markets, Sally Dewar, said: “There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling.  We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them.

“We remind market participants of the need to take extra care, in this market climate, to adhere to the market code of conduct.”

I think this may be referring to the Halifax Bank of Scotland rumours reported in the news yesterday…