The Financial Blog

Moneyexpert.com say 350,000 motorists risk massive fines by driving without insurance

• 350,000 motorists admit to driving uninsured in the last 12 months
• 11% of uninsured drivers can’t afford the premiums
• 18-24 year olds the most likely to drive uninsured
• Hundreds of thousands of British motorists have admitted to driving without insurance, risking hefty costs and prosecution if they are caught behind the wheel without adequate car insurance cover, according to MoneyExpert.com.

The independent price comparison site has revealed that nearly 350,000 motorists have broken the law in the past year by failing to insure themselves before getting behind the wheel.

And MoneyExpert says young people are most likely to drive a vehicle without adequate car insurance with almost half of all offenders - 120,000 people aged 18 to 24 - admitting to having done so over the past 12 months.

According to the Motor Insurers’ Bureau the costs of uninsured drivers adds an extra £30 to the annual premiums of all honest drivers, with around £500 million being paid out in claims annually.

The legal minimum requirement for car insurance is Third Party cover which is meant to ensure that anyone involved in a serious accident is covered for medical costs and personal liability. Those who don’t properly insure their vehicle risk 6-8 points on their license, with the possibility of a ban, and a fine of anything up to £5,000.

Sean Gardner of MoneyExpert.com said: “It’s a real worry that many people persist in driving without car insurance. They are putting the personal and financial security of others at risk.

“Insurance premiums have not risen to such a degree that cost can be the only excuse. There are many ways to get a good value policy but regardless of the cost as a legal requirement uninsured drivers should never get behind the wheel.”

Nearly half (46%) of those driving uninsured blamed an oversight as the reason for doing so, while one in ten motorists (11%) claimed they could not afford the necessary premiums. But MoneyExpert.com is warning that avoiding the insurance costs is a false economy that could have serious financial and legal implications.

Sean Gardner continued: “It’s remarkable that such a high percentage of people are driving without insurance because of an oversight, with their policy having lapsed. The potential consequences are huge, with anything from a driving ban to a £5000 fine being a real possibility.

“We’d urge anyone who’s unsure about the state of their insurance policy to check out the details as soon as possible, and ensure that they’re sufficiently covered.”

Reason for driving uninsured vehicle    Percentage of people who gave the reason
      
It was an oversight as my insurance had lapsed  46%   
It was an emergency and I had to drive someone else’s car       11%   
Could not afford insurance      11%   
It was deliberate       13%   
Other   18%   
Don’t know / prefer not to say  5%

If you take a few minutes to compare car insurance online you could save money by finding the cheapest car insurance policies for your circumstances. Click Here to compare car insurance now!

The British Bankers Association have today released the March figures for the main high street banks.

Mortgage lending fell in March and the number of mortgage approvals also declined. As you might expect savings deposits increased during March and unsecured loan lending decreased. Quite surprising was a slight increase in credit card lending while lending amongst financial companies showed no real change.

David Dooks, BBA statistics director, said of the latest data: “The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals. Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on credit cards.”

So no real surprises with this report. Fewer mortgages have been accepted as has been reported in the news, lenders are definately tightening their lending criteria and ensuring people have adequate deposits if they’re looking for a mortgage, and 100 per cent mortgages are history.

As a result, in general, people seem to be more wary of getting credit so loan lending is down and credit card lending is showing a slight increase as apposed to the ‘normal’ credit card switching and continued spending we’ve been used to over the last few years.

As ever it’s time to start clearing existing debts before you even consider taking on any additional credit. At least in future lenders will have to be more responsible when it comes to mortgages, loans and credit cards.

Click Here to comapre mortgages

Click Here to compare loans

Click here to comapre credit cards 

If you’re looking for credit make sure you get the best deal for your cirsumstances.

Abbey savings seem to be going from strength to strength, every week their market leading savings rates hit the headlines.

Today Abbey have launched an instant access savings account that pays 6.50 per cent, Gross on balances above £1,000. You can open an account online and then manage the account by telephone or local branch. The rate includes a 1.00 per cent bonus for 12 months from the date of opening and after 12 months the interest rate drops to 5.50 per cent.

This is the first time that a bank is offering the generally higher interest rates you see with online savings accounts but for this account managed by phone or branch. Banks usually only offer higher rates with online accounts as the administrational costs are less for the bank.

Director of Savings and Investments at Abbey, Reza Attar-Zadeh, said: “This is an exceptional rate for a telephone access account.”

This market leading rate is backed by the strength of one of the world’s biggest banks. The account can be applied for online at Abbey.com and can be managed by telephone or at your local branch.

The Chiltern Debt Monitor is a regular analysis of Chiltern Debt Management’s database of live customers to determine the profile of debt and debtors in the UK.

• Average level of debt: £25,945
• Average age of debtor: 44
• Yearly gross income: £23,444
• Male: 42%
• Female: 58%
• Average number of creditors: 8
• Affordable payments as a % of contractual payments: 25%
• Monthly living costs: £1086
• Monthly disposable income: £225.36
• No of months to be debt free: 146

The average level of debt of someone on an informal debt management plan has fallen below the £26,000 mark for the first time and is now at its lowest amount since the Chiltern Debt Monitor started.

This average total debt amount is down by almost £400 since the beginning of the year, which shows that customers are dealing with their debts sooner and preventing their debts from escalating further than previously.

However people’s disposable incomes are dropping, with household expenditure rising, which suggests that household finances are still under increasing pressure. Already this year we have seen fuel, food and energy increases putting further strain on already overstretched budgets.

Credit is becoming increasingly more difficult to secure amidst the global credit crunch, with credit card holders seeing their limits reduced and homeowners having reduced mortgage options.

The Council of Mortgage Lenders (CML) has indicated that there have been 30 per cent fewer home loans offered so far this year than the same time last year, and many lenders have pulled the plug on their 100 per cent deals.

Chiltern’s Nathan Gladwell says: “The current climate is encouraging more people who are struggling with their finances to seek alternative options, as credit becomes harder to get hold of.

“Add to that the rises in food, fuel and energy costs and it’s no surprise that most people are feeling the pinch in their pockets.

“People struggling with their finances need to readjust their spending to more realistic levels and be open to alternative options, like informal arrangements.

Options like debt management can offer a valuable short-term solution whilst debts are brought under control, and they ensure that debts are prioritised so mortgage or rent and utility bills are accounted for first.”

If you’re struggling to keep up with repayments or your finances seem like they’re out of control then Click Here to get some professional debt help, start today.

Bank Holiday mini-breakers are urged to ensure they have comprehensive travel insurance and motor breakdown cover secured ahead of the May Day mayhem says price comparison site Moneysupermarket.com

•  Family cover for a one week UK break from £6.20
•  Annual motor breakdown cover from £42

Last year, over 200 million Brits took an overnight holiday in the UK and with the pound struggling against the Euro, it’s likely even more people will take their mini-breaks on our shores this year. This May Day weekend we can expect busier roads than ever with people taking to the motorway rather than jet-setting abroad.

Figures from moneysupermarket.com show a week’s UK travel cover is available from £6.20 for a family of four and annual motor breakdown cover from £42.2 City-break enthusiasts, who hold annual European cover, can add UK cover to their policy free of charge.

Director of insurance at moneysupermarket.com, Richard Mason, said: “You may not be heading across the Atlantic or the Channel this Bank Holiday, but a trip to the British countryside can make for a very relaxing break. Holidaying in the UK however, like any trip, requires adequate insurance - lost or stolen personal possessions, cancellations, medical emergencies and motor breakdowns are not limited to exotic locations.

“The last thing holidaymakers want is to interrupt a well-deserved break by stumping up an extortionate breakdown call-out fee or to replace personal possessions. With competitive deals available for UK travel and motor breakdown cover it’s better to take precautions than have to pay out more after the event.”

Get to Moneysupermarket.com now to compare travel insurance and motor breakdown insurance - http://www.moneysupermarket.com

Abbey say that from today their super ISA is the only ISA product offering 10 per cent and certainly the 2 financial comparison web sites I checked out just now do not have the Abbey Super ISA listed on their sites, unless of course I missed something…If these sites do list the Abbey Super ISA it certainly isn’t very easy to find.

The Abbey Super ISA offers 10 per cent if you put an equal amount, or more, into any Abbey investment product. The minimum investment is £1 for the Super ISA and £1500 for the investment side.

The Abbey Super ISA offers;

• 10 per cent AER fixed for one year
• Customers can get access to the whole of their balance should they need it and without penalty
• Allows transfers in and out

Head of Savings and Investments at Abbey, Reza Attar-Zadeh, said: “This is a tax efficient way to build a diversified portfolio to save for the future.  Since markets have fallen, the product combination of the top paying cash ISA rate offering instant access with an appropriate investment is compelling.”

You can apply for an Abbey Super ISA Account by visiting your local branch, telephoning the customer sales line on 0800 234 6065 or online @ Abbey.com

The Chancellor Alistair Darling has backed the Bank of England’s decicision to put a sum of £50 billion forward to help stop the credit crisis from damaging UK banks.

Basically the plan will allow banks to swap their risky mortgage debts for secure government bonds to help their liquidity which helps their ability to lend money during this phase of the credit crunch.

The Chancellor said it would make life easier for future borrowers and although the £50 billion funding has been welcomed, he said that the UK financial markets were ‘fundamentally strong’ - Hmmm, I’m sure the banks will be fine with £50 billion of funds to fall back on!

From Monday banks will be able to swap only mortgage debts for government bonds and this will be allowed for a period of 1 year but could be renewed for upto 3 years. The swaps cannot be used to fund new lending and can only apply to mortgage debts from the end of 2007 onwards, there is also no cap on the £50 billion…

But is this a bail out?

The BBC’s business editor Robert Peston said the primary purpose of the scheme was to prevent another Northern Rock

“Or to put it another way, taxpayer support is being provided to minimise the risk of huge future losses for taxpayers from another banking collapse.”

“This is a banking market bail-out of an ambition we haven’t seen in this country since the early 1970’s and possibly longer than that,” he said.

Click here to read Robert Preston’s full blog post…

Insurance from Marks and Spencer Money including their car insurance, travel insurance, home insurance and pet insurance policies have all been awarded a 5 star ratings by Defaqto, an independent financial services benchmarking company.

Defaqto scores insurance products by rating them with 1 to 5 stars; each insurance product is evaluated feature by feature and a 5 star rated product must have a specific minimum set of features. Only a small proportion of the market acheives a 5 star rating.

Commenting, Brendan Cook, Marks and Spencer Money’s chief executive said: “This rating is a great indication of the standard of insurance available from M&S Money.  We are proud of the policies we have put together in conjunction with our insurance partners and feel that they are some of the best available in the current market.”

Brian Brown, Head of Insight at Defaqto comments:  “We analysed the policies available from Marks & Spencer against the whole market, using a wide selection of product features and benefits.  Each of the these policies is among an exclusive selection of high quality policies to be rated Five Stars by Defaqto”

It’s great to hear that there are more high quality insurance products available for customers but is that really what people want?

Make sure you compare car insurance, compare pet insurance, compare home insurance and compare travel insurance policies online before you make any decisions about buying. What do the 5 stars mean and what will these insurance policies give you above and beyond any other insurance product? If you just interested in getting insured then go for the cheapest insurance policy you can find!

Of course if you want to get a quote from M&S Money visit www.marksandspencer.com/money or contact them by telephone:

Home & Contents - 0800 051 6302
Car Insurance - 0800 107 800
Wedding Insurance - 0800 316 5985
Travel Insurance - 0800 345 7669
Pet Insurance - 0800 432 0431

Credit card companies have turned down applications from more than 3.24 million people in the past six months as they continue to turn the screws on risky lending, new research from MoneyExpert.com reveals.

The independent financial comparison website’s research estimates that as many as 18,000 applications are being rejected by credit card companies every day providing yet more evidence that the UK’s credit binge is turning into a starvation diet.

With such a high number of applications currently being rejected MoneyExpert.com is warning all potential applicants to consider the strength of their credit rating before calling a card company. MoneyExpert.com says increasing levels of bad debt hitting banks as well as the current credit crunch has prompted many firms to tighten rules on new applications.

The figures show around one in 14 people - 7 per cent of adults - have been card rejects during the past six months. MoneyExpert.com says more people have been rejected for credit cards than for any other financial product.

Sean Gardner of MoneyExpert.com, said: “For years borrowers have had the upper hand in the credit card game but the rules have now changed. People with debts who thought they could keep shuffling their cards to stay ahead are now running into trouble.

“Card applicants need to be confident that they are going to be accepted in the current lending environment as a rejection could lead to black marks on credit reports.

“A credit rejection could have knock on effects for borrowers when it comes to taking out all kinds financial products including a mortgage.

“Given the turmoil in the mortgage markets the options are running out for people with problem debts. They need to take control of their borrowing and crucially to reduce their debts.”

Young adults are most likely to have a credit card application refused - the research showed that 10 per cent of people aged between 25 and 34 were turned down in the last six months, more than any other age group.

Those approaching retirement are by contrast considered the lowest risk by credit card companies, with only three per cent of people aged between 55 and 64 having been rejected in the same period.

MoneyExpert.com offers a free credit profiling service which helps people to understand their likely credit profile by answering straightforward questions about their credit history. MoneyExpert.com then recommends products from financial providers who lend to consumers with similar profiles, which lessens the likelihood of rejection.

The Co-Op Bank has launched a new Current Account Plus with a linked savings account. The account offers simple, straighforward current account facilities with a linked savings account that tracks the base rate, minus 0.5 per cent. The rate is guaranteed for life as long as you have a Current Account Plus and to maintain a Current Account Plus you must pay in a minimum of £1,000 per month.

Director of Retail Banking at The Co-operative Bank, John Hughes, said: “Our new current account not only offers customers a very competitive rate on the linked savings account which is guaranteed for life, but also provides customers with a very high standard of customer service from the bank recently voted number one on the high street for customer satisfaction by Watchdog and Which?”.

“At The Co-operative Bank we are committed to developing long-term relationships with our customers, and by listening to their financial needs we have created a new current account that meets all their requirements - a traditional account with automatic linked savings facility, one clear and simple rate, and a fee free overdraft of £200, all from a provider they can trust.”

The savings rate isn’t really the best available, there are other higher rate products so you should really compare savings accounts to find the best rates.

Having said that The Co-Operative has a very good track record when it comes to customer service and this is highlighted by the awards they constantly receive, they’re also one of the most ethically lead companies and this may appeal to you more than getting the best rate out there…?

The Co-Op Current Account Plus offers;

• An automatic instant access linked savings account available with every Current Account Plus
• One clear and simple rate - interest on the linked savings account tracks 0.5% below the Bank of England Base Rate and is guaranteed for life
• Automatic fee-free £200 overdraft facility
• A dedicated service for customers wanting to switch - 0800 240 700