The Financial Blog

I’m surprised more supermarkets haven’t taken the lead in providing their food shopping customers with cheaper fuel prices at the pumps.

From Monday 30th June Tesco customers who spend £50 or more in store or online will receive a coupon getting them 5 pence off every litre of fuel they buy up to 100 litres, maximum.

You must use your coupon at a Tesco petrol station of course! And you must use your coupon within 2 weeks of its issue date; the last date you can use a coupon will be 03rd August 2008 so it’s a fairly limited 2 month offer - but not to be sniffed at.

I remember when most supermarkets, certainly Tesco, Sainsbury’s and Asda, offered these vouchers practically all year round. At Sainsbury’s if you spent enough, which isn’t difficult, the coupon was automatically printed out accross the bottom of your receipt. All you had to do was tear it off and present it at the petrol station.

Peter Cattell, Category Director for Petrol comments: “Rising fuel prices are never far from the news agenda at the moment and we know our customers are concerned about the effect it’s having on their wallets. While we are always working hard to keep the prices down at our petrol pumps, we wanted to offer all our customers a thank you for shopping with us, which will make a real difference to their budgets.”

I remember not being bothered to hunt for the Sainsbury’s receipt on few occassions ‘just to get a few pence off a litre’ - what’s the point I used to think! Oh how times have changed; I’d use a penny off per litre coupon now if I got the chance!

From today Alliance and Leicester will offer a new 2 year tracker mortgage to new and existing customers.

The 2 year base rate tracker mortgage

• 5.98 per cent - which is Base Rate +0.98 per cent, then Base Rate +1.49 per cent
• Customers can borrow up to 75% of the property value
• £999 product arrangement fee
• Maximum loan - £1 million
• Full flexible features

It’s good to see a fairly competitive interest rate with the added benefit of a reasonable product arrangement fee. I say ‘reasonable’; personally I think mortgage fees are a rip off becuase the lender is providing mortgages to people every day, at the very least I think there should be a cap on mortgage fees. However, in today’s market a fee under £1,000 is a good start.

It’s also quite a warning sign for me that all the tracker mortgages seem to have competitive interest rates and low fees at the moment, compared to fixed rate mortgages. I say this because industry experts are predicting interest rate rises in the coming months, no-one knows when exactly of course but I’d say interest rates will rise again before the end of 2008.

This means that everyone taking out a tracker mortgage now will end up with higher monthly payments by the end of the year.

It seems like lenders may be trying to attract new customers with the low fees and relatively low interest rates of a tracker mortgage rather than a fixed rate mortgage. No wonder the fees and interest rates of fixed rate mortgages are increasing - lenders don’t want people to take out these products so they’re pricing consumers out.

I suppose mortgage lenders are running a business and it’s up to them to determine the fees and charges they impose on customers. One thing is for sure though - you have a choice so make sure you research carefully before making a decision and seek professional financial advice if you’re unsure.

>>Click here to compare mortgages online and find the best rates

Today 39 million people in Britain are recycling their household waste and I remember the change from our one ‘wheelie’ bin for all household rubbish to the smaller recycling containers everywhere today. There are still 800,000 people who say they have done absolutely nothing towards recycling their rubbish and haven’t taken any cost and energy saving measures.

New research from Tescocompare.com reveals that the huge rise in fuel and energy prices could force 22 million Brits into ‘green’ action, the ‘Greenvolution’ is coming, they say…

The UK might see somewhere in the region of a 50 per cent increase in environmental activity because of high fuel and energy costs. In fact 54 per cent of the 15 million British homeowners say that they will ‘go green’ to try and save money.

Simple tasks like recycling household waste is done by 39 million peoplem which is 83 per cent of us in the UK; 66 per cent of us switch off electrical appliances at the mains (turn the plug off!) rather than leaving them on standby, which wastes energy. I was quite surprised to see that 76 per cent of people have installed energy saving lightbulbs which cut down on electricity bills.

Other, perhaps less well known energy saving tasks include; washing your clothes at a lower temperature like 30 degrees, don’t take a bath because energy is wasted heating all the water, get a shower instead! And don’t overfill your kettle, use just enough water for the number of cups needed! These are all simple things that you probably think ‘yeah I knew that’ but honestly how many of us actually bother sticking to these suggestions?

Paul Baxter, at Tescocompare.com says, “Going green takes a little bit of effort but can reap huge rewards in the long and short-term. The cost of living and household bills are creeping up and up, but there are lots of things that cost next to nothing, which we can all do on a day-to-day basis to reduce our carbon footprint and energy bills. Simply turning gadgets off at the mains when you’re not using them is a sure-fire way to save the planet and the pound in your pocket.”

I’d be itnerested to know how many people have considered or are seriously considering changing their car for a Hybrid or LPG model? Not only would this help the environment but it would most definately save on your fuel bills…Take a look at my post about ‘Fuel-offsetting’, basically use the money you save from comparing car insurance and finding a cheaper deal toward your anual fuel bill.

Paul Baxter, Director of Commercial and Partnerships at Tescocompare.com, said:

“It is evident from the Pitt Review that the authorities and public alike must take the threat posed by floods more seriously - if we are to prevent a repeat of the £3bn of damage caused by last summer’s floods.  Tescocompare.com sincerely hopes the Government will take the Pitt Review’s criticism on board to ensure the nation is better prepared next time the rains come.”

“Being hit by flooding is no doubt a traumatic experience for anyone, but at least some of the monetary strain can be taken away by adequate insurance cover. It is important that people do check their insurance details carefully to make sure they are covered should the worst case scenario hit. Details such as whether the property has been flooded in the past, is within a flood risk area and the distance to the nearest stream or watercourse all need to be registered correctly on the insurance policy to make sure any flood related claim will not be invalidated. We urge people to take a close look at their policies now to ensure they are fully prepared should they be affected by any floods this year.”

>>Click here to compare home insurance

Peter Gerrard, head of insurance research at price comparison site Moneysupermarket.com Comments on the final report of The Pitt Review, he said:

“The final report of The Pitt Review is certainly a step in the right direction for managing flood risk in the UK. It has been one full year since floods hit Britain and homeowners in flood risk areas are already finding it difficult to find affordable and competitive insurance cover, especially if they have already made a claim for flooding.

“The ABI estimates that in some areas affected by the summer 2007 floods just a quarter of homes had contents insurance, yet in the aftermath, insurers received around 165,000* claims related to flooding - equivalent to four years worth of claims.

“Looking forward insurers may be reluctant to insure homes in flood risk areas, especially for properties where a claim for flooding has already been made. Anyone planning to buy a home on a flood plain should think carefully about the impact location might have on their premiums, or whether they can insure their home at all.

“I urge homeowners to ensure they have adequate insurance, whether living directly in a flood risk area or not. With last year’s dramatic events in mind it is crucial to check your home and contents are covered. If faced with a flooding situation the last thing you want is to find yourself underinsured or worst - not covered at all.”

>>Click here to compare home insurance

Sir Michael Pitt has called for changes in the way the UK adapts to the increasing risk of flooding and has put forward a range of policy reviews for the Government to consider, urging the government to publicy set out how it will help.

Sir Michael said; “During the year I have received more than one thousand written submissions from the public, consulted widely and visited communities to see for myself the extraordinary hardship so many families across the country are facing. It is unacceptable that one year on, thousands of people remain in temporary accommodation.”

“Research published as part of my report today shows that the risk of flooding continues to escalate; making the events that shattered so many communities last year an ever increasing threat. I urge the Government to show leadership and urgently set out the process and timescale for improving resilience in the UK. The recommendations in my report are realistic and affordable and should be made a priority. Waiting for another serious event is a dangerous ‘strategy of luck’; we need to act now to protect our future.”

The Government should:

• Establish a Cabinet Committee dedicated to tackling the risk of flooding, bringing flooding in line with other major risks such as pandemic flu and terrorism
• Publish monthly summaries of progress during the recovery phase of major flooding events, including number of households still displaced
• Ensure proper resourcing of flood resilience measures, with above inflation increases every spending review
• Establish a National Resilience Forum to facilitate national level planning for flooding and other emergencies
• Have pre planned, rather than ad hoc, financial arrangements in place for responding to the financial burden of exceptional emergencies
• Publish an action plan to implement the recommendations in this review, with regular progress updates.

More key requirements;

• The Environment Agency and Met Office should work together, through a joint centre, to improve their technical capability to forecast, model and warn
• The Government should put in place a fully funded national capability for flood rescue, with Fire and Rescue
• Authorities playing a lead role, underpinned by a statutory duty, if necessary
• The Ministry of Defence should identify a small number of trained Armed Forces personnel who can be deployed to advise Gold Commands on logistics during wide-area civil emergencies and, working with Cabinet Office, identify and suitable mechanism for deployment
• The rail industry, working through Local Resilience Forums, should develop plans to provide emergency welfare support to passengers stranded on the rail network
• The EFRA Select Committee should review the country’s readiness for dealing with flooding emergencies and produce an assessment of progress in implementation of the Review’s recommendations after 12 months

Morefrom Sir Michael, to finish;

“I welcome the positive approach and administrative structures that the Government has so far pledged to put in place to improve the UK’s flood resilience. I have worked closely with Government and our key stakeholders throughout the process and am pleased that so many of my recommendations are already being taken forward. Momentum on these issues must continue and I know we will all be watching with interest as my full list of recommendations are implemented.”

This isn’t good news for consumers in the midst of struggling property prices and the mortgage market seeing it’s worst time for decades.

Commenting om this Lousie Cummings, Head of Mortgages at price comparison site moneysupermarket.com, said:

“HBOS has waited until the exit fees debate has died down before sneaking in a more expensive charge.”

“When exit fees were under the microscope after last year’s FSA investigation, HBOS was hailed for reducing the controversial charges from Halifax Halifax deals from £225 to £50. Disappointingly it has now decided to introduce a fee of £245 just when borrowers are feeling the pain of increasing rates and the rising cost of living.”

“I urge HBOS to scrap this decision. Borrowers need all the support they can get at the moment, and more decisions like this from other lenders could shift the housing market from a stagnating slump into a fully blown crash.”

It seems to me that banks and mortgage lenders are using the ‘risk’ of lending in such an unstable economic climate as an excuse to pile on the fees; and now this new mortgage account fee has been dreamt up. The only aim of this and other mortgage fees is to line the profit pockets of mortgage lenders - they’re certainly not helping anyone but themselves.

Whatever next? I bet it won’t be long before you have to pay a fee just to submit a mortgage application, regardless of the fact it may be rejected.

>>Click here to compare fee free mortgages, find the best deals today!

The Post Office has launched a new 1 year growth bond paying a rate of 7.05 per cent and is perfect for savers looking for a guaranteed percentage over a fixed time period, what’s more is that anyone with a minimum investment of £500 can open an account.

Director of savings at the Post Office, Richard Norman, said: “The new one year growth bond offers one of the most competitive rates on the market. It is a fantastic opportunity for savers who do not need immediate access to their savings and who want a secure and convenient way to ensure a guaranteed fixed rate of return.”

“In times of economic uncertainty this guarantee is more important than ever. By making it available online, in branch and over the phone, we have made it one of the most widely accessible bonds on the market.”

Find out more about the Post Office Growth Bonds Post Office Growth Bonds at PostOffice.co.uk or call 0800 169 7500 or pop into your local Post Office branch.

>>Click here to compare other savings accounts and find the best rates

I thought I’d start off with some good news for a change, something more charitable - a bank giving money to charity, well done Tesco Personal Finance!

From today until 28th of February 2009 all Tesco will be donating to the Marie Curie Cancer Care charity every time a customer uses a Tesco cash machine.

The new promotion from Tesco Personal Finance is expected to raise in the region of £33,000 for Marie Curie Cancer Care, which is fantastic!

Tesco Personal Finance Operations Director, Duncan McKinnell said: “Every time customers withdraw cash, check their balance, request a statement or even simply top up their mobile, we will be making a donation to Marie Curie Cancer Care.”

‘Through this promotion we’re hoping to fund over 1,500 extra hours of nursing care, at home, for people with terminal illnesses throughout the UK. So by simply doing something ordinary, like using a cash machine at Tesco the next time they go shopping, customers can help in providing extraordinary care’.

Marie Curie Cancer Care is the Tesco charity of the year and throughout the rest of 2008 Tesco staff and customers will be working towards raising £2.5 million which equates to 125,000 additional hours care for terminally ill patients in the UK.

For more information about the Tesco Charity of the Year go to www.mariecurie.org.uk/tesco

I’ve never really thought about it quite like this but smokers are spending on average £170 a month if they smoke 20 cigarettes a day.

The health benefits of giving up are obvious but smokers could also make a fantastic financial decision. If a 20 a day smoker put the £170 monthly spend on cigarettes into a high interest savings account like the Abbey fixed rate monthly saver that pays 7.25 per cent Gross for 1 year, they could have built up just over £2,000 worth of savings in the last 12 months.

The 1st July 2007 was the first day of the smoking ban in the UK, and the anniversary should make smokers think very seriously about quitting and saving money.

Instead of spending £5 a day on cigarettes smokers could save £5 a day and use this money to overpay on their mortgage. Abbey says that customers could knock 8 years off their mortgage and save a staggering £50,000 over 25 years, in the process. Not a bad tip!?

Reza Attar-Zadeh, Director of Savings and Investments at Abbey said:  “It goes without saying that giving up smoking is not only great for your health but also for your bank balance.  Using the saving wisely could knock years off your mortgage”

>>Click here to compare mortgages and make sure you get the best rates