Carpetbaggers looking for windfalls?
July 1, 2008
The Catholic with a single branch in London and only eight staff is planning to merge into the Chelsea, one of the largest remaining mutual lenders.
This is a reflection of the difficult trading environment and increased financial regulations which small organisations are struggling to keep up with.
Experts predict this will be the first of a few merger deals to take place as other small societies look at their costs. It’s not just the smaller societies that are under pressure, even larger societies such as the Cheshire and Derbyshire may be open to merger offers after being hit by specialist lending problems and not moving with the times.
The Catholic was set up 50 years ago and specialised with offering loans to single women. These sector minnows usually only have a few hundred borrowers and a few thousand savers.
It is expected the existing customers with the Catholic will be offered cash bonuses for agreeing to the merger – likely to be £100 or £200.
But it is too late to open an account now and get this windfall. Only customers with an account as at 31st May 2008 will be eligible. It is also common practise that only members of the small society in a merger are given a payout.
The prospect of further mergers is likely to see a new round of account opening , known as “carpetbagging”, as people speculate which societies may be in line for a merger.
Savers can become members of most societies with a deposit of just £100 but some may have restrictions such as only accepting local residents. Most also require savers to sign away any rights to windfalls resulting from demutualisation for the first 5 years, but this sign away does not apply to merger bonuses.
Shopper’s big spending spree in May
June 20, 2008
Retail sales jumped by a whopping 3.5% from April – the biggest rise for more than 20 years.
Experts believe it is due to the long awaited warm weather which finally arrived. It was the hottest May since records began and saw sales in beachwear, barbeques and garden furniture soar.
Summer t-shirts, dresses and sandals were big sellers. Computer games and consoles, especially Wii Sports shot of the shelves. IPods and flat screen TV’s were also big sellers.
Statisticians were very surprised by the results and had to double check their findings. Economists were said to be staggered by the reports as this surge in spending what not as the market expected.
Food was up by 3.3%, clothes by 9.2% and household goods by 2.6%.
However the Government has stressed this is not the start of the retail recovery. With inflation on the increase and house prices on the fall there will be less for consumers to spend and we will all have to tighten our belts.
Inflation could rise above 4% by the end of the year
June 18, 2008
The Governor of the Bank of England has said that UK inflation could rise above 4% this year – mainly caused by the rising costs of food and energy prices.
The Consumer Prices Index (CPI) rose by 3.3% in May which is up from 3% in April – the fastest rate since the CPI measure began in 1997.
The largest contributor to consumer inflation is the higher price we are paying for our food; mainly meat products and vegetables and non alcoholic drinks. Closely followed by higher energy bills (up 10%), the cost of foreign holidays and the cost of books and stationery is also up.
If prices continue to rise we are likely to see inflation going over 4% in the second half of the year. Experts predict inflation will peak towards the end of the year and gradually fall throughout next year.
The Bank of England is unlikely to cut interest rates until the uncertainty over inflation is more stable.
The Government are advising people over high wage increases, saying anything near or over the rate of inflation will damage people in the long run.
Missed payments, late payment charges, we don’t know, do we care?
June 9, 2008
A recent survey carried about by CreditExpert.co.uk has revealed that the majority of us don’t really have much of a clue what’s going on when it comes to our finances.
One in ten of us admits to having no idea how much debt we are in whilst one in five of us admits to only planning our finances once every six months or less. More alarming perhaps, is that a whopping 74% of us don’t actually know how much we owe.
Managing Director of CreditExpert.co.uk, Jim Hodgkins said “it’s alarming to see that while almost the entire UK population think they are on top of their finances, many aren’t. Keeping track of your commitments and planning for the future are always important and in addition to checking bank and credit card statements, you also need to regularly check that your credit report is accurate and up to date”.
He added “this research provides a worrying insight into people’s perceptions of their finances. It is clear that many of us are not as familiar with our finances as we believe”.
Not only are missed payments recorded on your credit report and will affect your future credit applications, but you may face a penalty imposed on you by the lender or bank if you have failed to plan accordingly.
Alan Stubbs, a student customer of high street bank Halifax complained: “I forgot about a direct debit the other week and I ended up with a £28 charge on my account because I didn’t have the money in the bank to cover it”. He continued “but that took me over my overdraft so I got an extra £15 charge for interest”. That’s a total of £43 charges for being unaware of a financial commitment. Asked whether this was the first time he had been charged in this way, Mr Stubbs replied “Nah, it happens all the time”.
It makes no sense at all the pay charges on a bill you are going to pay anyway. With a little bit of time and effort; checking your credit report, reading through your bank/credit card/loan statements and knowing when your payments are due, you can avoid any charges, penalties or black marks next to your name.
New mortgages lowest since 1993
June 3, 2008
The BBA (British Bankers Association) has announced that only 58,000 mortgages were approved in April – this is 8% fewer than in March this year and down a whopping 39.4% on April 2007.
There has however been a small rise in people who are remortgaging their properties. This is due to the number of borrowers coming to the end of their current fixed rate deals and looking for a new and better deal.
Unfortunately most borrowers do not look around for a better deal, tending to stick with the same lender even when their repayments are going up.
At this time of the credit crunch when the mortgage market is changing all the time it is wise for borrows to look around for the best deals.
