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Building societies enjoy an increase in deposits

According to recent reports many building societies are enjoying a huge increase in business following the chaos at Northern Rock in September, when many customers withdrew a combined total of over £2 billion amidst fears that the bank was on the verge of collapse. The fears came after consumers found out that the bank, which was the fifth largest mortgage lender in the nation, had taken an emergency loan from the Bank of England. Read more

Chancellor responds to questions from the Treasury

The Chancellor of the Exchequer, Alistair Darling, has been responding to questions from the Treasury Select Committee recently following the chaos that occurred at Northern Rock in September. Along with the Bank of England and the Financial Services Authority, Darling is part of the tripartite authorities that were handling the Northern Rock situation. Darling answered questions from the committee and also stated that increased regulations in the banking sector were needed. Read more

Faster bank transfers could mean increase risk of fraud

Fears have been raised over the new faster bank transfer system that was launched earlier this week, with some officials claiming that the system could put consumers at increased risk of becoming victims of fraud. The new system means that the clearing period on one off transactions made by phone or online will be reduced from three days to a matter of just hours. Read more

Switching banks was rife this year

General dissatisfaction with the services and policies offered by many banks in the UK has been reflected in the number of people that actually switched their bank accounts over the course of the year. According to a recent report around eight million banking customers have switched their bank accounts this year, many of whom were very unhappy with the service, policies, and customer service that was provided by this existing bank, prompting them to switch to another. Read more

Continued problems for Northern Rock

Following reports last week about a sharp drop in Northern Rock share values, further reports confirm that the bank is facing further turmoil as customers are now flocking to the bank’s branches in order to take out their savings amidst fears that the bank may go under. Bank and government officials have offered assurances that the bank is still solvent and remains a ’sound financial institution’. However, this has not stopped a stampede of Northern Rock customers from withdrawing £1.5 billion from the bank so far since stories about its ‘bail out’ loan from the Bank of England broke out. Read more

UK consumers don’t want to see bank fees come in

The battle between the Office of Fair Trading and the UK’s major banks has been raging for some time in relation to bank charges, and this year saw the issue end up in the High Court, with the Office of Fair Trading stating that the fees charged by banks for unauthorised overdraft use, bounced cheques, and returned direct debits were not a true reflection of the charged incurred by the bank, making them unlawful and unfair. Read more

BBA wants banks to communicate more effectively with customers

The British Bankers’ Association has stated that banks in the UK need to communicate more effectively with customers, and need to keep customers informed of any changes as well as providing them with more information on the services and products available. According to the BBA banks need to make improvements when it comes to communicating with customers, so that customers are aware of what their banks offers and any up and coming changes. Read more

Treasury clarified guarantee over savings

The Treasury has recently clarified the situation with regards to guarantees over consumer savings. The issue was raised following the chaos that ensued after it was revealed that Northern Rock had taken a loan from the Bank of England. The bank, which has 1.5 million savers, saw a flood of customers pouring to the bank’s branches for days, queuing up to take out their savings, amidst worries that the bank was on the verge of collapse. Despite assurances from the government and the bank that the business was stable, over two billion pounds was taken out of Northern Rock savings accounts. Read more

False sense of security putting Brits in danger

According to a recent report Brits have been lulled into a false sense of security over the safety of their personal information and documents, and this is putting them at increased danger of becoming victims of identity theft and fraud. The identity theft firm CPP recently carried out a survey, and the results suggested that a massive three quarters of Brits are only too aware of the fact that identity fraud is now commonplace yet only one third of us actually take steps to try and protect our personal information and documentation from opportunists and thieves. Read more

Bank charges verdict in

Since January of this year many people have been waiting with bated breath the hear what the verdict would be in relation to bank charges for unauthorised overdrafts, returned direct debits, and bounced cheques. In the past, banks have charged hefty fees for such oversights, with some banks charging up to £40 per fee. However, over the past couple of years bank charges have been at the centre of controversy, with the Office of Fair Trading branding them unlawful and unfair, because the fees were sometimes ten times the costs incurred by the banks. Read more

New charge structure announced by Alliance and Leicester

Another bank in the UK has announced its plans to change its charging structure following Lloyds TSB’s recent announcement of fee changes. The Alliance and Leicester has announced that it will no longer be charging interest on its overdrafts on current accounts and will also be reducing some of its other charges. The charge for a bounced cheque will now be reduced from £34 to £25. However, although the bank is to get rid of interest charges on current account overdrafts there will be daily charges that are brought into force, so many customers may find that they are no better off. Read more

Online banking popular with older people

Online banking has become hugely popular amongst consumers in the UK over recent years, and according to a recent report this method of banking is becoming especially popular amongst those aged 55 and over, thanks to the ease and convenience that it offers. According to recent reports online banking has seen a rise of 175% rise in total popularity over the past six years. However, the popularity of online banking amongst those aged 55 and over has rocketed by 350% during this time. Read more

HSBC slated over misleading advertisement

The HSBC has recently been reprimanded by the Advertising Standards Agency over an advertisement that the bank was running, which has been branded as misleading by some of its rivals as well as by the ASA. The advertisement claimed that HSBC customers could enjoy the benefits of fee free cash withdrawals when using their cards abroad, but failed to mention that the foreign transaction fee would still charge, which normally amounts to around 2.75% of the amount withdrawn. The Advertising Standards Agency has stated that this is still construed as a fee, and therefore the bank cannot claim to offer fee free cash withdrawals. Read more

Kaupthing leaves rates on hold for second time

Since bursting into the UK market last year the Icelandic bank, Kaupthing Edge, has been trying to build up its customer base, and like many other financial newcomers to the UK market has tried to achieve this by offering impressive and competitive rates on interest on savings. Over recent months the savings account from Kaupthing Edge has enjoy a top position on the best buy tables, and it has managed to retain this position even after the Bank of England cut interest rates earlier this year. Read more

BSA claims building societies are not struggling like other lenders

Over recent months a number of building societies across the UK have reported that they have had to cut back on lending levels, restrict who they will lend to by changing their criteria, and withdraw various mortgage products from the market in light of the global credit crunch. Whilst building societies generally fund their mortgage lending from savers’ deposits rather than via securing funds on the wholesale money markets like banks, the reports suggested that smaller building societies had still not managed to escape the full effects of the credit crunch. Read more

New bank code brought in

A new banking code has recently come into force, which could result in banks having to do more to help consumers that are in financial difficulties, and could make it the banks’ responsibility to ensure that consumers do not overload themselves with debt. The huge personal debt mountain in the UK has been at the centre of concern for years, and with the ongoing credit crunch making the situation even worse authorities are asking banks to do their bit to try and reduce increasing levels of consumer debt. Read more

Banks lose High Court test case

Justice Andrew Smith, the judge presiding over the High Court test case into bank charges earlier this year, has now delivered his verdict, and has ruled in favour of the Office of Fair Trading when it comes to the fairness of bank charges. The case was brought by the OFT, which claimed that the charges were unfair, as they were much higher than the costs incurred by the banks. These charges were applied for unauthorised overdraft borrowing, bounced cheques, and returned direct debits. Read more

Bank charge decision to be brought forward

The decision relating to bank charges following the high court test case in January has been long awaited. However, many people were disappointed following the case after the presiding judge said that he needed some time to consider the facts before coming to a decision. Earlier this month it was reported that a verdict had still not been reached, and that the judge needed a further three months to consider the evidence, which meant that the verdict would not be made available until July. Read more

Officials claim building societies looking healthy

Over recent weeks there have been a number of reports claiming that building societies in the UK are now starting to really feel the effects of the global credit crunch, with a number of building societies having taken action to protect themselves against these effects. It was originally thought that building societies had managed to escape the problems that banks were facing in terms of getting finance on the wholesale markets, as most building societies fund their mortgage lending through savers’ deposits. Read more

Sandler plans to cut the size of the Rock

Northern Rock became one of the first high profile victims of the global credit crunch last year, when it was forced to take an emergency loan from the Bank of England to maintain liquidity, and then became the victim of the first run on a British bank in nearly 150 years. This was the start of a long line of problems for the Rock, which quickly entered into talks with various parties relating to the possibility of a private sale. Read more

Bank charges verdict delayed until July

At the beginning of this year a landmark High Court test case into bank charges in the UK was launched, having been brought by the Office of Fair Trading, which insisted that the charges that banks applied for unauthorised overdrafts, bounced cheques, and returned direct debits were unfair as they came nowhere near reflecting the costs incurred by the banks. Many banks were applying charges of between £20 and £35 per fee, whereas the cost to the banks was only around £2-£5 according to OFT officials. Read more

Kaupthing Edge remains at top of best buy tables

Following the base rate cut announced by the Bank of England earlier this week, one bank has announced that it will be leaving its savings interest rate on hold, so savers will not have to see the return on their savings reduced as a result of the rate cut. Icelandic bank, Kaupthing Edge, has been topping the best buy tables since it stormed into the UK market last year, and following the base rate cut in February it announced that it would be keeping its savings interest rate at 6.5%. Read more

Delay over bank charges verdict

According to a recent report the verdict over unfair bank charges, which were the subject of a test case in the High Court in January, has been delayed for a further three months. After the test case the presiding judge stated that he needed time to consider all of the facts and evidence before making a decision, and it was hoped that the decision would be delivered in April. However, reports state that the decision is being further delayed by three months, which means that the banks, consumers, and the Office of Fair Trading, which brought the case, will have to wait for the decision. Read more

Online shoppers are looking for convenience rather than long winded security measures

A recent report has shown that many online shoppers are more concerned about making quick and easy online transactions with their credit and debit cards than they are about time consuming security procedures. The report suggests that around 69% of consumers like to shop online using their plastic cards, but many may be at risk of becoming victims of fraud if they do not make the most of security measures that are being introduced by various banks. Read more

Building societies feeling effects of credit crunch

The global credit crunch that swept across the UK last summer has taken its toll in al financial sectors, and as a result of the credit squeeze, many lenders have had to alter their lending criteria and cut back on their lending levels and have made significant changes to their lending criteria. Many banks have found that getting finance on the wholesale money markets has become extremely difficult and expensive, and because of this they have had to tighten up on who they will lend to, how much they can lend, and how much they charge for borrowing. Read more

Building societies start to feel the effects of the credit squeeze

Since the global credit crunch took a hold in the UK in the late summer of 2007, banks and larger lenders have made radical changes to their lending, and this has come about as a result of these lenders finding it increasingly difficult to get finance on the wholesale markets in order to fund their lending. The mortgage sector has suffered significantly since the onset of the credit crunch, and rather than vying for business mortgage lenders are doing their best to close the doors on new lending as they try and cope with their own financial situations. Read more

There could be good news for savers

According to a recent report there could be some good news in store for savers who have been concerned about the safety of their savings following the Northern Rock crisis last year, when many pulled their savings from the bank amidst fears that the bank was going to collapse. At this time only the first £2000 of savers’ money was guaranteed by a 100% guarantee from the government, so understandably many people with larger amounts in savings were concerned. This resulted in nearly £2 billion being taken out of savings from Northern Rock in just a few days. Read more

Popularity of cash ISAs rising compared to equity ISAs

The volatile state of the UK’ stock markets and financial markets have resulted in the level of consumer interest in cash ISAs soaring compare to equity ISAs, as an increasing number of investors try and avoid taking any major risks with their money. The past year has seen a significantly higher number of cash ISAs opened compare to equity ISAs, with around 7.38 million cash ISAs being opened, compared with just 2.49 million mini and maxi equity ISAs. Read more

Long way to retirement for today’s older generation

A recent report has shown that many of today’s older generation could end up being unable to retire at the traditional retirement age, and may have to work well into their seventies in order to be able to afford to live and repay their debts. Around one in every four people aged between 55 and 64 have been identified as credit users, and the average debt per person in this age group is estimated at £2500. Read more

Lack of supervision over Northern Rock crisis

In a recent admission the Financial Services Authority has admitted to failing the stricken bank Northern Rock when it fell into crisis last year and became the victim of the first run on a British bank in nearly 150 years. The FSA admitted that it had failed Northern Rock on a number of levels, in particular relating to the supervision and monitoring of the bank and its situation. Northern Rock has now passed into public ownership following a string of unsuccessful private sale talks. Read more

Possible rise in government savings guarantee

According to a recent report there could be a rise in the level of savings that the government will guarantee by 100% by the end of the year, which means that savers might be able to enjoy even greater security. The level of savings that the government provides with a 100% guarantee has already risen since last summer as a result of the Northern Rock crisis, which saw savers withdrawing over £2 billion in savings over the course of a few days. Read more

FSA hunts rumour mongers

The Financial Services Authority is firmly set on finding and punishing the unscrupulous traders accused of starting recent rumours about the UK bank, HBOS, spreading news that the bank was on the verge of a Northern Rock style crisis in order to make some quick money on the stock markets. The rumours began last week just before Easter, and the bank’s share prices plummeted as rumours continued to circulate. Read more

Banks using baffling security measures to protect consumers

Many consumers are nervous about using their credit and debit cards online in order to make purchases in case they become the victim of fraud, and banks have been taking steps to try and deal with this issue. However, there are concerns that some of the measures that have been put in place by the various banks to protect consumer that are making card transactions online are too confusing and complicated. However, on the upside the Association of Payment Clearing Services has stated that in 2007 the level of banking fraud fell by one third, which means that the systems being used could actually be working effectively. Read more

Cash injection for the banking industry

The Bank of England has announced that it will be providing a surprise cash injection to the banking industry in order to try and relieve the problems that the industry is experiencing when it comes to liquidity. Industry officials have been calling for more cash from the Bank of England for some time in order to try and increase liquidity, and the central bank has now released an additional £5 billion into the banking sector in addition to a further £6 billion that had already been pledged by the Bank of England. Read more

ICICI succumbs to interest rate fall

The Indian bank subsidiary, ICICI, which has been enjoying a good position at the higher end of best buy savings account tables for some time now, has finally announced that it will be reducing the interest rate on its savings account in line with the interest rate cut from February, reducing the rate by 0.25% to 6.16%. The impressive rates that were being offered to savers by ICICI, which is one of a number of foreign banks that have recently broken into the UK market, saw the bank attracting around five thousand new customers a month last year. Read more

Cost of borrowing for banks could be increased on permanent basis

Banks and financial institutions have been warned that the cost of borrowing on the wholesale markets and via inter-bank lending could be permanently raised, as the global credit crunch continues to cause chaos in the money markets. Financial institutions have been warned that they will not be able to raise money as easily as they have in the past by selling off loans, and will therefore have to keep more loans on their own books, which could drive up the cost of borrowing. Read more

Are packaged current accounts better than standard ones?

Over recent years in increasing number of banks have started to offer upgraded current accounts known as packaged accounts to many consumers. These packaged accounts are known by different names depending on which bank you are with, but all operate in the same way which is to charge a monthly account fee in exchange for a range of benefits. Other than the additional benefits that these packaged accounts offer they operate in the same way as a standard current account, enabling customers to conduct their day to day financial transactions in the same way. Read more

Thirty-somethings could face bleak financial future

According to the results of a recent poll many people in their mid-thirties could face a bleak financial future, as they spend too much, save too little, and do not put any money aside to fund their retirement. Experts are concerned that many of those aged around 35 and under may end up either retiring with little or no money or may have to work well into their 70s in order to retire comfortably with enough money to live on. Read more

Uncertain financial markets for 2008

Officials from the bank, HBOS, which was former through a merger between the Halifax and the Bank of Scotland, have stated that this year is going to be an uncertain and turbulent one for the financial markets. The bank reported a 4% drop in profits, and amongst the factors that have affected these profits are higher costs involved in raising funds for mortgages from the wholesale money markets, which is a problem that has hit all lenders since the credit crunch took hold last year. Read more

Are banks using sneaky tactics to make more money?

Recently the online lending giant Egg delivered news that shocked many of its customers – new of its intention to withdraw credit card facilities from around 160,000 customers. The lender claimed that the customers that would be affected were those whose credit rating had deteriorated since they had opened their credit card accounts. Read more

Banks warned that cost of borrowing could be permanently raised

Banks have been warned that they will not be able to raise money as cheaply as they have done in the future by selling off their loans, and that having to keep more loans on their own books means that the costs of borrowing could increase on a permanent basis. The warning came from the Chief Executive of the Financial Services Authority, who added that the financial turmoil in the money markets means that banks are likely to have to change the way in which they operate. Read more

Customers still wary of putting savings into the Rock

A recent report has suggested that some savers are still worried about putting their savings into Northern Rock, despite the safety net of the bank passing into public ownership and despite the various tempting deals on interest rates that the Rock is offering to try and entice customers back. Northern Rock hit problems last year after it had to take an emergency loan from the Bank of England. It became the victim of the first run on a British bank in 150 years, with savers withdrawing over £2 billion in savings within the space of a few days. Read more

Temporary nationalisation for Northern Rock

The government recently decided that Northern Rock will benefit from going into public ownership, at least on a short term basis, rather than being sold off privately. The Chancellor of the Exchequer, Alistair Darling, said that the ailing mortgage lenders would be nationalised on a temporary basis. He said that neither of the two private offers, which included an offer from Sir Richard Branson’s company Virgin, offers sufficient value for money to taxpayers. Read more

Savers may want to steer clear of Northern Rock

Industry experts are warning that consumers that are thinking of transferring their savings to Northern Rock may want to consider the likelihood that interest rates on savings may go down following the bank’s nationalisation, which has now gone through.

Government officials stated that the nationalisation of the bank meant that it was safe for consumers to start giving their business to the stricken bank, but other officials state that the move may result in savings interest rate being cut, leaving savers receiving a lower return on their savings.

One industry official stated: ‘Northern Rock certainly has some attraction for savers, who may be drawn to it given the increased safety it offers over other banks, but when it is nationalised, it may decide to start to reduce these rates.’

She added: ‘You have to ask: what are they going to do with the money coming in? High interest rates are what banks use to bring customers in so they can use the money to finance their loan books, especially now as they are finding it hard to get the money elsewhere because of the credit crunch. But what if you don’t have a loan business? You don’t need that extra custom.’

With interest rates already having fallen twice in the past three months and set to fall further over the course of the year a number of other lenders have already announced cuts in their savings interest rates. Egg has upset customers further by slashing its savings interest rate by 0.5% despite the base rate cut only coming to 0.25%. One banks, Icelandic newcomer Kaupthing Edge, has decided to keep its interest rate at 6.5% for savers, and this is likely to attract a lot of attentions from savers looking to get good returns on their money.

MP worried over bank cards

An MP has expressed concerns over how some banks are treating their credit cards customers, claiming that some of these banks may be cancelling the credit cards of customers with good credit and who repay their balances responsibly, and are instead handing out cards to those with bad credit in order to try and make more money. Read more

Could other banks end up in public ownership?

Some industry official are expressing concern that other banks, building societies, and financial institutions could end up under public ownership in the same way as Northern Rock, stating that the Bill that was recently rushed through parliament to enable the ailing bank Northern Rock to be nationalised is actually a generalised bill and could actually apply to any financial institution that takes deposits. Read more

Some savings account fall by more than base rate cut

Many savers in the UK could lose out after it was shown that some savings accounts have come down by significantly more than the base rate cut. The Bank of England cut the base rate by 0.25% last week, and many lenders announced rate cuts on both borrowing and savings. However, whilst most lenders have passed on the full 0.25% cut on borrowing some lenders have applied above and beyond the 0.25% rate cut on savings accounts. Read more

Judge unable to deliver verdict on bank charge case yet

The judge that has been dealing with the High Court test case into bank charges has announced that although the case has now been concluded he cannot deliver his verdict yet because he has a lot of work to do before he will be able to do this. Justice Andrew Smith stated that he had no idea when he would be able to deliver his ruling with regards to the case, which was brought by the Office of Fair Trading against the banking industry. Read more

Bank keeps savings rate on hold

Despite the 0.25% interest rate cut announced by the Bank of England earlier this week, the Icelandic online bank Kaupthing Edge has decided to keep its savings interest rates on hold at 6.5%, raising the bar for other financial institutions who are looking at lowering their savings interest rates as a result of the base rate cut. Read more

Consumers can trace savings more easily

A new website has been launched to help consumers to trace lost savings more easily. Those with lost savings with banks, building societies, and National Savings and Investments will be able to trace their lost accounts more easily after the launch of a new website. Before the launch of this website there were separate tracing schemes for the three different organisations, but this has now come together under one tracing website. Read more

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