Bridging

In the face of huge debts amongst their customers, some banks seem to be growing increasingly aggressive. According to PricewaterhouseCoopers, the average Briton currently holds a debt of £33,000, nearly twice the average figure of £17,000 seen just seven years ago, in 2000.

Although banks claim that they want to help Britons with their overload of debt, the Citizens Advice Bureau (CAB) has publicly acknowledged that they have received an increase in reports from consumers regarding increasingly aggressive tactics from banks. The preponderance of complaints against banks revolves around frequent telephone calls to the customers, attempting to convince them to purchase costly loans to ease their debts.

One HSBC customer reported that the bank was repeatedly asking him to switch to a ‘managed loan’ with a rate of 13%, double the amount he pays on his current loan. According to the customer, HSBC agreed to a reasonable amount of repayment per month for him, but said they can only allow that payment if he switches to the higher rate ‘managed loan.’ In response to the allegations, HSBC stated that, ‘as a responsible lender HSBC only offers a managed loan to customers when all other lending options have been exhausted’.

Many Britons carrying a large debt turn to debt advice charities for assistance. The CAB reported that even customers who had asked their banks to deal with the charities were still receiving aggressive phone calls. A spokesperson for the British Bankers’ Association (BBA), said that banks are happy to work with and negotiate with these charities.

Two factors suggested as causes for the increase in consumer debt are escalating property prices, increasing monthly mortgage payments, and the current credit crunch.

The manager of Arsenal football club could have blown £30m on one signing if he had wished to during the recent transfer window, according to reports.

Arsene Wenger would have been given the funds for a single player if he’d have asked, a high-ranking executive at the club said.

Danny Fiszman, quoted by the Guardian newspaper, said the answer would have been “absolutely yes” if Wenger had requested a kitty for a big name.

Mr Fiszman, who is Arsenal’s second-largest shareholder, also said the club was in good financial shape even before it played a sensible game in the transfer market.

Other English clubs have spent big in the summer, with Chelsea spending £8m on Portuguese play maker Deco and £16.2m on his defensive compatriot Jose Bosingwa.

Arsene Wenger is known for buying lesser-known players and moulding them into world-class operators.

In 1997 he bought French striker Nicolas Anelka for £500,000 and later sold him in 1999 for £22.3m to Spanish club Real Madrid.

Arsenal have not won a trophy since 2005 but are known for a distinctive passing style which has won plaudits over the last three years.

Article supported by Physioroom.com, Tennis elbow suppliers.

Tesco says it is hoping to help people save money during the credit crunch by offering a new range of pay-as-you-go mobile deals.

The supermarket giant uses the O2 network to run its Tesco Mobile programme and is aiming to attract a broader range of customers with the changes.

As part of the overhaul, four pay-as-you-go tariffs have been scrapped in favour of a single new rate charging 20p a minute for phone calls and 10p per text.

Mobile customers on the deal can also pick four people who they can phone for just 10p a minute and text for 5p a message.

David Taylor, chief marketing officer for Tesco Mobile, said: “Right now, everyone wants to make their money go further, so we’ve been looking for ways to help our customers save.”

The company is also re-branding and re-marketing Tesco Mobile as a whole, and said the new look would reflect its identity and that of O2.

Broadband services, landlines and contract mobile phones are also offered by Tesco, which has the largest share of the UK groceries market.

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Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

According to Mark Gettinby, of Help the Aged subsidiary intune group, people are increasingly using equity release plans. Equity release plans allow retirees to boost their finances by releasing tax-free cash from their homes. The two most common options are lifetime mortgages and reverse mortgages.

Mr. Gettinby adds that more and more retirees are using equity releases to repay mortgages and other outstanding debts. He advises anyone considering an equity release plan to “seek independent advice from a specialist before proceeding.”

Dean Mirfin, business development director of Key Retirement Solutions, expands on Mr. Gettinby’s advice by stating that without a specialist’s counsel, people can easily pay too much for the plan, as salespeople eager to make a sale cannot be trusted to assist with consumer in finding the best deal.

David Kuo, head of personal finance at the Motley Fool, took time to explain that the link between the interest rate set at the Bank of England and the interest rate set by mortgage companies is not iron-clad. He explained that while many consumers eagerly awaited the expected interest rate cut by the Bank of England, these consumers may not necessarily feel the reprieve in their own mortgage payments, as mortgage lenders can decide whether or not to pass on the lower rate to their customers.

Unfortunately for many customers, he explained, mortgage companies are currently focusing on “rebuilding their battered businesses,” (referring to the negative impact the mortgage crisis had on many lenders).

Although many experts expect the Bank of England to continue cutting the interest rate in an attempt to kindle the British economy, most experts still expect the rate of personal insolvencies to greatly increase for the 2008 year.

With the Bank of England’s recent interest rate cut, many investors with money in a savings account have unfortunately seen their savings rate cut as well, by more than the .25% interest rate cut. Some of these lenders include Alliance & Leicester, HSBC, Halifax, NatWest, and the Royal Bank of Scotland, among others.

Lisa Taylor, from Moneyfacts.co.uk, said that many savings rates have been cut by more than double the base rate cut. “And with many of the accounts already offering uncompetitive rates, the proportion of the rate shaved off is much higher,” she explained. We only need look to Halifax Liquid Gold for an example, who cut their 1.36% rate by .36%, resulting in depletion of an entire quarter of the rate.

In addition to the recent rate cuts resulting from the Bank of England’s base rate cut, many savers’ introductory rate on a savings account expire without them knowing. Many of these introductory rates are high for a certain length of time, most commonly a year, but then drop to a rate even below the Bank of England’s set rate. When savers are not vigilant about monitoring their accounts, they end up with a poor performing savings account.

Some vigilant savers, however, jump around to different savings accounts, benefiting from their introductory rates and moving on when it’s over. Ms. Taylor, however, explains that this requires a lot of time and effort, and can be avoided by choosing a good, long-term rate. She goes on to explain, “With such a fast changing market, unless you are prepared to move your savings on a very regular basis, a consistently good performing account will offer a good return, without all of the time and effort of constantly searching the market.”

Some however, are calling for more action on behalf of the banks. Nationwide believes banks are taking advantage of their clients’ lack of alertness and are suggesting banks call consumers to inform them that their interest rates have dropped, in the same way that banks contact consumers to inform them that their mortgage payments are due. According to Nationwide, this two-way street is only fair.

Nationwide savings director, Matthew Carter, explained, “The savings market is a highly competitive one and providers are vying to take market share. Some providers seem more interested in boosting profit and achieving best buy status than actually offering long-term good value to their customers.”

What is a saver to do? Besides monitoring your savings account, Ms. Taylor says this is no time for loyalty. According to her company, Moneyfacts.co.uk, the average savings rate is 3.77%, lower than the rate of inflation. Long term, the saver who thinks he is doing well is actually losing money. Ms. Taylor summarizes, “Many of the worst hit accounts are no longer heavily marketed and are probably held by long standing customers who have held the account for many years. It’s just another example of when loyalty does not pay.”

With the recent news hype regarding mortgage disasters, many people may be wondering if they will have a problem receiving a mortgage. Andy Pratt, spokesperson for Alexander Hall, reassures the public that the crisis has been relatively concentrated to the sub prime sector, leaving the mainstream lenders unaffected for the most part. Mr. Pratt asserted that people with good credit history should not worry about being rejected from a mortgage application. 

“Self-cert mortgage,” for those not in the know, refers to receiving a mortgage based on your own confirmation of income, without the need for independent verification. Many self-employed people decide to go with a self-cert mortgage, as do those who have multiple income sources or an irregular income. In fact, according to the Economic and Social Research Council, 13% of all employed Britons are self-employed.

When asked about the affect the mortgage crisis has had on this sector, Mr. Pratt responded that it too is essentially unchanged, and that those who have sought a self-cert mortgage have been able to receive them.

With Credit Action estimating that the total UK debt is £1,400 billion, many UK residents are urged to make a twelve-month budget to assist in sorting out their financial situation.

The Consumer Credit Counselling Service (CCCS), recommends determining one’s budget by looking at quarterly bills, car insurance payments, and other monetary outgoings, setting an annual budget, and then dividing that by twelve.

CCCS spokesperson, Frances Walker, explained that setting a budget and looking into income maximization can assist many individuals and families. She warns, however, that if 20% of your income is going towards monthly repayments, you are stretching yourself too thin. If this is the case, one beneficial option may be debt consolidation.

Contrary to what one may think, consumers can potentially save money by taking out a bigger loan than a smaller one. Mr. Defaqto, principal consultant of banking David Black explained this is because banks categorize loans into tiers, with highest interest rates on the lower tiers. As a result, consumers can pay more for a smaller sum of money.

For this reason, Mr. Defaqto highly recommends researching interest rates for various size loans, as it can be extremely beneficial. He explains, “Researching the interest rates charged on different tier levels could save [consumers] a considerable amount of money.” In fact, taking a larger loan may require longer payments, but can save consumers as much as £1,000.

In addition to researching interest rates for loans, it is advised for consumers to research credit card rates, as switching between credit card companies can be beneficial in some situations.