Tagged with " cash ISA"
I recently had the great privilege of meeting a group of personal finance bloggers at the Write on Finance event. I’d certainly like to reflect more on this in due course, but it precipitates a very important point that arose this past week.
We’re often led to question why what we do is important. Why is it worth writing guides, for example, when the internet is full of them? Why is it worth trying to reach out when it takes time and effort and when mainstream banks should be able to provide all the help that their customers need?
Well – when it’s revealed how little banks often know about basic facts – as Which? did recently – it makes our efforts feel so much more worthwhile.
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A round-up of the main news stories this week. [Transcript provided below]
October Sees Minimum Wage and Tax Changes
Changes to the minimum wage and VAT came into effect at the beginning of October. Those over the age of 21 saw a small rise in the minimum wage, to £6.19 per hour. The rate for under-21s remains frozen, though there was a marginal rise for apprentices. Meanwhile, amendments to the infamous pasty tax mean that food which is intended to be served hot or which is kept hot by a specific heating unit will now be liable for VAT. Supermarkets have criticised the decision, saying that many families will be forced to reconsider purchasing freshly cooked food if the price rises by 20%.
Bank of England Defends ‘Funding for Lending’ Scheme
The Bank of England has been forced to defend its Funding for Lending scheme after figures revealed that consumers were borrowing less, not more. New loans to households fell by £400 million, the Bank revealed, despite the launch of the scheme which was designed to cut the cost of mortgages. Paul Fisher, head of financial markets at the Bank of England, said that it will be impossible to judge the effectiveness of the scheme before the end of the calendar year.
Chancellor Urged to Boost Cash ISA Limit
The Chancellor has been urged to boost the cash ISA limit to improve conditions for savers. Though adults can currently save up to £11,280 tax-free every year, only half of that limit can currently be saved in cash. With rates on savings accounts tumbling, the Chancellor is being asked to increase the cash ISA limit to allow consumers to protect their savings from tax without having to resort to riskier options.
House Prices Fall for Third Consecutive Month
House prices fell in September for the third consecutive month, according to the Halifax. The society’s house price index said that prices fell by 0.4% between August and September, to just under £160,000. Halifax attributed this fall to the weak economic climate, and predicted that house prices would remain broadly unchanged over the rest of the year.
Co-Operative Bank Chooses Ethical Route to Staff Pay
And finally, the Co-operative Bank has ditched its sales-driven rewards for staff in favour of a scheme that rewards customer service. The move comes after the Financial Services Authority criticised British banks for their aggressive hard-selling mentality, where desperate branch staff are made to sell lucrative products to consumers that they don’t need. The Co-op had previously linked 3% of basic pay to sales performance, but it now says that it will reward staff for customer service at its best performing branches.
Here’s hoping the rest will follow! For the latest news and product updates, remember to visit us at Which4U.co.uk.
It looks – and sounds – like a publication that exists purely to hit notoriety in the ‘Missing Words’ round of Have I Got News For You.
For all that, and its bookish layout, Ombudsman News is a surprisingly interesting read.
The recent decline in living standards, the high-publicised banking malpractices, and the ongoing technological changes that make financial management a more intricate affair, have all contributed to a surge in the number of complaints passed on to the world’s biggest arbitrator, which already employs close to 2,000 people.
And the Ombudsman News bulletin features plenty of complaint case studies, along with investigative details, the final resolution and the adjudicators’ reasoning.
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The fascinating war waged between ISA providers is set to come to an end as the tax year draws to a close.
Ahead of the Thursday 23:59 deadline, what can savers do in this final week to ensure that they maximise any of their remaining tax-free allowance for this tax year?
New Cash ISAs
Savers are only able to pay into one cash ISA in any tax year. Those who have not already paid into an ISA during this tax year have a small window of opportunity to open a new ISA.
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Research shows that there’s a lot of money left to pour into cash ISAs before the door slams on this tax-year.
And, according to high-street banks Santander and Halifax, the vast majority of savers now prefer the stability of fixed-rate ISAs – even at the sacrifice of access to their cash – to the slippery variable rates offered by instant access ISAs.
The vexation that cash ISAs products have created in recent weeks makes this revelation unsurprising. Contending with transfer regulations and different bonus rates has undoubtedly tested savers’ patience and goodwill.
“We have seen a stark shift in savings behaviour in 2012 with customers primarily opting for fixed rate products over variable rates”, explains Richard Fearon, Halifax’s Head of Savings.
“It’s not surprising to see that many savers prefer the certainty and peace of mind that comes with a fixed rate of return”, says Matt Hall, Santander’s Head of Savings.
This is particularly notable because the instant-access ISAs offered by these two banks in particular – part of what I’ve recently termed “the old order” – seem designed to steer customers in the direction of fixed-rate ISA products.
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Over the last few weeks, I’ve been circulating regularly to keep myself informed about all the recommendations for the new ISA season, conscious that Which4U has been sporting a different approach to most other financial and media outlets.
I’ve also caught sight of those hard-to-miss stories about trolling. I’m not suggesting that it’s particularly prominent in the nondescript field of personal finance, but it has been interesting to note the abrasive nature of public response to ISA reporting – especially across the tabloids.
A number of readers are choosing to interpret the attention given to ISAs as a personal affront to themselves and/or others who don’t amass thousands in savings. And vented fury against banks often becomes an impromptu personal invective.
The disdain towards the financial system is understandable. There’s numerous reasons for concern:
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