Monthly Archives: October 2009

Lucy Warwick-Ching

Gordon Brown wants to stop companies increasing interest rates on existing debts without telling card holders, issuing unsolicited credit card cheques and relaxing credit limits without being asked.

Speaking in a podcast, released on the 10 Downing Street website and YouTube at the weekend, he said: ‘We are announcing measures to make the credit and store card companies clean up their act to get you a fairer deal.’

Listen to the PM’s podcast here.

 

The recording comes ahead of Tuesday’s publication (by the consumer affairs minister Kevin Brennan) of the results of a review into credit and store card practices that it has been conducting over the summer. The review will include a proposal forcing an increase to the level of minimum monthly repayments card issuers ask for each month.

Watch out for Matthew Vincent’s story on this subject and what it could mean for you in tomorrow’s FT and on the personal finance website.

Related links:

Unsolicited credit card cheques to be outlawed in white paper plans, FT, July 2, 2009

Lucy Warwick-Ching

Banks have been forced into a corner over the issue of overdraft fees and are desperately seeking other ways to boost revenues.

Sharlene Goff, the FT’s Retail Banking correspondent, reveals the lengths that banks are considering going to in an article in today’s newspaper called “Banks plan to end free current accounts” .

A shake-up of the current account market is in prospect as high-street banks, under pressure over their charges, consider revenue-raising schemes that could eventually spell the end of free banking.

Banks are keen to drive up the money they make from paid-for accounts, mortgages and overdrafts, and reduce their reliance on the hefty charges they have been levying on customers who slip up by exceeding their overdraft limit or bouncing a cheque.

A number of banks are embroiled in a long-running court case over these charges, which run into about £3bn each year. The new Supreme Court is within weeks expected to rule on whether the Office of Fair Trading can assess their fairness. Read more

Related links:

End of free banking must end poor service, FT, October 23 2009

Overdraft charges halved by RBS, FT, September 8 2009

Ellen Kelleher

News of an alleged insider trading scam at Galleon poses some reputational risk for hedge funds. But their performance is on the mend, data out this week suggests, and this might encourage investors to ignore the gloomy headlines and buy into the sector.

Morningstar has just reported that its 1000 hedge fund index, a top performance benchmark, climbed 7.4 per cent in the third quarter and 17 per cent in the first nine months of the year. Exposure to emerging markets, distressed debt and small caps drove returns higher, said Nadia Papagiannis, a Morningstar analyst specialising in alternative investments.

Lucy Warwick-Ching

A quick warning for anyone filing a paper tax return to HM Revenue & Customs this month – local postal strikes are causing huge delays to the arrival of these returns.

I spoke to UHY Hacker Young accountants this morning and they told me that taxpayers could end up missing the October 31st deadline and face fines through no fault of their own.

This is because although the Revenue has made a bit of a concession based on the postal strike and said that returns arriving by Monday 2nd November will not count as late, they have said that tax returns that arrive after this could trigger a fine. But this, says UHY Hacker Young, misses the point completely, an extension of two days is not enough when post is currently being delivered weeks late.

Lucy Warwick-Ching

There’s been much talk of the rise of in the rate of income tax to 50 per cent from April 6 next year – much of it focused on how to avoid paying it.

As many high-earners across the UK have been searching for ways to minimise the impact it will have, some BBC presenters have said they will choose to go freelance. 

Alice Ross

Things aren’t looking great for civil servants’ pensions.

The Tories last week proposed a cap of £50,000 on pension payouts for higher earning civil servants. They also said that if they win the election next year, civil servants will face a two-year pay freeze.

And now John Lawson, head of pensions policy at Standard Life, has calculated that from 2011, high earning civil servants will have to put aside nearly 25 per cent of their gross pay in order to stay in their final salary scheme.

Alice Ross

Do you know how much you’re paying your fund manager to look after your money? It can get quite confusing.

Usually, we’re advised to look at the total expense ratio (TER) of a fund, which tots up all the various charges and shows how much you’re paying in fees overall.

But new research suggests that even TERs don’t show the whole story.

Lucy Warwick-Ching

As part of the Financial Times’ major series on The Future of Investing, John Lawson, head of pensions policy at Standard Life, answers readers’ questions on the best ways to build up your pension pot for all age groups on Thursday, October 15 at 3pm.

Pension investors have not had an easy ride during the financial crisis. Many have suffered losses of up to a third of the value of their pension funds.

Individuals have faced the double whammy of falling stock markets which have reduced the value of their retirement savings, and lower annuity rates. As a result many workers have been forced to retire later than they had planned – while millions have settled for a lower retirement income than they had expected.

Read more on rebuilding your pension fund in a piece by Steve Lodge which was published in FT Money this weekend. Or visit the FT’s Pensions in Crisis section on ft.com.

For more information about this Q&A and to read the answers to your questions go to the indepth Q&A page for John Lawson or post a question now to ask@ft.com.

Alice Ross

Who hasn’t been a target of identity fraud? It seems to affect everyone in one way or another.

I got a call from my bank once telling me I was a fraud victim before I had even noticed I was – which was nice of them.* It knew that something wasn’t quite right because someone had copied my card and taken out the maximum daily allowance from an ATM in Walthamstow at 11.59pm then again at 12.01. A cunning trick (hope I’m not giving anyone tips here).

So the fact that it’s National Identity Fraud Prevention Week this week can only be a good thing.

Lucy Warwick-Ching

So the 6th October deadline has passed at last and those consumers who reach 50 years of age before the end of the tax year are now able to shelter a further £3,000 from the taxman.

But whilst it was clearly a positive PR move from the Chancellor to increase the Isa allowance for a proportion of the population six months ahead of the new tax year, you have to question whether the cost to financial providers has been greater than the actual monetary benefit that the consumer will receive. We’ve also written about the technical difficulties these providers have had implementing theses schemes.

I spoke to Andrew Hagger of Moneynet.co.uk this morning and he made a significant point about the cost of the government’s implication of the Isa changes for the over 50s, using a very simple monetary example.



The FT’s Money blog is a forum for the latest news and insights from the UK’s personal finance scene. Matthew Vincent, the editor of FT Money and his team of reporters will upload their views and insights on what’s happening in the industry and how this affects people’s finances.

This blog is no longer active but it remains open as an archive.

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About our bloggers

Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

Matthew Vincent is the FT’s Personal Finance Editor and was previously the editor of Investors Chronicle, where he also devised the award-winning online video The Market Programme, and produced the BBC-FT standalone magazine ‘How to be Better Off’. He presents the weekly FT Money Show audio podcast, and previously worked on the BBC TV programmes Short Change and Pound for Pound.

Alice Ross is deputy personal finance editor of FT Money. She specialises in pensions, investments and investment trusts. Alice joined FT Money in April 2008 - prior to that she was deputy editor at Money Management magazine.

Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

Steve Lodge is a personal finance reporter on FT Money specialising in savings.


Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for FT.com. Prior to working at the FT she was a news reporter for the ABC.

Tanya Powley is a personal finance reporter on FT Money specialising in mortgages and the housing market. Tanya joined FT Money in November 2009 after working in Australia covering personal finance for the Australian Financial Review and its sister magazine Asset. Prior to that, Tanya wrote about mortgages for UK trade newspaper Money Marketing.

Jonathan Eley is editor of Investors Chronicle, and has been with the title for ten years. Before that he worked for newswires and trade journals in London, New York and Hong Kong.

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