Ridden with inaccuracies, half truths, and plain old news.
finance
ISA Limits Increased
Oct 23rd
The amount of money that can be saved in a tax free ISA was increased on the 6th of October for those aged 50 and over. The rest of us will see our ISA allowance increase at the beginning of the new tax year in April 2010. The new top limit is £10,200 half of which can be cash with the other half being shares:
- A cash component: a cash deposit that is similar to any other ordinary savings account, apart from the tax-free status. A TOISA must consist solely of a cash deposit.
- A stocks and shares component: the money is invested in ‘qualifying investments’ consisting of any combination of stock market equity investments (with no geographic restriction), public debt securities such as government or corporate bonds, or cash “awaiting investment”. As a consequence, the risk profile of the ISA may be anything from low to high. The investments may also include or consist of property funds or derivatives such as options. This element may be self-invested and managed through a stockbroker, but the majority of investors invest collectively through a collective investment such as a unit trust, OEIC or investment trust.
The limit has risen from £3600 per year cash allowing us to save an extra £1500 tax free. Unfortunately 40% of Britons feel unable to save. Those who can save may not see a great deal of benefit in having their money in a low-interest ISA rather than a standard savings account. Still an ISA is a good way of saving and keeping the dreaded tax man at bay.
Today it was reported that the country is still in the grips of a recession much to the surprise of most. The nation’s economy contracted by 0.4% between July and September which was the sixth consecutive quarter to see a reduction.
As the graph above shows the GDP has reduced by less this quarter but the fact that there was a reduction means that this is the longest recession we have witnessed.
40% of Britons Unable To Save
Sep 17th
A recent survey has shown that almost half of Britons are unable to save. Only 60 percent of those asked managed to put money into their savings account each month, saving on average £206. Back in January 34% said that they were unable to save. Of those who were able to top up their savings 65% used instant access savings accounts.
Another survey back in July found that a quarter of people had no savings put aside at all. With unemployment still rising those who are not saving must be concerned about what will happen if the are made redundant. We are lucky enough in this country to have support systems in place for those out of work but it is still not a good time to be job hunting.
Those unable to save should console themselves with the fact that ISA interest rates have hit an all time low. Its great to have saving to fall back on but those savings wont be growing by much until the economy recovers.
Bank Account Holders Concerned About Data Loss
Mar 31st
A recent study has shown that customers in the UK are concerned about data loss by their banks to the extent that they would move their savings or business account if information was lost. Security is a big concern and although the government has lost sensitive data on more than one occasion so far most of the major banks have not. The study, which was undertaken by ArmstrongAdams risk management, will make compelling reading for the banks in what is now an even more competitive market.
55% of bank account holders would move their savings account if their existing provider lost the personal data of their customers. 22% were “very likely” to switch and 19% were “certain” they would switch current account.
“The survey results clearly show the continuing concerns that British consumers have with regard to the security of their personal information held by British banks as well as the safety of their money. And although the survey only looked at personal bank accounts, it, it is not an unjustified extrapolation to say that all financial institutions that deal with large amounts of customer data should continue to pay serious attention to the concerns of their customers and ensure they are taking a very robust approach to information risk management.” -Tim Kipps
Where is best for your savings?
Mar 19th
Savings rates have hit a record low, in January notice accounts (simply accounts which require notice before withdrawals) paid an average of just 0.29%. Instant access accounts, for instance instant access ISAs, were also at an all time low. The fifth interest rate cut since October occurred on the 5th of February, bringing the rate down to just 1% . All this has lead to worries that consumers will be dissuaded from putting their money in savings accounts. This would only exacerbate the bank’s problems as they will have less to lend.
There are of course other factors involved. The massive amount of job losses that have occurred so far this year will have an impact. While some will be forced to live off their savings, others will see this as a possibility and attempt to save more incase they have to rely on their investments in the future.
Some will choose this as a good time to invest in property. The cut in interest rates makes mortgages a more viable option and it is hoped that this will kick start the stalled property market back into life. Rental prices have been increasing in most areas for the past few years to the point where monthly mortgage payments are often lower than rental prices. Those who have enough money for a deposit will be tempted by low rate first time buyer mortgages in the coming year.
The recession is forcing us to become more aware of the financial situation both nationaly and in terms of our own accounts. With daily updates about the status of various courporate banks on the news each evening it is hard
Time For A Cashless Society?
Mar 6th
We may be approaching a cashless society. Not in the sense that we are all running out of cash and will be hunting pigeons in deserted high streets but in the sense of not spending notes and coins. You might not use cash all that often anyway except to pay for parking and other small expenses.
Contactless technology has been around for years in the form of the London Underground’s Oystercard system but it is now due to be rolled out to shops around the country. Some coffee shops already take contactless cards such as Barclycard’s OnePulse (someone actually got paid a lot of money to come up with that name). These cards allow you to pay under £10 without entering a PIN by waving your card past the payment point.
This kind of technology might be useful for those with a business account for expenses as it is aimed at those spending small amount that previously might have be paid using cash. A record of each transaction will be linked with the business bank account but there will be no issues stemming from minimum payment amounts.
The video below shows a contactless payment transaction using a mobile phone which might one day be a commonplace event. Raises a few questions about security when no PIN number is needed however.
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