Ridden with inaccuracies, half truths, and plain old news.
Posts tagged finance
How the Recession Has Changed Our Driving Habits
Oct 28th
Running a car can be quite a drain on your finances. As well as road tax, petrol and a yearly m.o.t there are always the unexpected costs that appear at inopportune moments. I drove off from the petrol station last month wondering what was making a noise on the roof of the car, it turned out to be the petrol cap which was surprisingly expensive to replace.
A recent survey has shown that 61% of car owners in Britain have changed their driving habits in order to save money. Whilst we love having our own cars many are deciding to cut down on journeys and a third of those asked had started car sharing. 95% said that they would walk more if they gave up their cars although that seems like a strange question to me, who are the 5% who wouldn’t walk any more without a car?
The rise in car hire by the hour schemes has meant that some have chosen to not own a car but to lease one when needed. This option is best suited to those in cities who can rely on public transport day-to-day, in rural areas not having a car can leave people reliant on sparse bus services. Car sharing is also a good way of keeping down costs as well as reducing pollution.
The average driver in Britain spends around £106 per month keeping their car running, this is a little less than the European average of £126. This figure is sure to rise as petrol prices increase and local governments try to dissuade people from using their cars by increasing tolls and parking costs.
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.
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
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