The much anticipated Pensioner bonds from National Savings & Investments (NS&I) were launched last Thursday (16 Jan) but the unprecedented demand  caused the NS&I website to crash.

The bonds offer two choices for savers aged 65 plus – a one-year Guaranteed Growth Bond paying 2.8% AER before tax (2.24% net of 20% tax) and a three-year bond paying 4% AER (3.2% after  basic rate tax).

Interest is paid on maturity for the one-year bond and annually on the three year option. The minimum amount that can be deposited is £500 and the maximum £10,000 per person and the bonds can be held by an individual or jointly by couples.

In the first two days £1.15 billion worth of bonds had been snapped up – more than 10% of the total £10 billion of funds available under this government initiative.

Money expert Andrew Hagger of Moneycomms.co.uk said: It just shows how much pent up demand there is for decent savings rates – with standard savings accounts offering such miserly returns I expect demand to remain high and these bonds to sell out within the next three or four weeks.”

New research from Gocompare.com has found that nearly half of UK consumers didn’t switch any of the 10 most popular financial products in 2014, including car insurance, home insurance, energy provider, bank account and broadband.

Astonishingly it found that 1 in 5 admitted to NEVER having switched their mortgage lender, bank, car insurer, home insurer, broadband provider, mobile phone or landline providers, energy provider, savings account or credit card .

59% of the 2011 UK adults who took part in the research felt that the worst effects of the Government’s ‘austerity’ measures were still to come and 55% were expecting 2015 to be a tough year financially. However, Gocompare.com found that millions of consumers could be saving £4.7 billion between them on just three common household expenses.

The most switched financial product is car insurance with 35% of drivers changing their insurer in the last 12 months. However, 34% have not switched in the last three years and half of those (17%) have never switched.

Home insurance is another product which is easy to switch and 29% of consumers did just that in 2014.  32% of householders have not switched their home insurer in the last 3 years including 21% who have never switched. Those customers could be missing out on a collective saving of £611 million.

Lee Griffin, Gocompare.com’s insurance spokesman, said: “Loyal customers are throwing away billions of pounds of savings by sticking with the same financial services and household utility providers year after year. Consumers who don’t regularly ditch and switch uncompetitive products and services such as their car and home insurance, energy tariff, mobile phone and broadband deals are paying out hundreds of pounds a year more than they need to in household bills.

“There are considerable savings to be made, but the only way to be sure of getting the very best deal is to check it for yourself by comparing what’s on offer from the competition. If your insurer, bank or energy provider thinks you’ll be happy to stay and keep paying over the odds, they’ll be equally happy to let you.

Lloyds Bank has today a new travel notification service for online and mobile banking customers, which enables customers to let the bank know when they are going abroad.

Once customers are logged in to their online or mobile banking, they can now go into their profile and update the dates that they are going to be overseas, with the notification immediately effective.

The new travel service means that customers have greater choice to advise the Bank of their travel plans.

The travel notification can be set up  from the Internet Banking homepage, where customers can also add their travel destination and the dates of their travel.

The bank hopes that this initiative will give customers greater confidence and peace of mind when spending abroad, whether that’s paying for a hotel, meal or hire car.

Adrian Bryant, Director of Digital at Lloyds Bank commented: “We know that our customers find travel notification a useful service and previously they would have had to visit a branch or activate this through telephone banking. Enabling customers to provide us with this information in real time means that they can do it where and when it’s convenient for them, even if that is 2am in a departure lounge.

With digitally active Lloyds Bank customers now able to take advantage of the new service, it is expected that travel notifications will increase by around 50% over the next 12 months.”

 

 

The CPI measure of UK inflation slumped to 0.5% in the year to December, a sharp fall from the 1% November figure reported by the Office for National Statistics (ONS).

Inflation now stands at its lowest level for almost fifteen years when it was also at 0.5% back in  in May 2000.

The ONS said the major factors for the fall was due to gas and electricity pricing from 2103 being no longer part of the equation, and also a further drop in prices for vehicle fuel at the forecourts.

This 0.5% figure means that the Governor of the Bank of England must explain to the government why inflation is well off its 2% target.

The last minutes of the Bank of England’s MPC meeting showed that committee members had differing views on future inflation levels, with some predicting it would remain below target for longer, whilst others said there were external risks that could still push it over the 2% level.

The latest Inflation Report (November 2014), predicted CPI would sit below 1% in the next six months, and said it may stay that way for longer than originally anticipated due to the sharp fall in the price of crude oil.

Premiums for car insurance are too high, the competition watchdog has said.

The competition commission’s investigation of the £11bn motor insurance market found it was not working well for motorists . Too many drivers were footing the bill for unnecessary costs that were needed during the claims process for accidents and that this is adding between £150m and £200m a year to motorists’ premiums. These costs are initially for the drivers who have been in the accident but always end up feeding through to everyone else’s policy.

The commission is deciding whether to make a driver’s own insurer responsible for providing a replacement vehicle or to give insurers that are at fault a greater opportunity to take control over managing claims.

There could also be caps on the costs of providing a replacement motor and on the costs the repair peoples cars. This goes along with compulsory audits of repair quality, this is after the watchdog found that many repairs have not been completed to the required standard.

Other findings where with the sale of add-on products it is hard for customers to find the best value products.The Association of British Insurers (ABI) said it hoped the commission’s work would lead to lower premiums for customers.

Its head of motor insurance, James Dalton, said: “As an industry we remain absolutely committed to improving the car insurance market for hard-pressed motorists.”

According to a UK debt charity more than six million people will struggle with their finances in January as a result of too much spending in the run up to Christmas.

The Money Advice Trust says it is expecting its National Debtline advice service to get very busy this month, after research suggests one in eight people are “likely to fall behind with their finances” due to festive spending.

The research also found that 23% of Britons will save earlier for Christmas 2015 than they did in 2014; while a third (34%) had to borrow money to pay for presents.

Worryingly, more than one in five peole bought Christmas food on credit.

Joanna Elson OBE, chief executive of the Money Advice Trust, said: “After a Christmas that millions of people put on credit, we are unfortunately expecting an increase in debt problems in the New Year. The fact that so many people went straight online for advice on Boxing Day shows how fragile many households feel their finances are going into 2015.”

“More concerning, however, are the millions of people who may not seek advice at all, and thousands who will get off to a bad start to 2015 by turning to a fee-charging debt management company that only wants to make a profit out of their situation.”

“Our New Year message is simple. If you are dreading the arrival of that first credit card bill in a couple of weeks, now is the time to act. Set a budget by working out how much you have coming in and how much you need to spend each month, and open all of your statements to get a handle on how much you owe.”

The latest figures from the Halifax show that in 2014 the number of first time buyers rose to its highest level in seven years.

The bank estimated that 326,500 people bought their first property last year the most since 2007 and up by 22% compared with 2013 when just 268,500 homes were purchased.

Although the number of new buyers was up for the third year in a row, the average deposit for first-time buyers fell in 2014, to an average of £29,218, down from £31,582 in the previous 12 months.

Halifax said that the double whammy of rock bottom interest rates and the introduction of government Help to Buy initiatives had helped first-time buyers get on the property ladder.

Despite these positives, the price first-time buyers are paying is up 9% compared with last year, with the average cost of a first-time buyer property just shy of £172,000.

The average age of those purchasing their first home has also risen, from 29 in 2011 to 30 in 2014; though the average age of those buying in London is highest at 32.

A spokesman for Halifax, said: “First-time buyers are vital for a properly functioning housing market. Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first-time, contributing to the significant increase in the number of first-time buyers in the past two years.

“Record low mortgage rates and Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property.”

Around 23 million people have left some of their festive shopping until the last minute and will be hitting the shops on Christmas Eve, according to latest research from Sainsbury’s Bank Credit Cards.

Based on interviews with people regarding their Christmas week spending habits, the Bank estimates that a staggering £832 million could be spent on Christmas Eve.

The 23 million who are expected to shop on Christmas Eve is significantly higher than in 2013, when a similar poll estimated 17.5 million people would be leaving their festive shopping until the very last minute.

According to the results, Christmas Eve shopping in 2014 is more likely to be a case of picking up the last few items, rather than attempting a frantic dash to do everything in a day.

The findings show that consumers have taken careful consideration about how they will fund this year’s Christmas presents, with four in ten saying they planned to  use money they have saved over the course of the year. More than one fifth (22%) say they planned to use a credit card that they would either pay off in full, or switch to a 0% balance transfer card. A further 4% said they will buy gifts using a 0% purchase credit card.

A spokesman for Sainsbury’s Bank said: “It appears that fewer people are leaving all of their shopping to the last minute however our research shows there could be a rising number who are hitting the shops for one or two further gifts or last minute items.”

According to the latest research, £223m worth of unwanted Christmas gifts are set to be returned this year .

As a result comparison site Gocompare.com is urging people to check retailer’s returns policies before heading to the shops, as 45% of Brits who have tried to return gifts in the past said they had been unsuccessful.

The survey revealed that just under one in ten (9%) of Brits returned presents last year, worth on average £50.

Over the years, 29% of shoppers say they have attempted to return a Christmas present.  While the main reasons for returning presents was to exchange them for a better fit or colour (45%) or simply because the recipient didn’t like what they had been given (40%), 12% said that they had returned a gift because they wanted the cash.

When questioned about their experience in returning an unwanted gift:

  • 45% said that they have been unsuccessful;
  • 44% said that they have always been successful when returning presents;
  • A quarter said that they were told by the retailer that they couldn’t get a refund or exchange without a receipt;
  • 12% said that the retailer had told them they were beyond the time limit for returns;
  • 11% said that the shop had refused the return claiming that the item had been used or was damaged;
  • One in ten had been told that the retailer didn’t accept returns.

In addition, 38% of those surveyed said they have kept an unwanted Christmas present because they didn’t want to upset the person who gave it to them, while 17% did so because they didn’t think they could get a refund or exchange without a receipt.

Only 16% of those surveyed said that they were always honest with the giver about returning gifts, 14% said that they tend to avoid the subject of unwanted presents while 9% admitted to lying to the giver about returning a gift.

A Gocompare spokesman said: “As a goodwill gesture, many high-street stores operate a ‘returns policy’ which allow you to exchange, or receive a refund, credit note or gift voucher for unwanted presents.  These policies typically require items to be in unused, perfect condition and sealed in their original packaging and exclude perishable items such as food and drink and specially commissioned or personalised gifts.

Debit and credit card spending reached £47.8 billion in October but the annual growth rate is slowing, according to the latest figures from The UK Cards Association.

Card spending grew by 6.5 per cent in the year to October, down from a peak of 7.4 per cent in May this year. Figures show that debit cards are the preferred option, with the annual growth rate for debit card spending at 7.5 per cent, almost double that of credit cards at 3.9 per cent.

At the same time the total number of card transactions is growing at the fastest rate since February 2005, with 1.025 billion purchases in October.

With transaction growth once again outstripping spending, the average value of a retail card transaction has dropped to a record low of £33.30. This is a reflection of the continuing migration of low value cash payments to cards, along with the increasing use of contactless cards.

Richard Koch, Head of Policy at The UK Cards Association, said: ”While the lowest inflation rate for 12 years and falling petrol prices appear to be slowing the growth in the overall value of  card spending, consumers are actually using their cards more frequently than ever. Over three quarters of retail spending is now made via cards, with people opting for their debit cards for smaller payments in particular. ”