Wednesday, 21 December 2011

Britons take second jobs to heat homes

Fuel poverty has caused a 54pc rise in British workers taking second jobs.

Circling job in newspaper: UK unemployment falls as number of people in work rises
People are looking for second jobs to help pay winter fuel bills Photo: ALAMY
British workers are being forced to take second jobs to tackle the rising cost of heating their homes this winter., Europe’s biggest marketplace for online companies, has reported a 54pc rise in Britons joining its site to find extra work in the past month.
In the past six months, the website has seen an increase of 90pc in applications for second job roles, and over the past year applications have nearly tripled, rising by 177pc.
Applicants cited the rising cost of fuel as the reason for taking on extra work. Usman Bashir, from London, joined the website recently looking for a second job to help pay his fuel bills this winter.
“I already have a job but I need to earn extra money in order to pay for my utility bills," he said. "I am very worried about heating my home this winter. My last bill, which was for the summer, was £300. I shudder to think how high it will be this winter."
Xenios Thrasyvoulou, the founder of, said utility companies increasing their prices and profits had caused concern.

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"The recent news of energy companies making excessive profits has made people anxious about how they will afford to heat their homes this winter. People remember how cold it was last winter and, combined with rises in the price of electricity and gas, are seriously concerned that they need more money to pay for their fuel bills.
"The British people are already making sacrifices in this age of austerity. Now they are having to undertake two jobs to afford what should be a basic human right – the right to warmth.

Beat these Christmas deadlines and have a happier New Year

Before your world descends into a mince-pie and mulled-wine haze, get these financial matters wrapped up.

A C2C train runs through the snow - Beat these Christmas deadlines and have a happier new year
Buying your new season ticket before January 2 means you will avoid next year's price rise 
Christmas is almost upon us, and that tends to drive out thoughts of all else. However, before your world descends into a mince-pie and mulled-wine haze, there are some deadlines and financial issues you should be mindful of. Get these sorted out now and you will save yourself a lot of trouble in the new year.

1. Check your energy deal

If you are on a cheap online deal or a fixed energy deal, the beginning of the year may hand you a nasty surprise. Some of these plans end at midnight on January 1 2012, and you will find yourself catapulted onto expensive standard rates.
If your tariff is coming to an end you should have received a letter or email, but if you have a niggling feeling at the back of your mind it is worth phoning your supplier to check.
We are entering the most expensive period for energy use, and so moving unexpectedly from a cheap to a more expensive tariff will have a disproportionate effect. Bear in mind that it can take four to six weeks to switch tariffs.
Websites such as Heart Finance will  help you to find the best deals.

2. Apply for your tax details

The deadline for filing your online tax return is January 31, but do not assume you can leave it until then. Not only does the site struggle with extra traffic on deadline day, but you will not be able to get onto it until you have a login arranged.
This could take a week – or longer with heavy Christmas traffic. If you are not registered as a user of online government services, or you have lost your login details, then you need to sort this out now.
If you previously had a Unique Reference Number and can't find it, you will have to contact the Self Assessment Helpline on 0845 6055 999 and ask for it to be sent by post. If you have never had one you can register online via the HMRC website.
If you miss the tax deadline you will pick up a £100 fixed fine, while additional fees will be charged if you delay further. This is not one to put off.

3. Apply for a balance transfer card

If you are worried you have overspent this Christmas and know you will not be able to pay off your credit card bill, then don't wait until you receive it. Instead, apply now for a balance transfer card in preparation for putting the money on that, and thereby avoid racking up interest charges.
Most of these cards charge a percentage of the debt to transfer it, and then give you time to save up to pay it off.
If you just need a few months' breathing space, try something like the Virgin Money Credit card, which will give you 20 months' free of interest for balance transfers, and charges you 2.99 per cent of your balance or a minimum of £3 to transfer it.
Once you have applied you have 60 days to make the transfer.

4. Buy your season ticket

If you are planning to buy an annual rail card for the first time, make sure you don't get stung by the price rises. The average price of these will jump by 6 per cent on January 2, so it makes sense to get in early – although you cannot buy a ticket to start later in the year and still get it at the old price.
If you need to buy one soon, make sure it starts on January 1, not 2, in order to benefit from lower prices. Existing tickets can be renewed up to seven days in advance.

5. Buy Christmas travel tickets now

Driving home for Christmas? If not you need to hit the transport websites for advance fares. These tickets are nearly always the cheapest option, so log on and see what prices you could get now against those on the day. As an extra plus you should be able to reserve seats on specific services – useful for beating the Christmas crush.

by the Telegraph 

Christmas fails to cheer consumers as confidence remains in the doldrums

Christmas has failed to raise more than a glimmer of festive cheer for Britain's consumers, with Nationwide reporting only a tiny rise in consumer confidence in November.

A Christmas Carol
Christmas fails to cheer consumers 
The building society said that Britain's confidence had crept up by four points in November after five consecutive monthly declines. However, the index, which stands at 40, is seven points lower than the same point last year, and 37 points below average.
The survey showed that consumers were slightly more likely to be planning large purchases than they were in October, and there was a small improvement in expectations for employment prospects and household income.
"Signs that inflation has past its peak may have provided some comfort," said Nationwide chief economist Robert Gardner. "At least confidence has moved off its all time lows in the run up to Christmas."
He added that, despite the slight improvement in those customers planning to spend, twice as many people still judge it a bad time rather than a good time to be making a major purchase.
Financial advisers are also pessimistic, according to a survey by Skandia, showing that confidence in the UK economy fell by ten per cent in the last quarter of 2010. Seventy per cent of advisers said that European debt is the biggest threat to the UK economy, while 60pc think inflation will decrease over the next year.
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Almost two thirds of advisers believe that interest rates will remain at their current low base of 0.5pc in 2012. This is a huge change compared to just six months ago, when 84pc of them thought rates would rise.
"It certainly has been an interesting and turbulent year," said Peter Mann, chief executive at Skandia UK. "Who would have predicted the unprecedented events witnessed across global markets, including the US debt crisis, EU debt crisis, and riots across Europe and at home? These events have all taken their toll on adviser confidence, and concern in Europe continues to be forefront in people's minds. "

Wednesday, 14 December 2011

Five reasons why car insurance premiums rise

Law-abiding motorists are being forced to pay record car insurance premiums to meet the cost of staged accidents and claims for personal injury.

What to do after a car accident
Why are car insurance premiums rising? 
If you are one of the 33 million honest drivers out there you will be only too aware that your premiums have been going through the roof.
Yet despite the cost of cover being bumped up year after year, motor insurers claim that they have not made a profit for 16 years.
According to Fitch Ratings, the insurance industry pays out £123 in claims for every £100 in premiums collected. This is because of fraudulent claims and a steep rise in the number of whiplash claims by motorists enlisting the help of personal injury lawyers.
According to one leading insurer, if you took the average insurance policy of £450 a year, about £220 of the premium is charged to cover the cost of whiplash claims, fraud, legal fees and tax – or about half of the premium. Either way, honest drivers are paying the price; here we explain why.

Uninsured drivers

About one out of every 20 motorists drives without cover, which costs every driver about £30 a year on their premium. These uninsured drivers are 10 times more likely to have been convicted of drink driving, and are five times more likely to have been involved in road collisions, to fail to comply with other road traffic requirements and to be engaged in other criminal activity.

For those people prepared to drive without insurance the maximum fine is £1,000, but in practice they are fined an average of about £200 if caught – significantly less than a typical annual insurance premium. In fact, you could get fined more for being caught without a television licence or evading a fare on a London bus.

Personal injury lawyers

With aggressive television marketing campaigns, the number of companies offering claims management services and no-win, no-fee representation has almost doubled in the last year – and the effect these companies have on premiums is staggering.
For instance, according to the British Insurance Brokers Association, insurer Esure has reported a sudden 300pc increase in personal injury claims in the B31 postcode area, despite there being no increase in accidental damage claims.
Claims companies even run loyalty schemes designed to allow their members to refer friends and relatives requiring personal injury or replacement car services, earning points or up to £150 for each referral.
Personal injury claims have increased insurers' costs by at least 30pc a year, while figures from the Association of British Insurers show that motorists are now paying 10pc of their policy premium to meet the cost of personal injury claim lawyers.

Spurious whiplash claims

Another contributing factor to rising motor insurance premiums is the surge in whiplash claims.
With 20pc of every motor insurance premium spent on whiplash, drivers are paying a hefty slice of their premium on these claims. And the cost to the taxpayer is staggering. Each time a patient visits a GP for whiplash, the Government pays an £18 consultation fee – adding up to more than £8m per year.
The incidence of whiplash is also increasing, with the number of claims rising by 25pc in six years. This increase contrasts with the Government's road casualty statistics, which indicate that the number of ''slight'' injuries from road traffic collisions is falling.


Staged car accidents, in which fraudsters deliberately crash cars into innocent drivers to win thousands of pounds in compensation, are another reason why we are paying more for our car cover – some experts say about £44 from every policy goes to cover these claims. The accidents used to be confined to inner-city areas, but that is no longer the case as fraudsters realised that insurers had been carrying out postcode checks if their suspicions were aroused.
But these "crash for cash" claims are still so frequent in some parts of the country that drivers in some postcodes in the North West are finding it difficult to buy motor insurance at all.
A recent report suggested that one out of every 20 motorists under the age of 35 had deliberately braked in such a way as to cause the following motorist to collide with them, placing the responsibility for meeting the claim on the following driver.

Young drivers

Premiums for young drivers are increasing faster than for any other group, with AA figures estimating a rise of 51pc in the past year, bringing the average premium up to £2,500 for a young man and £1,400 for a young woman.
With 15pc of the drivers causing 30pc of the accidents and 40pc of all claims costs, insurance experts agree that schemes to educate new drivers can only help bring costs down, with significant evidence from programmes in other countries proving this.
For example, graduated licensing schemes in Canada, where new drivers are not permitted to drive between midnight and 6am for the first two years, have proved very successful.
Research by Cardiff University has estimated that insurance premiums for younger drivers could fall by more than 10pc if a graduated licence scheme were introduced, and could save more than 200 lives a year and lead to 1,700 fewer serious injuries on British roads.
by the telegraph
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OFT investigates car insurance steep premiums rises

The Office of Fair Trading (OFT) says an increase in personal injury claims has led to the cost of motor cover rising.

Cars on dual carriageway - OFT investigates car insurance amid steep premiums rises
The AA suggests that premiums have risen by as much as 40pc 

The OFT has launched a "market study" into private motor insurance in the UK after a sustained period of rising insurance premiums. It will also look at the provision of third party vehicle repairs and credit hire replacement vehicles to claimants.
The evidence the OFT has gathered suggests that private motor insurance premiums paid in the UK rose by around 12pc between 2009 and 2010, and by a further 9pc in the first three quarters of 2011.
Yet this is in stark contrast to findings from the AA, which suggest that premiums have risen by as much as 40pc.
Responses received by the OFT indicated that a key factor in these increases has been a rise in the costs associated with personal injury claims. However, the increased cost of third party non-injury claims, which include credit hire replacement vehicles and third party vehicle repairs, are also factors which have had a notable impact.
As a result of this work, the OFT said it had “reasonable grounds” for suspecting that there are features of the UK's private motor insurance market that restrict and distort competition relating to the provision of third party vehicle repairs and credit hire replacement vehicles to claimants.
Sonya Branch, OFT senior director of services, infrastructure and public markets, said: “Our call for evidence has enabled us to gather information swiftly and efficiently so that we can now focus on specific features of the market that we are concerned could be restricting or distorting competition.
“Our concerns relate to the provision of third party vehicle repairs and credit hire replacement vehicles to claimants, where we suspect companies may be competing to extract money from each other rather than keeping premiums as low as possible and providing car owners with value for money.
"By carrying out a market study, we aim to clarify whether a market investigation reference to the Competition Commission is appropriate.”
by the telegraph
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Saturday, 10 December 2011

The £10,000 debt burden of the average family (and that doesn't include £1.24trillion in mortgages)

  • Households suffering biggest squeeze on living standards since World War Two
  • London has highest average debt of £23,600...
  • ...compared to just £3,476 in Wales

Families are approaching Christmas weighed down by average debts of more than £10,500.
The huge sums – which come on top of mortgages – generate punishing interest and penalty charges at a time when people need every penny to cover essential bills for food, heat, light and transport.
However, the many who are suffering the biggest squeeze on living standards in peacetime simply do not have any spare cash to pay off what they owe.

Painful numbers: The average household debt, excluding mortgages, is more than £10,500 at a time when families are trying to pay for rising bills and Christmas
Painful numbers: The average household debt, excluding mortgages, is more than £10,500 at a time when families are trying to pay for rising bills and Christmas

Similarly, with unemployment running at a 17-year high of more than 2.5million and rising, those living on benefits cannot hope to clear their debts.
The average household debt figure – covering loans, credit cards, store cards, hire purchase and overdrafts – is put at £10,603.75, according to research by Aviva.


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This average masks huge regional swings, detailed in a debt map produced by the company.
The figure peaks at £23,608.54 in London, where the cost of living – everything from a litre of petrol to house prices and even a basket of groceries – is more expensive.
The Welsh are least likely to be carrying large unsecured debts. Here, the average per household is a relatively prudent £3,476.45.
On the plastic: Credit cards are the biggest burden, racking up debts of £2,203 per the average £10,600
On the plastic: Credit cards are the biggest burden, racking up debts of £2,203 per the average £10,600

David Cameron triggered controversy at the Conservative Party conference by urging people to do their utmost to pay off their debts. ‘The only way out of a debt crisis is to deal with your debts,’ he said.While sound advice at a household level, if every family paid debts rather than spending in the High Street, the UK economy would suffer.
Aviva’s spokesman Paul Goodwin said: ‘Our research shows that the average UK family spends around a tenth of its income repaying debts.’
However, he said that most people do not seem concerned by this, which demonstrates what a normal part of budgeting debt has become.
Burden: Londoners suffer the heaviest debts - peaking at £23,608.54 - due to the high cost of living
Burden: Londoners suffer the heaviest debts - peaking at £23,608.54 - due to the high cost of living


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This brought a warning from campaign group Save Our Savers, which said Britons are continuing to borrow at dangerous levels.
According to the Bank of England, total outstanding credit card debt in September was £57billion.

How the household debt figures add up
How the household debt figures add up

On the face of it, this was £2.1billion less than a year earlier.
However, SOS pointed out that the figure was lower only because the banks wrote off more than £3.9billion in bad debts on cards during the year.
Ten years ago, mortgage debt was £577billion and around £905million was being repaid each month.
Today, the total outstanding on home loans has leapt to £1.24trillion, while monthly mortgage repayments total more than £2.5billion despite low interest rates.
SOS argues that only higher interest rates will curtail borrowing.
This would also help savers who have seen the money earned on their nest eggs fall in the past five years.
SOS spokesman Simon Rose said: ‘Keeping base rates at an artificially low level of 0.5 per cent for almost three years has convinced people that interest rates will remain low.
‘They will have to rise at some stage, but households are clearly unprepared for the shock.
‘The continuing debt binge is being subsidised by the country’s hard-pressed savers.
‘Inflation is confiscating £43billion from savers in a year and effectively being transferred to borrowers to make their credit binge less painful.’

from the Mail Online


Wednesday, 30 November 2011

House prices up? Hang on, weren't they down yesterday?

Are house prices rising or falling? Rising, Nationwide Building Society said today. Falling, according to Land Registry figures released yesterday.

Nationwide branch - Which house price index should you believe?
'This latest set of Nationwide house price data is about as misleading as it gets,' said one observer

If that's not confusing enough, you can always look at the house price data from the Department for Communities & Local Government, the Royal Institution of Chartered Surveyors, Halifax, estate agents such as Savills and Rightmove and specialist index providers such as Hometrack and Investment Property Databank
For home owners and businesses, whose financial futures are inextricably linked to the value of the UK's housing stock, trying to make sense of the information is near impossible.
Nicholas Ayre of Home Fusion, a home buying agency, said: "This latest set of Nationwide house price data is about as misleading as it gets. Low transaction levels and low supply have led this data to bear scant resemblance to reality.
"Demand is glaringly weak, and as we enter what could potentially be an apocalyptic year for the global economy, it is likely to weaken further. Rising unemployment, collapsing consumer confidence and consistently high inflation do not make for a robust property market.
Although index providers like to present their data as the most comprehensive and trustworthy on the market, all of them are flawed – the methodology, sample size and historical relevance of the main indices vary enormously.
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The Halifax, the UK's biggest mortgage provider, samples roughly 13,500 properties per month, just over 10pc of the market for house sales. Nationwide does not reveal its figure, so we can assume it is considerably smaller.
Like Nationwide, Halifax takes its data from mortgage valuations at the point they are approved by the bank or building society. What this means is the valuation may not actually represent a sale, which is the only true measure of value.
Although both institutions claim that through the application of complex mathematics they can transform geographically and socially biased information into a true reflection of the whole nation's housing market, there remains a suspicion that the Halifax index is biased towards the North of England and Nationwide to the South.
How else do you explain recurring discrepancies?
So which index should you follow? The answer, unfortunately, is none of them and all of them.
Some brokers do not even look at the monthly figures because they tend to jump about all over the place, but rather pay attention to are the quarterly figures.
It is worth bearing in mind that mortgage lenders take their data from little more than half the market, missing great swaths of deals and data. Surprisingly, around 40pc of the UK's housing stock is owned outright – no debt, no mortgage, and therefore no visibility by Nationwide and Halifax.
Figures from the Land Registry are more complete. The agency captures all sales and in the good times that can be up to 120,000 a month.
Mr Ayre said: "[Nationwide's data] came just a day after figures from the Land Registry showed that prices are falling across the UK – and that is a far more accurate reflection of where the market is at."
However, the index comes out at least a month after Nationwide and Halifax. And as it records the price at the point of sale rather than when the mortgage is approved, it lags the market further. Experts also point out that given periodic changes to the economy, different sections of the population are buying and selling houses at different times, which could also skew the results.
The Government tried to deal with this by setting up its own index, the Communities and Local Government House Price Index. By drawing from a pool of nearly 50,000 mortgage valuations from 60 mortgage lenders, the index has a wider base than its peers. But it's still far from perfect.
Critics say that the index is too recent, so it is difficult to know how it behaved over previous cycles.
This would enable indices not just to plot the market performance, but to predict it. This is where house price indices move from being headline-grabbing marketing gimmicks, which was how many of them were conceived, into real business tools.
By modelling how markets have behaved in the past, economists, governmental and commercial, use the data to make decisions on core policies such as interest rates.
The Royal Institution of Chartered Surveyors, which has been carrying out its survey since 1978, trumpets the fact that the information it gathers is used by the Bank of England. Although the survey does little more than test sentiment among estate agents, it has 30 years of data to work from and is seen as one of the best forecasting tools on the market.

From the Telegraph