Weekend economic news round up

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Weekend economic news round up

Banks: just tell it how it is
It was revealed this week that providers are still penalising savers for making withdrawals from nine of the 15 highest-paying accounts labelled “easy” or “instant” access. Main offenders included BM Savings, owned by the Lloyds/Halifax group, the Post Office and a range of building societies.
The Daily Telegraph Your Money, p. 14

Hard-pressed workers drop pensions
The Occupational Pensions Schemes survey 2012 by the Office of National Statistics has shown that the number of people paying into a workplace pension scheme fell by 400,000 last year in the wake of the financial crisis.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 3

scams/ watch out for the dodgy pension liberation firms
Hundreds of thousands of savers are being targeted by unscrupulous pension liberation firms. They suggest you can unlock your pension early, but if you do so, you risk losing up to 90 per cent of your savings through tax losses.
The Independent, p. 60

Fund holders are being ‘conned’ out of £3bn
Almost four out of five investors feel they are being “conned” into paying billions of pounds in unnecessary fees by fund managers. Meanwhile, research by SCM Private, an asset manager that specialises in passive funds, has indicated that as many as 46pc of actively managed funds are actually “closet trackers”.
The Daily Telegraph Your Money, p. 9

Buy–to–let investors face doubling of mortgage costs
West Bromwich Building Society buy-to-let mortgage customers are planning to protests against the lender’s decision to raise its so–called “tracker” mortgage rates by 2 percentage points.
The Daily Telegraph Your Money, p. 8
Also appeared in : Financial Times Money, p.2, The Guardian Money, p.7

UK has highest house price growth since 2007
A report by Nationwide, the building society, has found that the gap between house prices in the North and South has widened to a record high of more than £100,000 in a worrying sign that a property bubble is emerging in the latter.
The Times, p. 9
Also appeared in : The Daily Telegraph, p.35

Clydesdale mortgage borrowers to get shortfall compensation
Clydesdale bank is to pay out £42m in fines and compensation after miscalculating the amount thousands of customers needed to repay on their mortgages, leaving some with shortfalls of up to £18,000.
The Guardian Money, p. 6
Also appeared in : The Independent, p.62

Houses beating households, London edition
London house prices are rising far faster than the rest of the UK, up 9.7 per cent over the 12 months to July, while the UK economy expanded in the second quarter by 0.7 per cent, figures from the Office of National Statistics have confirmed. Elsewhere, a recent paper examining the effect of advertising on hedge funds’ inflows and returns concluded that hedge funds associated with advertising mutual funds enjoy moderately higher inflows than their non-advertising counterparts.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 28

Many older mortgage holders can’t pay debt
Fears have been raised that many elderly people with large mortgages could be at risk of losing their homes.
The Daily Telegraph, p. 2

Act quick to make the most of mortgage help – or you may miss out
Property experts warned yesterday that prospective homebuyers should move fast to take advantage of the mortgage guarantee element of the Help to Buy Scheme when it starts in January.
The Times, p. 71

It’s not so grim up north! Hedge fund bets millions in cheap property swoop
Toscafund, one of the UK’s leading hedge funds, has begun snapping up cheap property across deprived parts of the north of England in expectation of a regional boom.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 1

RBS to build ‘challenger’ bank after £800m deal
Royal Bank of Scotland is to create a new bank under the revived Williams & Glyn’s brand that will comprise of 314 branches, mainly in the North West. The state-backed bank will receive an up-front investment of £600m from a group led by private equity firm Corsair Capital and a later payment of as much as £200m as part of the deal.
The Daily Telegraph, p. 33-35
Also appeared in : The Times, p.57, The Guardian, p.32, Independent i, p.46

Banking &finance
Twenty applications are being made by businesses wanting to set up new banks in Britain, up from only three a year ago, the Governor of the Bank of England has revealed.
The Times, p. 56

Barclays trims wealth management
Barclays is to move its clients with less than £500,000 to invest from its full-scale wealth management service into a “lighter touch” service called “Private Clients”.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Icelandic bank says it cannot meet £1.5bn debt repayment schedule
New Landsbanki, the state-owned Icelandic bank forged in the midst of the 2008 Icesave scandal, yesterday asked for more time to repay a £1.5bn bond that is threatening to destabilise Iceland’s recovering economy.
The Guardian, p. 34

Dave Stewart: pop star turned bank manager
Eurythmics musician Dave Stewart revealed plans yesterday for a new bank, to be called First Artist Bank, which will offer services designed to ensure fellow musicians “don’t sign stupid deals”. Speaking at the Reeperbahn music festival in Hamburg, Stewart said the inspiration for the bank, of which he will be co-chairman, is Farmers Bank in the US. “Farmers used to have problems such as droughts or their tractors breaking,” said the songwriter, producer and entrepreneur.
The Guardian, p. 33

Credit card rejection hits three million
More than three million people have had their application for a credit card rejected in the past 12 months. . Research from comparison website Totally Money suggests that one in 10 applications is turned down as lenders continue to play tough with borrowers who have even the faintest stain on their credit record.
The Independent, p. 59

Savers squeezed again as access to ‘instant’ accounts is cut further
Research by The Sunday Telegraph has found that banks and building societies are imposing strict caps on the number of withdrawals savers can make from accounts advertised as “easy” or “instant” access.
The Sunday Telegraph Money, p. 2
Also appeared in : The Sunday Times Money, p.1

Pension plans can come too late
Auto-enrolment may see older workers end up with a pot that’s too little to help but big enough to miss, says Julian Knight.
The Independent on Sunday, p. 62

Crossword p2 puff Smaller mortgage lenders raise their rates
Some lenders could be poised to raise mortgage rates as intense competition in the sector starts to hit their bottom line.
The Independent on Sunday, p. 65

If you’re getting on, you could struggle to get a new mortgage
Experts have accused lenders of “ageism” by imposing age limits just as lending surges to younger borrowers at the bottom of the property ladder. Over the past month, three building societies have slashed their age caps on mortgage lending: Leeds Building Society last week reduced its maximum age to 75 from 80; Skipton Building Society made an identical move in August; and Newcastle Building Society introduced a cap at age 75 whereas it previously had no limit.
The Sunday Telegraph Money, p. 7

First-timers may miss Help to Buy
Report on how first-time buyers could be priced out of the government’s controversial Help to Buy scheme as the Treasury seeks to limit the risks of a bubble. The financial policy committee (FPC), the watchdog, has been given powers to review the scheme annually and recommend lowering the £600,000 cap if it fears a bubble is emerging. The Scottish government unveiled its own version of Help to Buy last week, modelled on the first phase of the scheme, with a £400,000 cap.
The Sunday Times Business, p. 1

Foreign affairs
Conti, a British overseas mortgage specialist, has reported a 62% surge in overseas mortgage inquiries.
The Sunday Times Home, p. 26

RBS prays for sell-off
Royal Bank of Scotland is to sell a network of 314 branches to a consortium backed by the Church of England, in a deal forced by the European Commission because of the bank’s taxpayer bailout in 2008.
The Sunday Times Money, p. 2

Seeking a loan could hurt your credit score
A new survey from Rate-Setter, the peer-to-peer lender, found that a majority of borrowers were not told that applying for a loan could leave a footprint on their files. The huge majority of lenders – including Tesco bank, Sainsbury’s bank and Derbyshire building society – run so-called hard searches on anyone who asks for a quote.
The Sunday Times Money, p. 10

Markets to fall on Fed taper, warn investors
A survey of 200 City fund managers by Capital Spreads has found that 59% think that when the US begins winding up its quantitative easing programme, it will have a “slight downward impact” on global markets, with 10% fearing the negative impact will be “dramatic”. Only 18% said the markets would rise. However, the fund managers said the effect on the real economy would be delayed as the US Federal Reserve is expected to keep interest rates on hold for at least one more year.
The Sunday Telegraph Business, p. 3

Splitting RBS will allow taxpayer ‘to make bigger profit’
A plan to restructure Royal Bank of Scotland so that the Government is able to sell the taxpayer’s stake at a profit has been put forward in a restricted report by the bank’s own broker.
The Sunday Telegraph Business, p. 1

The above articles appeared on 28/09/13 & 29/09/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

Charterbridge Private Financial Planning, Independent Financial Advice, Thornbury, Bristol.