Experts Try to Estimate Future Cost of PPI Scandal to Banks

The PPI scandal has forced many of the country’s banks to incur large financial losses. A recent report found that the banks have already needed to pay more than £18 billion to compensate customers for the claims that they have filed. Some experts feel that the costs will increase much more in the near future.

Estimates of Financial Costs of PPI Claims

The PPI crisis has already turned out to be the largest financial disaster in history. Many people expected that it would have subsided by now, but that doesn’t seem to be the case. Approximately 15,000 people have been filing new claims every week over the past several months. The number seems to be growing year after year without any sign of slowing down.

Many financial experts are wondering how much the cost of PPI will be by the time everything is finally resolved. Some believe that the cost of the crisis will be at least twice what it is already. They are using a PPI claims calculator to determine the final cost of the mis-sellings.

Banks Setting Aside Record Amounts

The banks seem to believe that far more people are going to file claims in the near future. Barclays said that it will need at least another £1.3 billion to cover future claims. The bank has already paid approximately £17 billion to cover the claims that have been filed. Some of the banks analysts believe that Barclays will need to set aside at least another £3 billion to cover future PPI claims.

Barclays was one of the largest players in the PPI scandal. However, other banks may owe even more for mis-sold PPI claims. Lloyds has recently set aside PPI provisions of nearly £7 billion. Those provisions are expected to be used up by the end of this year. The bank is asking for another couple billion to cover claims that will be filed after January.

More PPI Claims Expected to Follow

Many more customers are expected to file claims in the near future. Over 50 million customers have purchased PPI products over the last twenty years. A substantial percentage of these customers were misled into believing that they needed the insurance or didn’t realize they were even purchasing it.

Experts believe that only a third of the customers who were duped have filed claims so far. The number of claims filed isn’t expected to drop anytime in the near future.

Is Grandma Selling her Home to Buy one for you?

Many people are surprised to learn that grandparents own almost 50 percent of the equity in British Homes. While there is nothing wrong with this, there is an important trend that is worth keeping an eye on.

A growing number of grandparents are “selling up” as a means of helping younger members of the family get involved in real estate. This is admirable for those making this decision, however, it is important to take note of some of the statistics associated with the trend.

It Helps the Market

While this may appear to be a bad thing for the real estate market, nothing could be further from the truth. In fact, many share the belief that this trend is a big reason why the real estate market has been able to regain its footing.

For a better idea of what is going on, let’s take a closer look at some of the statistics shared by property broker Savills in a recent The Telegraph article:

  • Homeowners in the age bracket of 45 years or older are holding onto roughly 83 pc of the UK residential property market
  • On the contrary, only 4.1 pc is owned by those in the age group of 35 and under

With this information in mind, the government’s “Help to Buy scheme” will be more important than ever, as it is meant to help buyers raise a deposit for a new home. Starting next year, the government plans to guarantee 95 pc mortgages for property sold for less than £600,000.

In the UK, more and more people belonging to the younger generation are getting the help they need to buy a home from one or both of their grandparents. Based on the numbers above, it is easy to see how this trend has started.

How to save money with credit cards

Do you want to know the tricks and tactics of saving money while using your credit card? Let us find out the ways and means to save money with credit cards.

  • Do your research work

When you are applying for new credit cards, don’t hasten to sign up for just anything. Do your research and compare the credit card offers provided by different companies. Read the terms and conditions carefully and based on your expenditure style choose the credit cards.

  • Don’t possess too many credit cards

This is one of the effective ways to save money with credit cards. Owning more credit cards means you will be charged more. Moreover you might not be able to control your desires of shopping and overusing the credit cards.

  • Pay bills on time

If you are paying your bills (electricity and gas bills, phone bills, internet bills etc) using your credit card, make sure to pay them on time. It actually gives you rewards and also helps you to repair your poor credit score or rating in case you are suffering from any.

  • Check for reward cards

If you have made up your mind to issue a credit card on your name, a reward card can be really helpful. With the help of reward cards you can take advantage of many things like cash back offer, covering a regular expense etc. Don’t you think it is good deal to try out?

  • Don’t depend on credit cards to cover an emergency

There are several people who don’t have any emergency funds on their names and use the credit cards to cover emergency situations (sickness, accidents etc). It might seem convenient for you but in the long run it will be quite expensive.

These credit card money saving tips can be effective if you follow them in your life.

The Biggest Scandal in the UK Financial Market

Payment Protection Insurance or PPI as a financial product, was introduced in the UK financial market in the 1990’s as a means to cover borrowers monthly repayments should they become incapable of doing so due to accident, illness or redundancy. The insurance, which was considered to be a great value product on its introduction soon became a massive money spinner for banks, who often made more from the PPI policy itself than they did from the interest on the loans it was supposed to cover!!

Seeing the huge potential for profit, UK banks and lenders began to push the product onto all of their customers. Telling customers that they would only be approved for the loan if they took out PPI; adding it to the loan by default without the borrowers consent; and selling it to people who were not eligible for it became common practice as bank staff were incentivised to sell the policy. Most bank staff were also given sales targets to meet for selling the policy – meet your target and receive up to 85% commission as a bonus – miss your sales target and be prepared to face your line manager in a performance review and be told that your job is on the line.

Performance Review

The reasons for mis-selling PPI were many and varied. But fast forward to 2013 and PPI claims scandal emerged as the biggest scandal in the UK financial market and the biggest compensation scheme ever seen in the UK… or anywhere else for that matter! Suffice to say, PPI is now considered to be an extremely poor value product.

There were several rules which needed to be followed for the selling PPI but non-compliance to the rules by banks and financial institutions led to the industrialised mis-selling of the policy. It is claimed that there are around 30 million PPI policies may have been mis sold to unsuspecting consumers.

Today, thousands of complaints are made regarding PPI but these are not being settled by the banks who claim that they’re receiving large numbers (up to 40%) of ‘bogus or fraudulent’ claims from people who do not even hold a PPI policy in their name and who are not even customers of the banks which is causing huge delays for genuine claimants.

But the Financial Ombudsman Service (FOS), who are now responsible for resolving these PPI complaints, have rubbished the banks claims by stating that only 3% of complaints have actually been fraudulent and that people have a right ‘to ask a question’ of their banks if they feel they may have been mis sold PPI. To find out more about PPI and enquire about making a claim, contact the PPI claims specialists at Mis Sold PPI Claims Co.

Short Term Loans – 3 Tips For Quick Borrowing

If it seems like your wallet is being drained more than normal, and bills are always sneaking up on you, then you may have considered applying for some short term loans recently.

Despite getting a lot of bad press, short term loans, also referred to as payday loans, are a life-saver for many people all around the country.

When used in the right way they are an excellent way to sort out cash flow problems and give you some valuable breathing space to get your finances in order.

One of the main advantages of short-term loans is that lenders do not usually run a credit check against your name when they are considering your application. This means that if you have a poor credit score, you can still be accepted for loan.

Quite possibly the biggest disadvantage is the high interest rates. It’s a well known fact that short-term loans carry the highest rates in the loan industry, which means you could end up paying back a lot more than the initial amount you borrowed.

Here are 3 short-term loan tips to help you get borrowing as quickly as possible:

Applying online

When speed is of the essence, you should look to apply for short-term loans online. The application process is simple and to-the-point, and once submitted, you can expect to receive a decision within minutes.

Not only that, but the money is then sent straight to your bank account that very same day, with many lenders now offering transfers within 1 hour.

Be prepared

To qualify for a short-term loan, you typically only require proof of your identity and of your earnings. For example, if you have some wage slips from the past few months, then make a copy of them so you can forward them to the payday loan company.

Being prepared means you can fill-out the application form and get approved much quicker. Also, if there is anything that you don’t understand, or you need some further clarification, then feel free to contact the lender by phone to get some assistance.

Make sure you can repay

One of the biggest mistakes you can make is applying for a short-term loan when you know that you won’t have the funds to repay the loan on time.

Because of the short nature of these loans, you won’t have months to repay the money, which means you need to be fully prepared in order to meet the payment deadline.

If the payment deadline is missed, then expect penalty charges to be added onto what you already owe.

Are you paying too much for your Mobile Phone?

A mobile phone is very much a 21st century essential item, something that both young and old alike use every day and for many different things. The modern smartphone is not just a phone but a full-on communication and entertainment device, and there is much to be said for the fabulous functions and features that are offered by the best selling models. However, the lure of a particular brand or model, the one that is the ‘in’ phone of the moment, can lead to you paying more than you need to.

mobile phones

Check Your Tariff

One common mistake that leads to unnecessary expense is taking on a deal that looks attractive, but that offers much more than you actually need. How many of those free texts do you use each month? Are you paying for more internet downloads than you actually need? Could you use less free calls and cut down on your monthly payments? It may be that you are paying well over the odds for your monthly tariff.

Make a List

The best way to assess your monthly contract is to make a list of your usage, and then compare what you actually use with what you are paying for. You should be able to see where you are paying for something you do not need, and where there may be a shortfall. By analysing your usage you can make a note of where you can make savings, and in doing so you may be able to contact your provider and come to an agreement.

Do Your Really Need It?

There is one more factor you can consider: do you really need that top of the range smartphone, or are you paying for a status symbol and nothing more? Luxuries are an indulgence, and always will be, and if you don’ really need the best phone on the market you could trade down and use one that does all the same things, but doesn’t carry the cache of a band name. Consider your options carefully, as the savings can be impressive.

Renovating Your Home on a Budget

Some people have been meaning to renovate their homes for years, but don’t think they can afford to do so. Fortunately, renovating your home may be a lot more affordable than you think. I know many people who have saved tens of thousands of dollars making renovations on their homes.

There are a number of ways you can save money renovating your home.

Saving Money Renovating

You should be able to pay for a renovating project without putting yourself too far into debt. However, you may need to be willing to make some sacrifices. You may not be able to build the exact layout you were looking for and may need to do some of the work yourself. You will still be able to make some nice improvements to your home. They just may not be what you originally had in mind.

Here are some ways that you can save money with a home renovating project.

Do Some Work Yourself

There are some projects that you need to leave to a professional. You don’t want to be doing any major electrical work if you don’t have the right training. However, there are some projects that you can do on your own. You may be able to fix your home plumbing or install a railing on your own.

See what types of projects you can handle on your own. Consider doing some of the work yourself if it is something you can do over a couple of days.

Choose Contractors Wisely and Get Bids

There is a lot of competition in the contracting industry. You will want to make sure that you find the contractor who can do the job for the best price while still providing the quality you are looking for.  Take bids from different contractors in your area before committing to a decision.

Look at Deals before Committing to a Project

Many people envision what their new layout will look like as soon as they decide to start a home renovation project. The problem is that the materials they are looking at may be much more expensive than they would expect.

You will need to be more flexible if you want to save money. Look for deals on  different materials and base your projects around them.

Save on Materials

Many people let their contractors decide what materials to use on the project. You may feel that the professionals do know best, but they also have a tendency to mark materials up. You should also be careful buying materials at Home Depot and many other hardware stores. You will probably be able to find better rates somewhere else.

You can usually find better deals at resale stores or Internet based firms. Also, you should consider purchasing imitation materials. They are usually functionally identical to other materials you would buy, but they will be a lot cheaper.

home improvement

Home Renovations Can be Affordable

You don’t have to spend a significant amount of money on home renovations. You will need to set a budget and find ways to work within it. You will also need to be realistic about how much the project will cost at the end. You will probably face some issues that will drive the cost of the project up, so you should probably set your budget about 20% lower than you would actually be able to afford.

Lloyds Posts Losses of £570m for 2012

Lloyds Banking Group has remained in the red after revealing they made losses of £570 million in 2012, which makes it five years of continuous losses.

The state backed bank racked up a staggering £1.5 billion charge in the final quarter to add onto its already existing compensation pot for customers who were mis-sold payment protection insurance.

The bank has currently set aside £6.8 billion in total for compensation for those wrong done by the scandal. In a completely separate issue, Lloyds has also set aside £400 million for compensation to small businesses who were sold costly ‘interest rate swaps’ with their loans.

The financial service authority also fined the bank £4.3 million for delays in compensation payments. Up to 140 000 customers who were mis sold payment protection insurance have waited months after finding out their claims were successful, and actually receiving a check.

 The regulator added “The group had failed to establish an adequate process for preparing compensation payments to send to payment protection insurance complainants who banked with Lloyds TSB, Lloyds TSB Scotland and Bank of Scotland. Staff engaged in the process lacked knowledge and experience, and there was ineffective tracking of payments.”

lloyds

Lloyds Banking Group has a 28 day target for payment after sending out decision letters to customers. Between May 2011 and March 2012, Lloyds sent out 582,206 decision letters to successful claimants, however, 140,209 customers – almost a quarter – waited longer than 28 days to receive their money.

Britain’s largest bank, Lloyds, received on average 6,000 complaints a day, in the last six months of 2012, of which around 80 per cent where regarding payment protection insurance.

Banks are now forced by the FSA to publish complaints data every six months. Despite this, Group chief executive Antonio Horta-Osorio will be awarded a £1.5 million share bonus and staff will have a share of £365 million in bonuses.

Tips on Reducing Your Driving Costs

A car is an essential item for many of us, particularly or the school run, commuting to work, and the obligatory trip to the shops, but how can you make it cost less than it already does? Fuel is expensive these days, and is likely to continue to increase in price, and maintenance is often needed. There are some simple things you can do to cut down on the cost of running your car, and many of them are surprisingly easy.

Watch your Right Foot!

One way to cut down on costs is to make your fuel last longer: heavy acceleration uses a great deal of fuel and, in town, does not save you any time. Keep things simple by accelerating only at a gradual pace, and you will be surprised how much money you save. Furthermore, fuel economy can be increased by removing such as roof-racks, keeping windows shut and keeping the air conditioning to a minimum.

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Ration your Journeys

Do you really need to drive to the shops for a loaf of bread? Surely it would make more sense to walk, or to make sure all of your essential shopping is done at one time? Short journeys are the least economical of all as the engine does not have time to reach the correct operating temperatures, so try and avoid them as best you can. Plan your weekly journeys so that you can use the car to its most efficient levels, and you can make a tank of petrol or diesel go much further than you might believe.

Share your Journey

Do you have a friend or work colleague who lives nearby and makes the same commute as you? If so, why not share the journey and use only one car? This practice can also be applied to shopping trips, especially if you use the same store. It really is little more than common sense when it comes to saving expenditure on your car, and by following the above simple tips you can rack up serious savings across a year that will make a very big difference to your household expenditure.

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