‘Recession means lower savings but also fewer withdrawals’

February 27, 2009 at 9:58 am

The recession means that we are saving only half as much as we did a year ago but we are dipping into our savings less and, when we do, it is for essentials rather than luxuries.

According to figures from the Bank of England, interest rates payable to savers are at an all time low and it is perhaps therefore no surprise that the amount of money being invested has dropped from an average of £644 for the final quarter of 2007 to £329 for the same period in 2008.

The good news, however, comes from a survey carried out by Wolverhampton-based bank, Birmingham Midshires, which has revealed that, for the same three months in 2008, withdrawals from savings accounts amounted on average to £302 as compared to £506 for 2007, equating to a drop of 40%. When we do take the plunge and raid the bank it seems that, unlike 2007 when we frittered our money away on holidays and going out, we now only dip into our nest egg for essentials such as repairs and bills.

Only 9% of us withdrew savings for luxuries whilst 22% of us did so for unforeseen items such as car repairs or work required on our homes. 20% of us had to "rob Peter to pay Paul", with withdrawals from savings accounts being used to top up our current accounts. A generous 12% withdrew cash to lend to friends and family and another 12% used it to pay energy bills.

Of those of us who do manage to save, 27% do so for a holiday, 26% for the nebulous “rainy day” and 15% for their retirement.

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‘Lloyds warns vigilance required’

February 26, 2009 at 2:26 pm

Last month Lloyds TSB Group acquired HBOS, and the new combined group is now called Lloyds Banking Group plc. The group’s brands now include Halifax, Bank of Scotland, Cheltenham and Gloucester, Birmingham Midshires, Intelligent Finance, Scottish Widows and Lloyds TSB Scotland. This may be a little confusing for some customers and this is exactly what fraudsters are banking on – no pun intended!

Lloyds Banking Group is warning clients to be on the look-out for e-mails asking for personal details. These “phishing” scams direct customers via e-mail to pages which look like the official log-in pages of bona fide banking websites but which are in fact fakes. The fraudsters hope that customers will be tricked into divulging personal details such as passwords, enabling the criminals to siphon off cash from accounts.

Fraudsters are always on the look-out for new ways of tricking the public and take-overs such as this give them fresh opportunities. Lloyds has stressed that banks will never ever ask for a customer’s password so, even if an e-mail looks totally genuine, it should be ignored if it asks for that sort of information. Rob Devey of Lloyds has also made the point that although Lloyds Banking Group plc is the holding name it will not be used as a “customer facing brand”.

Phishing is just part of a fraudster’s ammunition and customers should take the following steps to ensure the security of their bank accounts, if banking online:

  • Never keep a note of your password or tell anyone else what it is
  • Change it if you suspect someone may know it
  • Include letters and numbers in your password and change it at regular intervals
  • Avoid online banking in public places or at work
  • If this is unavoidable make sure you log off properly
  • Check your bank statements to make sure any suspicious activity is detected early on
  • Make sure your computer’s security is up to date

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‘Smile for the Bank Manager’

February 10, 2009 at 1:24 pm

As Barclays bank prepares to shed up to 2,100 of its permanent staff members, Hong Kong-born entrepreneur, Sir David Tang, has expressed his desire to see smiles on the faces of struggling bankers.

Pessimism, he explains, is the contagious factor that is currently devouring billions of public money, and only a jaunty, positive outlook on life is going to provide the cure-all panacea that the government has been searching for since last October.

It seems unusual then, that government minister Baroness Vadera, has been demonised in the press for suggesting that a few “green shoots” of economic recovery might be beginning to blossom somewhere in the financial quagmire that has enveloped the country.

Mr. Tang has blamed much of the economic downturn on poor business sense and haphazard investment. He has encouraged businesses to fight administration with simple weapons – adhering to basic supply-and-demand principles – rather than opting for the solution with the prettiest name.

The Royal Bank of Scotland, the most miserable company in Britain, is facing total nationalisation – a process that could elevate public debt to £3,067 billion, a figure that far exceeds the British GDP (Gross Domestic Product – our national income).

Shares in RBS fell by 66.6% on the 19th January alone, highlighting the continuing vulnerability of the banking sector.

National bankruptcy, it seems, is a very real prospect, and one that is not going to be swayed by a smile and a “sense of energy and laughter”. An optimistic outlook might help you keep your head above the waves, but it is not going to stop the sharks eating your legs.

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