‘Bankrupts not being allowed to open accounts’
July 28, 2010 at 12:37 pm
Citizens Advice has revealed that people who are in the process of going through bankruptcy are being denied the right to open a basic bank account.
The organisation looked at 17 banks in total, and discovered that only two out of the lot provided bankrupts with basic accounts. A basic account does not provide the user with access to credit or a cheque book, but allows funds to be paid into the account by direct debit, such as income and benefits.
This can have serious consequences because if people cannot get access to an account then they are more likely to carry cash with them, they are unable to take advantage of direct debit discounts and some people may even end up losing their jobs because they have nowhere to receive their wages.
Citizens Advice said that there is no legal reason why people should be denied a basic bank account because they have been declared bankrupt.
Gillian Guy, the chief executive of Citizens Advice, said that “great progress has been made in improving access to bank accounts for many groups who were previously financially excluded”, but lamented the fact that there are still groups who are unable to open accounts.
The only two banks to offer basic bank accounts were Barclays and the Co-operative. Other banks including HSBC, Santander, Nationwide and RBS do not provide the service.
Banks claim that their decision not to allow bankrupts to open a basic account is mainly due to risk issues involved. The BBC quoted a spokesman for the BBA (British Bankers’ Association) explaining that it is a commercial decision by each bank as to what they decide to do.
‘Interest rates not set to rise yet’
July 23, 2010 at 3:40 pm
It looks like interest rates are not set to rise for a while yet after the latest member to join the Bank of England’s MPC (Monetary Policy Committee), David Miles, announced that, according to his judgement, it was still too early to consider putting interest rates up.
The MPC is responsible for setting interest rates, and Miles joined just over a year ago. He confirmed that there are still problems in the banking system, suggesting that this means economic growth in the country could still weaken.
He said that he looked forward to the day “when it will be appropriate to tighten monetary policy,” as this would mean a return to “more normal levels of interest rates” and “would be a welcome sign that economic conditions were also more normal”.
However, he confirmed that he believed we were not at that point yet.
He is not alone in his views about keeping interest rates at the record low of 0.5%, a level it has been held at since March 2009. Another MPC member, Adam Posen, has also suggested that an interest rise could risk a return to recession for the country at this stage.
However, one member disagrees with the other MPC members. The only member to suggest a rise was Andrew Sentence. His decision to vote for a rise was based on the fact that inflation currently stands at 3.2%, which is above the target of 2%.
David Miles’s comments were made in a speech to the Bristol Business Forum, and in a nutshell mean that the country has a bit of a way to go before things really start to look better.
£5-only cash machines introduced
July 16, 2010 at 4:31 pm
21 new ATMs have just been launched across the country that will only give out £5 notes, whatever amount is being withdrawn.
The argument for the introduction of the cash machines is a serious one. There is evidence that easier access to cash, especially smaller denominations, helps people to budget better.
With smaller denominations, people won’t be forced to take out more than they need, meaning they will have less money on them and therefore less temptation to spend it.
The 21 ATMs launched on June 28 at locations around the UK, including Paddock Wood, Manchester, Cardiff, Penzance, Oakham, Oxford, Newton Abbott, Portsmouth and more.
Their introduction follows on from two years of trials carried out at Waterloo Station in London.
The ATMs will also help to get more £5 notes into circulation, something which the Bank of England is keen to see. During the two years of trials, an extra 100,000 notes went into circulation, so that will hopefully be reflected across the country now that the new machines have been introduced.
The Payments Council has said that ATMs giving out smaller denominations are normally found in lower-income areas because people don’t take out so much money in a single extraction as in other areas.
The Bank of England’s chief cashier, Andrew Bailey, said that the Bank “has several projects under way to meet public demand for more £5 notes.”
All of the new ATMs will be free to use and can be found located in Martin McColl newsagents.
‘VAT rise’
July 9, 2010 at 3:34 pm
The Chancellor of the Exchequer, George Osborne’s, announcement of a VAT increase from 17% to 20% from 4 January 2011 has brought about fears of a double dip recession.
The increase is expected to reduce the amount of money the coalition government will have to borrow by generating approximately £13 billion a year.
However, there are concerns that it could cause a rise in inflation and higher interest rates.
According to Simon Newark, a partner at UHY Hacker Young Chartered Accountants, “A VAT hike could push up prices on the high street by around 2%, which would have a very significant impact on inflation. Higher inflation could trigger interest rate rises, risking the spectre of the ‘double-dip’ recession.”
Increasing VAT is likely to affect everybody. Selected food items, children’s clothing, magazines and newspapers will still remain VAT free. But with the majority of products being vatable this means the majority of goods will become more expensive.
The Federation of Small Businesses said that the VAT increase would hurt small businesses in the high street.
And many retailers will feel the effects of the increase as consumers inevitably have less available cash and hold back on spending.
The British Retail Consortium has said that the VAT increase would "hit jobs, consumer spending and economic growth."
However, delaying the increase until January next year would give businesses time to adjust to the new VAT rate. It also means that a pre-Christmas spending surge is likely. Shoppers are expected to take advantage of buying goods and services before the rise takes hold.
‘Olympic tickets only available with Visa card’
July 2, 2010 at 2:40 pm
If you are a UK resident planning on attending the 2012 Olympic Games you had better make sure you have a Visa debit or credit card.
Visa are sponsors of the Olympic and Paralympic Games and part of the deal struck with the organisers is that no other card will be accepted. In addition, Visa will be the only type of card accepted at shops and cash machines at the Games.
The consumer champions Which? have said that it is outrageous for some sports fans to be discriminated against in this way and the Office of Fair Trade is looking into the matter along with the European Commission. A spokesperson for the London Olympics has, however, said that this has been the norm since the Seoul Olympics in 1988.
According to a spokesman for Visa, it is the exclusivity of sponsorship deals that makes the whole concept work, enabling the Olympic committee to raise the necessary funds. He also pointed out that fans who do not have a Visa card will be able to buy a pre-paid card for the Games.
Fans from abroad will be able to use other cards to buy tickets if they purchase them from their own Olympic Committees rather than from the London 2012 website.
A similar situation was threatened in Germany for the 2006 World Cup with MasterCard sponsoring the event. However, FIFA were forced to back down and accept other cards after intervention by the EU.
Last autumn Visa signed a deal to continue sponsoring the Olympic and Paralympic Games up until 2020, along with Coca Cola and Omega. It is predicted that Visa will provide up to $200 million in cash and services between now and 2020.
