Finance Matters

Posts Tagged ‘Banking News’

UK savers are putting more into their ISAs, with the average balance growing by 14 per cent to £8,949 over the year to January 2012, according to new research by the Halifax.

The national average ISA balance has been on an upward trend since February 2009, when it stood at £7,269, with the 2011 figure representing an increase of 23 per cent since that date.

ISAs now account for a third of national average pre-tax annual earnings of £26,871.

Older people are saving more in their ISAs than younger people, with savers above 65 years of age having an average balance of £14,400, 61 per cent above the average for all ISA savers.

In contrast, people in the 25 to 54 age bracket have an average balance of around £5,423, which is 40 per cent below the UK average.

Martin Ellis, economist at Halifax, said: “It is encouraging to see that in these tough times, savers are managing to build on their ISA balances, making use of the annual allowance.

“Indeed it is impressive that customers, on average, have an ISA balance equivalent to a third of annual gross earnings.

The Halifax reported a significant difference in average cash ISA balances between different regions of the UK, with the East of England having the highest average cash ISA balance of £9,724, while Scotland has the lowest, at £7,031.

With the 2012-13 tax year on the doorstep, a surge of new ISA products have come onto the market in recent weeks.

One of the latest comes from the Post Office, which has launched a Premier Cash Isa paying 3.01 per cent tax-free/AER.

This includes a bonus rate of 1.26 per cent which expires after 18 month, when the rate will revert to 1.75 per cent.

The product is available online from 6 April and by phone or in Post Office branches from 7 April.

Between £100 and £5,640 can be invested during the tax year, and existing ISA balances can be transferred into the new product.

Up to two free withdrawals are allowed each tax-year either by phone or by post.

The BBC today reported that around 10 per cent of Barclays’ customers are experiencing delays when they try to access online banking.

The bank has been phasing in improvements to its site since January and the rebuilt site is proving slow to load today, which is one of the busiest days of the month for transactions.

Social networking sites have been inundated with complaints from frustrated customers.

However the bank does expect the problem to be resolved by the end of the day.

“We apologise to customers who may be experiencing slow responses from Barclays online banking,” a spokeswoman said.

“We are seeing higher than normal volumes of traffic but the service remains available and we are working on the response times during the course of today,” she continued.

The latest figures from the Financial Services Authority (FSA) show that Barclays was the UK’s most complained about bank in 2011.

Barclays received 533,047 complaints last year, 281,484 of them in the final six months.

The majority of complaints were related to claims over the mis-selling of Payment Protection Insurance (PPI).

The bank received 146,316 banking services-related complaints in the second half and just over 50 per cent of these were upheld in the customer’s favour.

Antony Jenkins, chief executive of Barclays global retail and business banking, said: “Complaints are still higher than our customers should expect, but we are on the right track in bringing them down.”

Lloyds TSB received 422,830 complaints in 2011, making it the UK’s second most complained to bank.

It received 240,923 of these in the second half of the year, due to an increase in PPI claims.

It has set aside £3.2bn of compensation for customers who were mis-sold PPI.

The Royal Bank of Scotland received more than 206,000 complaints in the second half of 2011.

Nationwide was the least complained about major high street bank, receiving just 0.7 complaints per 1,000 accounts.

The BBC today reported that around 10 per cent of Barclays’ customers are experiencing delays when they try to access online banking.

The bank has been phasing in improvements to its site since January and the rebuilt site is proving slow to load today, which is one of the busiest days of the month for transactions.

Social networking sites have been inundated with complaints from frustrated customers.

However the bank does expect the problem to be resolved by the end of the day.

“We apologise to customers who may be experiencing slow responses from Barclays online banking,” a spokeswoman said.

“We are seeing higher than normal volumes of traffic but the service remains available and we are working on the response times during the course of today,” she continued.

The latest figures from the Financial Services Authority (FSA) show that Barclays was the UK’s most complained about bank in 2011.

Barclays received 533,047 complaints last year, 281,484 of them in the final six months.

The majority of complaints were related to claims over the mis-selling of Payment Protection Insurance (PPI).

The bank received 146,316 banking services-related complaints in the second half and just over 50 per cent of these were upheld in the customer’s favour.

Antony Jenkins, chief executive of Barclays global retail and business banking, said: “Complaints are still higher than our customers should expect, but we are on the right track in bringing them down.”

Lloyds TSB received 422,830 complaints in 2011, making it the UK’s second most complained to bank.

It received 240,923 of these in the second half of the year, due to an increase in PPI claims.

It has set aside £3.2bn of compensation for customers who were mis-sold PPI.

The Royal Bank of Scotland received more than 206,000 complaints in the second half of 2011.

Nationwide was the least complained about major high street bank, receiving just 0.7 complaints per 1,000 accounts.

There are just a few days left for savers to use their Isa allowance for the current tax year, which ends on 5 April.

However, savers who miss out on this year’s allowance may get almost as good a deal from an ordinary savings account according to new research by
consumer group Which?

Isas have traditionally offered a higher rate of interest than standard savings account because of their tax-free status.

Which? now reports that the average interest rate on a cash Isa is just 0.44 per cent higher than the average standard savings rate.

In comparison, in 2000 the difference between the average cash Isa and savings account was almost 2.8 per cent.

In February 2000, the average instant access cash Isa rate on a balance of £3,000 was 6 per cent, while the average rate on a standard savings account before tax was just 3.21 per cent.

Which? money editor James Daley said: ‘Many savers understandably assume that they will be better off in their bank’s cash Isa than they will in a taxed savings account – but all too often, that just isn’t the case.

“We’d like to see all banks and building societies promising to ensure their cash Isa accounts pay at least as much as their equivalent standard accounts after tax – if not significantly more – so that Isas once again provide people with a real incentive to save.”

Separate research by broker TD Direct suggests that stocks and shares ISAs are now more popular than cash ISAs.

TD Direct’s Global Investor Confidence Study found that 77 per cent of respondents had invested in stocks and shares ISAs in the 2011/12 tax year, compared with just 53 per cent who had invested in a cash ISA.

TD Direct Investing has conducted the study for six years and it is the first time stocks and shares ISAs have been the more popular option.

The UK government is negotiating with Abu Dhabi sovereign wealth funds over the sale of a stake in Royal Bank of Scotland (RBS), the BBC reported yesterday.

It is believed that Abu Dhabi, which is part of the oil-rich United Arab Emirates, could buy up to a third of the government’s 82% stake in the UK bank.

With RBS shares trading at a substantially lower price than the government acquired them for in 2008, the deal is likely to mean a substantial loss for the UK taxpayer.

The UK government bought the shares for £45.5bn in 2008-9 in order to bail out RBS following its ill-advised takeover of ABN Amro prior to the credit crunch.

Although selling the shares to Abu Dhabi would be loss-making, the sale could generate further interest from the private sector in the bank and this could see its share price increasing to a break-even position.

The UK government’s stake in RBS is held by UK Financial Investments, a company set up in November 2008 to manage its shareholding in rescued banks.

Speaking to the BBC the Treasury said: “The government’s policy has always been to return RBS to the private sector, but only when it delivers value for money for the taxpayer.”

In other banking news, US company GE has revealed plans to open its first British bank – GE Capital Direct.

The internet bank would try to attract billions of pounds of savings in its first year of trading.

The Financial Services Authority has approved GE Capital Direct’s banking licence and it can start offering a full range of banking services.

Its launch is part of GE’s global plan to diversify forms of finance following the credit crisis.

The company which is the world’s largest conglomerate and has an AA+ credit rating, recently opened GE Direkt in Germany.