Spealing to the Secretary of State for Business, Vince Cable, presenter Adam Shaw asked why the UK banking industry was so unfair, Mr Cable responded with an appreciation for the bank’s uncompetitve attitude, saying: “When we talk about restructuring the industry, we mean a more competitive system where consumers are not ripped off.”

The show also touched on emerging alterntives to the traditional banking houses, we’ve already spoken on the blog about Tesco and Virgin but the programme introduced us to Metro Bank, the first new high street bank for over 100 years. Metro’s approach is one that could prove very popular, putting aside jargan and zero competition and embracing customer service. This fresh approach goes as far as calling their branches ’stores’, opening at 8am, having glass-less counters, offering lollypops and even providing dog biscuits. With a current system that seems to be failing and with lending down by 10% over last year to 3.2bn, the lowest level in a decade, a new bank with new ideas could go a long way.

It’s easy to see why the poor old mortgage advisors have seen their paypacket hit, with figures showing mortgage related income falling to just 44% of their total average income. But they’re not down in the mouth, most advisors are looking forward to the job and welfare cuts and are predicting an increase in protection sales as a result.

It’s findings show that 34% of people with general insurance policies have switched provider in the past 12 months to get a better deal and a third of people said they were now more likely to use a price comparison website. Some encouraging news also came out of the research, according to the stats: fewer consumers are cancelling their insurance policies to avoid mis-sold PPI and save money. In last years survey, 11% of people said they were considering stopping their Payment Protection Insurance (PPI) to save money, but this has fallen to just 6% over the last 12 months. Good news, as long as the policy has been sold correctly.

The company operated as a network and recruited mortgage and insurance brokers but came unstuck when Mr Head failed to put in place systems and controls to ensure the brokers acted correctly. He also failed to properly supervise insurance brokers linked to a firm previously disciplined by the FSA for Payment Protection Insurance failings and as a result was fined £10,500.

Closer to home, payment protection insurance claims continue to flood in to the Ombudsman but with unemployment still high (2.5 million at the last count) and May’s figures due for release this week, the number of people protecting themselves with good PPI is at an all time low. This of course can have some serious consequences, some of which are discussed in an article from today’s Telegraph…

The different financial institutions add a certain amount each year depending on what they provide; banking, insurance, intermediary services and the total is used to refund or compensate customers. With the massive increase in the number of PPI claims has had to come an adjustment in the amount levied and this increase has been big. There has been a 58% increase in PPI complaints over the past 12 months, with over 49,000 new PPI complaints received and 89% of them upheld. To cope with this amount of compensation, the FSCS has set a budget of £61m for the 2010-11 financial year which is nine times that of the previous year.

Of course, in the same way people should be encouraged to save money for the future, they should also be encouraged to protect themselves financially in the present, but the possibility of rises in Insurance Premium Tax (IPT) seems to contradict this viewpoint. Should Mr Osborne increase IPT then the cost of insurance will go up and in these austire times, that can only lead to cancelled policies and a massive risk gap.

This news comes as the financial watchdog looks into the costs and benefits of requiring such qualifications for advisors of term assurance, critical illness cover (CIC) and income protection (IP). Why they aren’t including PPI is a mystery seeing as that’s the form of insurance that has been so grossly mis-sold. Maybe they’re relying on the new regulation stating lenders must wait seven days from a credit agreement to contact a customer about the insurance product. Or maybe they think the shift in public perception of the product is enough to protect future consumers, either way – we’d be a whole lot safer with qualified advisors on the end of the phone.

The new twenty, introduced in 2007, features economist Adam Smith and is definiately the one you want if a shop keeper gives you a £20 note in change. If you have an Elgar note and no shopkeeper will take it, today is the day to swap it at your bank or local post office, as from tomorrow they do it only at their descretion.

Strangely however, you may still find Elgar poked out of a cash machine when you request twenty pounds as there is no formal penalty in place to prevent the banks from issuing old notes. What to do if you get one and can’t swap it? You’ll have to post it to the Bank of England I’m afraid, but don’t worry, they’re good with money – they’ll sort you out.

It has been probably one of the most uneagerly anticipated budgets in recent years as it was expected to bring cuts in a bad way and rises in a, well, bad way. Lets take a look what was actually announced:

TAXES

- VAT on goods and services is going up on 4 January 2011 from 17.5% to 20%.

Why? The increase will generate more than £13bn a year by the end of 2014-15 to offset the deficit.

- From today Capital Gains Tax (CGT) will rise to 28% for taxpayers on higher income tax rates.

Why? It’s all about the deficit, the CGT changes should bring in an extra £1bn.

- The 10% CGT rate for entrepreneurs will be extended from the first £2m of qualifying gains to £5m.

Why? To encourage new business start-ups, the foundation of the economy, and to help young companies.

The personal income tax allowance is to be increased by £1,000 in April next year to £7,475.

Why? This is a Lib Dem drive to eventually raise the allowance to £10,000. This initial rise will mean 23 million basic-rate taxpayers will save up to £170 a year.

- Food items and children’s’ clothing will remain zero rated.

- No increases in duties on alcohol, tobacco or fuel and the 10% cider rate has been scrapped.

BENEFITS

- Benefits, tax credits and public service pensions will be no-longer be uprated by the retail prices index, instead the lower consumer prices index will be used.

Why? It will save the government £6bn a year.

- Tax credits will be cut for households earning more than £40,000 next year.
- The ‘Health in Pregnancy’ grant will be removed from April 2011.
- Lone parents will now have to look for work once their youngest starts school.
- Child benefit for all families will be frozen for the next 3 years.
- A medical assessment for Disability Living Allowance will be introduced from 2013 for all claimants to cut down on the number of people claiming it.
- Housing benefit will be restricted to a maximum limit of £400 a week.

Why all of these changes? They will save £11bn a year over the next 5 years.

EMPLOYERS

- The National Insurance threshold will rise by £21 per week above indexation in line with inflation.

- Corporation tax will be cut in April to 27%, and then drop 1% annually for the next 3 years, down to 24%.

- The small companies’ tax rate will drop to 20%.

Why? All of these changes are aimed at giving businesses more of a reason to keep people employed.

PUBLIC SECTOR

- There will be a 2 year pay freeze for workers in the public sector, but those who earn less than £21,000 a year are exempt and will receive pay increases of £250 a year for each of the two years.

THE END. (hopefully not)

So there it is, the Budget 2010 and we’ll all be affected. But just how much will you feel the changes? Let us know in the comments below.