Did anyone watch Panorama last week? It was about bank charges and as well as highlighting Halifax’s 3650% pa overdraft fee it also covered the £2.6bn the banks make on penalty charges every year. It made some good TV but also some tough points about PPI claims and the shocking profit that the banks are making on interest rates.

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.

As the tough times continue and the Chancellor delivers more cuts to benefits and state support, you would think that more people would be considering some form of Payment Protection Insurance (PPI). The reality is far from this and sees many mortgage holders and borrowers cancelling PPI to save money due mis-sold PPI claims and unemployment.

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.

While you’re in the mood for getting a refund on a useless product, you might want to root through your wallet, purse or matress for any old £20 notes and hot-foot it down to your bank. Today is the last day that the Elgar £20 note will be accepted in shops having been gradually replace by it’s successor, the slightly more purple one.

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.

Did you listen to the Budget announcement yesterday by Chancellor George Osbourne?

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.

If you have Payment Protection Insurance (PPI) on your radar, you’ll no doubt notice that a week doesn’t go by without another report about mis sold PPI and the problems associated with it. The much maligned insurance has taken quite a hit over the past few years after it emerged that millions of policies have been mis sold.

As important as it is that this scandal is exposed and those responsible are brought to account, it is also important to remember that it is still worth considering PPI cover if you have a borrowing. PPI, when sold correctly, is fundamentally a good product and with countless Cameron cuts on the way it really could be a life-saver. For sure reclaim mis-sold PPI payments but also look into insuring yourself through a trusted independent insurer.

Hello followers of the PPIRefundsUK blog, you may have noticed we’ve given the website a lick of paint recently, ain’t it lovely?! We think it is quite possibly the easiest and most informative PPI claims site around and to let everyone know, we’ve written a press release about it, have a read here…

Bolt on financial products, also known as ‘tie-ins’ are commonplace in the finance industry, you ring up about a loan and get payment protection insurance (PPI) as well. Although PPI is very much an option these days, it wasn’t always that way and it was the indescriminate inclusion of unwanted or ill-explained PPI that caused many to make compaints to the Ombudsman.

PPI itself is a perfectly worthwhile product when sold correctly, with the customer’s health and employment situation considered and at a fair and competitive price. But quite often mis sold PPI was thrown in with loans, credit cards and mortgages without any permission or knowledge from the customer, costing individuals thousands for completely worthless cover.

As if trying to impress it’s new boss, the Financial Services Authority (FSA) has been handing out more fines to banking institutions who have failed to handle PPI claims and complaints or act appropriately. The most recent lender to get a note on their windscreen is German financial services outfit Commerzbank, receiving a £595,000 fine for failing to accurately report trading data.

The FSA give regular and repeated reminders to banking firms of their obligations to provide accurate data but despite this; Commerzbank failed to recheck its submitted figures. The watchdog also discovered reporting failures at Barclays Capital and earlier fined Credit Suisse, Getco Europe and Instinet Europe a total of £4.2m on the same charges. It’s good to see the the banks getting a wrap on the knuckles but we fear it just seems all too much like a £100,000 a-week footballer getting a £60 speeding fine.

Financial Regulation – it’s up there with chocolate teapots, inflatable dartboards and Anne Frank’s drumkit as the most useless of things ever to have graced the planet. For years now, millions of banking customers have been right royally ripped off due to the serious lack of effective regulation. The Financial Services Authority (FSA), which is funded by the banks, has for too long been a toothless Guppy masquerading as a hungry Piranha.

The major failing of the FSA has been in the area of payment protection insurance, a mis-selling problem that was first pointed out way back at the beginning of the 90’s by consumer campaign group Which?. For years now, lenders have not only mis sold PPI but also grossly overpriced the policies and earned massive commissions. Meanwhile customers falling on hard times found that their policy was worthless, despite having paid every month for it, and couldn’t make the repayments. It seems the FSA did very little to stop this from happening and only now, after it’s all come out, are they threatening, fining and sanctioning – a little late don’t you think? Lets hope the new Government can give us financial regulation that lives up to it’s name and does exactly what it says on the tin. Good old Ronseal.

Hi, just a quickun today, if you’re interested in claiming PPI or just the general topic, this article is well worth a read. Combined with the comments, it makes a good arguement for and against the banks: have a read…