Posts From February, 2013

Moody's downgrades the UKs AAA credit rating 

Tuesday, February 26, 2013 11:27:00 AM Categories: Economy

The UK has lost its triple-A credit rating for the first time since the 1970s. Moody's, one of the three biggest credit rating agencies in the world, has downgraded its assessment of the outlook for the UK economy.

Moody's now expects that economic growth will be "sluggish" into the second half of the decade. This means it will take longer for the government to reduce its budget deficit - the amount it has to borrow every year because it is spending more than it receives in tax revenue.

The lack of growth makes cutting the deficit more difficult because when an economy is not growing, less tax is coming in from companies and individuals, while the government has to spend more on welfare payments, such as unemployment benefit. And as the UK's debt problem will take longer to get under control, there will be a deterioration of the country's "shock-absorption capacity".

In other words, it will make it harder for us to cope with any external problems, such as a worsening of the crisis in the eurozone, our main trading partner.

UK residents are the worst at saving for retirement 

Wednesday, February 20, 2013 10:20:00 AM Categories: pensions

The UK is the worst country in the world at saving for retirement, data from a new report into global savings shows. In the HSBC report, “The Future of Retirement: A New Reality”, the average Briton is found to spend 19 years in retirement but with savings that will run out after just seven. It means the average Briton’s savings only covers 37 per cent of their retirement income with the rest being covered by other income such as the state or employment.

On average globally people are storing up enough to pay for 56 per cent of their retirement which is an average of 18 years, leaving an eight year shortfall.

In the report, HSBC group head of wealth management Simon Williams says: “There are, of course, many obstacles to saving, including the lack of a regular savings habit and the financial impact of unexpected life events.

“Unfortunately, the impact of saving too little or too late will only become clear in later years, when people find they are retiring without the necessary income to support an active and fulfilling retirement.”

 

Long-term mortgage rates fall to record lows 

Sunday, February 10, 2013 4:43:00 PM Categories: Mortgages

Interest rates on some new mortgages fixed for five years have fallen to the lowest levels on record. There are currently 16 lenders offering mortgage loans at less than 3%, if borrowers can put down large deposits.

Rates below 3% were first launched last summer, typically at either 2.95% or 2.99%. Even cheaper deals have now emerged, thanks to the Bank of England's Funding for Lending Scheme (FLS), which was launched last August. This is offering up to £60bn of cheap funds to banks and building societies, if they then lend the money to individuals and businesses.

Ray Boulger, of mortgage brokers John Charcoal, said that FLS was definitely driving greater competition among lenders. "The number of very cheap deals has been rising for the last few weeks," he said. "We have also seen lenders cutting rates for people with just 20% or even 15% deposits."

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George Osborne backs bank break-up powers 

Sunday, February 03, 2013 11:41:00 AM Categories: Economy Regulations

The UK's big banks will be separated if they fail to follow new rules to ring-fence risky investment operations from High Street outlets, Chancellor George Osborne has announced.

He has said taxpayers are angry at banks' behaviour and will never again be expected to bail them out.

His speech comes on the same day the government introduces its Banking Reform Bill in Parliament.

Customers will also be able to switch bank accounts to a rival within a week.

Mr Osborne also said the banking system was not working for its customers, particularly small businesses and individuals.