News

Barclays: The UK’s least popular bank

The Financial Ombudsman Service (FOS) has released new figures breaking down the 106,193 complaints it received in the last 6 months of 2011.

With nearly 12,000 complaints during this period, Barclays was the worst performing bank.

From 1st July to 31st December, the FOS handled 11,524 complaints about Barclays. In 84% of cases, the FOS upheld customers’ grievances. 6,975 complaints related to mis-sold PPI, whilst 3,474 related to banking and credit. The rest involved a range of products and services including investments and mortgages.

There were a total of 20,310 complaints during that period regarding the Lloyds Banking Group, which owns Lloyds TSB, Cheltenham & Gloucester, the Bank of Scotland and Halifax.

PPI complaints accounted for 46,700 cases dealt with by the FOS in the second half of 2011. This was down more than 50% on the number of complaints received in the first half of the year, but, at present, the ombudsman is receiving around 1,000 complaints every day, with this figure expected to increase. In 2012/13, the ombudsman anticipates 165,000 complaints about PPI.

Overall, 72% of PPI complaints were upheld in the second half of 2011, compared with 47% in the first half of the year. This is because the vast majority of PPI complaints are being upheld.

Chief ombudsman Natalie Ceeney indicated that whilst some banks had made an effort to resolve PPI complaints quickly and fairly, others had been less proactive, stating “we now hope to see all businesses who were involved in PPI mis-selling resolving their customer’s complaints fairly, properly and quickly.”

Finding a job is just as hard for graduates as it is for school leavers

With youth unemployment at its highest since the 1980s, new data published by the Office for National Statistics (ONS) shows that the graduate unemployment level is equal to that facing those who leave school after their GCSEs.

In 2011, 25% of 21-year-olds who had completed university degrees were unable to find a job, compared with 26% of 16-year-olds with no qualifications other than GCSEs. The unemployment rate for 18-year-olds with A-levels was lower, at 20%.

Older graduates had less trouble finding work; just 5% of 24-year-olds with degrees were unemployed in 2011. 7% of 24-year-olds with only A-levels were unemployed, rising to 13% for those who left school after their GCSEs.

Charlie Ball is deputy director of research at the Higher Education Careers Services Unit. He said that, although the ONS figures are accurate, the picture they paint is misleading because the number of people leaving education after their A-levels was lower than the number of people graduated from university last year.

Ball explained that “although the number of young people out of work is historically high, the graduate unemployment rate in this recession has not reached the levels it did in the 1980s or 1990s.”

Indeed outlook for graduates may be better than the headline figures suggest; investment firm Skandia has undertaken research which shows that a graduate entering the job market today will earn an average of £1.6 million over 45 years of work, compared with £1 million for an 18-year-old working for 48 years. An individual with GCSEs only can expect to earn £783,964 over a 49.5-year career.

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Survey suggests consumers are becoming more upbeat, but warning signs remain

The latest Markit Household Finance Index survey shows that consumers are more optimistic about the economy now than at any time since April 2010. The index also shows that household finances are at their highest level since December 2010.

These trends have been attributed to falling inflation and a greater willingness amongst employers to increase wages, but consumer confidence will need to continue improving in order to drive any significant economic recovery.

The Bank of England (BoE) has already predicted that consumer spending will grow in 2012, and, along with increased mortgage lending and rising house prices, the Markit survey adds weight to the BoE’s assessment.

Markit economist Tim Moore said: “These positive developments meant that debt levels stabilised and households’ appetite for major purchases moved back to levels not seen since the VAT (sales tax) rise in January 2011,” but he also warned that “wider job market uncertainty is constraining spending even among those seeing their own situation stabilise.”

Meanwhile, a survey carried out by the Charted Institute of Personnel and Development (CIPD) showed that, in the last quarter, employers were more ready to increase employees’ pay than they have been since April 2009. Nevertheless, many continue to approach the matter with caution.

CIPD rewards advisor Charles Cotton said: “While the predicted increases in pay settlements reflects a cautious optimism among members in the private sector that the worst may now be over, uncertainty about how fast the economy will improve is acting to moderate pay forecasts.”

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10% year-on-year increase in mortgage lending

New figures released by the Council of Mortgage Lenders (CML) show that gross mortgage lending in January 2012 was up 10% compared with the same month last year.

There have been year-on-year increases in the amount of mortgage borrowing for the last 6 months consecutively, but the overall amount of activity has been low.

CML chief economist Bob Pannell welcomed the signs of improvement in the housing and mortgage markets, but warned against getting carried away, “given the very low levels of activity we are starting from and the protracted and difficult economic rebalancing that the UK and other countries have embarked upon.”

The upswing may also be, to some extent, the result of first-time buyers looking to get a foot on the property ladder before the end of the concession on stamp duty; the 1% stamp duty rate for first-time buyers moving into properties worth between £100,000 and £250,000 is due to be reintroduced on 24th March.

Moving forward, the CML predicts that, if inflation continues to fall, this will result in a boost to the housing market, with individuals and families regaining some of their financial freedom.

Unemployment continues to increase in the UK, but at a slower rate

The latest figures from the Office for National Statistics (ONS) show that in the 3 months to December 2011, unemployment increased by 48,000 to 2.67 million (a rate of 8.4%). Although this isn’t exactly an improvement – this is the highest unemployment rate for 16 years – it was the smallest leap in nearly a year, which suggests the outlook may not be as bad as some have predicted.

Around 60% of the recent increase in unemployment was accounted for by women, reflecting the impact of public sector cuts, whilst the number of part-time workers who were seeking full-time employment reached the highest level on record, having risen by 70,000 in the last quarter.

Youth unemployment also reached record levels, with over 22% of 16- to 24-year-olds out of work (including full-time students who are looking for a job).

There was also an increase in the number of people claiming Jobseeker’s Allowance – this figure rose by 6,900 in January, taking the total to 1.6 million.

There are perhaps some grounds for optimism, however; the number of job vacancies increased in the 3 months to January 2012, with the total standing at 476,000, but the “weakness in the wider economy” means unemployment will rise “much further,” according to economist Vicky Redwood.

Work and pensions minister Lord Freud referred to “signs of stability” but added “we are by no means out of the woods yet,” whilst shadow chancellor Ed Balls said the government was complacent and compared the situation to the 1980s.

Brendan Barber, general secretary at the TUC, said: “With one in three jobseekers looking for work for over a year, and around six unemployed people for every job, the government’s mantra that there are plenty of jobs out there just doesn’t ring true.”

Inflation fell 3.6% in January

The latest data from the Office for National Statistics (ONS) shows that the rate of inflation, as measured by the Consumer Prices Index (CPI), fell from 4.2% in December to 3.6% in January.

The rate of inflation according to the Retail Prices Index (RPI) fell from 4.8% to 3.9% over the same period.

The CPI rate is the lowest for 14 months, but is still considerably higher than the 2% target set by the Bank of England. The Government predicts that the rate will continue falling in 2012.

A statement released by the Treasury read: “Inflation fell significantly in January for the second month in a row, which is good news for family budgets. The Bank of England and other forecasters expect inflation to keep falling through this year, providing additional relief.”

But shadow treasury minister Owen Smith highlighted the fact that price increases from 2011 haven’t been reversed, whilst incomes “haven’t risen at all.”

Prices are actually increasing at nearly twice the rate of wages, and this is causing real difficulties for those on low incomes, and groups such as pensioners.

In a letter to the Treasury, Bank of England Governor Mervyn King wrote:

“Although inflation is now falling broadly as expected, the process of rebalancing still has a long way to go. Growth remains weak and unemployment is high.”

Some experts forecast that the CPI inflation rate will drop below 2% before the year ends, but this will be of little comfort to families, workers and retirees who are struggling at the moment.

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HMRC issuing fines to over 1 million people for late tax returns

The deadline for filing self-assessment tax returns online is 31st January (extended until midnight on 2nd February this year due to strike action by the public sector union PCS).

If you have any self-employed income, or you have a high income from savings, and you didn’t submit your tax return for the financial year ending in April 2011 in time, you will be fined £100 by HMRC unless you have a reasonable excuse such as bereavement or theft of documents.

Figures show that 1.1 million taxpayers are facing the £100 penalty for missing the deadline. If they don’t pay after 3 months, the fine will increase by £10 a day up to a maximum of £1,600.

This is actually the lowest number of late tax returns since online filing was introduced introduced (last year it was 1.4 million, and the year before it was 1.6 million).

A record 9.45 million forms were submitted on time. Roughly 1.8 million were filed by post by 31st October, and another 7.65 million were filed online before the deadline.

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Office of Fair Trading investigating gym contracts

The Office of Fair Trading (OFT) is undertaking an investigation into gym membership contracts, with a number of unnamed companies set to come under the spotlight.

The watchdog decided to launch an investigation after consumers complained about lengthy contracts and the difficulty of cancelling membership and the High Court ruled that gym company Ashbourne Management had issued unfair contracts lasting as long as 3 years.

In a statement, the OFT said the investigation was still at an early stage, adding that no breaches of consumer protection legislation have yet been identified, and that conclusions on whether the law has been broken won’t be drawn until the investigation has come to an end.

Any companies that have breached these regulations, however, will be forced to modify their contracts, or face fines or legal action.

The Fitness Industry Association (FIA) represents a number of companies operating gyms and fitness clubs. The FIA chief executive, David Stalker, said his organisation was “happy to play an advisory role in this investigation process,” and insisted that FIA members place consumers “at the heart of their offering.”

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Rail passengers want better value for money

Passenger Focus, the independent rail consumer watchdog, has conducted a survey of more than 30,000 British rail passengers, and found that 54% aren’t satisfied with the cost of their tickets. This is up from 51% a year ago.

84% said they were satisfied with their overall journey, but the Association of Train Operating Companies has accepted that costs need to be reduced and services improved.

Anthony Smith, chief executive of Passenger Focus, said the results of the national survey would provide an impetus for the rail industry and the government to “focus resources and effort where passenger satisfaction remains in the doldrums.”

30,590 passengers were surveyed between 1 September and 18 November 2011, before ticket prices increased by an average of 5.9% (and up to 11%), and new unregulated fares were introduced.

Michael Roberts, chief executive of the Association of Train Operating Companies, acknowledged that “the whole industry needs to focus on tackling costs as well as improving services” and apologised for letting passengers down.

Tim Shoveller, MD at South West Trains, said that above-inflation fare rises had been sought by successive governments looking to reduce the tax-funded subsidy for the industry and ensure investment in the railways continued.

He pointed out that plans have already been set out by the industry to cut costs by £1.3 billion a year by 2019. If this is achieved, fares would not continue rising at such a fast rate.

Passenger satisfaction varied significantly depending on the area. Satisfaction scores for specific routes operated by different companies varied from 72% to 95%.

The lowest overall satisfaction scores were for National Express East Anglia (NXEA), with an average of 77%, whilst the best performing operator was Grand Central, with a 95% satisfaction rating.

Across the UK, satisfaction with punctuality has dropped from 82% last year to 81% now.

Do you travel by train? Let us know what you think of ticket prices and the overall experience.

Graduate salaries set to increase?

The Association of Graduate Recruiters (AGR) has surveyed over 200 blue chip companies, and found that the average starting salary for graduates is likely to rise to £26,000 this year – a 4% increase on 2011. However, a 1.2% drop in the number of graduate vacancies is also predicted.

The salary increase represents the biggest rise since pre-recession levels – the average graduate starting salary has stayed fixed at £25,000 since 2009.

In 2010-11, investment banks offered the highest starting salaries, averaging £38,250. This year, however, a 41.7% reduction in the number of graduate vacancies is expected in this sector.

As data was only gathered from blue chip companies – the likes of Accenture, M&S and UBS – the AGR report isn’t an accurate reflection of the overall situation for graduates. Data collected by the Higher Education Careers Services Unit (HECSU) indicates that full-time salaries for new graduates are between £17,720 and £23,335.

Some employers are set to buck the trend of falling recruitment rates; companies in the IT and telecommunications sectors anticipate the biggest increase in the number of graduate vacancies this year, with the figure expected to increase by 32.5%. Similar increases are also predicted in the construction sector, the public sector, and amongst consultancy firms.

Although cost-cutting and restructuring is resulting in redundancies in many areas, industry leaders maintain that graduates are still regarded as an important source of fresh talent.

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