Thursday, 26 January 2017

Top cash machine providers

Here's the pecking of the of the biggest operators of free cash machines. It shows how the balance of power has changed. Independent ATM companies occupy two of the top three places. They're the ones outside supermarkets, railway stations and many garages and convenience stores. It means that banks have to pay them 25p a time if their customers find themselves at a shop and want to take out some cash. With so many cash withdrawals now being made at convenient spots where people happen to be shopping or travelling, it means banks are having to pay large sums to other ATM operators - and some bankers don't like it.

10,387 free cash machines - Cardtronics (Independent)
8,127                                     RBS/NatWest
5,821                                     Note Machine (Independent)
4,948                                     Lloyds/Halifax/Bank of Scotland
4,019                                     Barclays

In fact non-bank "independents" operate 2 in every 5 free cash machines.

Tuesday, 24 January 2017

Friday, 25 November 2016

Bereavement rights for unmarried parents

Earlier this year Claire Harris told me about the terrible loss of her partner, Gary, and the shock of finding that, because they hadn't been married, she and her kids were not entitled to bereavement benefits.

This was even though they had lived together for 16 years and had 3 children together before he died suddenly of cancer at the age of 36.



Now she is starting a campaign to raise money for a legal case. If she wins, she is hoping it will pave the wave for better rights for unmarried parents.

Tuesday, 22 November 2016

Bank which manages your life...

Here's a sneak preview of what our future banks might do for us:

*start a savings pot for friends' birthdays or a holiday, after checking your Facebook or what air tickets you're looking at.

*tell you what energy or insurance deals will save you money and switch you over

*alert you that an account you're sending money to might be fraudulent and block the payment temporarily

*tell you you're paying for two music services which overlap and offer to cancel one of them

*warn you to stop spending if you've used cards, cash or loans too much, even if they're with other banks

These are some of the features -- useful to some, a bit creepy to others -- to be offered by the new app-only bank, Tandem, one of its founders, Ricky Knox, has been telling me.

Tandem is in development-mode, operating credit cards and loans for friends, family and early backers before launching to the public some time next year.

The plan is to offer a current account but, interestingly, Tandem envisages including your existing current account from another bank within its own app.

That might sound awkward and you wouldn't be able to operate the account normally as things stand.

But new standards on open banking will allow banks and internet start-ups to combine a variety of accounts one platform.

This makes complete sense if you are a new bank challenging the High Street players, because people are still very sticky when it comes to switching current account providers.

If you can't persuade them to switch, why not move their old account lock, stock and barrel onto your app?

The new app banks or would-be banks, like Tandem, Atom, Monzo and Starling, have slightly different approaches but the key for all of them is the smartphone, which Knox argues provides greater security. 

After the recent security breakdown at another challenger bank, Tesco, that's an important assertion to make.

Knox says at the customer's end safety is enhanced because they have to use a fingerprint to log in on a mobile, while - behind the scenes - the service is so automated there is less risk of human failure at head office.

Let's hope he is right!

Friday, 11 November 2016

Pound helped by Trump effect

The pound is 6 per cent up against the euro in the past few weeks, at €1.16 and it's up against the dollar as well at $1.26.

It's still sharply down since the Brexit vote, but first the court decision that the government must get parliament to trigger Brexit and now the Trump victory have caused a little bounce.

Here's some comment from Rupert Lee-Browne, Chief Executive of currency firm Caxton FX.

"For holidaymakers it's a little bit of good news.
This is definitely a rebound after some very positive comments from President-elect Trump.
He's indicated he wants America the UK to continue with the special relationship and that has lifted spirits in the currency market.
There's also an uplift from talk about higher inflation in the UK which might lead to higher interest rates and there may be room for the pound to move higher.
But there is always the worry about Brexit and that could bring sterling down going forward."

Pound helped by Trump effect

The pound is 6 per cent up against the euro in the past few weeks, at €1.16 and it's up against the dollar as well at $1.26.

It's still sharply down since the Brexit vote, but first the court decision that the government must get parliament to trigger Brexit and now the Trump victory has caused a little bounce.

Here's some comment from Rupert Lee-Browne, Chief Executive of currency firm Caxton FX.

"For holidaymakers it's a little bit of good news.
This is definitely a rebound after some very positive comments from President-elect Trump.
He's indicated he wants America the UK to continue with the special relationship and that has lifted spirits in the currency market.
There's also an uplift from talk about higher inflation in the UK which might lead to higher interest rates and there may be room for the pound to move higher.
But there is always the worry about Brexit and that could bring sterling down going forward."

Friday, 21 October 2016

When will interest rates go up?

Plenty of people are wondering what might happen to interest rates - and hence the cost of borrowing and returns for long-suffering savers - if inflation really does pick up to the extent that some economists fear.

There are forecasts of 3% or even 3.5% inflation by the end of next year, up from 1% now. Higher inflation usually means higher interest rates.

However, the normal rules may not apply this time. The Bank of England, which controls interest rates in the UK, may keep them ultra-low.

Why the connection between inflation and interest rates? In the past rising inflation has been seen as a danger sign, of a country which can't pay its way or an overheating economy. Central banks have used higher interest rates as a tool to cool things down.

Here, the Bank of England has been using very low rates to make borrowing cheap and try to warm the economy up.

And across the world interest rates have been used as a sort of shield to defend a currency against a battering in the financial markets. The thinking is that investors might be more willing to buy your currency if you offer a better return in the form of a higher interest rate.

The story so far is that the pound has fallen by 18%, with a likely knock-on effect on prices for the goods we import, including food, clothing and electronic gadgets. So how will this play out?

Here are two scenarios: the "sterling crisis" and "low rates, whatever".

Plenty of newspapers have described what we have seen in the past few weeks as a sterling crisis. But it isn't really. Because, although the pound has fallen sharply, there has been no feeling of desperation about how to rescue it or prop it up.

Some welcome the drop as a way of helping exporters. It makes their goods cheaper for foreign buyers. The Bank of England has let it happen, partly for the same reason, partly because inflation is still well below the national target of 2%. The Bank governor, Mark Carney, has even said he would be willing to see inflation rise higher and still keep Bank rate low. It's currently 0.25%.

That doesn't mean that a sterling crisis might not occur at some point, in which worries about Brexit cause a much steeper fall, threatening much higher inflation. Or in which the public finances deteriorate, or the shortfall on our trade with the rest of the world gets dramatically worse.

Currency experts don't buy this crisis scenario at the moment, though many do see the pound drifting lower.

For what it's worth, anyone who has lived through a foreign exchange storm in a South American country will recognise what happens. Economic problem - currency falls - central banks pretend it's not happening - currency disappears through cracks in floor - central bank raises interest rates sharply - recession - country forced to live within its means.

The low rates whatever scenario features inflation rising but the Bank of England sitting on its hands, possibly after shaving a tiny bit off Bank Rate again early next year.

The thinking behind this is that the Bank can tolerate above target inflation, keeping rates low to support the economy and jobs through the Brexit uncertainty.

If there is anything that the last few years have taught us about the Bank's thinking, it is that its Monetary Policy Committee, the MPC, watches wage increases very closely as a long-term indicator of the inflationary trend.

Wages are increasing, but not very fast and it is hard to see them taking off while employers shift nervously from foot to foot, watching the course of Brexit.

Another factor is today's news that public borrowing is coming down slower than hoped. So it would be harder for the new chancellor, Philip Hammond, to ease off on taxes in some way to give the economy a boost. So reliance on the Bank keeping interest rates low will continue. 

If interest rates are going to stay low, how will that affect your finances?

If you are starting a mortgage or re-mortgaging, you want to be on the lowest rate, obviously. But you might think carefully before paying a big arrangement fee for a short term fix.

Savers need to hunker down for a longer period of low returns. Tempting interest rates on current accounts, like Santander's, are being cut already.

Gas bills. We're at the mercy of the markets here: the pound and wholesale energy prices, which are in dollars.

Spending. Prices of imported items like cookers and dishwashers are already rising by 5-10%. If the pound doesn't recover, expect more increases.

Holidays. Cheaper at home.