Top money stories - 8th - 14th October 2007

Top Tip:

Christmas is a time of year that many look forward to - a time for enjoying the company of friends and family. However, it is also the time of year that we’re most likely to overspend. According to research from Cornhill Direct, each year, one in five people are still struggling to break out of debt in March, and one in ten have still not paid off their debts by the time next Christmas comes around.

Avoid Christmas spending hangovers by setting a realistic budget and making sure you stick to it. Even though the shops are already full of decorations and gifts, there are still two months to go before Christmas arrives, leaving you eight weeks to save up some money for gifts, food and celebrating.

The Financial Week that was...

Monday 8th October

8 of 10 people allow their identity to be stolen – Last week we revealed that police had foiled fraudsters’ attempts to use email in financial scams. The start of this week’s news also included headlines about fraud. A study conducted for National Identity Fraud Prevention Week, a government backed campaign that aims to make sure that people keep their personal details safe, found that eight out of ten households throw away personal information with their rubbish that could lead to their identity being stolen. Criminals can use the information to do a variety of things, from opening bank accounts to illegally applying for credit cards or mobile phones. It is important that documents that contain personal information are kept safely at home or are shredded if they not needed anymore.
For more information on how to prevent ID Fraud check out the National Identity Fraud Prevention Week website at www.stop-idfraud.co.uk.

100% Mortgages nearly double – The number of mortgages available that allow people to borrow the full value of the property has risen from 92 in April 2007 to 160 according to online mortgage company mform.co.uk. With the increasing signs that the housing market is cooling and, the often high, fees that mortgage owners have to pay, taking out a 100% mortgage means that there is an increasing likelihood that the value of your mortgage will soon be higher that the value of your property – a situation known as negative equity. This is not a situation that you want to end up in.
Check out the Mortgage Calculator on the Moneybasics website to obtain approximate figures for how much you can afford to borrow if you are thinking of taking out a mortgage.

Tuesday 9th October

Inheritance Tax threshold raised to £600,000 – Alistair Darling, Chancellor of the Exchequer, released his Pre-Budget report on Tuesday. Check out the Q&A on the Pre-Budget to find out how the changes affect you.

Thursday 11th October

Price Comparison websites risk misleading consumers – An independent research and policy organisation, the Resolution Foundation, has advised that online companies that compare financial products should sign up to a voluntary code of conduct on accuracy and impartiality. One of the key reasons for this is the current lack of information available regarding the relationships between the websites and the product providers. It is important to know if there are existing relationships that could lead to the unfair favouring of one company’s products over another’s. They argue that increased transparency is needed. While it may seem like unnecessary work, using a couple of the price comparison websites instead of just one of them will help you to get a more balanced view of the products available on the market.

House prices continue to fall – Last week Halifax announced that house prices fell by 0.6% in September. On Thursday, the Royal Institution of Chartered Surveyors’ revealed that, in the three months to September, house prices fell at their fastest rate in two years. Furthermore, future sales forecasts are at their lowest level in four and a half years on the back of the credit crunch, rises in the base rate by the Bank of England and the introduction of Home Information Packs (HIPs). HIPs are a set of documents that are prepared by the seller of a property. An Energy Performance Certificate and sale statement are just two of the documents that need to be included in a HIP. The HIP is an added step int the process of selling a house and so has helped contribute to the slowdown in sales forecast for the housing market.

Late payment charges in the pipeline for bill payers – The strike action brought about by Royal Mail employees has led to a build-up of over 60 million mailed items. If you have posted cheques over the last two weeks you may be in line for late charges. If you have credit card payments or utility bills that you have sent via the post during this time, it is important that you get in contact with your lender or service provider to let them know that the payment is on its way.