Bankers to face jail time… Ooooh, that’s more like it!!

A report by the Parliamentary Commission on Banking, published today, has recommended that “senior persons” who run banks in a “reckless manner”, should be jailed and have their bonuses clawed back… nice!!

According to a report by a cross-party group of MPs and peers, led by Andrew Tyrie MP, bankers had escaped “personal responsibility” for their actions following the banking collapse, and said that radical reforms are required to restore trust in the UK banking sector. “Where the standards of individuals, especially those in senior roles, have fallen short, clear lines of accountability and enforceable sanctions are needed,” said Mr Tyrie.

The 576 page report, which is the fifth and final publication by the commission, brings to an end a 6 month investigation during which it’s members asked 9,000 questions of hundreds of witnesses, during 73 sessions which lasted a total of 161 hours.

The key recommendations of the report are:

Introduction of a new Senior Persons Regime, to ensure that the most important responsibilities within banks are assigned to specific, senior individuals so they can be held fully accountable for their decisions
Making reckless misconduct in the management of a bank, a criminal offence carrying a custodial sentence
For bonuses to be deferred by 10yrs so that they can be clawed back retrospectively, even after the senior persons have left their position
Introduction of a new Licensing Regime underpinned by new Banking Standards Rules to ensure that senior persona are subject to the full range of enforcement powers
Replacing the existing inadequate and confused statements of principle with a new set of Banking Standards Rules

Recommendations by the commission, which was set up last year in the wake of the Libor-rigging scandal, which require legislation are expected to be added to the Banking Bill that is currently going through Parliament, meaning a criminal law for bankers could be in place before the end of 2015.

We’re still digesting the contents of the report and will no doubt be discussing it in more detail in the coming weeks!

How to Choose the Right Credit Card

Credit cards are found everywhere nowadays and it has never been easier to fill in an application and have one delivered to your door within a few days.

Even individuals with a poor credit profile can often get small amounts of credit thanks to companies that cater specifically for people looking to improve their credit score.

If you’ve decided to get a credit card then it is important to make sure that you’re getting the best possible deal for you, so here are some tips to help you choose the right credit card:

How will you Use the Card?
The card you choose will ultimately depend on how you plan to use it. If you want a credit card to pay for balance transfers, for example, it would be wise to opt for a card which has a low interest rate specifically on balance transfers. Are you going to pay your balance in full each month or do you plan on carrying it over from month to month? This will determine if you opt for a charge card or perhaps a card with a low interest rate.
Use Comparison Sites
Comparison websites such as Credit.com, IndexCreditCards.com, and CardRatings.com provide an excellent resource for comparing the various features of different credit cards. This makes life so much easier because all of the information will be in one place in an easily-digestible format, enabling you to make a fair and objective comparison.
What is the Grace Period?
The grace period simply refers to the amount of time you have to pay your balance in full each month before additional charges and interest are applied. Many cards typically offer a one month or 28-day grace period; however, some offer a longer period so this is something to look out for if you think you may need more time to pay your balance in full.
What is the APR?
The annual percentage rate or APR is the amount of interest applied to balances carried over past the grace period mentioned above.
Credit cards often have a different APR for balance transfers and purchases so make sure you’re aware of the different rates for each to ensure you’re getting the best rate for your purposes.
What is the Credit Limit?
If this is your first credit card, you will probably be given a lower credit limit but this can really depend on your credit history.
The spending limits imposed will vary from card to card – as will the fees imposed for going over your limit – so make sure you’re getting a limit that is appropriate to your level of spending, and check that the over-limit fees are not excessive.
The best way to avoid spending beyond your credit limit is to always keep your balance fairly low and set a percentage amount that you will never allow it to exceed. Many card providers also send alerts when you are within a certain range of your limit so this is definitely worth taking advantage of.

Guest contributor: Oliver Harding has written many articles for thebestdiscountcodes. He covers money saving tips in addition to providing great money management advice.

How To Keep Your New Business Afloat

After all the hard work that goes into setting up a small business, including establishing contacts with customers and achieving the first sales, it is unfortunate that many start-up businesses find the going to be too tough and have to cease operations before reaching their second anniversary. It is difficult to run a small business and the prevailing financial climate can make it very tough indeed; however, there are some tactics that can help to keep a business afloat even in such stormy financial weather.

Difficulties of the current climate

The national and international economy at present appears to be stacked up against the interests of small businesses. It can seem that corporations and large companies have distinct advantages in terms of taxation legislation. For example, it has been reported in sources such as Recruiter news online that falling foul of the distinction between contractor employment and self-employment can have tough financial consequences under recently amended tax laws. Moreover, small businesses are finding it very difficult to receive financial backing from banks and other lending institutions, which are generally in a phase of being very conservative about small business loans. All of this is against a backdrop of low demand and variable consumer confidence.

Tips for the entrepreneur

Entrepreneurs can mitigate the risks inherent in the current climate, however, by taking some steps to consolidate their business position. Some small businesses call upon the services of an umbrella company to assist with several of the financial and taxation aspects of running a firm and ensure good support for entrepreneurship. On a day-to-day basis, businesses need good levels of sales, and this often means prioritising good customer relations so that the flow of sales continues and hopefully grows. In turn, this requires effective and well-targeted advertising.

Practically, these elements can be achieved with some simple actions. Holding face-to-face meetings with individual customers, to gather feedback and explore possible expansions in their needs, is one of the most obvious methods available. For many businesses, an increased focus on the online side of the business and a reduction in costly physical premises is another way to balance the books between income and expenditure. Furthermore, it is necessary to maintain vigilance to spot ways to improve business efficiency and to find possible new business outlets and revenue streams. Many companies have survived over the years by shifting their strategic position rather than remaining locked into a single market area.

The need for efficiency

Maintaining and improving business efficiency is, indeed, one of the key issues in running a successful business. There is little point in spending time, and paying for it, if somebody else has already covered the task in question. When a small business involves several people or employees, the tasks and roles need to be clearly defined and co-ordinated, to avoid unnecessary overlap and to ensure that each person can focus on the things that they do best. Focus, organisation, and efficiency may sound a little like business buzzwords, but they can be the key to small business survival.

The Numbers Behind the PPI Claims Scandal

As you know, we love a good infographic here at Financial Reform! And having followed the Payment Protection Insurance (PPI) scandal closely, we’re delighted that someone has finally taken the time and effort to produce a visually pleasing yet informative infographic about the controversial subject!

It’s no surprise, looking at those numbers, that PPI mis-selling was such common practice within all branches of all banks across the country… 87% commission paid to financial advisers for selling the policy – WOW!! But they’re now paying the price as it’s estimated the the total refund bill will be approx. £25billion… making it the biggest compensation scheme ever in the UK.

More information about the facts and figures behind this infographic can be found on the PPI Claims Company website.

Should everyone have a mortgage?

Jumping on the property ladder is a dream for many would-be first-time mortgage buyers who want a slice of bricks and mortar success. Fresh statistics from the Council of Mortgage Lenders have found that the amount of mortgages have increased by 12%. This shows the appetite for first-time mortgages in the UK as lenders start to come back to the industry after the belt-tightening of the recession where consumers looked for cash from sources like payday loan providers. Let’s look at the advantages and disadvantages of first-time buyers in the mortgage market:

Pros

Mortgages make everyone investors: Property is an investment in the same way that art is. It’s really important for people to have the chance to own a slice of property to protect them in the future and to get on the property ladder. The positive effects of mortgages are that it allows everyone the chance to be investors in their own financial portfolio and to take control of their ability to shelter themselves.
It’s better to do it now: Time plays a huge factor in the success of first-time buyers and it’s really important to get in on the act before prices for homes rise and the effect of inflation affects your ability to get on the ladder. Many people subscribe to this way of thinking and this is why many first-time buyers look for additional help from family to get a mortgage.

Cons

It can be expensive: Being a first-time buyer is not necessarily cheap regardless of how small the deposit can seem especially coupled with savings and money from inheritances. You need to consider if you can afford having a mortgage. If you lose your job or you become sick, you should look at whether you can pay your mortgage to avoid getting into debt.
It eats into savings: Paying off a mortgage for a set amount of years means that it can be more difficult for you to save especially if you have dependants that you need to pay for. Always have emergency savings in place before you jump onto the property ladder in case times get difficult, you then know you are not eating into your personal finances.

A mortgage is seen as a right that everyone is entitled to. In the UK we love property, and mortgages come as the glossy packaging to dream properties for first-time buyers. Ensure that you can financially afford the mortgage and start your property journey today with thorough planning.

Working as a Freelance Writer? How Much Should You Really Be Charging?

Many freelancers begin without fully understanding how to determine their charges. Some charge so little that there is no feasible way to earn what they need.

It is important that you know what rates are appropriate for the services that you provide. Understand that what you can feasibly charge will depend highly on your level of expertise. Those with more experience and more expertise in a specific subject matter will be better able to command a higher price.

That being said, there is a way that you can determine how much you need to charge, in order to earn the income that you require.

How Much You Need

Before you can determine how much to charge per hour, project or even per word, you will first need to determine how much you need to earn to live comfortably. It is essential that you set your own rates as opposed to allowing your clients to pay you what they want. Some clients would take advantage of your insecurity and practically pay nothing for your hard work.

Spend some time calculating your yearly budget and ensure that you are including everything that you pay out each year. This calculation should include things like rent, utilities, and food, etc.

According to the latest figures by the Office for National Statistics (ONS), the average earning of a full-time worker in the UK is £26,500. The study found that since April 2000, average annual pay for those in full-time work has risen by 40% from £18,848.

Divide Your Calculation

Once you know how much you spend yearly, divide that number by 12. For instance, if you spend £24,000 each year on living needs then you will divide that number by 12 which will give you an income need of £2,000 per month. This is the amount of money that you need to clear every month after taxes, and other expenses have been paid.

This should give you a goal of the amount of work you need to win. If you need help working out your actual take home pay after pension contributions etc., try using a take home pay calculator.

Hourly Rate Calculation

Now that you know how much you need to make monthly, you can determine how this calculates hourly. Keep in mind that most freelance writers do not work a typical 40 hours each week, so dividing by that figure is not going to help.

You have to allow time for interviews, research and networking as well as proofreading, editing and other tasks. You are not going to be spending 40 hours every week simply writing. There are other tasks that also have to be considered.

If you are like most writers, you will spend around 20 hours each week actually writing. If you need to make £500 per week to meet the £2,000 per month income requirement, you would divide that income by the 20 hours that you will be working each week which gives you £25 and this is what you need to be charging per hour.

How many articles can you write in one hour? Obviously this will vary depending on research and word count. What kind of content is it- a landing page, a link building article or a press release? Landing page content tends to charge more.

If you choose to charge on a per word basis, we recommend £2 per 100 words. This equates to around $2-$5 per 100 words but please note, if you are going to charge $5 per 100 words, the article needs to be well-researched, error free, and include at least one picture that has a Creative Commons license.

Once you have determined what you need to make in a year, you can better determine what you need to be charging clients for your time. The calculations above are simply examples and you should change the numbers as needed, to meet your specific income requirements.

Ask yourself, if you are just starting out, can you really charge top rate fees for your lack of experience?

This article was provided by Nixon Williams, the UK’s leading contractor accountants serving freelance contractors, interim managers and consultants. Visit them at www.nixonwilliams.com/to find out which business structure is right for you.

What illnesses will qualify you for financial help?

If you can prove that sickness or disability prevents you from working a full time week, there are benefits available for you such as tax benefits, including tax credits. The benefits available to you depend on your ailment: difficulty in walking around, unable to work or if you care for someone who is sick.

Image courtesy of Marin / FreeDigitalPhotos.net

Additionally, if you can work a number of hours but have very low income, there is working tax credits available to boost your weekly income. As a homeowner, getting housing benefit and council tax benefits are critical if you are unable to pay your mortgage.

The Department for Work and Pensions runs a telephone line so you can ask about benefits based on your illness. It could be a serious progressive illness, or be terminal; perhaps a doctor has been forced to issue a potential period of no more than six months to live?

Here are the illnesses and qualifying benefits available:

Sickness from injuries

If you are disabled, deaf or have become ill purely due to an accident at work, the Industrial Injuries Benefit will be good financial assistance. This also includes disease as a result of being at your workplace. You may be able to gain Disability Living Allowance in addition to this benefit.

Other qualifying illnesses include cancer, asthma, spinal cord injury, and Alzheimer’s disease.

Mentally or Physically Disabled

If mental or physical disablement ails you, there is Attendance Allowance which can pay for someone to visit your home and provide care services. Paying for a carer becomes ever important for people in their old age and if you are over the age of 65, this benefit offers financial support.

There is also the Employment and Support allowance which can top up these benefits to help you avoid care home fees.

Employment and Support Allowance

This benefit is available for you if you are unemployed, employed, or self-employed. If you can prove that you are unable to attend work or find work due to your illness or a disability, the Employment and Support Allowance can help; provided that you are below the state pension age, and not already in receipt of jobseeker’s allowance or statutory sick pay, you are eligible to apply.

Bio: The article was written by Cheselden, who offer professional advice on how to fund your care home fees, as well as refund fees that have been wrongly paid. We fund ALL of our cases ourselves which means we only take on a claim if we fully believe it will be successful, and there will be absolutely no cost to you if the claim does not get approved. Give us a call or fill out the enquiry form on the website.

Budget 2013: same challenges, same measures in a bid for long term growth

The Chancellor of the Exchequer’s budget last week has received mixed reactions; some business leaders and insiders consider the provisions a step forward, while others are stinging in their criticism of it.

At the dispatch box, George Osborne gave a brave performance. In presenting some optimistic figures, he still revealed that public borrowing is set to rise marginally over the next few year, accompanied by a fall in growth, from 1.2% to 0.6%. After promising in previous years that the deficit is being reduced, and will be gone by 2014/15, it will now be eliminated by 2016/7. This was just the prelude to more government cuts.

Amongst those cuts, a 1% public sector cap on pay will remain. Most government departments will see their budgets cut by 1% each year for two years; education, health and international development budgets will be ring- fenced however. A further financial burden to each department is that

£11.5bn in cuts has been announced for 2015-16.

For the public sector, it is not all doom and gloom. Transport and infrastructure, both public and private, will see an extra £3bn in 2015-16, and will receive in £15bn in total by 2020. This comes after investment in aerospace and related industries was announced. Investment in shale gas exploitation will get tax allowances, and the Midlands pottery industry will be exempt from climate change charges. Mr. Osborne also fully endorsed Lord Heseltine’s proposals plan for a regional fund to stimulate economic growth in the region; this measure is fully supported by the Liberal Democrat coalition partners. On environmental matters, tax incentives were announced for ultra low emission cars.

For the military, reeling after cuts in personnel, projects and future procurement projects in recent years, after praising their courage, Mr Osborne announced that the recommendations of the Armed Forces Pay Review Body would be adopted, bringing with it an exemption from “progression” pay limits. Indeed, Mr Osborne went further, announcing increased funding for Combat Stress, Help for Heroes and similar charities; this would mostly be funded by bank fines from the Libor scandal.

Reflecting the fact that the Bank of England will see new management later this year as Canadian Mark Carney takes over from Sir Mervyn King, the rate of inflation was left at 2%. The Bank of England’s remit is to be altered so it can tackle growth in addition to inflation and currency stability. These measures give Mr. Carney a lot of scope and flexibility when he takes over to implement changes to stimulate the economy.

Gloom aside, Mr. Osborne stated that his budget was in favour of British businesses; and it was. In measures designed to get businesses trading and growing, corporation tax was cut (to 20% from 21%), with tax reliefs for businesses who invested in social enterprises. Government procurement from small to medium businesses (SME’s) is to rise, and stamp duty on certain shares is to be abolished.

The real boost for business was over National Insurance. A new Employment Allowance will cut National Insurance bills for businesses by £2,000, with 450,000 SME’s paying no NAtional Insurance. With the extra money, more staff can be hired, and more money can be invested in growth or procurement strategies.

In a measure designed to stimulate both the property market and first time buyers, yet another government scheme was announced. Government backed interest- free loans, worth up to 20% of the value of new-build properties- will be available, and shared equity schemes will be be expanded. Again government- backed, banks will offer and underpin £130bn of new mortgages. Coming into affect from 2014, these measures are particularly aimed at first time buyers; after previous and similar government interventionist schemes, whether these schemes will in reality stimulate the property market remains to be seen.

As a reminder of recent high profile scandals, tax avoidance and evasion agreements will be signed with other jurisdictions, particularly in the Channel Islands, aiming to get back up to £3bn in taxes. Such matters of overall financial policy aside, families and households will be directly affected by some budget outlines.

Fuel duty- set to rise by 3p in September- will remain the same for now. Beer duty- set to rise by 3p in April- will instead be cut by 1p. An annual rise of 2% in beer linked to inflation will stop, but wine, cider and spirits will still have the same “duty escalator” as before applied, as will tobacco duty, which will rise to 2% this year.

The big break for taxpayers is that the personal allowance (the threshold at which taxpayers start paying tax on earnings) will rise, reaching £10,000 by 2014. For families, the proposed single flat- rate pension of £144 a week will come into force from 2016, a year earlier than originally planed.Additionally, from 2015 a tax relief of 20% will be placed on childcare, up to £6,000 per child.For those who bought Equitable Life policies prior to 1992, and lost money, there will be payments up to £5,000.

The Chancellor was criticised for bringing before Parliament a Budget of “much of the same”. Similar to pat budgets, cuts in public spending were once agin announced. However, this was counterbalanced by measurers designed to boost business, and more efforts to re-energise the property markets. Family and business friendly policies were central to the Budget, and will improve the financial prospects of families and businesses alike when they come into effect.

However, the figures and measures in George Osbornes’s budget show that Britain will be in a deficit and in debt for longer now. The immediate relief provided by some measures in the budget are counterbalanced by the stark reality that Britain’s economic problems will last for longer as some recent economic measures are not working. Stimulating a flagging economy (with European economic worries as a backdrop), reducing the deficit, lowering unemployment, establishing economic security again, and similar will take more time and effort form government and the private sector alike.

Payday Loans- New Regulations

Payday loans and the dangers of debt are the current hot topic; today it has been everywhere on the news, radio and internet. Everyone is well aware that the current economic climate is far from favourable – despite the government’s attempts to tell us all the recession is on its way out. Wages are flat whilst inflation just seems to keep rising and the everyday family are finding it difficult to make ends meet. The latest figures suggest, not surprisingly, that more people are turning to credit as a way of tiding themselves over, and payday loans are the way many people are choosing.

The government today announced its plans for intervention in the conduct and practices of the payday loans industry. This follows a lengthy investigation by the Office of Fair Trading, which found many inadequacies in the current services provided many such companies. Presently the OFT holds the power to revoke a company’s licence for credit if it is proved unfit to hold one, although this power will next year be passing on to the new financial regulator, the Financial Conduct Authority (replacing the FSA).

Jo Swinson, the government Under Secretary of State for Employment relations, Consumer and Postal affairs, stated : “We are clear that no-one should be lured into using payday lending, and people should have the tools to make informed decisions about the help on offer.”

The new regulation will impose hefty fines on payday lenders if they are in breach of the tough new codes of practice, which include limits on the rates of interest that can be charged and limitations to the advertising of payday loans on daytime TV. They also will be required to make their charges clearer in their advertising. “Please make sure that you only apply for a payday loan if you know you can afford to repay the amount borrowed on your next pay day” are the words Payday Loan Direct say on their website, but not all companies are clear on the appropriate usage of their services, and this is increasingly problematic as many vulnerable people are getting into debt they simply cannot afford.

UK Households Feeling The Burden Of Debt

The Office for National Statistics recently conducted a study into the change in household debt pre-recession compared to the first few years of it coming into effect. The research was named the Wealth and Assets survey and focused on the years 2006-08 and 2008-10.

The research found the median amount borrowed between 2006-08 and 2008-10 increased from £400 to £3,200. Therefore an average UK household owed £3,200 on credit cards, overdraft or loan during the time Britain hit recession. Credit and store cards that are not settled each month, overdrafts and all forms of fixed-term loans are categorized as household financial debt by the ONS. Mortgages however are not included.

£94.7bn is the figure for the total debt, excluding mortgages, that Britons had to deal with between 2008 and 2010. Half of all houses included in the study believed that their debt was a burden.

The figures show the debt burden for households in the UK rose by 10.3%. This rise is not however applicable for those living in London. Elsewhere, for example in the North-West, debt increased by 41.7% and by a third in the East Midlands. The highest amount of household debt at £4,000 was found in the South-East, whereas Welsh household had the lowest at £2,000.

“It seems reasonable to suspect that household debt has risen further since 2008-10, with people’s purchasing power being squeezed by extended weak income growth and elevated inflation”, said Howard Archer, chief economist at IHS Global Insight.

Less wealthy households were 13 times more likely to regard their debts as a burden compared to those in wealthier households. The findings also showed that household headed by younger people had more debt as opposed to those in older age groups. Over 65s had the least amount of debt. Lone parents are thought to have the highest amount of financial debt, yet had a total of £1,600 whereas married or cohabiting people with no children had a high £5,500.

Debt continues to be a heavy burden on many households across the UK and indeed over the world. Advice and help is available from a number of charities and organisations, for example Debt Free Direct.