Tag: savings

Scottish Building Society posts its best results in its 174-year history

World’s oldest remaining building society sees major growth in savings and mortgages

Scottish Building Society, the world’s oldest remaining building society, has posted record results for the financial year ended 31 January 2022.

Established in 1848, the mutual has seen its balance sheet grow by nearly 40% in the last 2 years, leading to a pre-tax profit of £2.4m and mortgage assets of £454m.

The Society, which only offers savings and mortgage accounts, ascribed the growth to customers seeking both value and purpose when joining SBS.

The Society’s Chief Executive, Paul Denton said: “We are as committed to our wider purpose today, as we were back in 1848.  As a mutual society, we reward our members with fair interest rates whilst responsibly using those funds to provide flexible mortgages, enabling Scottish people to buy homes and get on the property ladder.

“The environment has changed over the years, but that simple strategy has helped the Society survive and thrive towards its 175th anniversary next year.”

As the society is a mutually owned organisation, it has been able to offer its members savings accounts above market average interest rates, helping people get the most out of their money.

Mr. Denton continued: “Despite the historic low base rate, we have continued to pay savings rates above the market average, whilst our income has benefitted by growing our mortgage balances more than 36% in the last two years.

“We are now helping more members buy their homes than ever before, which is something we are incredibly proud of in today’s fierce mortgage market.

“As a mutual, unlike the high street banks, we do not have shareholders, so all profits are reinvested into the business, in areas such as in new digital technologies, improving our member experience and increasing our capital base to support future growth.”

Mr. Denton credits the staff at SBS for their “immense work” during the pandemic as one of the reasons why the society has performed so strongly.

He explained: “It has been without doubt two enormously difficult years from an economic and operational perspective, but our staff have delivered outstanding results despite these major challenges.

“Unlike retail banks who are moving out of towns and cities across the country, we are working harder than ever to provide for our members- be that through online or in-person banking.

“When many of our competitors sought to save money by cutting services, we were looking for ways to help our members, by offering compelling interest rates for savers and have now helped a record number of people own their own home.”

Thousands of teenagers missing out on Child Trust Fund cash

HM Revenue and Customs (HMRC) is today urging young people to check if they have a hidden pot of gold – in the shape of a Child Trust Fund (CTF).  

It is now one year since the first account holders started turning 18 and around 55,000 CTFs mature every month. This means their owners can withdraw funds or transfer savings into an adult ISA. Hundreds of thousands of accounts have been claimed so far, but many have not. 

CTFs were set up for all children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. 

Parents or guardians set up these accounts with Child Trust Fund Providers – usually banks, building societies or investment managers – using vouchers provided by the government. If an account was not opened by the child’s parent, HMRC set one up on the child’s behalf. 

Between 2002 and early 2011, about six million CTFs were opened by parents or guardians, with a further million set up by HMRC. 

Economic Secretary to the Treasury, John Glen, said: “It’s fantastic that so many young people have been able to access the money saved for them in Child Trust Funds but we want to make sure that nobody misses out on the chance to invest in their future. 

“If you’re unsure if you have an account or where it may be, it’s easy to get help from HMRC to track down your provider online.” 

Some young people may not know they have a CTF – or some parents or guardians may have forgotten who they set the account up with. To help them find their accounts, HMRC created a simple online tool.  

Any young people unsure about whether or not they have a CTF should first ask a parent or guardian if they remember setting one up. Once they know who their provider is, they should contact them directly – and either request to withdraw the money or transfer the funds into an adult ISA or other savings account. 

For those who cannot access the tool, HMRC will provide alternative, non-digital routes to finding a CTF provider upon request. HMRC will send details of the provider by post within three weeks of receiving their request.  

The accounts were set up to encourage positive financial habits and a saving culture among the young account holders. HMRC is working with the Money and Pension Service (MaPS) and the CTF providers to continue to provide financial education to the beneficiariescation to the beneficiaries.   

At 16 years, a child can choose to operate their CTF account or have their parent or guardian continue to look after it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account.

Consumer finance expert: How to fix finances for Summer

Relaxed restrictions in Scotland offer the chance to make the most of many of the much-missed activities that the pandemic put a stop to, from concerts to theatre trips and holidays abroad. But before you splurge on some much-missed activities, consumer finance expert PAUL WILSON explains ways you could get your finances in order first. 

With over 20 years experience in consumer finance, Paul has highlighted common pitfalls that consumers often fall into and the simple ways that consumers can get their finances in check whilst still making the most of the summer. 

“Many Scots will be excited to make the most of the things that they’ve missed out on in the past year, from concert tickets to holidays abroad. But, whilst there’s temptation to splurge and ‘go all out’ this summer to make the most of the relaxed restrictions, it’s important to make sure that spending doesn’t get out of control.

“Having worked in the finance industry for 20 years, some of the most common money management mistakes I see people make are not actively monitoring and striving to improve their credit score, not setting and sticking to a monthly budget and spending beyond their means on what often turns out to be frivolous.

“As things open up more, it’s important for consumers to enjoy their money, without falling back into bad habits they may have broken in lockdown. There are simple tricks and spending behaviours that can be adopted to make sure people keep their finances in check.”

Cancel those unused, or under utilised, subscriptions

“For many of us, TV and entertainment subscriptions were an essential part of getting through lockdown. But as restrictions lift and it’s easier to do more of the activities that used to fill your time, you may find that some subscriptions go unused.” 

“Check your subscriptions. It’s easy to sign up for a new subscription service – particularly when many companies offer free trial periods or low cost sign up offers – and then forget to cancel it. Or perhaps you have a number of subscriptions that you do use, but you could ask yourself how essential they really are. If you can live without it then you could save money by cancelling the subscription or choosing a cheaper alternative.”

Update your utilities providers

“The summer months are a great time to review your insurance and utilities providers. As things open up more, life admin tasks like this can fall by the wayside, so set aside some time to check your spending and see if you can get a better deal.” 

“Shop around for all of your insurance and utilities. Generally speaking, loyalty doesn’t pay when it comes to products such as insurance, energy, broadband and TV, and there are usually cheaper deals for an equivalent product out there. So when it comes time to renew one of these products, don’t just accept the renewal price – use a price comparison service to check for the best deals available.” 

Budget for your new lifestyle

“As tempting as it is to splurge this summer, make sure you properly budget all of your new spends, from setting aside a budget for going out and leisure activities to factoring in how much you want to spend on drinks at the pub or online shopping.”

“Calculate how much you have coming in each month and how much your essential financial commitments are (e.g. mortgage/rent, transport costs etc.) and therefore what you can afford to put away into savings and what your disposable income is. Once you have your budget – stick to it! Post it up somewhere in your house where you will regularly see it or set reminders on your phone to prompt you to check how you are tracking against your budget.”

Get on top of the weekly food shop

“For many of us, staying at home more often in lockdown meant spending more money on food and treats. So, the relaxing of restrictions is a great time to get on top of your food bill.”

“Save money on your weekly food shop by planning a menu and a shopping list to ensure you only purchase the items you need. Embrace batch cooking and freeze portions to be eaten at a later date – this may help avoid being tempted to use costly food delivery services when you haven’t got anything in for dinner. Consider choosing one of the budget supermarkets such as Aldi or Lidl for the bulk of your shop and downshift from brand name items to own-brand.” 

Spend savvy

“With more people getting out and about and making the most of the summer, there’s more incentive to buy new things, from new holiday clothes to treating yourself to see a band you haven’t been able to see live since 2019. So, if you’re planning on treating yourself, try using comparison sites that offer savings incentives in order to get your money to go further.”

“There are a number of ways you can save money when you are purchasing online. Firstly there are cashback sites that offer money back in your pocket when you purchase via a special tracked link – it costs you nothing extra, takes just seconds longer, and if you were going to buy the product anyway it’s a no brainer. Secondly there are browser extensions and apps you can use to hunt out bargains. For example, InvisibleHand is a chrome extension that runs in the background of your browser and automatically notifies you if it can find the product you are shopping for at a lower price on another site. Similarly, Honey is an extension that automatically finds and applies discount codes at the checkout when you shop online.”

Think about your credit options for big purchases

“It’s great to see the travel corridor opening up and more countries being added to the green list so that everyone can get a much-needed summer holiday. But as tempting as it is to go away, it is important to properly review your finances before committing to a summer holiday.”

“Save up for big purchases wherever possible rather than putting them on credit. Taking the time to save the money can give you time to evaluate if the purchase is really something you want or need. If you have the cash up front it will save you money on paying any interest and avoids any potential damage to your credit score through missed repayments. And remember, it’s tempting to pay for the holiday of a lifetime on a credit card, but then you’ll be paying for that holiday many years after you’ve come back.” 

Track your spending

“It can be very easy to lose sight of how you are spending your money so use a money tracking app linked to your bank account to ensure you keep track of every pound leaving your account.”

“Many money-tracking apps let you categorise spending and easily set budgets for different categories, such as shopping, eating out and groceries. This allows you to properly keep track of your personal finances and stick to your budget, as helpful notifications will let you know when you’re close to your budget for each category.”

Put savings away

“Don’t let the excitement of relaxed restrictions stop you from putting money away for a rainy day. Try to put a small amount away as soon as you get paid, or try saving a few pounds a week to kick-start your savings pot.” 

“If you do have any left over cash at the end of the month, put it in a savings account and try to build up an emergency fund. As a general rule, you should ideally have 3 months worth of critical expenditure (rent, food, bills etc) in your savings account to deal with unforeseen circumstances such as a redundancy or replacing an essential appliance.”

Save on travel to work

“One of the best things that came out of the pandemic is the uptake of cycling, with millions of Brits getting on their bikes to enjoy exercise and space outside in lockdown. Whilst some offices are inviting staff back to work in the office, a blended approach of remote and office-based working has been adopted by many businesses, which takes the pressure out of travelling in peak commuting times.”

“If you can sacrifice the convenience factor, you can save some significant money on fuel and parking by ditching the car and walking or cycling whenever possible. For example, could you walk or cycle to work? Even if it’s just one or two days per week or even just when the weather permits, the money saved can quickly add up.” 

“If I were to choose one of these tips as the most important, I would say that the additional benefits of walking or cycling – both in terms of the benefits to an individual’s health but also to the environment – make ditching the car more frequently the most important tip.” 

Paul Wilson is a consumer finance expert at Financial Conduct Authority authorised and regulated credit broker Little Loans.

Breakthrough? UNISON postpones lobby of crunch finance meeting

‘Our mandate from our members remains. Industrial action remains a real possibility in the event of compulsory redundancies.’ – UNISON lead negotiator Tom Connollycapital

UNISON has postponed its lobby of Edinburgh Council’s Finance and Resources Committee tomorrow following assurances from senior councillors that privatisation plans will be dropped and redundancies delayed for further talks.

Amanda Kerr, Edinburgh UNISON branch secretary, said: “Following concerted UNISON pressure, we welcome this re-think and the dropping of privatisation plans. We also welcome the delay on redundancies, however we still have a long way to go and we will be building for a lobby of the next Finance and Resources Committee on 29 October.

“Our campaign has brought this to the public eye and that campaign will continue. We warned that the level of cuts envisaged would be devastating for services. After years and years of cut after cut, no council can sustain even more massive cuts.”

Lead negotiator Tom Connolly added: “This is an important victory. The damage privatisation would have caused cannot be overestimated. The union will focus on protecting jobs and conditions, engaging with our members and building towards the lobby on 29 October. Our mandate from our members remains. Industrial action remains a real possibility in the event of compulsory redundancies.”

Last week, UNISON warned that up to 3000 jobs could be lost as the council aims to balance it’s books, and councillors are set to consider a number of key proposals to address a £126m budget shortfall over the next four years at tomorrow’s meeting.

Councillor Alasdair Rankin, Finance Convener, said: “We are very clear about the scale of the financial challenge that the Council is facing. The Council is experiencing greater demand for services than ever before, with a growing population in Edinburgh and increasing numbers of older people and younger people, while our overall budget remains the same.

“We need to take action in order to achieve the necessary savings to meet this demand, and we are making every effort to do this in a way that will safeguard frontline services for the people of Edinburgh.

“We want to invest in the services that are important to the public but must also look to rationalise our spending where appropriate. We recognise that some of these proposals may involve tough decisions, including a reduction in Council jobs, particularly in middle management. But while this won’t to be easy, savings will allow us to prioritise the things that matter most to people.

“Our aim, as ever, is to improve and enhance the city for residents, and this package of measures is the next step to achieving this. Councillors will consider these proposals and we are looking forward to the discussions. ”

Osborne: pensioner bonds will pay 'best available interest'

Chancellor of the Exchequer George Osborne has announced that that the government’s 65 plus bonds will pay savers the best available interest rates.

One year bonds will pay an annual interest rate of 2.8%, while three year bonds will pay 4% – both rates are significantly higher than any others currently offered in the market.

A key part of the government’s long term economic plan is to support savers at all stages of their lives. That is why the government announced at Budget 2014 that National Savings and Investments (NS&I) will launch two fixed-rate, market-leading savings bonds, which will be available in January 2015.

These bonds, the rates of which were confirmed on Friday, will provide certainty and a good return for those who have saved all their lives and now rely on their savings in retirement.

With an investment limit of £10,000 per bond per person, the government expects that the 65 plus bonds will help an estimated 1 million pensioners. The bonds will be available directly from NS&I by post, phone or online.

The Chancellor made his announcement during a vsit to Eastleigh, where he met with pensioners to discuss the benefits of the 65 plus bonds. The visit formed part of the Chancellor’s tour around Britain aimed at highlighting the policies announced in Autumn Statement 2014.

Mr Osborne said: “A key part of our long term economic plan is to support savers and boost hardworking peoples’ financial security at all stages of life. That’s why the government is introducing savings bonds for people aged 65 and over, and why we’re confirming today that these bonds will pay the best available interest rates. They will give hundreds of thousands of older savers the certainty and comfort of a good return over the life of their investment”.

Investors can hold bonds jointly, but this will still count towards their individual limits – i.e. a couple could hold £40,000 jointly.

There is a minimum investment of £500 per bond.

Visit www.nsandi.com for further details.

 

Pensions: millions to benefit from impartial advice

piggyMillions of people will benefit from a right to free and impartial guidance on how to make the most of the new pensions choices that come into effect in April 2015, Chancellor of the Exchequer George Osborne announced today. This follows the Westminster government’s consultation on how best to deliver the radical changes to how people access their pensions announced at the Budget.

In total 18 million people will be able to benefit from the changes to pensions should they wish to do so.

From April 2015 300,000 individuals a year with defined contribution pension savings will be able to access them as they wish when they turn 55 – subject to their marginal rate of tax.

This is the biggest change to how people access their pensions in almost a century, removing the effective requirement for many to purchase an annuity.

The consultation since the Budget has shown that these changes have been overwhelmingly well received, with individuals supporting greater freedom and choice, and the pensions and insurance industry ready for the challenge of creating new, flexible products, which better suit individuals’ needs.

The government’s response to the consultation today confirmed that:

  • the guaranteed guidance on pensions choices will be provided by independent organisations rather than pensions schemes or providers
  • even more people will be able to benefit from the new pensions flexibilities as the government will continue to allow individuals to transfer from private sector defined benefit schemes to defined contribution pension schemes – subject to two important new safeguards
  • a new override will be introduced so that pensions schemes are able to offer individuals flexible access to their savings and the pensions tax rules will be amended to allow providers to develop new retirement income products that are tailored to the needs of individual consumers

Chancellor of the Exchequer, George Osborne, said: “It’s right to support hard working people that have taken the long-term decision to save for their future and I’m pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive.

“We’re making sure that people have the right support to make their own choice about how best to finance their retirement and I’m pleased to confirm that everyone with defined contribution pension savings reaching pension age will get free and impartial guidance on their range of available choices at retirement.”

The government wants to ensure that guidance is trusted by consumers, and the vast majority, including most of the financial services industry who responded, said that consumers would not trust guidance given by a person or organisation with a vested interest in selling a financial product or service. It will bring together a range of delivery partners, including the Pensions Advisory Service (TPAS) and the Money Advice Service (MAS), which already provide guidance and support to consumers.

People with private sector defined benefit savings will continue to be able to transfer to defined contribution schemes (excluding pensions that are already in payment), alongside two new safeguards to protect both pension schemes and the individuals transferring out.

Guidance will be offered through a broad range of channels, including web-based, phone-based as well as face-to-face, and to remain free to the consumer will be funded by a levy on regulated financial services firms.

The Financial Conduct Authority (FCA) have also today published a paper which consults on the elements of the guidance guarantee for which the FCA will be responsible: setting and monitoring the standards with which guidance providers will have to comply, making and enforcing rules on how contract-based schemes signpost to the guidance services, and adjusting the FCA’s existing conduct rules to support the introduction of the guidance guarantee and in response to the new flexibilities.

Two new safeguards are being introduced to protect both individuals and pension schemes in relation to defined benefit to defined contribution transfers: a new requirement for an individual to take advice from an impartial financial adviser regulated by the FCA before a transfer can be accepted; and, new guidance for trustees on the use of their existing powers to delay transfer payments and take account of scheme funding levels when deciding on transfer values.

HM Treasury

HM Treasury also published the following guide today:

Pension Reforms: Eight things you should know

Understanding the pension system can be complex sometimes. We’ve explained how the new system will work and what it means for you.

1. We’re completely overhauling the system so you can take your pension how you like

In order to create greater choice and flexibility for people who have saved hard for their pension, we announced at Budget 2014 a series of changes to how people access their pension.

From April 2015, no matter how much you decide to take out from your pension after retirement, you will be charged the normal rate of income tax you pay on your salary (so either 0%, 20%, 40% or 45%) rather than the previous tax charge of 55% for full withdrawal.

2. 25% of your pension pot will remain completely tax-free, as it was before

You’ll be able to access 25% of your pot in one go without paying any tax.

3. We previously announced this would apply just to people with ‘defined contribution’ pensions

This is a type of pension also known as a ‘money purchase’ scheme.

This is when the money you and your employer pay in is invested by a pension provider chosen by your employers. The amount you get when you retire usually depends on how much has been paid in and how well the investment has done.

4. We’ve now announced that people who have a ‘defined benefit’ scheme will benefit too

A ‘defined benefit’ pension is typically a promise of a certain level of pension in retirement which is linked to your salary.

We’ve now announced that people in the private sector or in a funded public sector scheme will still be able to transfer from a defined benefit pension scheme to a defined contribution one if they want to, meaning they can benefit from the changes.

This means that around 18 million people will ultimately be able to withdraw their pension flexibly should they wish to do so.

5. Everyone who will be able to take advantage of the new reforms will be able to access free and impartial guidance

This will help people make confident and informed choices on how they put their pension savings to best use.

This guidance will be available through a number of different channels – via an online tool, over the phone, or face to face. Individuals will be able to choose the channel, or mix of channels, that they find most convenient.

It will be entirely impartial, so won’t be given by anyone who could be trying to sell you a product.

6. Your pension provider or scheme will be required to tell you about the guidance and how to access it

Accessing the guidance will be arranged by your pension provider, who will be required to tell you about it.

7. The changes will come into effect from April 2015

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then.

If you’re younger than 55 then you will be able to take advantage of the new system when you do reach 55.

8. You don’t need to do anything until then

If you’re thinking about retiring soon, you don’t need to do anything in the meantime, but we’ve also made other changes to help you save until then, such as our reforms to ISAs.

You can find more information about the pension reforms by reading our factsheet we published at Budget explaining the differences between the new changes and the old system, or more details on our response to the consultation.

Police warn of ‘bank’ phone call scam

imagesPolice are warning members of the public to be alert to phone calls from criminals who claim to be working for banks. The fraudsters frighten victims into believing their bank accounts have been hacked – and then persuade them to transfer their savings into new ‘safe’ accounts. 

The fraud works like this:

A phone call is received from a male pretending to be from their bank’s Fraud Department. He informs the victim that there has been suspicious activity on their bank account and asks them to call the helpline telephone number on the back of their bank card in order to verify his position at the bank.

The alarmed victim does this – but unbeknown to him/her, the caller keeps the telephone line open (there will be no dial tone). The phone call is then  ‘answered’ by a female and she was then ‘transfers’ the victim over to another male who claims to work in the bank’s Fraud Department.

He advises the victim that that their finances are at risk of fraud and they must transfer their money into ‘safe accounts’ immediately; he then manipulates the unsuspecting victim into transferring their savings into these new ‘safe accounts’.

A call of this nature is upsetting, and that’s what the fraudsters rely on – they stress the urgency of the need to act NOW to protect your funds and they don’t give victims the time to think.

If you have even the slightest of concerns or are suspicious in any way, hang up and use a mobile phone to call your bank – always call back from a different phone.