thebestbestbuys.com

To Save or not to Save?

2010-02-22T18:56:00.003Z

The accepted wisdom has always been that you should save money no matter what circumstances you find yourself in. The fact is, it’s not always good to save and it very much depends on your personal circumstances.

If you have no debt (except your mortgage) and find yourself with spare cash at the end of every month then you have a choice, you can spend or save. With savings rates at the level they are at the moment you may be wiser to overpay your mortgage than to save money in a savings account. If this describes you, then decide what level of liquid funds you need to have at hand and then find out how much you can overpay your mortgage by. Depending on your mortgage provider this may be somewhere between £0 and 100%.

The situation is completely different if you are carrying any debts i.e. loans, credit card balance, etc. The difference between the interest charged on debts and the interest gained by saving is now so pronounced that you should seriously think about using any savings you have to pay off your outstanding debts.

Any interest you have gained from your savings is being wiped out by the interest you are paying on your debts. The sooner the debts are paid off the better off you will be and you can start saving again but this time you would be safe in the knowledge that you are actually gaining from putting your money away.

Where many people become confused on this is when they think not saving means having no money in reserve that they can use if they need to. Savings should only become savings if you do not intend using them in the next 6 months. Everybody needs a little bit of ready cash now and again for unforeseen expenses.

If this is all completely alien to you because you never have any money and you are always in debt then you need to take more drastic action. If you require any more information about debt you should log onto the Citizens Advice Bureau website.

The Best Best Buys website has a number of financial product guides to help you get a greater understanding of how Mortgages, Loans, Credit Cards and Savings Accounts work.

Building Societies Raise Their Standard Variable Rates

2010-02-16T00:40:00.005Z

In recent weeks there has been a lot of press coverage regarding building societies raising their Standard Variable Rates (SVR). This is the rate of interest that they charge their mortgage borrowers when they come off any deal that they may have had, it is also sometimes referred to as the "Revert to Rate".

A total of 12 building societies have either raised their SVR or announced that they will be increasing it in the last two weeks. They include, Skipton Building Society, Kent Relience Building Society, Norwich & Peterborough Building Society, Mansfield Building Society, Marsden Building Society and the Cambridge Building Society. This is by no means the full list and it is expected that those who haven't announced it yet will so soon.

The reason they have all had to make this decision is that they are no longer making money from savers. Only last month the Building Society Association released figures to show that in 2009, £7.6billion less was deposited with building societies.

Historically building societies have used the funds they attract from savers to fund their mortgage lending but because the Bank of England Base Rate is so low the savings rates that they are offering are not attracting savers.

This leaves homeowners that currently have a mortgage with a building society that is on the institutions SVR in a tricky situation. If they do not have enough equity in their property it is unlikely that they will be able to access the best mortgages as the mortgage best buy tables at present show that institutions are looking for customers with between a 30 and 40% deposit.

In the last 18 months lenders SVR's have looked like a relatively attractive proposition as many lenders have been unwilling to lend and the number of available mortgages in the market has remained quite low. However there has been an increasing number of mortgage products coming onto the market in the last two or three months. A sure sign that financial institutions are more willing to lend.

The only thing that remains to be improved is the loan to value ratios (LTV) that banks and buliding societies are willing to lend at. Newcastle Building Society released a range of products at the end of last year that not only had a high LTV of 80% but the rates meant they were featured in many mortgage best buy tables.

In this weeks mortgage best buy tables, the Leek Building Society is offering a Discounted Variable Rate Mortgage with an LTV of 85% and an incredibly low fee. Leek Building Society are only a small society and they will not be able to offer this product for long but hopefully it is an indication that institutions are beginning to be more realistic with the LTV's on their mortgages.

So if you have a lot of equity in your property and you are sitting on a building society's SVR it may well be time to move. If you have less equity but are in the same situation you can find deals if you look but hopefully in the coming months more appropriate mortgage products will become more widely available in the mortgage best buy tables.

Aleksandr the Meerkat doesn't know about personal finance either

2010-02-08T23:06:00.005Z

He’s may well be cute, he may well be cuddly, you can become his friend on Facebook or follow him on Twitter but as far as personal finance is concerned Aleksandr the Meerkat from the Compare the Market adverts is talking out of his furry little earhole.

If you take a look at the Compare the Market website you will find that in their Credit Card section they are promoting other financial products ahead of the best in the market. One can only assume it is for monetary gain. If it’s not it is because they don’t know what they are talking about. Either way the consumer visiting their website is being shown products that aren’t the best at the top of their charts.

For example in their Balance Transfer chart, Compare the Market place the best deal in the market, the Virgin MasterCard in fourth position and in their 0% on Purchases chart the best product in the market the Tesco Clubcard Visa does not feature at all.

Compare the Market get their financial data from Love Money (formerly The Motley Fool) in the form of a “White Label”. If you care to take a look at Love Money you will find that the same misleading information is displayed on their consumer finance website.

A “White Label” is when another website in this case Love Money, allow a company, in this case Compare the Market to produce their own version of the their website using their logo and corporate branding.

There are two ways the finances can work in a deal like this, either Compare the Market paid an annual fee to replicate Love Money in this way or Compare the Market get a cut of the money made by Love Money through the deals they have set up with the providers of financial products.

Malcolm Murphy the Business Development Manager at The Best Best Buys said, “This is fairly typical of the industry. That is why www.thebestbestbuys.com was set up. We compare and contrast the best buy tables that appear on the internet and in the press so as consumers don’t have to. There are very few financial comparison websites that truly have the best interests of the consumer at heart.”

Skipton Scrap Mortgage Promise

2010-01-23T17:53:00.005Z

The Skipton Building Society has decided to break their Mortgage Promise, that their standard variable rate (SVR) will never be more than 3% above the Bank of England Base Rate.

They have informed their existing mortgage customers that as of the 1st March 2010 their new SVR will be set at 4.95% a leap of 1.45%. They have been able to do this as the Mortgage Promise they made had a clause in the contract to allow them to break the deal off under “exceptional circumstances”. Each of the customers this affects now has the option to change their mortgage without incurring any penalty or fee.

Unfortunately at present Building Societies have to make some tough decisions and we are seeing most of them raising their SVR. Skipton are only doing what others in the sector are doing, the only difference being they have had to scrap the promise they made to do it. On a business level you can understand the need for some action but it is the circumstances and the scale of the rise that are eyebrow raising.

The bit that worries me is that Skipton Building Society have recently taken over The Scarborough Building Society, should this have been allowed to happen if Skipton’s finances are in such a state that they have to raise their SVR by 40%?

In addition to this Skipton have already sold part of their group, Callcredit and in doing so allegedly raised £100million. The press release I read said that it had sold the company to support its balance sheet in order to takeover smaller societies that may be in trouble.

One last thing, the thing that bothers me most of all and I think it should bother others too. Skipton Building Society is supposedly a mutual society and operates under the premise that they are run for their members, both borrowers and savers by the appointed board. Yet they feel it is ok to break their promises and hike the borrowing rate up by 40%. In addition to this the members of this allegedly mutual society did not get a sniff of the money made on the sale of Callcredit.

How mutual does all that sound to you? Here at www.thebestbestbuys.com we don't think it is very mutual at all.

First Time Buyers in 2010 is it Boom or Gloom?

2010-01-16T09:24:00.002Z

Earlier today I was looking at the Finance Markets Forum and one of their threads was all about the rosy days ahead for first time buyers, falling house prices and cheaper mortgages. So although the credit crunch has been nasty, there has been a positive correction in the favour of first time buyers, or has there?

It's weird because I read an article on Sunday 4th January 2010 in the Financial Mail that tells of the expected woes of First Time Buyers in the year ahead. The main thrust of the article was that although house prices are coming down (depending who you believe, where you live, relativity, etc.). There is still the matter of a 15% deposit and the stamp duty if you pay more than £125,000 for the property that need to be taken into consideration.

Who do you believe? The optimism of the flat statistics or the more real life version put forward by the Financial Mail? I am hoping that the truth lies somewhere between.

There are 90% mortgages available for first time buyers, the situation was improving at the end of last year, so let us hope that the tidings of joy from Mr Prestridge are a little premature and we continue to see more lenders offering higher LTV's in the next 12 months.

Hopefully the recovery continues and confidence returns to both lenders and employers. I personally believe this one is too close to call but I hope that first time buyers can access mortgages with higher loan to value ratios and attractive initial rates of interest.

It may not be the panacea the economy needs but it would be good to see any positive moves in the housing market, sooner rather than later.

Northern Rock: Who will win the race?

2010-01-11T15:01:00.004Z

The year has gotten off to a great start with many rumours flying about that the Government is looking to offload Northern Rock ASAP. With the election looming it would be a real coup for Mr Brown to get rid of the albatross which is Northern Rock. The sell off will take the usual format, in that the deposits and any low risk mortgage assets will be sold, while the Government retains the more toxic end of the stick.

There are two financial institutions who have more than a passing interest in the purchase of the Northern Rock assets. There is also a third contender BBVA a Spanish bank who are said to be interested in following Santander into the British banking industry but it is not clear how serious their interest is.

Firstly we have Virgin Money, they missed out first time around and it was probably just as well for them as the financial crisis deepened and widened. I suspect now that their bid will be revised down the way and a lot closer to the real value of the company. The big motivation for Virgin would be that they could finally enter the mortgage market after more than 6 years of talking about it.

Virgin Money has been particularly active in the last week or two, the acquisition of the little known bank, Church House Trust bank. There has also been a well reported meeting between Richard Branson and Blackstone, allegedly about financing a bid for Northern Rock. Virgin Money has also popped up in the Best Buy Tables for unsecured personal loans. They also continue to dominate the Best Buy Tables for Credit Card Balance Transfer Deals where they are an ever present at the top of the charts.

The other contender is National Australia Group (NAG) who own two very well known British banking brands in Yorkshire Bank and the Clydesdale Bank. They are in good shape financially as they stuck to a conservative risk policy during the boom times and resisted the temptation to buy in readymade growth.

Yorkshire Bank and the Clydesdale Bank have consistently been in a number of mortgage best buys charts over the last 12 months. Like other banks in a similar situation i.e. HSBC, there is no doubt NAG have been cherry picking low risk customers and adding to their asset base at good margins.

It is also believed that NAG are set to benefit from the forthcoming branch sell off that was triggered by the European Competition ruling on Lloyds TSB takeover of HBOS as they look to buy up branches that Lloyds Banking Group have to sell. However, they won’t get it all their own way as Tesco is believed to be interested in the branches as well as they gear up to launch the Tesco Money Shop.

I personally think there is a case to support either of the potential bidders, Virgin as they could neutralise the bad connotations the words Northern Rock conjure up with their well known and well respected brand. While NAG bring a lot to the table with their good governance, past experience, existing processes and back office infrastructure.

The one thing I am 100% certain about is that both the Government and the British Tax payer want rid, sooner rather than later. I suspect that this issue will all be resolved no later than the end of April 2010.

A Review of the last 12 months in the Mortgage & Saving Markets

2010-01-05T00:12:00.004Z

You don’t need me to tell you that it has been a tough 12 months for many of us in financial terms. It was the year we all felt the rather nasty effects of the credit crunch.

The review looks at the changes in the mortgage and saving market in the UK from the perspective of the user of financial services. After all there has been so much going on it’s hard to know which bits are actually the important bits.

This synopsis of the mortgage and savings market covering the last 12 months is meant as an executive summary, helping you see past the numerous headlines and outcries and get a handle on what actually happened in the last year to both savings and mortgages.

The most important thing for me is the effect of the turmoil in the financial markets and not the turmoil itself. It is so easy to get lost in the details and miss what actually happened.
In order to examine the changes in the market I have looked at how mortgages and savings started the year, then how they looked in June and finally what was happening in December.

• Mortgages in 2009
• Mortgages in December 2009
• Savings in 2009
• Savings in December 2009
• Mortgages in 2010
• Savings in 2010

Hopefully this approach gives each of the subjects a beginning, middle and end. I then finish off with a best guess for the next 12 months.

Mortgages in 2009
At the start of the year mortgages were available with Loan to Value ratios of between 75% and 95% and Lenders such as the Dunfermline Building Society, Britannia Building Society, The Bank of Ireland and Royal Bank of Scotland were still featuring in the Best Buy Charts in both the newspapers and on the web.

The initial rate of interest on a short term fixed rate mortgage was averaging out at 4.85% at the top of the market.

By June 2009 mortgages were very much in short supply, with many lenders effectively looking to “cherry pick” customers. The profile they were looking for was bordering on risk free; remortgages with a loan to value of no more than 75% and an impeccable credit history.

HSBC/First Direct and The Co-operative Bank seemed to dominate the market for mortgages as neither of these two institutions required any real support from the Government in terms of them continuing to trade. This freedom and relatively competitive position meant they could capitalise on the situation in the mortgage market.

Mortgages in December 2009
By the end of 2009 competition was returning to the UK mortgage market for the first time in 18 months. Loan to Values were creeping up, with more lenders starting to offer 90% mortgages and the Newcastle Building Society launched a number of mortgages with LTV’s of 80% and competitive initial interest rate.

This has been taken as a sign that “liquidity” was improving within the banks and building societies and the willingness to lend is returning. Hopefully that will mean that in the coming 12 months it will be easier to get a mortgage and the banks will begin to loosen the lending criteria they base their decisions on.
At the end of the year the average rate at the top of the market for a short term fixed rate mortgage was approximately 3.99%.

Savings in 2009
At the beginning of the year it was possible to get a no notice savings account or a notice savings account with an Annual Equivalent Rate of Interest of between 4% & 4.5% without too much trouble. In fact if you were looking at internet based accounts you had a choice of at least four institutions that offered over 4.3%.

Many institutions were desperate to attract funds to support their lending operations, many banks and building societies offered good savings rates to attract deposits.

However, by June 2009 Savers were looking at interest rates on their savings of about 2.5%. This was the case for instant access, notice accounts and even internet based savings accounts. This was a significant drop in interest rates over the first 6 months of the year and proved costly for savers that rely on their savings to provide an income.

Savings in December 2009At the end of 2009 there had been some improvement on the interest rates being offered by the financial institutions.
Depositors can now expect to find savings accounts with instant access available with a rate of approximately 3% and notice accounts are available with rates in excess of 3% but still well short of the rates enjoyed at the beginning of 2009.

Mortgages in 2010
• Availability of mortgages will continue to improve
• Mortgages with higher LTV’s will become available
• Increased cost to the borrower (Bank of England Base Rate is expected to rise around April)
• Lenders are starting to increase their Standard Variable Rate now

Savings in 2010
• Low returns expected to continue
• Banks are less reliant on deposits to fund their lending operations
• If the Bank of England Base Rate rises in April as predicted it will not significantly affect rates as lenders try to make better margins.

To conclude 2009 has been a bit of a roller coaster of a year in financial terms but there are signs that things are starting to improve. By the end of the first quarter of 2010 everybody will be in a better position to make predictions about the future.

The next 12 months look as if they are going to be flat but hopefully stable. With stability comes confidence and as we get through the year, businesses will start to take on staff and job security will return.

Newcastle Building Society Storm the Mortgage Best Buy Charts

2009-12-07T18:36:00.003Z

Last week the Newcastle Building Society released a new range of mortgage product and they are now at either the top of the best buy charts or at number two in the following categories:

• Short Term Fixed Rate Mortgages
• Long Term Fixed Rate Mortgages
• First Time Buyer Mortgages (Moneyfacts only)
• Tracker Rate Mortgages
• Discount Variable Rate Mortgages

If the providers of these types of charts actually looked at anything other than headline rate i.e. the Loan to Value (LTV), the Newcastle Building Society’s mortgage products would be sitting at the very top of all the aforementioned best buy tables.

The only exception being, the Moneyfacts First Time Buyer Best Buy Table published in the Scotland on Sunday. Here at the www.thebestbestbuys.com we do not think that any mortgage product that does not have an LTV of 90% should be displacing products that do. If anything it shows a lack of understanding of what represents a “best buy” to the first time buyer market.

Stranger still is the fact that Moneyfacts have dropped the Furness Building Society from the First Time Buyer Best Buy table in the Scotland on Sunday for the first time in about 14 months. Having checked with Furness the product is still available at 4.94% for 3 years with a fee of £699 and an LTV of 90%. We however have put it at its rightful position of number 1 in our charts.

Moneysupermarket are even stranger as the Furness product simply does not appear in their best buy tables for first time buyers and to the best of my knowledge it never has.

Hopefully the actions of the Newcastle Building Society will force other providers to up their LTVs and we will see competition return to the UK mortgage market for the first time in over 18 months.

Financial comparison websites are misleading and the newspapers help them mislead

2009-12-05T14:00:00.004Z

In today’s Daily Telegraph there is a very good article by Harry Wallop explaining how industry experts have said that Comparison Websites are misleading and that they give greater prominence to providers who pay their fees. Although this is obvious to anybody that knows anything about financial services the wider public seem to struggle to understand that they are being manipulated.

If you are reading the article online, take a look at the left hand side of the page. There you will find a best buy chart provided by Moneysupermarket that is promoting Credit Cards with 0% on purchases. How ironic is it that the credit cards shown in this pseudo best buy table do not list the top deals for credit cards of this nature.

So you have to respect the editorial independence of the telegraph but I think we should also point out that the newspapers, the telegraph included, continue to promote and get paid by financial comparison websites like Moneysupermarket.

So although Mr Wallop has brought the issue out in the open the paper he writes for continues to ensure the prominence of websites that are attempting to fleece the consumer.

They use the PR guff generated by these sites as the basis for articles, they use them to comment in numerous stories each week and they get paid to carry their advertising.

A very bad case of ignoring the facts when it suits and not even being that smart about it.

Here at the www.thebestbestbuys.com we will continue to bring the issue of misleading websites to the attention of as many people as we can. However it is not easy when the press are so obviously in bed with the comparison sites that we know are taking the proverbial and profiteering through misrepresentation.

Comparing the financial comparison websites – Watching the watchers

2009-11-30T11:46:00.003Z

As you may or may not know here at www.thebestbestbuys.com we monitor and assess the financial best buy tables from the press and from websites. This means we can bring our users a top 5 best buy table for savings, mortgages, credit cards and loans that has been created by comparing the financial comparison websites, so you no longer have to take their word for it.

The Best Best Buys has no vested interest in promoting any particular provider and therefore no conflict of interest because:

• We do not sell financial products
• We do not sell leads
• We do not manipulate the customer journey of our users
• We do not promote inferior financial products for personal gain

The reason we get up in the morning is to expose the many sharp practices that are employed by the companies in this unregulated sector.

Don’t be fooled by TV advertising, remember the saying, “there be dragons” was once a warning to sailors.

The well respected BBC Radio 4 programme, Money Box discovered when researching the topic that financial comparison websites of all sizes, make money from the providers of financial products in many different ways:

• fees for prominent product placements
• money for every customer who clicks through to a particular company
• Personal Details sold as leads

The programme concluded that, financial comparison websites, "had an obvious incentive to feature companies that give them the best rewards."

We are continuing to keep our eye on about half a dozen websites and are almost at the stage of naming and shaming......watch this space!

Woolworths: After a year the top executives blame the Administrators....what a pair of clowns!

2009-11-23T14:56:00.002Z

It was about 12 months ago we witnessed the collapse of an iconic brand on our high street, Woolworths. Yes, it was a retailer we all grew up with and it held fond memories for many of the British public but looking at the harsh reality it was never going to survive.

We all talked fondly of it but we never went, never bought anything and the world had moved on. In the last year I have not once thought, damn if only “Woollies” was still open. Have you?

Woolworths went before the affects of the credit crunch had really kicked in and I doubt very much it would have survived any restructuring as its management seemed completely out of touch with the retail business and customer’s needs.

The company had also been restructured, as had its finances prior to this particular crisis.

So what happens one year on, the two individuals who managed the fiasco, Steve Johnson the former CEO and Richard North the former Chairman, come out and blame the Administrators?

Absolutely unbelievable!

These two bozos were in charge when they ran the business aground for the second time; they are the ones who couldn’t make it pay even in the good times. In my opinion they are the ones that killed the iconic brand but they did it slowly over a number of years through ineptitude.

To come out and try to make out that that the collapse was down to Deloitte who were appointed Administrators is pathetic. If the dynamic duo of Johnson and North hadn’t screwed up so royally nobody would have been appointed to sweep up their mess.

Surely these two should simply shut up about Woolworths and concentrate on not screwing up in their new jobs, that’s if anyone was daft enough to employ them. Someone has given Andy Hornby of HBOS a new job so there is hope for everyone, no matter how big your corporate cock up is.

Are we coming out of recession or going into a “double dip”?

2009-11-12T17:08:00.003Z

Mervyn King the Governor of the Bank of England announced yesterday he is now starting to see evidence that we are at the beginning of the recovery. As always he also sounded a cautionary warning that the recovery was still fragile.

So it is a good job that they are pressing on with their fiscal stimulus or quantitative easing.

However in the background there are a number of articles warning that Britain is heading for a “double dip” i.e. a noticeable recovery and then a return to previous lows. The predictions of the shape of the recovery are growing ever wilder, we have had the “W” and the “Slipper” but somebody has coined a new one on me, the “Bath Shaped” recovery. All of which are completely lost on me and I suspect the wider public.

So are we or are we not now safe? Are we in or out of recession? Has the recovery started or is it another false dawn? None of this does anything to inspire the consumer’s confidence.

I am with Merv, we are starting to move out of recession, a number of factors have stabilised in the last month, unemployment appears to have peaked, mortgage lending has improved and the lower pound is making our goods and services more attractive in overseas markets that have already come out of recession.

The reasons for the “Double Dip” theory are based around three things:

1. Large companies seeking funds from the bond market
2. The return of securitisation
3. Underlying concern about the recovery in America

As long as the recovery is gradual and the economy is managed through this tricky period properly, which I believe it is, we should not face a double dip.

But as we keep repeating at www.thebestbestbuys.com until the end of the first quarter in 2010 we will not know for sure.

Proposed changes to the way credit card providers can operate

2009-10-29T14:05:00.008Z

The long overdue revue of the way credit card companies operate in Britain has finally happened. This week saw the announcement by Consumer Affairs Minister, Kevin Brennan details the Government’s proposals to combat the nation’s credit card debt. That said, £2billion has been paid off in the last 12 months, resulting in an overall reduction in credit card debt from £66billion to £64billion.

The aim of this Government initiative is to ensure the providers of credit cards do not take advantage of their customers who find it difficult to clear their accumulated balance. As an industry the credit card market is worth £53billion per annum. The practices used by most of the credit card companies have contributed to us earning the unenviable reputation as the “debt capital of Europe”.

Credit cards were never designed to carry a balance for any length of time and with an annual interest rate averaging out at nearly 20% it is obvious why you should not carry a balance on a card. Yet a major industry has been allowed to spring up around this i.e. balance transfers. If anything this proposal has come over a decade too late.

The proposed changes include:

Higher Minimum Monthly Payment of 5%

Presently most credit card providers take a minimum monthly payment in the region of 2% of the outstanding balance. If you take an average card with an APR of 18% and a minimum payment of 2% it takes well over 16 years to pay off a balance of £2,000 if you only pay the minimum monthly payment.

However, if the credit card companies raise their APR to offset this, we will be no further forward.

Customers to pay off the most expensive debt first

Credit card providers (with the exception of Nationwide and Saga) choose to pay the least expensive debt off first, an action that is in their favour not the consumers. This is known as “Adverse Scheduling”, so if you take cash out on your credit card which is charged at the higher rate this is the last element of the debt that will be paid back.

Automatic credit limit increases to be banned

Stop the practice of routinely increasing the available credit to the customer without their prior consent. It is common practice within the credit card industry to increase the borrowing limit of a customer over time as long as they have no late payments or arrears. The credit card company does not assess their current financial situation or their ability to afford the new borrowing.

Annual Statement of Interest

All other forms of consumer credit must provide an Annual Statement of Interest, at present credit card providers do not have to. This new measure is intended to ensure that every customer is aware of just how much the debt carried as a balance on a credit card is costing them annually.

There has been some concern raised by debt charities and consumer groups about the proposals as they fear that these measures may tip a large number of customers over the edge. This is a real possibility for some but ultimately the issue of credit card balances has to addressed, as carrying a large credit card balance or two is the one thing that will keep you poor.

In an ideal world http://www.thebestbestbuys.com/ would have liked to see at least one other measure put in place:

Central Register of Credit Cards

A central database would stop people being able to have numerous credit cards and therefore the ability to run up huge balances with different credit card providers. It would also hopefully stop the next generation of credit card customers falling into the same debt cycle that many in Britain face today.

Only time will tell if the proposals that have been outlined will ever become reality. The proposals are a good start but they could have gone just a little further. It will take a very long time to re-educate people not to live beyond their means. Let’s hope it doesn’t take as long as it does to pay off a credit card balance using the minimum monthly payment.

If you want more information regarding credit cards, you can find a “Guide to Credit Cards” on our website, http://www.thebestbestbuys.com/

The Economists and the City Experts get it really wrong this time!

2009-10-23T14:10:00.000+01:00

The word on the financial street was that Britain was today going to officially come out of recession. Just to clarify that is the “technical recession” as measured 3 months too late by various Government bodies and not the actual recession that we are all living through. We were going to join France and Germany in reporting growth in the economy.

All of the Business Analysts and Reporters have been banging on about this landmark in the move out of recession. They have been quoting various economists and city commentators, they all seemed very excited and very upbeat.

Ooops! The figures came in at around 9:30am today and guess what......they all got it wrong, again.

In actual fact the economic data shows that we are still very much in recession and consumer spending has not returned. The two most worrying elements of today’s news are firstly the construction industry is still struggling and secondly the demand for services from the consumer market has yet to return.

For the record we were always going to lag behind the likes of Germany and France as the British economy was far more reliant on the financial sector for its economic growth. As the current crisis is very much centred on the collapse of the global financial system it shouldn’t take a genius to work that out.

As this whole thing goes on it is becoming more apparent that our economy is run by IDIOTS! And the journalists that report on it are just as bad. Did nobody think to analyse even the anecdotal evidence?

For example, mortgage approval rates are improving but only slightly and are nowhere near previous levels, credit card spending is down, credit card approval are down, the savings ratio is up, estate agent windows still look bare, shops are closing, the fear of redundancy still hangs over many jobs in Britain, etc.

It is hard to resist the temptation to say, I told you so, so I won’t, I told you so. In more than one previous blog I stated quite clearly that until the end of the first quarter of 2010 any expert that tells the world they know what is happening is talking out of their ear (for want of a much better word).

Energy Best Buy Websites Exposed by The Daily Telegraph

2009-10-22T10:45:00.000+01:00

So it is not just financial comparison websites you need to watch out for!

Here is an extract from an article that appeared in the Daily Telegraph on Saturday 10th October 2009:

Kara Gammell reported in the Telegraph's Your Money supplement:

An investigation of comparison websites by Your Money reveals there can be more than 50 per cent between the cheapest and the most expensive "best buy" energy deals.

"The banner at the top of the webpage read: "Accredited by Consumer Focus, which means that our prices are the same as other comparison websites."But when I went shopping for a cheaper energy tariff, that didn't appear to be the case at all.In a bid to reduce my energy bills this winter, I visited four leading comparison websites, Confused, uSwitch, GoCompare and Moneysupermarket and was shocked to find different results from each."

All four of the aforementioned comparison websites are accredited by the Consumer Focus Confidence Group (it actually sounds made up) which in theory means each of the sites should return similar results.

Turns out they all calculate things slightly differently and you need to put in your exact energy consumption by units in some cases.Sounds like a fair bit of flannel to me, surely if you are putting in similar data to similar websites the results should not differ by a huge amount but in this case the highest quote was £680 and the lowest was £431 a huge difference of £249.

But I have saved the best till last, the most expensive quote which was provided by uSwitch was actually more expensive than the customer pays at the moment. I can only assume the journalist decided to go with Confused.

The lesson to be learned here is that no matter if you are using a financial comparisons website or one that deals with utilities you should always use at least two or three different websites to check your findings.

Another thing worth remembering is that each of the sites mentioned has a Consumer Finance or Money element to them. They say they offer the best deals on mortgages, credit cards, savings and loans but can you trust them in light of what The Daily Telegraph have reported? You can make your own mind up on that one.

Here at http://www.thebestbestbuys.com/ we will keep monitoring the big and the small alike and we will only bring you the best best buys in the UK for mortgages, loans, credit cards and savings.

What to watch out for when you are transfering a balance from one credit card to another

2009-10-19T13:27:00.001+01:00

If you are in the unfortunate position where you have to transfer the balance of one credit card onto another credit card there are a few things you need to be aware of:

1) There will be a fee of about 3% based on the balance you are transferring

2) How long is the deal for? Is it a date or a set period of months?

3) How high is the interest rate (APR) when the deal is over?

4) If you miss one monthly minimum payment the deal may be void

5) Don't use the old credit card just because you can, REMEMBER, if you cannot be trusted: CUT IT UP!

Credit cards were not designed for long term borrowing but many people find themselves in the situation where they carry credit card debt round for years hardly making a dent in the balance.

They can often end up being the most expensive way to borrow money.

If you want an unsecured personal loan you should pop down the shops

2009-10-18T20:17:00.000+01:00

When you are looking for an unsecured personal loan it appears that the retail giants of: ASDA, Tesco, Sainsbury’s and Marks & Spencer have it covered. Three of the aforementioned grocers have been consistently at the top of the best buy tables for a very long time.

There are currently about a third less providers of unsecured personal loans than there was 18 months ago. The rates on offer have been constant and their typical APR has not altered despite the reduction in the Bank of England Base Rate (BEBR). Meaning they are making more money on these products than they did when the BEBR was higher.

In the £5,000 0ver 3 Year category, 3 of the top 6 providers are retailers, while in the £10,000 over 5 Year category we find a similar ratio. It might be worth mentioning the banks that are also in the same charts:

Your Personal Loan (owned by the Co-operative Bank)
Alliance & Leicester (owned by Santander)
Smile (owned by the Co-operative Bank)
The Co-operative Bank (I assume owned by the Co-operative Bank)

The Post Office pops up but we don’t know whether to class them as a retailer or a bank but then again neither do they.

You can have a look at the top 5 loan rates for both £5,000 over 3 Years and £10,000 over 5 Years at www.thebestbestbuys.com

The Best Best Buys joins Squidoo

2009-10-16T14:06:00.000+01:00

If you want to take a look please log on to:

http://www.squidoo.com/thebestbestbuys

Cheers

When is a loan not a loan? When it is tantamount to "money lending"

2009-10-01T15:03:00.000+01:00

I was reading an article in Scotland on Sunday last weekend about the rise in the cost of personal loans. It appears that major lenders have been increasing the cost of unsecured personal loans by as much as 1.2%. Some figures that were quoted suggested that on average a consumer looking for a loan of this type could expect to pay about 10.32%in interest (APR).

Looking at the best buy tables for both, £10,000 over 5 years and £5,000 over 3 years, the top of the market seems to be between 7.9% and 9.9%. This has been pretty constant for a long time. The issue seems to be that because the Bank of England Base Rate is at an unprecedented low of 0.5%, loans should not be increasing as the margin for lenders has widened.....a fair and just point.

This got me thinking about lenders such as Provident Finance or the “Provy” as it is affectionately known. Would you like to take a guess at what their APR on a £300 loan over one year is? To be honest it is so outrageous that I doubt you would guess in a million years.

272%

And before anyone asks, no I haven’t missed out a decimal point.

The Provident’s justification is that they deal in small sums of money, they offer their services through agents calling personally to collect the money and their products offer flexibility. If truth be told they are ripping off the poor. Their customers are low income families without access to high street lenders or mainstream personal finance. It is actually a fairly disgusting business model and all involved should be thoroughly ashamed. Worst of all they are not alone, there are other companies that employ the same deplorable business model

The Office of Fair Trading already has the means to stop this enshrined in the Consumer Credit Act of 1974, whereby it is charged to protect consumers from “extortionate rates of interest”. While the FSA should be tackling issues like this head on, if the OFT is not capable of policing the Consumer Credit Act then the FSA should have sought to take over responsibility years ago. I think it is fair to say that the FSA have missed the boat on this one.

It has also been subject to Parliamentary scrutiny and I am pretty sure they are still debating it through some Select Committee or other. Let’s face it, you don’t need a committee to tell you when something is this wrong.

The solution is quite straight forward the Office of Fair Trading, the Government and the FSA should get off their collective arses and revoke the Consumer Credit Licence of Provident Personal Finance, “simples”, to quote that annoying piece of fur on the telly.

So are we in recession or out of recession? Is the depression still looming or is it all coming up roses?

2009-09-16T22:11:00.000+01:00

You would be forgiven for holding either view as at present the newspapers seem to carry a story with quotes from respected industry experts and commentators along with supporting evidence for either the recovery or the recession on alternate days.

On Tuesday we are given the front page headline in the Daily Telegraph, “Double dip slump fears as US credit shrinks at Great Depression rate”. In another quality broadsheet on the same day they rehashed a story from a couple of Sunday’s ago about the company insolvencies that are about to happen.

However, this is being played out on the backdrop of comments and findings of the International Monetary Fund that hinted that we were at the “Start of the Recovery” (they went on in their statement to align more than enough caveats to make the original statement worthless). Then today we read that the “Head of the Fed”, Ben Bernanke has announced that, “the recession is very likely over”. A statement that leaves enough “wriggle room” should this not be the case.

Looking at all of the available information and the various statements from all the leading people in the world of economics, finance and government my conclusion is this. Anyone that tells you they know the recession is over or not is talking out of their ear (I use the word ear for the want of a better word).

The fact of the matter is that the number of variables involved in this unprecedented situation is overwhelming. The number of scenarios involved in modelling this crisis would be hard to comprehend. The current economic situation will not be cured by house prices in Kent going up a few bob for a couple of months in a row.

My conclusion is that until we get 2009 over with and head in to the first quarter of 2010 we won’t know where we are in global financial terms. By the end of the first quarter the great and the good of the economic, financial and political worlds will be far better placed to play the experts again. Between now and then we will just have to put up with inane banter and posturing of those that let things get into this state.

Why on earth don’t more people use discount codes and vouchers?

2009-08-04T10:59:00.001+01:00

Retailers have used sales promotions and discounts for over a century to attract new customers. The internet today is no exception and there are often good incentives to convince you to purchase from a particular retailer. In some cases companies will offer you a discount not to use their store or call centre. They reduce their costs and you get a better deal. Everyone is a winner.

As the internet has become a major influence on buying decisions more and more retailers are using discounts to attract customers. Smaller companies can use discount codes and vouchers to become more attractive. Some major brands are also starting to look at the benefits of offering sales promotions in this way. Gone are the days of having to snip round a voucher in a newspaper, mailing leaflet or product packaging and stand in a shop clutching your “Money Off” voucher. So you can no longer claim that the embarrassment factor prevents you from getting the discounts on offer. I can only assume that people are not aware of the available discounts or they are too busy (lazy) to use them.

There is one reason I can think that you wouldn’t use discount codes and vouchers........when you go on a Discount Code and Discount websites is that you get bored or frustrated and give up. The major websites that carry the promotional codes and vouchers are a mess. They are like a jumble sale. They are also quite often out of date because they are trying to bring you every discount and deal available. What we have tried to do on www.thebestbestbuys.com is to bring you a selection of what we feel are the best codes and vouchers on offer. They are presented in an orderly manner and kept up to date.

The idea behind including this type of information on the site is to encourage people to think about what they are spending and where possible save money. If you are saving money you will have more disposable income and could choose to put the extra in a savings account, pay a bit more off your credit card or use less of your overdraft. You get the picture.

You can then help your friends, family and colleagues save money by telling them about the discounts you have found. Remember these companies want to give you money, it would be rude not to take them up on their offer.

The Moneysupermarket, Sainsbury’s loan saga continues

2009-07-23T04:13:00.000+01:00

In the middle of last week we got round to checking if http://www.moneysupermarket/ had fixed the http://www.sainsburysbank.co.uk/ loan rate as it was still wrong in the Sunday papers. The loan rate had been incorrect for two weeks and the Sainsbury’s loan had been shown in position three and not at number one. We weren’t particularly surprised when we found that it had been sorted and the correct rate was showing on the website.

As I said in my previous blog, it is only an error and all companies dealing with data have an error rate, however small. In fact due to the publicity on this one you would have expected it to get picked up the first week. So you can imagine my astonishment when I was going through the best buy tables on Sunday and the loan was still showing at the rate of 8.7% APR and not 7.9% APR.

What the hell is going on at Sainsbury’s Bank that they could miss the fact that their unsecured personal loan was showing incorrectly on the biggest price comparison site in the UK? Whoever manages the sales of this product for the bank has lost them a bundle.

Hopefully for all concerned the data will match up this week, Sainsbury’s can take up their rightful place in the charts, Moneysupermarket will be showing the correct data and consumers won’t be making financial decisions with suspect information.

Please don’t think that http://www.thebestbestbuys.com/ is turning in to a “Gripe Site”, we just find it incredible that a company such as Sainsbury’s can pay so little attention to a major sales channel. It is a fair bet that their shareholders would not be chuffed if they knew. We would also have expected Moneysupermarket to have picked this up sooner as the error is out in the public domain, it is not a data error tucked away in the back of a database.

http://www.thebestbestbuys.com/ adds a great deal of value to the consumer finance sector because we carry out a cross reference of data sources. Remember, if one of the major providers of financial data gets it wrong, it is wrong in all the other websites and publications they provide with best buy tables.

Another example of this happened this week, http://www.moneysupermarket.com/ was showing a savings product from Manchester Building Society in its No Notice Savings Account Best Buy Tables, however it was not being shown in the best buy tables of http://www.moneyfacts.co.uk/ or http://www.defaqto.com/ . When we investigated, it turned out that the savings account had a 35 day Notice Period (not exactly Easy Access). Again, it is a simple mistake but I wonder how long it will take them to spot it?

Sadly enough I am now eagerly awaiting the arrival of the papers at the weekend to see if http://www.moneysupermarket.com/ are wrong 4 weeks in a row about http://www.sainsburybank.com/ unsecured personal loan. Surely not?

Or if they are wrong for a second week about the presence of a 35 day Notice Account in their No Notice Savings Account Best Buy Tables.

Why do store cards still exist?

2009-07-17T17:39:00.000+01:00

I will never understand why store cards are not a thing of the past. They have been in decline for years but they are still with us, hanging about like a bad smell. A store card in general has a very high interest rate in comparison to a mainstream credit card and ties you to only being able to use it in a department store or in a chain of stores.

Most people acquire these hideous products in-store. The retailer will offer a discount based on the application for the card. So on the day the card will save the applicant 10% or more on their purchase. This can be a significant saving if you are making a major purchase, furniture, etc. However they then hang about in a wallet, purse or handbag waiting for you to use it again. The only way a store card can be of benefit is if you use it to secure an additional discount on a major purchase and you can pay the balance off in full.

Not even the King of Consumer Finance, Martin Lewis has been able to kill off these dreadful things. So let’s look at the facts and hopefully we can help bring about the end of store cards:

Store cards are expensive and inflexible.
Credit Cards are cheaper and more flexible.

Ideally you should not carry a balance on any card (store or credit) if you can avoid it. They are both forms of “expensive money” and were never designed for medium to long term debt.

If you know someone with a store card tell them to pay off the balance, if there is one, and to cut it up. Should they want or need access to this type of borrowing they can log on to www.thebestbestbuys.com and look for the best credit card deal. They may not offer you a discount but you can get a credit card that will not charge you interest on your purchases for up to 12 months.

So who is right about the Sainsbury's Finance Unsecured Personal Loan

2009-07-10T18:34:00.000+01:00

So if you are looking for an unsecured Personal Loan at the moment you have probably seen the Sainsbury's product available at a typical APR of 7.9%. However, if you looked on another website and in many newspapers it appeared with a rate of 8.7%. So who is correct: in many charts this is the number one loan of this kind, in all the other it is number 3. So who is right?

Here at http://www.thebestbestbuys.com/ we understand how the charts in the newspapers are compiled and due to the editorial process the Sunday Papers show the rates available on the Thursday before. But when we checked a number of websites are still showing the product at a rate of 7.9%. It was only Moneysupermarket that was showing the higher rate of 8.7%.

When we checked http://www.sainsburysbank.co.uk/ it was also displaying the 7.9% APR (as long as you had a Nectar Card). So either Moneysupermarket are accurate or the data in all of the websites that take their data from major providers: http://www.moneyfacts.co.uk/ and http://www.defaqto.com/ have the wrong information.

We contacted the Product Team at Sainsbury's Finance and asked them to tell us who is wrong.....Sainsbury's Finance & 70% of the major consumer finance websites in the UK or Moneysupermarket.com by far the biggest and most influential of all the comparison websites?

Well, well, well. It turns out that it is http://www.moneysupermarket.com/ that are incorrect. Hardly surprising when you consider that they were promoting the 7.9% loan last week as an exclusive product when it was easily available through numerous comparison sites.

At the end of the day this is an error but what it really highlights is that all of the credible consumer finance websites such as http://www.confused.com/, uSwitch, Interactive Investor, etc and all of the national press take their Best Buy information from one of three suppliers, Defaqto, Moneyfacts or Moneysupermarket. If one of these sources is wrong then it is wrong in many other places too.

Unfortunately for Sainsbury's The Sunday Times, The Sunday Telegraph, etc. have been publicising the wrong rate and the product that should have been at number one was actually shown at number 3, for the last 2 weeks. Yes they lost revenue but I am pretty confident they will survive.

The moral of this tale is just because Moneysupermarket are the biggest and the most recognised doesn't mean they are the best.

Has Mortgage Lending Increased or Decreased?

2009-07-07T13:19:00.000+01:00

In the past week we have seen one set of headlines saying that mortgage lending has decreased and other reports have said that there has been an increase (however slight). So what the hell is going on?

To make matters worse neither of the two statements are incorrect, but you have to have an understanding of where these conflicting pictures come from.

So on the 30th June 2009 we were told that mortgage lending had decreased for the 5th month in a row. Now, the source of this report is the Building Societies Association. It explains that its members (virtually every Building Society) have seen an overall decrease in mortgage lending.

Yet on the 1st July 2009 there were reports that there had been a marginal increase in the number of approved mortgages. This report came from the Bank of England and gives details of all the mortgage lenders in the UK.

The Bank of England Report is the one to go with, they are looking at the entire market and giving the most accurate picture. The Building Societies Association is reporting on its members' performance in the last month and there are a number of reasons why their mortgage lending is down:

There are fewer Building Societies aggressively pursuing mortgage business through the best buys.
Banks are now more actively seeking new mortgage business and they are offering better rates than building societies at present
Building Societies are finding funding mortgages through savers at present is tough as there is more competition for deposits

It is important not to take headlines at face value in these strange financial times, as a little knowledge can be dangerous

What has the internet become?

2009-07-06T12:50:00.001+01:00

I am old enough to remember the world before the internet and throughout the last 14 or 15 years I have watched it go from a nice to have to being an absolute life essential. In the beginning it was a place to find information, yet it has gone from the lofty ideals of youth to the other extreme.

The internet today is a place where you have to question what is before you and employ a healthy dose of cynicism. The information you need is still there but it is tucked away behind the attempts to sell you things or lead you off in another direction. Companies view the internet as a “channel of distribution” while, the user must remember that they should look at the internet as a source of information and a way of saving time and effort as well as money.

It takes longer these days to get what you want from the internet but it is still worth it, you just need to remember that many websites and companies are trying to relieve you of your hard earned cash. Some are legitimate, some indulge in sharp practices and some are actually untruthful and misleading. In the case of consumer finance websites, unfortunately, it tends to be that virtually every site is either using sharp practices or is misleading.

So how did it get to this point, where I am worked up enough about it to change my plans, career, develop a website and start ranting on a blog. The owners of http://www.thebestbestbuys.com/ have all worked for either one of the major financial comparison websites, a major bank or both. We came together to offer consultancy services to banks and building societies but when we started to research the business idea it became apparent that virtually every financial comparison website hides the best products behind their sponsored links or partner’s products.

In most cases you can find the right information. You will need to get to the home page, choose the required section, get past the sponsored products and partner’s products and fill out the search. Even then three of the major comparison sites have one last go at selling you their sponsored links or partner’s products.

Our issue with this is that anybody who did not know too much about the subject or wasn’t paying attention will be taken in by the subtle tricks being employed and can quite easily end up with a product that is not the best in the market. They went on to the internet to get the best deal. Financial Comparison websites are supposed to give you details of the best financial products. However, it would appear that there has been a huge disconnect here. The visitor to one of these sites must spend time searching for the information and they have to then check it against other sites to make sure they can trust it. Not really in keeping with what the net should be or what we hoped it would be.

It should be straight forward to use the internet to get the information you require. However we are now entering a time where only the users can ensure other users know where to go to find what they need. Forums, Blogs, Twitter and recommendations from friends on Facebook should now be the first step when searching for information on anything important in life.

We have therefore started to aggregate the aggregators, http://www.thebestbestbuys.com/ looks at hundreds of financial best buys and puts the top 5 in easy to read tables. The right information should never be more than two clicks away and you can be sure that the site is giving you the right information to start you on your way to finding the right financial products to suit you. Hopefully our approach to publicising the best mortgages, savings, loans and credit cards brings the internet back to what it should be and what we all hoped it would be.

Please check out http://www.thebestbestbuys.com/ Please give us your feedback on the site and the concept.

Please recommended it to friends, family and colleagues but only if you think it is worthy.