Those with bank accounts and loans are over-estimating their balance by £70.73 concludes research from a top UK bank.

Barclays discovered that when customers with accounts and loans thought about what their balance was, most could not accurately say how much money was there at any one time and, on average, over-estimated the figure by £70.73. This was the average amounts for Brits in general, but the research goes even deeper, suggesting that Londoners are even worse. Those living in London overestimate their balance by about £91.62. The research compiled a list of areas of the country where the most out of touch with their bank account live. The top ten included Leicester, Manchester, Edinburgh, Newcastle and Portsmouth.

So why this lack of knowledge when it comes to our bank balance? Barclays’ research indicated that customers only check their bank balance four times a month. To solve this, Barclays’ research suggests that mobile and text banking may be the answer. 57% of people questioned believed that using mobile and text banking would be a way of keeping more on top of their balance.

This is backed up by more of the survey’s findings: 84% who currently used mobile banking were more accurate in estimating their bank balance. Compared with the 83% of bankers with no mobile banking capabilities, only 17% of those with mobile banking admitted they didn’t know what was going in and out of their bank account on a regular basis.

“Being in control of your money starts with knowing how much you’ve got and where it is being spent. Online and telephone banking made that easier and now mobile phone banking is taking it a step further. Mobile phone banking is still a relatively new way of doing your banking but the number of users is growing at a phenomenal rate and simultaneously more features and functionality are being added. It’s really encouraging to see the positive impact it is having on helping people stay in control of their finances in a quick, easy and convenient way,” said Sean Gilchrist, Barclays Digital Banking Director.

Keeping on top of bank accounts and loans is important to ensure you are not overspending and to get a good idea of things such as day-to-day budgets. The Barclays research suggests that things such as mobile banking can be a great help in keeping on top of your finances.

Guest Article by Neil Camp 

Banks, investment firms and insurance companies have all been slapped on the wrists again as The Financial Ombudsman Service releases its third set of six-monthly complaints data.

And banks, like many companies across the financial sector, do not come out of the findings that well.

The report from The Financial Ombudsman Service covers complaints that were received for the first half of the year. The total number of new complaints in this period were 84,212. And nearly 90% of these related to 160 businesses which were financial in nature. The Ombudsman actually covers 100,000 businesses.

To compare with what happened in the second half of 2009, then there were 82,136 received then, so a slight increase in 2010.

What’s worrying, is that five individual groups had more than 3,000 complaints each. Taking as a total, this amounted to over half of all the new complaints.

As to the number of complaints upheld (those found in favour of the person complaining), then 44% were seen to have validity. This compares with 53% in the second half of 2009, which suggests that the complaints although up in number, are not for some reason being upheld so frequently.

A contributing factor may have been that some 15,000 complaints about unauthorised overdraft charges were filed and then closed. This was the only course of action left open to The Financial Ombudsman Service, after the Supreme Court dashed everyone‘s hopes by ruling last year that the Office of Fair Trading’s test case could not be used to challenge the fairness of unauthorised overdraft charges.

The chief ombudsman, Natalie Ceeney, said:
“The latest set of complaints data shows that some businesses are really committed to ensuring that complaints are handled well, and are used to inform and improve the service they offer their customers.

“However, the complaints data also shows there is still more that some businesses need to do to ensure that complaints are properly investigated and fairly resolved. The ombudsman is keen to continue to play its part and help businesses draw lessons from the complaints that we see, so disputes can be sorted out at the earliest opportunity.”

As for which banks got the worst marks, way out in front is the UK’s largest bank, Lloyds TSB. Of the 12,750 complaints about in the first half of 2010, some 45% were upheld. And although Barclays was second with 7,991 complaints, a whopping 61% of those were upheld. Third on the name and shame scale was Halifax/Bank of Scotland, with 6,211 complaints, although only 23% were upheld. Ironically, with Halifax/Bank of Scotland being part of Lloyds TSB, put those figures together, and the group wasn’t very popular at all.

Santander customers like to complain, but with only 19% of 4,881 complaints upheld, the Spanish banking group, coming in at number four, might have averted a PR embarrassment.

Fifth on the list is the bank that likes to listen to its worldwide customers, but obviously not enough, because 3,286 customers didn’t like what they were being told, although only 34% of the complaints were upheld.

Bringing up the rear of the top six worst offenders – no doubt due to those nauseating television adverts about their friendly bank staff – was NatWest with an not too unrespectable 2,810 complaints and 43% of those were found to be valid.

So complaints up, but numbers of those upheld down, so maybe there’s hope for the remainder of the year.

Guest Article by Neil Camp

Customers may like to rank their bank, but the European regulators and central banking governors have just done the same thing.

But how they rank their bank is far more exacting, as senior European regulators have got together in Basle, Switzerland, and created new stringent capital rules.

It comes down to how much capital a bank should hold in case it hits a financial problem. The financial crisis in 2008 highlighted how the banking system – not just in the UK, but across the globe – could not cope with a crisis, such as the US mortgage collapse.

It has been agreed that banks should now put aside some 7% of their loans and investments in reserve to cope with financial wobbles, without having to run to their respective governments for taxpayers help. The figure used to be 2%, which proved completely inadequate as the banks stood on the verge of near collapse.

But for some commentators, the newly found prudence could ironically lengthen recession, and might actually cause the double dip most economists fear. The argument goes that if banks have to spend more of their cash in bolstering their reserves, then that means less cash for the consumer on the street, or for hard-strapped businesses.

The UK’s chief money regulator was pleased though, with the Chairman of the Financial Services Authority Lord Turner saying that the changes were: “…a major tightening of global capital standards and will play a major role in creating a more resilient global banking system…”

Jean-Claude Trichet, President of the European Central Bank, added his weight to the proceedings, declaring that the new rules were: “…a fundamental strengthening of global capital standards. The transition arrangements will enable banks to meet the new standards while supporting the economic recovery.”

The US added their congratulation as well; it’s been known for a long time that Barak Obama, the American President, is in favour of more stringent banking rules worldwide.

For those worried that the new rules could bring about a double-dip recession, their fears should be somewhat calmed with the news that the Basle III – as the new guidelines were called – do not come into force until 2013 and will still then take several years to be gradually be introduced. Banks will not have to immediately squirrel away millions of pounds into their vaults.

And Basle III still needs the final ratification from the heads of governments who attend the G20 summit in November.

The reactions from the individual banks has been mixed. Many UK banks already discipline themselves to reserves pegged at around 9%, which possibly highlights the inadequacy of the new rules. But mainland European banks are going to find it more difficult, as they have operated traditional with lot lower reserves.

Indeed, the Swiss, UK and US authorities were lobbying hard for 10% and feel that 7% is just not onerous enough and will not deflect the next major stress test.

So from now, you can rate your bank from a new perspective.

Guest Article by Neil Camp

The term savings fixed rate will be uncomfortable for many of the over-55s if a new report from Aviva is to be believed.

The report concludes that around 25% of over-55s are having to take the unwanted step of dipping into their income-generating savings in order to pay for life’s unexpected expenses. And for those whose financial plans embody the savings fixed rate schemes, there could be a tightening of the purse strings in the future.

The report revealed that the majority of over-55s (92%) have faced unexpected expenses in the last five years. What’s more, for this age group, the biggest financial fear is the rise in the cost of living. Some 64% cited this as the thing that keeps them awake at night. And given that this worry has gone from 18% of those asked in May 2010, to 64% in the latest survey, then this demonstrates the sense of panic and bewilderment caused both by the effects of the recession and the Government’s plans regarding the austerity measures.

And when it comes to financing those unexpected expenses, most of the over-55s dip into their emergency savings funds to foot the bill. A quarter use income-generated savings to fund the payout; some 17% cut back in other areas to make savings; just over 10% organised a loan, or paid by credit card; and, 6% sold assets.

Aviva’s Clive Bolton, a director of the company focussing on retirement, said about the findings of their report:
“Over the last thirty years, people have generally seen retirement as an opportunity to relax after a long working life and enjoy the fruits of their labour.

“However, when you consider that for a savings pot of £16,296, you would get an annual gross income of just £117 from the standard branch based notice account, you can understand why many over 55s are very worried about their finances. In fact these figures reveal that one in five over 55 households is struggling to get by on almost a third of the national average income.”

She went on to explain that:

“Retirement income is also relatively fixed which is why any rise in the cost of living is particularly concerning for this age group. This coupled with the fact that people often have to pay for unexpected expenses for which they have made no provision highlights how vitally important it is to build up retirement savings over your entire life.

“The Aviva research shows that as longevity increases individuals will spend longer in retirement. As such we want to help them plan their retirement finances so that they can enjoy the best possible lifestyle in their later years. At Aviva we offer a range of saving and investment solutions, as well as access to financial planning tools, to help individuals save for both planned and unplanned future expenses.”

In short, a worry for anyone with savings fixed rate plans.

Guest Article by Neil Camp

When it comes to money, a research report from financial giant the Prudential has revealed that one in three couples are oblivious to their partner’s finances.

And the Prudential – in the dock itself currently over its abortive plans to go large in Asia – worries that if partners don’t know each other’s money situation, then they risk poverty in old age through a lack of proper financial planning.

The Prudential study concluded that nearly one third of couples (33%) who were over the age of 40, but not yet retired, did not know, or indeed fully understand, their partner’s financial retirement planning. What’s more, just over a fifth (22%) admitted that they had never talked to their partner about the idea of planning for retirement.

The research went onto reveal that its women who are less likely to discuss these money matters with their men folk. Nearly a quarter of women said they had never broached the subject, whereas only one in five men said they had never raised retirement plans.

Perhaps even more worrying, just over 10% of both men and women admitted that they were not remotely interested in their partner’s financial affairs, nevermind their financial planning.

Investments director at Prudential, Andy Brown, said:
“It is incredible that so many people do not know the details of their partner’s retirement savings. Essentially, this could mean millions of UK adults are banking on hope as their core retirement strategy and are approaching what is arguably the most important financial decision without a full understanding of their household financial situation.

“It’s astonishing that one in 10 men and women say they’re not interested in their partner’s retirement savings arrangements. Firstly, couples should strive to have open conversations with one another but they also should aim to be constructive and use these conversations to begin laying the foundations for their retirement planning. The reason this is so important is because the longer retirement planning goes unresolved.”

And it also turns out there is a north/south divide over this money awareness. Those in the north of the UK had the lowest levels of awareness, compared to the greatest awareness which was found to be couples living in the South East and East Midlands.

Guest Article by Neil Camp

Those looking for fast finance are using their wedding rings to raise money and given the expected rise in the divorce rate in 2010, not too many tears will be shed.

Recessionary times always bring out ways of quickly raising finance and for many couples unhitching from the marital yoke, getting a firm to buy the gold, rather than just pawning it, appears to be growing in popularity. The recent difficulties in the economy have led to this trend, with postgoldforcash.com having bought over 10,000 engagement and wedding rings since 2009.

It’s not, however, purely financial reasons that are driving people to sell their precious wedding rings. Many find their wedding rings are no longer that precious after divorcing from their partners; divorce-online.co.uk has predicted that the number of divorces will increase in 2010 due to the economic recession. In the first quarter of 2010 alone, there was a 6% increase in the breakdown and eventual separation of married couples compared to the same time period in 2009.

For England and Wales, the totals are usually on the high side. In 2008 the divorce rate was over 11.2 people divorcing for every 1000 that married. This was relatively low by the standards of England and Wales, but globally this is the one of the highest divorce rates seen.

Arguments over mortgage payments, unemployment, savings, what to spend and what to save, are just some of the areas in which couples may be finding strong disagreement in any marriage. Combined with the current economic situation, and these problems are magnified to the point where they have appeared to be dissolving marriages at staggering rates.

The notion of selling one’s wedding ring for some cash is not quite so surprising a notion when – as the case appears to be now – it is combined with divorce. But both notions are apparently driven by our gloomy economic climate, although ‘divorce’ has yet to appear on any prescribed money saving tips list.

With personal finance looking down, selling a wedding ring appears to be one way of overcoming two problems at once. Those wanting to make some extra money this way can find a number of ‘gold for cash’ websites and services, varying in reputation and price.

Guest Article by Neil Camp