Barclaycard has announced that spending on credit and debit cards was up over the 2009 festive period.

Barclay Payment Acceptance, which is one of the largest processors of credit and debit card transactions, said that UK shoppers spent more using their plastic than they did last time. The figures compare 19th December to 31st December, 2009, to the same period in 2008.

And the busiest day turns out to be the 23rd December, when a whopping £497 million was spent using credit and debit cards. Further examination of the data might show of course that this was men doing their last minute shopping.

The next busiest day was 29th December when no doubt attention turned to sale bargains. On this day some £376 million was passed through the tills using plastic.

The total turnover for the period under review was a quite staggering £4 billion, not bad considering the country is still officially in recession. It was a 2.4% increase over 2008 which saw just shy of four billion being spent.

Breaking the data even further, reveals that spending after Christmas was also up from 2008, with £1.68 billion compared to £1.64 billion.

On Christmas Day itself (thought that was a holiday), there were 700,000 transactions totalling £24 million. These appeared to peak at 12.08pm (maybe in readiness for lunch and the Queen’s Speech), with 32 transactions a second. The online retailers accounted for £9.5 million’s worth of trades on the day itself, compared to £8.1 million in 2008 (up 17%).

On boxing day, many of the transactions, which averaged around £73, were driven by the DIY sector.

Head of Sales at Barclaycard Global Payment Acceptance, Marc Pettican, said:
“Our retailers have seen an increase in turnover compared to the same period last year with over £4 billion being spent. We’ve also seen a stronger post-Christmas performance as shoppers take advantage of the sales discounts and consider the effects of the imminent VAT increase.”

Guest Article by Neil Camp

It seems it’s recession, what recession when it comes to children’s presents this Christmas with an estimated five billion being spent on keeping the little ones happy over the festive season, up 20% from last year.

The figures come out of research conducted by The Children’s Mutual, which is one of the UK’s largest providers of Child Trust Funds. They say that the average child in the UK will get £380 worth of presents this year, compared to £316 in 2008.

And not only toys. Alongside an estimated over £4 billion worth of toys and other presents underneath the UK’s Christmas trees, there will be a staggering £960 million in cash given as well. The average amount of cash given is £73, although around 25% will receive around £100.

Unsurprisingly, the sensible souls at The Children’s Mutual are asking parents, grandparents, relatives and friends alike to put some of this cash to better use than as a means of buying the video game. But how kids will respond with a letter from their loved ones explaining a decision to invest part of the filthy lucre they were expecting in their Child Trust Fund is not clear.

But David White, Chief Executive of The Children’s Mutual, is undeterred:
“It’s great news that the recession is not affecting kids’ stockings this Christmas. However we are urging parents to think about their children’s futures and ask friends and family to invest a portion of this money for the long-term.

“Around £200 is spent on presents that won’t make it past Easter, but if this money was invested in a Child Trust Fund each year, it could be worth £6,100 by the time it matures when the child turns 18. This way friends and family can give a gift that could last well beyond the child’s 18th birthday and providing them with a nest egg for the future.”

Although quite what kids will make of his reasoning remains to be seen, although The Children’s Mutual do point out that top ups into Child Trust Funds do get a timely boost at Christmas with an average increase in ad hoc payments of just under 25% during the festive period.

So it’s hopefully less cash on the hip this Christmas and better financial planning, although don’t the Government still say that only the brave (or foolhardy) consumer will save the county from continued recession?

Guest Article by Neil Camp 

VAT across Europe is about to be set at new high levels as members of the European Union introduce rises in a way to cope with the financial criss that confronts them all.

The average weighted rate was 18.6% in 2006, but the annual TMF EU VAT Tracker predicts that that figure will rise to nearly 20% by 2010. Spain are already believed to have pencilled a 2% rise in their VAT rate with their Premier, José Zapatero, recently speaking of the need for a major increase by the end of 2009. The Spanish financial press think that this means a 2% rise.

Finland is to up their rate by 1% next year and the UK will shortly end their 2.5% VAT reduction.

Standard VAT rates around the 27 European Union are tracked by the annual TMF EU VAT chart and up until 2007, it showed that countries were implementing big VAT increases to subsidise cuts in business taxes. The basis of this strategy was the belief that this was a vital way of securing job-creating inward investment and preventing the leakage of employment to low-cost emerging markets.

Germany was said to be the best exponent of this strategy, which pushed through a 3% rise in 2007. France and Netherlands were said to be following German’s lead, but fears of inflation and then the start of the credit crunch in 2008 put an end to their interventions.

Nonetheless, VAT rises are back on the respective Government agendas because of rocketing deficits emerging over the past year. In order to cope with their debts and pressure from the currency markets, the last six months have seen emergency VAT rises in Ireland, Lithuania, Hungary, Estonia and Latvia. And more countries are expected to follow suit.

Richard Asquith, MD of TMF VAT Services, said:
“It now seems that the earlier fears around inflation and recession have now fallen away as economies stabilise. With record-breaking government deficits in all countries, we may now see a rapid re-acceleration of this policy with an expansion of the VAT burden on consumers. Without doubt, other large European countries will follow suit and push VAT rises back to the top of their tax strategies.”

Guest Article by Neil Camp

An unfortunate side effect of the current recession is that household pets are increasingly being dumped in order to save money on shopping bills.

The Royal Society for the Prevention of Cruelty to Animals (RSPCA) recently claimed that over 30 pets a day are being shown the door. And this figure is set to increase.

The RSPCA, together with a number of other pet charities and organisations, are providing advice for owners as to how to keep pet keeping costs to a minimum.

Firstly, if you haven’t already got say a dog, or cat, don’t buy a pedigree. Get a mongrel. Not only are they cheaper to buy, but they will be cheaper to run as well. The theory is that many pure breeds are somewhat more prone to illnesses than a backyard scruff. Pure breeds are often the result of many years of careful breeding and this can result in inherent weaknesses. And more of those mean potentially larger vet bills.

And if you definitely want a pure breed, do a bit of research on the ones available and what they might cost your wallet. A recent piece of research showed that, for example, a Rottweiler was, on average, over 50% more expensive to keep going in terms of vet bills, than a West Highland terrier.

Secondly, and still on the subject of vets, if your dog is exhibiting signs of discomfort, or illness, don’t just rush out to the vet. Okay, if your pet is in a lot of pain, then fair enough, but with a mild problem, just care and attention might do the trick. At least leave a little time before the problem properly manifests itself before a vet visit, which might help the speed of diagnosis and cut down on the number of expensive visits. Research has shown that over £100 million was wasted last year on unnecessary vet visits.

Thirdly, vets are now obliged by law to offer prescriptions of the drugs they intend to administer to the pet. So a consumer is well within their rights to purchase these medications, say from the internet and if able, give them to their pet themselves. Prices on the internet can be some 50% less than offered by a vet.

Finally, buy your pet food in bulk. The general rule is that the more you buy in bulk, the cheaper it will be than in smaller amounts. And buy online for the best bargains in pet feed.

Guest Article by Neil Camp

The increasingly deepening recession is good news for tenants still in employment, but not so good for landlords as the rental market goes through a period of readjustment to a new economic reality.

For those tenants hanging on to their jobs, many are renegotiating big rental discounts. And for those that find themselves being made redundant, they are resorting to missed payments, leaving the properties quickly, or driving their payments down.

And for landlords not wishing to adjust to an average reduction of around 20 to 30%, they have to face up to losing tenants and re-advertising in a very competitive market which is suffering from over-supply.

So landlords are losing hundreds of pounds as their tenants take steps to bring their costs down.

And the Royal Institution of Chartered Surveyors said that too many properties available to rent were having a detrimental effect on rents. Corporate demand for rental properties has almost come to a halt and with people unable, or unwilling, to sell because of the poor market, many have chosen to rent instead.

There is also evidence of some tenants being particularly demanding, effectively asking landlords to pass on the benefits of lower interest rates – and therefore lower mortgages payments – onto them in the form of lower rents. Observers see this as a particular new tactic, as though tenants feel they should share in the lower interest rate environment. And with the rapid expansion of the buy-to-let market before the recession, a lot of tenants are aware that their landlords are individuals with mortgages that in many cases are becoming less expensive.

A favourite tenant tactic when negotiating is to secure a price on a new property, then use that in following negotiations with their present landlord, making it clear that if they don’t reduce the rent, then they will move, leaving the landlord to find a replacement.

Although ironically, the fact that mortgages have dropped so much, means that some landlords have been able to dig in and resist some of the wilder reductions asked for by their tenants.

And in order to anticipate a re-negotiation, some agents are advising their clients to offer their tenants a 10% decrease, almost as a goodwill gesture and one that might stave off an argument for more.

Some London agents are reporting rent drops of around 15% in the last year, with up-market properties suffering the worst of all, with falls of as much as 30%, especially with corporate tenancies.

Others are saying that although tenants are asking for reductions, and others are under threat from the recession, defaults have not yet become a major problem, although this might change as things get worse.

Much will now depend on how many tenants start to default, or how many landlords are forced to play ball in the future by reducing rents. Interest rates cannot fall much more, the costs of being a landlord will not have decreased dramatically, and a point will be reached when renting becomes unviable. But for many buy-to-let mortgage holders, they may have no choice but to give-in to their tenants.

And if the property market were to fall even further, then many tenants might find the tables reversed and their landlords being repossessed, leaving them to move out without any recourse to the law whatsoever.

Guest Article by Neil Camp