Well covered across this blog, and indeed one of the core financial issues that we at Bournes are absolutely committed to; is the fight against irresponsibly sold Payment Protection Insurance (PPI).

For many unhappy customers, PPI is a spectre that has haunted their agreements for credit cards, loans and the like, and outrage has been raging on for years surrounding cases of PPI being sold unnecessarily, without prior knowledge and even tied in with packages which were closed to insurance claims at all.

So for those affected, news this week that the Financial Services Authority (FSA) has finally pulled its finger out and given lenders until 1 December to clean up their policies regarding their dealings with PPI, will be a major step in the right direction towards fairness.

The finer details of the new regulations have yet to be revealed, but included in the proposals are changes to the way in which lenders handle complaints relating to PPI. This is to give rise to a wave of complaints from customers who have been previously affected, together with claims for compensation that could total nearly £3bn in the next five years.

The news is certainly welcome relief for those currently engaged in a fight with their lender in getting some recompense for being led astray. But let’s face it, December is still quite a wait – though this summer’s weather would have you believe otherwise – and if you can’t wait for the FSA to step up to the plate, don’t forget to get a dose of the advice we have on our pages to give you a boost.

Source: FT.com

Have you checked your supermarket receipt recently? That loaf of bread you bought this week seems just that little bit dearer than it did last month, doesn’t it? Yes, you’ve guessed it: the economic pest that everyone loves to hate – inflation – is back on the rise, and this time its as rampant as ever.

So much so, that one influential consumer think tank – Policy Exchange – has warned this week that base rates of interest set by the Bank of England will have to rise to a whopping 8% in the next two years, if the rises have any chance of being curbed.

Inflation is currently rising at 3% per year, thanks in part to the 0.5% base rate and the billions of pounds that have been pumped into the struggling economy to help stimulate growth. The trouble is that once things do start to pick up again there looks set to be far much money in the economy to cope with to small a supply of goods and services.

This will be great news for savers, with rises in personal wealth looking set to resemble that seen at the end of the 1980s, but absolute misery to borrowers – particularly homeowners, who will get a harsh taste of reality when their mortgage rate goes through the roof.

If inflation is giving you a run for your money right now, and your at odds to keep your budget balanced, you might do well to take a step back from things and soak up some of the budgeting advice floating around our website. Sometimes a few tweaks here and there can make a huge difference to what you have to spend throughout the week.

Source: Business Week

Unless you’re a parent, or indeed a prospective or current student yourself, it’s very easy to gloss over the unfolding events surrounding the Government’s forthcoming review of University tuition fees and finance. But just stop for a minute and take heed…

Less than 15 years ago, tuition fees did not exist on the UK. Furthermore, an annual grant (yes grant) was provided of nearly £2,000. When New Labour came to power in 1997, means-tested tuition fees (with a maximum cost of £1,250) were introduced, and grants were replaced by similarly means-tested loans. Then in 2006, ‘top-up’ fees were introduced and the cost of tuition spiralled, but still a cap of £3,225 was imposed.

Which brings us to the present time when, any day now, the go ahead will likely be given for this cap to be lifted, allowing Universities to introduce charges for tuition of their own choosing in order to recover costs of running courses – up to £14,000 in the most extreme cases, and with an average of around £6,000 a year.

Those in favour of the rises argue that the new systems mean that no money will be required by the student up front, but the can of worms that this opens up is far more alarming – a lifetime of crippling graduate debt.

Recent research has shown that the average amount owed on leaving University will be £25,000 for those enrolling this year. Is this a figure that the economy as a whole can continue in affording to ignore?

Source: Press Association

History has proved that, no matter how hard we try, our elected masters (currently Mr Cameron and his faithful coalition associate, Mr Clegg) are loathe to listen to what we, the population, have to say on the issues that matter.

But with big lessons seemingly waiting to be learned from the recent financial lurch, caused in part by an excess of unsecured credit, it would appear that the Government might have to start taking notice of calls from disgruntled borrowers, to cap the interest rates that lenders can impose.

Various research conducted in recent weeks, led by consumer group Compass, has shown that as many as 7 in 10 people are crying out for a cap, to alleviate the ‘pact with the devil’ that many people are having to take in order to get the credit they so desperately need. Such an openly exploitative tactic as employing dizzying interest rates on products should be the domain of loan sharks and their ilk, they say, rather than the practice of supposedly approved sources of credit.

Indeed, now that the Government has talked of creating a ‘fairer society’ as a cornerstone of its policies, it is just this sort of issue that should be atop its lengthy to-do list…

Source: BBC News

Turning to the plastic in times of need, when you find yourself stranded in that inevitable limbo between your last payday and the next, is a fact of life for most of us. And who ever said there was any shame to be had in utilising the wealth of credit available to get by, especially in times of late?

But it seems that being shrewd in choosing your source of credit in these instances is most definitely the name of the game, after figures published this week shows a startling rise in the use of so called ‘payday’ loans. These short-term loans are starting to attract the disdain of consumer groups with extortionate interest rates – rising above 2000% in some cases – and their seemingly wide-open availability.

In principle the loans are a handy quick fix and have been given endorsement by the Office of Fair Trading, who argue that it is better for those who use them to be borrowing from sanctioned lenders, rather than turning to loan sharks and other far less salubrious sources of credit. The real problems start to arise when customers ‘roll-over’ their loans from month to month, thus baring the brunt of higher interest rates rising with the amounts that are borrowed, as well as inadvertently falling into a state of dependence – always behind on the next repayment.

We suppose the real question is whether your payday will be big enough in the first place?

Source: Independent