The Money Well » Savings

Post Office Bank Accounts – How Long Before They Sell It?

Sid — Mon, 29 Mar 2010 18:49:51 +0000

I had a distinct feeling of Deja Vu this morning on hearing of plans to set up a banking service to be run from Post Offices. It seems like such an obvious move and you would think it could and should have been done years ago. So why the feeling of Deja Vu? Because it was done before and if you wonder why it does not currently exist it is, of course, because ‘they’ sold it.

According to an excellent page about the Girobank at Wikipedia the Giro Bank was,”Established by the General Post Office, it was bought by Alliance & Leicester Group, which was subsequently acquired by the Spanish banking group Banco Santander.”

“The organisation chalked up notable firsts. It was the first bank designed with computerised operations in mind; the first bank in Europe to adopt OCR (optical character recognition) technology;[1] the first UK bank to offer free accounts to individuals; and the first bank in Europe to offer telephone banking, beating the much trumpeted First Direct service by several years. It is widely credited for shaking up the UK banking market, forcing competitors to innovate and respond to the needs of the mass market.”

A shame such a good business was sold off then. We had a widely available and successful bank operating at post offices around the country back in the 1960’s which was able to provide banking facilities for ordinary people in convenient locations and by post. If it had continued it might have benefitted the Post Office enough that we could have avoided the policy that caused several thousand post offices having to close. It would seem that it’s success was to prove it’s downfall and our elected scoundrels decided to sell it off in 1989.

We are well aware that we cannot trust any government with our assets. We saw the sell off of British Gas, British Airways, British Rail, Girobank and just about anything else that might have made a profit and benefited us all back in the 1980’s. We saw our unelected Prime Minister selling off our gold reserves some years ago and he certainly never asked me or any other voter if he should. Interestingly this bold move was at a point when the gold market was at something of a low and that same gold would be worth four times as much now and if we were consulted and considered selling it something we should do now it would be worth four times as much now. Apparently it would now be worth an extra 6 or 7 BILLION pounds. I remember the good old days when talking of Millions was pretty hard to grasp. Now we talk about a few billion here and a few billion there as though it is mere pocket money.

Our leader likes to suggest he is a man with his finger on the pulse in financial matters. Hmmm. I have seen some bad financial decisions in my time, and made quite a few myself, but that was a huge financial error that cost every man woman and child in the country £100 each.

Why is it that no government seems able to see that something that makes a profit would benefit the public for year after year, instead of one simple windfall benefit from selling off our assets. The other question is, of course, if they are our assets shouldn’t we be consulted about a possible sale of any of them?

One of the current targets for a potential sale is the Post Office and the reason given is that it is a loss making drain on resources. So why would anyone want to buy it? If some company would decide to buy the Post Office it would surely be done on the basis that they would be able to make a profit in the future.

Why is it that any government would consider themselves incapable of successfully running a business like the Post Office yet they maintain they are capable of running the country? Clearly the intention of selling the Post Office is proof enough that they are incapable of successfully running the coutry. This is not a party issue as the Tories are as eager to admit they are just as incapable of successfully running the Post Office and the country as Labour.

The other suggested sale has been the Dartford Crossing. How anyone could consider selling such a rip-off goldmine like the Dartford crossing is astonishing. It is money for nothing. It was always supposed to become a free crossing once the first tunnel was paid for from the cost of the tolls. It never did become free. They decided to open a second tunnel and delayed the free use because of the cost. Next they added a bridge which again delayed the free use and last year charges were increased. You only have to see the queues of traffic, caused by the toll booths, to see how much money is being made. Astonishing amounts of money being collected from motorists even though we were promised it would be free eventually and this ignores the cost to the country of the people wasting time in queues that are entirely caused by the toll booths.

Incidentally, there was a No10 online petition about the Dartford Crossing asking that the toll booths be removed to ease traffic congestion. The reply from the Prime Ministers office to that petition argued that it was necessary to have the toll booths to smooth traffic flow so there is no need for toll charges at all. Perhaps we can expect to see toll booths for pedestrians in Oxford Street at Xmas time to ease the flow of people during busy periods! It also contained lies about the number of lanes available to traffic, saying that there were fewer lanes available than elsewhere on the M25. (The crossing has 4 lanes heading North and Six lanes heading South) The M25 has mostly 3 lanes which is less than there are at the Dartford Crossing. Presumably they already had plans to sell off the crossing and a profitable company is likely to sell for more money. Incidentally, is it a mere coincidence that there was a 50% increase in the cost of using the tunnel/bridge a year or so ago? 50%? These people expect us to vote for them when they deceive and lie to us?

Anyway, I seem to have rather got off the point there. The idea of a post office based bank is a good one and is something to be applauded. Such a shame it has taken 13 years of government for them to decide to do this and the chances are that either a) Labour are not re-elected so it goes no further or, b) they are re-elected and then conveniently forget all about it.

There is also talk about encouraging children to save at the Post Office. More deja vu there. It used to be that children were encouraged to save and the post office savings account was the first place to start bing able to put a few pennies into a savings account. These days it seems that nobody wants small savers because there is not enough profit in them. Even the Governments own Premium Bonds require you to purchase a minimum of £100 worth.(It’s actually National Savings, did they sell that off too?)

So, yes. This is a very positive step in the right direction. We should all be encouraged to save for the future and if that means your child wants to deposit just £1.00 then they should be able and encouraged to do so. The Post Office would also, apparently, be able to offer 90% mortgages so you may in the future be, visiting your local Post Office and asking, “Can I have ten first class stamps and a £250,000 mortgage please.”

My worry is that if it takes place and proves to be successful greed will overcome commonsense and it will be sold off. Actually, it just occured to me that this will make the Post Office much easier to privatise with a successful banking operation. The cynic in me wonders if that was the sole purpose of this idea and any benefits to customers are mere coincidence. I wish I were able to have more confidence in the honesty of politicians but it is hard to have any when all they do is spin the truth, mislead the electorate and attempt to damage their opposite numbers. Let us hope that a Post Office Bank has a long and successful future that benefits the taxpayer forever.

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Changes To ISA Account Limits

Sid — Mon, 05 Oct 2009 13:57:45 +0000

The ISA tax free savings accounts are limited by rules that specify how much you can invest and this has been set at £7,200 but that will be changing from 6th October 2009 for anyone who will be aged 50 or more by the 5th April 2010 and from the 6th April 2010 for everyone else.

From the 6th October 2009 anyone who is 50 or older by 5th April 2010 will be allowed to invest up to £10,200 in either fully in a stocks and shares ISA account or 50% in a cash ISA and the remainder in a stocks and shares ISA.

If you currently hold an ISA account and you will meet the criteria you should speak to your ISA provider and if you do not hold an ISA there are plenty of eager providers to be found with a quick search online.

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Take Care If You Want To Save Money Doing DIY Home Improvements

Sid — Fri, 28 Aug 2009 10:21:09 +0000

The news that house prices rose at their highest rate in one month in July since 2004 will have brought a little cheer to some people’s lips while those still hoping to get on the housing ladder may be disappointed but with the August bank Holiday upon us there will be plenty of people deciding that a little diy home improvements will be the way to spend their long weekend.
DIY should, perhaps, come with a wealth warning though as diy home improvements often end up as a botched job that requires and even greater amount of money to have it fixed by a professional than it would have cost to have done in the first place. While the recession continues to take it’s toll many people with little previous knowledge or experience are tempted to do jobs around the home that are beyond their limited abilities in order to save money. This is in fact a false economy as it is predicted that Brits pay a massive £1.5 billion to fix DIY jobs gone wrong, adding to their already hefty household debts.
Figures have shown that over a third (38 per cent) of Brits choose to spend their bank holiday working on DIY jobs, and an amazing one in ten of those projects will have gone wrong. To add to the cost there are something like 250,000 people who suffer DIY-related injuries every year, but debt management company Kensington Financial Management Consultants warns that such DIY disasters could lead to further unwanted debts.
It may seem like a good idea to use the break to put up a few shelves or repaint the front room but bank holiday DIY can prove to be a very costly mistake if it all goes wrong. Common accidents include flooding caused by drilling through water pipes or damaging a tap, flat screen TVs falling off the wall, flat pack furniture collapsing, paint being spilt on carpets, broken glass and electrics short circuiting.

Mark Love from Kensington Financial Management Consultants says: “With the housing market struggling to improve there has been an increasing trend of ‘improve, don’t move’. This has lead many to undertake a spot of DIY in a bid to save cash. But this can end up costing more in the long-run and most Brits can’t afford to take on any more debts. For more ambitious jobs, we’d recommend saving up to get the work done professionally.”

The average house decreased in value by £62 every day during the last 12 months, so it’s probably only really worthwhile doing jobs that are absolutely necessary or that will increase the value of the property by more than the cost of the work.

Many people become over-ambitious when it comes to DIY so here are some tips to avoid throwing a spanner in the works-

Manage your money and work out exactly how much you will need to spend on tools, materials and equipment to finish the job and make sure you stick to this budget.
Check your tools and make sure they are in good working order to reduce the risk of mishaps. Check that any equipment you use carries British or European quality or standard marks in the manual.
Know your limits – If you are unsure of the extent of the job, call in an experienced professional. This may work out both quicker and cheaper as you won’t have to fork out for specialist tools and you may get a better end result.
Check your insurance policies to see what you are covered for in case of an accident and make sure you would be covered for any accidental damage.
Rushing a job can lead to a botched job so make sure you have the time to finsih the job and don’t leave the job unfinished, or sharp tools lying around.

Work and play safe and have a great bank holiday.

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Get Good Advice When Choosing Financial Products

Sid — Wed, 13 May 2009 15:57:43 +0000

Finance and financial products have become far more complex and confusing and as we have seen over the last year or so, even the banks themselves don’t fully understand what they are doing.

So, it is hardly surprising that the average man or woman in the street may not fully understand what financial products are available or which are most suitable for them. This makes us all potentially very easy customers to sell these things to.

When we are confused a financial salesperson will attempt to shine some light on the problem but if they are working for a particular finance company or bank they are likely to only show you their own company products. They may advise you on what is the best of the range they have on offer but there may be others on the market that would be a better deal for you.

Independent financial advisers are able to offer a whole range of financial products from many different companies so they might well suggest products that are a more suitable for you and your situation.

We often spend a lot of time sifting through different deals and offers for holidays, cars and TVs but we will often be happy to accept the first deal offered when it comes to financial products. This could be a mistake that costs us a lot of money and we should reduce that risk by getting advice from several different sources and making a considered judgement once we have a better grasp of the facts and what offers are available.

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Is There Any Point In Saving Money?

Sid — Mon, 23 Mar 2009 12:25:07 +0000

With interest rates at the lowest they have been for centuries, savers are feeling very hard done by. They have good reason to feel that way as they have been doing the right thing. All through the credit fueled consumer boom there were voices calling for us all to save more towards our pensions and many people did continue to save for the future.

Those savers now feel they are being punished for the carelessness of others and they have a good point. Unfortunately the solution to the problems created by the madness of the credit powered consumer boom seems to mean that savers get punished more than the borrowers as they see returns from their savings drop to almost nothing.

So, is it a waste of time to save spare cash? No way. This is an exceptional period of time we are living through and things will turn around at some point. Interest rates will riseand get back to more normal levelsand what is more, I believe, the saver will become a more important and valued customer in the future.

Banking and finance have to change and governments around the world are looking to improve the behaviour of the banking industry. Politicians, with a few notable exceptions, tok credit for the consumer boom but ignored the costs and consequences which we now see all around us.

Having recognised that you can’t allow a fox to run the henhouse, or bankers to be trusted to behave sensibly where money is concerned the regulations will be tightened up and banks will become more boring places as they were once before.

The savers will once again be considered important because they will be the people providing the funds for the banks to lend out. Whereas we have had a few decades where the borrower was seen as the most important customer we may now, at last, see the saver valued, by banks and governement, as the important person they are.

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