Talk Money

Scottish football clubs can declare a result in the battle with the credit crunch after a report revealed their financial health was improving.

PricewaterhouseCoopers has said ”shrewd business acumen” has led to clubs clearing debt and becoming more efficient.

Eight out of 12 clubs are now recording positive earnings and the highest general profit in the last 10 years.

Just four years ago many of Scotland’s top clubs were technically insolvent and facing a total debt level of £186m.

But better use of assets like stadiums and improved financial management has seen the football fraternity transform its fortunes.

David Glen of PricewaterhouseCoopers said the improved financial performance will help many clubs “weather any financial storms”.

The season of 2006 to 2007 was seen as a turning point, with many clubs sorting out balance sheets and recording improved attendances.

During the year 28,000 extra supporters went to games and St Mirren saw an average attendance increase of 48 per cent.

The total football wage bill continues to climb however, up by seven per cent to £100m with the Old Firm making up more than 50 per cent of this.
Celtic’s finances are doing well in particular, posting a 31 per cent rise in turnover to a record £75m, helped in part by reaching the last 16 of the Champions League.

Article supported by Physioroom.com, Shoulder Strap suppliers.

New wireless technology could see people ditching cash and cards in favour of using mobile phones to pay for goods.

UK payments association Apacs said Near Field Communication (NFC) could ‘revolutionise’ the way consumers buy things.

NFC is a short-range wireless connectivity technology that allows secure transactions, undergoing development as people abandon cash in favour of cards, according to Apacs.

Apacs spokesman Jemma Smith said: “At some point the scales are going to tip to the point where people really do start using [mobile technology] and then it will potentially revolutionise the way that we pay for things.”

Apacs has reported people are now more likely to use cards to fund purchases, particularly for more expensive items.

However, this is contradicted by research from the British Retail Foundation, showing cash is used for 60 per cent of all transactions, up on a total of 54 per cent last year.

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As reported by nearly 2/3 of brokers, the ongoing regulatory investigations into Payment Protection Insurance (PPI), by the Financial Services Authority (FSA) and Competition Commission, have had little impact on selling Mortgage Payment Protection Insurance (MPPI).

The Mortgage Alliance (TMA), in conjunction with Cardiff Pinnacle ran an online, General Insurance (GI) survey which showed that nearly 2/3 of respondents (64%), felt recent media attention and regulatory investigations have had little negative impact on the selling of MPPI. The GI survey was launched in order to gain feedback and specific views on the current market in terms of both household and MPPI.

The survey reflected the following results pertaining to media attention and investigations, from respondents:

Implications have had a mild effect on sales — 21%.
Implications have had no effect on sales —  15%.

The survey also highlighted the importance (from “extremely important” to “not important”), for brokers and their clients to have the option to advise on household, buildings insurance and mortgage insurance.

The results of the respondents’ poll revealed the following results:

Claiming the option to be “extremely important” — 49% .
Claiming the option to be “very important” — 26% .
Claiming the option to be “important” — 16%
Claiming the option to be “fairly important” — 5%.
Claiming the option to be “not important” — 4% .

Other essentials of the survey showed an immense 97% of the respondents considered it to be ‘important’ to have a facility which allows customers to spread household repayments over 12 months, while only a meagre 3% reported that they did not feel it was important.

The comprehensive poll also surveyed brokers to determine how they preferred their commissions to be paid. The majority of respondents (44%), reported that they were ‘unconcerned’ whether they were paid monthly or annually. Those who claimed they preferred to be paid annually, in advance, were only 33%, while 23% of the respondents said they preferred to be paid their commissions on a monthly basis.

The results of the survey will be used to identify any potential fears or developments in the market, which TMA will use to address in future trends.

National Sales Manager at Cardif Pinnacle, John Harrop stated, “At Cardif Pinnacle, we are constantly reviewing and updating our products, and the survey has proved invaluable in obtaining feedback from the people who actually sell the products at point of sale. The information gained from the survey will provide a framework for future product development.”

Phil Whitehouse, head of TMA, added, “This survey conjured up some very interesting points, and certainly helped us garner a better understanding of what brokers are looking for to get the most out of this important sector of the market.

“A good mortgage club should offer brokers added value in order to help them increase sales/income and, at TMA, we will certainly be looking at elements from this survey to bring a strong proposition to the market that will be of true benefit to our members.”

A recent report by the independent financial comparison site, MoneyExpert.com, has revealed that a combination of rising insurance premiums, higher petrol prices and general car and van maintenance costs are forcing more and more motorists off UK roads.

The report reveals that around a quarter of vehicle owners now claim that they use their car or van less because of the overall increase in the cost of simply running a vehicle, with 29% of drivers aged 55 or over claiming to have used their car or van far less in the past year because of soaring costs.

The report cites petrol price rises as the chief cause of cutting back on vehicle usage (76%), with rising van and car insurance premiums and higher maintenance costs combining to poll 16% as the secondary cause of reduced road use.

With the current price of unleaded fuel now standing at an average of 107.5p a litre in the UK, and reaching highs of £118.9p in certain parts of the country, increasing numbers of motorists are now finding themselves unable to use their vehicles as freely as they had in the past, as they struggle to contend with the rising prices.

Neither is the situation likely to improve in the foreseeable future as the Chancellor, Alistair Darling has already announced in this year’s budget that fuel duty on larger engined ‘gas guzzlers’ will effectively increase by half a pence a litre from 2010, and fuel duty is due to rise by a further 2p per litre from next October.

As the current credit crunch begins to affect more and more consumers, motorists have also seen some car insurance premiums rise steeply, with the average comprehensive car insurance policy now reaching £629.04.

MoneyExpert.com spokesman Sean Gardner commented on the situation: “Many people are finding their finances being squeezed to the limit, and for some motorists that now means having to leave the car at home and take public transport or cycle to work, simply because motoring has become too expensive.”

“The cost of petrol is high, but the single largest outlay for the motorist is the insurance premium.”
Mr Gardner further suggested: “The only way to minimise the damage is to shop ‘til you drop in order to find the best possible insurance deal.”

In fact the most recent figures from MoneyExpert.com’s independent Switching Monitoring Index indicates that 4.9million vehicle owners have already done just that, having switched car insurance policy providers within the last six months.

But motoring is not, of course, the only area to be hit hard by the latest effects of the continuing credit crunch, with the impact on property investment and the housing market also spreading down to cash-strapped consumers.

According to a very recent report released by Savills, the estate agent, house prices could continue fall by as much as 25% if the crunch persists. This follows on from a 10% decline in the housing market already this year, and a predictive fall of 15% in 2009.

Savill’s forecast coincides with the latest figures released from the property data business, Hometrack, indicating that house and property prices have already dropped another 0.6% in the past month alone, making this the seventh consecutive fall and causing the inevitable impact on property investment in general.

However, there was a cautionary note of optimism from Yolande Barnes, Savill’s director of residential research, who indicated that if home loans were to become more freely available soon, prices could begin to stabilise to a mere 4% lower by the end of the year and could ease by another 2% by 2009. However, she warned, there could be even greater difficulties if the banks did not end the drought on mortgages very soon.

With so many of the usual options for refinancing currently imposing barriers and tighter restrictions, so far this year the numbers of consumers forced into taking out Debt Management Plans (DMPs) or Individual Voluntary Arrangements (IVAs) rose to 800,000 in 2008, double that of the previous year.

Trying to save money wherever you can is important to us all. Car insurance should be no different. Do not assume that your agent knows everything about you and your vehicle.

Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways.
For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

According to Alliance Leicester Mortgages London will remain the most popular region for property investment in 2008, with Scotland and the North of England experiencing the strongest growth.
Professional landlords, especially in London, are more successful than buy-to-let landlords. In Central London rental yields can be up to four times higher than buy-to-let properties in South East England. Scotland and the North of England are emerging as growth regions for property investment, forecast to generate 5% and 4% rental yields respectively in 2008.
Professional landlords with large portfolios are the most financially secure. Almost 50% of landlords who owned 20 or more properties were able to save a proportion of their lettings income, 40% of these landlords relied on their portfolios as their main income. Of all the landlords surveyed by Alliance and Leicester, 71% said they are optimistic about the prospects for 2008.
Jeremy Claridge, Head of Mortgages at Alliance and Leicester said:
“It is encouraging that buy-to-let landlords indicate they are feeling about the outlook for 2008. Regardless of a tough financial year, it is clear the buy-to-let property market is still healthy for longstanding landlords, especially for those in the south-east of the country.”

Data released by the Royal Institution of Chartered Surveyors (RICS) shows that the slowing housing market has increased rental growth.
The difficulties for first time buyers to step on the property ladder has led to a rise in rented accommodation. The strong rental market and continued economic uncertainty means that the outlook is good for landlords. Jeremy leaf, a spokesman for RICS said:
“With rents still on the increase many would-be-buyers will find accessing the housing market even more difficult as they struggle to raise the capital for that first important purchase.  However, many landlords will still take solace from uncertainty in the economy and enjoy the gains from rising rents.”
RICS most recent quarterly Lettings Survey showed that the demand for family homes was higher than that for flats as the market for the latter has become saturated.  Compared to the second quarter of 2007, 25.2% more chartered surveyors reported a rise in the demand for rental houses in the third quarter of 2007.
However, due to stronger lending criteria and successive interest rate rises, there is some uncertainty in the buy-to-let market.

With The Bank of England cutting the rate of interest on December the 6th, two further mortgages providers have reacted, lowering the rate of selected products.
From January 2008 Standard Life will decrease the rate of its Freestyle standard variable rate (SVR) by 0.25% to 7.21% and HSBC will reduce the rate of its variable mortgage by the same margin to 6.75% as of December 24th.  HSBC was one of the first lenders to act on the Bank of England’s decision, cutting the rate of its tracker mortgage shortly after the Bank’s announcement.
Financial comparisons website Moneyfacts.co.uk reported that 31 providers had cut their SVRs following the interest rate cut announcement with 6 providers reducing their SVRs by less than 0.25%.  Moneyfacts Analyst, Lisa Taylor, believe the pace of change was slow compared to the last time rates were lowered in August 2005. She said:
“The last time we saw rates fall back in August 2005, 46 lenders had made announcements. The rate of change now appears to be relatively slow.”

According to mortgage broker John Charcol, tracker mortgages offer better value than fixed-rate alternatives. Charcol’s confidence in trackers comes from the small number of mortgage lenders who have who have lowered lending rates in line with the Bank of England’s recent interest rate cut.
For some time Ray Boulger, Senior Technical Manager for John Charcol, has been recommending trackers to people taking on variable mortgages. He said:
“We have seen over the last few years there is always a proportion of lenders who do not move their rate in line with the Bank’s rate. Most of the time a tracker mortgage is a quarter of a percentage point higher than a fixed rate mortgage, providing the starting point is good.”
Mr Boulger noted that because of the credit crunch, mortgage lenders were cutting down their portfolios, to mitigate any risk.  However, he predicted, that trackers will be available as no restrictions will be placed on them as base rates fall. Despite his belief in the value of tracker mortgages, Boulger does not envisage a rise in consumers switching mortgages, he said:
“The reality of people deciding to look at their mortgage product is based on whether the value of a discount mortgage is cheaper than a tracker mortgage or vice versa.”

Mortgage customers are being charged exit fees when changing lenders, despite recent campaigns by watchdogs to stop the practice. Mortgage website mform.co.uk has published research saying the average cost of changing lenders is £150, despite attempts by the Financial Services Authority (FSA) to make exit terms more transparent.
The FSA has urged lenders to make the charging of exit fees clearer, resulting in lenders including Royal Bank of Scotland , Standard Life, Cheltenham & Gloucester and Lloyds TSB dropping fees. However, many lenders are still charging over £100 exit fees with many not making charges clear to their customers or on their websites.  On top of urging lenders to drop fees, the FSA has ruled that from 2008 customers can reclaim exit fess if they pay a higher charge than set out in the original terms.
Francis Ghiloni of mform believes that stopping exit fees is good for consumers. However, he believes consumers should begin to factor exit fees into the cost of remortgaging, rather assume they are an administrative charge for closing the loan. Ghiloni said:
“ [Exit fees] should be considered at the start rather than come as a nasty surprise when its time to move on. Borrowers who regularly remortgage and move from lender to lender need to take account of exit fees as well as application fees and other costs which will have an impact on the true cost of their loan.”