PPI Is Sooooo Last Year

The Financial Conduct Authority’s latest report has highlighted that consumers are making less complaints about PPI mis-selling and the flood of gripes is slowing. There were 1.39 million new complaints in the last 6 months about the sale of the loan insurance……a fall of 22% compared with the previous 6 months.

 

I blogged last September on the next banking issue that was around the corner……

 

 

http://stevesmithlive.blogspot.co.uk/2013/09/and-next-bank-misselling-scandal-is.html

 

And low and behold……the regulator has announced that complaints about current accounts have risen by 8%.

 

As one storm ends, another one draws closer.

 

You make your bed……

Wronga

I’ve got a bit of a bee in my bonnet regarding anything that prays on the vulnerable or desperate……and ‘payday loans’ very quickly fit into that box.

Over the past week there has been some concern over a TV advert by Wonga. The issue escalated to such an extent that the advertising watchdog ruled that it “confused the public about the interest rates that applied”.

The commercial featured a conversation between two puppets about the costs of a Wonga short-term loan. The Advertising Standards Authority stated that the advert was “misleading by implying a representative APR of 5853% was irrelevant”.

My issue here is not Wonga……They pray on the vulnerable or desperate and we should expect their adverts to do exactly that……which they do.

My issue is that it took an advertising regulator rather than a financial regulator to stop this……and that was only due to complaints. Why is this not being picked up before it even gets to TV airing? All promotional material from a business card to a TV advertisement has to meet strict regulator criteria in the financial world……surely an APR of 5853% that is being promoted as ‘irrelevant’ would cause some concern with somebody? Surely?

I can’t make a company conform to my moral compass but I should expect it to confirm to a regulatory one?

Silly me……I expected better.

Cautious Optimism Definitely Maybe

George Osborne was given a significant boost yesterday after the International Monetary Fund (independent and impartial – we can trust them) retreated from its previous criticism of the UK’s austerity policies and predicted the UK will grow faster than any other ‘rich’ economy this year.

 

To avoid confusion……‘rich’ is described as the Group of 7 (G7). This is a group consisting of the seven advanced economies……Canada, France, Germany, Italy, Japan, UK and USA. Now, to ensure that there is no confusion between G7 and G8……G8 is the G7 plus Russia. Get it?

 

Anyway, the big deal is that the G7 countries account for around 40% of all money / growth made in the world. And for dramatic effect……that’s 40% from just 7 countries.

 

The IMF’s bi-annual analysis is looking pretty good……an upbeat forecast for the world economy generally and for the UK in particular. Given that it previously predicted growth for the UK at 1.5%, the latest prediction of 2.9% for 2014 is another substantial upgrade to the IMF's assessment of the UK outlook.

 

Lots to be confident about looking forward……we just need the growth figures to be ‘actual’ rather than ‘predicted’ and we will have some substance to support the confidence.

 

I’ll leave the last word to the politicians given that the General Election is just 12 months away……

 

In the blue corner……Chancellor George ‘Gorgeous’ Osborne hailed it as "proof that the economic plan is working".

 

In the red corner…… Shadow Chancellor Ed ‘Grow Some’ Balls accused the government of "complacently trying to claim that everything is going well".

 

Regardless, the IMF says there is plenty to be confident about……so I’m feeling confident. So there!

 

Substance To The Stench

I apply quite a simple rule to all the announcements in any Budget…… ‘what’s in it for them’.

 

Take a decision made by the Chancellor, question what’s in it for that political party, dissect it from a number of angles and then publicise what it really means. Pretty simple……but it seems to work.

 

My initial reaction to the Budget was one of anger and disappointment. I felt it was a party political broadcast aimed at those aged 55 and over as 75% of this demographic will vote in the General Election next year. That was my initial ‘off the cuff’ reaction……unsubstantiated and lacking any merit to back it up.

 

And then I took to the internet in search of substance to support my reaction…….and an HMRC report into ISA investor demographics popped up. It’s a 24 page report but there were two key messages that came out of it (you’re very welcome)……

 

(1) Average ISA Subscription

 

The table below highlights that the average amount invested in an ISA is £3,945. If this is the average amount invested, why increase the limit from £11,880 to £15,000?

 

 

 

(2) Average ISA Savings By Age

 

The table below highlights the average ISA savings value increases dramatically for the over 55’s. Or to put that another way……the increase in the ISA limit is most likely to benefit an over 55 as they will want and use it.

 

 

My initial reaction was……what a complete farce of a Budget. And I stand by that even more. All we should ever want from any Government / Budget is to represent us well, do what is right and do what is needed for our long term prosperity.

 

A blatant attempt at vote winning doesn’t tick any of those boxes.

 

If you are not angry, you should be.