The Financial Services Authority (FSA) announced today that Lenders paid out £570.5 million in compensation during April to victims of payment protection insurance (PPI) mis-selling.
This is the largest overall monthly pay out and pushes the total paid out since January 2011 to £4 billion. But with an estimated £9 billion of compensation due in total, the process is far from over.
Last month, Lloyds Banking Group, RBS and HSBC set aside £800 million extra between them, on top of their original pots to pay out from. Barclays also set aside an extra £300 million in April.
Millions will see pensions slashed by up to 20% as new EU rules are set to send annuities plummeting
MORE bad news on pension's!! TIME TO ACT!
Millions of people could see the value of their pensions slashed by up to 20 per cent because of new EU rules.
Those with a £100,000 pension fund could be more than £1,100 per year worse off in retirement because of the reforms, research has shown.
The Solvency II rules, which are due to come into effect in January 2014, will force pension funds to hold a higher proportion of 'safe' Government bonds.
As the bonds - called gilts - have such low rates of return it will drive down the returns on retirement fund annuities, which are used to pension income.
The reforms are designed to make pension funds safer and reduce the risk of them going bust.
Annuities, which set retirement income for life, have already fallen to historic lows because of the impact of quantitative easing.
At present, a pension annuity fund may invest 20 per cent in low-yield gilts and the rest in riskier corporate bonds which have a higher rate of return.
But under the new EU rules, annuity funds will be forced to hold a higher percentage of gilts.
New research by Deloitte suggests annuity rates will plunge by between five and 20 per cent when the directive comes into force in January 2014.
A £100,000 pension pot currently gives an income of £5,837, but once the regulations come into effect they will be between £292 and £1,167 a year worse off.
Take control of your pension by investing in Alternative Investments via a SIPP.
LINK TO SIPP INFORMATION PAGE AND VIDEO - SIPP's LINK
Read more: ARTICLE LINK
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Student accommodation will continue to offer attractive investment returns in spite of upcoming changes to tuition fees, this is according to all the major market analysts.
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Buy to let mortgage lenders are sighing with relief after the European parliament voted to exclude landlord loans from tough new lending rules.
The UK’s Council of Mortgage Lenders (CML) has campaigned long and hard for
buy to let to be treated as a commercial loan rather than a residential mortgage, which was the initial thrust of the European directive on credit agreements relating to residential property (CARRP).
After intensive lobbying, the European Parliament’s ECON committee voted to
leave buy to let lending outside of the directive.
“We’re pleased to see that many of the long standing issues we have been
lobbying on have reached a positive outcome for the UK. So for example, the UK
would be able to exempt buy to let from the directive,” said a CML spokesman.
“However, some provisions have been included which only emerged at a late
stage of negotiations but which may not have had their full implications considered and we will continue to work on these issues as the directive goes into its next stage of discussions.”
CARRP is aimed at implementing a Europe-wide mortgage policy, but UK lenders
claimed this was unfair on buy to let landlords as the UK market differs significantly from the rest of Europe.
In most European countries, the buy to let market is either fledgling or developed through lending to companies rather than individual investors.
UK residential mortgages will come under the CARRP rules.
As a result, mortgage lenders will have to strengthen underwriting for loans, offer a cooling off period to borrowers and will have less power to repossess properties if homeowners fall in to arrears on mortgage repayments.
“Parliament has given a qualitative breakthrough regarding the initial text. We now have more ambitious legislation which establishes the international golden standards bringing in the principles recently adopted by the Financial Stability Board”, said the directive’s main champion Antolin Sanchez Presedo after the vote.
“We introduced a new chapter on financial education, strengthened information
to consumers, established a reflection period and the possibility to receive
good advice as well as fair principles for crisis situations.”