UK Finance News

The date for the UK Budget 2010 has been announced by current Prime Minister Gordon Brown, who said during a speech in London that it will take place on Wednesday March 24th.

The Budget speech comes at a crucial time for the UK  both politically and financially and depending on the upcoming election result we could be going through the whole process again, if the incoming Chancellor decides on implementing emergency fiscal measures.

For now however, the current Chancellor Alistair Darling’s speech will be put under the microscope by financial analysts as well as political hopefuls for the next election and it will be interesting to hear how he intends to strike a balance between tackling the annual public deficit and sustaining a fragile recovery programme during 2010.

It is a very fine line to tread for the State Owned Banks, do they offer financial assistance in the form of mortgages at cut rates to lenders in a bid to re-vitalise the property market as requested of them by the UK Government, or should they protect the tax payers interest by offering deals at interest rates higher than their competitors.

It is an argument that is currently raging in financial circles following statistics revealed by MoneyFacts this week after conducting a comparison of interest rates currently on offer from the UK’s biggest lenders.

Basing their research on a two-year, fixed-rate deal for someone able to put down a 25 per cent deposit on a home, MoneyFacts found that Cheltenham & Gloucester, part of the Lloyds Banking Group, charges 4.57% compared to a UK average of 4.19%.

Northern Rock which has 100% Government backing came in second place offering their services at 4.37%, and in third place was the Halifax, another Lloyds lender charging 4.27%.

The only Government supported lender that came out of the poll smelling of roses was the Royal Bank of Scotland, where the average rate for a two year fixed mortgage is shown as being 3.84%.

The lenders involved made a case for themselves by explaining that they each offer a wide variety of mortgages that offer substantial discounts to lenders meeting certain criteria.

But should these banks be seen as being more competitive in a market that almost caused their downfall, the argument is that having taken the tax payers backing the banks priority is to build up their balance sheets in order to repay the funding and show that they can stand on their own two feet.

The argument goes on.

A report conducted by the Financial Times suggests that the Chancellor Alistair Darling could be well off the mark when predicting that the UK’s one off tax on bank bonuses would bring £550million in to the Treasury during this financial year.

Instead the Financial Times report says that the 50% tax levied on bonuses over £25,000 is more likely to bring in a more welcoming £2.5billion to the government, after a survey conducted through the UK banks.

While the Treasury could not confirm the Financial Times figures the much needed extra cash would help to payoff some of the Governments record budget deficit and help the UK on the road to financial recovery.

For many of us the festive season is a time for over indulgence, be it over eating or drinking or over spending on presents for our families and loved ones. It is often our credit cards that take the brunt of the cost for the season and nothing brings on the January blues quite like the credit card bill hitting the doormat.

Now is the time that many will be looking to transfer their debt from one credit card to another, to take away the pain of having to pay excessive interest on their credit card account.

While there are plenty of credit card comparison sites on the internet, choosing a new deal is by no means a simple choice. Despite our pleas for plain speaking and easy to understand terms, the credit card market still represents a minefield for those looking to transfer outstanding balances.

It is therefore very important to take stock of personal finances and ability to pay off the outstanding balance before making a switch to another provider, bearing in mind that if you cannot repay the balance during the interest free period, interest on the balance will be charged at the standard rate.

One of the best credit card deals around at present is the MBNA Platinum card, which charges an interest rate of 5.9% throughout the life of the outstanding balance, so even if it takes ten years to pay off, the interest will remain at 5.9%. This would represent a far better deal than many of the zero percent transfers on offer if you are unlikely to be able to pay off the card balance in a restricted time frame.

This comes out favourably against many of the providers offering, say 0% on transfer balances for 15 or 16 months and then reverting to standard rates.

These deals are not restricted to personal credit cards, as there are also similar offerings for professionals looking for a business credit card that offers a great deal along with greater online protection and chip and pin security on the high street.

The end is nigh for the humble bank cheque, after more than three hundred years as the payment of choice for many, banks are expected to vote to phase it out in favour of more up to date payment methods.

During the last  forty years credit and debit cards have taken over from bank cheques for payment, while Standing Orders, Direct Debits and BACS payment systems have emerged as direct payment methods.

In the internet age, technology is such that most of us are able to conduct our banking online from anywhere in the world, with instant transfers from one account to another at no cost.

Surprisingly over 3.8 million cheques were written out each day last year in the UK, although that is a far cry from its peak of popularity in 1990 when almost 11 million cheques were issued.