Bank compensation faces brexit cut
Post Brexit, savers will benefit from the same protection if their bank or building society goes bust, but after the UK exits the EU they could face changes to how much compensation they receive and find it a bigger hassle to claim their money back.
At present, under EU law, you are entitled to up to 100,000. This gives UK savers £75,000 protection (£150,000 on joint accounts) under the Financial Services Compensation Scheme. Before the start of the EU Deposit Guarantee Scheme in 2011, the UK limit was £50,000 for individuals (£100,000 on joint accounts). EU rules also give up to £1 million cover if you have a “temporary high balance” in an account, for example from selling property. This extra cover lasts for six months after the money lands in the account. The EU also forces banks and building societies to pay out within seven working days.
This cut red tape faced by UK savers putting their money with a bank run by another EU member. They must pay the money into the UK scheme, avoiding the problem of having to claim compensation in a foreign language. This is one of thousands of examples of consumer-friendly EU legislation the Government will have to decide if it wants to continue. Another is the scrapping of roaming charges for mobile phones and compensation for delayed flights within the EU.
Broadband customer service suffered after BT and EE merged
BT-EE has emerged as the most complained-about broadband provider after its £12.5 billion merger, raising fresh questions over the impact of the deal on customer service. The company, which combined forces in January, struggled to stem complaints in its broadband division, according to the telecoms regulator Ofcom. The watchdog, which also highlighted poor service at Vodafone, said it was clamping down on providers who do not meet standards, having issued £1.25 million in fines to companies over customer service failings in two years.
From January to March, 34 out of every 100,000 EE broadband customers complained to their provider, and 31 out of 100,000 BT broadband customers – the highest rates in the industry. The combined businesses have 10m broadband customers. For Vodafone mobile, the complaint rate was 29 per 100,000 customers.
One response by BT to this avalanche of complaints was to bring all its call centre operations back to the UK.
Amazon founder’s fortune hits £50bn
Strong earnings from Amazon and a boost in the company’s share value have made its founder, Jeff Bezos, the world’s third-richest person, according to Forbes. Mr Bezos owns 18% of Amazon’s shares, and Forbes estimates his fortune to be almost £50 billion.
Amazon’s revenues beat analysts’ expectations, climbing 31% in the second quarter of 2016. Mr Bezos’s fortune is only surpassed by Microsoft founder Bill Gates, who is worth £59bn, and the £55bn fortune of Zara founder, Amancio Ortega. Aged 52, Jeff Bezos created Amazon as an online book retailer in 1994, doing so after a career on Wall Street.
Eurozone growth halves to just 0.3%
Eurozone economic growth halved in the second quarter, but the 19-nation single currency area moved away from deflation. GDP rose by 0.3% between April and June, in line with expectations but below the 0.6% rate in the first quarter. France, the eurozone’s second-largest economy, saw no growth after expanding by 0.7% in the first quarter. Inflation rose to 0.2% in July from 0.1% in June as a result of higher food, alcohol and tobacco prices.
Data also revealed that the eurozone jobless rate has remained at 10%. The next figures for the eurozone, due in the autumn, will show the degree to which it has been affected by the uncertainty surrounding the Brexit decision.
HMRC U-Turns over Gift Aid charity donations
Families who had part of their charity donations denied by HMRC earlier this year have had £1.6 million in Gift Aid payments refunded to the causes they chose to support. Gift Aid is a refund of the income tax people have paid on donations. In March, HMRC began refusing to pay the tax refund to charities if there was more than one name in a message on a fundraising website – for example, ‘Love from Mum and Dad’. Under Gift Aid rules, you’re not allowed to claim the refund on behalf of someone else.
But HMRC appears to have now eased back on its strict interpretation of the rule and has released money withheld from the fundraising website, Justgiving. However, it says that where gifts are made by groups of people, such as work collections or large groups of friends, Gift Aid is not due and should not be claimed.
Consumer borrowing hits 11-year high as UK faces a ‘debt binge’
Families are borrowing money at the fastest pace for 11 years amid warnings the country faces a dangerous debt binge. Bank of England figures show a 10.3% rise in non-mortgage borrowing, such as debt on credit cards and car finance. People took on an additional £1.8 billion of debt in June and now owe £186bn. The amount owed on mortgages was up £3.3bn, a 3.3% growth rate. In total, £1.3 trillion has been lent against the value of houses.
This has prompted fresh concerns that the borrowed money underpinning the economic recovery makes the UK economy and growth less stable than figures suggest.