The Financial Conduct Authority (FCA) is one of the successor agencies to the Financial Services Authority (FSA) and is currently expected to be established by end-2012.

The FCA’s focus will be to regulate both wholesale and retail financial firms providing services to consumers and to maintain the integrity of the U.K.’s financial markets.

The authority will have the power to ban unacceptable financial products and enforce the withdrawal of misleading promotions, among other regulatory powers.

Much like FSA, the FCA promises to protect consumers by promoting transparency and healthy competition in the financial sector while helping consumers make the right choices; but will it be able to succeed where the FSA arguably failed?

The official “Approach to Regulation” document on the Financial Conduct Authority’s objectives and powers (.pdf, 508 kb) sets out how the authority will approach the delivery of its objectives. However, MPs and experts alike are worried that the FCA will be “more of the same”.

Back in August of 2011, a parliamentary committee announced an inquiry into the accountability of the FCA to be published by the Autumn of 2011 and earlier this week (albeit admittedly a bit late) the Treasury Select Committee published a full-blown report into Financial Conduct Authority. This in-depth report contains a number of recommendations for the Government’s consideration ahead of the drafting and publication of the Financial Services Bill early in 2012.

Among the Treasury Committee’s most significant recommendations are that the FCA is properly accountable to Parliament and that tools are available to enable the required level of explanation from the regulator.

Commenting on the publication of the report, the Chair of the Treasury Committee, Andrew Tyrie MP, said:

“We need a fresh approach to regulation.

The plain fact is that the FSA did not succeed in protecting consumers from spectacular regulatory failures. The mis-selling of PPI and endowment mortgages are just two examples. The FSA is not only expensive, for which the consumer always pays, but many have told us that it has also become bureaucratic and dominated by a box-ticking culture.

The creation of the FCA is an opportunity to create something much better.

If we are not careful, the FCA will become the poor relation among the new institutions. But it is the one that will matter most to millions of consumers.”

Even though there are legitimate concerns, especially given the FSA’s recent mistakes, some experts hope that with careful planning and the Treasury Select Committee’s input the FCA will hopefully turn out to be less expensive and more efficient than the FSA in safeguarding the consumers’ interests.

Average house prices across the UK have been steadily declining throughout the year and according to a survey by Halifax consumers expect house prices to drop even more in the foreseeable future.

According to the survey, thirty percent of the people surveyed predicted a further decline in prices over the next twelve months while a quarter said that prices will not change in the coming year. All the while a house price expectations index by Halifax fell to -2 from this year’s highest value of +9 in April.

Halifax economist Martin Ellis commented: “It is unsurprising that confidence in the housing market has been shaken a little over the last few months given the increasing uncertainty about the current economic environment, together with pressure on householders’ finances,” and he added: “We expect little change in both prices and activity over the next few months.”

Forecasts on house prices by analysts have also been pessimistic, predicting house prices to drop by as much as 5% in 2012. The generally weakened economy combined with substantial fears that the economy could start shrinking again point to further decline in house prices over the next twelve months.

However, as residential property prices across the UK continue to fall, prime central London prices continue their steady climb. According to the Land Registry house prices in London have increased by 2.7% since September 2010 and are now at an all-time high.

Many observers question the stability of those inflated figures, especially at the top end of the market, while others argue that these figures reflect a growing tendency for buyers, both local and overseas, to purchase central London property as a long-term investment.

Earlier this month, the Bank of England’s Monetary Policy Committee voted to give the economy an additional cash injection of 75 billion pounds.

This was the second round of quantitative easing (QE) as the bank had already injected 200 billion pounds back in 2009 in an effort to increase commercial bank lending.

While answering questions on the current status of economy to a parliamentary committee, Bank of England governor Mervyn King commented on the decision to increase QE and the impact that might have on bank lending:

“I can’t guarantee that it means that bank lending will rise, but what I do believe is that it won’t fall as far as it might otherwise have done and it may start to rise now we’ll see. But I think the action will make a difference to the amount of lending, but it certainly doesn’t guarantee that lending to the real economy is positive.”

Mr. King acknowledged that Britain’s economy has been problematic and mostly stagnant for the past year and warned that it could start deteriorating again as he commented on inflation and the causes of the “very large squeeze on household income”:

“Now that’s not the result of inflation being high, inflation is the symptom. The causes of that squeeze on living standards are real causes, they are a change in real prices of energy, and utility prices of gas, electricity at home, they are the consequences of higher Value Added Tax, higher food prices, and consequence of a fall in the real exchange rate which was necessary to enable us to be able to rebalance our economy in a way that was… after quite a long period, and of relatively overvalued exchange rate.'’

Finally, when asked why the Bank of England did not increase the QE plan earlier, possibly stimulating commercial bank
lending, the governor replied that the deterioration of the Eurozone and world economy could not have been predicted earlier.

“I don’t think the scale and the immediacy of how the problem deteriorated in the euro area was obvious at the beginning of the summer”, he replied.

Hey fellas, if your aged between 60 and 65 you need to have applied for your winter fuel allowance and it’s worth a cool £250! And for those aged 80 or over, the payment increases to £400.

The winter fuel allowance is paid automatically to anyone who receives a state pension but men between the ages of 60 and 65 aren’t eligible for state pension and, therefore, have to apply for the allowance separately.

Anyone aged over 60 by 27th September is eligible for the payment this year.
The Department for Work & Pensions is apparently concerned that some men are unaware that they are eligible for this allowance and have been advertising the availability of the payments. If you need to claim for this year’s payment, then get your claim in a.s.a.p. and in any event before 30th March 2010. Use the Winter Fuel Helpline on 0845 9151 515

Our tip for today is pay this months’ credit card and utility bills either online, by phone, at the post office or at you bank. Why? Because the regional postal strikes are extensively delaying postal deliveries and it’s set to become much worse.

If you usually pay your bills by post, there’s a strong possibility that your payment will arrive late. That means that your credit cards will charge you a late payment fee and that late payment will find its way onto your credit rating. So you face a two way hit.

Local postal strikes have been happening since June but a national strike is now on the cards after the Communication Workers Union balloted its members on strike action over conditions and pay.

Estate agents and others in the property market have consistently criticised Home Information Packs (HIPS) as an irrelevant add-on to the home selling process. But does a hidden agenda explain the Government’s lack of hearing?

Rumours abound that HIPS certificates are to be pressed into service to raise more cash for the government. Since October last year, anyone renting or selling a property has had to have a HIP certificate and an energy rating certificate. Some are predicting that the autumn budget will see the stamp duty on the sale of houses rescheduled to take into account the property’s energy rating. And we all know what “re-scheduled” means – it’s a rise!

And this could open the flood gates! If the government can use HIPS to increase stamp duty they could also use it for increasing property valuations for council tax purposes. Now wouldn’t that get the mini mandarins at the town halls salivating!

We in the UK have some of the highest house prices in the world – but does that really mean we’re richer? There is a paradox here. Our house prices are high because there is a constraint on the supply of houses. If overnight we could construct a million houses in the right locations, which would increase our housing stock by about 4%, we might assume that the nation’s wealth would increase.

But such a sudden increase in housing supply would probably lead to a collapse of prices in the entire housing market – and lead to a reduction in our national wealth even though there were 4% more houses.

This paradox lies at the centre of our national obsession with the price of houses. We feel rich when house prices are rising and tend to borrow more against them to finance fancy cars and holidays. But at the same time we forget the obvious: that apart from a lucky few with castles in the country, higher prices force us to live in smaller and poorer houses that we would like to live in.

In this context, higher house prices make us poorer.

Home Information Packs, HIPS for short, which have to be prepared before you can put your house on the market, are making estate agents loads of money by taking advantage of their position. Great for them but bad if you’re a seller!

A survey found that some estate agents are charging double the price that a specialist HIPS provider would charge. The result is that many sellers could save upwards of £130 by shopping around.

Apparently the Halifax estate agency was the dearest taking a typical three bedroomed freehold semi. For that they charged £413 – but a HIPS specialist such as Fridays Property Lawyers would have charged just £189, giving a saving of £224!

And when it comes to leasehold properties the cost are even higher due to the additional legal work involved.

The Government imposed HIPS on to home sellers back in 2007 despite constant opposition from solicitors, mortgage providers and estate agents. The Government claimed that the selling process would be faster and more efficient with the HIPS containing information for the potential buyers on planning searches and the energy performance of the property.

So our advice is, get a quote for a HIPS off your estate agent and then go online and see how much you can save.

The bloodbath in the loans market has meant that many of the small and medium sized loans companies that once sold loans have gone bust or dissolved, particularly those that sold to people with impaired credit.

The result is that many clients who make a claim because they believe they were mis-sold payment protection insurance cannot reclaim against the business that sold the loan to them, because it no longer exists. Instead they are appealing for refunds from the Financial Services Compensation Scheme.

Take Picture – they were a specialist lender whose PPI premiums for a five year loan often amounted to 50% of the initial loan value. The problem is that Picture went into liquidation last year so any customer that makes a claim is re-directed to the Financial Services Compensation Scheme. And under that process, compensation can easily take 12 months to come through.

There are suspicions that some of the lenders have dissolved themselves to avoid the mis-selling liabilities that stood on their books. In our view, if that can be proved, then lawyers should find ways to hold the Directors personally responsible for the company’s mis-deeds.

The Financial Services Authority has announced that it would take enforcement action against building societies, large banks and broker dealers who fail to follow its new remuneration code which is due to come into effect in January 2010.

Following its concerns that the current bonus regime contributed to excessive risk taking in the banking sector, the FSA wants pay and bonuses to be more closely linked to the profitability of financial institutions. The new code makes clear that financial institutions should not enter into contracts with employees which provide guaranteed bonuses for more than a year. The FSA also wants two-thirds of bonus value paid to senior employees, to be spread over three years.

The businesses will have to send a statement of their remuneration policy to the FSA by the end of October. This will have to be approved by the businesses’ remuneration committees and will provide the basis on which the FSA can check compliance with the code.

The FSA has said that non-compliant business will face enforcement action or be forced to hold additional capital resources if they follow risky business policies.

This new code should achieve two objectives. Firstly, Directors must ensure that the total value of bonuses distributed to employees is consistent with good risk management and sustainability. Secondly, individual compensation schemes must provide the appropriate incentives.

To action their new policies, the FSA has added eight principles to their rule book. These are designed to ensure that all financial institutions fully understand how the FSA will assess their compliance.

These eight new principles are consistent with the recommendations of the Financial Stability Board and with the measures being considered by other countries in the EU and Switzerland.

According to the Centre for Economic and Business Research unemployment is set to rise from it current level of 2.4 million to 3.8 million, an increase of 58%. That’s far worse than anything the UK has experienced since the Second World War.

Stories like these are leading to a boom in the sales of Unemployment Insurance that pays out tax free cash if you were to be made redundant. Many people are buying the insurance, which can also cover against accidents and sickness, to ensure that they can continue to pay the mortgage or the rent, if the were made redundant. But in actual fact, the cash these policies pay out can be used for any purpose the policyholder wants.

As a guide, premiums are about £3.50 per £100 of monthly income to be paid for a 18 to 30 year old. This rises to about £5 for a 46 to 65 year old.

If you’ve not got Unemployment Insurance don’t leave it too late. If you have any idea that you are about to be made redundant you won’t qualify for a new policy.

If you have had money stolen from your bank accounts or credit cards as a result of fraud or identity theft, then unless the bank is sure you took care to protect your banking details, they won’t pay up and the police won’t bother to investigate the case either.

This leaves you in a legal black hole. Unless you yourself can prove who stole the money (some chance!), you have no way of getting either justice or compensation.

And in the mean time you’re out of pocket – and probably big time!

In the four years since chip & pin systems were introduced, fraud on bank cards has halved but it is still running at the rate of £54 million a year. But remember, this figure represents the money the banks lost. It doesn’t take into account the stolen monies that the banks would not reinstate.

Under the Banking Code, you are entitled to claim for any money fraudulently taken from your accounts unless the banks believe you have acted irresponsibly. In practice, this means that if your bank thinks you did not keep your banking details secure, they won’t repay the money that’s been stolen from your accounts.

The fine for not wearing a seat belt is doubling to £60. The Department of Transport says that this is not about money and is all about saving lives.

According to official statistics, around 565 people killed each year in car accidents were not wearing their seatbelt and of these more than 300 would have been saved if they’d been belted in.

Last year some 235,000 fixed penalty notices were given out because the vehicle occupants were not wearing their seat belts - and a further 4,000 cases were heard in court.

In our view is it simply daft to not wear a seat belt. No matter what “non-users” say, they don’t restrict your ability to drive the car and what restrictions they do impose are surely small beer compared to the pain and suffering they undoubtedly save.

If you don’t believe me ask the doctors who end up piecing together the accident victims whose injuries are twice as serious because they weren’t belted in.

Or ask the families of the 300 people who would be with their families now if they had only worn their seat belt.

To re-coin an old phrase – “clunk click every trip”.

The number of potholes being reported to local authorities has risen five fold according to a new study. This works out at over £1 million of damage to cars each day. And in Scotland and some areas of Northern England where the situation is worst, as many as 1 in 7 are damaged.

It is thought that there are more than 3 million potholes in the UK’s road network causing damage to vehicles and severe danger to cyclists and motorcyclists alike.

An the cost of putting our roads right?

It’s estimated that there will be no change out of £100 million and at the current rate of repair, it will take 10 years to put right.

Damage to cars can be caused by one big hole but more often than not it’s the damage caused by driving continually over poor surfaces that causes the real damage. The average repair cost is estimated to be £240 although the bigger claims which are often covered by an insurance claim, can be as high as £2,700.

If want to join the campaign for better road repairs visit www.potholes.co.uk

We are constantly hearing about the results of people’s identity being stolen – the fraudulent debts being taken out in their name, the scams on paypal and so on.

So what can you do to avoid being a victim of identity theft? Well you can never protect yourself 100% but here are some suggestions –

• Take yourself off as many mailing lists as possible – register with the Mail Preference Service (www.mpsonline.org.uk)
• Go ex directory. Contact your landline provider
• Whilst you will want to remain on the Electoral Role you can elect for your name to be taken off the published version. Speak to your local authority.
• Never volunteer any information about your date of birth or job especially to any organisation or web site that may publish that information – such as Facebook.
• When you have finished with any official mail or any mail which contains your date of birth, shred it.
• Many of us constantly receive emails purporting to be from banks, credit cards and other financial organisations. Unless you are expecting a specific email from your bank, delete them. Never reply when they ask you to “confirm any of your confidential banking details” or any personal information.
• Always open all of your mail, especially mail from phone companies, financial organisations or businesses selling electrical goods. It may be a letter about an application that they think you have made. If it does sound like that, phone up the company and check out why you received the letter.
• Always check your bank and savings account statements. If money has gone the quicker you get in touch with your bank, the better.
• If you post suddenly stops arriving contact your Post Office. Someone may have put a divert on your post.
• When you move home always divert your mail to your new address, it costs £39.05 for a year or £26 for 6 months
• If anything suspicious happens, check out your credit file at a major credit agency such as Equifax (www.equifax.co.uk)
• And finally, if you have had your identity stolen, confirm all your telephone conversations with the banks, etc by letter. With something as important as this, you need to leave a paper trail behind you in case disputes arise.

There’s a new ploy to exploit legal loopholes and get debt wiped off.

It’s a debt transfer scheme whereby the debtor pays a fee and transfers the debt to a claims firm through an agent. The debtor is then supposed to be debt free. The firm effectively gabbles that it will be able to get the debt cancelled.

The problem is that there are concerns that the debt transfer may not be legally watertight. If that is the case the debtor will have ended up paying a fee and still be saddled with the debt. Not very satisfactory if you are the debtor!

If you are in debt and are offered one of these schemes, take care. Look closely into the paperwork and get some form of guarantee that your creditors cannot still come back to you.

Better still don’t get into a financial mess and pay your debts!

Landlords financing their properties on buy-to-let mortgages are 3 times more likely to default on their mortgage payments than normal borrowers. This has led to a spate of repossessions.

Between January and March this year, 4,100 buy-to-let properties have been taken back by the lenders. 1,700 were repossessed and 2,400 were transferred to “receivers of rent” who then took over the running of the properties.

Few tenants would be aware that their landlords were in financial trouble, so often, the first sign of a problem is when the bailiff comes knocking and they discover that the property is about to be repossessed.

So now the Government is proposing to bring in laws to protect tenants. But an existing law helps them if they are part way through a tenancy agreement. It’s called the Law of property Act 1925. Under this legislation, the lender can appoint a receiver of rents to take the property from the borrower. These receivers are often insolvency practitioners or chartered surveyors and operate independently from the lender and the borrower. But it is up to the lender to decide whether to apply for repossession or appoint a receiver of rents.

If you are a tenant and are up to date with your rent, the law says that you have the right to remain in the property until the end of your tenancy agreement. If you are not up to date, then you have effectively broken the agreement and you can be evicted.

A problem sometimes arises when the lender is not aware that the borrower had rented their property out. In this situation, the tenancy agreement is not normally binding on the lender. The lender will consider the agreement as fraud on the borrower’s part and therefore the tenancy agreement becomes void. In those situations the lender can decide whether to opt for immediate repossession or go down the receiver of rents route. In today’s difficult property market some lenders prefer to keep the rental going and hold the property until the housing market improves.

If you are a tenant and know that your landlord is in financial trouble, you should consult your solicitor.

As you may know the Financial Services Authority allowed all the banks to suspend clients’ claims for excessive bank charges for two years. The argument is that the banks charges are excessive and in breach of unfair contract terms. This waiver was authorised by the FSA on 27th July 2007 and to begin with the waiver was just for twelve months whilst the banks and the Office of Fair Trading battled the case out in court.

But here we are two years later and the issue has still not been resolved.

Both the High Court and the Appeal Court have ruled in the favour of the clients but the banks are battling on to the House of Lords. Next week the House of Lords will start to hear the case but the outcome is unlikely to be announced for a number of months.

Let’s hope that things will be resolved in time for compensation to be paid out by Christmas!

This possibility is something that every family should have covered but it seems that more than 1.5 million families with children haven’t even considered the situation - and far more, 7 million, admit that they don’t have adequate life or critical illness cover.

This means that if the grim reaper came knocking, those families are likely to suffer severe financial hardship. In the worst case scenario the family might be unable to pay the mortgage and face repossession.

I know that the recession is putting strains on some family’s budgets but quite honestly, if you are under-insured you need to sort it out. At least get some life insurance which will payout in the event of death – the price of life cover is at an all time low so it’s a relative bargain. A 30 year old male, could get cover for £100,000 for 25 years for as little as £6.53 a month.

Even better, get some cover in case you become critically ill. Critical Illness policies cover the big three illnesses – cancer, stroke and heart attack – plus a wide range of other serious illnesses. These policies payout as soon as a diagnosis of an insured illness is confirmed. In many ways this type of cover is even more important that than life cover although you can buy both types of cover in a combined policy. Critical Illness cover is more expensive that pure life cover – because the chances of a payout are higher – which in many ways is confirmation of the importance of this type of cover.

So if you are one of the 1.5 million or indeed, one of the 7 million, for your family’s sake get it sorted!

If your employer wants to fire you he now has to follow a new grievance procedure which amends the old “3 step” system.

If there is a disciplinary issue, the law now encourages employer to try to resolve the issue informally through discussion whilst carrying out prompt and thorough enquiries. It’s a softer start to a procedure which, it is hoped, will reduce confrontation and the escalation of difficult situations.

Only if the soft start fails or in very serious disciplinary situations does the previous 3 stage procedure kick in.’

The first stage of the formal procedure is for the employer to write to the employee detailing the disciplinary issue. The company must then arrange a formal meeting. Then the employee has the opportunity to appeal against the boss’s decision if the employee is unhappy with their decision.

It is hoped that the new start to the procedure will prove to be more flexible and will be able to resolve differences with a quiet word rather than always imposing the full process.

We agree. Sense prevails!