What the Finance

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November 20, 2014

Good Money Week

Good MoneyIn a recent YouGov poll, commissioned by the UK Sustainable Investment and Finance Association (UKSIF), 53% of the respondents said they wanted to know more about government spending on energy infrastructure and 46% wanted to know about climate change initiatives. 4 out of 5 also said that they did not think that ethical finance options were easy to find. This information suggests that, although people are interested in environmental issues and how they are funded, they do not know how to go about investing in them. The UKSIF created Good Money Week to tackle this problem.

Originally, it was called National Ethical Investment Week, when it was started back in 2008, and its aim was to raise awareness of sustainable, responsible and ethical financial options. The initiatives it wants to guide people towards support clean energy, sustainable agriculture, communities, water supplies, education and employment, healthcare and retirement plans. Last year 470 financial advisers were involved and they held 55 events in 30 towns and cities across the UK.

This year, the events included lectures, talks and webinars with speakers such as:

  • A former Bishop of Worcester
  • The founder of Positive Money
  • The CEO of Somerset Capital Management LLP
  • Founder and Editor-in-Chief of Blue and Green Tomorrow magazine
  • Masters of Architecture students from Sheffield University

These and many more gave their advice live or over the internet throughout the week all around the country.

In addition to attending events, supporters of the campaign were encouraged to get involved by emailing their local MP to ask them to support the cause, tweet their bank about where their money is being invested and share infographics about the issues on Twitter and/or Facebook.

Examples of the kinds of schemes ethical financing supports are provided in the form of case studies on the website. One scheme is called Anafon Hydro. It is a hydro-electricity generating business supported by the people of Abergwyngregyn, a small village in Wales. To receive funding for this project, they will offer share options which conscientious investors can buy.

Another example is a young couple in Devon took out a mortgage from ethical bank, Triodos, to buy an eco-friendly camp site comprising space for tents, a bunkhouse, 3 yurts and a cafe.

Encouraging these types of developments is exactly what Good Money Week is about as well as providing expert advice on investments that provide good returns but also support good causes.

October 10, 2014

The Future of Payday Loans in the Wake of Wonga

We have all heard about payday loan company, Wonga, being forced to write off £220million worth of loans as well as scrapping the interest and charges for a further 45,000 customers.

The question is: do payday loans have a future?  From the end of 2014, the FCA (Financial Conduct Authority) will implement new regulations that may make running this type of business less attractive. For a start, they will cap interest rates to 0.8% a day to stop companies like Wonga charging terrifying APRs in excess of 5000%. They will also allow default fees of no more than £15 and restrict the total cost of the loan to no more than 100% of the original amount.

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August 7, 2014

Why Footballers go Bankrupt

Bankruptcy

George Best is famously quoted as saying, “I spent 90% of my money on women, drink and fast cars. The rest I wasted.” That neatly sums up most people’s opinion on why so many rich footballers end up declaring themselves bankrupt. David James, goalie for Liverpool, Aston Villa and England, is the latest to join their ranks. Despite his huge salary and a lucrative modelling career, he declared himself bankrupt in May due to money owed to the Inland Revenue. According to sports charity, XPro, around three in five professional footballers declare bankruptcy in the first five years after retiring from the sport. They also claim that this is not due solely to decadent and irresponsible behaviour.

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July 10, 2014

The Threat of Cyber-Crime

Cyber CrimeBanks are becoming increasingly worried about the threat of cyber-crime. Last month, the Bank of England launched a new framework to access the risk to financial systems, by replicating threats being used by criminals, called CBEST. Why are they so worried and what exactly are they worried about are questions that will be addressed.

Andrew Gracie, Executive Director, Special Resolution Unit, Bank of England, gave a speech recently where he stated that, “low-level attacks are now not isolated events but continuous.”

He, amongst others, fears that a large co-ordinated attack by computer hackers could cause the financial sector serious problems.

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June 16, 2014

Meeting the World’s Growing Energy Needs with Renewables

oilrunoutIf you were asked to explain the benefits of renewable energy production, chances are you would first say the obvious thing – it is renewable! Aside from the many other benefits, it is the fact that you have an inexhaustible supply that makes renewable energy such an attractive proposition, and in the coming years, this is one benefit that will become much more relevant to the energy-hungry world.

The world is quickly running out of oil. Oil is harder to find and extract with each passing day, and new oil field discoveries are an increasingly rare occurrence. It is estimated that there is enough oil in the ground to last 40 years, and that by 2040 production levels will only be 20% of what we consume today. This problem is compounded by the fact that the global energy demand is likely to rise by 35% by 2040.

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May 5, 2014

The ‘Swap Scandal’

Business LoanNearly two years on since the ‘swap scandal’ hit the headlines, the repercussions are still being felt. When this story broke, some financial commentators predicted that this could be a bigger issue for the banks than the PPI mis-selling fiasco. Now, with companies still claiming, not just their money back, but compensation for consequential losses as well, they could have been right.

This latest financial product mis-selling scandal came about because businesses, particularly small & medium sized, were being sold Interest Rate Swap Agreements (IRSAs) without being made fully aware of what they actually were. In addition, similarly to the situation with PPIs, businesses were being told that they had to buy the IRSA as a condition of the loan.

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April 5, 2014

The Retirement Fund Conundrum

PensionsThe average person in the UK can expect a state pension that equates to one third of the average wage. Therefore, for most some form of private retirement fund is a necessity. As the popularity of pensions waxes and wanes, people are looking into different ways of saving for their retirement. Investing in property and ISAs are the most common alternatives. All three of these options have their advantages and disadvantages making it difficult to decide which is the safest bet for a secure retirement fund.

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March 30, 2014

The Pros and Cons of Bitcoin

BitcoinWith political goings on destabilising economies around the world and currencies rising and falling because of that, is Bitcoin the way forward in a global market? This software based form of online payment is growing in popularity with more and more businesses accepting it as a form of payment. Companies like Virgin Galactic, WordPress and Overstock.com are already accepting Bitcoins and there is talk of eBay and PayPal supporting Bitcoin transactions too which all sounds very promising for this new online currency. However, some people still have reservations about its usefulness.

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February 11, 2014

Paypal’s President’s Credit Card Used In Shopping Spree

credit card fraud, PayPalPayPal President’s credit card details were stolen, his card was cloned and consequently used to finance a shopping spree.

Irony was not lost on David Marcus as president of PayPal -the online secure payment service- who said that his credit card was probably ‘skimmed’ at the UK hotel he was staying at or at a merchant he visited during his stay in the UK.

PayPal’s Marcus did not miss the opportunity to tout his company’s security benefits by saying that the breach would not have happened should the merchant had the means of accepting PayPal as a form of payment.

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January 6, 2014

Personal Finance: Best Fixed Rate ISAs 2014

imagesIn the UK anyone over the age of 16 can save money in an ISA and pay no tax for the interest accrued. In 2014 the tax-free allowance limit is £5,760.

There are two main forms of ISA:

  • the Cash ISA lets you withdraw money at any time,
  • while the Fixed Rate ISA is for those who do not mind locking their money away.

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