Money Matters

Cheaper Oil

Buy in bulk ...

Savings can be made to your oil bill by buying in bulk. If you are interested in joining the Whitstone scheme or in setting up a similar scheme in your area more details can be found on the Oil Consortium Page. We were looking for heating oil and realised that the biggest savings can be achieved by friends and neighbours grouping together to purchase their heating oil at the same time. We have set up this scheme in the hope that as many people as possible will join in so that we can all benefit from bulk purchase discounts. We propose to order 4 times a year.

CAB

Ban cold calls ...

Citizens Advice welcomes OFT response to its super complaint on cold call credit but wants cold calls banned. 1st June 2011.

Citizens Advice today welcomed the Office of Fair Trading’s (OFT) response to their super complaint on cold call credit and debt management.*

A report published by the charity in March revealed how tens of thousands of people are being tricked out of large sums of money by rogue loan finder firms taking advantage of the difficult economic climate.

Citizens Advice Chief Executive Gillian Guy said:

“We are very pleased that the OFT agrees there is a serious problem and that action is needed to stop cold-call credit brokers tricking vulnerable people out of large sums of money for non-existent loans and other financial services."

“Rogue firms need to be stopped in their tracks before they get their hands on anyone’s money. Current economic conditions are providing fertile ground for unscrupulous credit businesses and fraudsters and the problem is set to grow much worse. That’s why we still believe there is a compelling case for a ban on cold calls to shut this gateway to scams.”

“Looking at closing loopholes in the law - including a possible ban on upfront fees - and convening a round table between the industry, consumer groups and regulators to look at tackling cold calling are important steps towards tackling some of the problems we highlighted in our super complaint. We also welcome the OFT’s consultation on new credit brokerage guidance and revised debt management guidance, and their pledge to take strong action against rogue firms.”

The super complaint

Cashing in, based on evidence from Citizens Advice Bureaux all over England, Wales and Scotland, described how victims of the recession are being targeted by firms who phone or text out of the blue offering to help find a loan. People are then charged a hefty fee for a loan that often fails to materialise, and cannot get their money back.

In many cases they are persuaded to part with bank account details only to find money is withdrawn from their account without their consent. Their details are often then passed on to other companies who bombard them with more texts and cold calls offering loans, debt management or claims management services.

CAB evidence suggests that cold calling is concentrated among credit brokerage firms that appear to target people unable to get mainstream credit because of a poor credit history, low income or current financial difficulties.

Many of the problems seen by the CAB service involve seemingly legitimate licensed credit businesses breaching current consumer protection rules. But CAB evidence also suggests that fraudsters posing as credit brokers are using the same tactics to extract bank details from people and steal hundreds of pounds from their accounts.

A big problem

Citizens Advice said these practices were widespread, with 840 million cold calls made by debt management firms in 2009 and loan fee scams affecting at least 110,000 people a year and costing the UK public £190 million annually.They warned that these numbers are bound to rise further at a time when, according to recent estimates, up to six million households are either in arrears with bills or credit commitments or are finding a constant struggle to keep up.

Living Costs in UK Rural Areas

'up to 20% higher for remote areas'

People in rural areas need to take home up to 20% more than those in urban areas in order to reach an acceptable living standard, according to a report.

The Commission for Rural Communities said someone in a remote village needed £18,600 a year to get by, compared with £14,400 for an urban dweller. It means a villager must earn about 50% above the minimum wage of £5.93 an hour to reach a minimum living standard. The report cited transport and fuel as the main extra cost burdens.

Falling short

A team from Loughborough University that calculates the Joseph Rowntree Foundation’s minimum income standard index carried out the research for the CRC. This index is based on what items peoplethink households need to be able to afford to achieve a minimum acceptable living standard.

The report found that, with low pay more common in rural areas, many rural workers fall well short of being able to afford their essential needs. The findings show that the more remote the area, the greater the extra costs.

According to the report, to afford a minimum standard of living a single person needs to earn at least: • £15,600 a year in a rural town;
• £17,900 a year in a village;
• £18,600 in a hamlet or the remote countryside.

When factors such as taxes and tax credits are taken into account, that equates to a difference with the urban figure of £14,400 in take home pay of 10-20%, researchers said.

Wage gap

The report also found:

• A car is a significant additional cost for rural households because people said public transport is inadequate

• Many rural dwellers face higher energy bills because they are not always connected to mains gas, so must use other fuels

• In a hamlet, a family of four needs £72.20 more per week than a similar urban family

The report’s author, Dr Noel Smith, said: “We were struck by the gap between how much people would need to earn to meet these rural requirements and the level of some of the wages actually available.

Workers in the most basic rural jobs can work very hard yet still fall well short of what they need for an acceptable standard of living.

Nicola Lloyd, executive director at the CRC, said: “Although it is now widely recognised that one in five rural households experience poverty, this is the first time we’ve also had reliable data to show the minimum cost of living in the countryside is higher than in the city.

Income required to meet living costs
	Urban	Rural town	Village	Hamlet
Single adult, no children	£14,436	£15,644	£17,863	£18,577
Couple, two children	£29,727	£37,841	£40,073	£42,277
Lone parent, one child	£12,454	£17,773	£19,431	£19,980

She said there were ways to lessen the need for expensive travel to reach essential services in rural communities. These included greater access to broadband and mobile technology, “and creative solutions to providing employment and services closer to home”, Ms Lloyd said.

Mark Littlewood, director general of the Institute of Economic Affairs, told the BBC the picture was more complicated than the report suggested. But he said: “It does show that poverty is very different in different areas of the United Kingdom... that the sort of policies we need to tackle extreme poverty in, say, Tower Hamlets are very different from the sort of measures we need to tackle extreme poverty in the Shetland Islands or in Cornwall.

“So I think what it shows is that we need to take a very decentralised approach to tackling poverty, to welfare and to getting people back to work. “I would be extremely keen to see budgets transferred to, say, Cornwall County Council and for different local areas to experiment with different schemes.” Mr Littlewood also pointed out that the challenges in one rural area differed to those in another. For example, in a tourism-based economy like Cornwall, the seasonality of employment is a major problem, while in the Shetlands, access to transport is the biggest issue.

Courtesy of BBC News Online November 2010

Credit Unions

A straightforward idea ...

The recent financial crisis has made many people wary of ‘big banks’ they are concerned about their savings and finding it difficult to borrow money.  However there is a ‘local’ alternative, a Credit Union.

Over a quarter of a million people throughout the United Kingdom today have accounts with Credit Unions and over recent years membership throughout the country has accelerated as new Credit Unions are established.

A Credit Union is a straightforward idea and gets back to the basics of banking by serving the Community.  “A Credit Union”, explains the association of British Credit Unions Limited (ABCUL), “is a financial co-operative”.  It is owned and controlled by its members and is run for the benefit of its members.

To establish a Credit Union people need to have what is known as a common bond, this may be living in a geographical area or working in a particular place.  The North Cornwall Credit Union (NCCU) based in Camelford has as its common bond that members need to live or work in the North East Cornwall Area.

They help people on low incomes and are an alternative to the ‘loan sharks’ who charge an outrageous amount of interest.  Whilst some Credit Unions may give loans to members who have not started saving, NCCU only offers loans to savers at the present time.

The interest rates that Credit Unions can charge are regulated by law, NCCU charge 1% on the outstanding loan balance at the end of each month equivalent to an APR of 12.68%.

This rate is far, far lower than what doorstep lenders or ‘loan sharks’ charge.  The support a Credit Union can give a person who needs a small loan is very effective and can often mean an escape from real poverty.  You may also borrow money if you are a saver.

NCCU policy is that most borrowers must have saved for at least thirteen weeks and the initial loans are usually between £100 and £500 depending on the amount they have saved, with a condition that they maintain their saving with the Credit Union.

The difference between a Credit Union and a Bank is when people save they are buying shares in the Credit Union.  In addition to giving loans NCCU also acts as a savings club where your savings are safe unlike some recent high profile failures.  NCCU are of course regulated by the Financial Services Authority and operate within a legal framework.

So if you are tired of big Banks, Building Societies and the lack of local banking facilities it may be time to think about joining your local Credit Union.

Ray Feltham, Whitstone (Whitstone Whistler July 2010)

For further information contact:
North Cornwall Credit Union
Council Offices
College Road
Camelford
Cornwall  PL32 9TL

Tel 01840 213841

Email:info@nccu.eclipse.co.uk