The Finance Factor

1. Keep your tyres fully pumped-up and cut your air-conditioning usage

It is estimated that half of all drivers in the UK are driving with under-inflated tyres. This increases the resistance and therefore raises the amount of fuel used. The RAC advises that your fuel bills will increase by up to 2% if your tyres are not fully inflated to the recommended pressure.

Ensure your tyres pressure is kept at the correct level by checking them once a week. You can find out the recommended pressure readings for your tyres by consulting your car manual.

According to the National Energy Foundation, using air conditioning will increase your fuel consumption by up to 25%, so only use it when absolutely necessary. An alternative method to stay cool is opening the air vents, or even simply opening the windows. However, if you’re travelling over 60mph an open window will increase drag which can end up costing more than having your air-con on.

2. Service your vehicle

If you fail to service your vehicle regularly you could be reducing fuel economy by over 10%. Some of the key areas that must be covered are changing the air filters, as according to the RAC, dirty filters can seriously increase fuel usage; and regular oil changes, as clean oil will reduce the wear caused from friction of all the moving engine components, thus improving fuel economy.

Both of the tasks mentioned above are inexpensive and can help to drive your fuel costs down.

3. Change your driving habits

Changing the way you drive can drastically reduce fuel consumption, and this isn’t just about refraining yourself from putting your foot down.

Continue reading ‘Six tips to keep your car fuel consumption down’ »

Lloyds Banking Group are the next major bank to reveal losses after releasing the first half year figures from 2009. The group has put the mounting losses down to its acquisition of HBOS, which took place in January.

The firm made a £4billion loss from January to June this year, which was worse than originally expected, after the value of all assets were recorded but the total cash equivalent amounted to less than previously anticipated.

The banking group, which is part-nationalised – 43% owned by the state, took on £13.4billion, the majority of which was made up of bad loans, with 80% of this belonging to HBOS.

But it has said that it expects results to show signs of improvement in months to come.

Lloyds shareholders can grasp some comfort in knowing that most of the poor quality loans taken on by the group are now being insured by taxpayers, so that the taxpayer would foot the bill for any further losses as opposed to the bank.

Continue reading ‘Lloyds reports £4bn in losses for 2009’ »

According to new research carried out by financial group Moneyfacts, almost 50% of all current accounts offered to consumers provide no return on their money.

The number of accounts paying no returns at all has risen from 19% recorded a year ago, to 49%. The new figures have also shown that current accounts paying 0.10% or less now constitute to 83% of the market, compared to 57% 12 months ago.

Over the last year, the average rate of interest paid on current accounts has fallen from 1.54% to 0.71%. However, in the same period, the average overdraft rate has increased from 12.99% to 13.2%. “current accounts are the most widely used accounts, yet is is surprising how many people are reluctant to switch in order to get a better deal,” said James Booker, a spokesperson for Which4U.

Continue reading ‘Fall in returns offered on Current Accounts’ »

The Bank of England has today announced plans to inject a further £50billion through its quantitative easing programme – a process used to help stimulate the economy by putting more money into circulation.

The new plans will increase total spendings to £175billion, exceeding the £150billion limit first set by the chancellor.

The rate setters said in a statement that the recession “appears to have been deeper than previously thought”.

They also made the decision to freeze interest rates at 0.5% for the fifth consecutive month, the lowest rate ever recorded.

A number of people in the markets were surprised by the Monetary Policy Committee’s (MPC) decision to expand the programme.

The announcement had a negative effect on the pound, losing recent gains against the dollar to fall by over a cent to $1.6830.

Mervyn King, Bank of England governor, was obliged to ask the chancellor for permission to extend the programme beyond its original £150billion limit, to which Alistair Darling accepted.

Stephen Timms, financial secretary to the Treasury, said he thought extending the programme was the right thing to do.

Continue reading ‘Bank of England to inject £50bn into economy’ »

Over the last year, the financial sector has witnessed some extremely turbulent times, beginning with the credit crunch and moving into the recession. This has made us all more aware of our financial well-being, encouraging people to become more frugal with spending and consider their futures.

Last year, The Bank of England’s base rate peaked well above average, so it’s no surprise that people were benefiting from high interest rates on their savings accounts. But as inflation became almost unavoidable, the Bank of England lowered rates on a number of occasions, eventually marking the lowest rates ever recorded of 0.5% – the level it remains at today.

Although many have benefited from this on one side of the market – involving mortgages and loans, savers are suffering, as many banks are struggling to offer attractive interest rates. But the fact is that if you choose your account wisely, you can earn up to 10 times the current base rate for a guaranteed period of time.

Fixed rate bonds allow savers to lock in at a rate for a specified term, providing them with a guaranteed predictable income from their investment. Barnsley Building Society are currently offering savers 5% on investments between £100 and up to £500,000 on its three year fixed term bond.

Although the base rate is likely to increase over time, 5% is a very respectable rate and would even have been so before the financial crisis first surfaced.

Continue reading ‘Fixed rate bonds provide potential to earn 10x base rate’ »