Are you sure you should be doing that?

Saturday, May 28, 2011

NS&I Savings Certificates - the clock is ticking!

If you're considering buying an NS&I Savings Certificate, especially the (RPI-) index-linked version, you may need to decide quickly.

NS&I's site says they "expect [them] to be on sale for a sustained period of time", which gives them room for manoeuvre as to timing and could leave ditherers suddenly high and dry. They also say "we are currently experiencing high volumes of calls" and this could mean that they will reach their overall sales target well before the end of the financial year - which is why, reportedly, the Certificates were withdrawn from sale last July . It's also worth noting that there is no specific target for Savings Certificates - as I reported here last month, it is merely expected that NS&I will end the tax year managing £2 billion more than it did at the beginning - spread over all its products, including e.g. Premium Bonds.

Moreover, there is commercial pressure to withdraw the Certificates. I reported that they were back on 12 May, and a mere two weeks later the Nationwide Building Society began complaining of "unfair competition" from NS&I.

The Government is in a cleft stick: people should have a secure and inflation-proof haven for their cash, but it is also a priority to get banks and building societies lending again to stimulate the economy.

It has also been observed that since the financial sector has been allowed to dominate the economy, the Treasury has become semi-dependent on taxes on bankers' bonuses. I have to bite my tongue at this point!

Actually, the competition complained of is not as fearsome as it was. True, you can invest up to £15,000 for a 5-year period (and can also buy them for children aged seven or more); but the 2- and 3- year versions are no longer available for new purchases (existing ones can usually be rolled-over on maturity), so the maximum you can invest has been sharply reduced: in 2006 you could have committed up to £45,000 per person, by buying three different versions at the same time!

Further, although the Certificates are still RPI-linked and tax-free, the additional interest is now only 0.5% per year. As before, you can access the cash before the end of the 5-year term (I suspect this term was chosen as being the least attractive), but you lose a year's interest.

Having said that, I still think they are better than what you can get elsewhere. As this FT article says (see end), the commercial alternatives are either taxable or carry a degree of investment risk.

If you do want to get in (and remember, this is NOT a personalised recommendation!), do so before the market whinges the Government into submission. You can apply online here.

INVESTMENT DISCLOSURE: We're just considering buying some ourselves!

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Sunday, May 15, 2011

Letter to The Spectator: GM contrarianism

Sir;

Matt Ridley’s statement (Diary, 14 May) that “GM allows the organic dream of drastic cuts in pesticide use to come true without high cost” must surely be disingenuous coat-trailing, or at least an instance of grossly unbalanced journalism. Before he ripostes that this was only a passing comment in a desultory diary, I should like to suggest that the subject of how we are going to feed ourselves and our descendants deserves better than a contrarian throwaway line.

Mr Ridley makes no reference to research (e.g. as quoted by Friends of the Earth in 2008) that indicates increased use of pesticides in conjunction with GM crops. Is he also unaware of the common assertion that one of the purposes of GM in cereals is to develop crops that are resistant to the side-effects of herbicides and some pesticides, so helping to expand the market for the agrichemical industry? Does he further wish us to believe that he is ignorant of the debate about monoculture farming: how it allegedly increases liability to disease and pests, which in turn encourages the use of chemicals that harm wildlife and soil microorganisms and degrade the soil structure?

As a meat-eating, leather-shoe-wearing Westerner, I should like those who come long after me to have the same options; it is not only the plastic-sandaled devotees of Gaia who are concerned about sustainability, or the integrity of our environment.

Thursday, May 12, 2011

NS&I Savings Certificates return!

Five-year index-linked and fixed rate NS&I Certificates are now available again, according to a hotline email received here today.

Demand is likely to be high so if you want to get in, NS&I recommend applying online.


INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Tuesday, May 10, 2011

Quizlet

Who said this?

"The purpose of agriculture is not just to produce the maximum amount of food, at the cheapest direct cost, employing the least number of people. The true purpose should be to produce a diversity of food, of a quality which respects human health, in a way which cares for the environment and which aims at maintaining employment at a level that ensures social stability in rural communities."


1. Hugh Fearnley-Whittingstall
2. Tony Benn
3. David Miliband
4. Sir James Goldsmith
5. Ross Finnie
6. Barbara Ward and Rene Dubos
7. Nick Brown

Saturday, May 07, 2011

We need both AV and compulsory voting

It looks as though the Alternative Vote will be given a resounding raspberry.

A shame, because we may soon see radical policies in Scotland on the "mandate" of a majority party that has won overt support from less than 25% of eligible voters.

Here, thanks to The Guardian's Datablog, are the results of the Scottish Assembly Elections, expressed as a percentage of the electorate, 49.64% of whom abstained:



This is hardly the basis on which Mr Salmond can feel justified in reversing the Highland Clearances, or whatever he plans to do with the systemically-distorted power he is set to wield.

The Celtic Twilight is perhaps better represented by the party I call (with apologies to Dylan Thomas) "Fforeggub" - which has just put in a storming performance in my own ward's local council election, garnering over two-thirds of the potential vote. This democratic failure has ousted the nice Lib Dem lady (I voted UKIP, on principle) in favour of the Labour bod, who got less than 16% of the franchise:



In an increasingly divided and crisis-beset country, I'd argue that we need not only the Alternative Vote but (as I said last month) mandatory voting.

For me, a spoiled ballot is spoilt behaviour, and an abstention is a moral abdication. It is not a worthy exercise of your liberty to surrender liberty itself. The blasé line "Don't vote, it only encourages them" is exactly wrong: the failure to vote empowers and emboldens those who squabble to grab the country out of each other's hands and play recklessly with it.

Thursday, May 05, 2011

The One Percenters

Just voted. I asked one of the returning officers, "Good turnout?"

"Still under 200." This is at gone half five. So my wife and I represent over 1% of votes cast so far, at that station.

I wanted my vote to count, but not this way.

Tuesday, May 03, 2011

Credit cards and consumer protection

As reported in the Daily Mail today, you get additional consumer protection if you make a purchase of an item worth £100 or more by using your credit card.

The Mail piece is based on details on page 16 in the latest issue of "Ombudsman News", a regular publication by the Financial Ombudsman Service (aka FOS -see link in sidebar under "Financial Regulators (UK)"). In the case cited, a student had bought what turned out to be a faulty computer and when she complained, the shop advised her to contact the manufacturer; but she didn't have time to do this, so she sought redress from the credit card issuer instead. When the issuer refused, the FOS ruled in the student's favour.

Section 75 of the Consumer Credit Act 1974 (current version) states:

"If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor."

"Jointly and severally" means that the consumer does not have to deal with the shop or the manufacturer first, he/she can get the money back from the credit card company; but the supplier can also be dragged into the action, if the consumer so chooses.

This does not apply if the purchase is via a "non-commercial agreement", or if the item cost less than £100 or more than £30,000, or if the credit card terms have been breached (e.g. by exceeding the credit limit on the account).

In the definitions section of the Act, "“non-commercial agreement ” means a consumer credit agreement or a consumer hire agreement not made by the creditor or owner in the course of a business carried on by him" - in other words, loosely speaking, the transaction has to have been commercial rather than private.

Worth buying a car from a dealer this way, perhaps?

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Monday, May 02, 2011

AV explained beautifully



(htp: angry exile)

A letter to Douglas Carswell MP

Monday, 02 May 2011

Douglas Carswell MP
The House of Commons
London
SW1A 0AA


Dear Sir

Financial Services (Regulation of Deposits and Lending) Bill 2010-11

Congratulations on your speech introducing the above Bill, which I have just seen on YouTube. May I offer some counter-arguments so that you can rebut them when others raise them?

• Were your Bill to become law, the banks might simply offer no interest on “storage bank accounts” and a sufficient differential on “investment accounts” to draw money away from the former, even from cautious savers (but still not enough in the latter case to match inflation). In fact something like this is already happening with people investing in stocks who shouldn’t.

• British business might be at a disadvantage if we have this rule but other countries don’t. Look what the US has already bought from us with “candyfloss money” – the old Cadbury Quakers must be spinning in their graves.

• Savings need to be safe in terms not only of the return of capital, but the return of its real value. NS&I Index-Linked Savings Certificates fitted that bill, and were withdrawn in 2010 for the first time in 35 years. This is an indication of the Government’s priorities, surely. But even when available, money had to be locked up in those Certificates for years. And when first introduced, they were only available to pensioners.

• If you really want sound money for the protection of ordinary savers, then we should have index-linked (and linked to a properly fair index of consumer price inflation), instant-access (or short-notice access) cash ISAs, so that deferred consumption is at least not penalised, if not positively rewarded.

Very best wishes to you and for your Bill,

Rolf Norfolk

INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

Sir Fred Goodwin

Owing to a "super-injunction" still in force, I am unable to say any more than that Sir Fred Goodwin is a *anker and has been a prominent *anker for years.

Sunday, May 01, 2011

In the news: Gerry Adams and Libya

In the Daily Mail, Petronella Wyatt recalls how, aged 12, she was threatened by the IRA on account of her father's journalism; she describes Gerry Adams' smile as reminding her of "the glint of coffin handles".

Elsewhere in the news: one of Colonel Gaddafi's sons (and three grandchildren) reportedly killed by a missile on account of Western interests' quarrel with his father. This is not authorised by UN Resolution 1973 and the assassination of political leaders is against inernational law; when the inevitable reaction occurs, the Libyan ambassador is ordered to leave the UK.

It is said that at the Battle of Waterloo, Napoleon rode momentarily within range of a British musket, but Wellington forbade the shot.

In praise of rotten boroughs

Democracy is inconvenient and there are moves to tidy it away, one of them being to reduce the number of MPs from 650 t0 585, with the following result (using size of electorate as at 1 December 2010):


Imagine that the constituency in which you live is a vast coach, and the MP your driver. What chance is there that you will go to the destination of your choice? Especially when the front rows are filled with lobbyists, Whips and others with much louder voices than yours.

Whereas in the General Election of 1831, 152 out of 406 MPs were chosen by fewer than 100 voters. Gatton (Surrey) and Old Sarum (Wiltshire) each had only 7 electors and each sent 2 members to the House of Commons. At least you'd have got a drink out of them once every few years.

AV means the driver might just hear a little chorus from the back, above the commercial and cliquey hubbub roaring just behind him.