Product news
National money guidance service
3 March 2008
HM Treasury (HMT) has today announced that we (FSA) will lead a pilot project to test delivery of the UK's first national money guidance service.
Banking
Banking reform
On 30 January 2008, the Chancellor announced proposals for strengthening the current framework for financial stability and protecting depositors. Find out what the proposals are designed to do, and what this means for you.
Unauthorised overdraft charges
The OFT, seven banks and one building society have initiated a test case in the High Court about unauthorised overdraft charges. Find out what this means for you if you've made a complaint or are thinking of making one.
Insurance
Critical illness cover
Critical illness cover (CIC) pays out a lump sum if you are diagnosed with certain illnesses – it won't replace your income. The illnesses covered will be specified in the policy along with any exclusions – these differ between insurers – so make sure you check what you're actually covered for.
Payment protection insurance
Payment protection insurance (PPI), will cover monthly repayments on mortgages, loans, credit/store cards or catalogue payments if you have an accident or sickness and are unable to work, or you become unemployed – but for a fixed period of time. You don't have to take it out but if you do, make sure you check what you're actually covered for.
Pension term assurance
Pension term assurance (PTA) is a type of term assurance which uses the rules for pension schemes to provide life cover. You don't pay pension contributions so you won't get an income in retirement – it only pays out on your death.
Mobile phone insurance
Be wary of any calls you receive soon after buying a mobile phone from companies offering you insurance cover. Various unauthorised providers claim they are linked to shops and mobile phone providers but they may not be who they say they are.
Savings and Investments
ISAs (Individual Savings Accounts)
By using an ISA you can invest in cash or longer-term investments and not pay tax on the income you get from it.
You'll see that providers are competing hard to get you to take up any used ISA allowances – but don’t get hooked by the headline interest rates – they may have strings attached.
Mortgage endowments
Because of stock market conditions, many endowment policies taken out in the 1980s and 1990s are unlikely to pay out the amounts originally estimated. So if you’re using your endowment policy to pay off a mortgage, it may not pay out enough to do so.
Landbanking
Have you been approached to invest in land? Companies operating these schemes are looking for investors to buy plots of land in areas which have not yet been granted planning permission, and may be in Greenfield or Greenbelt zones.
Split capital investment trusts
Splits are investment companies and most are listed on the London Stock Exchange. They were in the news a few years back as there was concern about their financial position and a lot of people lost money they had invested. An independent company, Fund Distribution Limited (FDL), was created in 2005 to administer a distribution fund and make payments to qualifying investors.
Spread betting
Spread betting can be on anything – sports, politics or reality TV. With spread betting, the more right you are, the more you can win but the more wrong you are, the more you can lose – and your loss is not limited to the amount of your stake.
Venture capital trusts
Venture capital trusts (VCTs) provide a valuable source of capital for small companies and help the UK economy to develop, but make sure you understand the risks as well as the benefits before investing.