A report released today claims that of the 3 million of the UK population who take on seasonal work from home, the vast majority will be earning less than the minimum wage.  This is the time of year when companies involved in postal campaigns and similar issues will look to recruit those desperate for additional cash for the festive period.

While it is actually illegal to employ anyone at a rate less than the national minimum wage, the problem is that these people are desperate for that extra few pounds and will do just about anything.  It is a sad indictment of the UK business world when people are paid literally a few pounds an hour for such menial and time consuming activities.  Lets not forget that these are vital part of many mail shots throughout the country, and due to the low pay offered the “employers” are able to pocket more profit for themselves.

So how can you fight back?

Unfortunately for every person who decides to drop out because of the low pay there are another 10 ready to take their place.  While many were initially attracted to the working from home philosophy, because in the main it compliments their life style which may involve child care etc, it is not easy going.

How do the companies get away with paying an illegal rate?

While the laws were initially set up to avoid situations such as the ones we are covering, employers are able to get away with it by publishing unrealistic hourly targets for output, which when put into practice may take substantially longer to complete – resulting in a reduced hourly rate from the one published.

While the vast number of the 3 million UK residents who take on such work are under paid, there are still some reputable companies out there who will pay you a fair rate for a fair days work.  They make take a little finding, and they may offer a different kind of work, but they are there.   

While we have heard so many rumours and stories about possible takeovers, cash injections and a possible break-up of the business, it seems that Northern Rock just keeps rolling on.  While the authorities have indicated that they want the situation resolved as soon as possible, the loan from the Bank of England has risen to a massive £23 billion – all tax payer’s money!

Despite pressure from the Bank of England and the government to arrange a quick bail-out, the management of Northern Rock do not appear to be in any great rush – is it the fact that the authorities cannot afford to pull the rug from under them, or is it more complicated than that?

In all honesty it seems to be a mixture of the two, because even though the situation is not receiving anywhere near the same amount of press coverage as when it first began, the situation is still very critical – probably worse now than ever before.  While taking a step back, you also need to consider who in their right mind would take on a brand name which has been tarnished, as well as a £23 billion funding position – even though it will be backed by mortgages, loans, etc in the longer term.

Even after all of these weeks there is still no certainty that the business will survive in any shape or form and the longer it drags on the less chance of this happening.  The authorities are now in a very difficult situation as they cannot take the bank “private”, they cannot call in the loan and the pressure they have been exerting for a swift conclusion seems to be falling on deaf ears. 

Quite when and how this one will end is very very unclear.

In a move which will be rued by the credit card industry, the Lords have upheld an earlier decision to instruct a number of credit card companies to refund the cost of items which were bought overseas, but either did not turn up or were damaged.  In a move which was instigated by Lloyds TSB and Tesco Personal Finance they challenged the understanding of the Consumer Credit Act in relation to goods purchased outsdie of the UK

Under section 75 of the Consumer Credit Act, the credit card holder is insured for items with a value between £100 and £30,000 in the event of damage or non-delivery.  The action was brought about because of the recent upsurge in internet usage, which has seen a massive rise in the number of products purchased online from overseas traders.  The potential cost to the credit card industry could run into millions if not billions of pounds in the years to come.

The finance companies involved had tried to argue that overseas purchases were out of their jurisdiction and should therefore not be covered by UK regulations.  However, the counter argument that it cost more to buy goods overseas was brought up time and time again, and the fact that consumers should at least be able to expect the same level of cover seen in the UK.

It will be interesting to see how the credit card companies react - Will they increase charges? Will they ban overseas transactions? Or will they just take the ruling on the chin? What ever you think, it seems inevitable that the consumer will be forced to dig deeper at some stage.

As they say, what goes around come around……

An official ruling last week has caused further confusion in the mortgage endowment market, where many IFAs were hit with compensation claims as client endowments failed to cover the value of their mortgages, as had been “promised”. The Financial Ombudsman has ruled that an IFA who was previously forced to pay out compensation can, in the event that the policy is in surplus at the end of the term, claim back all or part of the compensation paid out.

Not only does this ruling further muddy the water, but it will also cause major logistical problems with IFAs now obliged (for their own benefit) to monitor all final endowment payouts.  Even though this ruling does seem fair on the surface, it does not seem to take into account the pressure and financial strain which many endowment holders felt.  In some ways it seems that IFAs will possibly benefit from a rebound in investment returns (if it happens) even though their advice may well have been technically flawed initially.

Many experts are now expecting a mass of IFAs to take court action to retrieve as much of their compensation payments as possible.  It seems that while many thought the endowment issue was dead and buried, this may not be the case.

It also open the door for a possible reversal of past claims in other areas, where the financial markets may well have bailed out advisers if investment instruments were left to mature. 

As the internet continues to bring the latest news, views and offers straight to your door step, many people are now asking about the role of Independent Financial Advisers, and whether they are actually worth the money they charge. Surely it is time to “go it alone” and look after your own affairs online?

While those with substantial experience of the financial markets themselves may well be able to “cut out the middle man”, the financial markets are still very dangerous for those who do not fully understand them.  What level of pension are your after? What can you really afford? Should you use up the equity in your home? Which tax free investments should you consider?

For many people these questions may as well be written in a foreign language, as they may mean nothing - where do you start? Who do you blame if it all goes wrong? What protection do you have?

For those who are not up to date with the financial markets and the vast number of products on offer, it is still highly advisable to go through your own Independent Financial Adviser.  They do have the experience, they do have the knowledge and above all you are protected if they give you the wrong advice.  Cutting corners with regard to your future financial well being can be incredibly risky, and should be averted unless you know what you are talking about!

While there are up top 540,000 ladies over the age of 60 who do not receive any form of UK state pension, many are not aware that for a relatively small one off payment they will actually be able to fill the gaps in their national insurance contribution record.  This will then make them eligible to receive a minimum pension of 25% of the current state pension - amounting to some £1,000 a year.  So how can this be?

Unless a person in the UK has contributed 10 years of national insurance in total, they are not eligible for the state pension.  As there were many ladies in the past who initially worked, then married and left employment to bring up a family, some were not in a position to contribute for the full 10 years.  Little publicised government legislation allows those in retirement to cover the shortfall, and bring their record up to the 10 year minimum requirement  For those 65 years of age, or over, they will be able to claim back pension of approximately £1,000 a year, back to the year they turned 60.

Quite why this interesting information has not been more widely covered by the financial press or the government advisers remains to be seen, but it could prove priceless for many.  It will be interesting to see if the vast array of Independent Financial Advisers out there actually look to take this news on board.  As more and more pensioners struggle in later life, the £1,000 a year income could prove vital.

As we approach the Christmas period, many people around the world will be chasing up their Christmas clubs to ensure their vouchers and money are ready for the Christmas rush.  These are people who having been saving up for nearly 12 months in order to give their families a Christmas which they will remember.  But are Christmas savings clubs safe?

Many people will remember the Farepak disaster a couple of years ago, where many many people lost the majority of their Christmas savings when the company went under.  Unknown to the many savers, their money was not ring-fenced from the company, and when the company went under the receivers claimed these funds as assets of the Group.  Many savers lost thousands and thousands of pounds, with Christmas cancelled in a number of households.

While the rules in the UK, and other countries,. have been tightened after the Farepak collapse, it is still essential that you know who is looking after your money, and what degree of protection you have.  There are many legal issues to contend with, whereby unless ring fenced from the company in specific bank accounts, your money can be claimed back by the receivers in the event of collapse.  It is therefore essential that you know how the savings club is set-up, and what would happen in the event of collapse.

It is unfortunate but there are good solid savings clubs out there who have seen their business reduced by the Farepak chapter.  Many people are turning to good old fashioned savings bank accounts, and while they have ready access to the money, many are turning a blind eye until the Christmas period.

The choice is still there, and there are Companies out there who will look after your money properly, and ensure that you get the Christmas you always wanted.

In a move which has surprised many in the financial sector, the Bank of England have had not one taker for their £10 billion fund to assist the sector through the credit crunch.  Does this mean that things may not be as bad as first thought, or are the institutions looking to hold out for as long as possible?

While there has been no real sign that the money markets are returning to normal, the fact that the £10 billion has not yet been touched is encouraging.  However, with problems in the US, a UK economy which is in danger of slowing down, and a property market which is unpredictable at best,  the signs are not good.  When you add to this the fact that the banks have recently been refusing some of the more risky transactions, it looks more like battening down the hatches for a rocky ride. 

In many ways it seems that the Bank of England are in a no win situation with criticism when they jumped in to bail out Northern Rock, and criticism because of the time they took to arrange the £10 billion funding arrangement - a fund which no one seems willing to utilise.  Quite what else they can do at this moment in time is not clear, but they will no doubt come in for more criticism in due course!

When you consider that the original credit crunch situation sprang up from no where, there are still a number of situations which could happen to heap yet more pressure onto the sector.   The financial industry may be able to see through the clear land, but it is still a long way out of the forest!

When you consider the current turmoil in the financial markets, the Northern Rock saga and the softening housing market, it is no surprise that many people are starting to ask what would happen if their mortgage provider went out of business. Would they need to sell their home and repay the mortgage? Would they be transferred to another provider? Would their terms change?

These are all sensible questions that any home owner should be asking themselves in the current climate, although things are not as bad as they may seem.  True, we may see more companies get into substantial difficulties over the next few weeks and months, but as an industry the financial sector do pull together in times of trouble. 

Imagine the situation if Northern Rock was to go under over the next few weeks - a situation which could well happen - there are potentially thousands of mortgage holders who would need assistance.  In this situation, there is no way that the banking sector would either (or could afford to) force home owners to repay their mortgages early, causing a major financial crisis and a flood of property onto the market.  In this situation, a company or companies would come forward and transfer the Northern Rock mortgages onto their business books.

There is some debate whether they would actually be able to amend terms in this situation, but they still need to be competitive and any major changes would be unlikely.  While the UK banking sector is one of the most cut throat in the world, they all appreciate that they have a part to play in the well being of the sector.  If one major bank were to fall, without making arrangements for the transfer of viable client business, then the whole sector would be badly effected, not only on a profit level, but on a trust level (which can be more important that the short term profit outlook).

Whether we actually get that far down the line remains to be seen, but the position of Northern Rock is still very precarious.

In an investigation which has not only shocked the Financial Service Authority (FSA), but the industry as a whole, a recent BBC report has shown that a significant number of UK sub-prime mortgage brokers have willingly encouraged customers to overstate their wages.  By overstating their income the customers will have been offered larger loans, ones which many just cannot afford to finance.  This is yet another element to the financial market which has many experts worried.

Apart from the fact that the housing market has turned down (confirmed by today’s announcement from Barratt Developments), there seem to be many home owners out there who may never have been in a  position to fulfil their mortgage obligations, even prior to the fall back in prices.  While these customers will take a while to work their way through the system, there are again real concerns about the UK sub-prime mortgage market.

When you consider that the credit lines for the sub-prime sector have all but dried up, it is a little surprising that there have been no major collapses as yet.  However, this can surely only be a matter of time, especially in the light of the BBC report.  If the sector were to collapse, it also begs the question “Would the authorities intervene as they did with Northern Rock?”.  Highly unlikely, but then who would have thought the Northern Rock would be on their knees in such a short space of time.

Thankfully the FSA have acted swiftly on the report findings and a number of mortgage licenses have been revoked, but were the BBC lucky enough to catch all of the rogue mortgage brokers - very very unlikely!