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!

The whole Northern Rock affair has prompted a major review of the rights and wrongs of government intervention in the free markets, as well as potential changes to the protection offered to banking customers.  As the debate rages on, many people seem to have missed the fact the Gordon Brown was Chancellor of the Exchequer for 10 years, and had a very influential role in the set-up we have today.  How does he appear to have escaped any criticism?

There is also the much larger question as to whether it was correct for the authorities to intervene so heavily in what was, and still is, a publicly quoted company, with Northern Rock listed on the London Stock Exchange.  The authorities will quite rightly argue that they were forced to intervene due to the potential for the whole UK banking system to collapse, and the massive repercussions that would have had.  However, while many accept this point, some are starting to point the finger of blame at the authorities and the fact that they could “let” a company with such a risky business model become so prominent in the UK banking sector.

The authorities have also promised to review the protection laws for UK banking customers, although the “deposits are 100% backed” claim from the government some days ago is unravelling a little.  It appears that the small print is not quite as straight forward as it could have been – surprise, surprise.

While there will be many who are breathing a sigh of relief, if the signs from the US are correct this situation could be far from finished.  A falling housing market, increased financial pressure on yet more sub prime lenders and an economy that could stall do not bode well for the immediate future.  Stock markets have held up fairly well over the last week or so, but this short term revival may well be short lived if either the US or UK financial sectors continue to suffer.