28/06/2014 Your Money

more than we can afford but it won't just affect people looking for a new

mortgage, it may affect those on mortgages already. That's what we

are looking at this week. This is your weekly guide to making

the most of your cash. New curbs on mortgages, but people who have a

mortgage already may be caught out. We will tell you who it affects.

Getting back the money that the banks should never have taken in the

first place, we will see how the financial ombudsman service is

dealing with PPI claims. And the superb ISA, we will tell you how the

new account will work and how we can make the most of it.

up over 18% in London over the last year,

That explains why the Bank of England has told

the mortgage lenders to rein in their galloping horses.

The Bank of England says it wants mortgage lenders to check

that borrowers could afford to pay back their loans, even

if interest rates rose by another 3%.

And it wants to cap the proportion of risky mortgages that

dwarf people's salary, the Bank says no more than 15%

of all mortgages should be risky mortgages.

That's mortgages where the loan is 4`and`a`half times bigger

The lenders are way, way below that target across the UK,

House prices may be up by more than 18% in London, but they

rose by less than 1% last year in the north east of England.

They fell by nearly 1% around Hull and the Humber.

It shows what a challenge the Bank of England and the financial

watchdog face, trying to control what's effectively a regional boom,

with financial tools that apply to the nation as a whole.

David Hollingsworth joins us from Bristol. Of course the mortgage

lenders have already brought in new tougher checks on affordability.

What impact has that had already? That's right, they are still bedding

in, if you like. The affordability test is at the heart of the lending

decision and it has got tougher, so lenders are looking at doing, and

outgoings. It remains to be seen how bad will hold back the level of

lending. So this measure doesn't really have an instant impact, it

will be in the background to prevent any slide in the future. When you

hear about curbs on lending, you think it is new loans, to new

borrowers, but some of this may affect people who have a mortgage

already but will need to renew the mortgage when their existing deal

runs out. Year, when they come to look for a new deal, they will go to

a new lender, they will have to go through the new rules that came into

place because of the mortgage market review. That will be new lending,

feeding into the figures that are going to be monitored by the bank to

prevent a slide towards more borrowers ring higher multiples. It

is mainly in London and the south`east that people are

affected, that is where the house price increases are the highest of

all. The bank really can't control what the house prices are, but it

can look at trying to minimise a move towards higher and higher

levels of debt. Those who are demanding bigger and bigger more ``

mortgages are likely to pay more in the housing market and that is

currently London and the south`east. A balancing act because in the

regions we are not seeing anything like the kind of rises that London

is. The head of mortgages at the building societies OCH and was on

breakfast this week and he raised the concern that limiting mortgages

to 15% of the total loan book could actually stop people who could

easily afford to repay a big mortgage, could stop them getting

the money in any case. At the moment the expectation is that there will

be no immediate change because the banks are well within the 15%. More

like 10% currently. Borrowers shouldn't expect a change next week

from this. The risk is still with the lender, the decision remains

with them and you can still borrow 4.5, or more. This puts a safety

break in place, so if there is a move to a slacker lending policy and

more always take higher multiples, this will kick in and prevent higher

levels of indebtedness Thank you for joining us.

The cost of taking the driving test is going

to fall in October, says the Driver and Vehicle Standards Agency.

The cost of car and motorcycle theory tests will

fall by ?6 to ?25 with a further cut of ?2,

The practical car test still costs ?62 on a weekday

Selling us insurance to cover our loans and credit cards

if we fell sick or lost our jobs, insurance that we didn't need or

It's one of the biggest, and most expensive,

If you want to claim the costs of that insurance back, the first

place you ask is the bank that sold it to you in the first place.

But not all those PPI claims go smoothly,

and many end up in the hands of the Financial Ombudsman Service.

Our reporter got an exclusive behind

the scenes look at how the Ombudsman is dealing with those claims. Also

tonight: Banks facing huge compensation pay`outs... We

remembered the headlines, payment protection insurance, PPI, was

mis`sold to hundreds of thousands of people. Since the start of 2011 a

staggering ?14.7 billion has been claimed, but not all of the cases

are straightforward. If you've made a compliment about payment

protection insurance and didn't the result you are after, the

chances are your next step would be to get in touch with

ombudsman service. We have been given exclusive access to see how

they deal with your complaint. Most people call into the financial Burns

service to start the process. they deal with your complaint. Most

people call into the Then you get they deal with your complaint. Most

people call into the Then advice on filling out the complaint form. How

can I help? You will be talking to an adjudicator. Most appeals are

settled by the adjudicator. There are cases that are appealed again,

or are more, gated. These are passed on to the ombudsman. Steve told me

how he came to a decision on a case. The consumer was

self`employed. The policy I have here has some clauses that make it

really difficult for a self`employed person to claim. My conclusion at

the end was that although yes, the business gave him a choice and they

were right on that particular area, because of the terms within the

policy, the detail I've gone into, I can actually say that the policy

wasn't really suitable for that client. So I'm going to uphold the

case and I will get compensation. So how busy is the financial ombudsman

service? They've received over 1 million complaints, half in the last

18 months. At its peak they were getting 12,000 calls a week. They

are still getting 5000 a week. It isn't just mortgage PPI, and credit

PPI. 5000`10,000 claims have been made against retailers who have sold

the likes of cars and fridge freezers on credit. Many people use

a claim management firm to get the money back but that isn't always

necessary. It isn't difficult to make a claim directly. You don't

need to use a claims management company who are usually the people

sending texts. If people want to use them, great, but you don't have too.

My advice would be to have a think about whether you may have a policy.

Many people down there lies that they did. The volumes of claims that

the ombudsman deals with are still very high and some have been

critical of the speed so it has taken on more people. Due to the

number of staff who deal solely with PPI claims, the organisation is now

twice as big as it was before the beginning of the scandal.

From next week, we'll pay less to make or receive

calls on our mobiles when we're travelling in the European Union.

The maximum charge will be around 15p a minute.

Sending on will cost a maximum of around 5p.

Browsing the web, getting and sending emails, that

There is an overall spending cap on all these charges, it's

If we go over this limit, our data roaming facility will be

cut off, unless we tell your mobile company it's ok to spend more.

But old friend of this programme, Sarah Pennells, Editor of the Savvy

woman website, warns those text charges are just for text.

Watch out if you're sending pictures, the

From next week, we can keep more of our savings,

The new, bigger, super ISA savings account is launched.

We'll be able to put up to ?15,000 into one

Fine if you've got that a year to spare .That's all from

It is another roughly ?3000 per person, and don't forget that if you

are in a couple, that is ?15,000 each, so actually you can save up to

?30,000 and avoid tax on that. That is as a couple, as an individual,

you are only allowed one of these a year, is that right? It is a bit

more, located than that, I am afraid. You can have a cash Isa, and

a stocks and shares Isa. I thought the point of the new rules was to

get with that distinction? Yes, that this tension has gone, so you can

have one ISA. The flexible to that will be attractive. `` the flexible

at the foot of you used only be able to move from cash into stocks and

shares, now you can go in both directions. When we talk about

moving money between accounts, we don't mean going in and the cash,

because there is a limit on how much you pay in... And if you take the

money out, you lose the protection and you can only put as much in as

is allowed by your allowance. So the magic word is transfer, rather than

withdraw. Exactly right. The text year started in April, what happens

if you opened an old ISA account after April but before these changes

click in? What you can do between now and the end of the current tax

year is to top it up to the limit. If you put in the full ?11,880, you

can put in the extra to take up to ?15,000. You can keep it all in cash

if you want to, if you don't want the risk of investing in the stock

market, you can put some of the money into shares, depending what

accounts are available, what about other investment types? The amount

of investment types has expanded. You have mentioned cash, you have

mentioned individual shares. Of course, you can put funds in there,

but also there are more types of shares. For example, the smaller

alternative investment market, you can put those in and I say now, and

in fact there is a consultation `` in an ISA now. What about things

like bombs or gilts. `` bonds. There was a limit on the type of bonds you

could put in. You are betting on the 3.20 at Aintree, that still doesn't?

Absolutely not, this is a long`term savings mechanism! If you have never

done this before, where do you go, who do you talk to? It depends on

what type of ISA. Banks and building societies will offer those, but if

you are in shtick in moving between cash and stocks and shares, then a

stockbroker or a fund provider will help you out there. I just wonder is

it worth it? If you are keeping your money just in cash, looking at the

interest paid on it, and it barely keeps up with rising prices, even

with the tax break. ISAs, certainly for cash ones, have been a pretty

poor investment in recent years. That is the point, keeping your

money in cash in the medium to long term is not a good idea, because of

the low rates, and it being eaten away by inflation. So this new

flexibility of being able to move within cash and stocks and shares

within one ISA is really helpful. That is it for this week's Your

Money. You can follow us on social media. More again next week, thank

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