OK...my simple, but probably not straightforward question....(especially to the knowledgeable folk who post on here) is - should I be thinking now about buying more equities. I already hold a few thousand shares in Lloyds Bank (as an example) and they have gone down a lot...would it be wise to invest when low (in general)?
In general its always best to buy low & sell high. Whether it's a good time now to buy Lloyds shares is anyones guess. The thing you should be asking yourself though is " do I really want more shares in Lloyds ? " Do you have any other share holdings? If not, why Lloyds specifically? There are other banks.....in fact there are thousands of different Companies you could buy into, not just banks.
If I were you I'd be looking at an investment fund - something that invests in more than just 1 Company. Diversification is the name of the game.
As I said in my post I used Lloyds Bank as an example (as they've fallen a lot). I hold shares in 24 different companies spread across several sectors. I also have money in about 15 different funds - but I like playing around with individual shares taking an occasional punt - some pay off and some don't most are a few hundred pounds worth to a few thousand. Just wanted a general pointer to if now looks a good time to buy (generally)...
If I understood your question correctly, you’re thinking about adding different equities, rather than more Lloyds as Golfie thought. Certainly if I were you I would follow his general advice to diversify by buying funds rather than individual stocks. That will allow you to diversify by business sector, and by region. The other thing that many of us are fans of, is buying regularly each month rather than trying to guess the market. Having said that, whether right now is a good time to start, is an open question. I’ve been dipping in for several months, but right now I think I’m going to pause at least until November to see how things pan out. There are risks the like of which we haven’t really been dealing with before. But I am into retirement so I need to be more cautious than somebody younger about buying stuff whose value can fall. I seem to have been spending a lot of time in the last few weeks scouring the cash deposits options, rather than funds and shares. If you can get 5% guaranteed on a fixed deposit, which I think will come soon on the British market, I think there’s a strong argument for having some of that with money you might otherwise put into funds. But I’m sure others will have a different viewpoint.
If I understood your question correctly, you’re thinking about adding different equities, rather than more Lloyds as Golfie thought. Certainly if I were you I would follow his general advice to diversify by buying funds rather than individual stocks. That will allow you to diversify by business sector, and by region. The other thing that many of us are fans of, is buying regularly each month rather than trying to guess the market. Having said that, whether right now is a good time to start, is an open question. I’ve been dipping in for several months, but right now I think I’m going to pause at least until November to see how things pan out. There are risks the like of which we haven’t really been dealing with before. But I am into retirement so I need to be more cautious than somebody younger about buying stuff whose value can fall. I seem to have been spending a lot of time in the last few weeks scouring the cash deposits options, rather than funds and shares. If you can get 5% guaranteed on a fixed deposit, which I think will come soon on the British market, I think there’s a strong argument for having some of that with money you might otherwise put into funds. But I’m sure others will have a different viewpoint.
Thanks @PragueAddick. Yes - spot on in terms of not Lloyds - just generally. I am in retirement and, funnily enough a few years back closed my S Widows pension and moved into an HL SIPP - buying funds recommended on here by you, Golfie and others at the time. Did very well too...until just recently...but I also like to dabble in equities not on a regular trading front - just to sit on for capital growth. Never risk much and, like you, have moved some back into cash and 1 year savings accounts around the 4.5%. Just trying to tease out some pointers on individual shares to buy...but agree funds seem a better bet generally. Some years back I bought shares in a hydrogen producing company based on an article in the Times for £600 and sold them 16 years later for £12,000 - that's what I'm looking for again?! Yes I know....
The BoE has so far offered to buy up to 40 billion pounds' worth of gilts but has only bought about 5 billion pounds.
So much for "bailing out" pension funds to the tune of £65bn
Again I dont remotely challenge your overall superior knowledge of the underlying issues, but again the noise from the BoE this morning doesnt sound reassuring to me. After establishing that Amol Rajan was not presenting I listened to the Today prog who offered several knowledgeable commentators, including an ex BoE board member. The consensus seems to be that 1) the markets dont buy the KamiKwazi package, and will not until full workings are provided- and that ińcludes specifics on exactly where the inevitable budget savings will be found. 2) the markets didnt like the time limit the BoE put on the initial support package, hence its panic button pressing this morning.
I don’t like the look of Bailey at all. I would sack him and bring in another “foreign coach”. The most obvious candidate would be Mario -whatever it takes - Draghi😉
Don’t mean to give the impression there is not a crisis, but challenge the message that the B of E intervention was primarily to save pension funds when the far bigger risk is a collapse of the UK debt market and hyper inflation.
Pension funds could just refuse to pay the collateral they were asked to pay and cancel the LDI contract. In which case the potential losers would be the investment intermediaries acting as quasi banks.
Pension payments are made from bonds bought in the past whose maturity dates match the dates when pensions must be paid, so bond prices are irrelevant as there is no sale occurring. It’s the cash to be raised for collateral that requires assets to be sold - because the margins thought adequate didn’t foresee a mad Chancellor running amok.
Faced with the choice of paying collateral or paying pensions the latter will take priority. Also, the employer’s liability to fund pension obligations has not been suspended. Finally, I understand collateral could be provided by lending the assets instead of selling them.
Just like the Sub Prime Mortgage failure, participants in LDI focused on counter party risk and didn’t price unquantified risks of illiquidity in the market.
@valleynick66 thanks for your interesting reply. You manage on the banks' behalf to clarify somewhat that the measure is supposed to help protect customers from fraud, ( rather than suspecting its customers of fraud, or money-laundering, which is the impression I've rather gained, but possibly because when it comes to banks and big privatised utilities I've got a default mindset of cynicism). So that's a good answer, pity I have to get it from CL rather than a bank CEO.
But it's not entirely convincing, is it? I mean it sounds like it's aiming to protect a financially naive older person trying to use internet banking, but such people are also the very people for whom the loss of £25k would be devastating. It ought not to be beyond the wit of man, especially with the resources the banks have, to devise a more flexible system for those who basically know what they are doing, and give their consent to be allowed to do so. I'd suggest the limit, subject to a mutual consent process, should be £85k, which of course is the bank guarantee limit - it would act as a useful caution. I just find that the banks aren't interested. Certainly not HSBC. Currently they have three tiers of personal account tariffs, I'm on the second one but the third one doesn't offer a higher transfer limit either. Just loads of stuff I don't need or can't use (e.g the travel insurance, which nowadays insists the journey must start in the UK, so would rule out most of my travel purchases).
BTW re your explanation of how Faster Payments is supposed to marry beneficiary and account number. Another issue I have, which may be specific to HSBC's automated system, is what happens if it cannot do that for a new payee. It warns you that it cannot, and basically says "you're on your own here, mate". However it has a higher level of warning which states bluntly some thing like "our systems detect this transaction carries a higher risk of fraud". I have had this several times recently. Sometimes I know the payee personally at some level (e.g the Pompey fan and private investigator whom we paid to help the Dossier team in the early stages), but most recently it happened when I was dealing with a debt collection agency re final utility bills for gas and elec. at the house I just sold. I have another thread about that. The debt collector came out of the blue, and at first I really though they were fraudsters because of the communication style. Again CL assured me that they look to be an established debt collector, and that the initial demand, for the electricity, looked reasonable so I paid it. But when I set up the payment I got the "higher risk of fraud" message - and that really made me pause again. In the end I hit the button because it was £120 or so and I had everything documented up to that point. But imagine someone less well resourced, with the power of CL behind them, in the same situation. They could end up on the credit registry because the bank scared the shit out of them over what turns out to be a legitimate if badly communicated debt.
The reason why I get grumpy with stuff like this is probably because I spent 38 years working in business environment with a high personal expectation of "delivery", including 25 years running my own biz where I didn't earn a penny unless I delivered 100%. Senior bank management pays itself eye-watering amounts of money. So they should earn it. I suppose someone will say "retail isn't where the money is". So IMO, we get mugged off. But here we are.
You seem to have fallen into the trap of of an emotive rather than balanced consideration because of your perceived lack of service from your bank.
I fully acknowledge your perception is your reality.
However I’d just remind that you are actually getting access to a very effective and efficient payment system at no cost (you may pay a fee for your account but this service is free). The rare scenario you feel a victim of is an infrequent event and atypical. There is always the option of calling your bank to navigate around on these odd occasions.
The limit will inevitably rise in time but will only do do when consumers are ready and the banks are confident the bad guys (the minority always spoil it for the majority) can be kept at bay. I cite again the sceptical views on contactless limits being increased.
It will rise in due course I have no doubt.
Broadly most retail customers get a free service and ease of transacting far removed from the days of limited opening hours / paper cheques and account fees. The service is actually very good for most as it’s become so well automated / self serviced.
It fell almost 2% within mins - from being up 0.5% at 1.30 pm to being down 1.4% at 1.35pm.
Might have been a big sale order or some form of triple witching hour (don't ask) but it is a large fall with no news proceeding it.
EDIT.
Ah, just seen it was news of US inflation data. Hmmm. Lets see what the US does in an hour.
It went back up to where it had fallen from. FTSE 100 closed 6850 up 0.35%.
Watching the News & Newsnight earlier I get the feeling that the markets are expecting another U turn, either tomorrow or over the weekend. Looks like reversing the Corporation Tax reduction (or just not putting it up as Rishi had planned in his last Budget) is the most favoured outcome. If that doesnt happen & Truss keeps with the Thatcher mantra of being not for turning then the markets will slide again.
Also, I'm not so sure that the BOE will stop their buying of Bonds tomorrow. They may try, but the market might once again go into freefall (or in terms if interest rates, rapid rise)......as they say, you cant buck the market.
For those buying shares, IMHO you need to know when to sell! I've probably bought and sold Barclays and Lloyds 10-15 times in the last 5 years, sometimes hanging on to get your money back is false economy.
For those buying shares, IMHO you need to know when to sell! I've probably bought and sold Barclays and Lloyds 10-15 times in the last 5 years, sometimes hanging on to get your money back is false economy.
I've likely bought & sold Barclays & Lloyds shares about 30 times over the years, but I'm left with some Lloyds that I kinda plan to sell at @60p, but every time they edge towards 50p they fall back again.
For those buying shares, IMHO you need to know when to sell! I've probably bought and sold Barclays and Lloyds 10-15 times in the last 5 years, sometimes hanging on to get your money back is false economy.
A little difficult in my position @Rob7Lee as I always had to apply through Compliance to be allowed to sell (the purchases were only ever through SAYE or SharePurchase schemes). The paperwork was a ball ache and Compliance sometimes forgot your request and eventually got back to you 2 weeks later. You however, only then had 48 hours to action your request or start the process all over again.
No such restrictions on me anymore & just moving them to a single broker to make everything easier.
Dont know if this is the right thread,my son has a property in Old Farm Road Finchley,he is trying to sell this but every buyer he gets has their mortgage application declined,has anyone on here got any inside knowledge of why this might be.
I really don't know what to do with any spare cash right now other than put it in a savings account. Too nervous to put it anywhere with this volatility.
If anyone can convince me otherwise, I'd appreciate it! And I don't want to hear "time in the market" as a defence because I feel a massive crash is coming.
Chase have just announced they are uping the Chase Saver Rate from 1.5% to 2.1%...think they were at risk of people moving their savings...
Ha, I already did last week, but I’ll move it back if they are back to that level. That’ll learn ‘em. 😂
I almost did, but waited because I thought they would eventually put it up - and interestingly the day or so after Marcus increased to 2%! Just sent some more to the Chase account, for now.
I really don't know what to do with any spare cash right now other than put it in a savings account. Too nervous to put it anywhere with this volatility.
If anyone can convince me otherwise, I'd appreciate it! And I don't want to hear "time in the market" as a defence because I feel a massive crash is coming.
I’m with you there, unfortunately. Maybe not massive crash but enough to make a savings account of 4% plus attractive and giving a good nights sleep. I’m waiting to see the next BoE rate increase because I reckon that will unleash some 5% + options, albeit probably a one year fix.
Chase have just announced they are uping the Chase Saver Rate from 1.5% to 2.1%...think they were at risk of people moving their savings...
Ha, I already did last week, but I’ll move it back if they are back to that level. That’ll learn ‘em. 😂
I almost did, but waited because I thought they would eventually put it up - and interestingly the day or so after Marcus increased to 2%! Just sent some more to the Chase account, for now.
I thought Marcus are on my st 1.8%. Is there another product they offer?
EDIT literally just received email advising rate rising to 2% next week.
Dont know if this is the right thread,my son has a property in Old Farm Road Finchley,he is trying to sell this but every buyer he gets has their mortgage application declined,has anyone on here got any inside knowledge of why this might be.
Your son needs to find out why they are being declined....is it something about the house/ valuation or do applications not get that far. ie, is the property above a shop, or of unusual construction or has a flying freehold.
Also, what do you mean by "declined" ? I've been a mortgage broker for 30 years and very few applications get declined if proper scrutiny of the borrowers are done beforehand.
Is it that they are failing affordability ? Due to the recent interest rate increases leaders are tightening up on how much they will lend. But that doesn't usually lead to a declined application, just reduced borrowing capacity.
There are lots of reasons but he needs to ask the EA who are putting these applicants forward. Usually they do Due Diligence themselves & shouldn't be getting people to make an offer unless they have an Agreement in Principle already sorted.
I really don't know what to do with any spare cash right now other than put it in a savings account. Too nervous to put it anywhere with this volatility.
If anyone can convince me otherwise, I'd appreciate it! And I don't want to hear "time in the market" as a defence because I feel a massive crash is coming.
Depends on how much you have & your time span for investing. If you have £100k then you could drip in £20k every so often (@pragueaddick likes this method) although I still think with the FTSE100 around 6850 there is more upside than downside. Over the last 2 years we've had Covid, inflation fears, Ukraine and now the shit storm that is Trussonomics. The market may have further to fall but most of the known hurdles are already out there (reminds me of Donald Rumsfelds unknown unknowns) and we all know a worldwide recession is due very soon.
Chase have just announced they are uping the Chase Saver Rate from 1.5% to 2.1%...think they were at risk of people moving their savings...
Ha, I already did last week, but I’ll move it back if they are back to that level. That’ll learn ‘em. 😂
I almost did, but waited because I thought they would eventually put it up - and interestingly the day or so after Marcus increased to 2%! Just sent some more to the Chase account, for now.
There are better rates out there. Santander and Cynergy at 2.75%.
I really don't know what to do with any spare cash right now other than put it in a savings account. Too nervous to put it anywhere with this volatility.
If anyone can convince me otherwise, I'd appreciate it! And I don't want to hear "time in the market" as a defence because I feel a massive crash is coming.
I’m with you there, unfortunately. Maybe not massive crash but enough to make a savings account of 4% plus attractive and giving a good nights sleep. I’m waiting to see the next BoE rate increase because I reckon that will unleash some 5% + options, albeit probably a one year fix.
Thanks, that's literally what my plan is. Wait for the next raft of rare rises and then see where the land lies.
Mortgage at 3.05% kicks in in Jan (locked in in July), and that made me very sad, but the rate rises since have actually made me feel quite smug!
In July I anticipated any extra cash going into overpaying my mortgage (a bit might) but now it's going to go into a high rate savings account with a fix until after the property crashes/equities crashes are finished.
@golfaddick you're always much more bullish than me on the economy, you told me in July I was wrong when I said a housing crash is coming! I'll probably keep it all in a mattress!
Been using AJ Bell for a few years, and it was all going very well until about six months ago. I’m still ‘up’ over that time, but most of the gains are being chipped away at on a seemingly day by day basis.
I should probably have followed my instincts and baled out a year ago, but never mind. I’m advised to leave the investments there now, as they’ll go up again in the long run? Or is that a bad idea? I don’t have a mortgage, so lucky in that regard.
Dont know if this is the right thread,my son has a property in Old Farm Road Finchley,he is trying to sell this but every buyer he gets has their mortgage application declined,has anyone on here got any inside knowledge of why this might be.
Your son needs to find out why they are being declined....is it something about the house/ valuation or do applications not get that far. ie, is the property above a shop, or of unusual construction or has a flying freehold.
Also, what do you mean by "declined" ? I've been a mortgage broker for 30 years and very few applications get declined if proper scrutiny of the borrowers are done beforehand.
Is it that they are failing affordability ? Due to the recent interest rate increases leaders are tightening up on how much they will lend. But that doesn't usually lead to a declined application, just reduced borrowing capacity.
There are lots of reasons but he needs to ask the EA who are putting these applicants forward. Usually they do Due Diligence themselves & shouldn't be getting people to make an offer unless they have an Agreement in Principle already sorted.
Thanks for reply,the mortgage people say that it is because of lack of resale ability which is untrue because he has now had 4 people who have been refused.The most recent only wanted 80k mortgage on a property sold for 400k.The property is on an estate privately owned and most are rented out with options to buy.I believe there is a 99 year lease and service charge which is all made very clear in the selling process.He has had the place for 6 years and had no trouble getting his own mortgage.I will pass on to him your comments,thanks once again.
@valleynick66 thanks for your interesting reply. You manage on the banks' behalf to clarify somewhat that the measure is supposed to help protect customers from fraud, ( rather than suspecting its customers of fraud, or money-laundering, which is the impression I've rather gained, but possibly because when it comes to banks and big privatised utilities I've got a default mindset of cynicism). So that's a good answer, pity I have to get it from CL rather than a bank CEO.
But it's not entirely convincing, is it? I mean it sounds like it's aiming to protect a financially naive older person trying to use internet banking, but such people are also the very people for whom the loss of £25k would be devastating. It ought not to be beyond the wit of man, especially with the resources the banks have, to devise a more flexible system for those who basically know what they are doing, and give their consent to be allowed to do so. I'd suggest the limit, subject to a mutual consent process, should be £85k, which of course is the bank guarantee limit - it would act as a useful caution. I just find that the banks aren't interested. Certainly not HSBC. Currently they have three tiers of personal account tariffs, I'm on the second one but the third one doesn't offer a higher transfer limit either. Just loads of stuff I don't need or can't use (e.g the travel insurance, which nowadays insists the journey must start in the UK, so would rule out most of my travel purchases).
BTW re your explanation of how Faster Payments is supposed to marry beneficiary and account number. Another issue I have, which may be specific to HSBC's automated system, is what happens if it cannot do that for a new payee. It warns you that it cannot, and basically says "you're on your own here, mate". However it has a higher level of warning which states bluntly some thing like "our systems detect this transaction carries a higher risk of fraud". I have had this several times recently. Sometimes I know the payee personally at some level (e.g the Pompey fan and private investigator whom we paid to help the Dossier team in the early stages), but most recently it happened when I was dealing with a debt collection agency re final utility bills for gas and elec. at the house I just sold. I have another thread about that. The debt collector came out of the blue, and at first I really though they were fraudsters because of the communication style. Again CL assured me that they look to be an established debt collector, and that the initial demand, for the electricity, looked reasonable so I paid it. But when I set up the payment I got the "higher risk of fraud" message - and that really made me pause again. In the end I hit the button because it was £120 or so and I had everything documented up to that point. But imagine someone less well resourced, with the power of CL behind them, in the same situation. They could end up on the credit registry because the bank scared the shit out of them over what turns out to be a legitimate if badly communicated debt.
The reason why I get grumpy with stuff like this is probably because I spent 38 years working in business environment with a high personal expectation of "delivery", including 25 years running my own biz where I didn't earn a penny unless I delivered 100%. Senior bank management pays itself eye-watering amounts of money. So they should earn it. I suppose someone will say "retail isn't where the money is". So IMO, we get mugged off. But here we are.
Highlighted part is a very dangerous mindset @PragueAddick I know personally of very many extremely sophisticated individuals who have been caught by fraudsters and sent thousands (in one case a cool million) to fraudsters accounts. One did it the day after training on the matter, so complex are some of these fraudsters attempts. It is not just the old and vulnerable. Most of them had your mindset the moment before the payment was made.
Plus you only have to look at newspapers, listen to radio, look online to see where all these people go when the money gets lost.. it is their bank to demand recompense. Why then would a bank give a large limit. They open themselves to huge losses caused by their customers mistakes.
Don't you find it a little hypocritical to add a link to HSBCs fine for allowing money launderers to pass money through accounts at the same time as asking them to be more lax?
In my experience big fines tend to lead to tightening not relaxation.
Dont know if this is the right thread,my son has a property in Old Farm Road Finchley,he is trying to sell this but every buyer he gets has their mortgage application declined,has anyone on here got any inside knowledge of why this might be.
Your son needs to find out why they are being declined....is it something about the house/ valuation or do applications not get that far. ie, is the property above a shop, or of unusual construction or has a flying freehold.
Also, what do you mean by "declined" ? I've been a mortgage broker for 30 years and very few applications get declined if proper scrutiny of the borrowers are done beforehand.
Is it that they are failing affordability ? Due to the recent interest rate increases leaders are tightening up on how much they will lend. But that doesn't usually lead to a declined application, just reduced borrowing capacity.
There are lots of reasons but he needs to ask the EA who are putting these applicants forward. Usually they do Due Diligence themselves & shouldn't be getting people to make an offer unless they have an Agreement in Principle already sorted.
Thanks for reply,the mortgage people say that it is because of lack of resale ability which is untrue because he has now had 4 people who have been refused.The most recent only wanted 80k mortgage on a property sold for 400k.The property is on an estate privately owned and most are rented out with options to buy.I believe there is a 99 year lease and service charge which is all made very clear in the selling process.He has had the place for 6 years and had no trouble getting his own mortgage.I will pass on to him your comments,thanks once again.
In that case there is a problem with the property, or the estate it's on. The fact that 4 lenders have refused to lend on it means there is an inherent problem. It could be the lease as usually lenders wont lend if the remaining term of the lease is less than 80 years (roughly - different lenders have different criteria) or maybe due to the high level of non owner occupier properties.
Thing is, the EA will know. They know why a property is not mortgageable. Best he asks them to be straight with him.
@Athletico Charlton thanks for your reply. I'd like to answer it, but first I'd like to say (to all) that I have had my grouse about it, and accepted the current status quo, so I treat it now as a purely academic discussion. All, please just skip this if you are not interested. But I am very interested to hear and learn from anyone in the banking biz. Cynicism about banking generally underpinned my grouse but I have never had a chance to see a banking business in operation, nor have any friends who work there.
I think "very dangerous" mindset is a bit extreme. If you'd said "complacent", I'd have taken it, although I dispute that it applies in my case.
The suggestions about why these restrictions exist covered two separate financial crimes, and I think we should distinguish them. Fraud, as you described, sees the bank customer as the victim. I respect the way banks take steps to help customers think twice before paying a fraudster. It was exactly this system which kicked in, in the case I described myself in, with the debt collection agency. The problem there was, I was taking the bank warning very seriously; but I was left to make the final call myself. Where else could I go? That's not per se the banks' fault; I'd suggest it shows we need overall a more joined up and proactive approach to protect consumers from online fraud.
The cases you describe of fraud are good examples of the overall threat. But surely they have little to do with this issue because quite patently the guy who sent £1 million to fraudsters, didn't use retail online banking! I presume he did it in a professional capacity, with a business banking facility. Also is it really the case that customers who send money by online banking to fraudsters, then successfully claim recompense from the bank? I would have thought that the warnings you get from the bank before it lets you click "send", would protect them legally. Maybe I'm wrong; however personally I would not expect the bank just to cover my losses. I would though expect the bank to assist police investigations in such cases – and I assume that happens.
Money laundering is a different financial crime. In this case, the customer, let's say a Russian oligarch or or one of his siblings, is the perpetrator. Are we saying that a 25k limit deters money launderers? I suppose that it might deter certain types. However, the point is that banks are widely held to have wilfully supported large-scale money launderers, in breach of their obligations, both regulatory and ethical. As a cynic, I feel that the banks have happily imposed restrictions on their normal punters as a way of demonstrating that they are complying with the global push back on money laundering; however when the big money comes along they have been all too quick to help their potential customers find a way around the regulations. So no, I don't think it was hypocritical at all to post that link -about my bank.
Finally I accept that it's a minority of cases where the limit is a problem, however in a country where so much of the wealth of ordinary people is tied up in property, I wouldn't say the cases are infinitesimally small. As I said to @valleynick66, I agree that there should be limits, but they should be higher than they are. And there should be some flexibility. He suggests that it might come when the banks feel more confident about the robustness of their systems; that seems fair enough, however in the meantime we have one of the big banks (Barclays) having a limit twice as high as all of their competitors, which seems to me a bit odd. When I first unburdened myself on this issue, I assumed that the limit had been imposed by a relevant authority, such as the FCA, and the fact that this is not the case increased my cynicism. That said, I can imagine the banks feel a little vulnerable when, as you and I know from elsewhere, bodies like the Serious Fraud Office have been wilfully underfunded by successive governments, as have the regular police who obviously need to be better equipped to investigate the many frauds which probably don't pass the test of "serious". And that's probably where the real problem lies.
@Athletico Charlton thanks for your reply. I'd like to answer it, but first I'd like to say (to all) that I have had my grouse about it, and accepted the current status quo, so I treat it now as a purely academic discussion. All, please just skip this if you are not interested. But I am very interested to hear and learn from anyone in the banking biz. Cynicism about banking generally underpinned my grouse but I have never had a chance to see a banking business in operation, nor have any friends who work there.
I think "very dangerous" mindset is a bit extreme. If you'd said "complacent", I'd have taken it, although I dispute that it applies in my case.
The suggestions about why these restrictions exist covered two separate financial crimes, and I think we should distinguish them. Fraud, as you described, sees the bank customer as the victim. I respect the way banks take steps to help customers think twice before paying a fraudster. It was exactly this system which kicked in, in the case I described myself in, with the debt collection agency. The problem there was, I was taking the bank warning very seriously; but I was left to make the final call myself. Where else could I go? That's not per se the banks' fault; I'd suggest it shows we need overall a more joined up and proactive approach to protect consumers from online fraud.
The cases you describe of fraud are good examples of the overall threat. But surely they have little to do with this issue because quite patently the guy who sent £1 million to fraudsters, didn't use retail online banking! I presume he did it in a professional capacity, with a business banking facility. Also is it really the case that customers who send money by online banking to fraudsters, then successfully claim recompense from the bank? I would have thought that the warnings you get from the bank before it lets you click "send", would protect them legally. Maybe I'm wrong; however personally I would not expect the bank just to cover my losses. I would though expect the bank to assist police investigations in such cases – and I assume that happens.
Money laundering is a different financial crime. In this case, the customer, let's say a Russian oligarch or or one of his siblings, is the perpetrator. Are we saying that a 25k limit deters money launderers? I suppose that it might deter certain types. However, the point is that banks are widely held to have wilfully supported large-scale money launderers, in breach of their obligations, both regulatory and ethical. As a cynic, I feel that the banks have happily imposed restrictions on their normal punters as a way of demonstrating that they are complying with the global push back on money laundering; however when the big money comes along they have been all too quick to help their potential customers find a way around the regulations. So no, I don't think it was hypocritical at all to post that link -about my bank.
Finally I accept that it's a minority of cases where the limit is a problem, however in a country where so much of the wealth of ordinary people is tied up in property, I wouldn't say the cases are infinitesimally small. As I said to @valleynick66, I agree that there should be limits, but they should be higher than they are. And there should be some flexibility. He suggests that it might come when the banks feel more confident about the robustness of their systems; that seems fair enough, however in the meantime we have one of the big banks (Barclays) having a limit twice as high as all of their competitors, which seems to me a bit odd. When I first unburdened myself on this issue, I assumed that the limit had been imposed by a relevant authority, such as the FCA, and the fact that this is not the case increased my cynicism. That said, I can imagine the banks feel a little vulnerable when, as you and I know from elsewhere, bodies like the Serious Fraud Office have been wilfully underfunded by successive governments, as have the regular police who obviously need to be better equipped to investigate the many frauds which probably don't pass the test of "serious". And that's probably where the real problem lies.
The systems are robust but the bad guys look for ways to exploit them. Also though the public need to be confident in using them and sometimes that takes time too.
As I said before banks do not benefit from limiting self service channels. It’s more expensive to service a customer in person or by phone. Any limit will be a risk based decision. It’s not to inhibit a customer unnecessarily.
As to money laundering yes limits can deter and force them to try and find alternate ways of integrating their ill gotten gains into the system. There are multiple transactions of varying size which conceal dirty money.
When you suggest banks find ways around the regulations when the big money arrives. Well that’s a whole topic in itself. But it’s usually more to do with poor due diligence on the status of the customer and their funds in the first place than the transactional limit. When payments are made they are requested and genuine but the underlying customer is not what they purport to be. That’s driven by the trade off of a front office banker trying to put their customer first (and of course meet their sales targets) versus the back office compliance functions trying to spot the bad guys. My point being the limit isn’t the only factor here.
But we have digressed somewhat.
Faster payments by nature leave little room for funds to be reclaimed / reversed when errors or fraud are identified and the bad guys have moved the money on again upon receipt.
As to who pays up if you are a victim of fraud it will likely depend on the circumstances and how they got your money. Likely case specific each time.But you are in a weaker position to apportion responsibility to the bank if you input the account details and ignored any warnings etc.
The limits are generous and ensure many many transactions process every day without any issue.
Comments
FTSE 100 closed 6850 up 0.35%.
If I understood your question correctly, you’re thinking about adding different equities, rather than more Lloyds as Golfie thought. Certainly if I were you I would follow his general advice to diversify by buying funds rather than individual stocks. That will allow you to diversify by business sector, and by region. The other thing that many of us are fans of, is buying regularly each month rather than trying to guess the market. Having said that, whether right now is a good time to start, is an open question. I’ve been dipping in for several months, but right now I think I’m going to pause at least until November to see how things pan out. There are risks the like of which we haven’t really been dealing with before. But I am into retirement so I need to be more cautious than somebody younger about buying stuff whose value can fall. I seem to have been spending a lot of time in the last few weeks scouring the cash deposits options, rather than funds and shares. If you can get 5% guaranteed on a fixed deposit, which I think will come soon on the British market, I think there’s a strong argument for having some of that with money you might otherwise put into funds. But I’m sure others will have a different viewpoint.
Pension funds could just refuse to pay the collateral they were asked to pay and cancel the LDI contract. In which case the potential losers would be the investment intermediaries acting as quasi banks.
Pension payments are made from bonds bought in the past whose maturity dates match the dates when pensions must be paid, so bond prices are irrelevant as there is no sale occurring. It’s the cash to be raised for collateral that requires assets to be sold - because the margins thought adequate didn’t foresee a mad Chancellor running amok.
Also, I'm not so sure that the BOE will stop their buying of Bonds tomorrow. They may try, but the market might once again go into freefall (or in terms if interest rates, rapid rise)......as they say, you cant buck the market.
A little difficult in my position @Rob7Lee as I always had to apply through Compliance to be allowed to sell (the purchases were only ever through SAYE or SharePurchase schemes). The paperwork was a ball ache and Compliance sometimes forgot your request and eventually got back to you 2 weeks later. You however, only then had 48 hours to action your request or start the process all over again.
If anyone can convince me otherwise, I'd appreciate it! And I don't want to hear "time in the market" as a defence because I feel a massive crash is coming.
I almost did, but waited because I thought they would eventually put it up - and interestingly the day or so after Marcus increased to 2%! Just sent some more to the Chase account, for now.
good nights sleep. I’m waiting to see the next BoE rate increase because I reckon that will unleash some 5% + options, albeit probably a one year fix.
EDIT literally just received email advising rate rising to 2% next week.
Also, what do you mean by "declined" ? I've been a mortgage broker for 30 years and very few applications get declined if proper scrutiny of the borrowers are done beforehand.
Is it that they are failing affordability ? Due to the recent interest rate increases leaders are tightening up on how much they will lend. But that doesn't usually lead to a declined application, just reduced borrowing capacity.
There are lots of reasons but he needs to ask the EA who are putting these applicants forward. Usually they do Due Diligence themselves & shouldn't be getting people to make an offer unless they have an Agreement in Principle already sorted.
https://savingschampion.co.uk/best-buys/personal/easy-access-accounts
Mortgage at 3.05% kicks in in Jan (locked in in July), and that made me very sad, but the rate rises since have actually made me feel quite smug!
In July I anticipated any extra cash going into overpaying my mortgage (a bit might) but now it's going to go into a high rate savings account with a fix until after the property crashes/equities crashes are finished.
@golfaddick you're always much more bullish than me on the economy, you told me in July I was wrong when I said a housing crash is coming!
Plus you only have to look at newspapers, listen to radio, look online to see where all these people go when the money gets lost.. it is their bank to demand recompense. Why then would a bank give a large limit. They open themselves to huge losses caused by their customers mistakes.
Don't you find it a little hypocritical to add a link to HSBCs fine for allowing money launderers to pass money through accounts at the same time as asking them to be more lax?
In my experience big fines tend to lead to tightening not relaxation.
Thing is, the EA will know. They know why a property is not mortgageable. Best he asks them to be straight with him.
I think "very dangerous" mindset is a bit extreme. If you'd said "complacent", I'd have taken it, although I dispute that it applies in my case.
The suggestions about why these restrictions exist covered two separate financial crimes, and I think we should distinguish them. Fraud, as you described, sees the bank customer as the victim. I respect the way banks take steps to help customers think twice before paying a fraudster. It was exactly this system which kicked in, in the case I described myself in, with the debt collection agency. The problem there was, I was taking the bank warning very seriously; but I was left to make the final call myself. Where else could I go? That's not per se the banks' fault; I'd suggest it shows we need overall a more joined up and proactive approach to protect consumers from online fraud.
The cases you describe of fraud are good examples of the overall threat. But surely they have little to do with this issue because quite patently the guy who sent £1 million to fraudsters, didn't use retail online banking! I presume he did it in a professional capacity, with a business banking facility. Also is it really the case that customers who send money by online banking to fraudsters, then successfully claim recompense from the bank? I would have thought that the warnings you get from the bank before it lets you click "send", would protect them legally. Maybe I'm wrong; however personally I would not expect the bank just to cover my losses. I would though expect the bank to assist police investigations in such cases – and I assume that happens.
Money laundering is a different financial crime. In this case, the customer, let's say a Russian oligarch or or one of his siblings, is the perpetrator. Are we saying that a 25k limit deters money launderers? I suppose that it might deter certain types. However, the point is that banks are widely held to have wilfully supported large-scale money launderers, in breach of their obligations, both regulatory and ethical. As a cynic, I feel that the banks have happily imposed restrictions on their normal punters as a way of demonstrating that they are complying with the global push back on money laundering; however when the big money comes along they have been all too quick to help their potential customers find a way around the regulations. So no, I don't think it was hypocritical at all to post that link -about my bank.
Finally I accept that it's a minority of cases where the limit is a problem, however in a country where so much of the wealth of ordinary people is tied up in property, I wouldn't say the cases are infinitesimally small. As I said to @valleynick66, I agree that there should be limits, but they should be higher than they are. And there should be some flexibility. He suggests that it might come when the banks feel more confident about the robustness of their systems; that seems fair enough, however in the meantime we have one of the big banks (Barclays) having a limit twice as high as all of their competitors, which seems to me a bit odd. When I first unburdened myself on this issue, I assumed that the limit had been imposed by a relevant authority, such as the FCA, and the fact that this is not the case increased my cynicism. That said, I can imagine the banks feel a little vulnerable when, as you and I know from elsewhere, bodies like the Serious Fraud Office have been wilfully underfunded by successive governments, as have the regular police who obviously need to be better equipped to investigate the many frauds which probably don't pass the test of "serious". And that's probably where the real problem lies.
The limits are generous and ensure many many transactions process every day without any issue.