Where Does It Go? – UK Money Blog £

Where does it all go? Well, tax wise at the moment, it goes into paying for bankers mistakes, with the Government, who are at least partly responsible for not foreseeing the problem in the first place, now bailing out the banks bad debts with your money.

And now it turns out that the Banks were not only guilty of mismanaging their business but avoiding paying their fair share of tax whilst they were making billion £’s worth of profit. Allegedly.

The Guardian recently found evidence that Barclays had been busy creating companies in low-tax countries such as Brazil and Luxembourg. Allegedly.

These documents were published on the Guardian website, only to have a judge phone up at 2am demanding they are taken down, and in so doing generating even more publicity around the story than would have happened.

This take down order has now been ratified by a judge, in a chilling blow for free speech in the UK.

The confidential leaked documents describe how SCM, Barclays‘ structured capital markets division, allegedly planned to use more than £11bn of loans to create hundreds of millions of pounds of tax benefits, via “an elaborate circuit of Cayman Islands companies, US partnerships and Luxembourg subsidiaries”.

The tax benefits for Barclays are said to be in the region of £1billion a year, although this is unverified.

And so, Techcrunch in the US, has managed to publish the documents, in solidarity for free speech around the world. Here is the information Barclays do not want you to see:

Barclays Confidential Tax Avoidance Documents

Alleged evidence of Barclays tax avoidance documents:
Barclays Tax Avoidance – Lux
Barclays Tax Avoidance – Knight
Barclays Tax Avoidance – Valiha
Barclays Tax Avoidance – Brazil
Barclays Tax Avoidance – Berry
Barclays Tax Avoidance – Faber
Barclays Tax Avoidance – Brontos

A little diversion courtesy of Goodmagazine.com who attempt to answer – where did all the money go in the credit crunch?

Where Did It Go?

Got some interesting statistics from the FSA this week about how much the average 20-something spends on a night out – find out more at www.whataboutmoney.info, a financial site set up by the FSA to help young adults with their finances. They say:

New study reveals the true cost of going out

The Real Life Costs Report* from What about money? found young adults thought they were spending nearly £60 a week on socialising, but in reality young adults are more likely to be spending more than £90 on ONE night out (£92.22 UK average).

The report reveals that many of the UK’s young adults are going out more than one night a week, which could result in spending up to as much as £547 per month just on nights out on the town. That’s over half (53 per cent) of their monthly expenditure on having a good time and a possible £6,570 spent on socialising every year.

This makes for an annual socialising bill of more than £47 billion amongst the UK’s youth population**.

The research found that in the current economic climate, young people are trying to manage their money better but despite their best budgeting efforts, many are getting caught out by the unplanned costs that usually boost the final price tag of nights out.

Over half (53 per cent) said they buy new clothes for a night out but many said they purchase shoes, make-up, and new haircuts adding an average of nearly £30 to their overall spend for a night on the town. It’s easy to see how extra ‘hidden’ costs can stack up!

How did they break this down? Well, according to the study the average 20-something spent:

Young adult cost of a night out…

• Getting ready, e.g. hair, beauty and clothes etc – £28.31
• Drinks -£22.39
• A tasty night-time snack, eg. kebab, chips, bar food and takeaways – £16.42
• Going out and getting home, eg. public transport or taxi fare – £13.23
• Entry to a club, gig, bars and other events – £11.87

TOTAL (night out) = £92.22

I suspect this figure may be gender bias, given the emphasis on the “getting ready” budget. Rebecca Filletti, a 23 year old trainee barrister from London said:

Rebecca Filletti

“It can be tricky to budget for a night out as you sometimes forget about the small things you spend money on – the cost of haircuts, clothes and make-up can all add up, but you don’t consider them part of a night out. Plus added extras like taxis or food on the way home can all mean you spend more than you originally planned to.”

Quite, but compared to my last evening it sounds like Rebecca here was attending the Proms or some such – I find it pays to just take cash out with you and not your card to avoid the temptation of drawing that extra £20 – admittedly I can walk to most entertainment nearby so don’t have to incur transport costs.

It sometimes galls me considering how much a person’s life is spent earning for those couple of hours a week where they can really let their hair down, it seems the way things are set up is too put young people into debt so they have to work the rest of their lives to pay it off – take the Student Loans for example, where only 20 years ago University was free to most, we now of course have University Fees (unsuccessful campaigned against when I was a student)

I made many mistakes when I was 21ish with money that I’m still paying off now – I suppose it is part of the learning process. For instance, taking out a loan with the bank with PPP(which basically you paying the bank to make sure they get their money if you ever go unemployed), running up large overdrafts and not shopping around for deals – all really due to lack of education. I’d be an advocate of basic money sense taught in schools, more so than it is currently, but could the school system just be factories for turning out good little workers for the country these days? (league tables, tests and subjects that work well commercially pushed over arts/fitness)

At any rate, I fully support the intention behind www.whataboutmoney.info so check it out if you’re 16-24 and looking for help, although I suspect if you’re on a personal finance blog you’re probably pretty clued up already!

If you’re interested in the area breakdown for the study, they were:

Money Spent On Night Out
UK Average – £92.22

• London – £93.13
• Yorkshire & Humberside – £82.44
• North West – £91.41
• North East – £80.84
• South East – £88.71
• West Midlands – £90.02
• East Midlands – £78.39
• Northern Ireland – £99.95
• South West – £94.66
• Scotland – £97.35
• Wales – £87.83
• East Anglia – £98.54

*All figures, unless otherwise stated, are from 72 Point. Total survey sample size was 2,000 and was carried out on-line.

**Figures based on current number of 16-24 year olds in the UK (7,220,400) and average annual earnings of this age group in 2008 (£12,313). Data provided by Office of National Statistics.

..at least, according to the British public. Recent stats from an internet traffic website Hitwise shows that Martin Lewis beat Obama, Britney Spears and Diana Vickers to the top spot as the most searched for celeb in the UK. A dubious honour, so what is it about Marty-babes that makes him so popular?

Lord Martin o Mighty

Well, money saving is the game, and there is nothing the British public like more than saving a bit of cash. Martin is also largely held responsible for the bank charge rebellion, which started a string of court cases against the banks for unfair bank charges.

Martin also presents a very nice brand image of being impartial upon his website, the peoples champion, and enjoys 5 and half million visitors to his forum every month.

But does anyone ever question how he got to that position? Is he a money saving genius, or simply a very good self promoter making money from people’s thirst to save money? Questions have been raised in the past about how much trust should be placed in his weekly newsletter, which recently advised people to dump all their cash in Iceland banks due to high interest rates….a few weeks before the country went bankrupt.

And what of his qualifications, those which make him a “money saving expert”? “Broadcast Journalism” says his offical bio.

And is everyone sure his impartial advice isn’t influenced by the large amounts of cash he receives from the finance companies he may advise to use?

I may be indulging in the typical UK trait of knocking down someone I helped put up on a pedestal, but I guess my general point is: don’t trust everything you read, even if it is from Martin’s lips, which to be fair he does say at the bottom of every page on his website.

Update: comments on the Hitwise blog confirms the above!

Quote from the comments:

I think I speak on behalf of the majority of journalists and television producers who have crossed Martin’s paths in recent years, when I say he is one of the most arrogant men walking this planet.

And a blog post from Insiders View entitled “Martin Lewis – Money Saving Expert or Money Grabbing Show-Off?” (hey guys, no need to copy my blog design so much )

Cars in the current crises are hitting all time lows, with new, nearly new and used vehicles available to up to half of the price a year ago.

Struck by the lack of credit to new customers and the lack of funds for cash purchases, dealers are desperate to move stock. I was quoted 18.9% for a new car loan recently, which is pretty outrageous (from www.peugeot.co.uk) – the worse bit was I had to spy on the salesman’s fingers on the calculator to get the APR – he kept up with some spiel of “don’t worry about the APR, think of the monthly cost”

Prices may be bottoming out, with the car manufacturers not responding by dropping prices, rather increasing them in reaction to the decline of the Pound against the Euro; Ford and Vauxhall report the are increasing list prices by around 5%.

Also, car dealers are reporting used car prices have risen by £300 from December compared with prices dropping like a stone in the months leading up to Christmas.

Some remarkable deals are around, such as Broadspeed offering two-for-one deals one cars to tempt buyers. Vauxhall are also hoping to tempt buyers with giving you back 5% of your 0% APR finance loan for three years

Rich Headland, editor of Which Car? has said recently:

If you have the cash and your job is safe, there are some stonking bargains out there – particularly for new cars. We recently found Fiat Pandas being sold for new for less than one year old models at dealers.

Smaller cars seem to be holding their prices better than big cars, with people still smarting from high fuel prices in the summer. Car Tax changes also mean you could be paying £350 for your yearly car tax for a big car, to no car tax at all with a modern fuel efficient car.

Lets not forget the new VAT price as well, a 2.5% drop in what you pay which will be taken away in a few months time.