Martin’s Blog…

If so, and you were around Shepherds Bush on Friday last week – I LOVE YOUR CAR STICKER! It was spotted by the MSF while she was driving to pick me up. We’ve got a photo; it’s the first time we’ve spotted one of the free MoneySavingExpert.com Car Stickers when out and about.

Comment and Discuss

On Tuesday I was doing my regular monthly Expert slot on Jo Whiley’s Radio 1 programme. This time it was on the credit crunch and the impact on borrowing, and especially, mortgages. One section was about first time buyers and getting a mortgage. In a nutshell I said the following:

• No one knows what’ll happen to house prices but the risk of a significant drop is greater now than it’s been before.
• If you don’t have a deposit you’re not going to get a mortgage and probably shouldn’t.
• If you’re looking to buy a big earnings multiple e.g. six times, it really is probably best to sit tight.
• Renting isn’t a dirty word; if house prices dropped by roughly more than 6% you’d probably be better off renting than buying right now.
• Houses are an asset and should be considered as such.

Of course all these are good sensible tips. And what with the Radio 1 audience being younger than other stations, it’s important to keep it plain and simple as people are less experienced with finance.

Yet afterwards, I was mulling the fact that while by answering this way I’m of course perpetuating house price decline, I have no choice as my answers are correct as I believe them to be. If first time buyers withdraw from the marketplace then there’s less money in there. I suppose this is why we see a spiral in all things rather than gradual change. Once sentiment shifts, it changes quickly, and that in itself impacts the situation so the sentiment is proved correct.

Discuss this blog

It doesn’t seem that long ago that I was writing a 1,000,000 on the e-mail list blog and now, less than 14 months later, we’ve doubled.

The use of this site frankly amazes me; when I started it as a place to support my broadcast work (read about the site’s history) little could I perceive that around 5,000,000 people in the UK would access it each month, and I’d be sitting here in a room filled with 16 full-time people all working together to help people save money. I must admit I’m very proud.

The Stats

I know many MoneySavers are stats nerds like me….

So here’s the progress chart for the weekly e-mail (it includes links to the waybackmachine, sometimes some images will be missing from the old versions of the site… to help improve that we may be a few days off).

August 2002… Home Page Launched. I launched MoneySavingExpert.com as my personal home page…. See what it looked like

22 Feb 2003… The Site Was Born. This was the point I had the site developed, and turned into the first version of what it is today… See what it looked like

25 April 2003…. 10,000 on email list. See what it looked like

11 January 2004… 50,000 on email list. See what it looked like

30 July 2004… 100,000 on email list. See what it looked like

28 April 2005… 250,000 on email list. See what it looked like

3 March 2006… 500,000 on email list. See what it looked like

24 Feb 2007…. 1,000,000 on email list. See what it looked like

01 June 2007…. Site re-design launched. Looked very similar to now.

20 April 2008… 2,000,000 on email list. I think you know what it looks like!

This is an incredible achievement, and I’d like to give huge thanks to the MSE team for their enormous dedication and to all site users who act as ambassadors and extoll its benefits.

When I wrote the 1,000,000 blog I was slightly demotivated as that had always been my ultimate target – now, in these times of credit crunch and financial woes, I simply want the site to be able to help as many people as possible.

Comment and Discuss

I’m a sucker for a historical novel, and I’m currently completely absorbed by Revelation, the fourth book in C.J Sansom’s series about the fictional 16th century ‘crouchback’ lawyer-turned-detective, Matthew Shardlake. Having never been the greatest student of history, what I find fascinating is that reading this series has taught me more about the Reformation, King Henry VIII, and the battles between Protestantism and Catholism than my entire school career.

I find myself absorbed in the discourse, shocked to read that one of the central arguments was over whether the common man should be allowed to read the bible, or whether it should be reserved only for latin-reading Priests. The beauty of the books is that you are seamlessly transported back in time, to a startlingly visceral world, primarily because in each book the story itself is a strong and powerful one.

Anyway I’ve enjoyed it so much I wanted to write this wee blog as a recommendation (I don’t think I’ve ever done it before).

The various books are… in order…

Dissolution
Dark Fire
Sovereign
& Revelation.

I think the second and third are slightly stronger than the first, but it’s worth investing and reading them all in order; the first does take 20 pages or so to get into. Though if you’re looking for a good escapist, but intelligent read, I highly recommend them….

Do let me know what you think.

Comment and Discuss.

Over the last fortnight, I keep hearing the Prime Minister making encouraging noises about the credit crunch, and commenting on how crucial it is we rescue first time buyers and make it easier for them to get on the property ladder during it. At first this seems a valiant aim, yet after mulling it over a bit more I’m not so sure.

Of course the Govt needs to do all it can to improve the Credit Crunch situation, and pushing the Bank of England into putting more money and greater liquidity into the mortgage market is a good move. Yet to dress this up as helping first time buyers worries me; what type of message are we sending out?

I don’t normally write anything Political with a big P, but this has been playing on my mind.

Should people be buying houses now?

The market is certainly less buoyant than it used to be; as I’ve discussed many times before I have no clue what’ll happen to house prices, yet the risks of price falls are higher now than they have been for a long time (though let me stress, that means I think it’s a risk, I’m not predicting it’ll happen).

My worry about the Prime Minister’s statements is that he’s bought into this mantra that “buying a house is a must” and “people have a right” and “renting is a dirty word.” Which of course in an unstable market isn’t true.

During an It Pays To Watch, I was asked by someone with a very limited deposit who earned £25,000 a year, about how she could buy a home worth £200,000 to get her first step on the ladder. My answer was simple: “you can’t”. This is eight times her earnings, yet you can almost hear the underlying mantra of “gotta buy, gotta buy, gotta buy” being whispered on everyone’s lips and now the PM’s helping.

I have no problem with people buying affordable properties as a long term investment, if they’re not overstretching their finances and have a decent deposit (see the mortgage guide). Yet to hear the Prime Minister bolstering the idea that ‘first time buyers must get on the ladder’ at a time of possible risk worries me; what message does that send out?

Surely the aim is to put some liquidity in the mortgage market and allow those who can get sensible lending access to it. Buying a house is not always a solution, it’s a nice long term aim, but it’s not something we must always pursue as a necessity. In many ways, more crucial is allowing those people who have mortgages and who’ve borrowed well and sensibly benefit from the decrease in interest rates.

The fact that a government-owned bank, Northern Rock, has penal rates of interest to get customers to leave, when many of those customers can’t get mortgages elsewhere due to 100%-plus mortgages, may perhaps be a more sensible way of giving an example of the perils that can befall some. Shame Mr. Brown seems not to mention that.

I’ve written much more extensively on my views of how we’ve been hypnotized into thinking property ownership is a must (see my various when did home ownership become a right, House prices could fall, if I hear renting is a dirty word again…, and a nation hypnotized by property porn blogs for a more extensive explanation of why I feel this way.

What do you think?

Comment and Discuss

I’ve just received the following press release from Hitwise, the most authoratitive web stats provider. As you’ll see, the site is now officially number one. We’ve been top on all its quarterly announcements for over a year, but this is the first time we’ve topped its annual rankings… long may it continue. Thanks to all MoneySavers who recommend it.

Hitwise press release:

Hitwise UK Online Performance Awards Winners

London, 14 April 2008

Hitwise, the leader in online competitive intelligence, today announced the most popular websites from more than 50 industries in the UK during 2007.

The Hitwise UK Annual Online Performance Awards recognise outstanding online business achievement and acknowledge the most successful websites as categorised in Hitwise’s key industries, defined by the percentage of user visits a UK website received between January and December 2007. Also included are the most searched-for brands, based on volume of searches.

As Hitwise reports on the anonymous online usage and search behaviour of more than 8.43 million UK Internet users - the largest online sample of its kind - this unique awards programme recognises excellence in online performance through public popularity.

“Website visits and searches provide an excellent measure of a website’s success and brand popularity. Each of our award winners have been recognised by UK consumers as leaders in their category,” commented Daniel King, General Manager for Hitwise UK. “This is truly a people’s choice award, as UK Internet users have determined Hitwise UK’s annual top websites and online brands.”

Hitwise would like to congratulate these businesses on being the most popular websites in their respective categories for 2007.

For a complete list of top 10 winners, please visit the Hitwise United Kingdom Awards Winners page.

No. 1 Online Performance Award Winners 2007

During 2007, the following websites ranked #1 by visits among all United Kingdom websites in their respective categories.

Automotive - Classifieds - www.autotrader.co.uk
Automotive - Dealerships - www.carcraft.co.uk
Automotive - Manufacturers - www.bmw.co.uk
Aviation - Commercial Airlines - www.easyjet.com
Business and Finance - Banks and Financial Institutions - www.lloydstsb.com
Business and Finance - Business Directories - maps.google.co.uk
Business and Finance - Business Information - www.moneysavingexpert.com
Business and Finance - Employment and Training - www.jobcentreplus.gov.uk
Business and Finance - Insurance - www.moneysupermarket.com
Business and Finance - Property - www.rightmove.co.uk
Business and Finance - Stocks and Shares - uk.finance.yahoo.com
Business and Finance - Telecommunications - www.bt.com
Business and Finance - Utilities - www.uswitch.com
Community - Humanitarian - www.raceforlifesponsorme.org
Computers and Internet - Electronics - www.sony.co.uk
Computers and Internet - Hardware - www.euro.dell.com
Computers and Internet - Social Networking and Forums - www.bebo.com
Entertainment - Arts - www.tate.org.uk
Entertainment - Movies - www.odeon.co.uk
Entertainment - Photography - www.pixmania.co.uk
Food and Beverage - Lifestyle and Reference - www.bbc.co.uk/food
Food and Beverage - Restaurants and Catering - www.beerintheevening.com
Government - Central -www.metoffice.gov.uk
Health and Medical - Health Insurance - www.norwichunion.com
Lifestyle - Beauty - www.avon.uk.com
Lifestyle - Dating - www.gaydar.co.uk
Lifestyle - Family - www.genesreunited.co.uk
Lifestyle - Weddings - www.hitched.co.uk
Lifestyle - Womens Sites - www.handbag.com
Music - Companies - www.sonybmg.co.uk
News and Media - Print - www.telegraph.co.uk
Shopping and Classifieds - Apparel and Accessories - www.next.co.uk
Shopping and Classifieds - Appliances and Electronics - www.currys.co.uk
Shopping and Classifieds - Automotive - www.ebaymotors.co.uk
Shopping and Classifieds - Books - www.whsmith.co.uk
Shopping and Classifieds - Computers - www.euro.dell.com
Shopping and Classifieds - Department Stores - www.amazon.co.uk
Shopping and Classifieds - Flowers and Gifts - www.iwantoneofthose.com
Shopping and Classifieds - Grocery and Alcohol - www.tesco.com/grocery
Shopping and Classifieds - Health and Beauty - www.boots.com
Shopping and Classifieds - House and Garden - www.diy.com
Shopping and Classifieds - Intimate Apparel and Accessories - www.annsummers.co.uk
Shopping and Classifieds - Music - play.com
Shopping and Classifieds - Rewards and Directories - www.kelkoo.co.uk
Shopping and Classifieds - Sport and Fitness - www.halfords.com
Shopping and Classifieds - Ticketing - www.ticketmaster.co.uk
Shopping and Classifieds - Toys and Hobbies - www.toysrus.co.uk
Shopping and Classifieds - Video and Games - play.com
Sports - Football - www.liverpoolfc.tv
Travel - Agencies - www.expedia.co.uk
Travel - Cruises - www.pocruises.com
Travel - Destinations and Accommodation - www.laterooms.co.uk
Travel - Maps - www.multimap.com
Travel - Transport - www.easyjet.com

About Hitwise:

Hitwise is the leading online competitive intelligence service. Only Hitwise provides its 1,400 clients around the world with daily insights on how their customers interact with a broad range of competitive websites, and how their competitors use different tactics to attract online customers.

Since 1997, Hitwise has pioneered a unique, network-based approach to Internet measurement. Through relationships with ISPs around the world, Hitwise’s patented methodology anonymously captures the online usage, search and conversion behaviour of 25 million Internet users. This unprecedented volume of Internet usage data is seamlessly integrated into an easy to use, web-based service, designed to help marketers better plan, implement and report on a range of online marketing programs.

Discuss this blog

They say the last to recognize a prophet are those closest. And while I’m certainly no prophet, I’ve been accused of MoneySaving zealotry many times, and predictably my family are the toughest to persuade.

In a past blog I recounted how my Dad only listens to my info through a third party (see past “Have you heard of…”) blog. This time it was the turn of my cousin Mark, a successful solicitor in Manchester.

At my family engagement party kindly thrown for the MSF and I by my father and step-mother, I was chatting to Mark… who good naturedly said something akin to “MoneySaving is all well and good, but I’m pretty good with cash anyway, and it’s only small change really.”

This is a common retort from people in good jobs, and of course, it’s true there is a time/money equation … but my standard reply to it is…

“I’ll accept that sometimes you don’t have the time to save money;
if you’ll accept that sometimes you don’t have the money to save time..”

Ok, I admit it’s a little cryptic, but it flows well and the sense is important. Even those short of time need to accept that by skimping on sorting out the big elements of their personal finances they’re going to be hit severely in the pocket, and spend the time accordingly. After all, as the Money Makeover guide shows, by sorting out all your cash it is possible to give yourself the equivalent boost to a 25% payrise.

Of course, I continued to try and persuade him, with suggestions of big and easy MoneySaving, such as Mortgage Fee Reclaiming… (I’m a bit like a dog with an old rag when I get on the subject; I won’t let it go, whether it’s worth it or not.)

Yet all’s well that ends well, as I’m pleased to say I received the following email the other day…

E-mail received from Mark Lewis…

“Hi Martin

Mark”

YAY!!!!!!!!!

Comment and Discuss

I’m very proud today. The site has won many accolades: it’s the biggest money site in the UK by a mile, it’s been Radio 2 website of the year, personal finance website of the year, one of the Telegraph’s 100 most useful websites… but frankly nothing comes close to this.

Google webmaster tools shows we are now top of the image search for the term “Baboon’s Bum” for, rather unsurprisingly, the image in my past Baboon’s Bum blog. And this is a popular search for many intents and reasons. How marvellous!!!!

Comment and Discuss

PS. Know anything else MSE comes top for that you wouldn’t expect? Please report it in the discussion thread.

When I go for my Tuesday mornings at GM-TV, I tend to spend a chunk of my off camera time answering questions for the crew, production and editorial team about their money issues; whether it’s in wardrobe, make-up or meetings. And I know GM-TV’s resident GP Dr. Hilary Jones does something similar.

Last Tuesday was a first though. Sadly, after GMTV early Monday morning followed by a long day in the office, I got a stomach upset, and the resulting hot and cold flushes meant I didn’t sleep at night. Lying awake at 3:30 (my pickup time is 7:05) I called in ill, but in the end decided I would try and get my slots done.

When I got there, sadly I’d missed the whole night’s sleep and was feeling pretty dire. Hilary walked in and asked if I had five minutes. He wanted a quick chat about a financial question… perfect… so I grabbed my opportunity too. Good symmetry!

Comment and Discuss

Icelandic bank Icesave’s been the subject of a few newspaper money section articles about limited withdrawals from its UK account with concerns about the credit crunch. Newspapers do enjoy stories of worry, doom and gloom, so my aim’s to take a detailed look at the bank; how your money is protected in it, and the safety issues to help you make up your own mind.

It’s a difficult call, and my aim is far more to give you the information needed to make a rational consumer decision rather than sway you. My view is in the summary at the end, but its your money, you need to make your own mind up!

Why this focus on Icesave?

My overall reason is because its cash ISA is currently one of my top picks (see top cash ISAs) and its savings account is still one of the highest interest payers (see top savings). Therefore it’s an account that many, choosing on standard MoneySaving terms, should be picking/using.

Yet with the credit crunch biting; it’s important to also consider wider issues. Before I go into those, it’d be useful if you’d read my full Are your savings safe? guide first….

Now onto a couple of stats.

Icesave is a member of the financial services compensation scheme (FSCS).

All money in UK savings accounts, cash ISAs and current accounts are protected up to the first £35,000 put in there, in the unlikely event it went bust. Icesave is no different in that respect.

Icesave has opted for the ‘passport exemption’.

However, Icesave is one of a few EEA (European Econmic Area) banks, which has the passport exemption (there’s a full list in the Safe Savings guide). This means that in the unlikely event it went bust, the first E20,000 needs to be reclaimed from the Icelandic compensation system not the UK system. The remainder of the £35,000 would still come from the UK scheme.

Add this exemption together with the fact the Icelandic financial system is exposed to the crunch and this has caused a small minority of people to wobble.

It’s interesting to note that this doesn’t seem to be happening, to the same extent with Kaupthing, the current highest interest savings account. While it too is a bank of Icelandic origin, when UK savers put their money in, they’re in fact doing it with its UK banking arm, which has the standard FSCS protection as it hasn’t chosen the exemption.

In the unlikely event of problems; how would the passport protection work?

This is something we’ve raised with Icesave; below is its response, which was backed up by a document from the Icelandic Financial Services Association; confirming the legal strength of the info.

“Icelandic banks pay into a fund which is set aside to be paid out for compensation should it be needed – the UK scheme doesn’t have this and could therefore technically take longer than the Icelandic scheme!” (Note from Martin: The UK scheme is set up to call money in if needed, rather than work on a pot of money system).

If you could make it clear that Icesave customers are fully protected up to £35k the same as customers of any UK bank and that they will be paid as quickly I’d be very grateful!”

Of course this doesn’t offset the fact you’d be dealing with an overseas regulator, yet as this is an unlikely possibility, the above does put to rest many of the issues.

So what’s the problem?

So far I’ve deliberately focused on “how protected is it?” rather than “how likely is it to go bust?” And as far as I’m concerned that’s the more important question.

The reason behind this is simple. The credit crunch is a nightmare. Picking out “which bank is under threat” almost feels like a game of random chance. The job of looking at the indicators isn’t mine, that belongs to the City banking and bond strength analysts. Yet even then the crunch has shown, that system isn’t very accurate and hasn’t been predicting events.

Northern Rock was an issue of sentiment. When it got into problems, the cause was the fact that a huge amount of its cash came from the money markets, which were teetering. However, what killed it was the mass panic and withdrawal queues.

Giant US bank Bear Stearns was much more of a shock for many, and was highly rated as a profitable player not long before hand.

That means picking out if any other banks are vulnerable is a bit like drawing a lottery ticket. And it’s virtually impossible to pick out which banks have risks (my guess is even in the discussion linked from this blog you’ll see people arguing both sides). As that’s all about speculation, for me it is far more important to understand the available protection; which is fact.

On its own website Icesave has an article detailing its own financial strength indicators. This boast should of course be taken with as much a pinch of salt as anyone saying the system is struggling.

The Summary

Icesave has high interest rate accounts, and is a best buy in certain categories. That makes it an attractive account. The risk of it going bust, doesn’t seem to be very substantively more than any other top savings account bank and this is unlikely to happen (though nothing’s impossible).

Yet if you are looking to place more than £35,000 in it, so that your cash is not covered by the compensation scheme, the risk element with it (and any other bank) increase. You need to see how that fits in with your entire holding of savings (see are your savings safe? for strategies).

If, in the unlikely event Icesave were to collapse, it would probably be bureaucratically more difficult to get your money back than if a fully-UK bank went bust; but again not substantively so, and may actually be faster.

Therefore, where Icesave is a best buy, it remains a best buy. If I were to arbitrarily pick accounts not to include, then articles wouldn’t be accurate, where do you draw the line? This site is about listing highest interest rates to save people money… to get in the ‘picking the dodgy bank’ game - is an impossible task.

Of course, there are no guarantees, and it is a VERY tough call, but this is my best estimate of the situation. Yet, my aim by writing this breakdown of the facts is to help you make your own decision with full information.

Comment and Discuss