How do banks and building societies guarantee investors money will be safe in the event of liquidation?

Alan O’Sullivan, banking reporter with This is Money, says: All banks operating in the UK are required to sign up to the Financial Services Compensation Scheme, which guarantees savers’ money up to £35,000 per individual, per banking compensation licence.

Each of these banks pay an annual fee to the FSCS compensation fund, which is used to compensate savers in the unlikely event of a bank going bust.

Like all UK financial institutions, your money is safe with a smaller building society for one main reason: following the Northern Rock crisis, the UK government will not allow another institution to go belly-up for the sake of the reputation of the UK financial industry. Some of the smaller building societies may have to allow themselves to be bought out by larger rivals due to increasing operating costs and the credit crunch, but they will not simply collapse. For example, Nationwide recently bought out Cheshire and Derbyshire building societies as they had run into trouble.

Read more from the original post: How is savings safety guaranteed?

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Adverse credit loans are designed for homeowners with a bad credit history. There can be many reasons why a borrower has a bad credit rating, the circumstances of which aren’t always foreseeable such as redundancy or illness. Secured loans of this type are often the only option if you have an adverse credit history.

The loan is generally secured against the borrowers property, should the borrower consistently default on loan repayments the Lender has the right to repossess the property as payment in full of the loan amount.

As with any loan you can use the funds for a variety of reasons including debt consolidation, a new car, a holiday, home improvements etc. A little known side benefit of taking out an adverse credit loan is that it can be used to improve your credit rating, provided you make payments on time and consistently your credit rating will improve.

Debt consolidation can also have far reaching benefits. Consolidating your debts in to one easy monthly repayment each month will not only lower your outgoings but also improve your credit score and it could just be the first step towards a clean credit sheet.

Although the rate of interest on this type of loan can be higher than other types, it is often the only option for those with a bad credit history.

Finding a Lender online is the simplest way to go about finding a loan. Many loan brokers are taking their businesses online and stiff competition means some great deals are to be found. Of course it’s also a great time saver as many Lenders will offer somekind of comparison service. Applying online could also mean you can be pre-approved within a matter of minutes.
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UK Homeowners will be forced to find another £450 a year as UK lending giants rush to push up their home mortgage rates

UK Banks and building societies are raising their fixed rates, with some deals being increased by up to 0.5 percentage points.

UK Lenders blame the soaring cost of borrowing, which has been triggered by the unprecedented collapse in confidence following last week’s economic turmoil in Britain and the US.

Last week, the swap rate - which dictates lenders’ fixed rates - was just 5.2%. Yesterday, it had soared to 5.54%.

For lenders who cannot borrow money as easily or as cheaply as they once did, the only option is to raise rates and - possibly - mortgage fees.

Today Woolwich, which is owned by Barclays, becomes the latest lender to make its fixed mortgage deals more expensive. Last night, Skipton Building Society took the axe to its entire fixed range, a signal that the new deals are likely to be dearer.

HSBC its subsidiary First Direct and Yorkshire Building Society were the first to make the move.

At Yorkshire, a top 15 lender, some deals have increased twice this week, while one for first-time buyers has shot up 0.5 percentage points.

Read the original post: Mortgage rate rise adds to the misery