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Page last updated at 13:24 GMT, Tuesday, 22 September 2009 14:24 UK

Are fixed-rate mortgage costs fair?

Traders at money broker ICA
BBC Radio 4's Money Box
Saturday, 19 September 2009 at 1204 BST On Radio 4 and Online

The margins mortgage lenders are making on fixed rate mortgages are the highest they have been for at least 20 years.

On average, banks are charging customers 3.22 per cent more than they are paying for two- year funds, according to financial data service Moneyfacts.

It is costing mortgage lenders less to borrow money, but those savings are not always being passed on to customers.

In some cases, fixed-rate mortgages have been getting more expensive. This week Royal Bank of Scotland raised interest rates on its two-year and five-year fixed-rate mortgages.

Money Box decided to find out exactly what goes on behind those fixed-rate mortgage deals.

Paul Lewis spoke to economist Don Smith, in the dealing room of money brokers, ICAP.

Related information:

Ombudsman names and shames

Lloyds TSB logo
Lloyds Banking Group received the most complaints

Data published this week by the Financial Ombudsman Service revealed which banks and financial companies it received the most complaints about.

The tables also showed the proportion of complaints upheld for each company.

The Ombudsman said a strategy of sharing the data privately with firms has not led to improvements. So it decided to name them publicly instead.

We put these concerns to the British Banking Association's head of retail, Eric Leenders.

Professional complainer Jasper Griegson of also shared his top tips for achieving the resolution you want.

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Local currency

One Lewis pound lying on top of one Brixton pound
Thomas Paine, Lewes resident 1768-1774 is featured on the Lewes note

The number of towns in Britain with their own currency doubled this week.

Lewes in Sussex and Totnes in Devon have had their own currency for more than a year.

Last week they were joined by the Stroud pound in Gloucestershire and on Thursday the latest arrival was launched in the inner London Borough of Brixton.

The pound notes can only be used in local shops which have signed up to the scheme. But do they really keep money in their own community?

Bob Howard reported from Lewes.

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'Penny shares' warning

FSA logo

The Financial Services Authority (FSA) is taking action against penny share dealers after finding that older people are being targeted with high pressure sales tactics.

Eleven firms have been ordered to stop selling penny shares until they overhaul their business model and prove they no longer pose a risk to consumers. Six of those firms have now ceased trading completely.

We spoke to Lesley Titcomb, the FSA's director of small firms.

Related information:

Pension Quality Mark

An open purse containing money
It is hoped the PQM will boost pension contributions

The National Association of Pension Funds is launching a Pension Quality Mark (PQM) for 'defined contribution' workplace pensions.

The schemes involved are not final salary pensions but those which combine employer and employee contributions in a pot, and convert that into a pension when you retire.

The hope is that the quality mark will improve pension provision.

We asked Joanne Segars, chief executive of the National Association of Pension Funds, what standards providers will have to achieve to obtain a quality mark.

Related information

BBC Radio 4's Money Box was broadcast on Saturday, 19 September 2009 at 1204 BST.

The programme was repeated on Sunday, 20 September 2009 at 2102 BST.

Money Box



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