Depositor protection proposed

BBC Radio 4's Money Box
Saturday 5 July
at 1204 BST
On Radio 4 and Online Read the transcript (16 pages)

New measures to increase depositor protection in the event of a bank getting into financial difficulty, have been proposed by the Chancellor Alistair Darling.

They include the prospect of savers receiving some compensation within seven days of a bank closing, and for savings up to £50,000 to be fully protected.

The proposals are intended to increase public confidence in the banking system following the near collapse of Northern Rock last year.

While consumer groups have welcomed the suggested changes, they stress that they do not go far enough.

Treasury Minister Kitty Ussher outlined the draft proposals, which we discussed with Eric Leenders, of the British Bankers Association and Vera Cottrell, Which? Personal finance campaigner.

Further information/related stories:

Savers' cash safer if banks fail Q&A: Deposit protection plansBank triumphs in finance shake-upExternal links and helplines

Making a will

More money should be allowed to parents with dependent children if their spouse dies without leaving a will, according to senior legal experts.

In England and Wales husbands, wives and civil partners are eligible for the first £125,000 of the estate and are due the interest on half of the remainder.

The rate has not been changed since 1993.

Some surviving parents say the income is not sufficient and they may be forced to sell the family home to pay the inheritance tax bill.

We talked to Geoffrey Shindler, president of the Society of Trust and Estate Practitioners.

Further information/related stories:

Have Your Say: Making a will Call for inheritance law change Inheritance tax and wills: your questionsDangers of not making a willWhere there's a will, there's a wayExternal links and helplines

Mortgages and housing

There has been a raft of figures this week showing the continuing downturn in the housing market.

According to the Bank of England, the number of new mortgages approved has dropped heavily for another month - 42,000 new home loans were given the green light in May, a 28% fall compared with the previous month.

The difficulty of obtaining a mortgage and warnings that interest rates may need to rise in the autumn are having an impact on the house-building industry too.

Both Barratt Developments and rival developer Taylor Wimpey are planning to cut jobs.

In this difficult economic climate a new financial product - "MarketGuard", a form of interest rate insurance - has just been launched.

It is intended for homeowners on variable rate mortgages and offers protection if your repayments go up by at least 1% over an agreed policy period, due to an increase in base rates.

We talked to Chris Taylor, chief executive of MarketGuard, and also to Melanie Bien from Savills Private Finance about the immediate prospects for the housing market.

Further information/related stories:

Mortgage squeeze 'will continue'UK spending power 'in heavy fall' Housebuilder may axe 1,000 jobs Taylor Wimpey woes hammer sharesExternal links and helplines

Banks' cash call

New money has been found to rescue the mortgage lender, Bradford and Bingley, after the American group that was crucial to the bank's current rescue plans - Texas Pacific - pulled out.

Emergency fund-raising was organised by the Financial Services Authority and leading City institutions rallied round to provide nearly £180m of equity.

Now that the cash has been found, bankers say there is no reason for Bradford and Bingley's depositors or creditors to be concerned about its soundness.

Barclays is also asking its shareholders for more money.

We talked to Georgina Mitchell Head of Investment Services at stockbrokers Redmayne Bentley about what this all means for small shareholders of the two financial institutions.

Further information/related stories:

UK investors rescue B&B cash call Q&A: Troubles at Bradford & BingleyBarclays plans £4.5bn fundraising'Tough conditions' hit BarclaysExternal links and helplines

Other news

Despite a recent age discrimination law, once an employee reaches the age of 65, their boss can still choose to force them to leave even if they do not want to.

The Confederation of British Industry wants employers to keep this right but campaigners believe any upper age limit on work amounts to discrimination.

The European Court of Human Rights began this week hearing a case bought by the charity Age Concern.

The Treasury has announced that it is to "relax" the rules governing credit unions.

Until now, although any area or organisation could form a credit union, they had to operate within their own communities - known as the "Common Bond."

The Treasury plans to broaden this to allow the sector to expand and also to get rid of many restrictions on who credit unions can lend to.

BBC Radio 4's Money Box was broadcast on Saturday, 5 July June 2008 at 1204 BST.

The programme was repeated on Sunday, 6 July 2008 at 2102 BST.