Rip-off News round-up. Our pick of the last week's media (Thu 5th June)

Student loan debt IS now considered when applying for a mortgage, throwing graduates' home ownership plans into jeopardy. 

Despite recent advice suggesting otherwise, graduates will now have their student loan debts included in the affordability calculation for a mortgage. The Financial Conduct Authority’s Mortgage Market Review guidelines will force all mortgage lenders to consider student loans as a committed expenditure, greatly reducing the amount they are likely to offer. Alexander Burgess, British Money director and a former MBA student, said: 'There appears to be a common misconception among students that anyone who has taken out student finance will have their loan discounted, but this simply isn’t the case... Universities infer it’s not considered to be a debt, credit rating firms are swerving the subject on whether they’ll access student loans records and financial sites such as Money Saving Expert suggest “student loans do not go on credit files”.’ In the current academic year, university fees can be up to £9,000 per annum, not counting accommodation and cost of living, meaning debts of tens of thousands of pounds for students. Burgess added: ‘This is penalising a whole generation who are already saddled with unrealistic proportions of debt just because they have career aspirations that can only be fulfilled through higher education... Graduates have loans for an education that a few years ago was free, but are now less likely to secure a mortgage.” DAILY MAIL

Boris Johnson calls for massive council tax rise for owners of empty homes

Boris Johnson has called for "at least" a tenfold increase on council tax for the owners of empty homes to help to tackle Britain's housing crisis. The London mayor said he was urging London boroughs to "whack up" tax on property owners who allow their homes to stand empty for more than a year. Speaking on his Ask Boris show on LBC Radio, Johnson praised Labour-controlled Camden council for charging 150% council tax rates on homes that have been empty for more than two years. He claimed it was the only London borough to use the power, and urged others to do the same. But he went further by calling for a change in the law to allow councils to impose punitive 1,000% rates on the owners of vacant homes. Johnson said: "What is certainly not acceptable is people buying homes as assets and then keeping them empty in Kensington and Chelsea or Westminster or wherever as a sort of bank balance in the sky. That is no good. What we are saying to councils, who have powers to impose punitive council taxes on such people, is do so. Whack up the council tax." Johnson acknowledged that building more houses was the only way to make homes affordable, saying “The only answer is to build hundreds of thousands more homes." GUARDIAN

Losing out on £2,500-a-year: How the new state pension will leave millions of workers rich and poor worse off

Workers earning as little as £5,772-a-year stand to make more from the existing two-tier system of basic state pension and second state pension (S2P - the state earnings-related pension), than they would under the new flat-rate state pension being introduced from April 2016. The Government has championed its single-tier state pension as 'fairer and simpler' than the complicated system currently in place, but it will be public sector workers and the self-employed who benefit the most, while private sector workers both rich and poor will lose out on potentially tens of thousands of pounds in retirement. Someone earning just £5,772-a-year with 30 years of National Contributions and S2P entitlements would get, based on this year's numbers, a basic state pension of £113.10 plus S2P contributions of about £53-a-week, a total of £166.10-a-week. The new single-tier pension is expected to be worth around £155-a-week by the time it is introduced, providing £11.10 less than this a week, or £577 a year. Someone earning £30,000 meanwhile with 30 years of S2P accrual would be entitled to around £185-a-week under the existing system, an extra £30-a-week or more than £1,500 extra every year. The worst off will be those accruing the maximum amount of S2P - people on £40,040 and over - who would have been entitled to £200-a-week in retirement, some £2,530-a-year less than they stand to get under the new system. DAILY MAIL

British retailers set to take on payday lenders with employee credit union that will offer cheap loans

In a bid to offer an alternative to the hefty interest rates charged on payday loans, New Look and Next are among names to have signed up to RetailCure. The credit union is for people working in the retail sector. RetailCure is expected to charge interest from roughly 7 per cent to nearly 28 per cent depending upon the borrower's credit history. People who borrow £400 over 30 days from a payday loan firm are stung with an interest fee of around £127, while the same loan would cost just £8 from the credit union. Veteran retailer John Lovering, who has led buyouts of companies including Debenhams, Homebase and Somerfield, will chair the organisation, which is set to be launched later this year. He told Sky News: 'The industry feels that we have to find a way of providing a source of cheap, reliable credit for our people... The three million in retail and the nearly five million in the wider industry do have a need for low-cost, value-for-money, short-term borrowing facilities, and that's what we as an industry are trying to provide.' DAILY MAIL

Get ready for a 'savings crunch': Rising cost of living and a return to pre-crisis spending will push us back to 1960s levels

Despite a growing optimism that the economy has turned a corner, the amount of money available for households to save is in decline, according to the Future of Savings study by the Post Office and the Centre for Economics and Business Research. The report - which looked at changing trends in savings over the last 50 years – says the average amount available to save will fall from £3,780 last year to £3,630 in 2014 – this, once adjusted for inflation, is similar to that seen in the 1960s. That figure will continue to fall to £2,944 by 2018. In 2010, the figure was a 33 per cent higher at £4,414. While spending is good for the economy, the reality of the situation is people are not saving enough, the report says - and Britain is in danger of returning to pre-recession spending habits. Perhaps unsurprisingly, the wealthiest 40 per cent does almost all of the nation’s saving, with more than £18,000 available to put into savings. In comparison, the lowest income households are not saving at all, and haven’t done consistently from 2002. The Cebr predicts by the end of 2014 this group will end the year with no savings and an average debt of £1,910. The worst hit is the North West where almost a third expect to save a lower proportion of their income. It’s a different story in London, however, with those who save hoping to deposit a higher proportion of their income than they did last year. DAILY MAIL

Insurance fraud at record high, says ABI

Fake car crashes helped to push the level of insurance fraud to a record £1.3bn in 2013, according to the Association of British Insurers (ABI). The figure represents an increase of 18% on the previous year. The biggest rise was in car insurance. The number of dishonest motor claims rose by 34% to 59,900, attempting to cheat the industry out of £811m. The ABI said fraud was now costing each household in the UK an extra £50 a year, through increased premiums. So-called "crash for cash" car insurance scams are when fraudsters stage a car crash, for example by slamming their brakes on at a road junction, often having disabled the brake lights. An unsuspecting motorist then crashes into the back of the first car. In other cases a professional golfer claimed £8,000 for an injured knee, but was later filmed giving golf lessons. A vet was also jailed for trying to claim £200,000 in connection with the "treatment" of non-existent pets. Malcolm Tarling of the ABI said insurers were getting better at detecting fraudulent claims, saying: "The number of detected frauds is rising; that's because we are getting better at detecting staged accidents. We are going to continue to tackle fraud - that's what our honest customers expect us to do." BBC NEWS

PPI: Compensation payouts could have £1bn shortfall

Some leading banks may have underpaid compensation certain customers are due for mis-sold Payment Protection Insurance. One expert, commissioned by the BBC, estimates it could amount to "somewhere in the region of £1bn". The customers potentially affected had PPI on credit cards issued by Lloyds Banking Group, Barclays, MBNA and Capital One. The shortfall in compensation arises because, although these banks all refunded the premiums on their mis-sold PPI policies plus interest as regulators require, they have been failing correctly to refund additional charges which were triggered by the premiums of the mis-sold PPI policies. This failure to include fees and charges in compensation calculations has resulted in dramatic reductions to the amounts some customers have received. For example, Mark Pascoe was paid £5,800 of PPI compensation by the large credit card company MBNA. But MBNA's calculations did not include just over £600 in fees and charges Mr Pascoe incurred since taking out his card in 1997. BBC NEWS

UK banks 'still vulnerable to next financial crisis'

Britain is still unprepared for another financial crash and its banks have yet to strengthen their reserves sufficiently to survive another crisis, according to a senior Bank of England official. Richard Sharp, a member of the central bank's financial policy committee (FPC), which monitors risk in the financial sector, added that the economy remains weak and vulnerable to external shocks. In a speech at the London School of Economics, he said the Bank's policy of quantitative easing and maintaining low interest rates, combined with similar policies in the US and Japan, could also cause problems as investors attempt to predict how and when cheap credit will be withdrawn. He was concerned that measures to boost demand, such as low interest rates and quantitative easing were just raising asset prices and causing investors to hoard wealth, reducing economic activity. The warning shot is Sharp's first venture into public debate since joining the FPC last year. A former Goldman Sachs partner and private equity expert, Sharp is well-known in government circles after George Osborne recruited him to be one of four City figures to "question the unquestionable" as part of the Treasury's austerity drive. GUARDIAN