Labour might appear to have calmed the storm over the scrapping of the 10 percent income tax rate for now. But new research shows the extent to which Britons are peeved about the level of income tax.

When asked what would be their key requests of Chancellor Alistair Darling, the largest proportion of more than 3,000 people polled for Unbiased.co.uk — 31 percent — said they’d like to see a cut in income tax. And, it seems, many Britons feel an obligation to help the less well-heeled: while 12 percent would like to see it reduced for everyone, 19 percent want a cut for less affluent sections of society.

The issue was, perhaps unsurprisingly, found to be the most pressing for younger generations — those with long working lives and greater earning potential ahead of them. Around 44 percent of 18 to 24-year-olds surveyed want a cut, compared to 19 percent of 55 to 64-year-olds and 13 percent of those aged 65 to 74.

But the requests do not stop there: almost a quarter would ask the Chancellor to provide a better level of state pension, 6 percent want increased pay for public sector workers, 5 percent increased support for carers, the same percentage an increase in the inheritance tax threshold to 750,000 pounds (from a current 312,000 pounds), and 2 percent want the stamp duty thresholds to be reviewed.

Others would implore the Chancellor to reconsider public spending: 5 percent want funding for the third generation of nuclear deterrent to be scrapped, 4 percent call for a four billion pound cap on the Olympic budget; and the same proportion want more spending on environmental issues.

It’s easy to see why: soaring house prices have pushed more people into the inheritance tax net and sent stamp duty bills soaring, “fiscal drag” — whereby thresholds fail to rise in line with inflation — is pulling people into new and higher tax brackets, and interest in “green” issues is on an upward trend.

But don’t forget that there are simple things we can all do to keep the taxman’s hands off our cash. The nation is wasting a whopping 9.3 billion pounds in unnecessary tax payments — from the likes of people not making use of their individual savings account allowance (a total 7,200 pounds this year, of which 3,600 pounds can be stashed in cash), wasting tax credits and not taking steps to reduce their taxable estate for inheritance tax purposes.

These days, “keeping up appearances” has less to do with the pompous Hyacinth Bucket (or should that be “Bouquet”?) of the British sitcom of the same name, more to do with “bling” and extravagant spending by the younger generation.

A survey of 1,619 consumers, commissioned by mobile banking service Monilink, found that 71 percent of 16 to 34-year-olds admitted secretly competing with their friends in the purchase of “luxury” products — cosmetics, gadgets, clothes and the like. Image concerns are the key driver of this “bling-itis”. Over half (56 percent) of those questioned say they believe people are judged on appearances and possessions in modern British society, rather than personality.

That has fuelled a level of spending that is problematic at best, severely damaging at worst. More than 60 percent are still paying off credit card debts from “bling-itis”-driven luxury purchases from 2006 and 2007; over a fifth say they have so much debt from non-essential spending that repayments are a “significant” strain; and around the same proportion admit they find it hard to keep track of spending and make ends meet.

Perhaps even more worryingly, young Britons associate spending with personal happiness, and value short-term luxury over longer-term financial security. Some 55 percent of 16 to 34-year-olds purchase goods simply to make themselves happy and “feel down” if they don’t get the opportunity to buy goods regularly. Meanwhile, 72 percent state that a good lifestyle in the short-term is “considerably” more important than making savings in case of an emergency (27 percent). Top areas of spending to achieve this “good lifestyle” are holidays (27 percent), drinking and going out (21 percent), clothes (19 percent), gadgets (12 percent), home improvement (10 percent), cars (8 percent) and jewellery (3 percent).

If only they’d listen to the Janet Jackson and Luther Vandross hit of 1992: the best things in life are free.

Consumers might be one step closer to being able to claim back billions of pounds in bank changes following the High Court ruling this week that paved the way for the Office of Fair Trading (OFT) to assess bank charges for fairness. But it’s not all rosy in the garden for bank customers.

The show is far from over, and dragging the process out is costing consumers 111 pounds per second, according to consumer group Which? Based on the OFT’s estimate that banks make up to 3.5 billion pounds per year from unauthorised overdraft charges, the amount the banks have made since the start of the test case on Jan. 14 at 10 a.m. will hit 1 billion pounds just before 5 p.m. this Sunday. That is the equivalent to 110.98 pounds per second — or 399,600 pounds per hour.

Further High Court hearings will consider a fair amount for bank charges, and the exact timetable will be decided at a hearing on May  22. In the meantime, hundreds of thousands of cases are still on hold: the Financial Services Authority gave banks a waiver from dealing with bank charge reclaiming cases until after the case — meaning they needn’t respond to complaints in the meantime. The clock is ticking: you can only attempt to claim charges over the past six years (five in Scotland), and delaying might mean you lose the ability to get old charges back.

And there could be one even more significant upshot: an end to “free” banking.

As it stands, high street banking is largely free for those who remain in credit and do not flout the rules. Contrary to popular belief — 60 percent of UK consumers believe that Britain’s banks have the highest bank charges in the world — UK bank accounts are, in fact, ranked amongst the top three countries in the world for best value, a survey from EDS shows. This is due to banks and building societies offering free overdraft facilities for student and graduate accounts, credit cards offering 0 percent finance and attractive returns on instant-access savings accounts.

However, those who slip into the red — either an authorised or unauthorised overdraft — are hit with interest or fees. A curb on fees could very well see banks impose annual or monthly banking fees for all customers. That is unlikely to please over half of the population: 51 percent of consumers polled by EDS would prefer charges to come from less transparent means, such as lower interest rates on their current and savings accounts, rather than a monthly charge (37 percent) or per transaction (12 percent). Those banks who start to impose fees first will, of course, haemorrhage customers. But, if rivals follow suit, what choice will consumers have?

Poles coming to Britain have become accustomed to headlines praising the industry of their tradesmen. They work hard, do the jobs many Britons can’t be bothered to do and are inexpensive.

By contrast, dodgy British builders, plumbers, electricians, decorators and other home improvement traders are still rife, if new figures are anything to go by. Consumer Direct, the government advice service, received more than 19,000 complaints about home maintenance traders in the first three months of this year totalling almost 80 million pounds — up by almost 6 million pounds on the same period last year.

Complaints about building work totalled 40 million pounds, problems with fitted kitchens reached 14 million pounds, and central heating installation and servicing complaints topped 5.5 million pounds.

Michele Shambrook, operations manager for Consumer Direct, said: “There’s no foolproof way of avoiding problems, but you need to do your homework before you embark on a project, agree clear terms with the trader, and if things go wrong, check your rights and take prompt action.”

Would you employ a Polish tradesman rather than a local?

Do you think the service builders provide is getting worse?  Have you been left out of pocket by a botched job? 

Borrowers might be under the cosh, but savers have never had it so good. Historically, when the Bank of England (BoE) base rate changes, mortgage and savings rates follow suit. But amidst the current credit crunch, those with spare cash and prepared to move their money around can take advantage of banks’ and building societies’ eagerness to attract retail funds.

The last time the base rate stood at its current level of 5 percent was 17 months ago — in November 2006. And there are huge differences between then and now in fixed savings rates. The top six-month fixed rate bond is now paying 1.59 percent more interest on a 10,000 pound investment, at 6.86 percent. Kaupthing Edge and Icesave top the best buy tables with that rate, Heritable Bank is close behind with its new offering of 6.80 per cent as of this weekend, and Alliance & Leicester this week issued a fixed rate bond with a competitive 6.83 percent. “With many people thinking  that the base rate is likely to fall further this year some of the fixed rate products available now look outstanding value,” says David Black, principal consultant for banking at financial research company Defaqto.

There is no saying, however, how long the good times will roll for savers, and those looking to take advantage of attractive rates should move quickly. Remember, too, that the maximum protection afforded under the Financial Services Compensation Scheme is 35,000 pounds per financial institution; those with more than that in cash reserves should split their pot between different providers.

In contrast, the credit crunch is continuing to hit borrowers and investors: overall, even those with substantial savings might wind up no better, or worse, off. The FTSE 100 index has dropped 9.32 percent over the past six months, according to stocks and shares Web site ADVFN.com. Its data highlights the extent of the volatility that has been hampering markets. Having opened the year at 6450.9, Britain’s blue chip index dropped to its lowest level of 5338.7 points on January 22 — a long way from its six month intraday peak of 6751.7 achieved on October 15. This equates to a 1413-point move — a 21 percent drop from the index’s high to its low. “There are no two ways about it; we are in a bear market,” says chief executive Clem Chambers. “In markets such as these where the underlying trend is down, strong rallies are commonplace, but the day-to-day weakness overcomes moments of strength overall. Breaking back up through psychological barriers such as 6000, unfortunately, does not mean the good times are back. This is bad news for investors but can be profitable for traders.”

And, in mortgage markets the London Inter Bank Offered Rate (Libor) — the most famous barometer for short-term interest rates in the world — continues to loiter stubbornly high in relation to the base rate. Libor, the rate at which lenders borrow money, determines mortgage pricing for consumers, and is now the “hoodie of the finance world” — symbolic of a fallen system, where banks lack the confidence to step out of their houses to trade with each other — according to independent mortgage broker Charcol.

The BoE’s discussions on the mortgage market will not necessarily improve the situation, according to Andrew Townsley, chief executive of Sheffield Mutual and president of the Association of Friendly Societies. “Even if market conditions improve, mortgage lenders are likely to continue to impose relatively high lending rates on mortgage products and the situation won’t necessarily improve for borrowers,” he warns. “Banks will be tempted to improve profit margins, and although lending rates may come back a little we won’t see them revert to the attractive levels borrowers have experienced over the last few years, for some time yet.”

Savings rates could soon take a turn for the worse, too: ”We can expect to see a drop in attractive saving rates as the situation eases, meaning the consumer remains yet again at a disadvantage,” says Townsley.

Not time to crack open the bubbly yet, then.

Long life: it might be seen as a blessing, but increasing longevity poses one of the biggest risks to our financial wellbeing.

A person aged 55 today has a one in two chance of living to 90 and a one in four chance of living to 95, according to acturial consultancy Watson Wyatt. By 2010 the number of pensioners will, for the first time, exceed the number of children in the population, according to the Office for National Statistics, and by 2031 there will be 40,000 people aged 100 or over, compared to just 300 in 1951.

This creates a huge issue for retirement savings: there is an estimated 57 billion pound savings gap in the UK and the government has repeatedly warned that people must increasingly shoulder the responsibility of providing for their own retirement.

“The fact is that the UK’s population is growing older by the day: we are all, on average, living longer — and this has alarming consequences for both society and the individual,” says Mike Lake, chief executive of Help the Aged. “More than ever we need to be aware of the implications of living a long life, and a vital part of this is for people to consider their longevity hand-in-hand with their future finances.”

It is exactly this that a new independent, not-for-profit organisation aims to address. The Life Trust Foundation has been formed to act as a central voice and point of education and research into the financial implications of long life. Chaired by Lord Hunt of Wirral, president of the Chartered Insurance Institute, the organisation also boasts Lake, Fay Goddard, deputy director-general of the Association of Independent Financial Advisers, Anna Bradley, chief executive of the National Consumer Council, and Laurence Heyworth, founder and non-executive director of Life Trust Holdings, on its board.

During its first year, the foundation will work with the Institute of Ageing at Oxford University to analyse a wealth of existing information on longevity; bring together people from the worlds of academia, business and charity to debate the issues; and set up a consumer panel of people aged 60 to 85 to help gain and develop insights into the behaviour and attitudes of those in or nearing retirement. It wants to “understand the delicate relationship between money, lifestyle, relationships, health and happiness”.

It is, certainly, a tricky relationship — and one that few are addressing head-on. A fear of finances is creating a “pensions paralysis” among Britain’s over-40s, according to research by Norwich Union. Over a third of those in their 40s admit they have no financial plan for their retirement, and of those who do, the same proportion (37 percent), say they have no idea what their final settlement will be. A lack of understanding and “complicated” products are the biggest barriers to pension planning, the research shows.

The financial services industry has its part to play in helping people understand the options — and the amount of savings necessary for a retirement in which long life does not equal living on the breadline. And, indeed, the financial services industry is slowly responding to the challenges of longevity.

Earlier this year, Life Trust, a newly formed company, launched a new type of financial product, the longevity income plan. Unlike traditional annuities — whereby insurance companies keep any unused capital when a customer dies — Life Trust will redistribute investment fund growth accruing to funds previously held by deceased policyholders to those still alive.  These “birthday units”, coupled with investment returns, which are also calculated to increase each year, lead to a rising income as the policyholder ages.

But consumers, too, must wake up – living longer means a longer retirement. And that heralds a greater need to tackle retirement planning as early as possible.

Thursday’s cut in interest rates should come as some relief to hard-pressed borrowers, under the cosh from the credit squeeze which has seen lenders raise their rates, cut maximum loan-to-values and tighten lending criteria. Those on tracker rates – that mirror movements in the base rate – will, of course, see a reduction in the amount of interest they pay. Others, though, are at the mercy of their lenders.

A string of high-street names said they’d reduce their standard variable rates following the quarter-point Bank of England (BoE) base rate reduction to 5 percent. That, however, will only partially offset hikes imposed by many of these very lenders in recent times and many commentators argue that the Monetary Policy Committee has failed to go far enough to ease the pain in the mortgage market — and should have acted faster by cutting rates by 0.5 percent.

Nationwide Building Society is raising rates by as much as 0.32 percent on some products and several others — Alliance & Leicester, Chelsea Building Society, Standard Life Bank and Leeds Building Society included — have hiked rates on some of their mortgage products by up to 0.26 percent.

The real problem lies in the gap between the base rate and Libor, the interbank lending rate, which dictates the deals offered to mortgage borrowers: it has ballooned in recent months, despite two cuts in the BoE base — and only a substantial cut in interest rates would have any real impact on narrowing the gap, according to online mortgage company mform.co.uk.

“The crucial factor is the gap between Libor and the base rate; they are massively out of sync and that is dictating terms in the mortgage market,” says chief executive Eamonn Rice. “The 0.25 percent cut will have no effect. The Bank of England has failed to grasp the opportunity to help homeowners and potential borrowers.”

It’s been an eventful week for the housing market — the latest in a turnaround in fortunes brought about by the slowdown in house price growth and the liquidity crisis sparked by the U.S. subprime woes. This side of the Atlantic, the fallout from the credit crunch has continued apace, and lenders’ PR machines have been working on overdrive.

A week ago, First Direct withdrew mortgages for new customers after its relatively cheap deals saw borrowers flock to its doors. Then, on Monday, Britain’s biggest mortgage lender Halifax raised its rates, hiked its minimum deposit to 5 from 3 percent and introduced cheaper rates for those with 25 percent or more of their property value to put down. On Tuesday the first-time buyer became an endangered species: Abbey, Britain’s second largest home loan provider, stopped offering 100 percent mortgages, joining all its major rivals in requiring at least some deposit from borrowers — and pricing many trying to get a foothold on the ladder out of the market. The same day the Halifax house price index for March showed the largest fall since the recession of the early 1990s.

It comes as little surprise, then, to see the Nationwide reporting on Wednesday a four-year low in consumer morale during March. That tallies with an ongoing “flight to safety” that has seen people pull in the purse-strings and seek out safe havens. In the wake of the Northern Rock debacle, government-backed National Savings & Investments (NS&I) products have soared in popularity. NS&I offers savers a 100 percent guarantee, whereas the Financial Services Compensation Scheme protects cash on deposit with Financial Services Authority-regulated institutions only up to 35,000 pounds each.

NS&I, which pumps all the money it makes into the government (ironically, now the owner of Northern Rock), doubled its net financing target for 2007/08 to 5.6 billion pounds from an initial forecast of 2.8 billion pounds. The final figure will come in near to those 5.6 billion pounds, chief executive Jane Platt told me at a press dinner on Tuesday evening.

The increase is attributable to a number of factors: the market conditions and Northern Rock; Bank of England base rate rises totalling 1 percent between August 2006 and July 2007, and higher-than-expected inflation. Together, these have resulted in a boom in demand for NS&I’s products, in particular its direct ISA, the rate on which is tied to the base rate, and savings accounts which guarantee to beat inflation by a certain margin.

“It’s chicken soup time,” says Platt. “People have been living off caviar, but now it’s time for chicken soup.”

But Wednesday has also brought some positive news: the government appointed former HBOS chief executive Sir James Crosby to head a working group on ways to improve the functioning of the country’s mortgage markets, and HSBC said it would exploit rivals’ weakness in the mortgage market with an offer to match homeowners’ existing deals — a move that should do at least something to boost confidence.

It is, of course, vital for consumers that sources of funding for Britain’s mortgage market are refreshed. And the HSBC move has fired a shot across the bows of other lenders, ramping up competition in a market that some lenders are using to boost margins.

“I think what we’re going to see is some very profitable lenders over the next 12 months,” says Alex Murray, group director of mortgages at independent broker Thinc Group. “Some lenders are using the credit crunch as a way to streamline their proposition: many are going down the route of profit before volume.”

The broker is unable to help around a quarter of potential customers — either they want to borrow too much against the value of their property or their credit history is not clean enough. But, hopefully, this new working group will bring some much-needed confidence back to the market, aided by an anticipated cut in interest rates on Thursday: the crisis in liquidity has rapidly turned into a crisis of confidence.

In reality, though, that will not happen overnight, and the next few months will prove critical as to whether current woes prove a glitch or spell a chicken soup diet for far, far longer.

First Direct has pulled the shutters down on new mortgage business. Albeit a temporary move, it is yet more unsettling news for scores of homeowners coming to the end of cheap deals. Such a move is unprecedented, but perhaps comes as little surprise, given that the lender has been market-leading for quite some time. With pricing more or less 0.5 percent below that of its nearest competitor, the influx of new business that has created a huge backlog is understandable.

The mortgage market is moving at an alarming pace: First Direct’s decision to suspend new borrowing and push business to its parent company, HSBC, is yet another example of lenders taking action to manage volumes. Others have used other means of stemming inflows — increasing rates, withdrawing products and restricting their best rates to lower loan-to-value customers, as the fallout from the credit crunch continues.

Borrowers, particularly those nearing the end of offer periods, are unnerved. Three-quarters of homeowners face significant jumps in mortgage repayments when their fixed-rate deals expire, personal finance Web site Fool.co.uk says, with a typical increase in interest from 4.8 percent to 6.3 percent. Homeowners on discounted, tracker and capped-rate mortgages could face significant hikes too. On a typical 25-year repayment mortgage of 200,000 pounds fixed at 4.8 percent, monthly repayments are 1,146 pounds. But every one percent rise in rates increases these repayments by around 120 pounds. The low-rate party, it seems, is finally over, and borrowers — both new and old — could be forgiven for feeling the rug is being pulled from under their feet.

All, however, is not lost: there are still some attractive rates around, largely from building societies and smaller players. Cumberland Building Society has a 5.28 percent rate fixed until March 1 2010; Derbyshire Building Society charges 5.29 percent until July 31 2010; and Cheshire Building Society has a three-year fix at 5.49 percent. Indeed, building societies have proved the most competitive so far this year, according to online mortgage company mform.co.uk. It ranks best-buy products based on the true cost of a mortgage, including fees. Each time a lender appeared in the top 10 in the three months to March 31 they were awarded a point and, at the end of the period, the most points signify those lenders consistently offering good value.

Yorkshire Building Society was the most competitive mortgage lender during the first three months of 2008, with 24 points, followed by Furness Building Society in second place with 18 points, and the Chorley and West Bromwich building societies in joint third with 13. The big players — Halifax and Nationwide — scored just six and four points respectively, while Cheltenham and Gloucester achieved just two.

But with lenders pulling tranches of deals and changing their offerings on a near-daily basis, nothing remains the same for long. The message is clear: people looking for a new mortgage should shop around early to wade through the quagmire that is today’s mortgage market.

Everyone, surely, would love to have a licence to print money. Well, one man has taken the concept to a whole new level. It might sound bonkers, but Sheridan “Shed” Simove has created his own currency.

“It makes the world go round. Oh, and it’s the root of all evil. Although strictly, the love of it is actually the root of all evil,” he writes in his new book, “Ideas Man: The Amazing Real-life Adventures of a Modern-day Creative Genius“. “Yes, I’m talking about the basis of our capitalist society, the units of exchange we use to obtain material goods — MONEY.”

Simove has always been fascinated with the concept of money — not high finance or currency markets so much, more the bizarre concept of ‘cash’ in its physical form. It all began with a history lesson at school on America’s Great Depression, soaring inflation and the devaluation of the dollar that necessitated wheelbarrows of money just to buy a loaf of bread.

Years later, the advent of computer games in which players accrued points to “buy” weapons and powers for their characters became the inspirational trigger for a new challenge — especially after one “bright, enterprising spark” got the idea to sell his character’s virtual weapons for real cash. “A fire was lit within me,” says Simove. “And boy, did it burn brightly. If something ‘unreal’ could be sold for cash, could I do the same?”

And, so, the Bank of Shed was formed and the “Ego” was born — an apt name, some might say, for a currency adorned with Simove’s picture and images that sum up his character: a full English breakfast on a plate to represent time working on “The Big Breakfast”; an image of Walt Disney, one of his inspirational idols; and a picture of a lightbulb to convey “the power of ideas”, his “passion”. The names of Simove’s family are also embedded through the background pattern of the note. This “graphic resume” of his life also doubles as an effective business card; his telephone number is the banknote serial number, and his email address is printed in tiny type on the reverse.

Then came the real challenge. Would people buy for hard cash something that had no actual value in the world as we know it? Simove wrote a sales pitch and uploaded some photos of the currency on auction Web site eBay. Amazingly, the buyers flocked from far and wide. Some were simply curious to see what he’d done; others were banknote collectors from around the world. One auction went to 5.50 pounds for a single Ego; an art student from Glasgow bought 20 notes for 15 pounds; while quite a few sold for just the starting price of 10 pence. After a month, the Ego had an average exchange rate of one to 0.74 British pounds.

Seemingly, though, the Ego — unlike the dollar, either back in the Great Depression or now – is appreciating in value. The latest auction saw the note exchange hands — to a user called “Molly the dog” for 1.53 pounds. But, before you think of rushing to the printers to run off your own currency, here’s a word of warning. A two cent coin that Simove later had minted has a cheeky message. The “heads” side of the coin depicts the “ideas man” himself. The “tails” side depicts a bottom (presumably his), and the following words: “The bottom may fall out of this market.”