(updated on July 15 with news that Gillespie won’t join as chairman)

Alliance & Leicester had increasingly been looking like a takeover target and Spain’s Santander has taken advantage of 75 percent collapse in the mortgage banks’ share price over the past year.

The Spanish bank had made little secret of its ambition to expand in the UK banking sector following its acquisition of Abbey in 2004, having already sniffed round A&L last year.

The move shows Santander’s faith in the UK banking sector, the Daily Telegraph says, and that prudently written mortgages are still valuable. “Halifax-owner HBOS will take some comfort from that. As will the Government and the Financial Services Authority, who are fed up with rescuing or orchestrating the rescue of Britain’s troubled banks,” the newspaper’s banking editor Philip Aldrick writes.

But what about the shareholders?

To those who stuck with A&L throughout its share price downturn the deal is worth 317p per share - they will be getting one Santander share for every three A&L share that they own, plus a cash dividend of 18p per share - still significantly lower than the 12-month high of 1,170p.

They might be well advised to hold on to their shares. According to thisismoney.com, one of Alliance & Leicester’s major shareholders, Standard Life, has given clear advice to shareholders big and small: Don’t sell yet. “Santander wants to buy this bank on giveaway terms,” Standard Life warns. It predicts a higher counter-offer soon.

Significantly, as part of its 1.3 billion pound takeover bid Santander says it’s willing to fund A&L’s 42 billion pounds of mortgage obligations. With economists predicting a fall of as much as 35 percent in house prices from peak to trough, A&L’s reliance on mortgage business was a key factor behind its share price dropping 75 percent last year as the credit crunch started to bite in Britain.

Simon Maughan, analyst at MF Global, has told Reuters that Santander could use the deal to drive through economies of scale to boost profitability at Abbey, which is low relative to its other operations.

The FT’s Alphaville blog points out that apart from obvious cost synergies, Santander’s Emilio Botin wants to accelerate expansion at Abbey. Adding A&L would increase Santander’s share of the UK mortgage market close to 13 percent.

Bank analysts at Lehman Brothers say that Santander is likely to have been attracted by A&L’s 31 billion pounds in deposits, plus the prospect of extracting close to 180 million in cost synergies, the Times said.

On the executive front, one factor that might “oil the wheels” is A&L’s recent appointment of Alan Gillespie, a well-respected industry veteran to succeed the late Sir Derek Higgs as chairman, Management Today points out. “The choice of Gillespie (who A&L pinched from Ulster Bank) was widely seen as an attempt to steady the ship ahead of further write-downs,” the magazine says on its Web site.

It was announced late on Monday that Alan Gillespie would not join it as chairman next month as previously announced.

Annual inflation has hit 3.3 percent, its highest level since the Bank of England was given control of interest rates 11 years ago.

But for many their personal inflation rate will be much higher, depending on where they live, and how much of their income is devoted to basics like food and energy costs.

How are rising prices affecting you - have you barely noticed any change, or are you seriously cutting back?

Tax: it’s all getting a bit of a drag. The number of people paying the highest level of income tax has almost doubled since Labour came to power, according to recent statistics.

“Fiscal drag” — a fancy name for failing to uprate tax thresholds and allowances in line with wage inflation — has meant that many hundreds of thousands of middle earners (such as higher-paid teachers, nurses, police officers and many civil servants) have been trapped into paying 40 pence to the Exchequer for every pound on some of their earnings.

Around 3.7 million people are estimated to pay higher-rate tax, up from just over two million in 1997.

That figure, estimates the Institute for Fiscal Studies, will rise to more than 4 million by the end of the current tax year, due to fiscal drag alone. Indeed, the individual taxpayer has borne the brunt of Labour’s tax policies, according to a report by accountancy firm BDO Stoy Hayward released to coincide with “tax freedom day” earlier this month.

Higher-rate tax now starts for many at 41,435 pounds (the personal allowance of 5,435 pounds plus the basic-rate tax band of 36,000 pounds). But with some careful planning those dragged into the higher-rate tax net could save some or all of the extra tax levied by paying money into a private pension — and pave the way for a rosier retirement.

You should always try to make a pension contribution which attracts higher rate tax relief. So, if you’re earning 50,000 pound per annum and make a contribution of no more than 8,565 pounds (50,000 pounds minus the starting point for higher-rate tax of 41,435 pounds), this will attract tax relief at 40 percent — boosting your pension contribution by 3,426 pounds that would otherwise have gone to the tax man.

There are other ways, too, to maximise the amount of pension contributions that receive 40 percent tax relief, says Malcolm Cuthbert, managing director of financial planning at independent financial services group Killik & Co: take into account other sources of earned pensionable income — such as bonuses, redundancy payments (if above the first 30,000 pounds, which is tax free), as well as holiday lets (although not rental income).

Most importantly, do not forget to claim back the entitlement for higher-rate relief annually on your tax return. Although basic-rate relief of 20 percent is paid at source on personal pension contributions, the other 20 percent of higher-rate relief must be reclaimed on your tax return.

“Making your personal finances as tax efficient as possible is a no-brainer that will help ensure your money lasts as long as you do,” says Cuthbert. “One of the smartest ways to achieve this is to claim higher rate tax relief whilst you’re working — and then engineer your affairs so you pay basic rate tax in retirement.” Now, that’s a nice little way of getting one up on the tax man.

Think you’ve got plenty of time to save for retirement, boost your bank balance or achieve the level of wealth you’ve always aspired to? Think again.

While it might be said that life begins at 40, this is far from the case on the financial front: wage growth stalls 30 years before the average retirement age, according to personal finance website Fool.co.uk.

A poll of 3,321 of its panel members found that average earnings accelerate in the 20s and 30s. A typical 16- to 20-year-old sees their wages increase from 15,000 pounds to 17,500 pounds by the time they reach their mid-20s, then to 25,000 pounds between the ages of 26 and 30. The rate of increase accelerates through the early 30s — to 35,000 pounds between the ages of 31 to 35.

But, average earnings then flatted out — and remain at 35,000 pounds until aged 55. If that doesn’t make painful enough reading, it gets worse: income typically falls to 25,000 pounds from the ages of 56 to 70, then drops to 20,000 for those aged 71-plus.

Women’s earnings reach their potential earlier, but with a whimper rather than a bang. Earnings plateau in the mid-30s, compared to the mid-40s for men, and never reach the peak of 45,000 pounds hit by their male counterparts.

This withering in wages coincides with a stage in life that is typically more dynamic — making income stagnation a double blow. It is around this stage that eight out of 10 people own their own homes, of which a third are family dwellings. Six out of 10 support dependents — including both parents and children.

What makes the findings even more worrying is that people in their 20s and 30s have racked up a sixth of Britain’s total consumer debt in recent times, according to Bank of England figures. It is this uncontrollable spending — and “can’t save, won’t save” mentality — and could spell serious trouble.

Just think – at 40, contributions of more than 2,000 pounds per year are necessary to support an average lifestyle at retirement. Wait until the big 5-0 and that figure soars to almost 6,300 pounds.

But just look at what happens the earlier you start: those who start a pension at aged 30 need only stash away 738 pounds per year to achieve a 200,000 pound pension pot (based on a 10 percent investment return). Nine years earlier — when 21 — that figure falls to 306 pounds. Start pension saving at sweet 16, and annual contributions of 189 pounds could spell a 200,000 pound retirement pot; at aged 13 the figure stands at 141 pounds; and at birth just 30 pounds per year would need to be saved.

That’s a cautionary tale, if ever there was one, for today’s 20- and 30-somethings.

No longer do little boys and girls dream of being doctors, nurses, firefighters and solicitors — commendable jobs that command a steady income and offer a career for life. These days, it seems, being famous is far more desirable.

The most desired careers among young people include being a musician, famous singer or band member, working in the media, and being a “celebrity or socialite”, according to research by Alliance & Leicester. Its poll of 1,077 people aged 16 to 21 showed that 25 percent want to be a famous musician, 24 percent desire a job in the media and 14 percent want to be famous for, well, being famous. Being a fashion designer (13 percent) or a teacher/ lecturer (13 percent) completes the top five most popular careers.

In contrast, just 8 percent fancy nursing and 5 percent want to be a vet, as today’s generation of young people move away from careers that involve years of study and are designed to last a lifetime to those where fame and fortune are achievable in the blink of an eye.

This desire for fame — and the apparent ability to rake it in for doing nothing other than being a well-known face — is a sad reflection of today’s society, and is epitomised by this year’s bunch of Big Brother housemates. When the show started nine years ago, it was billed as an experiment in psychology and sociology. Now, it is little more than a platform for wannabe pop stars and TV presenters.

“Even though BB bosses promised ‘real people’ this year, we can reveal that Mario and Lisa are serial wannabes who have been trying to become famous for 12 YEARS,” reports today’s Daily Star newspaper in a five-page Big Brother special, which features a picture of presenter Davina McCall waving an “Unleash the Freaks” sign.

With such role models, it’s perhaps unsurprising that young people crave celebrity status and the trappings that apparently come with it. Jade Goody, who became famous after appearing on the Channel 4 reality TV show in 2002, might have been voted the third most pointless celebrity (behind Celebrity BB 2006 winner Chantelle Houghton and Paris Hilton) in a December 2007 poll by Now magazine, but she is believed to have accumulated a personal fortune of around 3 million pounds from TV appearances, book deals, promotional work and a perfume line.

Her “career”, however, took a turn of the worse in the wake of a racism row stemming from the very show that made her. And for every one who “makes it”, countless others don’t. As many former Big Brother contestants prove, such “fame” can prove incredibly short-lived – and the dole queue can soon beckon.

Onto another form of entertainment now… and while England’s failure to qualify for Euro 2008 has shattered the dreams of fans across the country, there are some benefits. Britian will potentially save the equivalent of 30 double decker buses-worth of carbon dioxide emissions, as up to 70 million televisions remain switched off come kick-off time, according to utility provider E.ON.

That will not only make England’s carbon footprint considerably smaller, but should save fans a tidy sum in electricity costs — not to mention money on those match-time refreshments. A silver lining if ever there was one.

The trade body for the mortgage industry has written to the Chancellor of the Exchequer. In its letter to Alistair Darling, the Council of Mortgage Lenders (CML) outlines the range of steps that lenders are, apparently, taking to minimise problems borrowers may face in the wake of the credit crunch — and help limit the number of property repossessions. Its members have committed to four “significant specific measures”. These are, in the CML’s own words:

* To analyse their existing arrears management policies and implement any changes identified as a result of the industry guidance which we (the CML) are preparing. The guidance will be informed by the feedback we receive from the FSA (Financial Services Authority) on its thematic work on arrears management. We hope the industry guidance will in due course be confirmed by the FSA, but we are at a very early stage of this process.

* To provide consumer information to borrowers in arrears to help explain the arrears management process, to help borrowers understand what to do and expect, and to set out how their lender will treat them fairly.

* To introduce an appropriately worded pre-action protocol for mortgage cases for use before court proceedings.

* To ensure they have a strategy for contacting borrowers coming out of initial deals, such as two or three year fixed rate periods, to inform them in good time of their new payment and encourage them to make contact if a financial problem is likely to arise.

Despite all the words, there appears to be little substance to these “significant” measures.

As the CML maintains, the number of mortgage arrears cases and repossessions are likely to remain low — and certainly far below the level reached in the housing market crash of the 1990s. Huge increases in house prices in the past few years have meant that, for many, the average loan-to-value is likely to remain low, meaning comparatively few borrowers are facing the prospect of negative equity. Indeed, HSBC unveiled data last month that showed the average mortgage from a stampede of new business represented only 56 percent of the value of the property it was secured against.

That said, some borrowers ARE suffering at the hands of lenders who continue to try to protect their margins and limit bad debts. Across the industry, the maximum amount people can borrow in relation to their property value has plummeted, cheap deals have been replaced with more expensive ones, rules of who can borrow what have been tightened considerably and fees have doubled. The housing market continues to be choked by the lack of mortgage availability, particularly for first-time buyers and those with little in the way of deposit.

At the same time, a two-tier system is emerging whereby the best deals are only available to homeowners dealing directly with lenders — not through intermediaries that generally charge lenders commission. That is effectively making bypassing independent brokers, who help consumers search the entire market for the best deal for their circumstances, uneconomical. Surely, that can’t be right?

British house prices might be in the doldrums, but isolated hospots around the world are bucking the trend. Bulgaria has again topped Knight Frank’s quarterly global house price index, confounding market fears of oversupply. It has reigned supreme at the top of the table since the second quarter of last year and notched up annualised price growth of 31.5 percent in the first quarter of 2008 — far above a worldwide average of 6.1 percent.

Making up the rest of the top ten are: Singapore (29.9 percent), Hong Kong (28.8 percent), Jersey (28 percent), Russia (21.7 percent), Iceland (19.1 percent), Australia (13.8 percent), China (11.7 percent) and Sweden (9.1 percent).

In contrast, property in the Baltic region is being blighted by difficult economic conditions, evident in high rates of national debt. Latvia and Estonia suffered the worst house price drops during the first three months of the year: prices in Riga fell 20 percent on an annual basis, while those in Tallinn declined 10.7 percent.

The US is also continuing to experience difficulties, but overall managed to stay out of negative territory during the quarter, when property prices were flat. This side of the Atlantic, prices rose just 1.1 percent in Britain — significantly lower than the 11.2 percent raked up in the first quarter of last year.

Those looking to invest in property now have to scour the globe for potential purchases: “The geography of the best performing markets is not so clearly delineated as in previous years, when we might have been able to say that growth was strongest in the Far East, or Central and Eastern Europe,” says Liam Bailey, head of residential property at Knight Frank. “Today, the top performing markets are dispersed around the world.”

But investors should also not overlook one crucial factor: exchange rates. The strength of the Euro and weakness of the American dollar against the pound have seen buyers turn to the States and away from the typical holiday home destinations of France and Spain, according to foreign exchange firm HiFX. Enquires about property purchases in France and Spain have fallen 11 percent and 12.5 percent respectively since March, while those for the US have doubled since April.

Interest is also increasing in emerging markets such as Panama, Egypt and Brazil, it says. With sterling trading at its lowest levels in six years against the Brazilian real there could be some bargains to be had, but be warned: those looking for a holiday home could find themselves exposed to the wild currency fluctuations experienced in these developing destinations.

Britain’s largest banks and the Office of Fair Trading remain locked in a case management hearing in court over the thorny issue of current account default charges, but the judge has already indicated that the banks will be given the green light to appeal the ruling against them. The appeal — on at least part of Mr Justice Andrew Smith’s ruling, which relates to “fairness” and the rights of customers to sue banks — is a hammer-blow to scores of consumers whose claims for compensation have been put on hold while the matter trundles through the courts.

The issue could now go to the Appeal Court and the House of Lords before the full case goes to court — and that could take two years or more. In the meantime, the Financial Services Authority has put on hold customer complaints and court cases relating to the charges, putting the brakes on any compensation payments. And, as the legal process rumbles on, the banks continue to rake in vast sums of money by hitting consumers who go over their overdraft limit or write a cheque that bounces with exorbitant charges. Analysts have estimated that that banks make up to 3.5 billion pounds in overdraft charges every year: by delaying the case, they could amass some 7 billion pounds.

Time, it seems, is money. But despite the ban on compensation payments, those who believe they have been hit with “unfair” bank charges should not delay. Customers can’t stop the banks from appealing – but they can stop the clock from counting down the time allowed to submit their claims.

Currently, bank customers can reclaim “unfair” charges plus interest from the past six years — as far back you can go in the courts. Submitting your claim as soon as possible might not mean you’ll get any subsequent rebate sooner, but it will stop the clock from ticking on how far back the claim can stretch.

“Anyone who plans to appeal should write to their bank to ask for the charges to be refunded,” advises David Kuo, head of personal finance at Fool.co.uk. “Follow up with a letter threatening court proceedings. Many courts will probably stay the majority of claims, but at least the six-year limitation on your claim will be halted too.

“Banks know that time is money, which is why they are appealing — they want to hang on to your money for as long as possible. But bank customers can get their own back. Submit your claims without delay so you can get your refund in full when banks run out of time — and options.”

Whatever happened to “girl power”? The phrase became a cultural phenomenon after the formation of the Spice Girls pop band in 1994, and was adopted as the mantra for millions of girls, even making it into the Oxford English Dictionary.

But, it seems that many fans — now grown women — are relinquishing this ideology in favour of that portrayed in a later cult classic: Sex and the City. Today’s generation of single women are relying on finding their “Mr Big” to fund their future and are investing a significant amount of time, effort and money in pursuit of the Carrie dream, a survey shows.

Almost one million women have set their sights on a knight on a white horse, banking on finding a rich man to take care of them, according to the “fashionistas not cashonistas” report from Friends Provident. Just 23 percent of the single women it polled have a pension and 20 percent have life or health insurance, yet just over a quarter own more than 30 pairs of shoes. Many are investing in their appearance to help them net an eligible man, too, the survey of 1,458 women aged between 25 and 45 found: 36 percent spend more than 50 pounds per month on clothes and accessories and 24 percent spend more than 200 pounds per year on beauty treatments.

And, it seems that money — not love — is the motivating factor in many relationships. Almost a third of Britons state they are reliant on their partner or spouse for financial security — but not all these relationships are based on love, according to another recent survey. Over 955,000 Britons would leave their partner if financially independent, according to Kaupthing Edge, the online retail financial services arm of Iceland’s largest bank.

It might be a sad fact of life that many women — like their counterparts in years gone by — still marry for money. But, for those women trying to stand on their own two feet there are still huge inequalities, particularly when it comes to pensions.

Figures from HSBC show the picture of retirement savings among women has improved greatly: in 2005, when it started tracking consumer attitudes to pension planning, just over a third of women surveyed aged 18 to 60 were contributing to a pension. Three years on, over half of women questioned are now paying into a pension.

But there is still a serious issue that lies largely outside women’s control. They still have far more erratic working patterns than men, taking time out from employment to raise children, for example. That means that, currently, only 35 percent of women retire on the full basic state pension, according to the Department for Work and Pensions’ gender impact assessment of pension reform, published last December.

The introduction of “personal accounts” into which workers will be automatically enrolled — the government’s solution to the looming pensions crisis — aims to increase that to two-thirds. Still, far more needs to be done to level the playing field. “It seems as if pensions were built by men for men and assume that everyone has a full basic state pension, which does not help women,” said Steve Bee, head of pensions strategy at Scottish Life in a recent podcast. “The government is making a mistake by assuming that women’s lives and work patterns are becoming more like men’s and that, therefore, they suit pension products designed for men.”

He called on ministers to allow women to buy back “missing years” of national insurance contributions to help them achieve a full basic state pension and put in place “proper advice structures” to help them on the road to a rosier retirement. Perhaps small steps, such as these, would herald the beginning of a new era of financial “girl power”.

It has been a long-standing issue: the sale of payment protection insurance (PPI) is a multi-billion pound protection racket that continues apace. More than a year on from the Office of Fair Trading (OFT) referring the market to the Competition Commission, high street names are still found to have PPI failings.

The news that furniture retailer Land of Leather and its chief executive have been fined for improperly selling PPI makes sobering reading. The sector has increasingly come under regulatory pressure since the OFT move in February 2007. The Financial Services Authority has previously fined six firms over poor PPI selling practices: HFC Bank by just over one million pounds; Regency Mortgage Corporation by 56,000 pounds; Loans.co.uk by 455,000 pounds; Redcats (Brands) by 270,000 pounds; GE Capital Bank by 610,000 pounds and Capital One Bank by 175,000 pounds. It has also imposed a public censure on Eastern Wester Motor Group and Cathedral Motor Company.

Three other cases have been concluded where problems relating to PPI also featured — Capital Mortgage Connections was fined 17,500 pounds; Home and County Mortgages by 52,500 pounds and Hadenglen Home Finance by 133,000 pounds for the firm and 49,000 pounds for its chief executive.

But the saga has been well documented by financial journalists for years. The insurance is designed to cover debt repayment for people who fall ill or lose their job, but is often aggressively sold, expensive and unsuitable for most people’s needs. It is an issue that affects millions: many people are paying for this cover that they don’t need, can’t use and may not even know they have. There are more than 20 million PPI policies in place, according the OFT, which has estimated that Britons could save one billion pounds a year with greater competition in the PPI market.

The industry generates 5 billion pounds-worth of premiums per year, but only 20 percent of that is paid out in claims. That figure is shockingly low when you compare the sector to others: 82 percent of car insurance revenues and 54 percent of home insurance premiums are repaid to claimants. These must-have insurance policies are, clearly, far better value than PPI. It, in contrast, is not only expensive, but is often almost impossible to claim against.

A package from consumer group Which? that arrived in the Reuters’ office this morning illustrates the point. The insurance, it says, is as useful as the enclosed: a chocolate teapot.