Money News: Lloyds looks after the pennies if you spend the pounds

Lloyds TSB is to launch a "save as you spend" scheme that automatically transfers "change" into a savings account each time a purchase is made on a debit card.

Under the bank's "Save the Change" scheme, when customers use their cards to buy goods or services, the amount spent is rounded up to the nearest pound. The "change" is then transferred into a nominated Lloyds savings account.

If, for example, you spent £19.83 on groceries using your current account, you would be charged £20, with 17p going into your linked savings account. If you spent £20 exactly (or any round sum), no money would be switched.

To give savers a boost when the scheme goes live in February, Lloyds will - until the end of March - match every penny of the first £50 saved in both months.

The scheme is open to all holders of new and existing Lloyds TSB savings accounts, with the exception of Monthly Saver, term deposits, child trust funds and individual savings account (ISA) products.

Customers can nominate another person to receive the savings. For example, a parent can transfer them into a child's savings account. Transfers will take place only if the current account is in credit at the time the purchase is made.

"We welcome this initiative to encourage saving, but it is a prime example of a bank giving with one hand while taking away with the other," said Emma Bandey from the consumer group Which?

"Just recently, Lloyds TSB increased its overdraft rates by more than the recent base rate rise - and its unauthorised overdraft charges are some of the highest on the high street, at up to £35 a time.

"If the bank really wants to help its customers save money, it should look at making its charging system fairer."

She added that many consumers would be better off opening an account elsewhere with a higher rate of interest, and saving the equivalent sums into it regularly.

Borrowing: Which way next for interest rates?

The Bank of England has left interest rates on hold at 5 per cent.

Coming after quarter-point rises in August and November designed to bring inflation under control, the decision to freeze rates was widely expected by analysts, economists and the City.

Ray Boulger of mortgage broker John Charcol said it was a "foregone conclusion" and predicted next month's meeting would yield the same result.

"Last month's set of economic statistics have mainly been either neutral or indicate that no further rise in rates is needed in the foreseeable future - especially with the very weak industrial production figures and the recent sharp rise in sterling against the dollar."

Mr Boulger believes the Bank will be prepared to "wait some months" to gauge the impact of the two recent rises, "before seriously considering another increase". But opinion is divided. Some think it will come sooner.

"Most commentators still believe there is a likelihood of an interest-rate rise some time in early 2007," said Mehrdad Yousefi from Alliance & Leic0ester.

The latest Halifax house price survey shows the two recent rate rises have not cooled the market. Property prices in Britain rose 1.7 per cent last month, pushing the average cost of a home up to £187,995 - 9.6 per cent higher than this time a year ago.

FSA investigation: Unauthorised firm took £10m from investors

A property investment business has been closed by the Financial Services Authority (FSA) for taking £10m from nearly 200 investors despite not having the proper authorisation.

The City watchdog took out ab injunction against Christian Orpin and Michael Vickery in the belief that they were unlawfully accepting deposits from investors who thought their funds would be invested.

The injunction will prevent the men - and their firm, Orpery Ltd, of which they are directors - from accepting deposits; it also freezes the men's assets.

The scheme was promoted by Mr Orpin under the name of PDS High Wycombe, and was operated by him as PDS Business Finance.

Mr Orpin took investors' money and lent it to Orpery to invest in properties. Investors were promised payments of £150 a month for each £5,000 invested, for up to six months, plus the return of their deposit.

But neither Mr Orpin, Mr Vickery, nor Orpery has ever been authorised by the FSA.

This means that if problems arise with their investments, investors will have no recourse to the Financial Services Compensation Scheme or the Financial Ombudsman.

Currently, the FSA is trying to establish the value of Mr Orpin's assets to determine whether there is a shortfall in his liabilities to his investors.

The FSA's investigation is continuing.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

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