When the bank is bare ...
Pawnbrokers are a useful fall-back for raising money in an emergency, if an overdraft is out of the question. By John Andrew
Wednesday 09 July 1997
A few years ago, Hazel inherited a piece of jewellery from her aunt. Single and retired, she is reasonably comfortable financially, with a company pension to supplement her state pension. She also has "adequate" savings and investments that produce an income which she uses for holidays abroad.
There are three possibilities: to consign the piece to auction; to sell it direct to a dealer, or, if she were unsure whether she really wanted to sell the brooch, but still needed cash while she made up her mind, she could borrow against the piece from a pawnbroker.
We decided on TM Sufton's, opposite London's Victoria Station, which has been described as the Harrods of pawnbrokers. We were led through a back door to Jim Tannerhill's office.
"Beautiful, beautiful, beautiful," he remarked as he looked intensely at the piece. He knew it was by Faberge and appreciated the craftsmanship. "We normally see large chunks of jewels; nothing like this. How much do you want?" We suggested pounds 5,000 and received the response, "No problem, though I will have to go through the normal formalities such as identification, and a consumer credit agreement. If you wanted more, I would need a couple of days to get a professional valuation."
Then came the crunch question, "What is the interest rate?" Sufton's tariff is 5 per cent a month for pieces under pounds 500; 3.5 per cent for advances from pounds 500 to pounds 10,000 and 3 per cent for sums above pounds 10,000, with amounts over pounds 100,000 negotiable. When asked the APR for an advance of pounds 5,000 Jim responded immediately, "46.4 per cent". As Hazel was a good credit risk, borrowing from a bank would be two-thirds cheaper for her. However, as Jim pointed out, this is not an alternative for everyone who wants immediate cash for a short period.
Certainly when he showed us around the vaults, one was in no doubt that the asset-rich but cash-poor use pawnbrokers to help their monetary liquidity. A diamond tiara lay in the inner sanctum, while close by in a locked cupboard there were jewels on which sums of up to pounds 250,000 had been advanced - rare, coloured diamonds of several carats, and an emerald the shape of a small pear and as large as a man's thumb.
I was intrigued as to what happens to items that are not redeemed. This occurs to fewer than 10 per cent of the items pledged to Sufton's. While the company accommodates individuals who have funds "on the way", when it is apparent that customers are not going to honour their side of the pledge agreement, they are advised when their treasures will be consigned to auction, which in many cases will nudge them into redeeming the pieces they have pledged. The net proceeds, after Sufton's has taken the interest it is due, are forwarded to the client.
We decided that raising cash with a pledge at a pawnbrokers was not for Hazel. However, for an individual who is really hard pressed for cash, and where a bank overdraft is not a possibility, a pawnbroker's is a viable option. The National Pawnbrokers Association has 240 members, and Paul Finch, of the association, estimates that there are around 600 pawnbrokers in the UK.
When I remarked to him that I was taken aback by the APR on advances, he made the valid point that the APR for an overdraft includes interest only and not fees for unauthorised overdrafts, charges for letters on the state of the account and the fee made every time a cheque is bounced.
Hazel's heirloom was clearly a thing that would have had the experts on the Antiques Road Show drooling. However, if you want to sell any heirloom, it is essential to do your homework first. Had Hazel not appreciated the value of the piece and known nothing about it, she could have sold it for a song to a person who also did not appreciate its true worth. So just as you shop around when buying anything, do not rush when selling. Of course, do remember that not all antiques are worth a fortunen
The National Pawnbrokers Association publishes a list of its members and a booklet on pawnbroking. Any item of value is normally suitable for pawning (which is when the loan is below pounds 50) or pledging (when it is for pounds 50 or more). Call 0171-242 1114 for more details.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Sales of the tablet are set to fall again say analysts
World's most lethal spider found under a bunch of bananas
I Am Bread could actually a challenging and nuanced title
Company decides to go for simply scary after criticising other sites for 'creepy and targeted' advertising
Footage shot by a passerby shows moment an ill man was carried out of his burning home
The HiFX guide to international money transfers
Mark Dampier: Woodford’s young companies could be the stars of the future
Charges related to car parking rising and leading to serious money woes
Money Insider: Help to Buy must be boosted by building
Weekly Money: Round-up of the personal finance stories you may have missed 13-17 October
- 2 Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
- 4 Meet Thea, Norway's 12-year-old child bride
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village