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.
Co-operative Energy looks to future with User Chooser
Bare necessities of life cost a pensioner £10,000
Employees will be able to request flexible hours in drive to make workplaces family friendly
The 10 Best money-saving sites
Credit unions to offer instant online approvals as ministers clamp down on payday loans industry
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 2 Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
- 4 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Sustained immigration has not harmed Britons' employment, say government advisers
British jihadist calls for 'flag of Islam' over Downing Street and Buckingham Palace
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...
£60000 per annum: Harrington Starr: A leading provider in investment managemen...
£600 - £700 per day: Harrington Starr: AVS, JVS Openlink Endur Developer JVS, ...
£30000 per annum: Harrington Starr: A global leader in trading platforms and e...
Day In a Page
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
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay