This week there has been much discussion over the US government’s rescue plan for the troubled US financial system. At the beginning of the week it seemed that the plan wouldn’t be passed as the US House of Representatives refused to pass the necessary legislation. Yet, after the Bill was modified slightly it was passed by the Senate on Thursday and by the House of Representatives on Friday, (both the Senate and the House of Representatives have to approve a Bill before it can become legislation.) By passing this Bill the US government can pursue a plan worth $700bn (£394bn) to rescue the US financial sector, by buying up the bad debts of failing financial institutions. In the coming weeks it will be interesting to see what effect this has and whether it restores some much needed confidence back into financial markets.

Let’s now review the top money stories of the past week commencing the 29th September 2008.

Monday 29th September:

Bradford and Bingley is nationalised – Today it was announced that Bradford and Bingley (B&B) are to be nationalised by the government, with the government taking control of £50 billion of mortgages and loans. The remaining assets of B&B, the local branches and savings for example, are to be sold to Spanish bank Santander who own Abbey. B&B were one of the largest mortgage lenders in the UK, specialising in buy-to-let mortgage deals. The details of the collapse of B&B can often be awash with complicated jargon, so let us have a look at what the collapse of B&B will mean for you. In brief if you have your mortgage with B&B you will be unaffected in the short-term but when your deal runs out you will need to shop around for a cheap deal, which might be difficult (see below). If you have savings with B&B, don’t forget that the government guarantees the first £35,000 of your savings with any bank. But, it is worth making sure that you know who your account is with. Although the government does guarantee your first £35,000 of savings, this only applies per banking institution, and not per account. For more details of this, see moneysupermarket.com who have helpfully explained who owns which banks and how this affects your savings. **Breaking News: As from Tuesday 7th October the Government will guarantee the first £50,000 of your savings, although the same rules apply in that the £50,000 guarantee is per banking institution and not per account.**

Decline in mortgage products available – Research by Moneyfacts.co.uk has shown that the number of mortgage products available fell sharply today. At the beginning of the day there were 3,914 products available, but by the end of the day there were only 3,469. This decline in numbers reflects the collapse of Bradford and Bingley as lenders withdrew many mortgage deals. If you are one of the 1.4 million that is coming off a fixed-rate mortgage deal this year you will probably find it increasingly difficult to find a cheap deal. In times where banks are apprehensive about lending to each other and so charge each other high interest rates, a cheap deal will be tricky to find, as banks will pass on these high costs to consumers. Check out Moneyfacts.co.uk to see the different deals that are available to you, it is vital that you stay informed and shop around for the best deal.

Tuesday 30th September:

Household savings fall –Recent figures from the Office for National Statistics (ONS) show that household savings fell in the first 3 months of this year, the first time it has does so since 1958. This reduction in savings highlights how tightly our budgets have been squeezed, with rising costs of mortgages, food and utilities, encroaching on the amount that we can put away each month. Saving is an important element of successfully managing your money, as it helps you to be prepared in case the unexpected happens. Moneybasics has advice on savings, and how to work the practice of saving into your monthly or weekly budgets, in these tricky times it is definitely worth a look.

Wednesday 1st October

National Minimum Wage has increased -As of today the national minimum wage has increased from £5.52 to £5.73 an hour for those over the age of 22. The rise in the minimum wage comes with a harsh warning that the government will crack down on those employers who flout the rules and pay workers less, by imposing a £5,000 automatic fine. A helpline was recently set up for people to report instances where workers have been illegally underpaid. If you think that you are being paid under the minimum wage rate call the minimum wage helpline on 0845 6000 678 for advice.

Investigations of PPI mis-selling -The Financial Services Authority (FSA) is going to investigate the miss-selling of Payment Protection Insurance (PPI). PPI is commonly sold alongside loans, as a type of insurance to protect consumers if they cannot repay the costs of the loan. However, many people who took out PPI cover were not told that the cost of the insurance would be added to their loan and that they would have to pay interest on it. These investigations are good news for consumers as it should mean consumers are better protected against the mis-selling of products and also that consumers are better informed about what financial products mean for you. For information on different insurance products, click here.

Wednesday 1st October

House prices continue to fall -House prices in the UK continued to fall in September, as they dropped by a further 1.7%, say the latest report from the Nationwide. The Nationwide recorded a 12.4% annual drop in prices and it now estimates that the average UK home costs £161,797 - more than £20,000 less than a year ago. Predictions from Fionnuala Earley, Nationwide's chief economist said that although there was a “sharp correction” in the housing market now, in the long-term house prices would continue to grow.

Prepared for Moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).