The real test is what happens to borrowers who get into arrears on their mortgages and the damning conclusion of

The real test is what happens to borrowers who get into arrears on their mortgages, and the damning conclusion of the report is that less than a third of existing home-owners currently in default would have qualified for a private policy and fewer than one in 10 would have succeeded in claiming on existing policies. Investors who have been sold guaranteed bonds promising minimum income or capital gains over the next five years well in excess of other investments are also entitled to feel slightly uneasy. The attraction of such investments is obvious because it offers small investors with a couple of thousand pounds the kind of returns which only a deposit of pounds 50,000 could earn in conventional deposits.Guaranteed bonds worked initially because the life companies could ensure high returns by recycling funds through offshore reinsurance companies and use their expenses to reduce the tax liability. Since the Budget last November they have had to use an alternative route, buying options on gilt-edged stocks to provide the returns if the stock market fails to achieve the required gains. If the stock market performs adequately, the option is not used but in the meantime it has been a cheap safety net.Traditionally, gains on gilts and options have not been subject to tax, but the Inland Revenue's implicit threat to tax the gains could undermine the investment which guarantees the guarantees. Although the principle of no retrospective legislation is long-established, business already written could also be caught if the option has to be exercised in future.It is almost unthinkable that insurance companies would renege on the guarantees already given. But if the worst comes to the worst, they may have to rob their other policy-holders to underwrite the guarantees, and in the meantime they will either have to dilute their future guarantees or stop selling the product.For good measure the High Court decision a week ago - which effectively allows independent financial advisers to ignore SIB advice to warn their clients who may have been mis-sold a personal pension - is likely to undermine confidence in the private pensions industry even further.The IFAs argued that to warn their clients would invite claims, even if the advice subsequently proved satisfactory and would effectively invalidate their own personal indemnity policies, which are the only real source of the money to provide the compensation which may then be due.This is a real problem because there may well be many thousands of personal pension holders, especially those tempted out of occupational pension schemes, who are unaware they may have a claim.Presumably someone, somewhere, will find a way of squaring the circle, but in the meantime the public perception of an industry trying to wriggle out of its commitments can only be strengthened.Meanwhile, financial advisers will have to err on the side of caution in making projections, and leave the personal pensions, which are urgently needed to replace state and company funding, looking even less attractive to a bemused and suspicious public..

IS THAT bulge in your pocket a wallet full of store cards, or are you carrying wads of cash? Judging by figures on their use over the past six months, it must be cards. Research shows the use of cards issued by a range of stores rose by 19 per cent in the 12 months to the end of March. So what is the attraction? Answer: they confer the status of regular customer, and none of them charges an annual fee. Perhaps they are targeted at the shopper rather than the person who pays the bill, because except for John Lewis, which charges 18 per cent APR, and Fortnum & Mason, whose credit customers pay 16.8 per cent, all other stores charge interest rates in excess of that on most credit cards. Burton Group, whose card is usable at Top Shop, Evans and Dorothy Perkins, weighs in at 29.9 per cent APR Laura Ashley charges 30.9 per cent, Next 28.9 per cent. Sears, whose card covers Miss Selfridge, Olympus, and Lilley & Skinner, levies 26.9 per cent. Timecard, usable in Comet, B&Q and Woolworths, charges 28.5 per cent APR.Store-card issuers claim users often gain extra benefits, such as free catalogues and promotional evenings They also offer interest-free periods of up to 56 days. But most generic credit cards offer a similar interest- free period.

Although they levy an average pounds 12 a year, this is offset by the lower interest, ranging from 22.9 per cent for Barclaycard to 23.4 per cent APR for Access.. PRESENT housing market conditions mean that more and more people are seeing renting as a more attractive proposition than buying. With house prices in the doldrums, a home is no longer seen as an investment, and job insecurity and negative equity have made potential buyers more cautious. Renting is seen as simpler and more flexible. In many ways this is true.

But if you don't read the small print of your lease and negotiate a fair deal, renting can become a costly headache. It is important to remember that a lease is legally binding, and the wording will have a specific legal meaning If you don't understand it, get legal advice The main expense for the tenant will be the rent. Check the lease yourself to see whether it provides for rent increases. The Housing Act 1988 allows some tenants to get an assessment of the rent by referring the matter to the Rent Assessment Committee for the area.Find out whether the tenant will have to pay the connection fee and deposit for the supply of utilities and the quarterly bills, and who pays the council tax.Make a note of what furnishings are supplied with the property and what you will have to supply.

Most properties are let fully furnished, but one landlord's idea of fully furnished may be different from another's.Find out if there is an additional service charge for the cost of maintaining and repairing communal areas in flats, such as hallways and grounds. Find out what the services are and the average service charge over the years. Ask to see the accounts and inquire whether there are any unusually high expenses envisaged.Normally the landlord pays for repairs to the property itself, and to the furnishings provided. The only time a tenant should pay the repair or replacement bill is when the item is damaged by deliberate misuse.The lease will, however, usually require the tenant to leave the property in a similar state to its condition at the start of the lease. The tenant should make sure that fair wear and tear is allowed for, otherwise he could find the landlord arguing that everything should look like new.The only way of recording the original condition of the property is for the landlord to make a full and detailed inventory of the contents. You should take the time to check the inventory is correct before you sign it. If an item is in a bad state of repair, you should make a note of this on the inventory.