Saturday 28 June 2014

Saturday, June 28, 2014 Posted by Jake No comments Labels: , , , , , , , , ,
In June 2014 Parliament started debating a key change to the nation's pensions, the "Pension Schemes Bill". According to the Department of Works and Pensions' press release, "Public backing means full steam ahead for pension reforms".

As it apparently already has your backing, dear fellow ripped-off Britons, we thought you should know more about what you are so keen on. 

The proposed legislation includes worrying provisions relating to independent trustees, indexation, and more. But for the purpose of this post, we shall focus on the "new" type of pension being introduced.

Britons have been used to three main pension options:
  • Defined Benefit (DB): Where you are certain how much pension you will get, usually based as a percentage of your salary (final salary; career average; or whatever).
  • Defined Contribution (DC): Where you only know how much pension you will get when you buy an annuity when you retire.
  • No Private Pension: Where your employer makes no contribution, and you depend on the state pension plus welfare and any other savings and investments you yourself may have.

Friday 27 June 2014

Friday, June 27, 2014 Posted by Hari No comments Labels: , , ,
Fee, KJ and Chris do some maths...

Thursday 26 June 2014

Thursday, June 26, 2014 Posted by Hari No comments Labels:
Barclays shares fall 6.5% on new fraud accusation
The New York attorney general has filed a fraud lawsuit against Barclays. The lawsuit alleges the bank falsified documents and misrepresented benefits it was offering to big institutional clients, including pension funds. It relates to the bank's "dark pool" trading operations, which allow clients to trade large blocks of shares while keeping prices private. Barclays has begun an internal probe into the allegations. In an email to staff, Barclays chief executive Antony Jenkins said: "I will not tolerate any circumstances in which our clients are lied to or misled and any instances I discover will be dealt with severely.” Barclays has been the subject of several investigations, fines and settlements in recent years. In May it was fined £26m by UK regulators after one of its traders was discovered attempting to fix the price of gold. In April, Barclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA), which claimed that Barclays misled US mortgage lenders Fannie Mae and Freddie Mac during the housing crisis. In 2012 it was fined £290m by UK regulators for attempting to manipulate an important lending rate, known as Libor. BBC NEWS

Energy companies under “once and for all” investigation over high profits and prices
Britain's Big Six energy companies face the threat of being broken up for ripping off customers after regulator Ofgem asked the top competition watchdog to investigate their profits and prices. The Competition and Markets Authority will begin its “once and for all” investigation “immediately”, Ofgem said, and is likely to conclude by the end of next year. The referral, which Ofgem first proposed in March, came as the regulator published new data suggesting that energy suppliers’ profit margins had increased further this month. It suggested they stood to make £101 before interest and tax from a typical bill over the next year - a 7.5pc margin and an increase from £96 last month and from £48 a year ago. The Big Six companies - British Gas, SSE, Npower, EDF, Scottish Power and E. On - have so far resisted calls to cut prices in the wake of falling wholesale costs, despite the fact they typically claim to require just a 5pc margin. TELEGRAPH

NHS cash problems will get worse next year, finance chiefs believe
The NHS's financial problems are set to worsen next year, with more hospitals ending up in the red, the health services's finance managers have warned. Growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment are driving up costs for NHS care providers, the Healthcare Financial Management Association found. Its survey of 188 finance directors of NHS organisations found that just 12% of 129 hospital finance directors believe their trust will achieve its financial targets in 2015-16, while 44% do not. Similarly, just one in four finance directors in GP-led clinical commissisoning groups, who commission and pay for care, said they would meet their targets. Professor John Appleby, chief economist at the King's Fund thinktank, said: "This report echoes our own surveys and highlights a truth now widely acknowledged within the NHS – that it is heading towards a financial crisis in 2015-16, if not before." GUARDIAN

Tens of thousands march in London against coalition's austerity measures
An estimated 50,000 people marched from the BBC's New Broadcasting House in central London to Westminster. A spokesman for the People's Assembly, which organised the march, said the turnout was "testament to the level of anger there is at the moment". He said that Saturday's action was "just the start", with a second march planned for October in conjunction with the Trades Union Congress, as well as strike action expected next month. The crowds heard speeches at Parliament Square from People's Assembly supporters, including Green MP Caroline Lucas and journalist Owen Jones. Addressing the marchers, Jones said: "Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger." He added: "The Conservatives are using the crisis to push policies they have always supported. For example, the sell-off of the NHS. They have built a country in which most people who are in poverty are also in work." GUARDIAN

Tuesday 24 June 2014

Tuesday, June 24, 2014 Posted by Hari No comments Labels: , ,
  • Germany has much lower ticket prices
  • German clubs are owned by their fans
  • German clubs depend on sponsorship, not high ticket prices
  • German clubs think long-term

Germany has much lower ticket prices
Ticket prices are low in the Bundesliga: the average price for the cheapest tickets is just over £10. In the Premier League, fans pay upwards of £28 for the cheapest tickets.

At Bayern Munich, you can get in (albeit to stand) for £12. Contrast those prices with £30 at the cheap end in Manchester United.

For a season ticket, it averages £207 in Germany's top-flight games compared with £468 in England. These figures come from a High Pay Centre report which looks at figures up to 2011.

Let’s compare the basics of the Premier and the Bundesliga champions. Deloittes did a comparison in 2012, from where we source the figures (SOURCE: Deloitte Football Money League 2012):
Manchester United:
Bought by the American Glazer family for £790m in 2005 in a controversial deal which loaded the club with debt. Since 2012 10% of its shares have been listed in New York.
Revenues = £331.4m, Cheapest season ticket price = £532
Bayern Munich:
Run as private company it is 82%-owned by its fans, with the sports goods firm Adidas and car company Audi holding just over 9% each.
Revenues = £290.3m, Cheapest season ticket price = £67

Tuesday, June 24, 2014 Posted by Hari 1 comment Labels: , , , ,

Saturday 21 June 2014

Saturday, June 21, 2014 Posted by Jake 1 comment Labels: , , , ,
The Governor of the Bank of England has said the official Bank Rate, commonly known as the Base Rate of interest, is going to go up sooner than we think

The Bank of England website explains what this official rate is for:

The Bank of England sets an interest rate at which it lends to financial institutions. This interest rate then affects the whole range of interest rates set by commercial banks, building societies and other institutions for their own savers and borrowers.
In 2009, in order to assist recovery from the banking crash, this official interest rate was brought down to 0.5%. The idea being banks would be able to borrow money cheaply, and lend it out to businesses and individuals cheaply. 
Bank of England Data
Cheap loans: to encourage investment and spending, to strengthen the economy. As it happened, the banks didn't lend as intended, contributing in part to the UK economy taking a record 6 years to get back to its pre-crisis peak.

So should we be afraid of the Bank of England raising its official rate? None of us actually have mortgages with the Bank of England, so why should we care? The high street banks don’t actually HAVE to change interest rates they charge us just because the Bank of England changes its official rate.

The question is “will they or won’t they” follow the Bank of England? Recent history, shown in Bank of England statistics, show that the banks both will and won’t.

Friday 20 June 2014

Friday, June 20, 2014 Posted by Hari No comments Labels: , ,
Chris and KJ look to the German model...

Thursday 19 June 2014

Thursday, June 19, 2014 Posted by Hari No comments Labels:
NHS is the world's best healthcare system, says international panel of experts
The NHS has been declared the world's best healthcare system by an international panel of experts who rated its care superior to countries which spend far more on health. The same study also castigated healthcare provision in the US as the worst globally. Despite putting the most money into health, America denies care to many patients in need because they do not have health insurance and is also the poorest at saving the lives of people who fall ill, it found. Furthermore, the NHS spends the second-lowest amount on healthcare among the 11 – just £2,008 per head, less than half the £5,017 in the US. Only New Zealand, with £1,876, spent less. The UK came first out of the 11 countries in eight of the 11 measures of care the authors looked at. It got top place on measures including providing effective care, safe care, co-ordinated care and patient-centred care. The fund also rated the NHS as the best for giving access to care and for efficient use of resources. The only serious black mark against the NHS was its poor record on keeping people alive. On a composite "healthy lives" score, which includes deaths among infants and patients who would have survived had they received timely and effective healthcare, the UK came 10th. The authors say that the healthcare system cannot be solely blamed for this issue, which is strongly influenced by social and economic factors. GUARDIAN

Rabbit-hutch Britain: Growing health concerns as UK sets record for smallest properties in Europe
Britain is in the grip of an invisible housing squeeze with millions of people living in homes that are too small for them, according to new research which reveals that more than half of all dwellings are failing to meet minimum modern standards on size. The poorest households are being hit hardest, with estimates suggesting that four-fifths of those affected by the Coalition’s “bedroom tax” are already forced to contend with a shortage of space. The findings will put pressure on the Government, which announced it was to develop a national space standard – although this will only be enforced where it does not impinge on development. Critics argue that the UK already has the smallest properties in Europe following the end of national guidelines in 1980. The average floor space for a dwelling in the UK as a whole is currently 85 sq metres, whilst new-builds average only 76 sq metres – putting Britain at the bottom of a league table of 15 countries including Ireland, Portugal and Italy. When analysed by floor space instead of the number of rooms, 55 per cent of all homes fail to meet the industry-wide standards. Overcrowding causes health problems including depression, insomnia and asthma. INDEPENDENT

Credit Suisse and Yorkshire BS fined for selling financial product with “close to zero” chance of success
Credit Suisse designed a product, called "Cliquet", to provide a minimum return, with the apparent potential for getting back significantly more if the FTSE 100 performed consistently well. Both the banks had promoted the products' potential maximum return, which investors had almost no chance of getting, the Financial Conductor Authority (FCA) said. The FCA said that the probability of getting back a minimum return was between 40% and 50%, while the chance of a maximum return was "close to 0%". The product was sold to 83,777 people, typically people with limited investment experience. Tracey McDermott, FCA's director of enforcement and financial crime, said: "CSI [Credit Suisse] and YBS knew that the chances of receiving the maximum return were close to zero but they nevertheless highlighted this as a key promotional feature of the product. This was unacceptable." BBC NEWS

A third of UK households 'in poverty'? Research claims 18million struggle to afford decent housing, food and heating
Researchers found that the numbers ‘in poverty’ had increased sharply over the past 30 years from 14 per cent to 33 per cent of households despite the size of the economy doubling. The majority of children who suffer from multiple deprivations live with one or two siblings, with both parents, have at least one employed parent, and are white and live in England. 5.5 million adults go without essential clothing, 2.5 million children live in damp homes and 1.5 million children live in households that cannot afford to heat their home. The report is by the Poverty and Social Exclusion report funded by the Economic and Social Research Council. Anti-poverty campaigners claim that full-time work is not always sufficient to escape poverty. Low wages and working conditions in many parts of the UK mean that one in six adults in paid work is suffering from a low income and cannot afford basic necessities. Whist wage growth remains low, full-time work is not sufficient to escape from poverty for a 'large number of people', with almost half the employed poor working 40 hours a week or more. DAILY MAIL

Tuesday 17 June 2014

Saturday 14 June 2014

Saturday, June 14, 2014 Posted by Jake 6 comments Labels: , , , , , ,
Remember those ‘diet breads’: 25% fewer calories per slice? Achieved by 25% smaller slices? Outsourcing companies have used the same ruse to win vast government contracts. Promising great savings (slimming down), achieved by employing fewer and less qualified people and paying them less (less bread). 

Diet breads charged you more to give you less.You risk your health if you don’t understand this. The Tories didn't understand (or perhaps more shamefully, they did). Their fetish for slimming down the Public Sector is proving to be more than unhealthy for Britain. Cutting costs has its price: unqualified teachers in “free schools”; unqualified translators and underqualified barristers in the legal aid system; paramedics doing what doctors used to do; reservists doing what the professional army used to do. And there is more.

The Telegraph reported the chief executive of the Royal College of Nurses complaining of hospitals being starved of staff:

“Understaffing remains a real issue across the NHS, and we know that many trusts are down to the bone in terms of the number of frontline nursing staff they have due to cutting posts to save money....Unsafe staffing levels have been implicated in a number of high-profile investigations into patient safety.”

According to the National Audit Office the Ministry of Defence (MoD) has managed to starve the armed forces by failing to find suitable reserves while continuing to sack the experienced professionals. 

Friday 13 June 2014

Friday, June 13, 2014 Posted by Hari No comments Labels: , , , , , ,
Chris, Fee and KJ work out things could get better - briefly - before they get worse...

Thursday 12 June 2014

Thursday, June 12, 2014 Posted by Jake No comments Labels:
Shadow justice secretary Sadiq Khan: Labour failed on inequality
In a speech to the GMB union, Sadiq Khan said the rise in inequality under the coalition is a "stain" that is getting worse, especially as senior Tories such as Boris Johnson have argued that greed is a good thing. But he also acknowledged that the rise in inequality did not start under this government. Khan will say the share of income going to the richest 1% has risen from 8.2% to 9.8% over the past year, with the 100 wealthiest individuals seeing their assets increase in value by £40bn. He pointed out that Britain had the fastest rise in inequality in any developed country between 1985 and 2008. Before the speech, Khan said: "Over 13 years of government, we did many amazing things – from the national minimum wage to investing in education – but we also have to have the humility to admit that we weren't able to do enough to tackle rising inequality – and that it continued to rise under our watch." GUARDIAN

European commission to investigate tax affairs of Apple, Starbucks and Fiat
European regulators have launched formal inquiries into the tax affairs of Apple, Starbucks and Fiat, probing alleged sweetheart deals negotiated between the corporations and national governments in Ireland, the Netherlands and Luxembourg. Calling for multinationals to "pay their fair share of taxes", the European commission's top competition regulator, Joaquín Almunia, said he was concerned that special tax treatment may have been granted that breached state aid rules. Business leaders across Europe have complained that some corporations, particularly those operating online or from US headquarters, compete unfairly by exploiting loopholes. Europe's state aid laws ban tax breaks if they risk distorting competition, and business leaders in Britain and on the continent have complained that the negligible tax paid by some rivals puts them at a disadvantage. "In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes," Almunia said. Regulators may expand their investigations to other nations and corporations. Almunia told a press conference on Wednesday: "It is well known we contacted Belgium and the UK, in particular the UK in the case of Gibraltar, and maybe we will open a new investigation." GUARDIAN

Osborne to lay out plans to clean up Wild West foreign currency market
Chancellor George Osborne is asking regulators to lead a review, including crucial benchmarks used to set everything from currency rates to the price of oil. The aim is to then introduce statutory regulation to keep traders and brokers in check. With the general election fast approaching, Osborne is anxious to appear tough, particularly after lambasting the previous government for being lax on regulation and asleep at the wheel during the financial crisis. Regulators have predicted that allegations traders have rigged the foreign currency markets could – if proven – be an even bigger scandal than Libor, when traders fixed the inter-bank lending rate. David Buik from broker Panmure Gordon said forex could make Libor and PPI look like a ‘vicarage tea party’. Regulating this sprawling market will be a Herculean task. The forex, or FX, market is the biggest in the world, with an estimated £3trillion changing hands each day. Yet it is not regulated, with one market insider who blew the whistle on foul play by corrupt traders memorably comparing FX to the Wild West. Prices tend to be set by traders involved in the deals, allowing plenty of scope for manipulation by those wanting to rig their bets and boost their bonuses. The global investigation into allegations traders rigged foreign currency markets strikes at the heart of the City of London – still reeling from the Libor scandal. London accounts for 40 per cent of the FX market, with Deutsche Bank, UBS, Citigroup, and Barclays the dominant players. It has been reported that 15 banks around the world are involved in wrongdoing, with around 40 traders suspended so far. DAILY MAIL

Amazon “Living Wage” campaigners place dummy protest book on online retailer’s site
Campaigners who have been calling on Amazon to "end poverty pay" for months have brought their battle directly to the internet retailer's front doorstep with the launch of a "book" on Amazon's own website slamming the way it treats its workers. The title, A Living Wage for All Amazon Workers, says in its Amazon product description: "Over 62,000 people have called on Amazon to end poverty pay in 2014 – but Amazon has yet to take our demand seriously so we've brought it direct to", asking readers to "review this product below and let Amazon know that it's time to pay the human cost of its operations". The "product" was made available for sale this morning for £7.65 – "the living wage rate across the UK outside London where most of Amazon's warehouses are located", says its product description. Amazon states on its website that "in the UK, permanent associates start at a minimum of £7.10 per hour increasing to a median of £8.00 per hour after 24 months". The stunt is masterminded by Amazon Anonymous, a group of campaigners who have garnered over 62,000 signatories to their petition which says that "with UK sales in 2012 of £4.2bn, you'd think Amazon could afford to pay its workers [both permanent and contracted agency staff] enough to be able to feed and clothe themselves and their families". GUARDIAN

Wednesday 11 June 2014

Wednesday, June 11, 2014 Posted by Jake 1 comment Labels: , , , , ,
It's not whether you get caught, it's whether you get away that matters. The great Maradona got away with his "hand of god" goal that knocked England out of the 1986 football World Cup. 
The Swiss got away with their own escape thanks to the "hand of a dolt" who signed the 2011 tax agreement between the UK and Switzerland. An agreement that not only granted anonymity to tax dodgers, but also limited the number of questions the UK tax authorities could ask the Swiss when hunting dodgers. And also failed to extract the "billions in unpaid tax" HMRC expected.

We covered the nonsense of this agreement in an earlier post. The Boston Consulting Group's (BCG) annual "Global Wealth" report for 2014 shows that just as Maradona's misdemeanour didn't do his career any harm, the Swiss too have flourished after their Great Escape from the UK taxman.

Tuesday 10 June 2014

Tuesday, June 10, 2014 Posted by Hari 1 comment Labels: , ,

Saturday 7 June 2014

Saturday, June 07, 2014 Posted by Jake 1 comment Labels: , , , , ,

In 2010 Nigel Farage was unkind to Herman van Rompuy. Herman Who? Herman was President of the European Council (to be clear, not the President of the European Commission nor the President of the European Parliament). Nigel asked the very relevant question "Who are you?".

To be fair to Herman, the same could be said of everybody in the European Parliament other than perhaps Nigel. A poll done for The Independent by YouGov in 2013 found 95% of Brits didn't know who their MEP was. (In case you actually are interested in what your MEP looks like, you can find them by clicking >here<)

UKIP's "victory" in the UK European election means they won
Graph by the FT

Friday 6 June 2014

Friday, June 06, 2014 Posted by Hari 1 comment Labels: , , , , ,
Chris and his professor chum try to work out all the implications...

Thursday 5 June 2014

Thursday, June 05, 2014 Posted by Hari No comments Labels:
Student loan debt IS now considered when applying for a mortgage, throwing graduates' home ownership plans into jeopardy. 
Despite recent advice suggesting otherwise, graduates will now have their student loan debts included in the affordability calculation for a mortgage. The Financial Conduct Authority’s Mortgage Market Review guidelines will force all mortgage lenders to consider student loans as a committed expenditure, greatly reducing the amount they are likely to offer. Alexander Burgess, British Money director and a former MBA student, said: 'There appears to be a common misconception among students that anyone who has taken out student finance will have their loan discounted, but this simply isn’t the case... Universities infer it’s not considered to be a debt, credit rating firms are swerving the subject on whether they’ll access student loans records and financial sites such as Money Saving Expert suggest “student loans do not go on credit files”.’ In the current academic year, university fees can be up to £9,000 per annum, not counting accommodation and cost of living, meaning debts of tens of thousands of pounds for students. Burgess added: ‘This is penalising a whole generation who are already saddled with unrealistic proportions of debt just because they have career aspirations that can only be fulfilled through higher education... Graduates have loans for an education that a few years ago was free, but are now less likely to secure a mortgage.” DAILY MAIL

Boris Johnson calls for massive council tax rise for owners of empty homes
Boris Johnson has called for "at least" a tenfold increase on council tax for the owners of empty homes to help to tackle Britain's housing crisis. The London mayor said he was urging London boroughs to "whack up" tax on property owners who allow their homes to stand empty for more than a year. Speaking on his Ask Boris show on LBC Radio, Johnson praised Labour-controlled Camden council for charging 150% council tax rates on homes that have been empty for more than two years. He claimed it was the only London borough to use the power, and urged others to do the same. But he went further by calling for a change in the law to allow councils to impose punitive 1,000% rates on the owners of vacant homes. Johnson said: "What is certainly not acceptable is people buying homes as assets and then keeping them empty in Kensington and Chelsea or Westminster or wherever as a sort of bank balance in the sky. That is no good. What we are saying to councils, who have powers to impose punitive council taxes on such people, is do so. Whack up the council tax." Johnson acknowledged that building more houses was the only way to make homes affordable, saying “The only answer is to build hundreds of thousands more homes." GUARDIAN

Losing out on £2,500-a-year: How the new state pension will leave millions of workers rich and poor worse off
Workers earning as little as £5,772-a-year stand to make more from the existing two-tier system of basic state pension and second state pension (S2P - the state earnings-related pension), than they would under the new flat-rate state pension being introduced from April 2016. The Government has championed its single-tier state pension as 'fairer and simpler' than the complicated system currently in place, but it will be public sector workers and the self-employed who benefit the most, while private sector workers both rich and poor will lose out on potentially tens of thousands of pounds in retirement. Someone earning just £5,772-a-year with 30 years of National Contributions and S2P entitlements would get, based on this year's numbers, a basic state pension of £113.10 plus S2P contributions of about £53-a-week, a total of £166.10-a-week. The new single-tier pension is expected to be worth around £155-a-week by the time it is introduced, providing £11.10 less than this a week, or £577 a year. Someone earning £30,000 meanwhile with 30 years of S2P accrual would be entitled to around £185-a-week under the existing system, an extra £30-a-week or more than £1,500 extra every year. The worst off will be those accruing the maximum amount of S2P - people on £40,040 and over - who would have been entitled to £200-a-week in retirement, some £2,530-a-year less than they stand to get under the new system. DAILY MAIL

British retailers set to take on payday lenders with employee credit union that will offer cheap loans
In a bid to offer an alternative to the hefty interest rates charged on payday loans, New Look and Next are among names to have signed up to RetailCure. The credit union is for people working in the retail sector. RetailCure is expected to charge interest from roughly 7 per cent to nearly 28 per cent depending upon the borrower's credit history. People who borrow £400 over 30 days from a payday loan firm are stung with an interest fee of around £127, while the same loan would cost just £8 from the credit union. Veteran retailer John Lovering, who has led buyouts of companies including Debenhams, Homebase and Somerfield, will chair the organisation, which is set to be launched later this year. He told Sky News: 'The industry feels that we have to find a way of providing a source of cheap, reliable credit for our people... The three million in retail and the nearly five million in the wider industry do have a need for low-cost, value-for-money, short-term borrowing facilities, and that's what we as an industry are trying to provide.' DAILY MAIL

Tuesday 3 June 2014

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