Posted by Jake on Thursday, July 17, 2014 with No comments | Labels: Roundup

Between 2008 and 2013, the real household income of the
under 30s fell by 13 per cent while among 31 to 59 year-olds, the fall in
household income was just over half that at 7 per cent. The IFS said the
employment rate among the under-30s fell by 4 per cent following the financial
crisis while remaining unchanged for 31 to 59-year-olds. Moreover, those under-30s
that could find work found their average pay fell by 15 per cent compared with
just 6 per cent for 31 to 59-year-olds. Just over one quarter of adults under
the age of 30 continued to live with their parents, the IFS study found,
helping to cushion the impact of the recession on their household incomes. Those
living with their parents found their income fell by 8 per cent between 2008
and 2013, compared to those living on their own whose incomes fell in real
terms by 17 per cent. In contrast those over the age of 60 saw almost no impact
on their pay or employment. The report comes four months after the Chancellor
delivered a Budget that was largely seen as being aimed squarely at older
voters, with reforms to pension rules among one of George Osborne's big
announcements. ‘Young adults have borne the brunt of the recession” said report
author Jonathan Cribb, a research economist at the IFS. ‘Pay, employment and
incomes have all been hit hardest for those in their 20s. 'A crucial question
is whether this difficult start will do lasting damage to their employment and
earnings prospects’. DAILY MAIL
FTSE fat cats now
earn 180 times the average worker, as their salaries hit £4.7m a year
The gap between bosses and workers has soared over the past
20 years - from just 60 times the average wage in the 1990s. On average the
bosses of Britain's 100 biggest companies took home £4.7million last year - up
from £4.1million the year before, according to the High Pay Centre. Ordinary
workers, meanwhile, earned £26,884. A Business Department spokesman said: 'The
Government has introduced comprehensive reforms to give shareholders more
powers in order to restore the link between top pay and performance, which in
recent years has become excessive and increasingly disconnected.” But the High
Pay Centre said shareholders were still signing off soaring executive pay
despite being given the power to vote them down at annual meetings. They urged
the government to take 'radical action' to close the gap, such as requiring
firms to cap executive pay at a fixed multiple of their lowest paid employees.
High Pay Centre director Deborah Hargreaves said: 'The Government's tinkering
won't bring about a proper change in the UK's pay culture... We need to build
an economy where people are paid fair and sensible amounts of money for the
work that they do and the incomes of the super-rich aren't racing away from
everybody else... A maximum pay ratio would recognise the important principle
that all workers should share in a company's success and that gaps between
those at the top and low and middle earners cannot just get wider and wider.' DAILY MAIL
Fleecing the elderly:
home and car insurance price rises that shame the insurance industry
Over the last year, market rates for home and car insurance
have plummeted. In Manchester, average car premiums are down by more than £100
and are heading back to rates last seen five years ago. So it is scandalous how
insurers chase new customers with low prices while fleecing their elderly, more
loyal ones. But there is now a glimmer of hope. If new proposals come into
force, customers receiving their annual renewal on car or home insurance will
have to be told what they paid last year. It's extraordinary that until now
they have had to dig out old documents to see whether they're being shafted
with a rise. Many people don't – allowing the insurers to sneak through rise
after rise. In March 2008, we highlighted the case of Robert King who was
quoted a home insurance renewal price of £551 by Direct Line. Yet when he went
to its website, posing as a new customer, he was quoted £173. He had been a
customer for 10 years. Ans an 83-year-old Derbyshire pensioner, living in a
modest two-bed bungalow, had his home and contents policy with the same insurer
for 58 years. It progressively ramped up his premium to £648 a year – yet if he
bought it as a new customer it was just £135. So when you open your renewal
letter, look for a premium that is lower than last year. If it's not, it's time
to switch. GUARDIAN
Uncovered... great
sun cream swindle: Prices inflated then slashed to give illusion of discounts
Supermarkets are putting up the prices of lotions just
before offering discounts to make shoppers believe they are getting a better
deal, it has been claimed. Shops such as Boots, Sainsburys, Asda, Morrisons and
Tesco now face accusations that they are manipulating British families ahead of
the summer holidays. An investigation by mySupermarket.co.uk, tracked the
prices of major brand and own-brand sun tan lotions over the last year. The
price comparsion website found a ‘zig-zag’ pattern, where prices were raised
shortly before being slashed to ‘half-price’, to create the impression that
consumers were getting a bargain. Boots’ own-brand Soltan kids’ SPF 50+ spray
is currently half-price as part of a ‘Get the Most out of Summer’ promotion,
reduced from £10.50 to £5.25. But the spray was only £10.50 during term-time
between January and March this year, when it was also on buy-one-get-one-free. Ever
since it has been sold for £5.25. The Department for Business rules for traders
state that ‘the price used as a basis for comparison should have been your most
recent price available for 28 consecutive days or more; and the period for
which the new (lower) price will be available should not be so long that the
comparison becomes misleading.’ DAILY MAIL
FCA proposes payday
loans cap of 0.8% per day
The measures announced include: Initial cap of 0.8% a day in
interest charges. Someone who takes out a loan of £100 over 30 days, and pays
back on time, will therefore pay no more than £24 in interest; Default fees
capped at £15. Borrowers who fail to pay back on time can be charged a maximum
of £15, plus 0.8% a day in outstanding interest; Total cost cap of 100%. Even
if a borrower defaults, he or she will never have to pay back more than twice
the amount they borrowed. The FCA estimates that payday lenders will lose £420m
a year as a result of the changes, or 42% of their revenue. But it says
consumers will save an average of £193 each a year. Since 1 July, payday
lenders have already been subject to new rules, including a limit on
roll-overs, more affordability checks, and controls on Continuous Payment
Authorities (CPAs), which allow lenders to take money from people's bank
accounts. Those changes have already led to far fewer loans being made. The
payday industry said the changes - due in January 2015 - would mean more people
turning to loan sharks. BBC NEWS
Insurance price
comparison sites failing, says regulator
Of 14 sites reviewed, many were accused of being
"unclear" by the Financial Conduct Authority (FCA), and some were
failing regulatory standards. The FCA said comparison sites tend to focus too much
on price, without telling consumers about other policy details - such as the
excess they might have to pay in the event of a claim. It said that some
consumers mistakenly believed that the price comparison website had provided
them with quotes on the best policy for their individual needs and had assessed
the suitability of the policy for them. In addition, some sites which are owned
by an insurance company or an insurance broker, were failing to flag up a
potential conflict of interest. This is against FCA regulations. Small print on
the Gocompare.com website informs customers that it is 50% owned by Esure, an
insurance company. Those who read right to the bottom of another site,
Confused.com, will see that it is owned by Admiral Insurance. However, the FCA
found no evidence that such firms had profited as a result of their potentially
conflicting ownership. BBC NEWS
Citigroup pays $7bn
to settle sub-prime mortgage investigation
The agreement comes after months of tense negotiations and
comes as Justice Department continues to negotiate a similar settlement with rival
Bank of America. Citigroup executives ignored their own warnings and misrepresented
the quality of the subpar mortgages they were selling to investors. In an
internal email cited by the government one Citigroup trader stated the bank
"should start praying" because so many of the investments it had made
were about to fail. The trader said he was “amazed” the loans had ever been
made. Despite knowledge that many of the loans were failing or likely to,
Citigroup packaged up the home loans and sold them to investors. Attorney
general Eric Holder said the bank’s conduct had "contributed mightily to
the financial crisis that devastated our economy in 2008... As a result of
their assurances that toxic financial products were sound, Citigroup was able
to expand its market share and increase profits.” GUARDIAN
Watchdogs in Britain
accused of failing to shine spotlight on emerging 'dark pools' trading scandal
Giving evidence to the Treasury Select Committee, Bank of England
officials including governor Mark Carney were admonished for lagging their
counterparts in the US and Europe. In the US, Barclays was last month accused
of ‘systemic fraud and deceit’ against its ‘dark pool’ customers by New York
Attorney General Eric Schneiderman, who launched a lawsuit against the bank. In
further evidence that US regulators are turning up the heat, Goldman was also
fined £466,000 by the US Financial Industry Regulatory Authority earlier this
month for failing to protect clients in its ‘dark pool’. In a salvo against Carney
and the Bank’s Prudential Regulation chief Andrew Bailey, committee member
George Mudie suggested similar urgency had not been evident among the UK
watchdogs, including the Bank of England. So-called dark pools are secretive
markets where people buy and sell stocks without disclosing information about
the transactions. DAILY MAIL
US drugs giant AbbVie
trying to buy UK’s Shire in bid to cut tax bill already operates international
network of offshore havens
AbbVie bosses want to slash the firm’s global tax bill by 40
per cent in two years by buying the Irish-based pharmaceuticals firm for £31bn.
But almost 40 per cent of AbbVie’s subsidiaries are already based in tax havens
such as Bermuda, Jersey or Switzerland. Of the 122 offshoot companies
registered to AbbVie 46 are based in tax shelters, according to corporate
documents analysed by the Mail. A total of 19 are based in Delaware, the
notorious tax haven US state which houses almost a million companies, with as
many as 300,000 registered at a single address. DAILY MAIL
Taxpayers 'lost £1bn'
on Royal Mail sale, MPs say
The government feared failure and acted on bad advice over
the Royal Mail stock market flotation, reports the Business, Innovation and
Skills select committee. On flotation, the taxpayer-owned Royal Mail shares
were priced at 330p, but jumped as high as 618p per share, and now stand at
around 473p. The committee also said it was "disturbed" that the
taxpayer may not have benefited from valuable assets included in the
privatisation. In particular it highlighted three sites in London which the
National Audit Office (NAO) said had a hidden value of up to £830m. The
committee also expressed concern about so-called preferred investors who
received large blocks of shares, prior to the flotation. Some were also
advisers to the government over the share sale. Lazard, UBS and Goldman Sachs
all had Royal Mail shares allocated to separate parts of their businesses.
Lazard and the banks made millions of pounds on the sale on behalf of clients. The
Department for Business said the MPs' report contained "factual errors and
misunderstandings". The committee's report is the latest in a series of
official criticisms of the sale, including by the National Audit Office and the
Public Accounts Committee. The government announced there would be a review,
led by former City minister Lord Myners, of how it handles all stock market
flotations. BBC NEWS
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