Thursday 29 October 2015

Thursday, October 29, 2015 Posted by Hari No comments Labels:
Posted by Hari on Thursday, October 29, 2015 with No comments | Labels:

Average UK living standards return to pre-recession levels, thanks only to soaring pensions. Workers are still waiting
The Office for National Statistics (ONS) has published the latest snapshot of household incomes. It shows that, more than seven years after the financial crisis, the losses suffered in the most severe downturn of the modern age had finally been recouped. But the ONS said the recovery since the trough in living standards reached three years ago was entirely due to the improved financial state of retired households, adding that working households still had ground to make up to return to pre-recession levels. Retired households are almost 10% better off on average than they were before the recession, their incomes having risen to £21,100 – £1,800 above their pre-downturn peak of £19,300. The incomes of non-retired households also rose in 2014-15, but remain £800 below their pre-recession high of £28,900, at £28,100. Britain’s pensioners have seen their spending power safeguarded by the triple lock, which guarantees that pensions rise by the rate of inflation, growth in average earnings or 2.5%, depending on which is the highest in any given year. Non-retired households, by contrast, have been affected by wages increasing more slowly than prices. The ONS said its preliminary estimates suggested income inequality had been broadly unchanged between 2013-14 and 2014-15, but was slightly lower than it had been before the recession. The Gini coefficient, one yardstick for calculating income inequality, was 34.2% in 2007-08, but has since fallen to 32%. (A Gini coefficient of zero would indicate that income was shared equally, while a Gini coefficient of 100% would mean the entire income of the UK was taken by one individual). GUARDIAN

Energy firms defiant after big suppliers are slammed for failing to pass on plunging wholesale gas and electricity costs
Although there was a round of gas price cuts between January and April, British Gas is the only one of the Big Six to reduce tariffs since then, with a 5 per cent gas reduction in August - and no major energy supplier has cut electricity. Four out of the 'Big Six' suppliers snubbed a June letter from Energy Secretary Amber Rudd demanding they pass on a 20 per cent reduction in gas and electricity costs. Ms Robinson said, 'Single digit reductions fall well short of the double-digit drop in wholesale energy prices. With the global oil surplus expected to continue into 2016, suppliers have no excuses left for refusing to pass on double-digit bill reductions to hard-pressed consumers.' Earlier this month, analysts at ICIS revealed that 'the gas price finished September down 29% from the same time last year, at 40.713p/th.' DAILY MAIL

Monsoon named and shamed for not paying 1-in-4 staff minimum wage
Monsoon short-changed 1,438 workers – more than a quarter of its UK store staff – a total of £104,507.83. The company has been forced to reimburse staff and pay a fine of £28,147.81. The retailer previously required all staff to wear Monsoon clothes on duty, after buying them at a discount. The compulsory expense meant in effect many staff were taking home less than the minimum wage. Monsoon has since started paying a clothing allowance and raised wages. 115 companies have been caught in the latest swoop by HM Revenue and Customs (HMRC), which oversees implementation of the pay regulations. The government introduced the practice of naming firms in October 2013 to raise pressure on companies to stick to the rules entitling workers to a minimum of £6.70 an hour. This year’s list includes hair salons, car repair shops and a riding centre for disabled people. Workers at the 115 companies were owed more than £389,000 in arrears. After years of falling real wages since the financial crisis, campaigners have piled pressure on employers this year by highlighting that the government was topping up low pay through the benefit system. They targeted the annual shareholder meetings of major retailers, including Morrisons, Next, Sainsbury’s and Tesco, with protests to demand the adoption of the full living wage, which is set by independent analysts and is £7.85 an hour, or £9.15 in London. GUARDIAN

Channel 4 FactCheck: Pre-election Cameron DID say tax credits are “not going to fall”
The Treasury is proposing cutting the income thresholds for tax credits – that’s the amount of money you can earn before your tax credits begin to be withdrawn. If a new piece of legislation is passed, people will start seeing their Working Tax Credit reduced after they earn £3,850 instead of £6,420. The Child Tax Credit threshold will fall from £16,105 to £12,125. Once households reach the threshold, the credit will be removed at a faster rate – by 48p in the pound instead of 41p. And the amount of extra income you can earn in a year without affecting the payments is being cut from £5,000 to £2,500. There is no transitional protection to soften the blow for people who will see their benefits cut. The proposed changes come on the back of other reforms to benefits and tax credits already voted through in the summer Budget and the Welfare Reform and Work Bill. Ministers have said that the Conservatives were upfront with voters about wanting to slash Britain’s benefits bill. But there was no specific mention of tax credits in the party’s 2015 manifesto. In the party leaders’ edition of Question Time just before the election, an audience member asked David Cameron if he would “put to bed rumours that you plan to cut child tax credit and restrict child benefit to two children”. He replied: “No. I don’t want to do that. This report that was out today is something I rejected at the time as Prime Minister and I reject it again today.” Asked if the child tax credit payment was going to fall, Mr Cameron said: “It’s not going to fall.” CHANNEL 4 FACTCHECK

Banking needs a revolution – not a comparison website: Challenger banks savage report calling for customers to try switching banks
Challenger banks have openly mocked proposals from the regulator, the Competition and Markets Authority (CMA), that the best way to boost competition in banking is for consumers to shop around rather than make fundamental changes such as breaking up the big banks. One boss implied they amounted to nothing more than a new price comparison website. The CMA ducked calls for an end to free-if-in-credit current accounts and a more radical break-up of the banks. Some smaller banks were seething at the timidity of the CMA’s findings. Paul Lynam, who is chief executive of Secure Trust Bank and chairman of the British Bankers’ Association’s challenger bank panel, said that discount supermarkets Aldi and Lidl have been able to take market share from the likes of Tesco and Asda because there was a level playing field. ‘No such level playing field exists in banking and the CMA provisional proposals fail to address the fundamental inequities in capital, funding, access to payments and proportionate regulation,’ he said. For Lynam, the CMA report is the latest betrayal of a promise made by George Osborne in 2013, when he said that the banking sector ‘verges on an oligopoly’. Lynam has also been very critical of bank capital rules that allow large banks to use their own internal risk models to calculate how much capital they need to set aside for a mortgage loan. The internal models result in much lower capital requirements than standard models, which new entrants have to use. DAILY MAIL

Steelworkers march on parliament as minister pledges talks with EU
The business secretary Sajid Javid has called for an emergency EU meeting on the steel industry amid increasing cdemands for the government to intervene to prevent plant closures. He said: “I want to see steel top of the EU agenda. We cannot stand by while the steel industry across Europe, not just in the UK, faces such unprecedented challenges. There are no straightforward solutions to the complex global challenges, but the UK government wants to work with the EU and our European partners.” Workers protested in Westminster on the same day as a parliamentary debate on the industry’s plight. The steel industry, unions and Labour MPs have accused Javid of inaction following the indefinite closure of the Redcar steel mill on Teesside, the administration of Caparo industries and the mothballing of Tata Steel mills in Scunthorpe and Scotland. The industry has been battered by falling steel prices, made worse by alleged dumping of cheap steel in Europe by China, high energy costs and the strength of the pound making exports expensive. GUARDIAN

Thousands of Money Shop customers set for refunds totalling £15.4m as watchdog cracks down on leading payday lender
Dollar Financial UK, which owns brands The Money Shop, Payday UK, Payday Express and Ladder Loans, has been forced to compensate 147,000 customers in the coming months who suffered as a result of its affordability checks, debt collection practices and systems errors. The review by the regulator, the Financial Conduct Authority, revealed that many customers were lent more than they could afford to repay. Dollar Financial UK has since agreed to make a number of changes to its lending criteria in order to meet the FCA's requirements for high cost short term lenders. Carl Packman, author of a book about payday lending, said: ‘It confirms what many critics have known about the payday loans business for some time: that in order for payday lending to grow in the way it did over the recession years it needed to rip off people struggling with their finances.’ The Money Shop - the most familiar of Dollar's names - is heavily advertised on television and also has a high street presence, offering foreign exchange, pawnbroking services and Western Union money transfers, as well as payday loans over the counter. DAILY MAIL

That's a lot of Lamborghinis! Pensioners withdraw more than £2.7bn in first six months of new freedom rules
Pension freedom rules were introduced in April 2015 allowing those over age 55 to access their pension pots without the need to buy an annuity or enter drawdown. The first data from HMRC since pension freedom rules were introduced in April don't reveal how money was taken or spent but shows 146,000 retirees have accessed their pots. The figures represent those who have taken flexible annuities, cash or withdrawn money while staying invested, known as drawdown, but not any tax-free elements. Retirees are entitled to 25 per cent tax-free from their pot, with the option of withdrawing extra cash as they please subject to their marginal income rate. Many feared savers would blow their retirement savings when new freedom rules were introduced, with pension minister at the time Steve Webb declaring he was relaxed about people blowing it on Lamborghinis. Savers have also faced a number of stumbling blocks when trying to access their pots, such as varying transfer fees and times and some providers not offering all options. Another consequence of the reforms has been an increase in pension scams. Data from consultancy Portus found 14 per cent of working over-55s believe they have been targeted by a pension scheme scam since April. DAILY MAIL

UK firms must show proof they have no links to slave labour under new rules
The initiative is designed to force companies that subcontract work or buy in products from other producers to take responsibility for every step of the process. The legislation comes after a number of scandals involving multinational corporations purchasing products made with the use of forced labour. In 2014, it emerged that high-profile companies such as Tesco and Walmart had sourced prawns from a Thailand-based company that was buying fishmeal – to feed to its farmed prawns – from some suppliers operating fishing boats manned by slaves. The Modern Slavery Act, passed earlier this year, included a section on transparency in supply chains. Companies with a turnover of more than £36m and a presence in the UK will need to publish a prominent statement on their website detailing what steps they have taken to ensure there is no slavery or trafficking within their own organisations or supply chains. If no such steps have been taken, they must openly acknowledge in a similar statement that they have failed to deal with possible risks. The International Labour Organisation estimates that almost 21 million people are currently working in some form of forced labour – in agriculture, construction, domestic labour and manufacturing. About 17,000 UK businesses will have to publish these statements before the end of their financial year. Officials hope organisations campaigning against modern slavery will monitor the statements and name companies that are not taking any action. The UK is the first country in the world to introduce a requirement for transparency in supply chains, although similar legislation was introduced in California in 2012. GUARDIAN

She can't drive, rarely travels and owns a £10 phone: Lloyds charges Mavis, 80, £1k for account with perks she could never use
Mavis Taylor lives alone in sheltered housing. She can't drive, rarely goes on holiday and when she needs to make a phone call, uses a cheap, pay-as-you-go mobile. The former home help is 80 and has a small pension that barely covers life's essentials. Yet over the past eight years, the pensioner from Oldham has paid around £1,000 in fees to Lloyds for a current account that gives her a car breakdown policy, worldwide travel insurance and mobile phone cover - perks that she could never have used. To most ordinary people, this would seem to be a clear case of mis-selling - but not to Lloyds. Lloyds has rejected her complaint and says it was right to sell this packaged account - which costs £12.95 a month - to an elderly woman who couldn't use any of the benefits. The bank threw out the complaint, saying it was not possible for its staff to 'explain all the policy exclusions and eventualities for the insurance products'. It said that Mavis, who for the past decade has suffered from sight problems as a result of her diabetes, should have read the welcome pack that was posted to her as that explained all the exclusions. Mavis is just one of around nine million people who have been sold packaged accounts by banks in the past decade. Fees range from £6 to £25 a month. But today, like Mavis, tens of thousands of customers are trying to recover the charges, claiming they should never have been sold the accounts in the first place. Last week, the independent Financial Ombudsman Service revealed that it had received 29,030 inquiries about packaged accounts between April and September - almost as many as in the whole of last year. DAILY MAIL


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