Rip-off News round-up. Our pick of the last week's media (Thu 16th June)

FTSE 100 giants with vast pension black holes hand billions to shareholders

Britain's blue chips are dishing out billions more in dividends to shareholders despite a crisis in their pension funds. Analysis by investment group AJ Bell shows that 54 companies in the FTSE 100 index have handed out £48billion to investors in the last two years – despite having a £52billion pension black hole. And 35 have been paying out more in dividends than the total size of their pension deficit. Oil giant Royal Dutch Shell, for example, last year handed £8billion to shareholders despite figures showing it had a £6.7billion funding gap in 2014. Drug company AstraZeneca had a £1.9billion deficit in 2014 but threw off £2.4billion of cash last year. Fellow pharmaceuticals firm GlaxoSmithKline handed out £3.9billion in 2015, despite a £1.7billion gap for the previous year. AJ Bell investment director Russ Mould said: ‘Insufficient contributions to the pension fund could leave the company with hefty liabilities which could drag on future performance and ultimately lead to staff receiving lower pensions if the business runs in to difficulties and enters administration.’ It came as official figures revealed pension funds have plummeted almost £25billion further into the red. It means the 5,945 large schemes watched by the Pension Protection Fund (PPF) had a combined deficit of £294.6billion at the end of May – £24.4billion higher than a month earlier. The Pensions Regulator has issued a similar warning in the past. Andrew Warwick-Thompson, executive director of regulatory policy, said: ‘It is important that employers treat their pension scheme fairly. 'We expect trustees to question employers’ dividend policies where debt recovery contributions are constrained.’ Experts have warned Britain faces a looming pension crisis. Huge deficits mean around 600 pension funds are certain to collapse in the next decade, according to the Pensions Institute at Cass Business School. It says another 400 are also at risk. These funds have combined deficits of around £45billion – a figure which could potentially overwhelm the PPF rescue fund, which acts as a backstop in cases of disaster. DAILY MAIL

Passion and drive come first: 70% of small businesses say degrees aren't important

A huge 69 per cent of the online small businesses looking to expand this year that were questioned in the eBay Employee Skills Index survey say it isn't particularly important to them that candidates have a university degree. Instead, they place more importance on skills such as a strong grasp of social media, computer coding, and marketing. Half of those surveyed said finding employees with a university degree was 'not at all important' to them - and one in four said the same about GCSEs. Instead, the results indicate that practical skills gained through hands-on experience, and proficiency with technology are valued more highly than academic accomplishments. More than half of SMEs said it was important that a prospective employee has digital skills, and 41 per cent looked for candidates who could code and build computer programmes. Meanwhile, a considerable 61 per cent of respondents said they favoured candidates who had a strong grasp of marketing and advertising, One in three of the small businesses surveyed said they were planning to hire this year. And while the sorts of skills they are looking for are generally thought of as being the preserve of younger people, 41 per cent of prospective employees said age was 'not at all important' to them - which makes sense, as there are 900,000 more 50-64 year-olds in work now than in 2010. DAILY MAIL

Rigging the Energy Market: Price comparison sites to be investigated by competition watchdog

The investigation will examine whether websites agreed not to compete with each other when consumers searched on Google for the best deals. The Competition and Markets Authority said: “The CMA is investigating a suspected breach of competition law by some price comparison websites that offer energy tariff comparisons in relation to paid online search advertising.” Ofgem said it found that two or more of the comparison sites had, since 2010, “been parties to an agreement or concerted practice relating to bidding and/or negative matching for search advertising which have as their object or effect the prevention, restriction or distortion of competition.” These practices included “agreements not to compete in relation to particular search terms used for the purposes of online search advertising”. Negative matching is when an advertiser indicates to a search engine operator such as Google that it does not want its website to appear in the search results for specific keywords. In a bizarre twist, the issue was handed to the CMA after an initial investigation by the industry regulator Ofgem was at risk of being compromised by actions of Ofgem staff. Ofgem found its staff had, before the formal investigation begun, been in contact with the websites now under investigation, encouraging them to change their behaviour when it came to buying advertising on search engines such as Google. Once the investigation began, Ofgem realised its earlier activities could call into question the regulator’s own impartiality. GUARDIAN

M&S criticised for ditching antisocial hours pay to offset wage rise

The retailer plans to increase basic pay for its 69,000 shop-floor workers by 15% from next April to £8.50 an hour but has offset the cost of doing so by cutting special pay rates. The changes, announced last month, will give a boost to the majority of staff but long-serving workers – who previously enjoyed premiums for working after 9pm and on Sundays and bank holidays – will lose out. Labour MP Siobhain McDonagh said some staff members would lose up to £2,000 a year as a result of the changes. “This is not just any pay cut. This is a big fat M&S pay cut,” she said. M&S said the planned pay rise would give its staff one of the highest hourly rates in UK retail alongside one of the best benefits packages. All staff affected by the change are to get a one-off compensation payment to ensure they are not financially affected for the first two years of the change. The government faces pressure to crack down on companies offsetting rises in basic pay by removing other benefits. In recent months, a string of firms, from fish factories in Grimsby to coffee shops in central London, have withdrawn overtime, Sunday pay, bonuses, free food and paid breaks in order to keep the wage bill down. Major retailers including Tesco, Morrisons and B&Q have faced protests over implementing cuts to benefits alongside increases in basic pay. David Cameron said he had not seen details of the pay changes at M&S but wanted to see the “national living wage”, a new minimum wage for over-25s, feed through into “higher take home pay, not lower take home pay … We would urge all companies to make sure that is the case,” he said. GUARDIAN

'Cash beats shares!' BBC journalist Paul Lewis challenges conventional investing wisdom in study covering 21 years

Saving in best buy cash accounts over the past two decades beat putting your money in a FTSE 100 tracker the majority of the time, according to research by BBC Money Box presenter Paul Lewis. The high profile financial journalist has carried out a huge study which challenges the conventional wisdom that investing in stocks is more rewarding than saving if you stick with it over the long term. Lewis compared returns from the top one-year deposit account each year since 1995 to the money made on a simple tracker fund cloning the performance of the top 100 shares listed on the London stock market. This 'active cash' beat the tracker in 57 per cent of 192 rolling five-year periods from 1 January 1995 onwards. And cash did even better over longer periods, beating the tracker fund 96 per cent of the time in the 84 rolling 14-year periods since 1995. Lewis also highlighted that the tracker fund lost money up to a third of the time over investment periods ranging from one to 11 years - whereas cash savings will always grow. The research took into account dividends reinvested in the tracker and any interest earned reinvested in cash savings, so gains from compounding were included in both cases. Over the whole period shares did win out but by a small margin that is small enough for savers to question whether the risk was worth it. Lewis says money invested in best buy cash over the whole 21-year period from 1 January 1995 to 1 January 2016 would have produced an average annual compound return of 5 per cent, while the tracker would have produced a compound annual return of 6 per cent. That 1 per cent difference is far lower than the 3-8 per cent typically quoted as the ‘risk premium’ of investing in shares rather than cash, explains Lewis. DAILY MAIL

Why IS Barclays letting pushy salesmen flog £100 diet pills in its branches? Controversial US health schemes set up stalls in banks and pounce on customers

Salesmen from controversial health schemes are setting up stalls in Barclays branches and pouncing on people waiting to be served. Customers are being flogged expensive face creams and diet pills — and asked to become part-time sales staff themselves. Most of the companies involved are U.S.-owned and notorious for pushy sales tactics. They have hijacked a Barclays community programme that was designed to give small local businesses a cost-free way of reaching High Street shoppers. Barclays set up its scheme allowing small businesses to operate pop-up stands in its branches in 2014. You can apply to a local branch to put up a stall and the bank makes no money from the arrangement. However, Money Mail has discovered that instead of helping local entrepreneurs, the spaces have been seized on by big overseas businesses. The revelation has sparked concern that elderly customers who depend on branches are at risk of being targeted. Witnesses say salesmen are telling elderly customers that the products, which include £100 diet pills, energy bars and £30 herb-infused face creams, can ease ailments such as arthritis. Stay-at-home mothers are being told they can make an 'easy' £300 a month if they sign up to become saleswomen. Yet most of those lured in will be unaware of the dubious health benefits of the products. And those recruited as agents can face enormous pressure to sell — and stinging costs if they fail to hit monthly targets. Forever Living, Arbonne and Herbalife all appear to be regular fixtures in Barclays branches. They are dubbed 'multi-level marketing schemes' because they work by signing up customers to flog expensive cosmetics or health products to friends, family and neighbours. Typically, recruits work as and when they want — as they're technically self-employed — to supplement household income. Often they're promised promotions and extra cash if they regularly sign up new sellers. Critics have accused the companies of having a similar selling style to pyramid schemes — illegal businesses that promise staff rewards for enrolling others, as opposed to offering income for selling products. DAILY MAIL

BHS collapse: Sir Philip Green's reputation and knighthood depend on pension offer, say MPs

Sir Philip Green will have to make a generous offer to rescue the BHS pension scheme if he wants to save his reputation and knighthood, MPs have warned after a fiery six-hour hearing with the billionaire retail tycoon. Green promised to resolve the problems facing the pension scheme and apologised for the collapse of the department store chain during an extraordinary parliamentary meeting that ran from just after 9am until 3pm. The tycoon, who declined to provide details about his rescue plan, repeatedly clashed with MPs during the hearing, castigating Richard Fuller, the Conservative MP, for staring at him in a “really disturbing” way and accusing committee chairman Iain Wright of being “really rude”. MPs are now planning to call Green’s wife, Lady Green, to give evidence. Monaco-based Tina Green owns the family’s business interests, including Arcadia, the parent company of Topshop, Wallis and Dorothy Perkins. BHS is being wound down after administrators failed to secure a rescue deal, putting 11,000 jobs at risk and leaving it with a £571m pension deficit. Green controlled BHS for 15 years until March 2015, during which time the tycoon and other investors collected more than £580m in dividends, rent and interest payments. Green sold BHS to Dominic Chappell, a three-time bankrupt whose consortium, Retail Acquisitions, extracted at least £17m from the retailer. However, while insisting the demise of BHS was “my fault”, Green also pointed the finger at the pension trustees, the Pensions Regulator, Goldman Sachs and Chappell’s advisers, Grant Thornton and Olswang. GUARDIAN

350,000 renters put at risk of eviction, according to report

More than 148,000 renting households – equivalent to 350,000 people – were put at risk of losing their home in the 12 months to April, according to a new analysis of government figures by housing charity Shelter. People renting in the London boroughs of Enfield, and Barking and Dagenham faced the greatest risk of eviction, the charity said. In each of these boroughs, one in 23 rented homes were “under threat” during the period in question – which worked out as 2,314 households in Enfield, and 1,647 in Barking and Dagenham. Shelter also reported that the volume of people facing eviction who were approaching the charity for advice “was getting higher and higher”. A spokeswoman said: “In the past year alone, over 9,800 people facing eviction have called the Shelter helpline for advice, and 500,000 people have visited the Shelter website’s eviction advice pages.” GUARDIAN