Weekend economic news round up

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Weekend economic news round up

Popularity of company pensions at 15-year low
The number of Britons who are members of workplace pension schemes slumped to its lowest level since 1997 last year, according to
research released yesterday by the Office for National Statistics.
The Times, p. 42
Also appeared in : The Times, p.55, Daily Express, p.4, Daily Express, p.16, The Sun, p.43, The Daily Telegraph, p.31

Return of the 100% mortgage
Bath Building Society has launched the Parent Assisted Mortgage Scheme, which allows first-time buyers to purchase a home with no
deposit, so long as their parents are willing to stand behind the loan if they fail to keep up with payments.
The Times, p. 60

Index funds may be the success story of this season
Investors are turning their backs on active fund managers in favour of lower cost trackers, as the battle for this year’s Isa
allowance steps up.
The Times, p. 56-57
Also appeared in : The Times, p.55, The Guardian Money, p.3, The Daily Telegraph Your Money, p.2-3, The Guardian Money, p.6

Treasury ties Lloyds chief’s bonus to private share sale
António Horta-Osório, the head of Lloyds Banking Group is, for the first time, set to have his bonus package linked to the lender’s return to the private sector. The announcement, which could come as early as Friday, when the bank’s annual results are published,will dramatically raise hopes that some shares can be sold before the 2015 election.
The Times, p. 42
Also appeared in : The Guardian, p.32, Daily Mail, p.100, Financial Times, p.16, Financial Times, p.13, Daily Mirror, p.50,
Daily Express, p.71

Britain downgraded
Britain’s economic credibility suffered a humiliating blow last night when one of the world’s top ratings agencies announced that
it was downgrading the country’s triple-A credit rating. Moody’s said that it would cut its assessment of Britain’s creditworthiness from AAA to AA1, marking the first time in the UK’s history that it has had a less-than-perfect rating. The Bank
of England will suffer the same fate as a consequence.
The Times, p. 1-3
Also appeared in : Daily Mirror, p.10, The Guardian, p.1, The Daily Telegraph, p.1, Daily Mail, p.6, Daily Express, p.4

EU will cut fines for banks to end its probe into Libor
The EU intends to conclude its investigation into Libor-fixing by offering banks the chance to settle with reduced fines.
The Independent, p. 55
Also appeared in : Evening Standard London, p.47, International Herald Tribune, p.17, Independent i, p.47

RBS to unveil £8bn US bank float
RBS is to next week reveal plans to float its US retail bank, Citizens, in a deal expected to raise more than £8bn for the
state-backed lender.
The Daily Telegraph, p. 31
Also appeared in : The Daily Telegraph, p.32

Bank of England poised to strike currency swap deal with Beijing
The Bank of England is close to striking an historic deal between London and Beijing to encourage trade in the yuan/renminbi, amid Whitehall divisions over relations with China. Sir Mervyn King said that he was in talks with the People’s Bank of China to create a currency swap line designed to overcome fears of a liquidity shortage and to kickstart lending in the Chinese currency. The Bank of England Governor said that the three-year, reciprocal swap to finance trade and investment would “support UK domestic financial stability”.
The Times, p. 49
Also appeared in : Financial Times, p.3

Icelandic lender Arion in $88m bond milestone
Arion Bank has become Iceland’s first lender to issue an international bond since 2007.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17

Beware the end of Isa bonuses
Research from moneysupermarket.com suggests that millions of savers who put money into tax-free cash accounts with generous bonuses could lose out on more than £560m in interest when the rates expire.
The Sunday Times Money, p. 6
Also appeared in : The Sunday Telegraph Money and Jobs, p.11, The Sunday Telegraph Money and Jobs, p.14, The Sunday Telegraph
Money and Jobs, p.13, Sunday Express Financial, p.4-5

Fund rivals cut fees for savers
Investors are reaping the benefits of competition among fund supermarkets, which are cutting fees to attract new customers. Savers can invest up to £11,280 in a stocks and shares ISA before midnight on April 5.
The Sunday Times Money, p. 6

Farmers’ bank pays savers 3.6pc – but your money is at risk
Savers are being offered a market-leading rate on their money if they are prepared to lend it out to British farmers under a range of new bonds offered by AgriBank.
The Sunday Telegraph Money and Jobs, p. 16

Banks unclear over bond withdrawal penalties
The Observer has run an investigation that claims some banks are failing to make it clear to consumers who take out fixed-rate
bonds that they could lose some of their original savings as well as interest earned if they close their accounts early.
The Observer, p. 51

£645m is ‘rescued’
A free online tracking service has reunited savers with £645million in “forgotten” cash.
The Sun, p. 17

Fewer workers than ever are saving in a pension as Britain trails the world
The number of people saving in workplace pension schemes has fallen to its lowest level since records began. Workers are now being enrolled automatically into company schemes through a government initiative designed to get more than 10million employees paying into a pension over the next five years.
The Sunday Telegraph Money and Jobs, p. 2

10pc boost to pensions as fees face tighter cap
Charges can have a huge impact on people’s savings, and our tougher new standard is a big step in the right direction. “Pension
charges have decreased since the introduction of PQM, but we don’t want these gains to be unravelled as auto-enrolment reaches
medium and smaller-sized employers. PepsiCo, the Guide Dogs for the Blind Association and Severn Trent, the water company, are the latest schemes to receive PQM accreditation. They join organisations such as the BBC, L’Oréal and Michelin.
The Sunday Telegraph Money and Jobs, p. 3

Peacocks staff hit by pension blow
Former staff at collapsed retailer Peacocks have been dealt a further blow after the size of the pension deficit ballooned to
£26.3m – even though the banks that backed it will receive more than £70m.
The Sunday Telegraph Business, p. 2

Buck the trend and plan carefully for retirement
A new code of conduct overseen by the Association of British Insurers will mean that pension providers cannot force consumers into accepting their annuities.
The Independent on Sunday, p. 92-93

over the 80,000 MPs face anger the new pension women denied
Campaigners are demanding government action to correct a ‘manifest unfairness’ in the draft Pensions Bill that will result in
80,000 women being denied a right to the proposed single-tier State pension from April 2017.
The Mail on Sunday, p. 80-81

Mortgage borrowers crippled by foreign currency loans
British home owners who were advised to take out foreign currency mortgages have been badly hit by the strong appreciation of the
Japanese yen – and now face crippling debts.
The Sunday Telegraph Money and Jobs, p. 12-13

A better deal for annuity buyers
On March 1 the Association of British Insurers will launch a new code of conduct that should prevent those retiring being trapped
by sub-standard annuity contracts, which could rob them of tens of thousands of pounds over their lifetime. Traditionally, pension savers have been contacted at retirement by their pension company and offered an annuity contract, which converts their savings into a pension for life.
The Sunday Telegraph Money and Jobs, p. 8

Buyers frustrated by mortgage delays
Borrowers may have to wait until the summer to secure mortgage offers, after brokers complained that banks were taking up to three months to process applications. HSBC have admitted that applications were taking an average of 56 days to complete – leaving buyers at risk of losing their property.
The Sunday Times Money, p. 3

Lender relaxes rules on bonuses
Professionals who receive bonuses were given a mortgage boost last week with signs of a relaxation in lending criteria. The
specialist bank, Investec launched deals aimed at qualified professionals – and said it would take up to 100% of bonus income into account when deciding applications.
The Sunday Times Money, p. 3

Boost for buyers as mortgages hit 24-year low
Mortgage rates are at their lowest level in 24 years, even for first-time buyers with just a 10% deposit.
The Observer, p. 50-51

How will lenders act when time-bomb goes off?
Experts suggest the interest-only mortgage ‘time-bomb’ will not detonate fully until about 2020. The Council of Mortgage Lenders,
which represents the industry, says: ‘Technically at the end of the term lenders can require the full repayment, as per the
contract. In practice, borrowers may be offered choices, including extending the term or rolling over into a lifetime mortgage’.
The Mail on Sunday, p. 79

Renters forced to save 13 years for a mortgage deposit
Jeff Prestridge reports on the inability of young people in their 20s or early 30s to squirrel away adequate savings to afford a
deposit on a property. Ian McGowan, head of savings and investments at Widows, says: ‘We live in a society where many people strive to own their own homes. But with higher rents and increasing living costs, this goal isn’t going to be easily achieved.’ Housing charity Shelter says many young people are now resigned to renting.
The Mail on Sunday, p. 88

Credit Crunch Update
The cost of purchasing a home is now 16 per cent lower than renting thanks to better mortgage rates and higher rents, according to Halifax.
Sunday Mirror, p. 46

BANK SHOCK
Staff only found out they were losing their jobs with Barclays after one spotted their office was up for rent while searching
online for a new home.
The Sun, p. 8
Also appeared in : Daily Star Sunday, p.2

Chancellor: No Plan B despite debt downgrade
The Chancellor yesterday vowed that there would be no Plan B to kickstart the economy as he fought to shore up market confidence
following the loss of Britain’s AAA credit rating.
The Sunday Times Business, p. 1
Also appeared in : The Independent on Sunday, p.6-7, The Sunday Times Business, p.5, The Sunday Times, p.22, The Sunday Times,
p.7, The Independent on Sunday, p.43, The Sunday Times, p.1-2, The Sunday Times, p.22, Sunday Mirror, p.14, The Sunday
Telegraph Business, p.3, The Sunday Telegraph Business, p.4, The Sun, p.14-15, The Sunday Telegraph Business, p.2, The Sunday
Telegraph, p.2, Sunday Express, p.2, The Independent on Sunday, p.6-7, The Observer, p.47, Daily Star Sunday, p.2, The
Independent on Sunday, p.88, Sunday Mirror, p.6-7, The Mail on Sunday, p.73, The Observer, p.38, The Mail on Sunday, p.73, The
Mail on Sunday, p.71-72

RBS lines up £5bn share sell-off
The taxpayer-backed Royal Bank of Scotland is laying plans for a multi-billion-pound share sale that could hand a pre-election
windfall to George Osborne. At least 10% of the stock is likely to be sold, reaping about £5bn for the chancellor that could help
patch up the nation’s finances.
The Sunday Times Business, p. 1
Also appeared in : The Independent on Sunday, p.85, Sunday Express Financial, p.1-3, The Sunday Times Business, p.6, The Sunday
Telegraph Business, p.1, The Sunday Telegraph Business, p.6-7, The Observer, p.44-45, The Sunday Telegraph Business, p.1-2, The
Mail on Sunday, p.72

Lloyds pays for PPI hold-up
Lloyds Banking Group has been fined £4.3m by the Financial Services Authority for delaying compensation payouts to 140,000
customers who were mis-sold payment protection insurance.
The Sunday Times Money, p. 2
Also appeared in : The Mail on Sunday, p.80, The Sunday Telegraph Business, p.1

BARCLAYS looks for £7bn to build up balance sheet
Barclays is set to unveil plans within the next few weeks to strengthen its balance sheet by raising billions of pounds in
“contingent capital”.
The Sunday Telegraph Business, p. 2

Sir Mervyn: what makes me cross
Sir Mervyn King is losing patience with banks that refuse to lend to small businesses and is encouraging customers to “try new
lenders”, such as Sweden’s UK export, Handelsbanken.
The Sunday Telegraph Business, p. 10

Santander chief’s £2m-a-year pension
Ana Patricia Botin, the chief executive of Santander UK, is in line for a pension worth more than £2m a year. Alfredo Saenz, the
group chief executive of Santander, has an €88m pension pot, according to the bank’s annual report.
The Sunday Times Business, p. 2

The above articles appeared on 23/02/13 & 24/02/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

Charterbridge Private Financial Planning, Independent Financial Advice, Thornbury, Bristol.