Weekend economic news round up


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Weekend economic news round up

Brits more interested in saving in jars than banks
Research by price comparison site GoCompare.com finds that more Britons are saving into a coin jar than into an account with a bank or building society.
Sunday Express Financial, p. 2
Also appeared in : Daily Star Sunday, p.3

Pick the right route to a comfortable retirement
Last year, savers took out 420,000 annuities – a rise from 400,000 in 2011, according to figures from the Association of British Insurers (ABI). Sales this year are expected to be the highest since the credit crunch. Meanwhile, a growing minority of wealthy savers are opting to keep their pension pots invested in the stock market at retirement. Some 26,000 pensioners selected income drawdown plans last year, compared with 18,000 in 2011, according to the ABI.
The Sunday Times Money, p. 4

New Isa offering has Poppy appeal
Coventry Building Society has launched its first-ever Poppy individual savings account. The easy-access account pays 2.6 per cent, including a bonus of 0.6 per cent for the first 12 months.
Sunday Express Financial, p. 5

Awaken your returns as savings rates slumber
A feature article with advice for savers who are struggling to keep pace with inflation.
The Sunday Times Money, p. 6

Pensioners lose out as allowance is frozen
More than 4m pensioners have been hit by a series of tax changes, dubbed the “granny tax”, and will lose out by an average £285 a year. About 360,000 people will be an average £285 a year worse off, while 4.41m pensioners will be £83 a year worse off on average, according to HMRC.
The Sunday Times Money, p. 4

Minister signals the end of hidden pension adviser fees
Members of company pension schemes could see a boost to their retirement pots if the government clamps down on fees paid for advice given to their employers. Last year, the Association of British Insurers (ABI) admitted that trading costs, which relate to the buying and selling of shares held in schemes, had been concealed as they are not included in the annual management charge or the total equivalent charge quoted by pension managers.
The Sunday Times Money, p. 8

Avoid the banks for mortgages
High street banks have offered fewer competitive mortgage deals than building societies since the launch of the Funding for Lending Scheme, according to figures from Moneyfacts, the data firm.
The Sunday Times Money, p. 3

Landlords hit as lenders tighten buy-to-let terms
Brokers have reported an increase in the number of failed landlord mortgage applications because lenders “downvalued” the level of rent a property could produce. Some lenders are rejecting the estimate for rental income on mortgage applications even where it is based on an existing tenancy agreement already in place on the property, said brokers.
The Sunday Times Money, p. 7

First-time buyers’ cheer as mortgage cuts trickle down
It is reported that mortgage rates for new borrowers continue to slide as the Government’s Funding for Lending Scheme makes it easier for banks and building societies to offer competitive loans.
The Mail on Sunday, p. 79

Are paid-for bank accounts worth it?
Banks must now ensure customers are eligible to claim for any insurance products included when they open a packaged account, under new rules which came in this month. Staff will have to identify any features that are not appropriate when a customer first applies. Banks will then have to monitor a customer’s continuing eligibility and send annual statements detailing whether they are still able to claim. Customers will also be alerted when they reach the age limit for their travel insurance.
Sunday Express Financial, p. 4-5

HBOS banker takes £20m pension pot
Sir James Crosby, the banker who “sowed the seeds of destruction” at HBOS is reportedly sitting on a pension pot worth more than £20m from the collapsed bank. In a scathing report last week, the Parliamentary Commission on Banking Standards accused Crosby, Andy Hornby, his successor, and Lord Stevenson, the former chairman, of a “colossal failure” over the bank’s collapse in 2008. Hornby looks set to recoup some of the losses he incurred after the HBOS share price crashed, thanks to his current employer. He runs Coral, the bookmaker, and could share in a possible windfall of more than £50m from the parent company, Gala Coral.
The Sunday Times Business, p. 1
Also appeared in : The Sunday Times News Review, p.8-9, Sunday Express Financial, p.1, The Sunday Times Business, p.4, The Mail on Sunday, p.70, The Sunday Times Business, p.1, The Sunday Times Business, p.13, The Sunday Times, p.1-2, The Observer, p.38

JP Morgan to reval jump in profits to $5.6bn
JP Morgan is set to announce an increase in first quarter-profits, likely to take pressure off the chief executive, Jamie Dimon.
The Sunday Telegraph Business, p. 2

Bradford & Bingley’s public sell-off ‘flawed’
The nationalisation of Bradford and Bingley in 2008 was a “flawed decision” that not only destroyed shareholder interests but also a “viable business”, it has been claimed.
The Independent on Sunday, p. 80

The man from the Pru keeps faith after fine
Paul Manduca, the chairman of Prudential, the FTSE 100 life insurance company, has demonstrated his faith in the company following a hefty fine levied by the Financial Services Authority (FSA) at the end of March, with the purchase of 20,000 shares .
The Sunday Times Money, p. 7

Rip-off debit and credit card charges are banned
Under new rules imposed yesterday, retailers are no longer allowed to charge fees that exceed the costs that they incur on credit and debit card payments.
The Sunday Telegraph Money and Jobs, p. 2

Savers in Laiki bank rescued
Savers with a total of £270m invested in Laiki bank in Britain will be protected from the tax imposed on deposits by the Cypriot government. Last week the Prudential Regulation Authority (PRA), the banking watchdog that is part of the Bank of England, announced that the deposits of 15,000 customers would be transferred to the Bank of Cyprus UK.
The Sunday Times Money, p. 6

PS: Thursday’s decision by the […]
Comment on Thursday’s decision by the Bank of England monetary policy committee to leave Bank rate unchanged and quantitative easing at £375bn saying that it was in sharp contrast to the Bank of Japan’s QE fireworks.
The Sunday Times Business, p. 4

Tesco back with two–year mortgage at 1.99pc
A look at the latest financial products, including new offers from Tesco Bank and Chelsea Building Society.
The Daily Telegraph Your Money, p. 5

Halifax predicts modest price rises
House prices are set for modest growth this year after a 0. 2 per cent rise in prices in March, according to Halifax’s latest index.
Independent i, p. 47

Scathing HBOS report claims its first scalp as Crosby leaves Bridgepoint
Sir James Crosby, a former senior executive at HBOS, has resigned as adviser to the private equity firm Bridgepoint following a negative report on his time at the bank by the parliamentary commission on banking standards.
The Guardian, p. 28
Also appeared in : Daily Mail, p.6, Evening Standard London, p.1-2, Financial Times, p.1, The Daily Telegraph, p.31, Financial Times Money, p.2, Evening Standard London, p.14, International Herald Tribune, p.9

The mystery lender behind a Thai billionaire’s $9. 4 billion purchase of a stake in a major Chinese insurer was the Swiss bank UBS, which offered a complex financing package known to only a few involved, three people with direct knowledge of the matter said Friday.
International Herald Tribune, p. 12

V60 plugs into new hybrid technology
The Volvo V60 Plug-In Hybrid may look like a normal estate. It may even drive like a normal estate.
Daily Express, p. 54-55

Labour’s gift to George Osborne
It is well known that lucky generals are to be preferred to brilliant ones and this week David Cameron and George Osborne were put in the extraordinary position of having the high ground and a formidable arsenal of weapons handed to them by their enemy.
Daily Express, p. 27

Attacked HBOS chief quits new role
The former chief of collapsed bank HBOS yesterday stepped down from private equity firm Bridgepoint after a damning report said he should not be allowed to work in the financial sector again.
Daily Express, p. 2

Baroness Ashton will be paid £400,000 from taxpayer funds when she quits her Brussels post next year.
Daily Express, p. 2

Benefit fraudsters who work while claiming handouts are to have their wages seized.
Daily Express, p. 1

Food firms the target of US raiders
Billionaire US investor Nelson Peltz is understood to have spent at least $2billion in recent weeks buying stakes in two US-listed companies, PepsiCo and Mondelez, owner of chocolate maker Cadbury.
Daily Express, p. 77

Britain’s biggest insurance boss scooped £7.8million in pay and share rewards last year after getting a generous pay rise despite being criticised by the City regulator. Prudential chief executive Tidjane Thiam was slammed last week for his handling of a botched mega-deal in 2010 which cost shareholders more than £400million. He is the only serving chief executive of a FTSE 100 company ever to be censured by the Financial Services Authority.
Daily Mail, p. 6

What took you so long to cotton on, George?
The Chancellor reflected the views of the majority of hardworking people in this country when he said the benefits lifestyle of father of 17 Mick Philpott raised serious questions about the welfare state.
Daily Mail, p. 19

Pru boss Thiam’s pay soars days after FSA reprimand
A trio of senior executives at Prudential saw their pay packets rise 18pc to almost £20m last year. Chief executive Tidjane Thiam, pictured right, saw his pay and perks hit £7.8m last year – an increase of 66pc. US boss Mike Wells enjoyed a 50pc increase in the value of his rewards to £6.6m, up from £4.4m during 2011. And M&G director Michael McLintock’s package totalled £5.3m, even though this was lower than his previous haul of £7.6m. Thiam’s package was made up of £1m of basic pay and a bonus worth £2m, as well as £250,000 in pension payments last year. Additionally he received benefits worth £123,000 which include a car and health cover.
Daily Mail, p. 99

US jobs blow sees world markets fall
Shares around the world tumbled yesterday after job creation in the United States slowed at an alarming rate.
Daily Mail, p. 101

Pass the Salz
Ruth Sunderland comment on Anthony Salz probe into Barclays’ ethical shortcomings, which cost nearly £18m.
Daily Mail, p. 100

End this culture of welfarism and greed
On Wednesday, after Mick Philpott’s conviction for killing six of the 17 children he fathered by five women, this paper’s front page linking his degenerate lifestyle to the huge benefit cheque he received sparked a vigorous national debate on welfarism and its £180billion-a-year budget in an increasingly bankrupt Britain.
Daily Mail, p. 16

Prudence takes a back seat
The timing of the publication of the Prudential’s annual report is more than slightly unfortunate. It comes in the wake of the insurer being slapped with a fine of £30m for failing properly to inform the then regulator, the Financial Services Authority, of its proposed transforming bid for Asian insurer AIA.
Daily Mail, p. 101

Revealed: The cynical script energy giant salesmen used to con you on the doorstep
A consumer report on the ‘Energy Script’, designed for trainee sales staff of energy firms to persuade hapless consumers to sign on the dotted line.
Daily Mail, p. 12-13

FPC minutes reveal hawks wanted banks to raise even more capital
Minutes from the latest Financial Policy Committee indicate that some Bank of England regulators wanted lenders to be forced to raise even more fresh capital.
The Independent, p. 48-49

Cash point
A cash stash of £1.3billion is being saved “under the mattress” rather than in a bank or building society. About 33 million people have coin jar savings, compared to the 21 million who put money in savings accounts each month. The average jar contains £38.35 – but 9% have more than £100, research from gocompare.com shows.
Daily Mirror, p. 50

Banker Sir James Crosby yesterday quit his new City job after a report blamed him for the collapse of HBOS. Sir James got £8million from HBOS in his last five years there, before leaving in 2006. But yesterday Parliament’s Commission on Banking Standards blamed him, Mr Hornby and Lord Stevenson for the collapsed bank’s “colossal failure”. Mr Hornby now runs Coral and the bookmaker yesterday insisted: “Andy has done a great job, we are completely backing him.”
Daily Mirror, p. 6

Lying, cheating and fleecing hard-up customers – just some of the sales tactics of shamed power firm SSE exposed this week. SSE – whose boss Ian Marchant walks off with a golden handshake of around £15million this summer – was fined £10.5million for ruthless mis-selling on doorsteps, over the phone and on the high street.
Daily Mirror, p. 10

Banks ‘need restraint’
The Bank of England yesterday warned banks not to pay out big bonuses but to use the cash to build up their financial strength.
Daily Mirror, p. 50

Courts disrupted as civil servants walk out over pay
Thousands of civil servants were walking out today in a bitter row over pay and pensions.
Evening Standard London, p. 2

The above articles appeared on 06/04/13 & 07/04/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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