Weekend economic news round up

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Weekend economic news round up

Is ‘modernised’ National Savings failing its millions of customers?
National Savings & Investments has been accused of abandoning millions of interest-starved savers struggling to protect their money against the ravages of inflation.
The Times, p. 55-56

Clock ticks for tax evaders
People who have savings in Switzerland could find the value of their deposits reduced by up to 41pc on May 31, when the tax authorities impose a withholding tax on British savers who have not fully disclosed their investments and paid all taxes due to HM Revenue & Customs (HMRC).
The Daily Telegraph Your Money, p. 7

Coats shortfall threatens loss for Pension Protection Fund
The shortfall at the pension scheme of textile manufacturer Coats may be £400m or higher, showing why Britain’s Pensions Regulator had taken the unusual step of intervening ahead of a planned capital restructuring.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 16

Hargreaves defends fees
Hargreaves Lansdown has defended commission charges of up to 3.5 per cent for customers using a new unadvised online enhanced annuity service.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Multiple jobs create a pension black hole
A new survey shows that almost a quarter of adults have lost a pension pot. Age UK said the growing pension black hole resulted from shifting working patterns and confusion around retirement planning. With the idea of long-term jobs disappearing, young workers aged between 25 and 34 have often had as many employers as those aged 65 or older.
The Independent, p. 55
Also appeared in : Financial Times Money, p.4

New code highlights importance of annuity shopping
Advice on shopping around for the best retirement income offers, noting the Association of British Insurers last month introducing a new code of conduct for pension providers to make the Open Market Option clearer.
The Daily Telegraph Your Money, p. 10

On pensions people need help, not mere ‘educating’
A survey by the pensions consultant Hymans Robertson found that three quarters of people would welcome someone actively telling them how much to save to get the right income in retirement.
The Times, p. 57

Mortgage fees hit high
Mortgage fees have hit their highest level in 25 years, in spite of recent government initiatives designed to boost lending to homeowners.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Barclays stops loan perk for homebuyers
Up to 900,000 Barclays customers are set to lose a flexible feature which allows them to borrow back money after they pay it down on their mortgage.
The Times, p. 62

Surge in falsified applications
Growing numbers of people are falsifying their income and credit history when applying for a mortgage, credit card, savings account or insurance policy.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Britain to let Should you become a landlord?
Prudential plan to become the first UK institutional investor to enter the home residential lettings market in recent years.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 1

Buy-to-let is back – but it’s not a one-way street to riches
After years in the doldrums, buy-to-let is again being hailed as a key tool for investors, against a backdrop of miserable savings rates and uncertainty over pensions.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 8-9

Paying off the mortgage for a year takes 103 days
Mortgage company Halifax has calculated that today, the 103rd day of the year, is the point at which the average new homeowner will have earned enough to pay off the annual cost of their mortgage.
The Daily Telegraph, p. 31

Millions fear losing job would mean losing home
According to research by the housing charity Shelter, one in three workers could not pay for their home for more than a month if they lost their job.
The Independent, p. 55

FRAUD/ CREDIT DESPERATION IS CREATING CROOKS
The level of mortgage fraud has more than doubled since the start of the credit crunch. And Experian said it expected fraudulent applications to continue to rise throughout 2013, driven by the ongoing squeeze on household incomes and benefits, and stricter credit and lending criteria.
The Independent, p. 56

Pressure on Ellis to quit over HBOS
Pressure is mounting on Mike Ellis, the former financial director of HBOS, to resign as chairman of Skipton Building Society, due to policies by the bank’s executives in the run-up to its collapse in 2008.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 4

RBS loses Highland dispute appeal
Royal Bank of Scotland has lost a high profile legal dispute against US hedge fund Highland over a collateralised debt obligation (CDO) it had financed for Highland.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17

Probe into IT failure at RBS
The UK’s new financial regulator, the Financial Conduct Authority, is to investigate last year’s IT failures at Royal Bank of Scotland.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2
Also appeared in : The Guardian Money, p.7

Rebuke over yen Libor
The Japanese Financial Services Agency has issued a formal rebuke to Royal Bank of Scotland for its role in the global scandal over manipulation of benchmark interest rates.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 17

Post Office branches to offer current accounts
The Post Office plans to enter the UK’s current account market. As with savings accounts, insurance products, credit cards and mortgages already offered by the Post Office, current accounts will be run in collaboration with Bank of Ireland.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2
Also appeared in : The Daily Telegraph Your Money, p.3, The Independent, p.55

‘Jam jar’ bank accounts for benefits claimants rejected
The biggest high street banks have rejected calls from the Government to set up “jam jar” accounts to help benefits claimants to manage their budgets when universal credit goes live.
The Times, p. 47
Also appeared in : The Times, p.45

Huge profits at JP Morgan boost hopes for US recovery
JP Morgan Chase, America’s largest bank by assets, surpassed expectations with its quarterly profits yesterday, with the chief executive, Jamie Dimon, speaking of signs that the US was “healthy and getting stronger” – although a note of caution about small businesses hinted at a still uncertain outlook for the world’s largest economy.
The Independent, p. 49
Also appeared in : Financial Times, p.17, Independent i, p.46, International Herald Tribune, p.13, Financial Times, p.13, The Guardian, p.32, The Daily Telegraph, p.32, The Daily Telegraph, p.32, The Times, p.46, The Times, p.47

Swaps focus as watchdog subpoenas ICAP brokers
The International Swaps and Derivatives Association subpoenaed brokers at ICAP and traders from 16 global banks as part of an investigation into claims of possible market manipulation.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 14

Bank staff in spotlight over fraud
Cifas members, which include major banks, building societies, insurance companies, credit card companies and mobile phone suppliers – saw a 43 per cent rise in staff frauds against customers, to 539 reported incidents in 2012.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 4

Nearly all bankers pass the ‘honesty test’
Only 30 people out of 227 have failed the Financial Conduct Authority ‘s ‘fit and proper’ test in order to take on some of the riskiest jobs in British banking.
The Guardian, p. 32
Also appeared in : The Independent, p.48-49

Finance/Banks ‘still avoiding lending to SMEs’
Britain’s banks are less willing than before the financial crisis to lend to small businesses, according to research commissioned by the Business Secretary, Vince Cable.
The Independent, p. 51

With swipe at U.K., Austria defends bank secrecy
Austria will not knuckle under to pressure to follow Luxembourg in dropping its banking secrecy rules, Finance Minister Maria Fekter said Friday, as she sought to portray Britain as one of the European Union’s biggest tax havens.
International Herald Tribune, p. 13
Also appeared in : The Times, p.48, International Herald Tribune, p.1

Fate of Sáenz at Santander linked to new Spanish law
The Spanish government has passed a law that will make it easier for bankers with criminal convictions to remain in their posts, claiming the change was necessary to comply with a new recommendation from the European Banking Authority.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13
Top firms squeeze pension payouts
Employees approaching retirement are being tempted with incentives designed to reduce their employers’ pension bills that could leave someone with a £20,000 a year payout more than £240,000 worse off. Almost every large employer running a final salary pension scheme is looking at ways to cut costs. There are 1.6m workers paying into final salary schemes in the private sector. Only 13% of schemes are still open to new members, according to the National Association of Pension Funds.
The Sunday Times Money, p. 4

Drawdown rule changes could cost pensioners
Pensioners taking income drawdown could see hundreds of pounds knocked off their annual income as soon as April next year. The news that yet more changes are in store for people opting to draw a flexible income out of their pension pot will come as a blow, as the Government has already chopped and changed the rules twice in the past two years.
The Independent on Sunday, p. 87

Charity workers face pension cuts
Richard Evans looks at how tens of thousands of charity workers could see the value of their pensions fall by a third as a result of spiralling pension scheme deficits.
The Sunday Telegraph Money and Jobs, p. 5

Workers lose pension pots
Nearly a quarter (23%) of British adults admit losing track of at least one pension pot, according to charity Age UK.
The Sunday Times Money, p. 2

Economy boosted by housing revival
The UK is poised for a housing market revival as the market gives its strongest performance since the crash, according to a leading economic forecaster. More than 1m transactions will take place by the end of the year, representing the most activity since 2007 when there were nearly 1.8m, according to the Ernst & Young ITEM Club. The following year, the market dipped to a low of around 900,000. The high street should also see a boost as consumers start to feel slightly better off, ITEM predicts. The rise in personal income tax allowances – from £8,105 to £9,440 this month and to £10,000 next April – should add 0.4pc to disposable incomes over two years. Figures out this week from the Office for National Statistics are expected to show headline inflation stayed above the Bank of England’s 2pc target at 2.8pc.
The Sunday Telegraph Business, p. 2
Also appeared in : The Observer, p.14, The Sunday Times Business, p.2

Axa warns of house market ruin
Paul Evans, AXA UK’s group chief executive, has claimed that hundreds of thousands of homes will be “unsellable”, devastating regional housing markets, if the Government fails to agree a deal on flood insurance with industry soon.
The Independent on Sunday, p. 79

Moving on up
The number of properties sold in Britain reached a three-year high in March, according to the latest figures from the Royal Institution of Chartered Surveyors (Rics).
The Sunday Times Home, p. 12

Barclays cuts mortgage perk
Barclays are changing the terms of its flexible Open Plan mortgage, held by almost 1m customers. Borrowers who took out a mortgage before December last year can use a “mortgage reserve” facility, allowing them to draw down additional funds up to an agreed limit. The reserve is effectively an overdraft with interest charged at a variable rate, currently 4.99%.
The Sunday Times Money, p. 4

Landlords take advantage of buy-to-let cuts
Landlords are taking advantage of falling mortgage rates to refinance their property portfolios, according to figures released last week by Mortgages for Business, the buy-to-let specialist broker
The Sunday Times Money, p. 5

Mortgage fraud rises
Mortgage application fraud rose 9% last year compared with 2011, according to Experian, the credit reference agency.
The Sunday Times Money, p. 2

Millions set to switch accounts as study finds banks at fault
Research from Which has shown that more than a quarter of bank customers have had problems with their provider and as a result record numbers of people are expected to switch banks due to mis-selling, poor customer service and a faster switching service. The Which? research also showed that Bank of Scotland, Barclays and the Co-operative Bank had the highest proportion of complaints, while First Direct and Nationwide had the least.
The Observer, p. 19

Nationwide plans £500m bond
Nationwide, Britain’s biggest building society, and one of the UK’s best-capitalised lenders under the current measurement system, is considering raising as much as £500m to shore up its capital base.
The Sunday Times Business, p. 2

Rising bank fees hit households
Customers are being hit by a range of record-breaking charges on current accounts and loans after banks quietly pushed up fees, according to Moneyfacts, the data firm.
The Sunday Times Money, p. 1

POST OFFICE RIVALS BANKS
The Post Office is to take on the big five banks with a new current account launch which will roll out throughout the network over the next year.
The Independent on Sunday, p. 85
Also appeared in : The Sunday Telegraph Money and Jobs, p.1-2, The Sunday Telegraph Money and Jobs, p.2

Credit card holders hit by ‘hidden’ rates £ !
Consumers looking for a new credit card may end up with an APR 9 per cent higher than advertised rates, due to the widespread use by banks of highly secretive “risk-based pricing”, according to latest research.
The Independent on Sunday, p. 86

Victims fear bank is ‘milking’ Savile estate for millions
NatWest has been accused spending more than £1m earmarked as compensation for individuals sexually abused by the disgraced television presenter. The funds are understood to have gone towards the costs NatWest is incurring in administrating Savile’s estate, including its lawyers’ fees.
The Observer, p. 8

RBS facing fraud case
Royal Bank of Scotland has failed in an attempt to block a fraud claim by Highland Capital, a Texan investment firm.
The Sunday Times Business, p. 2

Spotlight on RBS failings
The Financial Conduct Authority are currently investigating Royal Bank of Scotland over a series of IT failures in June and July last year that left 17m customers, including those at NatWest and Ulster Bank, without access to their accounts.
The Sunday Times Money, p. 2

World banking order to be overturned by 2020
The world’s banking landscape will be “unrecognisable” by 2020 with none of the major players coming from the US, Europe or Japan, a leading hedge fund has claimed.
The Independent on Sunday, p. 80

Bank union ‘needs treaty change’
Germany’s finance minister Wolfgang Schaeuble has claimed that a banking union could require changes to EU law, potentially putting the brakes on a plan designed to prop up the euro.
The Sunday Telegraph Business, p. 2

Goldman in $1.8bn profit
Goldman Sachs is this week expected to reveal profits of $1 8bn for the first three months of the year, providing further evidence that Wall Street’s big banks continue to ride out the malaise in the broader American economy and the eurozone.
The Sunday Times Business, p. 2
Also appeared in : The Sunday Telegraph Business, p.2

Osborne cracks down on Caymans
Under tough anti-evasion measures being drawn up by the Chancellor George Osborne, banks in the British Virgin Islands and the Cayman Islands will be forced to reveal details about customers suspected of hiding money offshore.
The Sunday Times Business, p. 1-2

Banks warned by Germany
Germany’s finance minister Wolfgang Schäuble has warned that Europe’s banks should not expect instant bailouts from a new rescue scheme.
The Sunday Times Business, p. 2

Loan hopesfor small firms
Online platforms that directly link savers to credit-starved entrepreneurs have the potential to break banks’ “stranglehold” on small-business lending, new research by Nesta, the charity, will predict this week.
The Sunday Telegraph Business, p. 2

Trader pleads guilty to role in banking crash
In a case described by lawyers as a “tale of greed run amok”, a former Credit Suisse trader who hid a £351m loss so he could pocket a £4.5m bonus has become the most senior City figure to be convicted for the kind of mortgage fraud that helped precipitate the global financial crisis.
The Independent on Sunday, p. 4

The above articles appeared on 13/04/13 & 14/04/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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