Weekend economic news


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Weekend economic news

Investment rules baffle savers
New rules designed to improve financial advice may discourage people from saving for the future because they have made investment more complicated, a leading wealth management company has warned.
The Daily Telegraph Your Money, p. 7

Loyal customers, it’s the time to act
National Savings will be cutting returns on £540 million of accounts, says Holly Thomas. Some rates could be as low as 0.09 per cent.
The Times, p. 78

Pensions could scrap widows’ rights and index-links
On Thursday Pensions Minister Steve Webb revealed his latest proposals to improve Britain’s pension system. In short, he would like to hark back to when “pensions related to what people earn”. The proposals revolve around a new category of pensions that would be linked to salary to give employees some certainty about how much they will retire on.
The Independent, p. 59

Annuity rates touch a two-year high
It has emerged that Annuity rates have risen to their highest level in two years, but experts warn there are few signs of a sustained improvement to pre-crisis levels, and point out that drawdown limits are falling.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 3

Carney asked to explain Help to Buy scrutiny
Andrew Tyrie, the chair of the crossparty Treasury select committee, has written to the Bank of England governor, Mark Carney, demanding to know more about his role in scrutinising the chancellor’s controversial Help to Buy mortgage subsidy scheme.
The Guardian, p. 48
Also appeared in : The Daily Telegraph, p.40

Share Dealing Services
Tullett revenue falls on tapering fears
Tullett Prebon has posted a 9% drop in revenues, after a slump in business while traders waited to see whether the US central bank would withdraw monetary stimulus measures.
The Daily Telegraph, p. 40

Financial fallout Co-op fights to keep divi
The Co-operative Group has warned that the financial fallout from its troubled banking division could have an impact on its wider business, particularly its supermarket chain.
The Guardian, p. 44
Also appeared in : The Daily Telegraph, p.40, The Times, p.63, The Guardian Money, p.5, The Independent, p.62

Appeal court rejects Barclays’ attempt to dismiss ‘Libor test case’
The Court of Appeal has rejected Barclays’ claim that manipulating rigging the London Inter-bank Offered Rate (Libor) used to price loans was irrelevant to a £70m case brought against the bank by a care home operator. Guardian Care Homes claims it was fraudulently sold complex interest rate hedging products by Barclays.
The Daily Telegraph, p. 40
Also appeared in : The Guardian, p.48, The Times, p.63

More banks face payouts over loan blunder
Huge compensation payments by Northern Rock, Co-operative Bank and Barclays could be just the beginning of a loan scandal that could affect many of Britain’s banks and building societies. The Office of Fair Trading has written this week to 50 more financial firms after the three banks revealed they were having to refund customers who may have been wrongly charged interest on loans because the lenders’ paperwork did not comply with the Consumer Credit Act.
The Independent, p. 59
Also appeared in : The Times, p.58, The Times, p.57

HSBC to compensate customers
It was announced yesterday that more than 200,000 HSBC customers could be in line for compensation after receiving unsuitable investment advice from the bank. The global bank announced this week that it was putting aside $149m (£93m) to look into unsuitable investment advice provided over five years
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 3

Barclays to open branches in Asda
It was announced yesterday that Barclays plans to close four bank branches in the new year and move the services into nearby Asda stores. The scheme will expand later next year with the launch of four more Barclays bank sites inside Asda supermarkets.
This abstract from the Financial Times was produced by Kantar Media
Financial Times Money, p. 2

Metro to tap investors for nearly £300m
Metro Bank is to ask shareholders for nearly £300m to invest in new branches as it steps up its expansion. Metro will also delay a stock market flotation until 2016, Sky News reported.
The Daily Telegraph, p. 40

Asda stores set to get Barclays Bank branches
Barclays Bank is to open a string of branches in Asda stores from next year, offering seven-days-a-week banking services.
The Independent, p. 61

How ecommerce has enhanced money transfers
Internet banking has increased from 30pc to 48pc of adults in five years, according to the Office of National Statistics. Among adults aged 25 to 34, a massive 69pc reported using the internet to manage their finances.
The Daily Telegraph Your Money, p. 16

Interest rates stay on hold at 0.5 per cent
The Bank of England decided to hold interest rates at 0. 5 per cent yesterday, the same level they’ve been for the last 55 months.
The Independent, p. 61

ECB defies Berlin on banking union
The European Central Bank has put itself on a collision course with Germany over the future of the EU’s “banking union”, after concluding that a bailout authority should be centralised and cover all eurozone banks.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 5

MPs summon bankers to explain their valuations of Royal Mail
MPs investigating whether last month’s £3. 3bn sale of shares in the Royal Mail shortchanged taxpayers have summoned City bankers to explain how they put a price on the near 500-year-old firm. The Royal Mail share price has soared some 70% since 11 October when the government sold a majority stake in the postal service, prompting criticism from unions and opposition MPs that the firm was sold off too cheaply. It was revealed after the float that four investment banks – JP Morgan, Panmure Gordon, Deutsche and Citi – believed the Royal Mail was worth far more than the price achieved.
The Guardian, p. 44
Also appeared in : The Independent, p.51, The Times, p.60

UBS lays ghosts of crisis to rest with $3.76bn deal for fund
UBS will spend $3.76bn to purchase the fund set up to deal with its toxic assets during the financial crisis, in a move that will boost the Swiss bank’s capital position.
This abstract from the Financial Times was produced by Kantar Media
Financial Times, p. 13
Also appeared in : The Independent, p.57

RSA suspends three after finding £70m black hole
RSA has suspended three senior executives after an €83m (£70m) black hole was found in its accounts, forcing the insurer to issue a profits warning.
The Daily Telegraph, p. 37
Also appeared in : Financial Times, p.13, The Guardian, p.44, Financial Times, p.13, The Times, p.57

Open more current accounts for a 5pc return
Savers have become so desperate for income that they are opening multiple current accounts. This is because – in the topsy-turvy world of ultralow savings rates – certain current accounts now pay more than many traditional deposit accounts. But banks and building societies are wising up to the tactic.
The Sunday Telegraph Money, p. 2

Virgin Money scales the best-buy heights
Virgin Money, the group formed from the £750m takeover of Northern Rock by Sir Richard Branson and other investors, has shot to the top of the best-buy tables for tax-free cash Isas in the latest sign of the bank’s emergence from the wreckage of the credit crunch.
The Observer, p. 51

Top Isas and bonds cut
Leeds building society will no longer offer the five-year fixed Isa or its five-year bond at 3.05%.
The Sunday Times Money, p. 2

Doubts cast over future of final salary pensions
Workers banking on a salary-linked pension to protect them in retirement will have been shocked by proposals released by the government last week. A consultation paper from the Department for Work & Pensions suggested that companies should be able to change their retirement age at short notice, end inflation linking and scrap widows’ pensions. The guarantee of security in retirement provided by a pension linked to final salary has all but disappeared in the private sector.
The Sunday Times Money, p. 8
Also appeared in : The Observer, p.52, The Sunday Telegraph Money, p.4, The Sunday Telegraph Money, p.5, The Sunday Times Money, p.7, The Sunday Times Money, p.7

What about the younger workers?
The Government is keen for large companies to develop new hybrid pensions that offer a better deal to savers – especially those with decades of work ahead of them – than so-called defined contribution schemes. Nigel Stanley of the TUC said the proposals could deliver better pensions for the millions of workers saving for the first time through automatic enrolment. He said: ‘We have already seen good innovation in DC pension design from new players like NEST, but there are many interesting ideas in this paper to explore further. In particular we think that sharing risk between members in well-governed and large-scale collective DC schemes can make members savings work harder and deliver better retirement income.’
The Sunday Telegraph Money, p. 5

Lloyds eyes bonus from pension caps
Lloyds Banking Group is in line for an estimated £400m windfall from a proposal to cap the size of payouts from its final salary pension scheme. The trade union Unite is campaigning against the move, arguing that it will push its members “towards pension poverty”.
The Sunday Times Business, p. 3

Cambridge looks to ease the blues for first-timers
Cambridge building society has launched a new mortgage for first-time buyers who have a 5% deposit.
The Observer, p. 52

First-time buyers face new barrier as market booms
Homeowners hold onto their first properties as they move up the housing ladder, according to new research. Mentions Council of Mortgage Lenders.
The Observer, p. 7

Duty bound
According to the Council of Mortgage Lenders the average stamp-duty bill is set to hit £6,700, up from £4,200 in 2007-08.
The Sunday Times Home, p. 7

Co-op mayhem axes dividend to 7m members
The Co-operative Group is to axe the dividend paid to its 7m members and put businesses up for sale to relieve a cash crunch caused by the near collapse of its bank.
The Sunday Times Business, p. 1

Tax boost for Co-op’s troubled investors
Thousands of elderly savers who own hybrid bonds in the stricken Co-operative bank could benefit from a tax loophole that will boost payouts from a last-ditch rescue plan.
The Sunday Times Money, p. 1

HSBC and Sainsbury’s slash lending rates
A flurry of rock-bottom personal loan rates have come on to the market. HSBC has cut the interest rate on its personal loans to 4.8% for borrowing between £7,500 and £15,000 for up to five years. You must hold a qualifying HSBC current account and have an annual income of at least £10,000 to qualify. HSBC Premier account holders get access to the same low rate on loans of up to £25,000.
The Observer, p. 52

Economic rebound may speed rate rise
Economists expect the Bank of England to upgrade its growth forecasts for the UK economy this week, possibly paving the way for an earlier than expected interest rate rise.
The Sunday Telegraph Business, p. 3

COVENTRY Building Society has launched
Coventry Building Society has launched two top-paying fixed-rate bonds – which donate up to 0.45pc of the money invested to the Royal British Legion.
The Sunday Telegraph Money, p. 2

Bank hails rapid recovery
The Bank of England is set to lift its growth and employment forecasts this week as the UK enjoys one of the strongest recoveries in the developed world. The Bank could also revise down inflation in the short term. New figures are expected to show it fell to a six-month low of 2.5% in October from 2.7% in September and a high of 2.9% in June. The recent round of energy price rises takes effect this month.
The Sunday Times Business, p. 1-2

Paying rent late will hit credit score
The credit reference agency Experian has revealed that rental payments will appear on credit reports for the first time from the end of this year. Tenants who pay rent late will get a black mark, hitting their chances of securing a mortgage or credit card.
The Sunday Times Money, p. 1

The above articles appeared on 09/11/13 & 10/11/13 reproduced with the kind permission of Kantar Media UK. All rights reserved.

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