Many older people don’t bother with new pension schemes, thinking that they’re too old to get the benefits. But new pension reforms mean that they can up their contributions by 258% in just a few years and take out all their money without paying any tax. Woohoo!
Here’s how it works. In the last 2 years companies started automatically putting their employees on a pension scheme. Once you’re enrolled, your contributions are deducted from your payslip, your employer contributes something and you get tax relief from the government.
But people who were over 50 tended not to bother with it. WRONG.
If you do it, under the new reforms you can take all your wonga out of these schemes when you retire, rather than bothering with boring, stifling annuities.
Here’s the maths. (Theoretically.)
If you earn £24,000 a year this year, make an increase in contributions in 2018, and get a small pay rise every year – and there is a rate of 5 per cent annual growth – a 55-year-old could make £14,134 by the age of 65.
So get on it, silver foxes! That cruise ship buffet is waiting…
There were 27,029 personal insolvencies in the second quarter, a 5.1% rise on a year earlier.
This was mainly due to a 20% jump in the amount of people entering into individual voluntary arrangements (IVAs) to a new record high of 14,571 according to the Insolvency Service.
While some people, who know about this sort of thing, reckon it was showing that creditors were more confident about recovering debts, others claim it was evidence that families were on the brink after years of low wage increases (if any) and jolly government cuts.
Bev Budsworth, from The Debt Advisor confirms this: “Aside from all the talk of economic recovery, it’s clear that people are really struggling,”
“The acid test will be when the Bank of England starts to raise its base rate and people’s mortgage payments follow suit.”
She went on to say that hundreds of thousands of people were barely making debt repayments, as interest rates are still at 0.5%. Financial markets are likely to price in a rate hike before 2014 is up, due to economic growth.
Yet Matthew Chadwick, who is a business restructuring partner at BDO, thinks that with the economy looking healthier, those with bad debts were now more under pressure to pay them back, and so further gloom is ahead.
“A continuing rise in the number of personal insolvencies in the next 12-18 months is therefore likely. Today’s rise in individual voluntary arrangements is typical at our position in the economic cycle and need not be cause for alarm.”
Maybe not alarm, but not the best of news for families literally trying to get their financial head above the water.
The taxpayers had thrown the bank a lifeline to the tune of £25 billion when it was close to collapse.
Most of the fine was for short-changing the Bank of England which, at the height of the financial crisis, was helping to keep the firm afloat, the ungrateful arseholes.
Both British and US regulators demanded the massive cash penalty for what even the bank admitted was “extremely serious” rate rigging.
Lloyds had been taking advantage of taxpayer-backed funding schemes, but traders rigged rates on which a fee for using the lifeline was based.
Unsurprisingly, several of Lloyds’ staff have been suspended, and there’s talk of bonuses being rescinded.
And is if that wasn’t enough, the Serious Fraud Office is going to widen its investigation into 12 individual bankers to include Lloyds.
Bank of England Governor Mark Carney was all seriousface, saying: “Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct.”
Andrew Tyrie MP, chairman of the Treasury Committee, said: “The banks were manipulating Libor (the rate banks charge each other for lending money ) and the Repo rate, deceiving the Bank of England in its taxpayer-backed support scheme. This settlement is part of the much needed clean-up. Implementing the Commission’s proposals will be another.”
There’s been more than £2 billion paid by banks to regulators over their deceit and manipulation, including £290 million by Barclays and £390 million by RBS.
What a bunch of shitheels.
However, if the supermarkets get charged for existing, then they’re going to stick the price of their products up aren’t they?
These proposals has been put forward by a group of councils, led by authority in Derby. They think that these levies could generate as much as £400 million.
Anyway, those in the know about supermarkets think this is a bad idea.
“Profit margins at supermarkets are wafer thin. You cannot just continue to take money out in taxes before prices will have to rise. The business rates system needs overhauling and simplifying and this would only add more of a burden and more complexity,” said one supermarket source to the ThisIsMoney.
Derby City Council leader Ranjit Banwait said that life was being ‘sucked out of the city centre’ by out-of-town supermarkets and that, if they’re going to dominate local traders out of business, they should pay something back to the community.
The submission was made under the terms of the Sustainable Communities Act which encourages local initiatives and would apply to stores with a rateable value of £500,000 or more.
Surely there’s better ways of councils kicking some life back into their communities? If town centres are suffering, then how about going easy on the cost of parking in the community, which is just as prohibitive as anything else? Or maybe they should offer reduced business rates to independent businesses who are trying to offer something different to the hypermarkets?
Of course, one way of saving the country loads of money is to look at the expenses and budgets of local councillors too, but chances are, this union of local authorities aren’t as keen on that.
A security breach has lead to a host of email addresses and other contact info being stolen from a European Central Bank database.
The ECB have told everyone to calm it, as the information leaked is related to those who had registered to attend its events, such as conferences or visits, and was not encrypted.
Although, you know, you wouldn’t necessarily be on their database for the lols, but the ECB reaffirm their fans that no sensitive stuff was compromised.
The ECB said the matter first came to its attention after it received an anonymous email seeking money in return for the stolen data.
They also said it was in the process of contacting those who may have had their contact information stolen, while all passwords on its website have been changed as a precautionary measure.
Now, let’s try and do this whole anonymous threat thing again. Demanding money in exchange for a thing you’ve done, but failing to say who you are seems a bit daft.
Modern times, ladies and gentlemen.
Sales fell 6.1% to £364.4 million in the first half of the year as difficult market conditions in the supermarkets sector hit the food group.
Along with Mr Kipling and Homepride, the company also looks after OXO, Bisto, Sharwoods, Batchelors, Ambrosia and, oh, Loyd Grossman.
As well as that lot, the company’s ‘support brands’ include Angel Delight, Birds, Saxa, Paxo, Atora, Cadburys (cakes end), Smash, Marvel, McDougalls and Lyons.
Or what they call in the trade ‘ambient grocery’. Amazing.
Basically, if you don’t own or use at least one of those items, then you’re a social outcast and deserve to have urchins point and laugh at you in the street.
Gavin Darby of Premier has tried to calm the unrest by saying: “We grew profitability and most of our ammunition is yet to fire. The second half of the year will see a number of new product launches.”
The company is rumoured to be ploughing £30 million into a marketing spend, with new Mr Kipling adverts happening in August.
Following that, there’ll be a number of other product launches, including Bisto gravy and casserole pastes, Batchelors deli-box cous cous, Sharwood’s mini poppadoms and Cadbury sponge pudding desserts.
Cous-cous. I ask you.
And jolly floury chum Fred returns Bowie-ly to our screens after seven years, for the first major Homepride adverts in a decade.
For the period Premier Foods said trading profit was up 2.1% to £48.1 million, better than analysts expected, and it said profit expectations for the year remain unchanged.
Gross profit margin rose from 33.2% to 34.6%. The pre-tax loss was largely because of a write-off of financing costs.
Looks like they’re banking on a revival of ’80s food.
It’s estimated that 45p in every pound shelled, the taxpayer won’t ever get back.
Under the current system, students can borrow to cover the full cost of £9,000-a-year tuition fees, and do not have to start paying back their loans until they have finished studying and are earning above £21,000 a year, and any outstanding debt is written off after 30 years.
However the sheer amount of students defaulting on their debt (ie: they haven’t got jobs or even if they have, they’re not paying enough), and the system looks in crisis as it will soon become financially unviable.
Originally, the government has projected that 28% of loans would have to be written off, but ministers have been continually shouting “HIGHER!”
The number has been revised because economists have downgraded their predictions of how much graduates are likely to earn in the future.
The National Audit Office predicts that student debt will increase from £46 billion in 2013 to about £330 billion by 2044.
Meanwhile, the Student Loans Company is supposed to have 98.5 per cent of borrowers in a repayment channel – which means they are either repaying on time or not earning enough to repay, but they’re allowed to include people in that total, even if they don’t have any information on them.
The Institute of Fiscal Studies has predicted that the average student will now leave university with about £44,000 of debt, in 2014 prices, compared to about £25,000 under the old system.
Although the lowest earners will pay back less, far fewer graduates will pay off their debt in full by the age of 40, and almost three quarters will never earn enough to pay back their loans in full.
Tuition fees are higher in England than in any other public university system on Earth, and when you throw in other expenses, the cost of studenting in England in general was the third highest in the world.
The rules were launched by Trouble-haired chancellor George Osborne, following his announcement earlier this year when he scrapped a rule forcing people to buy an annuity, and thus freaked out insurers the land over.
Osborne is keen to allow people to tap into the cash they set aside during their working life by reducing tax penalties imposed on those who withdraw their savings in a lump sum.
On Monday, the government confirmed its intention to go ahead with such plans, seen as the biggest reform of pensions in a generation, and added details to its proposals following a consultation with industry, employers and consumer groups.
Osborne said: ”It’s right to support hard working people that have taken the long-term decision to save for their future and I’m pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive,”
“The government believes that the overall impact … is likely to be limited,” it said. “It is expected that there will still be a strong continuing demand for high-quality fixed-income assets, including government and corporate bonds.”
It all sounds quite good, but there are worries that the changes will allow pensioners to piss away all their savings while giddy in the first flush of freedom. Osborne, with his legendary charm, has rejected this idea.
It was all panic when Osborne first announced the shake-up earlier this year, it hit the share value of firms like Legal and General, Aviva and Standard Life who run annuities businesses. The shares have since recovered slightly, but remain below their pre-announcement levels.
The finance ministry said that after consultation, the industry estimated that only 10-20 percent of people in defined-benefit pension schemes would transfer out of them. Some pension schemes might need to hold more liquid assets as a result, however.
A summary of the consultation said the financial guidance provided to retirees would be provided independently and funded by a levy on regulated financial services firms.
All good news for anyone with a pension then. Oh.
Despite a new IFS report that suggests today’s pensioners are enjoying record high levels of income, for those of us unlucky enough to be young, it seems we may as well throw the towel in, as we can’t save enough for a pension even if we started at birth.
Liberty SIPP has calculated that, not only would age zero be too late to start saving for a pension, in fact, your parents would have had to have started saving 30 years before you were born to allow you to be comfortable in your retirement. Anyone with parents younger than 30 is therefore facing a double-impossibility-pension problem.
The figures are calculated assuming people would need half of the average salary in retirement- which works out at around £13,500. Assuming you would want to take a 25% tax-free lump sum, as is currently available, and that you contribute average contributions, the average person born today would need to have started saving in 1984 in order to achieve a pension pot of £250,000 needed to generate that level of income at current annuity rates. Good stuff.
But it’s not all bad news- if the lump sum is not taken, and with the forthcoming changes to pension rules this is likely to become more common, the pension pot only needs to be £188,000 at retirement, so you would only have had to start contributing to your pension in 1991, 23 years before birth.
Despite the scary numbers though, it isn’t actually impossible to save sensibly for a pension, although it might be impossible for babies born today to access the State Pension before age 80. Nevertheless, the State Pension should take some of the strain out of the total income required in retirement, reducing the size of the fund needed on retirement day.
Also, the average contribution into a pension is just £207 a year, so if you can afford more, you’ll build up a pot quicker. Saving £1,305 a year will mean you only need to start saving at 21, when pension provision is clearly top of your priorities.
Finally, more and more people are working past age 65, partly owing to the increase in State Pension age, so if you can afford to keep going a bit longer, your pension will go further when you do retire. You mightn’t be able to afford not to. Also, the new rules mean that buying an annuity will no longer be compulsory*, so you may be able to better use your pension lump sum and generate a more lucrative income.
Or just pop your clogs before you get old.
*assuming the rules haven’t changed again by that time that is.
They’re planning to ditch the “cuddly” puppets too. Which plays havoc somewhat with the definition of cuddly, but there you go. They’re off.
Incoming Wonga chairman Andy Haste, former chairman of insurance giant RSA, has said he didn’t want Wonga to be associated with ‘anything which inadvertently attracts children’.
Which is a relief, because the only children who’d be attracted to those puppets are the sort that need counselling.
Mr Haste added that he wants Wonga to become more ‘customer focused’ and change its business operations, even if that means it makes less money in the near term.
It’s all part of the government’s attempt to put a cap on lending and stop these asshats from rinsing the vulnerable for all they’re worth. As of July 1, lenders must put ‘risk warnings’ on television adverts. They are also banned from rolling over loans more than twice and must check potential customers can afford to take out debt before giving them loans.
The Wonga news comes weeks after Wonga said it had agreed with regulators that it would pay £2.6 million in compensation after chasing struggling customers with fake legal letters to pressurise them into paying up. Classy.
Mr Haste said the company, must review rates, fees and charges and no longer be seen as targeting ‘the young and the vulnerable’. We can assume they’ll have to stop sponsoring Newcastle United then?
He said: “Wonga is a company that needs to go through significant change if it is to have a sustainable future. Some serious mistakes have been made. The company admitted those mistakes and it has apologised for those mistakes. Wonga has understandably faced a lot of criticism and I know that we need to repair our reputation and regain our right to be an accepted part of the financial services sector.”
Which is all waffle as you can imagine, but ultimately the godawful pensioner puppets are no more. Now if we can convince Dolmio and Compare The Market that the puppet thing isn’t working, we can have a lovely big bonfire.
Well actually you do, to charge up your Oysters and all that, but a London cab driver is trialling Barclay’s Pingit app for the next week.
It allows the fare on the meter to be transferred between bank accounts within 30 seconds.
Mr Cable, who has been a London black cab driver for 23 years, told the Independent: “I am always up for trying new technology to help make mine and my passengers’ lives easier.”
He’s Mr Future basically, as he was also the first cabbie to accept chip and pin cards in 2004.
“It means I have more time on the road to earn money – rather than stopping off at the bank to pay in my earnings or pulling up at ATMs for passengers with the risk of getting a hefty parking fine,” he added.
Of course, you can still probably get away with doing a runner if you’re that way inclined, but we’d never advise readers to do anything like that.
A man named Darren Foulds, the director of Barclays Mobile and Pingit, said: “We are always keen to support new ways to make people’s lives easier. This trial really demonstrates the huge potential for mobile payments as they gain more widespread use.”
The app will use QR codes (SEE? THERE IS A USE FOR THEM AFTER ALL) and can access any bank account when cash is needed for their fare.
The Financial Conduct Authority have come up with a plan.
They want to see a cap on the amount that payday lenders can charge their customers, and they’ve announced what they’re going to do.
The short version is that payday loan rates should be capped at 0.8% a day of the amount borrowed, and the FCA add that in total, no-one should have to pay the loan companies back more than double what they borrowed.
These changes will come into play in January 2015, and some say that those desperate for money will avoid companies like Wonga and Quick Quid, and go back to old fashioned loan sharks who will reclaim debts with thumb screws or whatever it is they do.
The new rules say that there’s also going to be a cap on default charges, which is probably being set at £15.
FCA chief executive Martin Wheatley said: “For the many people that struggle to repay their payday loans every year this is a giant leap forward. From January next year, if you borrow £100 for 30 days and pay back on time, you will not pay more than £24 in fees and charges and someone taking the same loan for 14 days will pay no more than £11.20. That’s a significant saving.”
“For those who struggle with their repayments, we are ensuring that someone borrowing £100 will never pay back more than £200 in any circumstance.”
The FCA predict that these new rules will see payday loan providers losing £420m in revenues each year.
HMRC seems to be getting more sinister by the day. Hot on the heels of regulations allowing HMRC to forcibly remove cash in unpaid tax debts from your bank account, new regulations out for consultation would allow HMRC to change an employee’s tax code, which governs how much tax is deducted from salaries before reaching their bank account, without telling them- for up to 30 days. This means employees could receive far less (or presumably more) wages than they were expecting with no prior warning. Which seems a bit off.
Currently both employer and employee are immediately informed when a tax code is changed, and this allows the employee to contact HMRC should the tax code be incorrectly amended. Figures released last month showed that the number of taxpayers who had paid an incorrect amount of tax rose to 5.5m last year, so it’s not like the system is foolproof either. The proposed delay would mean people only find out when it is too late to correct the mistake and the money has already been deducted from their monthly salary.
Lesley Fidler (her real name, honest), a tax director at Baker Tilly, said: “When you are counting the pounds in your pay packet…you are thinking ‘have I got enough this month?’…People will effectively be lending to the taxman out of their salaries.”
However, Lin Homer, chief executive of HMRC, insisted that the powers would only be used in extreme circumstances and would never leave taxpayers short of “enough money to live.” But before you start chuffing about how on Earth the stonkingly well-paid Chief Exec of a public body would be able to gauge what is enough to live on, don’t worry, because HMRC propose to be able to judge this perfectly by gaining access to 12 months of the target’s personal spending habits. That’s not terrifying AT ALL.
An HMRC spokesman said that the delay is only likely to be used in “limited circumstances” at busy times of the year, such as around the self-assessment deadline and that it was all OK as “HMRC anticipates savings for the taxpayer of several millions pounds in printing and postage costs, as a result of these changes.”
HMRC will, however, welcome “comments on the detail” of the regulations, before finalising them “in the autumn.”
The proposals are currently out for consultation until the end of July.