Tag Archives: financial adviser

Unemployment Rises to 2.67m (Article by Vicky Hartley in Mortgage Solutions on 15.02.2012)

15 Feb

The number of jobless adults in the UK rose by 48,000 over the quarter to 2.67m, the highest rate since 1995, according to the Office of National Statistics.

The rise in employment figures is largely the result of the increasing numbers of part-time employees, which saw an increase of 90,000 to 6.61m.

The ONS confirmed the number of employees and self-employed people working part-time because they could not find a full-time job increased by 83,000 on the quarter to reach 1.35m, the highest figure since comparable records in 1992.

Full-time jobs fell 26,000 over the quarter to just over 18m and the number of self-employed also fell 10,000 on the quarter to just over 4m.

Employment also rose 60,000 on the quarter, which meant the percentage of unemployed people in the UK is still at 8.4% of the population.

Meanwhile, total pay, including bonuses, rose by 2% on a year earlier, unchanged on the three months to November 2011.

The number of unemployed people aged from 16 to 24 rose again, this time by 22,000 over the quarter to reach 1.04m, including 307,000 people in
full-time education looking for work.

David Birne, an insolvency partner at HW Fisher & Company chartered accountants, said: “Unemployment rose less than many had expected during the fourth quarter but it continues to climb. The slow but sure rise in the unemployment rate reflects the slow but sure decline of the economy. 2012 will see the unemployment rate continue to rise, as the public sector job cuts feed through.”

Watchdog bans RBS ‘Last Bank in Town’ Ads (Article by Rachel Dalton in IFAonline.co.uk on 15.02.2012)

15 Feb

The Advertising Standards Authority (ASA) has ruled that TV ads for Royal Bank of Scotland (RBS) and Natwest misled consumers.

The ads for Natwest and RBS both included scenes where bank employees pledged their banks would “continue to provide banking services wherever we are the last bank in town”.

However, a town councillor and the Campaign for Commuity Banking Services complained there are some instances in which the banks have withdrawn banking services where there are no other branches.

The complainants said Natwest, which is owned by RBS Group, had closed a branch in Farsley, Yorkshire despite being the last bank open in the area.

RBS had substantially reduced its opening hours or replaced branches with a visit from a mobile bank in some locations, the complainants added.

RBS said the ads did not specify that the bank would keep branches open, but that it would only continue to provide “banking services” to certain areas.

The bank argued it is keeping to this pledge by offering services through branches within a larger area, or via mobile banks.

However, the ASA ruled the claims made in RBS and Natwest’s ads were likely to be understood by consumers that there would not be bank closures or a reduction in opening hours, and therefore were misleading.

Gov’t Draws Up Plans to Cut Pensions Annual Allowance (Article by Alex Steger in New Model Advisr on 14.02.2012)

14 Feb
Gov't draws up plans to cut pensions annual allowanceThe government has drawn up plans to cut tax relief on higher rate earners pension contributions in a bid to fund plans to raise the personal allowance to £10,000 ahead of schedule, according to reports.Currently workers receive tax relief on pension contributions up to £50,000, but The Financial Times has reported that under proposals currently being discussed this limit could be reduced raising funds to pay for an increased annual allowance.

The government already reduced the annual limit from £250,000 to £50,000, but according to the FT prime minister David Cameron, chancellor George Osborne, deputy prime minister Nick Clegg, and Treasury chief secretary Danny Alexander are considering the plans which would save the government billions of pounds per year.

The paper quoted a person close to George Osborne, who said: ‘This is being looked at, it is definitely a good way to be able to raise money to get towards the £10,000 tax rate.’

In an interview with the Daily Telegraph Alexander recently said: ‘If you look at the amount of money that we spend on pensions tax relief, which is very significant, the majority of that money goes to paying tax relief at the higher rate.’

Clegg recently called on the government to raise the rate at which workers start to pay tax to £10,000 sooner than it had originally proposed. Doing so by 2015 would be set to cost about £4 billion, and if done by 2014 would cost £5.5 billion, none of which has yet been budgeted for.

Dilnot claims victory in fight for care reform (Article by William Robins in New Model Adviser on 14.02.2012)

14 Feb
Dilnot claims victory in fight for care reformAndrew Dilnot has claimed his proposed long-term care (LTC) reforms have the support of prime minister David Cameron and will not be killed off by political pressure.Speaking to New Model Adviser®, Dilnot (pictured) said there was no time for opponents to his plans to put forward an alternative to the £2 billion reforms.

‘It is now too late to kill off my proposals. Since no-one has been able to come forward with an alternative by now it is too late to do anything else.’ he said. ‘I think some people assumed it would be killed off by the prime minister, but he has not wanted to do that.’

Under proposals from Dilnot’s Commission on Funding of Care and Support, the government would fund any care costs above £35,000, excluding the cost of care homes. Another proposal is to raise the threshold of assets people can hold and still qualify for means-tested help from £23,000 to £100,000.

Together these two moves would cost the government an extra £2 billion a year.

If supported, Dilnot’s proposals will form the backbone of the government’s white paper on LTC, which was originally due to be published at the end of 2011. Publication has been delayed until April amid political reservations about Dilnot’s plans.

Tim Anstee, partner at LTC specialist IFA The Wealth Care Partnership in Hampshire, has been involved in cross-industry forums on the content of the white paper hosted by the Department of Health.

Anstee said Dilnot’s proposals were likely to become a reality but that there would be compromises.

‘[Dilnot] will not get quite what he proposed. For example, the cap is likely to rise from £35,000 to £60,000. The timing of the white paper is going to slip too. It has already been delayed from December to April. Now I’m hearing from meetings it will be May or June,’ he said.

‘We could be waiting until 2015. The problem is people need advice now.’

Anstee said the forums, which included advisers, care homes, organisations for the elderly, providers and trade bodies such as the Association of British Insurers, had discussed the creation of special financial products, such as a care annuity that increases its rate if people fall ill.

Steve Groves, chief executive of LTC specialist provider Partnership, said policy makers had been wary of Dilnot’s plans because they were unfunded and economically regressive.

‘Let’s say the white paper includes the cap at £50,000. That’s still an unfunded proposal. Dilnot has parked the question of funding. It is also regressive: a lot of people will get taxed but only a few people will get the benefit.’

Markets wobble as Moody’s puts UK AAA rating in jeopardy (Article by Kyle Caldwell in Investment Week on 14.02.2012)

14 Feb

Markets have slipped into the red in early trading as Moody’s negative outlook for the UK’s AAA credit rating weighed on sentiment.

The UK’s prestigious triple-A rating has been put on negative watch by the ratings agency, meaning there is a one in three chance it will be cut in the next 18 months.

The loss of the rating would be a bitter blow for Chancellor George Osborne, who has maintained it is the coalition’s efforts to tackle the country’s debt which has kept the UK’s financial reputation intact.

However, this morning it spooked markets, with the FTSE 100 down 0.25% or 15 points, at 5,891, by 9am.

Cyclical stocks paid the price in early trading, in particular resource stocks which relinquished some of their recent gains.

Rio Tinto is the biggest faller, down 2.05% or 79p to £37.66, while Xstrata has lost 1% or 12p, falling to £12.01.

Moody’s also warned on a number of European nations, putting France’s AAA rating under threat alongside the UK’s, while downgrading countries including Spain, Portugal and Italy.

As a result European shares were down, with the French Cac off 0.27% to 3,376 points, and the German Dax marginally down 0.05% to 6,734 points.

UK inflation rate falls to 3.6% in January (Article by BBC Business News on 14.02.2012)

14 Feb
Pound notes

Inflation fell sharply in January as the impact of last year’s VAT rise was no longer shown in the figures.

Consumer Prices Index (CPI) inflation in the UK fell to 3.6% in January, down from 4.2% in December, according to the Office for National Statistics (ONS).

Retail Prices Index (RPI) inflation – including mortgage interest payments – fell to 3.9% from 4.8%.

VAT went up from 17.5% to 20% in January 2011, pushing up inflation that year.

The drop brings CPI inflation to a 14-month low. However, the rate remains well above the Bank of England’s 2% target.

The government said it expected the inflation rate to continue to fall this year.

“Inflation fell significantly in January for the second month in a row, which is good news for family budgets. The Bank of England and other forecasters expect inflation to keep falling through this year, providing additional relief,” said a statement from the UK Treasury.

In addition to the impact of VAT, smaller increases in the cost of commodities and oil than seen a year earlier also helped to bring the inflation rate down, according to the ONS.

The average price of petrol in January rose by 0.6p a litre, compared with a 5.4p rise last year.

Diesel was up 0.7p a litre, compared with a 5.8p rise in January 2011.

S&P downgrades 34 Italian banks (Article in and by Investment Week on 12.02.2012)

13 Feb

UniCredit SpA (UCG), Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA (BMPS) are among 34 Italian financial firms downgraded by Standard & Poor’s.

The downgrades come after the ratings company reduced the nation’s grade last month to BBB+ from A, reported Bloomberg.

 UniCredit, Italy’s biggest bank, and No. 2 Intesa had their long-term ratings lowered to BBB+ from A. Meanwhile, Monte dei Paschi, the No. 3 bank, was reduced to BBB from BBB+. All three have a negative outlook, S&P said.

S&P also revised its banking industry country risk assessment, known as Bicra, for Italy to group 4 from group 3, citing mounting risks.

“Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt.

“We anticipate persistently weak profitability for Italian banks in the next few years,” S&P said.

The extra yield investors demand to hold bonds of UniCredit and for Intesa rather than government debt was 508 basis points on 9 February or 5.08 percentage points, compared with an average 306 basis points in the Bank of America Merrill Lynch Euro Corporates, Banking Index. European BBB ranked bonds are at 381 basis points and BB debt at 664.

UK will avoid double dip recession: CBI (Article by and in Investment Week on 13.02.2012)

13 Feb

Britain will avoid a double dip recession and modest growth should restart later this year, according to the CBI.

The business lobby group thinks the UK will avoid an official recession – two quarters of declines in a row – by bouncing back from its 0.2% fall in Q4 2011 to growth of 0.2% in the first quarter of 2012.

It predicts another 0.2% rise in the second quarter of this year before speeding up a little later in 2012.

Overall, it expects growth of 0.9% in 2012 and 2% next year and highlights the fact companies are starting to invest in new equipment and finding new export markets, the BBC reports.

However, consumers and households face a subdued outlook due to high unemployment and squeezed living standards.

CBI director general John Cridland said: “Economic conditions will continue to be tough, especially in the first half of the year and the UK recovery will depend on the successful resolution of the eurozone crisis.

“The pressure on household incomes will also ease slightly in the second half of this year as inflation falls, resulting in a slight increase in consumer spending.

“But weak wage growth and high levels of unemployment will continue to be a brake on household spending.”

The CBI added it was encouraged by cash injections from the European Central Bank and core eurozone countries were seeing signs of stabilisation

RBS Bankers Arrested in HMRC Tax Probe (Article by Natalie Holt in MoneyMarketing on 13.02.2012)

13 Feb

Four bankers from Royal Bank of Scotland have been arrested in a tax fraud investigation, according to reports.

The BBC reports that in addition to the four current RBS employees, one former RBS employee and staff from two other banks have also been arrested.

 The arrests were made on Wednesday as part of a three year investigation by HM Revenue & Customs into people suspected of evading tax by using a film finance loophole.

An HMRC spokeswoman told the BBC: “As a result of an ongoing HMRC investigation into tax-related criminal offences, HMRC has arrested a number of people, some of whom work for UK banks.”

She added that the arrests were related to the individuals’ financial affairs, and not related to their work for the bank.

Lib Dems Push for Pension Tax Relief Cut (Article by Rachel Dalton in IFAonline on 13.02.2012)

13 Feb
Deputy prime minister Nick Clegg and Treasury secretary Danny Alexander will meet with David Cameron and George Osborne today to demand more tax on high earners’ pensions.

The Liberal Democrats will push the Prime Minister and his Chancellor to speed up the increase of the lower income tax threshold to £10,000, the Telegraph reports.

It is understood that Clegg and Alexander (pictured) will reveal to the Conservatives their plans to fund the tax break for lower earners with progressive taxes on the wealthy.

Reducing tax relief on pensions will be one of the proposals put forward by the Liberals, sources have claimed.

Alexander is likely to propose that higher rate tax-payers will only receive basic rate tax relief on their pension contributions, although Osborne is known to be opposed to the idea.

However, a compromise could be that only those earning more than £100,000, rather than those earning more than £45,000, will be stripped of higher rate tax relief on their pensions.

A deal like this would save the taxpayer £3.7bn per year.

Another main source of funding for the tax break on the lowest earners is the General Anti-Abuse Rule (GAAR) proposed in a report prepared for the Treasury in December.

Clegg has hinted the GAAR could be included in this year’s budget.