In a speech on the final day of the Commons financial statement, Mr Duncan Smith said “Seven million people are not saving enough for the retirement that they want and few will be able to rely on a guaranteed income in retirement, as the numbers saving in defined benefits schemes in the private sector have halved in the last 20 years. In fact less than half of the entire working age population is currently saving in a pension at all.”
It is believed that there will be a new, flat rate scheme, which will start around 2015, and estimates of the flat rate figure vary between £140 and £155 a week. The current full rate pension is £97.65 a week but that can be topped up to ensure a minimum rate of at least £132.60.
The flat rate pension will only be available to new pensioners rather than the millions of existing ones. More than one-and-a-half million eligible pensioners do not claim pension credit, and the Government believes that such individual losses of entitlement would not occur under a simpler flat-rate system.
Mr Duncan Smith went on to say “This Budget is about rewarding those who do the right thing” and that the pension reform “will provide, I believe, a clear foundation for saving… We have to send out a clear message across both the welfare and pension system: you will be better off in work than on benefits and you will be better off in retirement if you save.”
Keeping in line with the simplification of systems this Government wants, Mr Duncan Smith went on to say “Less means testing, of course, is the key to this.”
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( 3 / 368 )It’s never too early to get children into good habits and later today details of the planned new Junior Individual Savings Accounts (Isas) will be laid out. These tax-free Isas will have a maximum annual contribution of £3,000 and the aim is to introduce them by November.
Junior Isas will replace the Child Trust Funds, which have been phased out but, unlike the CTFs, Junior Isas will have no Government contribution. The savings plans, which will be offered by high street banks and building societies, will be ‘locked in’ until the child is 18 and will then become adult Isas by default.
If the total amount is invested each year, a child will have a pot of £54,000 plus any interest, by the time he or she is 18 and, like any adult Isa, the money can be invested in funds or used to buy stocks and shares.
The Treasury believes that currently six million children will be eligible for the Junior Isas with 800,000 more becoming eligible on an annual basis.
One criticism of the scheme is that the children of poorer families or those in care wouldn’t benefit as, unlike better off children there would be no family or friends to contribute to the pot. However, the Government has announced that provision will be made for children in care and that up to £5m will be spent on the scheme for them annually.
Children’s charities have been campaigning to ensure that children in care don’t miss out on the tax-free Isas, which could make a big difference to their lives once they reach 18. Barnardo’s Chief Executive, Anne Marie Carrie, said “This modest investment into savings accounts for looked after children will help these young people achieve their goals and avoid negative outcomes such as homelessness or falling into cycles of debt."
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( 3.1 / 422 )This week has seen the launch by Prime Minister, David Cameron of ‘StartUp Britain’, a scheme, which aims to assist new entrepreneurs with financial help, contacts and advice. The campaign, started by entrepreneurs for future entrepreneurs, has the full backing of the Government and is in response to its call for an ‘enterprise-led’ recovery of the economy. Big hitting corporate supporters include Barclays, Intel, Blackberry, Experian, Google and o2
As one of its backers, Sir Richard Branson, says “SMEs provide nearly 60% of all private sector jobs, and nearly 50% of private sector GVA. StartUp Britain is designed to make it easier for new companies and innovations to flourish and encourage people who aspire to start new businesses to work for themselves.”
The launch dovetails with the Government’s announcement of a raft of measures aimed at encouraging young people to start businesses. These include the creation of enterprise societies in every university and a major roll-out of Tenner Tycoon, the competition owned and run by the Peter Jones Foundation. Part of the initiative is to introduce a Mentor Marketplace to help start-ups find tailored advice and support.
It is hoped that the move will give young people the opportunity to learn how to run their own show, inspiring the next generation to seriously think about starting their own company. Business secretary Vince Cable says, “We want to transform the ambition and aspiration of young people through real business experience.”
At a time when youth unemployment is at an all-time high, with more than one in five 16 to 24 year olds being out of work, this initiative should be broadly welcomed. However, only time will tell whether the StartUp Britain scheme – a start up business in itself - goes the way of the four out of five new businesses which fail.
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( 3 / 369 )All businesses want to build their brand – to formally announce what it is that they do or make and what they stand for. But how they communicate that message has changed dramatically over the years. Whereas, apart from face to face selling, adverts in newspapers or leaflets and brochures used to be the only way that small businesses could communicate with a wider audience, these days every small business has at least a website. Many companies also now tweet and blog and, increasingly, they advertise on the worldwide web.
According to research published today by the Internet Advertising Bureau (IAB) and accountants PriceWaterhouseCoopers, social media, video and mobile ‘phone advertising spend crossed the £4bn mark for the first time in 2010 and the trend looks set to increase, as more and more people spend more and more time online. The IAB said that people in the UK now spend 25 percent of their total time online on social networks, such as Facebook and Twitter. Therefore, advertising in the social networks alone has risen a whopping two hundred per cent.
Head of the IAB, Guy Phillipson, said that the market was “almost back in its pre-recession heyday", which is encouraging and the report shows that companies have been determined to finance their growth through advertising their wares.
According to the report consumer goods and retail companies raised their online budgets to become two of the four largest spenders on display advertisements. However, the financial sector spent the most in 2010, overtaking entertainment and media, with a 15.2 per cent share.
The figures indicate that Britons are spearheading this internet advertising revolution, as the equivalent spending share is only around 15 per cent in Europe and, interestingly, only 16 per cent in the United States.
Social networking may not have won the Oscars, but it would appear to be winning the advertising awards.
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( 3 / 380 )In the budget last week, Chancellor George Osborne promised a raft of measures, which would result in a ‘bonfire of red tape’. These measures had been widely called for by small business owners, as at least half of small businesses, which have closed in the last few years, have cited over-regulation as the main cause.
According to official figures, the measures are expected to save companies over £350m a year and the biggest beneficiaries will be small businesses. According to the Treasury’s budget report “the presumption will be that all regulations identified as burdensome would be removed, unless good reasons are given for them to stay.”
The changes include scrapping legislation that would have given staff of companies employing less than 250 people the statutory right to request time off to study or train and a moratorium on all new regulations applying to companies employing fewer than 10 staff and on all UK start-ups for three years from 1 April, and a public "thematic review" to reduce the volume of regulation.
However, one element of the ‘bonfire’ has received a less favourable response than given to most of the others. In the budget, the Government also scrapped proposed new dual-discrimination regulations that would have allowed employees at companies of any size to bring two discrimination claims simultaneously, such as age and gender.
This has brought condemnation from organisations representing women and older people. For example, the Fawcett Society, which promotes women’s rights, has said that 75% of the half a million people set to lose their jobs in local government will be women. Societies, such as Age Concern, have voiced concerns over the postponement of new age equality provisions for small businesses.
It would appear that when lighting a fire, it is almost impossible to ensure that no-one gets burned.
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