According to the OECD, British pension company returns fell 0.1 percent every year between 2001 and 2010, whilst nearly all other developed countries saw their pension pots swell – with Spain and the USA being the exception.
Within its OECD Pensions Outlook 2012, which reveals the performance of pension schemes throughout the developed world, the OECD pointed to a growing role for private pension firms within the UK, in closing the gap between pre and post retirement.
The OECD also suggest within their Pensions Outlook 2012 that the introduction of auto-enrolment pensions to the UK later this year, for all workers not currently covered by private pension plans, should increase the uptake of occupational pension schemes.
Following the release of the figures, Policy Director at the National Association of Pension Funds, Darren Philp said: “Investment performance has been very poor because of the exceptionally weak worldwide economic environment. UK funds are broadly in line with the global average but that performance is disappointing nonetheless.
“Final salary pension schemes have generally been moving out of equities in recent years as they attempt to trim their exposure to risk.”
He added: “The UK will struggle to pay for its retirement and the weak returns of recent years make it even more important that we improve these pensions. Strong workplace pensions are a must.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 530 )Former Cabinet Secretary, Lord O’Donnell, has claimed that the Treasury is in “danger of being swamped by the pressures placed on it” and should consider receiving funding from the financial services industry.
Speaking for the first time in the House of Lords, since stepping down as Cabinet Secretary last year, Lord O’Donnell warned that the Treasury may be struggling to address the problems caused by the ongoing global financial crisis, with his comments coming amid criticism that the Treasury has failed to develop radical policies to help boost economic growth.
During his speech, Lord O'Donnell suggested that part of the department dealing with financial services and stability could be funded by the financial industry to save taxpayers' money.
Along with suggesting that the Treasury should consider receiving funding from the financial services industry, in a similar way to the Financial Services Authority (FSA) and the City regulator, Lord O’Donnell also warned that too many Treasury officials are leaving and that pay levels were too low.
He told the House of Lords that it was in everyone’s best interests for the Treasury to continue to recruit the best, adding: “Otherwise the Treasury is in danger of cutting off its arms, as well as its nose, to make its hair shirt fit.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 499 )According to figures released by HMRC roughly 3.5 million UK savers paid too much tax during 2009 / 2010.
The latest figures were released by HMRC following a Freedom of Information Request made by a campaign group, who have stressed that the way in which savings are currently tax needs to be changed.
Currently savers are charged the basic twenty percent rate of tax on interest paid on savings accounts, but there is a lower ten percent rate applicable to those on low incomes with savings of up to £2,560 above their personal tax free threshold.
However, the campaign group have argued that the situation for qualifying savers is complicated and the lower rate is difficult to claim; whilst the figures released from HMRC which relate to the reclamation of overpaid tax on savings income in the 2009/ 2010 tax year, show that 3.5 million savers would have been liable to tax at ten percent, rather than twenty percent.
Following the release of the figures, the campaign group have argues that the current tax system in regard to savings penalises the poorest, whilst the way in which lower tax rates on savings operates is poorly understood and ineffective.
The group also claim that better-off savers are given generous credit terms to pay their tax whilst the poorest have to overpay immediately and then reclaim the overpayment.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 566 )According to the first annual report on the banking appeals process by Professor Russel Griggs, there has been a “seismic shift” in lending to SMEs since 2008 and goes on to say that the UK has “returned to what many would see as a ‘normal’ state of lending.”
Professor Griggs was appointed as an independent reviewer to oversee the appeals process, which was launched by the Business Finance Taskforce in April 2011. Under the scheme, businesses with a group turnover of up to £25m can appeal to their bank if an application for any form of lending has been refused.
During the year, the participating banks received 827,000 eligible applications for all credit products, ranging from loans and overdrafts to credit cards and asset-based finance. Around 14 per cent of them were turned down and of those, only 2 per cent – or 0.3 per cent of the total – went to appeal.
Griggs said that the banks needed to ensure that all customers knew about the appeal process. “There is a possibility that, if more knew they could appeal, more might apply for credit in the first place”, he added.
Business groups such as the Forum of Private Business (FPB) are now calling for increased awareness amongst SMEs of the appeal's process, with the FPB's senior policy adviser, Alex Jackman, saying:
"The fact that almost 40 per cent of lending appeals have been completely overturned says very clearly that banks are simply not gauging some small business lending risks accurately in the first place, and that has to change.”
"The report is right in identifying an over-centralised banking system that relies far too heavily on automated risk criteria and on data from credit rating companies, many of which appear to use wildly different factors to assess a firm's creditworthiness."
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 591 )The European Commission unveiled proposals yesterday to create a new “banking union” across all 27 EU member-countries, which could see banks’ shareholders and creditors bearing losses on banks requiring bail-outs before taxpayers have to get involved.
On balance, the UK government would support this idea but is less than enthusiastic about some of the other banking union proposals on the table and Chancellor George Osborne has today spoken out against power being removed from the City of London. He stressed that safeguards would have to be in place to protect the UK’s financial sector if such moves towards a banking union were implemented.
One proposal could see Brussels being able to parachute n a “special manager” to run an ailing bank; another is the idea of "intra-group support agreements", under which banks with operations in several countries across the eurozone would be allowed to transfer resources from one part of the group to another in times of crisis.
Speaking this morning on Radio 4’s Today programme, Mr Osborne said: "There is no way that Britain is going to be part of any eurozone banking union. I think Britain will require certain safeguards if there is a full blown banking union."
He also urged the eurozone to use its bailout fund to recapitalise Spain's banks but said that he did not know how swiftly eurozone leaders would reach an agreement on the issue, as he was "not directly party to these discussions".
However, he said: "I am optimistic they are working hard on solution and I think a solution is coming.”
The Chancellor also stressed the UK government's commitment to a referendum on Europe in the event of a "significant transfer of power and sovereignty" to the EU but said he did not believe that would necessarily happen as a result of the current negotiations.
For more information, please contact Glazers,
Chartered Accountants London or visit www.glazers.co.uk
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