Pensions ‘require funding boost’

31 August 2010 Last updated at 05:42 ET

Workers may need to pay more for their pensions amid a continuing picture of fund deficits, two surveys suggest.
Employees of large firms could have to invest more because of the costs of a new system to include more people in company pensions, actuaries warned.
Four in 10 companies would reduce future scheme benefits to pay the additional costs, the Association of Consulting Actuaries’ survey found.
Meanwhile, KPMG said business growth could be hit by pension costs.

The accountancy firm said that its analysis showed the UK’s largest firms were facing a growing pensions shortfall.
‘Cut back’
The poll of large firms conducted by the Association of Consulting Actuaries (ACA) found that 41% of employers said they were “likely” or “highly likely” to cut back the benefits of existing deals.
This was because they needed to meet the cost of a new scheme - being brought in from 2012 to 2017 - to automatically enrol some workers into a company pension.
Exactly the same proportion of small businesses said they might cut their existing pension scheme entirely and replace it with a government-sponsored scheme, when the ACA conducted a poll last year.
The government is currently reviewing the auto-enrolment plan. Companies will initially only have to pay in 1% of a worker’s earnings, rising to a minimum of 3% by 2017.
Individuals will have to contribute 4% of their salary to their scheme, with the government topping this up with 1%.
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“Start Quote

The pensions outlook for those aged 45 and over no longer looks quite as spectacularly good as it did”

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Savings raided to cover spending

20 August 2010 Last updated at 19:11 ET

By Susannah Streeter Business reporter, BBC News

Almost a third of adults in the UK have raided their savings over the past year to cover shortfalls in their income, according to new research.
The survey, by investment firm Schroders, estimates that savers have taken out a total of £60bn.
They have withdrawn an average of £4,600 each.
With interest rates at a 300-year low and the better saving deals pulled from the market, there seems to be more incentive to spend rather than save.
Dan Brett and his family from Bristol have been conscientious about putting away money for the future.
But now Dan, a father of four, is cashing in some of their savings.
“We have the money in the building society and it just hasn’t been making us much interest,” he says.
“We always need extra cash for stuff around the house and for the children - we thought this could be the rainy day we’ve been waiting for.”
‘Less incentive’
The amount of money banking customers have been depositing overall has been steadily increasing over the past two years.
Continue reading the main story

It is not just rainy-day funds that are being drained”

End Quote Robin Stoakley Schroders
But in the last three months there has been a marked slowdown in the growth of personal deposits in both savings and current accounts, according to the British Bankers’ Association.
The Schroders survey suggests that more women than men were forced to draw upon their savings, with 34% of women tapping into their capital reserves compared to 28% of men.
Those retired or approaching retirement were most likely to have dipped into their reserves to make up a shortfall in income.
“The amount of capital being drawn down suggests that it is not just rainy-day funds that are being drained, but a significant proportion of individuals’ long-term savings,” says Robin Stoakley of Schroders.
”This is particularly an issue for those nearing or in retirement as they have less opportunity to rebuild their savings and declining annuity income proves insufficient to cover their day to day expenditure,” he adds.
Where to save?
Investment advisors say times are tough for those who rely on savings for their income, but stress there are still some attractive offers available.
Some are from foreign banks which have been trying to attract customers in the UK.
“They are paying a bit more interest because they want to build up assets and they want to gather more market share,” says Christine Ross, head of financial planning at S G Hambros.
“Check that they have a UK banking licence and they are covered by the compensation scheme,” she warns.
Christine points to the continued attraction of putting money away in ISAs (individual savings accounts).
“They have no minimum holding period and although the headline rate might be slightly lower, because it’s tax free and if you are a taxpayer then overall your return is going to be better,” she says.
‘Encouraging saving’
Many economy watchers predict that the Bank of England base rate is likely to remain low throughout next year as well, which will means good deals for savers will be few and far between.

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Rail route compensation launched

19 August 2010 Last updated at 19:04 ET

By Richard Scott Transport correspondent, BBC News
The compensation scheme for people affected by the proposed High Speed Rail link between London and Birmingham is due to be launched.

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Homeowners concerned about the High Speed Link put their questions to Transport Secretary Philip Hammond

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KLM holds out on ash cash

14 August 2010 Last updated at 05:48 ET

Hundreds of British families are still waiting for compensation from Dutch airline KLM for delays caused by the volcanic ash cloud earlier this year.
According to EU rules, passengers must get hotel and meal costs reimbursed for the whole time they are stranded but KLM says it will only pay for 24 hours.
The EU has threatened legal action unless the airline complies.
KLM said it restricted payments to ensure a quick resolution for its thousands of customers across Europe.
Hundreds of thousands of people were affected when the ash cloud from an Icelandic volcano shut down much of Europe’s airspace for 18 days in April and May.
Under EU regulations, passengers are entitled to claim back reasonable expenses - on meals and accommodation - for the time their flight was delayed.
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We’ve given them all our receipts but sadly they’ve failed to come up with a fair offer”

End Quote Alastair Caithness KLM passenger
In some cases, passengers were held up for a week or more and families built up bills of thousands of pounds.
The European Commission has sent the airline a formal warning saying they must comply with EU laws, if they do not they could face legal action.
Alastair Caithness was stuck with his family in Athens, building up costs over the course of a week of £3,000. But KLM says it will only pay for one night’s expenses.
Mr Caithness told BBC News: “We’re really not very impressed at all. We’ve followed all KLM’s online procedures. We’ve lodged the appropriate claim forms. And we’ve given them all our receipts but sadly they’ve failed to come up with a fair offer.”
A European Commission spokeswoman said: “EU passenger rights are there to protect consumers. And they are there to act as a safety net for passengers - even in very difficult circumstances like this.
“So there is no grey area for us in this regard and those EU rights must be respected.”
‘Not their fault’
Many airlines are unhappy with the rules as they stand as there is no limit on the amount of compensation they have to pay - even if the delays are beyond their control.
Financial Times travel editor, Tom Robbins, said: “Obviously it’s a nightmare for the travellers but this is one of the very rare occasions when you can see the airline’s perspective.
“I mean if they’re selling a ticket that’s £100, but then they have to pay out £1,000 or £10,000 in compensation for something that wasn’t their fault, then that’s a very hard way to run a business really.”
Simon Calder, travel editor of the Independent, said airlines were not insured and were very upset when the rules were brought in five years ago.
“This was designed for the odd flight from Frankfurt to Stockholm being cancelled on a Friday night, it wasn’t designed for the full-scale close down of European airspace.”
Members of the European consumers’ organisation BEUC said they had received complaints from passengers who were not receiving compensation.
Rochelle Turner from Which? Holiday consumer magazine said hundreds of people had contacted them.
She said: “A lot of people are having trouble getting their money back, and a lot of people are having trouble getting as much money back as they thought they were due.”
Ryanair had also held out from paying full compensation to its passengers.
Initially, Ryanair said it would only pay expenses up to the value of the ticket passengers had bought, although it is now abiding by EU rules.

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New nuclear power stations will be built by 2018, promises Energy Secretary

By Daily Mail ReporterLast updated at 4:05 PM on 9th August 2010

Mr Huhne has reiterated that the Government will not subsidise the new nuclear power stations

Britain is on track to have new nuclear power stations up and running within eight years, Energy and Climate Change Secretary Chris Huhne has insisted.
Mr Huhne said a number of potential sites for the stations had been identified, generally close to existing nuclear energy installations, and that power should be on stream by 2018.
He reiterated that the Government would not subsidise the new nuclear power stations but said investors had indicated they were ready to press ahead thanks to rising gas, oil and carbon prices.
‘We are on course to make sure that the first new nuclear power station opens on time in 2018,’ Mr Huhne told the BBC Radio 4 Today programme.
‘There are a number of sites that have been identified around the country and those are generally on sites where we have previously had, for example, nuclear power stations and where the local people are very keen that there should be new nuclear build.
‘What we have to do - we have eight years now before I hope that the first one will come making a contribution to the grid - and we have to get through all of the prior arrangements, like, for example, the national planning statements, like making sure that investors have got their applications formally in and approved, and then of course building can commence.’
Mr Huhne said it was ‘clear’ that MPs would vote in favour of new nuclear power stations providing there was no public subsidy involved.
Defending the position, he said: ‘I don’t think you can determine whether a government is serious about energy policy merely in terms of whether it is prepared to write very large cheques.
‘It has always been clear that our next generation of electricity power stations are going to be built by private investors with a framework put in place.’
That framework included a ‘very clear commitment’ for a carbon price floor, Mr Huhne said, as part of an incentives system to encourage investment.
The Energy and Climate Change Secretary, who has been portrayed as an opponent of nuclear power in the past, also said his views had been ‘much misunderstood’.

Plans: There are a number of potential sites for the new nuclear power stations across the country, including two near Sellafield Nuclear plant in Cumbria, above

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HMRC allows late tax credit calls

1 August 2010 Last updated at 06:47 ET

People who missed Saturday’s deadline to renew their tax credits because a helpline was busy have been told to try phoning again on Sunday or Monday.
HM Revenue & Customs said its tax credit helpline was “extremely busy” on Saturday, and it would now look “sympathetically” on late callers.
It said this would be done on a “case by case basis”, where claimants can show they tried to ring on Saturday.
Four million families risk losing their tax credits if they are not updated.
To do this, they had to inform HMRC about any changes to their income or childcare costs before the 8pm deadline on Saturday, 31 July.
HMRC had put extra staff on its helpline, but the BBC has had numerous e-mails and texts from people who said they were unable to get through on both Friday and Saturday.
The standard helpline telephone number is 0845 300 3900 - or for customers who are deaf or hearing or speech impaired there is a textphone number 0845 300 3909.
At present, tax credits are based on a family’s own estimate of its income for the coming year, with households allowed to earn an extra £25,000 before they have to pay money back to the government.
But from next April, that leeway, or buffer, will be reduced to £10,000. The following year it will be cut to £5,000, meaning many more families face being asked to pay money back.
As a result, some experts have warned that the number of over-payments and subsequent repayments could rise sharply.
Five Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Interns are ‘entitled to be paid’

30 July 2010 Last updated at 19:00 ET

By Martin Shankleman Employment correspondent, BBC News

Many young people working for free as interns are legally entitled to be paid, and could launch tribunal claims for back wages, a new report says.
Think tank the IPPR and campaign group Internocracy argue private sector firms are “almost certainly” breaking the law by offering unpaid internships.
The report says many volunteers could be legally defined as workers under national minimum wage legislation.
It warns the current position leaves employers open to compensation claims.
Employment tribunals
“Private companies will normally be under a legal obligation to treat people employed on internship programmes as workers and to pay them the appropriate minimum wage,” the report, by Kayte Lawton, of the IPPR, and Dom Potter of Internocracy states.
Continue reading the main story

In the long run this is bad for business because it damages the reputation of these industries and makes it difficult for them to recruit for the broadest pool of talent”

End Quote Dom Potter Internocracy
“Employers often mistakenly believe there is a grey area around internships in the NMW (national minimum wage) legislation that allows them to take on unpaid interns as long as both sides understand it a voluntary position - but this is simply not the case.”
That, they say, means employers could be open to claims from current and former interns to compensation at employment tribunals, and employers could be liable for up to six years for back pay.
The report says the government should take a lead by phasing out unpaid internships in the publicly-funded organisations, starting at the BBC which it claims employs hundreds of unpaid interns each year.
But the BBC said it had a long and successful track record of training and developing young people from diverse backgrounds for careers in the creative industries.
“With work experience now a mandatory requirement for most schools and colleges, we receive hundred of applications from people who want to get work at the BBC and our policies ensure that people are selected based on merit,” a spokesman added.
‘Well-off backgrounds’
The report also suggests politicians should also consider scrapping unpaid internships at Parliament and in constituency offices.
“We now have entire industries that rely on the willingness of young people to work for free,” said Mr Potter.
“In the long run this is bad for business because it damages the reputation of these industries and makes it difficult for them to recruit for the broadest pool of talent.
“It also means young people from well-off backgrounds or with good connections have an instant advantage when it comes to finding a permanent job.”
Five Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

The internet licence fee: Viewers who watch TV on computer could be charged from next year, hints minister

By Simon CableLast updated at 5:53 PM on 26th July 2010Viewers who watch television on their computer could be forced to pay the licence fee as early as next year.Those who do not own a TV but watch programmes on services such as the BBC’s iPlayer do not have to pay the £145.50 annual charge.But Culture Secretary Jeremy Hunt yesterday hinted that this exemption could be stopped.The Tory MP revealed that he plans to discuss the issue with BBC Director General Mark Thompson when the corporation’s funding levels come up for review next year.Viewers who watch TV on computer could be charged from next year, hints ministerIt follows growing evidence that more television viewers are turning to online servies to watch their favourite programmes.The BBC’s technology chief Erik Huggers recently expressed concern that some viewers are getting ‘a free ride’ by watching its shows on the internet rather than on television.But Mr Hunt said he would not be in favour of simply charging anyone who owned a computer in the same way that anyone who owns a TV has to pay the licence fee.Speaking on BBC1’s Andrew Marr show yesterday, he said: ‘What we have said very clearly is that we accept the principle of the licence fee which is the idea, if you like, of a household tax to fund public service broadcasting that is ring-fenced.’We think one of the reasons we have some of the best television and broadcasting in the world in this country is because we have these different streams of income, including the licence fee, including subscription income and including advertising.’Now, the way we collect it may have to be rethought because technology is changing. A lot of people are watching TV on their PCs.’We are not going to introduce a PC licence fee. That is something [about which] I do need to have discussions with the BBC to see what their ideas are.’Asked about changes in the price of the licence fee, he added: ‘We haven’t had any discussion at all about the level of the licence fee, that’s something we’ll be doing next year.’A review by the BBC’s governing body, the BBC Trust, revealed 40 per cent of students in halls of residence use a laptop as their main way to watch TV.It admitted that some viewers might ‘forgo live television entirely’ by watching catch-up services.The iPlayer makes shows available for seven days after they were broadcast.A spokesman for the TaxPayers’ Alliance described the licence fee as ‘increasingly outdated’.’The Government should be looking for a source of funding that means fewer people are charged for programmes they don’t watch or listen to,’ the spokesman said.’The first step should be to cut the licence fee and force the BBC to start operating more efficiently and cutting back on the bloated bureaucracy that consumes too much of its resources.’  Share this article:Five Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Goldtrail customers promised help

18 July 2010
Last updated at 07:31 ET

The Civil Aviation Authority says it is doing all it can to fly people home after travel firm Goldtrail collapsed.
The Greece and Turkey holiday specialist, based in south London, went into administration on Friday, affecting as many as 50,000 people.
The UK’s air industry regulator said it was making plans to repatriate those currently abroad, and those due to travel later should apply for refunds.
Goldtrail customers can call the CAA on 0203 4410846 for information.
About 16,000 Goldtrail customers were overseas when the firm went into administration on Friday afternoon, while a further 2,000 were scheduled to fly from the UK over the weekend.
The CAA said all flights back to the UK from Turkey and Greece would operate as scheduled up to and including Monday. Information on flights from Tuesday will appear on its website later.
Those due to fly with the failed operator are being advised not to go to the airport and contact their travel agent instead.
The CAA said holidaymakers could claim back money lost on bookings, and also any out-of-pocket expenses, but it would probably take several months for those claims to be processed.
Jonathan Nicholson from the CAA said: “Everybody should be satisfied that we are ensuring that they will be able to have their holiday and they will be come back, if not exactly on the same flight, very close to the time and day they were due to come back.”
Hotel demands
But one traveller, Suzanne Bithell, told the BBC she and her boyfriend had had to run away from their hotel in Turkey after their holiday rep demanded they pay again for their accommodation.
“I told him: ‘We already have paid! We paid before we came!’ But he said: ‘No. The hotel did not get that money - Goldtrail has gone bust. You have to pay the hotel. Give me your credit card details. You can always claim it back later on insurance.’ The atmosphere was getting very tense.

Continue reading the main story
“Start Quote
How could they allow a company which was on the brink of insolvency to be selling flights right up until the last minute?”
End Quote
Simon Calder
The Independent’s travel editor

“We basically had to do a runner or we would have missed our flight home.”
Other customers say they have been forced to pay twice. Lorraine Davies told the BBC the manager of her hotel in Turkey would not let her leave until she agreed to do so.
“He had my passport and he warned me he would keep it in the safe until I paid up. I looked around for help but my holiday rep had vanished.
“[So] I paid the hotel. I didn’t know what else to do.”
Mr Nicholson told the BBC there was “always the issue with hotels, unfortunately, where the hotelier is unsure whether they’re going to be paid or not”, but travellers should not have to pay again.
“If they are asked to do so, they should call the CAA’s helpline and we will then contact the hotel to sort the matter out,” he added.
Refund worries
Gillian Harmer was one of the customers whose trip has been cancelled altogether. She told the BBC: “I’ve got four-year-old grandsons who’ve been asking me every day, ‘Today nana, today?’ and this morning I’ve had to say to them we’re not going. It’s probably the worst thing I’ve ever had to do.
“Everybody just says book more flights. If I had money to book more flights that would be great, I’m just not in a position to do that.”

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BBC licence fee could be slashed

By
Ryan Kisiel
Last updated at 9:50 AM on 18th July 2010
Television viewers can expect to pay less for their BBC licence as part of the Government’s austerity drive in public spending.Culture Secretary Jeremy Hunt believes the BBC had recently been responsible for ‘extraordinary and outrageous’ waste and will have to wake up to the country’s ‘very constrained financial situation’.And he says the Corporation needs to change ‘huge numbers’ of things after the ‘tough discussions’ that will take place when the BBC’s funding levels come up for review next year.
Cutbacks: People could pay less for their TV licence next year
Mr Hunt sent a clear message to BBC executives when asked if the licence fee could be reduced. He said: ‘Absolutely. I think that’s the discussion we need  to have. The BBC should not interpret the fact that we haven’t said anything about the way licence fee-payers’ funds are used as an indication that we are happy about it.’
Warning: Culture Secretary Jeremy Hunt says he could still cut the feeThe licence fee is £145.50 a year but Mr Hunt’s comments pave the way for it to be slashed after talks between Whitehall and the BBC. The fee will be reviewed next year and a new levy could be in place by 2012.Mr Hunt said the talks were his only chance to limit BBC spending at a time when Government departments have been told to expect 40 per cent cuts. He said: ‘There’s a moment when elected politicians have an opportunity to influence the BBC and it happens every five years. It is when the licence fee is renewed.’ The BBC Trust has begun a string of pre-emptive policy announcements in an attempt to appease the Government, such as pledging to close its pension scheme to new employees and promising to cut top executives’ salaries. The salaries of top ‘stars’ could also be published. The BBC’s accounts will be examined by the National Audit Office, after the Corporation’s annual report showed a rise in staff numbers and pay. A spokesman for the BBC Trust said: ‘We have said that, when we come to the next licence fee negotiations, the Trust will enter those talks representing licence fee payers’ interests alone.’ 

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