But things have changed over recent years. A few days ago, the Prudential released research showing that a fifth of people planning to retire this year were still paying off debts, owing an average of £33,100 each. Meanwhile, a YouGov poll for the National Association of Pension Funds (NAPF) today reveals that 43 per cent of people not currently retired say they cannot afford to save for retirement.
So today’s news that John McFall, former chair of the Treasury Select Committee, is to lead an inquiry into retirement saving by the Workplace Retirement Income Commission (WRIC), a move initiated by NAPF, is welcome indeed.
Measures are already under way to combat the ticking pensions time bomb of around 12 million British workers not saving enough for retirement.
The phased introduction of auto-enrolment will begin next year, with all workers aged over 22 and earning above the income tax personal allowance eventually being automatically signed up to save into a pension fund provided by their employer or, if none is available, the National Employment Savings Trust.
Describing auto-enrolment as “visionary”, Lord McFall says there is still a risk that millions of people will be left behind and that the new pensions regime should be “the beginning of the reform process, rather than the end”.
He wants to simplify pension provision – pointing out that there have been 800 changes in the pensions landscape since 1995 – and explore fees charged by fund managers and intermediaries, to establish whether people are getting the best return for their investment.
And he stresses that as well as reaching out to those in business and the pensions industry, the inquiry will be particularly focusing on the people at the heart of the matter – those who are trying to save for their retirement.
The inquiry will publish its findings in October this year to help the government make good a coalition agreement pledge to “reinvigorate” occupational pensions.
While we wait, at least there’s one person who won’t have to worry about their pension. The Daily Telegraph reports that the Bank of England has topped up governor Mervyn King's pension pot by £1.4 million, taking it to around £5.3 million, which means that when he leaves the bank, on expiry of his current term in 2013, he will be eligible to draw an annual pension equivalent to £198,200 today. As they say, nice work if you can get it.
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( 3 / 293 )John Cridland takes up his post as director-general of the CBI today and has wasted little time in making it clear where he stands on the UK economy.
In an interview with the Financial Times he describes himself as a “relative optimist”, a position that reflects what businesses have been telling him.
"The companies I talk to can see that growth is slowly and steadily building," he says. What’s more, Mr Cridland is backing the government’s strategy for recovery and growth, saying: "The coalition has done well for business so far."
Those are comments likely to be music to the ears of David Cameron and George Osborne but the CBI chief doesn’t stop there.
He throws down something of a challenge, saying the time has come to step up the pace even more and adding: "I believe we have 24 months to deliver a strategy which achieves above-trend growth to maintain the living standards of the British citizen."
A key date in the diary of Mr Cridland – and a fair number of British citizens and businesses – will be 23 March, when Mr Osborne presents the 2011 Budget, which the CBI chief says needs to set out a strong growth strategy as a twin priority to reducing the national deficit.
Mr Cridland’s comments suggest that he is likely to be a critical friend to the coalition: supportive where he feels it appropriate, ready to speak out when he thinks they’re going wrong. His reaction to the government’s Budget and growth strategy should make for interesting listening and reading.
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( 2.9 / 57 )The head of UK Financial Investments (UKFI) – the body tasked with looking after the government’s holdings in various troubled banks – presented the government with an interesting dilemma when he told MPs that breaking up the largest institutions would be likely to reduce the value of the stakes held by the taxpayer.
Robin Budenberg told the Treasury Select Committee that any attempt to divide retail and investment banking would have a negative impact on the share prices of Lloyds Banking Group and Royal Bank of Scotland – in which the government currently holds stakes worth £67billion.
The coalition’s Independent Commission on Banking (ICB), which is currently investigating the structure of the banks, suggested this week that it may call for the government to break up some of the largest institutions – meaning no moves to sell the taxpayer’s stakes are likely until the position is confirmed, which is likely to be in September.
Mr Budenberg admitted there would have to be a ‘trade-off’ between the government’s aims of maximising competition in the banking sector and achieving the biggest return possible for taxpayers on the sale of their stakes. If the ICB does indeed call for a break-up of the likes of Lloyds and RBS, this will be a difficult balance to strike.
Of course, Mr Budenberg’s comments only represent his own views and there may be others who consider the banks could be worth just as their constituent parts. This will not be an easy decision to make when the time comes, but whatever happens, it is in everyone’s interests that the banks concerned continue to recover in the meantime, maximising their value for a break-up or eventual sale.
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( 3 / 267 )The number of jobs to be axed at local councils over the coming months is steadily mounting as public sector cuts start to take their toll in the bid to drive down the national deficit.
Since the start of the year, Hampshire County Council has announced that 1,200 jobs are to go. Norfolk County Council is to shed 1,000 jobs and Manchester City Council 2,000. Portsmouth City Council has said it will cut its workforce by 400.
Today, we have reports that Liverpool City Council is to slash around 1,500 jobs from its payroll over the next two years as it seeks to make £141 million of savings between now and 2013, with £91 million in cost-cutting required in 2011-12.
Interestingly, the news comes in the same week that Liverpool opened what is being dubbed as an “embassy” in London to help woo investors.
With Liverpool identified by independent research group Centre for Cities as one of the UK cities likely to be hardest hit by public sector cuts – in 2008, around a third of jobs there were in the public sector – it’s a bold step designed to put Liverpool firmly in the shop window.
As Liverpool City Council leader Cllr Joe Anderson says: "Private sector investment is going to be vital to repair the damage caused by the cuts imposed on us.”
Sited, rather appropriately, close to Liverpool Street, the embassy is a joint scheme by the council, public sector groups and 30 Liverpool businesses and is funded by the businesses.
Initially it will be open for three months, but if the success of the Liverpool pavilion at the 2010 World Expo in Shanghai is anything to go by – it attracted 770,000 visitors – it may well be extended.
Those Liverpool council job cuts are a real blow to the local economy. But Liverpool is clearly fighting back and that can only be admired. Perhaps there’s a lesson to be learned elsewhere in the UK.
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( 2.9 / 239 )Appealing against a late filing penalty on VAT or other tax might be a smart move, given that more than half of such challenges so far have proved successful, according to recent statistics.
HM Revenue & Customs’ (HMRC) Internal Review Procedure, brought in on April 1 2009, has provided an easier method of querying tax appeal decisions and a growing number of firms are using the procedure.
According to HMRC’s own site, ‘the new review process will help provide a more consistent approach to the way we seek to resolve disputes with those who disagree with appealable tax decisions made by HMRC. Reviews … will be done by a trained review officer, who has not previously been involved with that decision, who will be able to offer a balanced and objective view.’
But is this ‘balanced and objective view’, which meant that almost sixty per cent of decisions were overturned between the inception of the Review and September last year, a good thing or a bad one?
If such a high percentage is overturned at Appeal, might it not mean that the penalties were issued wrongly in the first place? There has even been speculation that HMRC might be under pressure to issue as many fines as possible, or is, in common parlance, ‘trying it on’.
However, HMRC refutes this suggestion, saying that surcharges for late returns, which form the majority of penalty notices, are issued automatically and would generally be withdrawn or reduced if there was a good reason for their late filing.
A spokesman said that “the internal review process is there because we are listening to our customers”.
The statistics could also be viewed as a measure of the fairness of the review procedure. Whatever your point of view, it would appear that merely accepting a penalty is no longer the only option.
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