Finance Matters

Posts Tagged ‘report’

According to a report by the Office for National Statistics (ONS), the number of people paying into an occupational pension has slumped to a level not seen since 1956.

Last year, there were 8.3 million people contributing to an occupational pension (3 million in the private sector and 5.3 million in the public sector).

This represented the lowest figure for 54 years when 8 million contributed to this type of scheme – down from a record high of just over 12 million in 1967.

According to the National Association of Pension Funds (NAPF), in the last decade, thousands of private sector final salary schemes have closed to new members, with less than one in five final salary schemes now open to both new and existing members.

Commenting on the report, Joanne Segars, NAPF Chief Executive, said: “It’s astonishing that pension uptake has slumped to such a low level, and with a greying population living longer and longer, it’s the last thing our society needs.

“Unemployment is partly to blame, but many who have a job are struggling with household finances and the rising cost of living. People are thinking about today and putting tomorrow on hold, and unfortunately saving into a pension is being seen as a luxury,” she added.

She explains that many are being put off by the turmoil in the stock markets, as well as falling confidence in the pensions industry’s fees and charges.

However, Ms Segars warns that those who opt to stop paying into their pensions could be in for cash problems for later in life.

The Association is urging the Government do all it can with regard to new pension reforms by explaining the benefits of a pension and at the same time boosting confidence within the system.

According to the BBC, financial institution NBNK is to submit a second bid for the 600+ branches which Lloyds Banking Group is putting up for sale.

It is understood the branches could fetch around £1.5 billion, according to sources close to the matter.

Lloyds is selling the branches under the orders of the European Commission as a punishment of the billions of pounds in state aid that it received by the Government at the height of the financial crisis.

There are believed to be two other potential bidders, which are Co-Operative Financial Services, owner of Co-Op Bank and Britannia Building Society, and US investment company, Sun Capital.

However, these have yet to submit a second formal bid but banking giant Lloyds has not set a deadline which means the two can still put in offers in the next few weeks.

Antonio Horta-Osorio, the chief executive of Lloyds, has previously said he is keen to find a buyer for the business before the end of the year and that it could choose to spin-off those branches if it fails to agree on a sale.

NBNK, which is run by Gary Hoffman who is the former chief executive of crisis-torn Northern Rock, was established a year ago to make acquisitions and is set to build a significant presence in the UK as a retail bank.

It plans to compete with other High Street banks and said it will focus on “traditional, personalised banking services”.

It was co-founded by Lord Levene, the chairman of Lloyd’s of London, while board members include former Treasury Committee head Lord McFall and Sir David Walker.

In the meantime, it is believed that NBNK is eyeing 75 branches from nationalised bank Northern Rock but is banned from making a bid for the lender until November 1, because of Mr Hoffman’s appointment.

A report by the Institute for Fiscal Studies (IFS) has warned that households will be squeezed for the next decade as they suffer from the harsh spending cuts introduced by the Government.

It said households are suffering one of the worst attacks on their finances since the Second World War and that the impact of ‘the Great Recession’ is only now being felt.

The IFS, which specialises in the UK’s public finances, said the cuts will result in greater inequality and rising child poverty, with those on lowest incomes to suffer the most.

According to the report, families with children are being ‘hit harder’ than others due to welfare changes – such as the freezing of child benefit.

It highlighted that in the last year, earnings, state benefits and tax credits had all fallen in real terms.

Child poverty is measured by the percentage of children in households where income is less than 60% of the average for the UK.

Child poverty fell from 25% in 2000 to 20% a decade later, according to the study.

The survey also points out that families have seen the biggest fall in living standards in 30 years in the last financial year.

Robert Joyce, a research economist at IFS and a contributor to the report, said: “The current economic downturn began more than three years ago, and may seem like old news.

“But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come.”

Not only are the spending cuts having a massive impact on household budgets but many believe they could push the economy back into recession.

However, Chancellor George Osborne continues to defend the cuts and he has deemed them necessary and fair in order to bring the budget deficit down.

Unions have vented their anger at directors today after a report found that the average annual bonus for a director in a FTSE 100 company has soared by 187% in the last decade. The findings were in a report by the High Pay Commission and discovered that top executives received a bonus worth 90% last [...]

Leading think tank, the Ernst & Young ITEM Club, believes the proposed ring-fencing of retail and investment banks will reduce economic growth. The think tank’s prediction comes just a week before the publication of the Independent Commission on Banking’s (ICB’s) final report on ring-fencing. The ICB, which was established in June 2010, is considering forms [...]