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Commuting ‘cheaper’ than buying close to work – but only if you live in London

September 22, 2011 Leave a comment

This was my crowning glory at Thisismoney.co.uk. The press release came in and I spent hours going through the figures, making sure I’d got the data right for the piece, which was published first thing on the Saturday as the lead news story – lucky me.

Thanks, as always, to Thisismoney.co.uk for letting me print it.

Report suggests living outside London and commuting is cheaper for commuters.

Cost saving: Commuting into London is often much cheaper than living in the city

London workers are making big savings by commuting rather than living near work, according to a study looking at house prices.

But the same benefits are not seen around all other major cities.

Commuters living in Home Counties – an hour outside of London – own homes £375,000 cheaper than those in the city.

The study found that with a rail season ticket costing £4,400 a year, commuters from towns like Peterborough and Swindon could afford to travel to work in London for over 80 years with the savings they’ve made on their properties.

The average house price in Reading and Milton Keynes, half an hour outside London, is £275,000, while a property in Central London is £620,000.

Travellers from these locations have shorter journey times and cheaper rail tickets of around £3,100 a year. Their homes – and repayments – are typically 66 per cent lower.

 Residents in Wimbledon and other outer boroughs, only 15 minutes from the city centre, are paying on average £300,000 less for their accommodation, with commuting estimated at only £1,400 a year.

The study by mortgage lender Halifax does not take central London tube fare prices into account.

‘It’s no surprise, for London at least, that the longer your commute, the larger the difference in house prices,’ said Nitesh Patel, a housing economist at Halifax.

‘The decision to commute is not simply a trade-off between financial costs and journey times.’

Social factors such as better schools and quality of homes can explain why commuters would prefer to travel greater distances to get to work.

However, commuters living near other major cities in the UK do not always find the same pay-offs.

In Birmingham, the average cost of housing within the city is actually cheaper than in local towns 30 minutes away. Residents in these towns will be paying an extra £1,500 a year to commute on top of an extra £10,000 on their houses.

Of course, those who bought in the centre of London in previous decades are likely to have seen a bigger increase in the value of their home than those in the Home Counties, with those buyers getting an excellent return rather than pumping their hard-earned money into train fares.

The cost of rail travel is set to increase dramatically next year. This is due to changes in the way increases to train ticket fares are calculated.

Whereas previously fare increases were based on the Retail Price Index (RPI) measure of inflation, with train firms given leeway to add up to one per cent on top, from July this year, train companies are now allowed to add up to three per cent.

With the RPI inflation figure remaining at five per cent, commuters could see their transport costs soar up to eight per cent next year. But, because the rises can be calculated as an average across all fares, this means that some fares could skyrocket, whilst others remain relatively stable.

This week, the Transport Secretary, Philip Hammond, added his voice to the clamour, saying that trains have become a ‘rich man’s toy’, with some fares becoming ‘eye-wateringly’ expensive.

Stephen Joseph, chief executive of the charity Campaign for Better Transport, said: ‘Far from being simply “a rich man’s toy” trains are also vital for many of those on more moderate incomes who need to get to work.’

Original source: Thisismoney.co.uk

http://www.thisismoney.co.uk/money/mortgageshome/article-2038282/Commuting-cheaper-buying-close-work–live-London.html#ixzz1YgrDQVSB

British expats vow to stay abroad despite squeeze on incomes

September 22, 2011 Leave a comment

Here’s another article I did for Thisismoney.co.uk during my time with them. It was a really interesting piece, even though it came from a press release because I had no idea the squeeze on incomes was so tight on our expats. As you ca nsee from the comments links at the botton, it cause a wee bit of a debate, or at least more of a debate than anything I’ve written before has. Made me think about escaping the UK myself.

Thanks to Thisismoney.co.uk for letting me reprint it.

British expats are feeling the financial squeeze

Worth it: More than half of British expats will continue to live abroad despite rises in the cost of living leaving them out of pocket, according to a recent survey by Moneycorp

More than half of British expats will continue to live abroad despite rises in the cost of living leaving them out of pocket, according to a recent survey.

The study, by currency dealer Moneycorp, shows that over 50 per cent of expats say that while they moved abroad for a better standard of living, their incomes have actually plummeted since the economic downturn.

Despite these factors, nine out of ten expats said that they would continue to live abroad, with 25 per cent saying that they would rather move to another country before considering moving back to the UK.

The fall in incomes could be attributed to two factors: the decline of the British pound against other currencies; or the fact that many expats living off state pensions find their income is not index-linked.

 In 2007 an expat could expect to move to Europe with an annual income of £10,000 and see a return of £16,500, whereas in the current economic climate, the same amount would return just £11,000.

As reported earlier this year, in non-EU countries, like relocation hotspots USA and Australia, British citizens’ pensions are frozen as soon as they retire.

This means that a 65-year-old who retired in Australia today on a pension of £102.15 would still be receiving £102.15 in 2028. If inflation in these countries remains constant, then, according to online currency broker Currencies.co.uk, the value of these pensions could drop by half in just 17 years.

John Lawson, of Standard Life, says: ‘Retiring abroad is a dream for many people, but does require careful planning and advice.  Many people think living abroad is cheaper than living in the UK, but this isn’t always the case.’

The Moneycorp survey shows that many British expats are willing to shoulder the burden of lower incomes to retain their lifestyle while 80 per cent said they believed their children’s lives had improved.

David Kerns, Private Client Dealing Manager at Moneycorp said that although many Britons are happy overseas and enjoying a better quality of life, they are suffering from a rise in living costs and wanted to know more about transfer fees when moving funds abroad.

He advised expats:  ‘Speak to currency specialists to guard against adverse fluctuations. By locking into favourable exchange rates for up to two years, expats can protect themselves against the pound losing further value, as well as avoiding potentially costly transfer fees.’

He added: ‘Over a series of payments, these savings can run into the thousands of pounds.’

Original source: Thisismoney.co.uk

http://www.thisismoney.co.uk/money/news/article-2037381/British-expats-vow-stay-abroad-despite-squeeze-incomes.html#ixzz1YgqBgUnb

A-Z of the money pages: From making the most of your offset mortgage to rising energy bills

September 22, 2011 Leave a comment

This article was produced for Thisismoney.co.uk, a personal finance website and supplement for the Mail on Sunday. It is by their kind permission that I reprint it.

A round up highlights of personal finance and consumer news from the weekend newspapers.

A round up of the weekends big finance stories

The Sunday Papers

 

The Observer

The Peter Pan generation of adults paid £3.4billion by Bank of Mum and Dad

A report has revealed that more than 13million parents are paying out over £34billion a year in loans and gifts to support their adult children.

The average loan or gift was estimated at £2,480 a year, with the most money being given to adult children between 35 and 39.

Research suggests that £8.4billion was handed-out for mortgage payments, £3.5billion for home improvements, £2.2billion to pay off debts and £1.6billion to pay for education.

Labelled the ‘Peter Pan generation’, the research done on behalf of Sainsbury’s Finance indicates that many children are still dependent on their

Dark days for consumers with two energy rises in a week

Consumers could be facing an expensive winter as five of the UK’s biggest energy suppliers are set to make increases of up to 19 per cent to their tariffs this week.

EON has announced it will raise its standard tariffs for gas by 18 per cent and 11 per cent for electricity on Tuesday. This would see household bills for the year rise by £114 and £56 respectively.

Scottish and Southern Energy will increase standard tariffs by 19 and 12 per cent for gas and electricity on Wednesday, piling £122 and £52 a year on to bills. Only EDF Energy out of the big five hasn’t confirmed its intentions.

Consumer comparison site uSwitch.com advises consumers to move to dual fuel, pay by direct debit and sign up to an online plan to help reduce their winter bills. 

The Sunday Telegraph

Brussels directive to cost jobs

Almost a third of temporary employees could lose their jobs in the run up to Christmas if the new European rules are not diluted a study warns.

The EU Agency Workers Directive comes into effect on 1 October and would give temporary staff the same pay and benefits as permanent workers after working at the company for over 12 weeks. The new law could cost businesses in Britain up to £1.6billion a year.

The study, by Allen & Overy, suggests that up to a third of employers will attempt to avoid the new rules by terminating workers’ contracts in their 11th week. The law firm estimates that up to 462,000 of the UK’s 1.4million temporary workers could be made redundant in mid-December.

The CBI and other industrial bodies warn that unless the UK government moves to dilute parts of the new law, then it couldn’t come at a worse time for the country.

Inflation to rise as energy bills soar

Leading economists expect that a rise in inflation this week will not reduce the chances of a second bout of quantitative easing (QE) from the Bank of England’s Monetary Policy Committee (MPC).

Annual inflation is forecast to rise on the consumer price index (CPI) from 4.4 per cent in July to 4.5 per cent in August. The retail price index (RPI) is expected to rise from 5.0 per cent to 5.1 per cent over the same period. The figures continue to be unwelcome for the MPC as they continue to fail to meet their 2 per cent target.

The figures will be published by the Office for National Statistics (ONS) on Tuesday. With Scottish Gas raising its gas and electricity tariffs at the beginning of last month this is expected to filter through to the CPI in September.

Economists at Investec, a specialist bank and asset manager, have said they expect the MPC to start QE as soon as October because the risks of growth are so severe.

Google chief predicts UK jobs boom

The European head of Google has said that the UK is on the verge of an internet boom that could create over 350,000 jobs over the next five years.

Philipp Schindler spoke out ahead of the Telegraph’s Festival of Business in Manchester where he is a keynote speaker. He commented that even though the current economic climate is tough, internet-related companies and businesses that use the internet successfully were still growing.

The web is responsible for a fifth of Britain’s GDP growth. Economists working for Google based their estimates on the current economic forecasts for growth of GDP in UK and the current rate of job creation that is associated to a rise in GDP.

In light of these figures, Mr Schindler added that the estimate of 365,000 jobs being created was on ‘the conservative side’.

The Sunday Times

Thousands on claims blacklist

A Sunday Times investigation has found that tens of thousands of consumers could find their insurance policies are invalid because they have made inquiries to other providers, even if they never made an actual claim.

All calls to insurers are recorded at a central database known as the Claims and Underwriting Exchange (Cue). The problem arises because many providers don’t check the cue database when an application is made, only when a claim is put in. This has resulted in many consumers being accepted for cover, only to find their policy is invalid when they make a claim, because they are not aware that any claim inquiry (potential loss) has to be declared.

New laws to ban insurers denying claims and cancelling policies for minor and unintentional errors on application are to be debated in the House of Lords next month. These would force insurers to ask clearer questions on the outset.

Your guide to beating inflation

After the National Savings and Investments (NS&I) pulled its popular savings certificates last week the Sunday Times has looked at what alternatives are available.

The NS&I were the only company to offer a tax-free return greater than the rate of inflation and guaranteed by the government.

But companies like the Post Office offer inflation-linked bonds with a three-year return of 0.5 points above the annual change in the retail price index (RPI) and a five-year plan paying 1.5 points above RPI. However the accounts are taxable and consumers do not have the same freedom to withdraw funds compared to the NS&I.

Candidmoney.com has found that potential returns from the Post Office bonds are beaten by those of five-year fixed-rate Isas. The best five-year fixed-rate Isa is from BM Savings, which pays out at 4.25billion per cent, returning £6,157 on a £5,000 deposit.

Make the most of your offset

First Direct and Barclays cut their offset mortgage rates last week to tempt borrowers.

Offset mortgages allow buyers to set their savings against their loans, and by giving up the interest on their savings they make savings on the interest on their mortgage. This could benefit all sorts of buyers including parents, the self-employed, landlords and first-time buyers.

By putting their savings for children’s school fees against their mortgages, and toping it up with income when required, parents with a £500,000 mortgage and £75,000 in savings could save up to £2,625 a year compared to £1,687 in an instant-access account.

Self-employed could hold their as yet unpaid taxes against their loans, offsetting it against their mortgage until the taxes are to paid, while landlords can offset their own mortgage from the rent the claim on other properties.

First-time buyers with wealthy relatives could make savings on their repayments. If a relative offsets £50,000 of savings against the loan repayments would fall from £1,215 a month to £911.

Original source: Thisismoney.co.uk

http://www.thisismoney.co.uk/money/news/article-2036565/A-Z-money-pages-From-making-offset-mortgage-rising-energy-bills.html

Birmingham University Involved in Reconstructive Collaboration (case study published in University Business January issue)

The University of Birmingham has undertaken it’s most ambitious reconstruction in 30 years in partnership with Berkshire Consultancy Ltd.

Working towards creating five distinct university colleges by 2010 from the existing 19 subject based schools, the University aimed to create a more stable and flexible business foundation to meet the commercial pressures arising in the sector whilst retaining growth in research and postgraduate study.

The project, which was completed early last year, was initiated in 2005 as part of five year business plan. working in close cooperation with Berkshire Consultancy Ltd (BCL).

Heading the structural change programme was the People and Organisation Development Team (POD), led by Sally Worth, which is a division of the University’s Human Resources Team at the University.

In order to design and implement the new management and operational structure POD cooperated with BCL to design a bespoke programme that tailored to the unique needs of the institutions academic, non-academic, managerial and non-managerial staff.

Worth commented that they brought BCL into the restructuring programme because of their experience and the fact that their team: “demonstrated a commitment to understanding our specific needs from the word go.”

Both parties understood the potential upheaval the project could cause, and therefore undertook a needs analysis with 30 key stakeholders looking to maximise the transference of key skills and knowledge at every stage.

Two workshop stands were initiated in advance of the programme, which allowed staff of all levels to attend flexible events as and when the developments affected them. These workshops focused on providing the practical and psychological support for both managers and staff to maximise the benefits of the new structure and ensure that they had the skills needed to design and translate the changes in to local college specific perspective.

BCL and POD made sure all information was available before, during and after the restructuring process. At the end of the period BCL began a handover stage to in-house personnel, so the University’s staff could continue to provide support into the future.

According to both parties the development has gone ahead without major upheaval. Therese Turner, Account Director of the BCL team stated that: “Now the new structure is in place and all staff are pulling in the same direction. Birmingham University is now well placed to cope with new challenges facing the eduction sector.

Worth commented that the transition to the new structure was extremely smooth and added: “Rather than worry about the change, we have experienced a real buy-in from staff and excitement about the new structure.”

The Pro Bono Approach (feature published in University Business Jauary Issue)

It has never been unusual for students take part in voluntary or pro bono work, even if it is just to add some vital experience to their CV’s.

In a market with an ever increasing amount of graduates for a limited number of positions having hands-on experience on leaving university can have a massive influence on employers hiring decisions. What is more unusual is the way that some universities are now integrating this work into their curriculum.

The University of West England runs a legal clinic, Community Legal Advice and Representation Service (CLARS), in conjunction with the Citizens Advice Bureau. Over 200 students work with a team of academics to interview and advise locals on a range of legal issues.

Heading the project is Marcus Keppell-Palmer who has spoken exclusively to University Business regarding the integration of this scheme in to their course.

Mr Keppell-Palmer stated that UWE has recognised the value of incorporating work within students degrees and that they are hoping to incorporate more placements into the course structure.

He continues, saying that: “students who work in our Street Law project and in our Innocence project my use their experience as the basis of their year-long placement in our Law in Action placement module.”

Any student on the Barristers Course can claim a module of work if they work enough cases through CLARS..

They are not the only institution beginning to put practical placements on to the curriculum. The University of Birmingham has recently extended it’s Free legal Advice Group (FLAG), and at Oxford Brookes they are beginning to add one day a week placements to the accountancy course.

The Accounting for Charities: Engaging Students (ACES) scheme was launched in January 2010 between Brookes and Oxfordshire Community and Voluntary Action (OCVA), and it puts second year undergraduates into local charities to run their books.

Catherine Dilnot, senior lecturer at the Business School, has told University Business that the project has now been approved as an independent study module, incorporated into the BSc Accounting and Finance.

Whilst students currently participate in these schemes out of the goodness of their hearts and for their CV’s, but as more and more universities start to create links with both NPOs and private businesses it seems likely that more placements could be integrated in to degree courses.

 

Spending Cuts In The Animation Industry (As published in Imagine: the magazine for professionals in the animation industry)

With the release of the Comprehensive Spending Review on the 20th October and the budget on the 3th November professionals have been concerned over how these cut-backs will affect them and their businesses.

The animation industry is so varied that it has been hard to tell how the cuts will affect the industry as a whole. Will the cuts made by the Culture, Media and Sport’s Ministry have an impact on our animation film industry? Do the Business, Innovation and Skills Ministry believe that our high-tech animators, especially in the video games industry, will see any of their £200m planned investment in high-tech industries? Here at Imagine, we asked professionals in the industry how they felt the cuts would affect them.

With cuts set at 25 per cent across the board, the animation industry will be hit hard in more than a few places it seems. Richard Wilson, CEO of TIGA, the trade association representing the UK’s video gaming industry, has been campaigning for two years to try and get games tax relief from the government.

In an exclusive statement to Imagine, Wilson told us that: “We believe that the loss of games tax relief will lead to a decline in the UK development workforce.”

Having worked so hard to get he previous government to add this proposal to the budget talks, Wilson was shocked that the coalition dropped it from their talks this June.

Over the last two years the number of employees in the computer games industry has dropped by nine per cent. Wilson is determined to keep campaigning and arguing with the government to get tax relief for the gaming industry, which he claims could generate up to £415m in tax receipts to the Treasury.

The video games industry is not the only concerned party. In June this year, production companies including Blue Zoo and Aardman Animations, the creators of Wallace and Gromit, banded together as Animation UK called on the government to award them similar tax benefits as those awarded to the film industry.

Their campaign, Save UK Animation, was launched before the coalition announced their emergency budget. Both parties in the coalition proposed supporting the creative industries whilst in opposition, but now the cuts have come and the creative industries are being hit hard.

The global animation industry is estimated to be worth £200bn, but the industry in the UK is worth just £120m. Many professionals in the industry are worried that the cuts will result in the UK’s animation industry losing home-grown talent.

Miles Bullough, speaking on behalf of Aardman Animations, commented that: “If every country took away their financial support then the UK’s position in the international market would strengthen immeasurably because we are so good at it … as long as so many countries provide financial support to their production sectors we are at a disadvantage and we are losing to our overseas competitors.”

Wilson echoes these sentiments. When we asked him if he thought that the rise in university tuition fees to £9,000 a year would put students off studying animation he said he “hoped they wouldn’t” and said that universities in this country that provide courses in animation must be supported by the government in the same way as our competitors in Canada and Korea are.

The light on the horizon seems to be Business Secretary Vince Cable’s announcement on the 25th October that there will be a £200m investment in the high-tech industries. This could allow animators in both the film and games industry being able to claim a bit of government funding, but as Wilson points out, “It won’t simply be the development sector, or the animation sector that benefits from such a fund.”

 

Comment on Privatisation of Universities in the UK

It has been a momentous few months for the higher education sector. Rumours flying, numbers crunching and minds racing. But the key question seems to be where tuition fees will be capped.

It would suit the top universities in the UK to be able to charge whatever they fancy, and with the publication of Oxford Vice-Chancellor Professor Andrew Hamilton’s letter it made it very clear that in order to ease the black hole in funding that the 40 percent cuts would lead to fees must be set at around £8,000. Any addition to this would be a bonus, but with Browne proposing levies on fees above £7,000, universities if left to their own devices might look to start charging fees on a par with the US Ivy League.

Another option being toyed with by universities is privatisation. The London School of Economics was involved in a case of crossed wires with its Student Union over its review of the merits of privatisation. If universities drop out of the Higher Education Funding Council of England then they will be able to charge students whatever they please and not have to cooperate with HEFCE regulations. Again it looks like many of the top universities in the UK see the CSR as an opportunity to rise to the heights of the Ivy League universities like Yale and Harvard.

Many businesses will be gleefully rubbing their hands together at the prospect of private universities. In going private many universities will have to out-source funding from investors, and this would be an opportunity for big business to get their hands on share not only of the high tuition fees it is likely private institutions would charge, but to take their pick of the best candidates emerging from these institutions, or even to set teaching and research priorities. GlaxoSmithKline have recently set a up a partnership course at the University of Nottingham, in name to provide practical and industry standard pharmaceutical training for third year students in and out of the laboratory. In effect it will allow GSK to weed out the best students, but it is also a free pool of labour. With students doing pharmaceutical research in to the drugs GSK are producing, the company benefits from having the university doing its research for it.

Small institutions will be just as eager as the big ones to secure private funding, but for the opposite reason, staying in business, compared to maximising business.

What scares me the most is the idea that academics will have to have their agendas and research proposals approved for funding by private investors. This, I feel, might compromise the intellectual integrity of academic research world-wide.