Archive
A-Z of the money pages: From making the most of your offset mortgage to rising energy bills
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.
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
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.”
The Gammie Review 
Can we save water, pennies and time during the drought?
Showers can use up to 200,000l of water a year, cut the time to save money...
Courtesy of The Independent Blogs.
I have to admit that I am a self-indulgent when it comes to showers. There is nothing I like more than to stand under hot water, washing the sticky sleep out of my eyes, preparing for the day ahead. It is also the easiest cure for a hangover.
With the South East and Midlands in a state of drought, I was shocked to learn that my power showers could use as much as 136 litres of water each. Radox estimate that a family of four could use up to 200,000 litres a year in showers, which could fill a swimming pool in less than two years.
The cost is staggering as well. An eight-minute shower every day can cost the average family £416 a year, whereas a power shower not only uses nearly twice as much energy and water as a bath, but could cost consumers £918 per year.
In light of this, they’ve offered a series of tips to save water and money during the drought. But how far are you willing to go to save both water and some pennies?
Some of them seem pretty obvious. Halving your shower time will save on average 45,000 litres of water per year. Every minute less you spend under the hot jets will save 17 litres.
If you are worried about taking an egg-timer into the shower with you, or are unable to accurately estimate the time you spend there, Radox are here to help. They have come up with a shower app that will choose a song of appropriate length for you to shower to – singing is purely optional – so that when the song is over you know you should be towelling-off your intimates.
The one issue with this is, how long do you have to spend in the shower to be clean by the end of it? It’s all well and good using less water, but if you smell like last nights beer and doner kebab you might not be too popular.
A novel idea for some will be turning the shower off when you apply shampoo and conditioner. Radox estimate that a family could save £104 a year if they switch it off when they shampoo, condition and shave.
I remember staying in a hostel in China, where they had the tiniest bathroom I’ve ever seen. What was even worse was that slap-bang in the centre of the shower, was a hole in the ground. Now I’m all for brushing my teeth in the shower to shave a few minutes of my schedule, but the idea of urinating at the same time could be taking things a little too far.
It turns out that consumers in Brazil have also indeed been encouraged to wee in the shower, so maybe it is simply my British sensibilities being tested here.
As well as washing your face and hair, brushing your teeth and going to the toilet in the shower, are we about to see new showers coming with a coffee machine and breakfast bar? What about having your wardrobe in the bathroom so that you could have breakfast, go to the toilet, brush your teeth, and select your clothes, while showering at the same time?
It seems doubtful whether doing more in the shower is actually going to mean you spend less time in there. It runs contrary to the spirit of the water-saving advice, if not the letter.
Once again, consumers are forced to walk the fine line between practicality, affordability, and being environmentally friendly. We have to choose between saving time, money or water, and as DEFRA has officially declared a state of drought these choices could become ever more pressing over the next few years.
One day in the distant future we might be able to have all three at the same time, but for now we are left with these hard choices.