American Express? That won't do nicely

Amex workers in the UK will count the cost of its decision to stop paying into its employees' pension scheme contributions

I have been warning for a long time that the recession will bring with it a fresh round of final-salary pension scheme closures and employer contributions cuts. But I didn't expect employers to go as far as ceasing all contributions, yet last week American Express decided that it cannot afford to pay into its UK employees' scheme until January 2011.

The credit card provider, which employs some 6,000 people in the UK, says this is a temporary measure to cut costs in the face of the global downturn. The move affects the firm's stakeholder pension as well as its final salary scheme, which was closed to new entrants in 2006. Crucially, there is nothing to stop Amex turning around in 18 months' time, mothballing its current scheme and launching a cheaper pension plan. In fact, Amex, like other employers, won't be compelled to pay into its employees' pensions until the introduction of personal accounts in 2012 – which may never see the light of day. In one respect, in a recession it's good to see employers, employees and unions being flexible and doing what they can to avoid job cuts. It's a key difference from the early 1980s and 1990s recession. However, even under a best-case scenario, job losses will continue for the next year at least, and the pressure on pensions will grow and grow; heaven knows where occupational pensions will be by 2012 or 2013. As for Amex stopping pensions' contributions, to paraphrase its most famous advertising slogan: "That won't do nicely."



Disloyalty incentive

What rewards for loyalty? Well, if you use a particular retailer, car-dealer or airline time and again, you can usually expect a little titbit for coming back, either money off, or air miles or some sort of loyalty card programme. But in financial services, you're treated, frankly, as a bit of a mug. Take student accounts: banks offer lots of freebies and free overdrafts to get youngsters to sign on the dotted line. But against the backdrop of the credit crunch, banks are increasingly reining back on graduate accounts, cutting overdraft limits in double-quick time. A reader emailed me the other day to complain that, having just left university, her overdraft was slashed by her bank – she took out the account on the understanding that, at graduation, her overdraft would fall much more gently and slowly than has actually happened. She is now working in two low-paid jobs, in a scramble to meet the bank's demands. But there is another option: move your account at graduation. The financial information service Moneyfacts has shown, in the first year after graduation, the level of interest-free overdraft on a graduate account ranges from £1,000 up to £3,000, while additional authorised borrowing is charged at between 9.9 and 19.9 per cent. So ditch loyalty and shop around. Remember: the banks want you because you are on the cusp of a career. Play them at their own game.



Direct inaction

HomeBuy Direct, the Government's much-vaunted shared equity scheme designed for first-time buyers, has helped a pitiful 215 people into their own homes. Now I know HomeBuy Direct had the gross misfortune of being launched slap-bang in the middle of the biggest mortgage and housing slump in a generation. But 215?

The Government's original target for HomeBuy was 18,000, but the low take-up seems partly due to the fact that it's only available on new-build property, and in a falling market with so many building projects being mothballed, who would buy off-plan?

Independent Partners: 10 top tips for retirement. Get your free guide here

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam