Money News: Pension campaigners take case to Europe
Sunday 23 April 2006
Pensions campaigner Ros Altmann, a former adviser to Downing Street, is to petition the European Parliament on behalf of more than 85,000 workers left without a proper pension when their companies went bust.
Ms Altmann - together with Maurice Jones, a representative worker - will take the case to the European Parliamentary Petitions Committee on Tuesday. They will ask the committee to consider forcing the British Government to comply with European pensions legislation, which gives greater protection to employees.
The UK Parliamentary Ombudsman, Ann Abraham, released a report last month highlighting the plight of tens of thousands of workers whose company schemes were wound up when their employers went into administration. Because these firms folded before the Pension Protection Fund (PPF) was launched last year, their employees do not qualify for compensation.
Ms Abraham found evidence of "maladministration" by the Government. It had, she said, misled workers in its official literature by encouraging them to invest in their company pension schemes. She also claimed that the Government had ignored actuarial advice about the weakness of the funding behind many private schemes.
However, her call for compensation was rejected outright by Stephen Timms, the minister for Pension Reform. The Government could not be called upon to pay for collapsed private-sector pension funds, he said.
To compensate workers not covered by the PPF for at least part of their lost pensions, the Financial Assistance Scheme has been established. But this £400m fund has been criticised for being underfunded and slow to administer claims.
Now Ms Altmann wants the European Parliament to look at the British Government's decision not to offer compensation under the terms of the EU's insolvency directive. Separately, she is arguing that the right to protection of property enshrined in the Human Rights Act should be upheld.
Many UK final-salary pension schemes have been closed to new members over the past 12 months because of rising costs.
Debit cards: Cash no longer rules Britannia
The amount Britons spend on debit cards on the high street and online has outstripped cash for the first time, according to new research from the payments body Apacs.
Consumers purchased goods costing £89bn (37 per cent of their overall spending) on cards last year, against £81bn (34 per cent) with coins and notes.
Cash was still king in the UK as recently as 2004, used for transactions totalling £84bn. Debit card spending then stood at £82bn. But consumers have grown more confident about shopping online and debit card use overseas has helped push plastic ahead of hard currency.
Credit-card spending stayed the same in 2005 as in the previous year, at £61bn.
"More businesses accept cards now," said Sandra Quinn of Apacs. "And with debit cards around in the UK for almost 20 years, we also have an entire generation of shoppers who readily delve for their debit card instead of using cash."
Apacs' annual survey of the way we spend our money also showed that the use of cheques has continued to fall, down from £11bn in 2004 to £9bn last year. Spending on credit cards is expected to go up after a recent court ruling that overseas purchases must be afforded the same protection as in the UK if they prove unsatisfactory.
Property: Moving costs go through the roof
Stamp duty has helped push up the cost of moving house by more than twice the rate of house price inflation since 2000, the Woolwich has found.
Moving from an average semi-detached home in England and Wales (priced at £174,744) to an average detached home (£293,248) will cost buyers £12,535 today, it said. In 2000, the same move from an average semi (£91,341) to a detached house (£161,086) cost £4,535 in fees for solicitors, estate agents, the Land Registry, local authority searches and stamp duty.
"That's an increase in fees of 176 per cent compared with house price growth of 70 per cent," said Andy Gray, the head of mortgages at the Woolwich. "This can largely be attributed to detached property prices having gone through the Government's 3 per cent stamp duty threshold at £250,000."
As the UK housing market has roared ahead, so more homes have been caught in the higher-rate stamp duty net. However, for those not so far up the ladder, the average cost of moving has actually fallen, the Woolwich said.
To move from an average terraced home (£149,906) to a £174,744 semi in England and Wales would cost £5,304 today; in 2000, it would have set you back £3,333. This translates as a 59 per cent rise in fees against house price growth of 95 per cent.
Competition among solicitors and estate agents at this level of the market has helped keep a lid on costs, Mr Gray said.
Inflation: Spring price rises kept at bay
The cost of living rose at its slowest pace for more than a year last month.
The annualised consumer price index (CPI) nudged 1.8 per cent in March, wrongfooting many economists who forecast little or no change from February's 2 per cent. A surge in fuel bills had been expected to keep up the inflationary pressure.
In the end, however, a fall in the cost of air travel helped to dampen price rises.
The headline rate of inflation - known as the Retail Price Index - which includes mortgage interest payments, stayed the same at 2.4 per cent.
The surprise CPI figure has prompted industry speculation that the next Bank of England base rate move may be down instead of up.
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