Dear Listener
Happy
New Year.
It’s
been a bad week for final salary pension schemes. First the Association of
Consulting Actuaries said that nine out of ten of such schemes were now closed
to new members and that four out of ten were frozen for existing members too. In
addition a fifth of employers were planning to spend less on pensions despite a
new obligation to enrol all staff in a scheme – which starts for biggest firms
this October.
And
today one of our biggest companies, Shell, announced that it would close its
final salary pension scheme to new recruits from 2013. Shell is the last FTSE100
company with an open final salary pension scheme. The decision was taken to
reflect “UK market trends” rather than
because of fears about the cost or the risk – Shell’s scheme is thought to be
fully funded.
Regular
listeners shouldn’t be too surprised. Our Money Box Special last April was
called ‘The Death of Final Salary Pension Schemes’. In the private sector at
least, it is being proved right. Refresh your memory here
http://news.bbc.co.uk/1/hi/programmes/moneybox/9469419.stm.
***IN
MONEY BOX THIS WEEK***
From
this week – 1 Jan in fact – a new EU law should mean that all payments to and
from banks, building societies and credit cards happen more quickly. The EU
standard is called D+1 which means you give the instruction on day D and the
money reaches its destination +1 days later. Though ‘day’ means ‘working day’.
So Thursday for Friday, and Friday for Monday. In fact in
A major
insurer is giving car insurance customers extra legal protection cover free –
for three months and then it will charge them, even if they have already said
‘no thanks’. Esure defends itself against charges of unfair trading.
Absolute
return funds aim to give positive investment returns even when stock markets are
falling or really really messy and volatile. But in 2011, when there were all
those things, very few managed to achieve that aim, losing on average 1%, and if
you picked the wrong one as much as 16% of your money. So what does ‘absolute
return’ really mean? And is it a misleading name? No fund would come on Money
Box – but we find someone who will….
Around
14,000 customers with a Bank of Ireland mortgage are being shifted – willy nilly
– to a subsidiary of Nationwide called The Mortgage Works. The Bank of Ireland’s
standard variable rate is a friendly 2.99% whereas The Mortgage Works has a
hardly market leading SVR of 4.79%. No date has been set to raise the rate – and
some are protected on a fixed rate for a while – but when it comes the change
would add nearly £100 a month to the cost of a £100,000 repayment mortgage or
£150 a month to an interest-only loan. Nationwide won’t talk to us but we get a
mortgage specialist to give his view.
That’s
our four item agenda and we hope to squeeze in one or two short news items in
our usual 24 minutes. Listen to the finished article on Radio 4, Saturday at
midday and repeated Sunday at 9pm. Or listen online anytime
www.bbc.co.uk/podcasts/series/moneybox - or download the most popular
business podcast (ours) through iTunes.
There is
more information on our website
www.bbc.co.uk/moneybox where you can also download transcripts of past
programmes and send us ideas or problems you want us to look into in 2012.
This
newsletter is available at
bbc.co.uk/moneybox/newsletter around the time it hits your inbox (tell your
friends who don’t subscribe). And you could join more than 20,400 people who now
follow me on Twitter to enjoy (or rant about) my random but timely thoughts on
money and a few other things whenever I’m awake at
twitter.com/paullewismoney.
Wills
and Inheritance Tax is our topic on Money Box Live on Wednesday at 3pm. Call
with your question anytime after 1pm on that day on 03700 100 444 or email
through the website
http://news.bbc.co.uk/1/hi/programmes/moneybox/9671985.stm. Or of course
just listen.
Best
wishes,
Paul
PS. I
will be on Breakfast on BBC One around 0845 on Saturday with a programme trail
and back on Breakfast later in the week, probably on Thursday and usually around
0640 and 0820 talking about a money story and answering emails and tweets. But
the time, and occasionally the day, can vary.