Where is the cash!
We love cash. So much so that we have almost a trillion pounds of it. Yes,
£921,000,000,000 in cash is owned by individuals in the UK. An astonishing £38
billion of it, about 4%, is the notes and coins sitting in our pockets and
purses – and no doubt under quite a few mattresses. Just over half is in instant
access accounts with banks or building societies, about a quarter is in savings
accounts which require notice to get the money out, 15 per cent earns interest
tax-free in cash ISAs, and a surprisingly small amount is in current accounts
(though the way the figures are done some current accounts are counted as
‘instant access’).
The Bank of England figures also show that building societies offer better rates on average than banks — 4.6% for instant access compared to 3.47%. They also offer better rates on long-term savings at 5.36% compared to 5.18%. Altogether we earn £37 billion a year in interest.
These averages though are far below the best available. Research by Sainsbury’s Bank showed that nearly half of those it surveyed did not know the rate of interest their money was earning. Everyone should check that they are getting the best rate possible – currently more than 6% - and check again in six months’ time. If we all went for the best we would earn another £14 billion.
Banks fail low income pensioners
And there’s a timely warning about another waste of money from the Low Incomes
Tax Reform Group. It found that High Street banks and building societies are not
advising low income customers – including many pensioners – how to avoid the
automatic tax deduction from their savings interest. Its research found that
fewer than one in five banks provided the correct 2006/07 form to reclaim the
tax already deducted and barely half provided the help sheet that goes with the
form which enables people to see if they should pay tax on their interest or
not.
By law banks and building societies have to deduct 20% tax off any interest earned and pass it on to the Treasury. But if the saver tells the bank that they do not pay tax then that automatic levy is stopped. Anyone aged 65 or more with an annual income below £7,550 this year or £9,030 in 2008/09 should pay no tax on their interest. You can let the bank or building society know you should not pay tax on form R85 – call 0845 980 0645. And if you have wrongly paid it in previous years you can claim it back using form R40. You can go back six tax years but you have to get your skates on for 2001/02 – that claim has to be in by 31 January. Call 0845 077 6543. Low Incomes Tax Reform Group gives free help with tax 0845 601 3321 or at www.litrg.org.uk.
Credits for looking after children
The Government has launched an investigation into millions of National
Insurance records, just three months after denying there was anything wrong with
them. Many women spend time looking after their children or caring for other
relatives. Under a complex provision called Home Responsibilities Protection (HRP)
those years can help them get a better state pension. HRP should be recorded
automatically on NI records. But Liberal Democrat MP Steve Webb claimed last
year that half a million women were being paid too little pension because their
records had not been correctly updated. That happened especially when the women
were paying the reduced married woman’s National Insurance contributions. For
them HRP does not start for two tax years after they stop work. But HRP was not
always being automatically recorded when that two years was up. The Government
says it is now re-examining the NI records of all women over 60 who are not
entitled to a full pension but have no HRP on their record and who lived at the
same address as someone who reached 16. Anyone who thinks HRP may be missing
from their record should contact the pension service on 0845 60 60 265 or
www.thepensionservice.gov.uk.
Postcode pensions
Legal & General has started paying bigger pensions to people in poor areas
who it says are likely to die earlier than those in wealthier locations. The new
deal will apply to anyone with a pension fund when they use it to buy an annuity
– a pension for life – from the insurer. At the moment people from poorer areas
subsidise those who are richer. They live a shorter time but get the same
pension. People in Glasgow who reach 65 can expect to live about ten years less
than those in the wealthy Chelsea district of London. But examples given by
Legal & General indicate that the difference in the pension paid will not be
great – another 2% or 3% a year – and the insurer has said it will not be
cutting the pensions to people in wealthier areas where people expect a longer
life. Instead the cost of the new scheme will be paid for by the extra profits
from the new business it hopes the initiative will generate.
Already some insurers pay bigger pensions to smokers and those with diseases but Legal & General is the first to use other factors that may affect life expectancy. And Simon Gadd, L&G’s Managing Director for Annuties says the personal tailoring of annuities will not end there "Over time more factors will be introduced. Obesity could come into it, what kind of job you do, salary and so on."
In the sky…
A Saudi prince, the world’s 13th richest man, has become the
first individual to buy the world’s biggest airline, the new Airbus 380. The
plane can seat 850 passengers. But Prince Alwa-leed bin Talal will fit it out
with bedrooms and lounges and use it as a runabout for him and his family. The
list price of the jet is more than £150 million and trade estimates put the cost
of the luxurious personal interior at perhaps another £50 to £100 million.
Airbus pointed out that the cargo hold in an A380 could be used to transport
racehorses to meetings around the world or personal vehicles for international
shopping trips. Airbus VIP Marketing Director David Velpupillai commented “If
you have a 747 then bigger and better is the A380”. The Prince does have a
747-400. Its fate is unknown.
…and in cyberspace
A record price has been paid for a UK internet domain name – that’s the bit
after the www when you log on to a website. An investor spent £150,000 for the
domain recycle.co.uk. That works out at £13,636 per letter and beats the
£110,000 Sainsbury paid for taste.co.uk in 1997. The business of selling domain
names in the UK is growing – a total of £1.5 million was raised in UK auctions
last year. But these amounts are left in the shade by the value of the worldwide
.com domain names. In 2000 Halifax, now part of HBOS, paid $1 million – then
about £600,000 – for if.com at the launch of its new online bank Intelligent
Finance. In May 2007 porn.com sold for a record $9.5 million (£4.75mn) just a
year after diamond.com fetched $7.5 million. Last year seniors.com was sold for
$1.8 million. Paullewis.co.uk anyone?
Collecting
If there is one word that sends photographers into a state of almost
religious reverence it is “Leica”. Forget that most professionals use a Nikon or
a Canon; ignore the journey of the Hasselblad to the Moon, and pass over in
silence electronic newcomers like Sony. The Leica, the worshippers say, has a
shutter that sounds like a kiss, was used by Henri Cartier-Bresson, and launched
35mm photography. Dianne Arbus took her portraits with it. Robert Capa took it
to five 20th century wars. And Sebastião Salgado takes it wherever
people work on Earth.
The result is there are thousands who simply collect Leicas leaving them languishing in glass cases rather than using them to capture images. So it was no surprise that when one of the rarest Leicas of all came up for auction in Germany this winter it fetched a record price of €336,000 or about £240,000. The ‘O’ series camera was the first of a small number of prototypes to test the market for the new design in 1923. Not unique but very, very rare and possibly the only one still available to come on the market.
Not all Leicas are worth as much as a house. You can get a good series III (1935-1957) with lens for a couple of hundred pounds. But unusual models, including those with World War II connections, can be worth rather more. And many are still lying unrecognised in lofts and garages.
More from he Photographic Collectors’ Club of Great Britain www.nanites.co.uk/pccgb or the Leica Historical Society of America www.lhsa.org
Pound replaced by euro
From 1 January 2008 the pound has been replaced by the euro. Yes, really.
Not in the UK of course but in Cyprus as it becomes the 15th member
of the EU – along with Malta – to adopt the single currency. More will follow.
Lithuania and Slovakia in a year’s time and they will be joined by Bulgaria, the
Czech Republic and Estonia in 2010 and probably by Hungary and Poland a year
after that. People in Denmark and Sweden have both voted against joining the
euro and the UK now seems further from joining than ever. So the pound here at
least seems safe.
January 2008