Money

Cameron calls for tax transparency

Press Association — 2013-05-20T10:00:00+00:00

Filed under: Tax

David Cameron has written to the leaders of Britain's offshore tax havens stressing the need to "get our own houses in order" as he pushes for international action to tackle avoidance schemes.

In a message to 10 crown dependencies and British overseas territories Mr Cameron said he backed their right to be low tax jurisdictions but insisted that rules needed to be set and enforced fairly.
The move comes ahead of next month's G8 summit in Northern Ireland, where Mr Cameron will push for an agreement aimed at clamping down on tax evasion and avoidance. He said he wanted the G8 to "knock down the walls of company secrecy" to reveal who really owns and controls firms.

Mr Cameron's initiative came as he prepared to raise the issue of corporate tax dodging with Google boss Eric Schmidt at a meeting in Downing Street.

The internet giant's executive chairman is a member of Mr Cameron's Business Advisory Group, which has its regular quarterly meeting, just days after Google was given a mauling by a House of Commons committee over its tax affairs.

The group holds its meetings behind closed doors and Downing Street does not reveal the content of its deliberations but a source inside Number 10 confirmed that tax will be up for discussion, insisting that ''nothing is off the table'' when Mr Cameron meets the group of 16 business leaders.

The Prime Minister's letter calling for more transparency about tax information and the ownership of companies was sent to leaders in Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands Jersey, Guernsey and the Isle of Man.

Mr Cameron wrote: "As you know, I have made fighting the scourge of tax evasion and aggressive tax avoidance a priority for the G8 Summit which the UK is hosting next month.

"With one month to go, this is the critical moment to get our own houses in order. I am looking to all the overseas territories and crown dependencies to continue to work in partnership with the UK in taking the lead on two critical issues: tax information exchange and beneficial ownership."

Labour leader Ed Miliband has pledged to write new rules to tackle corporate tax dodgers if he wins the next election, even if there is no international consensus for action. In an interview with the Observer he said Mr Cameron's Government was "dragging its feet" on the issue.

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Where are Britain's highest tax bills?

Sarah Coles — 2013-05-20T09:33:00+00:00

Filed under: Tax

A small corner of leafy Surrey has taken the top spot in the league table of the highest income tax bills per person. Residents of Elmbridge pay an astonishing £1.18 billion in income tax every year. That puts a number of the major cities in the shade.

So who else is paying a fortune in income tax?

Biggest bills

Research by accountancy firm UHY Hacker Young found that there are only 130,000 people generating this income in Elmbridge, which works out as £16,100 each, making this the area with the highest income tax bill per person.

Visiting Elmbridge reveals that the size of the area's income tax bill shouldn't come as a huge shock. The leafy towns of Esher, Weybridge and Walton-on-Thames are filled with mansions, private estates, country clubs, golf courses, and riversides packed with millionaires. The proximity of Chelsea's training ground in Cobham has also brought well-paid sportsmen to the area.

It has become a haven for celebrities - from Elton John to Jensen Button, and is known locally as Britain's Beverly Hills. It's also the ideal spot for the banker to bring his family - just a chauffeur-driven 50 minute commute from the City.

Plus, of course, unlike the cities where rich and poor live in each other's pockets, the home counties bring the rich together out of reach of the less affluent.

The rest of the top ten is made up of:

St Albans £10,900
Windsor and Maidenhead £10,200
Guildford £9,830
London £8,580
Wokingham £7,490
Dacorum £7,490
Reigate and Banstead £7,000
Tonbridge and Malling £7,000
Wycombe £6,820
National average income tax £4,398.

Clearly London and the Home Counties dominate. Mark Giddens, Head of Private Client Services, says: "There is a growing regional mismatch within England and Wales, with wealth and tax bills becoming concentrated within a handful of cities home to lucrative industries, or a collection of leafy suburbs."

He adds: "Governments have attempted to boost the attractiveness of other regions in the UK to top earners, even encouraging some public sector organisations to relocate to different parts of the UK. However, the pull of the South East, culturally, politically, and financially is still very strong for the highest earners."

Away from the South, one city bucking the trend is Aberdeen, which has seen the fastest growth in income tax bills over the last five years. Average taxpayers in Aberdeen saw the amount of income tax they pay jump by 17.6% to £5,950 last year from £5,060 five years ago. This is nearly twice as fast as the growth of London's average tax bills and 12 times faster than the growth of the national average income tax bill.

Giddens says: "Aberdeen has been transformed since the 1990s with the growth of the oil industry. It's now a major global energy hub and one of the pillars upon which the Scottish economy is built. There is a lot of wealth in the city, with plenty of millionaires that have built oil services companies from the ground up."

Total tax bills

In terms of total income tax, the major cities dominate the list, with the plush home-counties towns pushing their way into the top ten.

London £33.7 billion
Greater Manchester £4.41 billion
Merseyside £2.19 billion
Leeds £1.49 billion
Edinburgh 1.45 billion
Birmingham £1.43 billion
Elmbridge £1.18 billion
Glasgow £898 million
St Albans £846 million
Bristol £843 million

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Pensioners on a seventh of minimum wage

Sarah Coles — 2013-05-20T09:30:00+00:00

Filed under: Pensions

The minimum wage will be a distant pipe-dream for the average current and future pensioner, according to research by pension provider Liberty SIPP.

So just how miserable is life set to be, and what can we do about it?

The company calculated that a person retiring at age 65 would need a pension pot of £220,276 to have an annual income equivalent to the minimum wage (£6.19 per hour or £12,115.20 a year). At the moment, however, the average UK pension pot is estimated to be around £30,000 - less than a seventh of the amount needed to generate a minimum wage income.

This is also way below the £8,254 a year that the Joseph Rowntree Foundation estimates marks the poverty line for a single pensioner in the UK.

John Fox, Managing Director, Liberty SIPP, commented: "These simple calculations drive home just how extreme the current pension crisis is. It's widely known that many pensioners are on the breadline but when you think that the typical retirement income will be just one seventh of the minimum wage, it relays the true extent of the problem we're dealing with."

Alternatives

Of course, pensions are not the only sources of income. Research from JP Morgan Asset Management revealed that 46% of pre-retirees admit they currently save nothing for retirement.

Almost half of respondents (47%) said that they will use state benefits as their expected source of income in retirement (up from 29% in 2006). At the moment, the state pension can be added onto any private pensions, which will bring many households within touching distance of the minimum wage. The question is how long the state pension is going to be part of the equation - and whether in 20 or 30 years time the level is so low - and starts so late in life - that it can no longer be factored into your pension planning.

Others will add their property value into this (16%) , but there's always the risk that you will not be able to downsize at the key time, or that property prices work against you. Similarly the 16% who are relying on an inheritance to fund their retirement are overlooking the risk that their relatives spend their money or fail to pass away in time. Almost a third (32%) say they will work part time, although this depends on them being in good enough health to work.

Help yourself

There is no easy answer to this crisis. There's no getting around the fact that the only away to be certain of avoiding poverty in retirement is to save as much as you can as early as you can. As a basic minimum, younger people need to be putting aside £200 a month, which should increase as you get older and your income rises. Those who start saving later in life will have to put a great deal more aside in order to make a dent in their retirement needs.

It may feel a burden too far in the current environment, but we need to sit down with a household budget and work out how we can squeeze this extra cash out of our income in order to save for the future. It may seem impossible, but if you think things are tough now, try living on seventh of the minimum wage.

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Beatles guitar sells for £269k at auction

Hannah Ricci — 2013-05-20T09:00:00+00:00

Filed under: Investing

A guitar played by John Lennon and George Harrison has sold for $408,000 (£269,000) at auction.

The custom-made instrument (pictured), made by the VOX company in 1966, was bought by an anonymous US buyer in New York.
Harrison played the guitar while practicing I am the Walrus during The Magical Mystery Tour, and Lennon played it while recording a video session for Hello, Goodbye.

Julien's Auctions said the guitar had exceeded its estimated value of $200,000-$300,000 (£132,000-£198,000).

"It's extraordinary when you have the opportunity to offer such an amazing piece of music history as the VOX guitar played by both George Harrison and John Lennon," said Martin Nolan, Executive Director of Julien's Auctions.

"From Here Comes the Sun to Hello Goodbye, this guitar is truly one of the most historical pieces of music memorabilia Julien's Auctions has ever had the pleasure of offering."

After playing the guitar, Lennon gave it as a 25th birthday present to Alexis "Magic Alex" Mardas in 1967, a member of The Beatles' inner circle during the sixties.

Beatles memorabilia is incredibly popular and continues to command high prices at auction, despite the group separating more than 40 years ago.

In April, a signed copy of The Beatles' 1967 record Sgt. Pepper's Lonely Hearts Club Band sold for $290,500 (£191,200) at a Texas auction.

In 2009, George Michael paid $2.1 million (£1.4 million) for the Steinway Model Z piano Lennon wrote Imagine on, while Lennon's handwritten lyrics for All You Need is Love fetched $1 million (£658,000) at auction.

In 2008 the painted drum skin featured on the cover of Sgt. Pepper's Lonely Hearts Club Band sold for $1.7 million (£1.1million) at Christie's in London. At the same sale, a pair of tinted prescription sunglasses belonging to Lennon, which the singer wore for the cover of the single Mind Games, raised $78,400 (£52,000).

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Train operator cancels dividend

Press Association — 2013-05-20T09:00:00+00:00

Filed under: News

Bus and train operator FirstGroup has announced a £615 million fundraising and cancelled its dividend after plans to turn around the business were derailed by the West Coast mainline fiasco.

The company, which is planning to pour £1.6 billion into a four-year investment programme and tackle debts of nearly £2 billion, told shareholders they would have to wait another year before seeing any pay-out.
It also announced that founder Martin Gilbert was stepping down as chairman after leading the firm for 27 years.

The Aberdeen-based company, which operates First Great Western, First Capital Connect and First ScotRail, has been hit by the botched bidding process surrounding the West Coast mainline.

After initially winning the bid, a review found flaws in the process, causing the takeover of the franchise from Virgin to be put on hold as well as delaying decisions on three other rail operations it already holds. Mr Gilbert said the company was "frustrated" that employees and shareholders had to endure the "extraordinary series of events" surrounding the franchise fiasco.

Underlying pre-tax operating profits for the group - which also has interests in US student and Greyhound buses as well as the UK bus network - fell in line with expectations from £271.4 million to £172.4 million.

FirstGroup announced that it was raising £615 million through the sale of discounted shares and that no dividend would be paid for the full-year or for the next half-year interim period, with the payment expected to return for the full year to 2014. Shares fell 16%.

It is investing in IT programmes across its businesses as well as expansion in the US, including cross-border bus services to Mexico. Chief executive Tim O'Toole said: "This is a decisive moment for the company."

He said that, with an experienced UK rail bid team, FirstGroup was in a "strong position for the re-commencement of franchising" and that it would remain a "major player" in the industry.

The results showed like-for-like revenues from the railways were up 7.4% to £2.8 billion, less than last year's 8.4% increase. Takings from UK buses fell from £1.2 billion to £1.1 billion - blamed on a fall in Government subsidy.

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UK consumers deserting cheap vino?

Adrian Holliday — 2013-05-20T08:30:00+00:00

Filed under: Shopping & Deals

Drink less, drink better. The average bottle of UK wine now costs £5.11, thanks to increased taxation and VAT. But British consumers are also choosing to buy pricier wine, despite the economic woes.

And sales of wines costing more than £7 are increasing by 16% in volume terms. Why the change?

Less = more

"With the £5 price threshold being crossed, we would expect to see volume fall, but whether or not it's a doomsday scenario very much differs by retailer and wine producer," Helen Stares from market analyst Nielsen told Off Licence News. "They may be selling less, but if it's at a more profitable price then this is surely good news.'

One retailer that is seeing wine sales surge is the Wine Society. Spokesperson Ewan Murray told AOL Money that paying "a quid or two more" for a bottle of wine can give you a considerable quality jump.

"When you consider that for every £6 bottle of wine you buy, half of that goes to the Chancellor of Exchequer - duty costs £2 and VAT costs you £1." Murray confirms that average spend is also rising, while claiming Wine Society prices have been held down in the last 12 months.

But cheap is okay

Sales of Australian wine to the UK continue to surge with total sales surpassing the £1bn mark with Italy (£830m), France (£765m) and the US (£686m) lying behind. Although Spain lay behind the market leaders, it saw total sales climb 17% in total to almost £540m.

Don't forget the cheapies. British consumers are becoming less sniffy about buying wine from retailers like Aldi and Lidl. Last year Lidl whacked the competition with a humble £3.59 Rioja that managed to outclass rivals costing up to ten times as much.

Quite an achievement given that the Coalition has the highest wine duty in Europe - up +50% in five years.

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Venezuela running out of toilet paper

Sarah Coles — 2013-05-20T08:03:00+00:00

Filed under: Shopping & Deals

Venezuela has been hit by a chronic shortage of toilet paper. The supermarket shelves stand empty, and supplies have almost entirely dried up. There's some disagreement as to how this has happened. The media blames the government, and the government blames the media for causing a run on toilet paper.

So what's going on?

Run dry

The bizarre situation has caused toilet paper to become a highly sought-after commodity. When there's a delivery to a supermarket, customers flock and long queues form until the shelves are emptied again.

This isn't the first shortage that Venezuelans have faced. Supplies of basic food items such as milk, sugar, rice, cooking oil and butter have previously run dry, as a result of the fact that prices are rigorously controlled - in order to ensure that the poorest people in the country can afford it. The problem is that prices are so low, that it doesn't pay anyone to manufacture, deliver or sell the products.

This is the first known toilet paper drought, however. Economists told Yahoo that it was likely to be influenced by the fact that the price of importing the raw materials means that after manufacturing the toilet rolls, factories do not not make any money. In addition, there's a shortage of foreign currency to enable factories to purchase raw materials from overseas.

Who is to blame?

Economists and the media are pointing the figure at the government, which controls prices and foreign currency stocks.

However, according to The Guardian, President Nicolas Maduro, who was elected in April, claims it's a media conspiracy designed to bring the country to its knees by creating panic and artificially stimulating demand.

What next?

Maduro has announced that the country will import 50 million toilet rolls, to control the panic.
Commerce minister Alejandro Fleming sai that plans to import more toilet rolls were designed to demonstrate to those behind the conspiracy that "They won't make us bow down."

The government will also import 760,000 tonnes of food in order to boost supplies, and said it would address the shortage of foreign currency.

This may help ease this particular crisis, but economists say that whenever prices are too low there will be shortages, and that controls on prices will have to be eased in order to solve the fundamental problem.

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Florida woman wins $590.5m Powerball jackpot

Hannah Ricci — 2013-05-20T08:00:00+00:00

Filed under: News

Luck was shining on one Florida lady this weekend as she awoke yesterday the winner of the $590.5 million US Powerball jackpot.

The massive prize is the highest single Powerball jackpot in history, lottery officials have said.
The single ticket was purchased for around £1.32 at a supermarket in the small town of Zephyrhills, near Tampa, Florida, according to Florida Lottery executive Cindy O'Connell.

"This would be the sixth Florida Powerball winner and right now, it's the sole winner of the largest ever Powerball jackpot," O'Connell told Associated Press. "We're delighted right now that we have the sole winner."

The as-yet unnamed winner who beat odds of 175 million-to-1 is believed to have come forward yesterday, according to the Mirror, and now has 60 days to decide whether she wants to take her astonishing windfall in one go or in 30 annual instalments of about £13 million each.

Winning numbers
Saturday night's winning numbers were 10, 13, 14, 22 and 52, with a Powerball of 11.

Consolation prizes from Saturday's drawing were making people rich too, according to USA Today. Tickets worth $2 million each were sold in New York state and South Carolina. And 33 people in 17 states will pocket a cool $1 million.

USA Today reports that the jackpot nudged only slightly ahead of Powerball's previous record jackpot of $587.5 million, which drew two winning tickets just last year. The largest U.S. jackpot was $656 million from a Mega Millions drawing in 2012 that was shared between three people.

Europe record
In July 2011, Brits Colin and Chris Weir won a record Euromillions jackpot of £161m - Europe's biggest-ever lottery prize.

As well as splashing out on a new home and fleet of luxury cats for family and friends, the Scottish couple set up a new charity with a £5 million endowment. The Weir Charitable Trust aims to support Scottish groups, individuals or other charities providing services in the country.

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Ryanair announces rise in profits

Press Association — 2013-05-20T08:00:00+00:00

Filed under: News

Low-cost airline Ryanair has boosted annual profits by 13% but warned that the recession across much of Europe will dampen growth this year.

The Dublin-based company, which operates on more than 1,600 routes, carried 79.3 million passengers in the year to March 31, an increase of 5% on a year earlier as revenues improved 13% to 4.8 billion euro (£4.1 billion).
Post-tax profits rose to 569 million euro (£481.4 million) and the airline is hopeful of another rise this year, albeit at a slower rate of growth as economic conditions put pressure on average fares across the industry.

Ryanair expects traffic to grow by another two million passengers to 81.5 million in the current year, helped by this summer's addition of more than 200 routes and seven new bases, including at Eindhoven, Krakow and Marrakech.
It said costs will continue to rise, with higher oil prices again the culprit after its fuel bill increased by 290 million euro (£245.3 million) in the last financial year. Fuel now represents 45% of all the airline's costs.

Ryanair's average fares increased by 6% in the year to March, although this was outpaced by a 20% jump in revenues from additional services such as reserved seating to one billion euro (£846 million) - representing 22% of all sales in the year.

With Ryanair hoping to carry more than 100 million passengers a year by the end of 2018, it recently announced plans for the delivery of 175 new Boeing aircraft.

Chief executive Michael O'Leary said: "Ryanair is now uniquely positioned to offer many of Europe's airports sustained traffic growth in return for low cost, efficient facilities.

"I am confident that in time this new order will enable Ryanair to extend its traffic leadership over Europe's airlines, and generate further returns for our shareholders."

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'Gloom lifting' for family budgets

Press Association — 2013-05-20T07:30:00+00:00

Filed under: News

The pressure on household finances has eased to its weakest levels in three years, in a sign that the "gloom is lifting", a report has found.

Hopes that families' budgets may be entering "a period of relative calm", came from a renewed increase in people's take-home pay as well as a perception that the rise in living costs is easing, according to financial information company Markit, which compiled the research.

Some 9% of people surveyed said their finances improved in May, while almost 28% said that they worsened. The overall reading of the latest monthly survey into people's finances was 40.4, marking the slowest deterioration in household finances since May 2010.

A reading above 50 signals that people's overall finances are getting better and one below 50 shows a decline. While 40.4 is still a negative reading, it is a sharp improvement on a reading of 37.7 in April, signalling that the squeeze on finances eased "substantially" over the month, Markit said.

Households were also the least downbeat about their financial outlook for the next 12 months than they had been since September last year.

The study recorded the biggest improvement to levels of income from employment in three years, which was mainly driven by people working in finance and business services and the IT and telecoms sector. Manufacturing employees also saw relatively strong levels of pay growth.

Meanwhile, households reported that the squeeze on their cash availability eased significantly, with the slowest decline in spending power seen in around two and-a-half years. Markit said its research recorded the most marked decrease in inflation perceptions since May 2009.

All income groups saw the pressure on their budgets ease over the month, but people with incomes of between £15,000-£23,000 saw the biggest turnaround, Markit said.

London and Yorkshire and the Humber were the least downbeat regions, while those living in the East Midlands were the most pessimistic.

Tim Moore, senior economist at Markit and author of the report, said: "May's survey is a clear indication that the gloom is lifting over household finances."

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Contactless cards charged by mistake at M&S

Sarah Coles — 2013-05-20T07:08:00+00:00

Filed under: Shopping & Deals

Radio 4's Moneybox programme has revealed that Marks and Spencer has accidentally taken payments from contactless cards that were not being used for payment. The terminals are only supposed to charge cards that are within 5cm of the terminal, but customers have claimed their cards were further away.

So what has happened, and are you at risk?

Mistakes

The contactless terminals are in 644 of the chain's shops in the UK, and can be used for all transactions under £20. The terminals detect contactless cards that are within 5 cm range, and deduct the sum from that card - without the card having to be inserted into the terminal - or even removed from your wallet.

Some shoppers have contacted Moneybox saying that money had been debited from their card accidentally. One shopper had put her debit card in the device, when the terminal automatically debited a separate card, which was in the wallet in her other hand at the time. She said that her wallet was further than 5cm away from the terminal.

She added that a manager was called, who asked her to repeat the transaction. The same thing happened again, and he refunded both payments.

Another customer had the same thing happen to her, but she didn't spot the error. She entered the PIN on the card in the reader, and ended up paying for her shopping twice. She received a refund when she took her statement into a store.

A spokesperson for Marks & Spencer said: "We've had an overwhelmingly positive response from our customers following the introduction of Contactless which helps make payments quicker and more efficient for transactions under £20. We've tested the system extensively and it is robust and fit for purpose."

A spokesperson told AOL that the cards are used for over 250,000 transactions for under £20 every week, and that in the last six months they had received five complaints, and refunded the money where any double payments were made. He added that the store would like to hear from any customer who had encountered this sort of thing.

UK Cards Association spokesperson said in a statement: "It is always disappointing to hear that customers have had problems making card payments. However, these problems are exceptionally rare, with only a handful of cases reported where the wrong card has debited when accidentally placed very close to a contactless card reader. Over 125 contactless card transaction are made every minute in the UK. The technology is extremely robust, has been thoroughly tested and is working as expected. Payments can only take place where the card is placed within 5 cm (2 inches) of the terminal ."

Are you at risk?

It means that it may be worth making sure that you check through your statements carefully to ensure that there's nothing unexpected, or any double payments. If you find something awry, taking the statement into a store should resolve the issue, as all double-payments so far have been refunded without question.

It's not just Marks and Spencer, it's also worth checking statements for unexpected payments to any retailer that uses the technology - including Transport for London and Pret a Manger.

If you run up against any issues when asking for a refund, contact your card issuer, who will be able to refund the money.

There are 32.5 million cards in the UK with contactless technology embedded in them, and 147,000 terminals equipped to take money in this way.

The UK Cards Association believes that this is the future of payments. It says that over time it expects the maximum spending limits to be raised above £20, and for all mobile phones to be enabled for payments in future.

It means it's even more vital that the technology is robust and secure, and that we all understand how to use it, so we won't run the risk of accidentally paying twice in the store. The spokesperson added: "The UK Cards Association will be looking at ways to increase awareness that customers should be careful not to place wallets containing other cards close to readers when paying."

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Crisp maker on menu for food giants

Press Association — 2013-05-20T06:30:00+00:00

Filed under: Investing

Crisp maker Tyrrells is set to attract the interest of global food companies after reportedly being put up for sale for about £100 million.

Langholm Capital, a private equity firm, has owned the Herefordshire-based business for the last five years after buying it from potato farmer William Chase in a £40 million deal.
According to the Sunday Times, Tyrrells is likely to draw interest from American food giant Kellogg's, the Japanese snacks firm Calbee and Tangerine, the Blackpool-based confectionery company that owns Butterkist popcorn.

Other potential bidders could include Germany's Intersnack, which bought KP Snacks last year.
Under Langholm, which is backed by the household goods firm Unilever and also owns Dorset Cereals, the company has enjoyed success in expanding its operations to new overseas markets, including the US and Canada.

Mr Chase turned to making crisps when his margins as a potato farmer were wiped out by the supermarkets. The crisps gain their flavour through the use of special potato varieties such as Lady Rosetta.

He claimed a victory with Tesco in 2006 when he found the group was stocking Tyrrells Potato Chips at reduced prices, forcing the chain to take the crisps off its shelves and pledge to boost links with local suppliers. The business was founded in 2002.

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How scammers make thousands from the desperate unemployed

lovemoney.com — 2013-05-20T06:10:00+00:00

Filed under: Scams & Fraud

With unemployment still high, scammers are having a productive time taking advantage of desperate job seekers.

You don't have to be an economics guru to know jobs, even of the minimum wage variety, are hard to find - especially if you are young.

According to the latest unemployment figures there are now 958,000 people aged 16-24 out of work.

But if you are in the scam game, then the desperation of those out of work is a golden opportunity. Phoney employment offers are big business - it's easy to convince an unemployed person to part with cash when you promise well paid work.

Job scams
Citizens Advice knows of 22,000 job scams that have taken place over the past year. But that's just the tip of the iceberg. Many more are unreported because the chances of getting your money back are so low, while there are also all of the scam attempts that are ignored because the job-hunter does not fall for the bait.

One scam targets those looking for employment on free advertisement websites. They search for "marketing assistant" or "finance officer" and are pleasantly surprised when jobs are found, all offering top rates of pay. In some cases this will be £5,000 to £10,000 a year more than they expect.

One dodgy site recently featured a marketing job suitable for a new graduate without previous experience which would provide training in an unspecified number of skills. The exact skills weren't revealed either. This 'job' paid an almost unbelievable - but hugely attractive - £31,000 a year.

How the scam works
Out of work people apply with their CV. A day or so later, they get a response saying that they are a leading candidate for the position and are given a telephone number to ring. This will almost certainly be a mobile phone number.

It sounds good. Only there's a snag. The scamster says the applicant is in a very good place but just needs to polish the CV. And to do that, they need to pay £99. Of course, the job-hunter is not told what is wrong with the CV.

Scam employment firms will push this further by asking personal questions, such as the applicant's experience of job interviews. It does not matter what the answer is, the scam merchant goes on to "strongly suggest" taking an online educational course to improve their face-to-face technique.

It will cover everything, they are told, including what to wear, how to talk and even how to avoid negative body signals. And it only costs a further £399 or so.

It is made clear that the application for this really good job cannot proceed without the CV rewrite and the training.

Taking advantage of the desperate
Why do people fall for this? Obviously, the need to get a job - especially a well paid one - is top of the list. But the work offers appear to come from genuine employment agencies. Often the fraudsters will clone a real site so it has all the appearance of a well-known legitimate site, but change the internet address, perhaps by adding uk to the name or switching a '.co.uk' into a '.net'.

And some are very cheeky. The small print disclaims just about everything, with clauses such as: "We are not an employment agency, employer, or resourcing agency. We do not procure, get, gain or retain jobs, employment, and interviews for our clients. We do not represent clients or guarantee any amount of income, employment for the use of this site."

Scams targeting Facebook double in a year

Turning hundreds into thousands
This scam could cost hundreds. But why stop there? There's an even better employment con which typically brings in around £4,000 from each victim. And that's by offering the course that leads to a great job.

It's no secret that there are skills shortages in plumbing (including central heating and air conditioning) and information technology (both software and hardware). These jobs pay well and enjoy a large degree of security.

So why not offer a course that leads to a recognised qualification in these or other skills?

Teaching these qualifications is not easy or cheap. You need instructors, premises and often expensive machinery for practical learning experience.

Or at least it's normally like that. What scam merchants do is to set up 'at home learning' courses which - and this sounds good - "allow you to progress at your own pace to gain a nationally recognised qualification". All this costs is £3,995 (plus sometimes a £200 registration fee).

Most people looking for work will not have that sort of money at hand. No problem! There are many lenders from high street banks to fringe firms who will offer this cash as an educational loan.

So the victims commit themselves to paying the cash, plus interest, over two to three years.

What do they get in return? The first instalment of the home study course arrives and it's badly photocopied pages from a do-it-yourself manual, all of which is very easy to find elsewhere and much cheaper. The instruction is to complete this within three months and send it off for marking.

You do this once or twice, but you never hear again from the so-called educational company. It evaporates like mist at dawn on a summer's day. It's a ghost company, the address is a mailbox while any directors are either the office girl or boy or a false name.

You've lost four grand. They've run off with the money. Eventually, the learning company ends up in liquidation, but by then it's all too late.

Revealed: the top 10 scams of 2012

More than 12 million pieces of personal information were illegally traded online by identity fraudsters in the first quarter of 2012 alone, according to data from Experian CreditExpert - outstripping the entire of 2010.

The vast majority (90%) of this illegally traded information is password and log in combinations - a result of the spiralling number of online accounts many of us now have. Research shows the average Brit uses around five different passwords online, but with an average of 26 different accounts each – this is nowhere near enough protection.

"Using a different password for each account will minimise risks, but if password information is stolen from a website, all accounts using the same details will be compromised, and this information can spread among fraudsters rapidly," warns Peter Turner, managing director at Experian Consumer Services in the UK and Ireland.

Step up your account protection with this guide to choosing a secure password.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/09/9898564.jpg" data-media-id="aol_5267364" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/09/9898564.jpg">1. Login detail theft
More than 12 million pieces of personal information were illegally traded online by identity fraudsters in the first quarter of 2012 alone, according to data from Experian CreditExpert - outstripping the entire of 2010.

The vast majority (90%) of this illegally traded information is password and log in combinations - a result of the spiralling number of online accounts many of us now have. Research shows the average Brit uses around five different passwords online, but with an average of 26 different accounts each – this is nowhere near enough protection.

"Using a different password for each account will minimise risks, but if password information is stolen from a website, all accounts using the same details will be compromised, and this information can spread among fraudsters rapidly," warns Peter Turner, managing director at Experian Consumer Services in the UK and Ireland.

Step up your account protection with this guide to choosing a secure password.
Credit and store cards continue to prove particularly attractive to fraudsters and 2012 year has seen 73% surge in the takeover of plastic card accounts by criminals with nearly one quarter of all identity frauds, and 36% of all account takeovers, taking place on these cards.

Richard Hurley, communications manager at CIFAS explains the threat: "Whether it is through using an innocent party's details to open a new account in the victim's name, or hijacking the victim's details and taking over existing accounts, the modern fraudster will continue to pay specific attention to credit and store card accounts as an easy way of obtaining funds and goods, while leaving someone else to pick up the bill."

Be vigilant with your cards and follow our tips to protect your plastic through safe online shopping.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/07/1941414.jpg" data-media-id="aol_5168387" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/07/1941414.jpg">2. Flexible friend fraud
Credit and store cards continue to prove particularly attractive to fraudsters and 2012 year has seen 73% surge in the takeover of plastic card accounts by criminals with nearly one quarter of all identity frauds, and 36% of all account takeovers, taking place on these cards.

Richard Hurley, communications manager at CIFAS explains the threat: "Whether it is through using an innocent party's details to open a new account in the victim's name, or hijacking the victim's details and taking over existing accounts, the modern fraudster will continue to pay specific attention to credit and store card accounts as an easy way of obtaining funds and goods, while leaving someone else to pick up the bill."

Be vigilant with your cards and follow our tips to protect your plastic through safe online shopping.
As if the mis-selling of payment protection insurance (PPI) wasn't scandal enough, 2012 has seen fraudsters preying on PPI victims. Consumers have received phone calls from someone who knows their name, announcing that they have won their PPI claim. The caller may also know the lender's name and an estimate of the loan amount.

However, the caller will then request a payment from the consumer in order to receive their compensation. This should signal warning bells, but many innocent victims have fallen for the scam and parted with money only for the bogus firm to disappear with their cash, and of course the compensation that never existed.

Consumers should be wary of all cold calls, particularly those that request cash upfront. There is no need to pay to make a claim for mis-sold PPI – you can claim direct to your bank for free and receive free advice from debt charities like Citizens Advice and the Consumer Credit Counselling Service.

If you do choose to take on the assistance of a claims management firm – never agree to an upfront payment. Reputable firms will only request payment for their services once you have received your compensation from your lender either by cheque or by payment into your bank account.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/01/moneyinsurancegetty.jpg" data-media-id="aol_4760691" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/01/moneyinsurancegetty.jpg" data-credit="Getty">3. PPI scam
As if the mis-selling of payment protection insurance (PPI) wasn't scandal enough, 2012 has seen fraudsters preying on PPI victims. Consumers have received phone calls from someone who knows their name, announcing that they have won their PPI claim. The caller may also know the lender's name and an estimate of the loan amount.

However, the caller will then request a payment from the consumer in order to receive their compensation. This should signal warning bells, but many innocent victims have fallen for the scam and parted with money only for the bogus firm to disappear with their cash, and of course the compensation that never existed.

Consumers should be wary of all cold calls, particularly those that request cash upfront. There is no need to pay to make a claim for mis-sold PPI – you can claim direct to your bank for free and receive free advice from debt charities like Citizens Advice and the Consumer Credit Counselling Service.

If you do choose to take on the assistance of a claims management firm – never agree to an upfront payment. Reputable firms will only request payment for their services once you have received your compensation from your lender either by cheque or by payment into your bank account.
Tens of thousands of people have continued to be tricked out of large sums of money this year by rogue loan finder and debt management firms. The difficult economic climate has seen a huge spike in consumers being targeted by firms who phone or text out of the blue offering debt advice or help to find a loan. People are then charged a hefty fee for the advice or a loan – both of which often fail to materialise - and cannot get their money back.

Citizens Advice reports that consumers' details are then often passed on to other companies who bombard them with more texts and cold calls offering loans, debt management or claims management services. These unscrupulous firms target vulnerable people unable to get mainstream credit because of a poor credit history, low income or current financial difficulties.

Consumers are advised to never reveal personal details or make an upfront payment in response to an unsolicited call. Instead they should take advantage of free debt and credit advice from registered charities.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/04/n0402851334827260972a.jpg" data-media-id="aol_4973627" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/04/n0402851334827260972a.jpg">4. Cold loan and debt calls
Tens of thousands of people have continued to be tricked out of large sums of money this year by rogue loan finder and debt management firms. The difficult economic climate has seen a huge spike in consumers being targeted by firms who phone or text out of the blue offering debt advice or help to find a loan. People are then charged a hefty fee for the advice or a loan – both of which often fail to materialise - and cannot get their money back.

Citizens Advice reports that consumers' details are then often passed on to other companies who bombard them with more texts and cold calls offering loans, debt management or claims management services. These unscrupulous firms target vulnerable people unable to get mainstream credit because of a poor credit history, low income or current financial difficulties.

Consumers are advised to never reveal personal details or make an upfront payment in response to an unsolicited call. Instead they should take advantage of free debt and credit advice from registered charities.
Phishing – when an unsolicited email arrives in your inbox requesting details to your personal accounts – continues to rise, leading to a surge in online banking fraud. Online banking fraud losses totaled £21.6 million during January to June 2012, according to CIFAS - a 28% increase on the 2011 half-year figure.

The emails trick customers into visiting fake banking websites – often made to look startlingly similar to the real thing - and disclosing their online banking login details. Online banking customers are also being tricked into divulging their bank login details and passwords over the phone to someone they believe is from their bank but is actually a fraudster.

The key point to remember is that banks will never contact you by phone or email and ask you to disclose your details, so always beware correspondence of this nature. Consumers should also be cautious of emails purporting to be from government bodies such as HMRC, or other financial accounts, such as Paypal.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/08/fotoflexerphoto-1345476313.jpg" data-media-id="aol_5221880" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/08/fotoflexerphoto-1345476313.jpg">5. Online banking fraud
Phishing – when an unsolicited email arrives in your inbox requesting details to your personal accounts – continues to rise, leading to a surge in online banking fraud. Online banking fraud losses totaled £21.6 million during January to June 2012, according to CIFAS - a 28% increase on the 2011 half-year figure.

The emails trick customers into visiting fake banking websites – often made to look startlingly similar to the real thing - and disclosing their online banking login details. Online banking customers are also being tricked into divulging their bank login details and passwords over the phone to someone they believe is from their bank but is actually a fraudster.

The key point to remember is that banks will never contact you by phone or email and ask you to disclose your details, so always beware correspondence of this nature. Consumers should also be cautious of emails purporting to be from government bodies such as HMRC, or other financial accounts, such as Paypal.
There were over 50 different scams known to the 2012 Olympic Committee, with fraudsters cashing in on the good-natured spirit of the Games and nationwide scramble for tickets. The vast majority of scams took the form of phishing emails – purporting bogus job offers; prize draws; lottery wins and complimentary tickets – all with the sole purpose of duping consumers into sharing personal details or parting with cash in order to claim prizes.

Official tickets for the London 2012 Games were only available for purchase through the London 2012 website and appointed ticketing partners, so any other sources were offering fake or non-existent tickets. As for competition prizes and lottery wins – consumers should remember that it is impossible to win a competition or draw that you did not knowingly enter and that if a prize seems too be good to be true, it probably is.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2013/02/pa-14204382-1360662734.jpg" data-media-id="aol_5635173" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2013/02/pa-14204382-1360662734.jpg">6. London 2012 Olympic scams
There were over 50 different scams known to the 2012 Olympic Committee, with fraudsters cashing in on the good-natured spirit of the Games and nationwide scramble for tickets. The vast majority of scams took the form of phishing emails – purporting bogus job offers; prize draws; lottery wins and complimentary tickets – all with the sole purpose of duping consumers into sharing personal details or parting with cash in order to claim prizes.

Official tickets for the London 2012 Games were only available for purchase through the London 2012 website and appointed ticketing partners, so any other sources were offering fake or non-existent tickets. As for competition prizes and lottery wins – consumers should remember that it is impossible to win a competition or draw that you did not knowingly enter and that if a prize seems too be good to be true, it probably is.
Surely the lowest of the low, charity donation fraud – when fake charities play on our sympathy by requesting donations to a worthy cause – is on the rise. Donation requests come in the form of unsolicited emails; phone calls; house visits or being approached in a public place. In many cases, donation requests are linked to a high-profile event, such as Hurricane Sandy that wreaked havoc across America last month.

Either the charity that the fraudster has asked you to donate to doesn't exist, or they are misusing the name of a genuine, often well-known, charity and pocketing your money.

Don't let fraud risks put you off donating – just make the necessary checks to ensure your money is going to the intended cause. Genuine charities are registered with the Charity Commission and print their registration details on all documentation, collection bags and envelopes, so check these details exist and if in doubt, contact the Charity Commission to confirm that they are authentic. Call the helpline on 0845 300 0218 or check the online charity register by visiting charity-commission.gov.uk.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2013/02/pa-10412953-1360662732.jpg" data-media-id="aol_5635171" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2013/02/pa-10412953-1360662732.jpg">7. Charity donation fraud
Surely the lowest of the low, charity donation fraud – when fake charities play on our sympathy by requesting donations to a worthy cause – is on the rise. Donation requests come in the form of unsolicited emails; phone calls; house visits or being approached in a public place. In many cases, donation requests are linked to a high-profile event, such as Hurricane Sandy that wreaked havoc across America last month.

Either the charity that the fraudster has asked you to donate to doesn't exist, or they are misusing the name of a genuine, often well-known, charity and pocketing your money.

Don't let fraud risks put you off donating – just make the necessary checks to ensure your money is going to the intended cause. Genuine charities are registered with the Charity Commission and print their registration details on all documentation, collection bags and envelopes, so check these details exist and if in doubt, contact the Charity Commission to confirm that they are authentic. Call the helpline on 0845 300 0218 or check the online charity register by visiting charity-commission.gov.uk.
Cases of cash machine fraud, where a device is used to trap money inside the ATM machine, have increased more than 15-fold in London in the past three months. Reported incidents have risen from 150 across the UK in May, to 2,500 in London alone in August, according to figures from Link and London's Dedicated Cheque and Plastic Crime Unit (DCPCU).

Criminals insert a device called a cash claw behind the guard on the cash drawer of an ATM. The device is undetectable to the public, who use the machine as normal until their cash fails to eject.

"The machine goes out of service and then the criminal comes along, forces open the drawer using a pair of pliers or a screwdriver, forces the device out of the cash machine, bringing the customer's money with it," explains Detective Chief Inspector Dave Carter, head of the DCPCU.

Customers are advised to immediately report any banknotes undelivered from cash machines.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/09/fotoflexerphoto-1347355837.jpg" data-media-id="aol_5273596" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/09/fotoflexerphoto-1347355837.jpg">8. Cash claw fraud
Cases of cash machine fraud, where a device is used to trap money inside the ATM machine, have increased more than 15-fold in London in the past three months. Reported incidents have risen from 150 across the UK in May, to 2,500 in London alone in August, according to figures from Link and London's Dedicated Cheque and Plastic Crime Unit (DCPCU).

Criminals insert a device called a cash claw behind the guard on the cash drawer of an ATM. The device is undetectable to the public, who use the machine as normal until their cash fails to eject.

"The machine goes out of service and then the criminal comes along, forces open the drawer using a pair of pliers or a screwdriver, forces the device out of the cash machine, bringing the customer's money with it," explains Detective Chief Inspector Dave Carter, head of the DCPCU.

Customers are advised to immediately report any banknotes undelivered from cash machines.
Rogue property developers selling land that they claim has great investment value, when there is little or no chance of it ever being developed, are on the rise again this year. Investigations have lead to a number of convictions in 2012, yet consumers are warned to be remain wary of this big money scam.

Land banking involves plots of land offered for sale, often online, with the promise of sizable returns when planning permission is approved for housing or other development. Yet often the land is located in areas protected from development by planning law.

The companies involved soon disappear with investors' money and as the firms are not protected by the Financial Services Authority, their funds are not covered by the Financial Services Compensation Scheme.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2011/10/standards-of-living-4-netherlands-pa-590mt031011.jpg" data-media-id="aol_4494960" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2011/10/standards-of-living-4-netherlands-pa-590mt031011.jpg">9. Land banking
Rogue property developers selling land that they claim has great investment value, when there is little or no chance of it ever being developed, are on the rise again this year. Investigations have lead to a number of convictions in 2012, yet consumers are warned to be remain wary of this big money scam.

Land banking involves plots of land offered for sale, often online, with the promise of sizable returns when planning permission is approved for housing or other development. Yet often the land is located in areas protected from development by planning law.

The companies involved soon disappear with investors' money and as the firms are not protected by the Financial Services Authority, their funds are not covered by the Financial Services Compensation Scheme.
In October, PhonepayPlus (the UK's premium rate telephone regulator) fined two firms a total of £450,000 for running a series of voucher scams on Facebook.

The scams, which claimed to offer free vouchers and supermarket gift cards for Tesco and Asda, resulted in members of the public signing-up for expensive premium-rate phone services.

The scams relied on Facebook users innocently sharing or liking the voucher promotions on their status, which included the promise of a voucher worth up to £250 for major retailers. After clicking on the promotion consumers were duped into participating in premium rate competitions, which involved questions sent to their phone at a cost of £5 each.
" href="http://www.blogcdn.com/money.aol.co.uk/media/2012/04/13256799.jpg" data-media-id="aol_4953302" data-photo-src="http://www.blogcdn.com/money.aol.co.uk/media/2012/04/13256799.jpg">10. Asda/Tesco voucher scam
In October, PhonepayPlus (the UK's premium rate telephone regulator) fined two firms a total of £450,000 for running a series of voucher scams on Facebook.

The scams, which claimed to offer free vouchers and supermarket gift cards for Tesco and Asda, resulted in members of the public signing-up for expensive premium-rate phone services.

The scams relied on Facebook users innocently sharing or liking the voucher promotions on their status, which included the promise of a voucher worth up to £250 for major retailers. After clicking on the promotion consumers were duped into participating in premium rate competitions, which involved questions sent to their phone at a cost of £5 each.

House asking prices reach new high

Press Association — 2013-05-20T04:30:00+00:00

Filed under: House Prices

House sellers' asking prices have soared to a new high, in further signs of confidence returning to the market, a property website has reported.

A 2.1% month-on-month rise pushed average prices to £249,841 this month, with new record prices set in London, the South East and East Anglia, according to Rightmove.

This has been the strongest start to the year since 2004 in terms of asking prices, with average prices rising by 9.1% or more than £20,000 in 2013 so far, the website said.

London asking prices surged past the half a million pound milestone for the first time this month, standing at £509,870 typically.

As well as being more than double the national average, asking prices in London were 8.6% higher than a year ago.

Prices rose month-on-month in every region across England and Wales. The North saw the strongest monthly increase, with a 4.2% rise pushing typical asking prices to £152,689.

East Anglia saw the second strongest month-on-month growth, with a 4% rise taking average prices to £233,447. Asking prices in the South East lifted to £325,489 typically and the region saw the second highest annual price growth after London, at 3.7%.

Yorkshire and Humberside and the East Midlands were the only regions where prices were lower this month compared with a year ago, dropping by 1.1% and 0.6% respectively. Asking prices in Wales rose by 1% month-on-month to £171,824 typically.

The new national peak is around £3,600 higher than a previous high recorded in June last year and the report adds to several studies which have pointed to seller confidence lifting amid signs that home buyers are finding it easier to get access to a mortgage.

In a further indication that activity is lifting, Rightmove said traffic levels to its website have risen by more than one fifth compared with a year ago, with property hunters getting through 1.25 billion pages in April, which is a record for the website.

More stories

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Empty shops reach new high of 11.9%

Press Association — 2013-05-20T04:00:00+00:00

Filed under: News

Shop vacancies have surged to a new high of 11.9% as retail failures including Comet and Jessops knock holes in shopping centres.

The percentage of empty UK shops in April worsened from 10.9% in January and was the highest rate since the British Retail Consortium/Springboard survey began in 2011.

High streets have been "vastly outperforming" shopping centres and out-of-town retail parks, boosted by a 5% increase in evening drinkers, diners and clubbers.

The retail sector has been battered by a wave of failures this year, with entertainment retailer HMV and camera chain Jessops both entering administration in January. Electricals retailer Comet slumped into administration in November.
BRC director general Helen Dickinson said: "It's a major concern that the vacancy rate has reached a record high, driven by increases in almost every part of the UK, with some regions like the South West seeing a significant leap in empty shop numbers."

But rising temperatures lifted April footfall 1% on a year earlier, a marked improvement on the 5.2% fall in March, as more shoppers ventured out compared with a rainy April 2012.

Ms Dickinson added: "The unsettled weather at the start of the month seems to have created pent-up demand, which brought many of us out to shop when more spring-like weather finally made an appearance."

High street footfall was up 3.4%, the strongest performance since December 2011, but shopping centre visitors fell 3%.

Diane Wehrle, retail insights director at Springboard, said: "This disparity is partly due to the fact that many of the high-profile retail failures - reflected in the increased vacancy rate - have been located in malls, creating holes in their retail frontages which have adversely affected their attractiveness to shoppers.

"The resilience of high streets is also likely to be a function of their diversity, as they have an offer that spans more than just retail."

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Yahoo close to buying Tumblr site

Press Association — 2013-05-20T03:28:00+00:00

Filed under: Investing

Yahoo is on the verge of buying online content-sharing site Tumblr in a 1.1 US billion dollar (£725,115,300) deal.

The acquisition could be announced later, and would be the biggest of the 10-month reign of chief executive Marissa Mayer as she tries to attract more traffic and advertisers to the Internet company's website and mobile applications.

The Sunnyvale, California, company's board of directors were meeting to consider approving the deal, and Yahoo has promised to unveil "something special" this evening in New York.

The event is being held in a Times Squares lounge located about two miles from Tumblr's headquarters.
Yahoo has only said that Ms Mayer will be on hand to unveil something related to a product, and buying Tumblr would fulfill her goal of reaching a wider audience on smartphones and tablet computers.

Tumblr serves up a constantly changing collage of stories, photos and other digital content provided by users who are increasingly connecting to the service through its mobile applications.

The service is also one of the hottest sites among teenagers and young adults, a demographic that Ms Mayer, 37, thinks Yahoo needs to do a better job of reaching.

If it is completed, the Tumblr deal would be her biggest coup - and, at the same time, the biggest risk - since she ended her 13-year career as a key executive at Google to try to snap Yahoo out of a prolonged malaise that had demoralised employees and investors alike.

Since her arrival, Ms Mayer has been focused on redesigning several Yahoo services and bringing in more mobile engineering talent, primarily by buying a series of small start-ups.

None of those previous acquisitions have required Yahoo to dip too deeply into its bank account.

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Call to stop demonising bankers

Press Association — 2013-05-20T03:00:00+00:00

Filed under: News

Sir Mervyn King has called for an end to bankers being "demonised" for their role in the financial crash, insisting the problem was with the system rather than individuals.

The outgoing governor of the Bank of England said there was a failure to adequately regulate the financial sector and society had given "too much status" to those in the City.

Sir Mervyn also warned that George Osborne's plan to boost the housing market must not become a permanent scheme because it was "too close for comfort" to a general state guarantee for mortgages.

Bankers who presided over the collapse of their institutions have been the subject of angry attacks from politicians, the public and the press, with RBS chief Fred Goodwin stripped of his knighthood and last month former HBOS chief executive Sir James Crosby offering to renounce his own honour, along with a third of his pension.
But in an interview with the Murnaghan programme on Sky News, Sir Mervyn said bankers were only part of the problem which led to the meltdown in the financial services sector.

He said: "What bankers did was not the only explanation of the crisis that we had. What we had was a world in which interest rates had become very low, investors of all kinds - not just banks - were desperately searching for ways in which they could earn more return, so they took big risks. Those risks, some of them, went wrong.

"Where the banks contributed to the problem was that they themselves had taken too many risks on their balance sheet and they simply didn't have enough capital to absorb the losses that were likely to come along. People took fright, they lost confidence in the banks, they wouldn't provide money to the banks so the banks couldn't lend to businesses or households.

"I would say to people, though, don't demonise individuals here. This wasn't a problem of individuals, this was a problem of a failure of a system. We collectively allowed the banking system to become too big, we gave it far too much status and standing in society and we didn't regulate it adequately by ensuring that they had enough capital. We have to put that right."

But Sir Mervyn raised concerns about the Chancellor's Help to Buy scheme, which will see the Government guarantee up to 15% of a mortgage on properties worth up to £600,000. The scheme, which starts in January 2014, is due to run for three years and Sir Mervyn warned it must not be allowed to become permanent.

He said: "I'm sure that there is no place in the long run for a scheme of this kind. This scheme is a little too close for comfort to a general scheme to guarantee mortgages. We had a very healthy mortgage market with competing lenders attracting borrowers before the crisis, and we need to get back to that healthy mortgage market."

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Updates from FirstGroup and MITIE

Adrian Holliday — 2013-05-20T02:34:00+00:00

Filed under: Investing

The FTSE 100 climbed 35 points to 6,723 on Friday. RBS was the day's biggest riser, up +5.85%, while miner Eurasian Natural Resources sank -8.03%. Most bourses climbed with the Dow Jones up +0.80% to 15,354.

The optimism continued in Asia through Monday with the Hang Seng up +1.61% and the Nikkei 225 up +1.35% to 15,341.
We start with preliminary numbers from FirstGroup, struggling with its considerable £2bn debt load. No final dividend is on offer from the company. Crucially, Chairman Martin Gilbert - criticised for spreading himself too thin given commitments to asset management player Aberdeen - will step down but only after a successor is found.

On the dividend cut, FirstGroup says it's targeting "an appropriate, progressive and sustainable dividend policy with cover of 2.0 to 2.5x in the medium term. In the short term the Board proposes that no final dividend will be paid in respect of the year to 31 March 2013."

Nor an interim dividend for the year to 31 March 2014. The new dividend policy will infuriate income investors. Meanwhile a new £600m rights issue is underway which "will remove the constraints from our balance sheet and enhance our ability to invest in our businesses going forward."

Next, preliminary numbers from energy and property outsourcing operator MITIE. Pre-tax profits climb +5.4% to £111.1m while the operating profit margin is up +6.2%.

Exiting its cyclical mechanical and electrical engineering contracting businesses - which generated margins well below the group average - saw business closure costs of £22.1m says MITIE; no further material costs are expected.

"We expect outsourcing opportunities will continue to grow," says chief exec Ruby McGregor-Smith, "with a trend towards more clients seeking to access integrated services. We are positioned to build further on our long track record of sustainable profitable growth."

Lastly, Salamander Energy. In an interim for the period 1 January to 17 May Group production averaged 14,100 boepd (Barrels of Oil Equivalent Per Day) in the year to April 30th with production during May climbing to an average 17,100 boepd.

Eight development wells are completed and on-stream on Bualuang Bravo platform (offshore Thailand). First oil flowed from its T2 reservoir and performance is ahead of expectations claims Salamander.

"It has been a busy start to the year with rigs operating in all of our focus areas. Production is well ahead of budget, " said chief exec James Menzies. "We look forward to further exploration drilling with eight wells planned during the rest of the year."

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A Closer Look At National Grid plc's Dividend Potential

The Motley Fool — 2013-05-20T02:25:00+00:00

Filed under: Investing

Dividend income accounts for around two-thirds of total returns, the actual rate of return that takes into account both capital and income appreciation. Given that share prices are often volatile and unpredictable, the potential for plump dividends can give shareholders much-needed peace of mind for decent returns.

I am currently looking at the dividend prospects of National Grid (LSE: NG) (NYSE: NGG.US) and assessing whether the company is an appetising pick for income investors.

How does National Grid's dividend history stack up?

	2010	2011	2012	2013
FY Dividend Per Share	38.49p	36.37p	39.28p	40.85p
DPS Growth	8%	-5.5%	8%	4%
Dividend Cover	1.4x	1.4x	1.3x	1.4x

Source: National Grid Company Accounts

National Grid's full-year dividend fell in 2011 owing to an earlier rights issue, but the company has resumed dividend growth since then. Dividend cover falls some way short of the accepted benchmark of 2 times forward earnings, although the firm's defensive nature -- electricity is one of society's must-need commodities -- helps to guard against earnings pressure.

What are National Grid's dividends expected to do?

	2014	2013
FY Dividend Per Share	42.1p	44p
DPS Growth	3.1%	4.5%
Dividend Cover	1.3x	1.3x
Dividend Yield	5.1%	5.3%

Source: Digital Look

National Grid's full-year results released last week showed pre-tax profits rise 14% to £2.9bn, helped by a solid performance within its British activities. The firm -- which also operates in the US -- saw return on capital employed in its crucial home market rise to 8.8% last year from 8.6% in 2012.

National Grid also announced a new dividend policy at the time of its results, in which the company said that it aims to build annual shareholder payouts at least in line with RPI (retail price index) inflation for the foreseeable future.

City brokers expect profits to fall this year before moving higher next year, moving in lockstep with fluctuating earnings. Forecasts have set out a 1% earnings per share (EPS) dip for 2014 before a 5% recovery kicks in during 2015. Dividend cover is forecast to remain stable, albeit still under par.

How does National Grid's dividend prospects rate against the competition?

	Prospective Dividend Yield	Prospective P/E Ratio
Gas, Water & Multi-utilities	4.3%	18.5
FTSE 100	3.1%	16

Source: Digital Look

National Grid currently trades on a P/E readout of 15.1 for 2013, cheaper than both its sector counterparts as well as the broader FTSE 100.

Furthermore, the electricity giant's prospective dividend yields far ahead of both of these groups, making it in my opinion a stock worthy of serious consideration for those seeking meaty dividend income.

The firm continues to invest heavily in its asset base, particularly in the UK -- total capital investment rose £291m last year to £3.7bn -- which I expect to drive long-term profits and underpin steady dividend growth.

In addition, the new eight-year regulatory regime agreed with sector regulator Ofgem helps provide excellent earnings visibility for a considerable time.

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What type of borrower are you?

Christina Hoghton — 2013-05-19T05:00:00+00:00

Filed under: Mortgages

One of the questions people often ask about mortgages is 'which is the best deal?', and they often feel aggrieved when they don't get a straightforward answer.

But it is an impossible question to answer accurately because there simply isn't one best mortgage product out there. All borrowers have completely different needs and preferences.

It's different strokes for different folks.

How do you choose?
Every borrower is an individual and you will need to look closely at your finances, personal circumstances and attitude to risk to assess the sort of deal that is best for you. If you really aren't sure, then an independent mortgage adviser can work with you to find the right deal for your exact needs.

However, there are certain mortgages that can broadly suit some types of borrowers - and while these are by no means set in stone, working out what kind of borrower you are from the options below can offer a useful starting point when it comes to choosing a new homeloan.

Single buyer
Single buyers cover a very broad spectrum, from those stretching every last penny of their income to get on the first rung, to buyers who are comfortably able to afford the property they desire. Chances are you are somewhere in between.

However, all single buyers have one thing in common - total exposure to your monthly mortgage commitment. If your interest rate rises, you can't share that burden with somebody else - you need to cover it yourself, and that may be a reason to opt for a fixed rate mortgage to give you some security of payments.

You may also be interested in fee-free mortgage deals, since you will need to cover all of the upfront expenses of homebuying yourself. For example Virgin Money currently offers a two-year fixed rate mortgage at 2.74% with no arrangement fees.

In addition, single buyers should consider income protection insurance to cover their mortgage costs if they are unable to work because of accident, sickness or unemployment, as there is nobody else to make up your shortfall in income.

Double income no kids yet - DINKYs
Couples in full-time work with no children often have a decent disposable income, and minimal fixed outgoings. This gives them a lot of freedom when it comes to choosing a mortgage.

For example, if you have a bit of leeway in your budget because you are both working you have the flexibility to opt for either a fixed or a variable rate, and this opens up more potential deals.

There are currently some pretty low rate variable mortgages for those who are happy to gamble that interest rates will remain low for the long term - and can afford to get it wrong. For example you can take a two-year discount mortgage from HSBC for 1.75% if you have a large 40% deposit.

Of course, many DINKYs are also first-time buyers and, while some have plenty of disposable income, not all do. It's also the case that many have never had experience of running a household budget before. If you are not confident about managing your finances, it could be worth considering fixing your rate to help you get used to budgeting.

Young family
Young families often tend to be strapped for cash, particularly if one partner is temporarily not working to look after the children, or if they are forking out a lot of money on childcare.

When budgets are tight fixed rate mortgages come into their own as they offer you security of payments for a set period, which really helps families manage their money.

Whether you choose a short- or long-term fix is up to you, but consider that you commit to a fixed rate for the length of the deal (or face steep penalties to get out early), so if you think your family will need more space in a bigger home in the future, a short-term fix rate may be more sensible.

While in theory you can transfer a mortgage to a new property, in practice it isn't always plain sailing. Two-year fixed rates are available from as little as 1.74% from Chelsea Building Society.

Borrowing big
Just because you are taking out a large mortgage doesn't mean your budget is stretched, as you could be a high earner. However, if you take a variable rate and then interest rates rise, you will really feel the difference in monthly repayments if you have borrowed big. So it could be worth considering a fixed rate mortgage.

What is very important is that you focus on the interest rate, not the arrangement fee you will need to pay, because the interest rate becomes more important the larger the loan.

This means it can often be worth paying a large arrangement fee if it bags you a super low rate of interest. First Direct's five-year fixed rate at 2.64% for example is a stunning rate (available on loans up to £1m), but you will need to pay a steep fee of £1,399 to bag it.

Modest mortgage
Those needing a small mortgage don't necessarily live in a small home. If you are nearing the end of your mortgage term you could have a small sum remaining, and if you want to remortgage you may have your pick of deals, particularly if you have a lot of equity in your property.

One thing to be aware of with small mortgages is that a large arrangement fee can skew the overall cost, so it can be worth looking at mortgages that come with low fees, or even fee-free deals.

These mortgages may come with a slightly higher interest rate than the best buys, but could work out cheaper overall. The Post-Office's five-year fix at 3.35% isn't the cheapest rate on the market (though it's still very competitive), but it does come with the bonus of no arrangement fee whatsoever.

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