Money

Winter sparks 28% SSE profits rise

Press Association — 2013-05-22T05:00:00+00:00

Energy giant SSE pocketed a 28% profits boost from UK households over the past year as they turned up their heating to keep out the bitter winter weather.

SSE's retail operation made £410.1 million in the 12 months to March, compared with £321.6 million in the previous 12 months as gas consumption increased by a fifth.

Overall pre-tax profits rose by 6% from £1.34 billion to £1.41 billion.

But executive bonuses were slashed by 40% in the wake of a mis-selling scandal which last month saw the company fined £10.5 million for misleading customers about prices and savings that could be made by switching over.
Lord Smith of Kelvin, the chairman of SSE, apologised over the practice. The firm said: "Companies don't just have to earn profits; they have to earn profits in the right way."

But the words will come as cold comfort to families after a year when SSE hit them with a 9% bill hike.

The energy giant said household consumption of gas over 2012/13 - which included a prolonged cold spell at the start of this year - went up 21%, with electricity use rising 5%. But its customer numbers in Britain and Ireland fell by 80,000 to 9.47 million.

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Baby gap cuts £70,000 off pension

Press Association — 2013-05-22T04:30:00+00:00

Filed under: Pensions

A woman could wipe as much as £70,000 off her pension pot by taking a career break to have a baby, research has found.

One quarter of women (25%) are planning to take time out of their job at some point, with the main reason being to start a family, according to the report by Duncan Lawrie Private Bank.

But based on average salaries, a five-year career break could cause a woman to end up seeing her eventual pension fund shrink by £70,000 during a 40-year career, the study said.

One-fifth of women planning a career break said they had "no idea" how they were going to fund their time away from work.
The figures are based on a woman starting paying into a pension aged 25 and contributing 5% of her salary to a retirement fund each year.

Her starting salary would be £25,000, which would gradually increase over time.

After taking a career break aged in her early 30s, the woman would re-start her career on the same wage.

The survey of more than 2,000 people also found that 13% of men are planning to or are currently taking a career break - although more than half (53%) have already started setting money aside to cover the costs.

The main reason given for men taking time out was to travel or live abroad.

Richard Boyd, a chartered financial planner at the bank said: "For some, a pension might be one spinning plate too many to manage, but its importance cannot be underestimated. Those that do let the plate fall may live to regret their decision later down the line."

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Three jailed for fake £1 coins plot

Press Association — 2013-05-22T04:00:00+00:00

Filed under: Savings & ISAs

Three forgers have been jailed for what police believe is the largest ever plot to make fake pound coins in the UK, some of which may still be in circulation.

Kevin Fisher, 53, from Goffs Oak in Hertfordshire, was sentenced to seven years in prison at Southwark Crown Court for his role as ringleader of the scam, Scotland Yard said.

Co-conspirator Daniel Sullivan, 28, from Hornchurch, east London, received three years, and another man Mark Abbott, 44, from Edmonton, north London, was given two years.

They were behind what is thought to be a record number of fake coins, which were discovered after an undercover police operation in May last year.

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'Failures' in tax fraud crackdown

Press Association — 2013-05-22T03:30:00+00:00

Filed under: Tax

Billions of pounds of taxpayers' money is being lost because of the failure of HM Revenue and Customs to clamp down effectively on fraud and error, MPs have warned.

The Commons Public Accounts Committee said HMRC was set to achieve less than half the projected savings from reducing fraud and error in the payment of tax credits.

The 2010 spending review set HMRC a target of saving £8 billion by 2015, but the committee said that it now estimated it would miss its goal by £5 billion.

In 2010/11 alone, it lost £2.3 billion due to error and fraud - £850 million more than expected - with one-in-five awards of tax credits thought to have resulted in the claimants being overpaid. The following year it wrote off £1.7 billion in tax credit debts as uncollectable.
Although the committee said that HMRC had massively increased the numbers of checks it carried on individuals from 123,000 to almost 2 million, it had only resulted in a doubling of the money saved.

"HMRC needs a better understanding of its performance as it hugely overestimated its progress in tackling error and fraud," the committee said. "HMRC needs to make more effective use of available data to prevent and detect errors and fraud."

Committee chairman Margaret Hodge said: "HMRC's performance in cutting the level of fraud and error in the tax credits system has been hugely disappointing and extremely poor. In these strained times, the Government cannot afford these failures."

An HMRC spokesman said: "In the last four years we have boosted our targeted checks on tax credit claims 10 times over, more than doubling the money protected, saving £390 million in three key risk areas alone.

"Work with the private sector has improved the data we use to make sure claimants' information is accurate and fraudulent claims identified. We are also getting tougher with claimants about the proof they need to support their claims, for example on childcare costs and on school leavers. From 2014 the new Real Time Information system will provide accurate and up-to-date information for tax credit claims, significantly reducing fraud and error. We will continue to improve the service and quality of information we provide, while clamping down on the minority who seek to abuse the rules."

A Treasury source added: "Gordon Brown created this system. We are clearing up his mess. Labour cut the number of people in HMRC tackling fraud and error - the coalition is increasing them."

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Many retiring 'below poverty line'

Press Association — 2013-05-22T03:00:00+00:00

Filed under: Pensions

One in seven people planning to retire this year has no private pension to fall back on and many will be forced to get by in poverty, an insurer has warned.

Women who are set to retire in 2013 were nearly three times more likely than men to be relying on the state as their sole form of pension income, Prudential found. Some 14% of this year's retirees said they had no company or personal pension and their only form of pension income would come from the state.

The full basic state pension is currently set at £110.15 a week, but how much someone receives depends on how many years of contributions they have made.

Almost one quarter (23%) of women will be retiring this year without a private pension, compared with just 8% of men, according to the survey. Nearly one-fifth of those planning to retire this year will be living below the poverty line, Prudential's analysis suggested.
Some 18% of people surveyed will be living on less than £8,254 a year, which is the amount estimated by the Joseph Rowntree Foundation that a single pensioner in the UK needs to live on.

The state pension will account for an estimated 43% of the average retirement income for women in 2013, while the average man retiring this year will receive 30% of his income from the state. But Prudential found that almost one quarter (23%) of people retiring this year overestimated the amount the state pension paid by more than £600 a year.

One in 10 people surveyed had "no idea" how much the state pension paid.

Vince Smith-Hughes, retirement income expert at Prudential, said: "The basic state pension alone is not nearly enough to provide a comfortable standard of living. While it's a very valuable source of additional income for millions of pensioners, the state pension should ideally only represent a part of someone's retirement income, not all of it. Relying on the state will see many people retiring below the poverty line this year, which shows the importance of building up a personal pension."

Joanne Segars, chief executive of the National Association of Pension Funds, said: "The average man or woman retiring now is expected to live into their 80s, and lifespans are increasing every year. It is worrying that around 100,000 people face the grim prospect of spending their final two decades struggling to get by on the state pension alone, and even more will be below the poverty line. Our state pension is up for some long overdue reform to make it simpler and fairer, and auto-enrolment will bring millions of people into a workplace pension. These vital changes will tackle the problem for future generations, and also help narrow the gender divide, but sadly they will come too late for this year's pensioners."

Minister for pensions Steve Webb said: "For too long women have been second class citizens in retirement. But women will be the main beneficiaries of our new flat-rate state pension introduced in 2016. In addition, millions more will start to build up a private pension because of our policy of automatic enrolment into a workplace scheme. We are protecting the income of current pensioners with a state pension that is the highest share of earnings for 20 years."

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Updates from Britvic and Scottish & Southern

Adrian Holliday — 2013-05-22T02:53:00+00:00

Filed under: Investing

The FTSE 100 finished Tuesday almost 50 points up at 6,803. Polymetal International saw the biggest rise of the day, up +8.43%, while Carnival, in contrast, sank -5.93%.

The Dow Jones also finished strongly, up 52 points, at 15,387 - an all-time high. Overnight, the Japanese Nikkei 225 finished at 15,627, up +1.60%.
We start with Scottish & Southern Energy, which hiked domestic prices by 9% in October but was also fined £10.5m for mis-selling to British consumers in April. So how large is the latest profits haul for the Perth-based company?

Preliminary numbers up to 31 March reveal SSE's biggest pretax-profit numbers since 2008 with reported adjust profits hitting £1.41bn compared to £1.33bn last year. SSE's full-year dividend climbs to +5.1% to 84.2p per share.

The company reiterated its apology over the mis-selling episode, claiming that "SSE has undertaken major reform of its Retail operations since 2011". However the latest profits numbers will infuriate many consumers.

Next, interim numbers for the 28 weeks up to 22 May from 7Up and Fruit Shoot drink maker Britvic. Britvic claims strong profit growth with EBITA of £53.6m, up +27.6% on last year and EBITA margin up 180 basis points.

Underlying EBITA is up +17.9% when adjusted for one-off and phasing items, demonstrating "a materially improved financial performance". Still little progress though on the proposed merger with AG Barr.

This merger lapsed on 13 February when it was referred by the Office of Fair Trading to the Competition Commission, which is expected to announce its decision end of July.

We finish with Cable & Wireless Comms, and results up to 31 March. Total Group earnings before the usual deductions come in at $905 million - ahead of prior year and outlook claims C&W. There's Group EBITDA of US$589 million with Panama up +8% in H2 versus H1, says the company.

Underlying equity free cash flow is up +11%, re-stated net debt is down in H2 to US$1,508 million while group strategy "progressed significantly" through agreed disposals, paving the way for a unified business structure.

"EBITDA finished slightly ahead of expectations," says boss Tony Rice,"mobile data revenue continued to grow across the Group, benefitting from the investments we made in our networks in 2011/12, and our cash generation saw double digit growth year on year."

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Cruise company in profits warning

Press Association — 2013-05-22T02:30:00+00:00

Filed under: Investing

Carnival, the world's largest cruise company, issued its second warning of sinking profits in less than three months as revenues fell and voyage cancellations increased in the wake of a series of major mishaps on its ships.

Shares were down nearly 13% in London after the company said full-year revenues, which were expected to be flat, would fall 2-3%, while earnings would also be hit. The expectations were also reduced in March when Carnival downgraded its hopes for revenue growth for the year.
The company operates 101 ships under a number of brands across the world, including P&O, Cunard and Costa Cruises. It suffered a major blow in 2012 when the Costa Concordia ran aground with thousands of passengers on board off the coast of Italy - claiming 32 lives.

Since then, Carnival has been dogged by further problems on its cruise ships.
In March last year, the Costa Allegra drifted without power for three days in the Indian Ocean after a fire on board, before having to be towed into port in the Seychelles.

In February this year, chief executive Gerry Cahill had to apologise to 4,200 passengers on the Carnival Triumph after it was left adrift for five days in the Gulf of Mexico. They were faced with overflowing toilets and scarce food.

The following month, a Caribbean cruise on the Carnival Dream was cut short after what was described as a "technical issue" involving a malfunction of the ship's backup diesel generator.

Shortly afterwards, the Carnival Legend had to limp back to Florida during another Caribbean cruise after a technical fault.

The operator said booking volumes had been driven up by its latest price offer but this had led to lower-than-expected revenues.

It also said it had been hit by "voyage cancellations beyond those incorporated in the company's previous guidance".

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Homeserve sets aside £6m for fine

Press Association — 2013-05-22T02:00:00+00:00

Filed under: Investing

Home emergency business Homeserve has set aside £6 million as it braces itself for a possible fine from City regulators for a mis-selling scandal.

The boiler repair company expects the fine from the Financial Conduct Authority (FCA) on top of the £24.2 million already set aside to cover the compensation process for customers and overhauling working practices.
The investigation, 700 UK job cuts and falling UK sales sent pre-tax profits plunging by more than half to £66.5 million for the year to the end of March.

Walsall-based Homeserve has been under a cloud since first revealing problems with its sales calls in October 2011. It said the FCA's investigation will take a "number of months" to complete and that £6 million was its best estimate on a potential fine and associated costs.
The probe is thought to centre on mis-selling of policies and poor handling of customer complaints. The company said it spent £9.5 million of its £24.2 million provision over the year on contacting and compensating customers, plus reviewing complaints from winter 2010.

Homeserve has already been fined £750,000 by telecoms watchdog Ofcom for silent and abandoned calls. Its UK workforce shrunk by 377 staff over the year and in March it revealed another 300 jobs will be cut at a cost of £4 million.

Homeserve's policies include boiler and central heating breakdown cover from £4 per month and insurance against blocked drains from £2.50 per month. It has tie-ups with major utility firms such as Thames Water and United Utilities.

The company was founded by chief executive Richard Harpin, who has about 12% of its shares.

Mr Harpin said: "Our products and services continue to meet clear customer needs and we are confident that our business model can continue to deliver long-term value for all stakeholders."

Shares in the company surged more than 11% on relief that the estimated fine was not greater. Homeserve held its total dividend at 11.3p per share.

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'No alternative' to Royal Mail plan

Press Association — 2013-05-21T12:00:00+00:00

Filed under: News

Business Secretary Vince Cable has insisted there is "no alternative" to controversial plans privatising the Royal Mail.

The organisation faces a "fundamental threat" from email and must be reformed in order to survive, the Liberal Democrat insisted.
But unions have warned that services will go into decline if the business is sold off.

Dave Ward, deputy general secretary of the Communication Workers Union, whose members will be balloted on the proposals this week, claimed loopholes would allow the universal service obligation to be eroded.
"There are opportunities for them to down dial the terms of the universal service in the future," he told BBC Radio 4's Today programme. "People who live in the suburbs, people who live in rural areas, people who live in villages will not get the same service under a private company."

It comes as Royal Mail is expected to announce results that show a significant increase in profits.

Mr Cable told the programme: "There is no alternative. The point is that it is not this particular government adopting an ideological position.

"We are following in the footsteps of the last government that recognised that certain things had to happen in order for Royal Mail to survive because it is faced with a fundamental threat to its business from email."

Mr Cable said around 10% of shares should go to the work force. "It isn't a bribe, but it gives them a stake in the ownership," he added.

The National Federation of SubPostmasters said the plans should be postponed to prevent an "even deeper crisis" for Britain's post offices. It is concerned that a privatised Royal Mail would not feel obligated to keep services with the Post Office network.

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Grayling defends legal aid reforms

Press Association — 2013-05-21T11:30:00+00:00

Filed under: News

Justice Secretary Chris Grayling has endured attacks from MPs on both sides of the Commons over the Government's controversial legal aid reforms.

On the day a Bar Council poll showed seven out of 10 people in England and Wales were worried that cuts to legal aid could lead to innocent people being convicted of crimes, shadow justice minister Robert Flello asked whether miscarriages of justice were a price worth paying for the reforms.
Responding during justice questions, Mr Grayling said: "I still don't think that the Opposition understands the nature of the financial mess they left behind and what we have to do to balance the books.

"I also think that the public expect me to do what I can to maintain a strong prison system, a strong court system, but also to have a legal aid system that provides justice but that is also affordable and that is what we are doing."
The reforms to the Legal Aid, Sentencing and Punishment of Offenders Act (Laspo) will help the Government cut its £2.2 billion legal aid bill by £350 million. A Government consultation on legal aid is also ongoing, which paves the way for lawyers to compete for contracts among other reforms.

Several MPs voiced concerns about a small number of businesses taking control of most of the contracts, saying quality would be driven down.

Senior Liberal Democrat Sir Alan Beith, MP for Berwick upon Tweed, said there would be no incentives for firms who won contracts to keep standards high, while Labour's Meg Hillier, MP for Hackney South and Shoreditch, warned that some lawyers would prove too expensive for the Government.

Mr Grayling said: "I have absolutely no intention of ending up with a legal aid market which is dominated by a small number of very large firms. And a central part of the tendering process will involve a quality threshold that ensures that we have the quality of advocacy and the quality of litigation support in this country that we need and expect."

Tory former lawyer Anne McIntosh, MP for Thirsk and Malton, warned that the reforms would mean young barristers would have less access to the profession.

Mr Grayling said: "We have taken care during these proposals to put together a package based on our statistical analysis that we think will actually protect incomes at the lower end of the bar particularly. It is my intention that where we have to impose changes on the profession that they come through either through the re-organisation of business or income changes at the top end of the scale."

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Inflation drop bigger than expected

Press Association — 2013-05-21T11:00:00+00:00

Filed under: News

Falling prices at the petrol pumps led to a bigger-than-expected drop in inflation in April, the first easing in the annual rate of price rises for six months.

The Office for National Statistics (ONS) said consumer prices index (CPI) inflation dipped to 2.4% in April, from 2.8% in March, as lower fuel costs and air fares pushed overall transport prices down for the first time in almost four years.
But the temporary dip in inflation triggered by weaker commodity prices will do little to ease the financial pain on households, with inflation expected to spike above 3% in the summer.

The pace of the fall surprised economists, who had expected CPI inflation to edge down to about 2.7% in April.
Howard Archer, economist at IHS Global Insight, said: "April's marked drop in inflation to a seven-month low of 2.4% is very welcome news, providing significant relief for both consumers and the Bank of England." But Alan Clarke at Scotiabank said while it was a "big downward surprise", much of the fall is likely to be temporary.

The Treasury said it was "good news for families and businesses", adding the economy is "healing".

Plunging global commodity markets have hit the price of Brent crude oil in recent weeks, driving petrol and diesel costs lower. Petrol prices fell by 2.1p over the month to 136.4p a litre compared with a 3.2p rise a year earlier. Diesel was 3.9p lower to 141.7p per litre, compared with a 2.1p rise a year ago. Air fares fell by 6.4% on a month earlier, compared with a rise of 7.4% a year earlier.

The only notable upward effect came from food and non-alcoholic drinks. Prices rose by 0.7% on the month, compared with a 0.1% fall a year earlier, as farmers pushed through price rises after the freezing winter ruined crops.

CPI inflation fell for the first time since last autumn, but is expected to provide only a temporary respite for households as rising gas, water and electricity bills feed through to households over the summer.

At 2.4%, it far outstrips wage rises which grew at just 0.4% in the first quarter versus a year earlier. Inflation has remained stubbornly above the Bank of England's 2% target since December 2009.

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Pensioner couple blows £60k on rollercoasters

Sarah Coles — 2013-05-21T10:54:00+00:00

Filed under: Retirement

Denis and Sylvia Bloor (aged 74 and 64), a couple from Tregurrian in Cornwall, have revealed that they have spent £60,000 visiting theme parks across Europe and the US, racking up 250 rollercoasters since 1994.

But why, and is this a ridiculous waste of money or money well-spent?

Rollercoasters

According to a report in the Daily Mail, the couple are the oldest member of the Rollercoaster Club of Great Britain. They first visited Alton Towers in 1994, and claim it was enough to get them hooked.

Among the strange statistics they have racked up is 4,000 rides on Nemesis at Alton Towers. They have also spent 1,000 days in over 40 theme parks. They travel to the US once a year for a three-week tour of the theme parks.

However, they're not keen on water rides.

Is it a waste?

It sounds like an extraordinary sum of money to spend on rollercoasters, but it's not so extreme when you consider that it's their main hobby, and their annual holiday, and it has been for almost 20 years.

Being a member of the club also means they can travel with an interesting group of people, and make new friends around the world. They put on special events, which makes visiting the same park several times seem more entertaining.

Assuming they can find a travel insurer who covers theme parks, and has no age limits, and assuming they both meet the health requirements for each ride, then they're not taking any particular risks, so why not?

Better than golf?

Put into perspective, spending £1,500 each a year on something that brings them so much joy doesn't sound so bad. Sylvia claims it keeps them young, and that the endorphins ease her arthritis.

How does it compare to other retirement hobbies?

There are plenty of people who spend far more on a golf club membership and the associated kit. Given that the average membership fee for a man is £706, and the average joining fee is £746, in the first year the costs are roughly the same - even before you step onto the course. If you add in the clubs, kit, green fees, lessons and tournament fees, the costs quickly add up.

Alternatively, some couples opt for travel as their retirement luxury. Even travelling off-peak and using every trick in the book to bring the cost down, it's easy to spend this money seeing the world. With a certain amount of scrimping and saving, they could backpack around half the planet in 20 years on this budget. However, with a modicum of comfort, just one cruise each year would wipe this budget out.

Of course, there are cheaper options. If you joined a gym, even if you squandered a small fortune on kit, you'd struggle to spend more than £1,000 a year. Meanwhile cooking, socialising and gardening are virtually cost-neutral. And if you choose to keep your brain more active with some light part-time work, your retirement hobby could even be a money-spinner.

But what do you think? Have the Bloors found the best way to spend their cash in retirement, or are those rides over in seconds and the cost too much to make sense?

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easyJet slims down hand luggage allowance

lovemoney.com — 2013-05-21T10:30:00+00:00

Filed under: Holidays

From July easyJet will limit the size of the hand luggage that will be guaranteed a spot in the cabin.

In the battle between budget airlines, no stone is left unturned to find ways to cut costs.

The latest shot in this war in the skies comes from easyJet, which is to reduce the size of hand luggage with effect from Tuesday 2nd July.

Baggage allowance cut by 37%
At present, easyJet allows luggage to be taken into the aircraft cabin if it is below the maximum size of 56cm by 45cm by 25cm. This gives a total volume of 63 litres for a single onboard bag.

But from 2nd July, these dimensions will be slimmed down to 50cm by 40 cm by 20cm (including wheels, pockets and handles). This gives a total volume of 40 litres, which is a loss of 23 litres of luggage space. In effect, easyJet has cut its allowance for hand luggage by more than a third (36.5%).

easyJet's argument for this change is simple. By introducing this new 'cabin bag guarantee', it promises that passengers with qualifying bags can take them into the cabin. This will apply even on the busiest flights, when overhead locker space is limited. Under this guarantee, onboard bags will be placed in overhead lockers or under the seats in front.

You may still be able to take bags that meat the old limit onboard as hand luggage. However it's not guaranteed, and it may be checked into the hold if the flight is busy and there is little space. While this will not incur a charge, it does mean that you will have to queue to retrieve your bag from the baggage carousel on arrival.

As before, a handling charge of £25 applies for cabin bags exceeding the maximum size of 56cm by 45cm by 25cm, rising to £40 at the boarding gate.

Cabin baggage will be checked for size with a new baggage gauge at bag-drop desks and again at boarding gates. easyJet's definition of a cabin bag includes a bag, briefcase, suitcase, laptop case, handbag, bumbag, rucksack, carrier bag or wedding-dress carrier. Infants travelling on an adult's lap don't get a cabin-bag allowance

The airline explains its new rules regarding cabin baggage in more detail on its website.

Buy your travel insurance before you fly and save - compare prices here

How to avoid this restriction
In theory, easyJet should enforce this new 'cabin bag guarantee' only when flights are full and cabin space is limited. However, in practice, it could apply this restriction to any and all flights.

That said, there are several ways that you can avoid this new restriction. The obvious answer is to keep within the new limits by making sure that your bag measures less than 50cm by 40 cm by 20cm.

Sadly, of 21 cabin suitcases recently tested by Which? magazine, only three would meet these reduced dimensions. In other words, around six-sevenths (85.7%) of cabin suitcases would not be guaranteed a spot in the cabin for easyJet flights from 2nd July. This is a huge - and likely deliberate - inconvenience to British travellers, lessened only by the news that manufacturers including Samsonite and Tesco already make bags that fit easyJet's 'guaranteed' size.

Passengers who are easyJet plus cardholders, or FLEXI fare, easyJet plus Upfront or Extra Legroom customers can continue to bring one piece of cabin baggage no bigger than 56cm by 45cm by 25cm, thus avoiding this new restriction. They can also use easyJet plus Speedy Boarding to board first and bag what space is available in overhead lockers.

Cynics - like me - might suggest that this new rule is simply a way to push travellers into signing up to one of these days, thereby boosting easyJet's profits.

How easyJet compares
In the fight for low-cost flights, no-one beats Irish budget airline Ryanair. Famous for its penny-pinching ways, Ryanair's maximum dimensions for cabin luggage are currently 55cm by 40cm by 20cm (44 litres).

Then again, after easyJet's 40-litre limit takes effect, Ryanair's baggage allowance of 44 litres will be a tenth (10%) more generous than easyJet's. Frankly, I can see Michael O'Leary, Ryanair's billionaire boss, following suit perhaps in time for the summer surge in travellers.

At 'the world's favourite airline', British Airways, the free allowance for cabin baggage is restricted to one piece of luggage measuring no more than 56cm by 45cm by 25cm (plus one laptop-sized bag, handbag or briefcase). Although these are the same as easyJet's maximum dimensions (a volume of 63 litres), BA has a weight limit of 23kg, while the bright-orange brand has none.

With Virgin, if you are flying enconomy or premium economy you can take on a bag measuring no more than 56cm by 36cm by 23cm and weighing no more than 10kg.

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The five worst holiday disasters

Your travel plans fall through
If you are a victim of a strike, or any other event beyond the airline's control (including ash clouds!), they must offer you a refund (in which case it's up to you to find a way home) or an alternative flight. While you are waiting for the flight you have the right to food and refreshment and accommodation.

If you are on a package holiday, your tour operator is entirely responsible for looking after you until you get back to the UK.
Your airline goes bust
This is more likely to happen due to the financial crisis, but in some situations you are covered.

If you pay by credit card and it's over £100, you'll get a refund from the card company.

Your travel insurance may well cover you too, but check before you go.
Your luggage goes astray
Talk to the airline, and if it is temporarily misplaced they should arrange for it to be sent to your accommodation, and you should be either given cash to cover the essentials in the interim.

If it's completely lost you must wait 21 days and then make a claim for compensation. If you are travelling as part of a package you can claim costs from your operator.
You get sick
If you are travelling within the EU you need an EHIC card, which gives you access to public healthcare. However, this won't necessarily be free, and if you need extra services such as accommodation for a carer, a helicopter home or a delayed flight, you could end up seriously out of pocket.

The only protection that will guarantee you will be looked after without running up a horrendous debt is by having travel insurance - which often covers up to £10 million of costs.
You are robbed
The most common form of theft is pick-pocketing, followed by theft from a car and bag snatching. Meanwhile, 752,000 of those surveyed had items stolen from their hotel room or villa.

If you have anything stolen, your only protection is insurance. You need to tell the local police immediately and get a crime reference for your travel insurer.

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PM 'did not raise Google tax row'

Press Association — 2013-05-21T10:00:00+00:00

Filed under: Tax

Google's controversial tax affairs were not raised by David Cameron when the internet giant's boss joined Downing Street talks about tackling avoidance schemes, Number 10 said.

The Prime Minister used the quarterly meeting of his Business Advisory Group to urge big firms to back his push for international action to crack down on the use of tax havens.
But he did not directly raise MPs' fury about the sums Google pays in the UK with the search engine's executive chairman Eric Schmidt - who is a member of the high-level panel - or hold any separate talks with him.

The California-based firm was last week branded devious, calculating and unethical over efforts to shelter its multibillion-pound profits from UK taxes, during a stormy hearing before the Commons Public Accounts Committee.
Mr Cameron plans to use the G8 summit being hosted by the UK in Northern Ireland next month to push for co-ordinated global action to tackle "the scourge of tax evasion and aggressive tax avoidance".

A Downing Street source said that during the discussions - the details of which are not usually disclosed - the premier "did take the opportunity to set out his G8 agenda on tax and transparency".

He said he "hoped people would support the reforms he was proposing" and that businesses should pay the tax they owed but his comments were "not directed at anyone specifically". Number 10 said there was "broad agreement" that any action would need to be taken on a multilateral approach.

Labour leader Ed Miliband pledged at the weekend to write new rules to tackle corporate tax dodgers if he wins the next election, even if there is no international consensus for action.

Mr Schmidt was said to be among those who backed Mr Cameron's G8 approach.

Ahead of the meeting, the Prime Minister wrote to the leaders of Britain's offshore tax havens stressing the need to "get our own houses in order". 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 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.

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New solution for leftover currency: is it a good deal?

Sarah Coles — 2013-05-21T09:41:00+00:00

Filed under: Holidays

It's impossible to judge exactly how much travel money you'll need when you go away. No matter how careful your planning, there's always a handful of euros or dollars kicking about in a drawer somewhere. In fact, the average person has about £59.40 of unused currency at home.

Now Debenhams has come up with a cunning solution. But is it any good?

Unused cash mountain

The department store says that 97% of people who went overseas last year still have some currency left over. In fact, between us we're sitting on £2.1 billion in unused currency. The most popular currency to have lying around is the Euro, which 69% of us have stashed away in our homes. This is followed by the US Dollar (24%) and Egyptian Pound (6%).

The research found that the average UK traveller would have to come back from holiday with £84.50 worth of currency before they would be inclined to change it back to sterling. This rises to £120.70 among Londoners, but falls to £54.60 for those from Scotland.

One in five (19 per cent) said that they have never changed their money back - they simply find other ways to 'get rid of it', with men being much more likely to change their money back than women.

New solution

Its solution is the new Debenhams Buyback Gift card. The idea is that you take your currency into a store where it is changed back into sterling and then loaded onto a gift card which you can use to spend in Debenhams. The bonus is that you get an additional 10% on top of any money you load on.

So is it a good idea?

Debenhams says that its exchange rate is very competitive. If, for example, you exchanged $100 on 15 May, you would get £60.79 in sterling, plus the bonus, which brings it up to £66.87.

According to Moneysavingexpert's comparison tool, you could go to an online provider and get up to £65.62 for $100 cash. (That's the rate today, but overall the dollar to pound ratio is roughly where it was on 15 May). However, if you went to a high street bank, you'd get roughly the same as the Debenhams deal before the bonus: £60.36.

Whether the Debenhams deal works for you, therefore, depends on whether you need something specific from Debenhams (and you are sure that Debenhams is the most competitive retailer for what you're buying). If you intend to spend at Debenhams anyway then you can get marginally more for your money in this particular instance, making it well worth considering. Of course, it's essential that you check your currency at the time you intend to change it to see if Debenhams is still competitive.

If you're not after something specific from Debenhams, then having a gift voucher for £66.87 that you don't need is no better than having $100 that you cannot use. In that case, it may well be better to exchange your cash through an online provider. You may get very marginally less, but you'll get it in cash, which gives you flexibility.

But what do you think? Would you use it? Let us know in the comments.

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Do these 20 things and you'll always be poor

lovemoney.com — 2013-05-21T09:30:00+00:00

Filed under: Loans

Staying solvent is tough enough without throwing money away by making silly financial mistakes. If you do the following, you will always be poor.

1) Spend now, pay later
Don't throw your money away when you're young, assuming you'll be richer when you're older. People in their 40s and 50s actually have the most financial problems, according to Halifax, with one in five so stretched their budgets would snap if they had to find an extra £24 a month. Enjoy your financial freedom when you're young, but don't squander it.

2) Fail to save
Too many people claim they can't afford to save while blowing their cash on gadgets they don't need, clothes they never wear, digital TV channels they can't find and nights out they regret in the morning. Set up a savings direct debit, so you don't notice the money leave your account. Then have fun with what's left.

See the latest savings rates

3) Only pay the minimum on your credit card
Say you owe £5,000 on a credit card at an APR of 18.9%. If you only make the minimum repayment every month (either 2% or £5), you will take an incredible 50 years and nine months to clear that debt, and pay £12,182 in total interest.

Pay off your debts for less with a 0% balance transfer credit card

4) Miss a monthly payment
Missing a single mortgage, credit card, loan, mobile phone or hire purchase repayment can wreck your credit rating and make it harder to get cheap finance in future. Set up a direct debit to make sure you don't miss payments by mistake.

5) Fall for get-rich-quick schemes
If you think you can get rich by day trading shares, replying to letters from Nigerian princes or sending cash to claim the jackpot in a Spanish lottery you never entered, you will always be poor.

6) Drive like a boy racer
The more you rev, the more petrol you burn. Driving at 70 mph uses 30% more fuel than 60 mph. A speeding conviction adds £200 to the typical premium, being caught using a hand-held device can add more than £300.

7) Get addicted
Addiction comes in many forms, all expensive. A 20-a-day smoking habit can cost £2,700 a year. A morning latte and muffin could eat up £1,500. Serious addictions such as gambling will leave you broke.

8) Have children
Raising a child to 18 costs £222,500 on average, according to insurer LV =, and no, that doesn't include private school fees. If you have two kids, you will blow an unbelievable £445,000. Think what you could have done with all that money! Worse, the Bank of Mum & Dad never shuts these days, but stays open throughout adulthood. Abandon financial hope all ye who have children.

9) Compete financially
Keeping up with the Joneses is expensive. They're richer than you.

10) Lie to yourself
Please don't kid yourself that you don't need a pension because you plan to work till you drop/downsize to a cheaper property/scoop a massive inheritance/live fast, die young/win the Lotto.

11) Impulse buy
The odd impulse buy is fine, but don't turn it into a lifestyle. Before the financial crisis, people used to joke about maxing out their credit card. Not so funny now.

12) Be loyal
Loyalty is an admirable trait... in a dog. But it's daft to be loyal to your bank, insurer or utility company. Loyal customers get worse savings, mortgage and credit card rates, and pay more for their insurance and energy. Stay loyal, and you will be treated like a dog.

13) Hoard your old stuff
Don't let your belongings gather dust, turn them into cash. Cashinyourgadgets will buy your old mobiles, laptops, tablets and digital cameras. MusicMagpie.co.uk helps you sell clothes, CDs, DVDs, games, gadgets and electronics. Or try local trade-in shops, a garage or car boot sale, or eBay or Amazon.

14) Trust sales people
Everybody knows you shouldn't trust a sales person, especially if they work for a bank. But we still do. The result: mis-sold pensions, endowments, payment protection insurance and plenty more. Your life savings are on the line. Be wary.

15) Buy an old property
Old houses need constant care and repair. They will swallow all your spare money. I know, I bought one.

16) Take out a payday loan
You probably can survive the odd payday loan, but only if you clear it in full by the end of the month.

17) Rely on somebody else
Love is a wonderful thing, but so is self-reliance. Too many women rely on their partner for a pension, only to end up divorced and broke. The average Briton is banking on a £78,000 inheritance from their parents, but four out of 10 will get nothing, according to Skipton Building Society.

18) Buy your holiday money at the airport
Nobody likes to feel poor on holiday, and you'll feel a lot richer if you pre-order your foreign currency online from companies such as ICE, FairFX, the Post Office, Tesco, Travelex, Marks & Spencer and Moneycorp. Those airport foreign-exchange boots are a rip-off.

19) Take the first annuity you see
An annuity is the income for life you buy with your pension at retirement. Too many wrongly people think they are obliged to buy it from their pension company, but shopping around can boost your retirement income by between 10% and 40%. If you don't, you could get up to 40% less income, for the rest of your life.

20) Stick your head in the sand
If you're in debt, face up to it. Get free advice today from a debt charity such as National Debtline, StepChange Debt Charity, the Debt Advice Foundation or your local Citizens Advice.

Where to get free debt advice

Another Good Reason To Hold BAE Systems Plc

The Motley Fool — 2013-05-21T08:55:00+00:00

Filed under: Investing

According to weekend newspaper reports, Sir Roger Carr -- currently chairman of Centrica -- is being lined up as the next chairman of BAE Systems (LSE: BA) (NASDAQOTH: BAESY.US). If true, it will be another good reason to hold the high-yielding shares.

The current incumbent, Dick Olver, is expected to step down this year, with more than a little push from shareholders after BAE's plan to merger with Airbus manufacturer EADS fell apart. Fund manager Neil Woodford of Invesco Perpetual, BAE's largest shareholder with 13%, campaigned for Mr Olver to go and is said to support Sir Roger's candidature.

What will this mean for BAE investors? I make three predictions.

Confidence and clarity

Sir Roger is an eminent City grandee, currently president of the Confederation of British Industry and deputy chairman of the Bank of England. He is outspoken, on topics such as UK energy policy, the UK's role in Europe and executive pay, so BAE will have a louder and more confident public voice than recently. That should embolden management to take proactive measures to address the company's weak markets, too. Mr Olver and CEO Ian King are damaged goods in the wake of the EADS debacle.

Don't be surprised if there's a good shake-up of the boardroom, too. Indeed, Mr King may not be among those celebrating.

A big deal?

Sir Roger was chairman of iconic chocolate brand Cadbury when it succumbed to a controversial £11bn bid from Kraft, and he was chairman of Thames Water when it was sold to RWE for £5bn. With his extensive connections and openness to big deals at the right price, it's not inconceivable that the EADS merger could resurface.

That deal was vehemently opposed by Neil Woodford, but Invesco is also a shareholder in EADS and, with the right price and structure, attitudes could change. At least another time around, BAE shareholders could expect to receive proper value.

To buy, or not to buy

Mr Woodford also savaged BAE's track record of over-paying for acquisitions, and called for the company to concentrate on shareholder value rather than growth.

It can be taken as read that Sir Roger will focus on shareholder value. But his reputation was built on M&A: in the 1980s and 1990s he worked for, and subsequently became CEO of, Williams Holdings as it grew from a car dealership to a FTSE 100 conglomerate. So his arrival might herald more acquisitions. With defence markets depressed, it's a cheap time to buy.

Sir Roger doesn't have an unblemished history. He resigned as chairman of Mitchells and Butlers after the pub operator lost £0.5bn in property deals. But as an investor in Centrica, Neil Woodford knows him first hand and that's said to be the reason behind his support.

Mr Woodford has an unrivalled record as a fund manager. His high-yield fund has grown at 12.6% a year since 1988, and is "the best performing of any fund investing in the UK since it launched" according to Hargreaves Lansdown. You can learn more about how Mr Woodford selects stocks in this report from the Motley Fool: "Eight Shares Held By Britain's Super-Investor". You can download it by clicking here -- it's free.

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Pharmacy advice slammed by Which?

Adrian Holliday — 2013-05-21T08:45:00+00:00

Filed under: Shopping & Deals

Stick to Boots, Superdrug and supermarkets if you want to trust your pharmacy. That's the abbreviated conclusion of a 122 mystery shop Which? investigation into pharma high street quality across the UK.

Independent operators fell down the performance table - and advice from some pharmacy assistants comes in for some over-the-counter criticism.

Investigation

"Independent pharmacies were worse than the leading chains and supermarkets," says Which? "Over half were unsatisfactory - the same as when we last investigated pharmacies in 2008."

The Consumers' Association used two other scenarios - one for diarrhoea and one for migraine. For the first, unsatisfactory advice given could have led to pharmacies missing a serious infection. For the second, it could also have led to medication being given, without checking for suitability.

Which? says counter assistants were significantly more likely to give poor advice than pharmacists. "Two thirds of the visits handled solely by them were rated unsatisfactory, compared with a quarter where the pharmacist either managed or was involved in the interaction."

Naming and shaming

In terms of naming and shaming, Boots, Superdrug and the supermarkets generally came out reasonably well. But in terms of unsatisfactory advice, Rowlands Pharmacy came out bottom of the table, with a 73% score compared to 17% from the supermarkets.

Surely consumers though have the right to trust any advice they receive from a pharmacy? The Royal Pharmaceutical Society and the General Pharmaceutical Council claim they recognise Which's concerns and are taking steps to tackle the issues.

In the interests of fairness, note Boots' score, though generally good, still saw a disappointing 38% of visits take an Unsatisfactory score. The Co-op also looks unspectacular, with just 8% of visits receiving Good scores, and 38% Unsatisfactory.

Full Which? scores below

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Who really owns our water companies?

lovemoney.com — 2013-05-21T08:15:00+00:00

Filed under: Utilities

As Severn Trent looks set to fall into foreign ownership, we look at just how many water suppliers are no longer in British hands.

Severn Trent has been approached about a takeover bid by a group of foreign companies. The deal could be worth a whopping £5 billion.

Severn Trent is one of the biggest water companies in the country and supplies 7.7 million people with drinking water across the Midlands and Wales.

The Severn Trent bid
The group involved with the bid include the Canadian investment group Borealis, which already owns assets in the UK, the Kuwait Investment Office and the Universities Superannuation Scheme.

A statement was issued confirming the proposed takeover, although acceptance of the £5 billion bid has not been confirmed.

It said: "This approach is at a very early stage, no proposal has been made and there can be no certainty that an offer will be made or as to the terms of any such offer, should one be forthcoming."

After this announcement shares in the company jumped more than 18% to a record high before falling back again.

More details will be announced on the 11th June when the offer will either be confirmed or extended.

Customers are unlikely to see a difference if the takeover does go ahead because prices are under the control of water regulator Ofwat.

Water firms urged to reduce leaks

UK water companies in foreign hands
Severn Trent is just one of several utilities companies now under foreign control. This is because utility companies have proved to be a strong investment, as they're a good way to receive a steady income.

After the UK water industry was privatised in 1989 several new companies were formed and many of these have now been sold off.

In 2006 Thames Water was bought by a consortium which included the Australian investment group Macquarie and a Chinese wealth fund.

Yorkshire Water, which now supplies 4.7 million people, was snapped up in 2007 by another consortium, this time made up of Citigroup, HSBC, and the Singaporean sovereign wealth fund GIC.

Northumbria Water was also bought in 2011 by the Hong Kong-based company Cheung Kong Infrastructure Holdings.

How to cut your water bills

Where your water company is based
The table below shows which water companies are owned by overseas investors. There are now 12 water companies, out of the 23 in the UK, which have foreign owners not including the proposed Severn Trent deal.

Water company	British or overseas ownership	Who owns it?
Affinity Water (formerly Veolia Water Central, Veolia Water East, Veolia Water Southeast)	Overseas	US-based Morgan Stanley and UK-based Infracapital (investment fund managed by M&G).
Anglian Water (includes Hartlepool Water)	Overseas	Osprey Acquisitions Limited - a consortium of several companies based in the UK, US and Canada
Bristol Water	Overseas	Split between Canada-based Capstone Infrastructure, Spain-based Grupo Agbar and Japan-based Itochu Corporation
Cambridge Water	Overseas	Hong Kong-based Cheung Kong Infrastructure Holdings
Cholderton and District Water	British	Independent water company
Dee Valley Water	British	Independent water company
Dwr Cymru Welsh Water	British	UK-based Glas Cymru
Essex and Suffolk Water	Overseas	Hong Kong-based Cheung Kong Infrastructure Holdings
Northern Ireland Water	British	Government-owned company
Northumbrian Water	Overseas	Hong Kong-based Cheung Kong Infrastructure Holdings
Portsmouth Water	British	UK-based South Downs Capital Ltd
Scottish Water	British	Government-owned company
Sembcorp Bournemouth Water (formerly Bournemouth and West Hampshire Water)	Overseas	Singapore-based Sembcorp
Severn Trent Water	British	Severn Trent Plc
South East Water	Overseas	Canada-based CDPQ and Australia-based Utilities Trust of Australia
South Staffs Water	Overseas	US-based KKR
South West Water	British	UK-based Pennon Group
Southern Water	British	UK-based Southern Water Capital Limited
Sutton and East Surrey Water	British	UK-based East Surrey Holdings Limited
Thames Water	Overseas	Australia-based Kemble Water Holdings Ltd, part of the Macquarie group
United Utilities	British	Independent water company
Wessex Water	Overseas	Malaysia-based YTL Corporation
Yorkshire Water	Overseas	Citigroup, HSBC, and Singapore-based GIC

See if you could save big money on your gas and electricity bills by switching

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Warning over Microsoft support scam

Sarah Coles — 2013-05-21T08:06:00+00:00

Filed under: Scams & Fraud

The experts are warning computer users of a scam doing the rounds - where users receive a telephone call out of the blue from someone claiming to be from Microsoft. They then use a variety of techniques, from infecting your computer with malware, to charging you a fortune for help you didn't want or need, or even just asking for your credit card details.

So what should you watch for?

The scams

These scams are not all new, but they have been highlighted by Which, after a number of subscribers contacted them to share their experiences.

In around a fifth of instances, the scammer on the other end of the phone will talk the user through the process of allowing the criminals to gain remote access to their computer. Once they have access, they can infect it with malware designed to steal internet banking and shopping passwords and account numbers.

In about a third of cases victims will be sold worthless subscriptions to support services, and around a fifth are asked directly for their credit card information - either over the phone or being directed to a fake website where the victim enters the details themselves.

Microsoft says that another common approach is to talk you into installing malware yourself - and then charging you to remove it.

It has released a list of the organisations that the scammers are claiming to work for, including Windows Helpdesk, Windows Service Center, Microsoft Tech Support, Microsoft Support, Windows Technical Department Support Group and Microsoft Research and Development Team (Microsoft R & D Team).

Protect yourself

Microsoft stresses that if you are approached by a cold caller, it's best to assume they are up to no good. Do not allow them access to your computer, and do not give them any details or sign up to anything.

They highlight that Microsoft would never call and ask you to pay anything - so if you are asked for payment, hang up immediately.

If scammers call offering a service that you think you need, hang up, and do a separate search for a reputable company offering these sorts of services. Don't be conned by a smooth-talking salesperson.

If you are a victim

Which? says that the average victim is 55 or over, and has lost £75 as a result of the scam.

If you are worried that you may have been a victim yourself, Miscosoft recommends a number of steps to protect yourself, including changing your computer password, the password on your main email account, and the password for any financial accounts, especially your bank and credit card.

You should also scan your computer with the Microsoft Safety Scanner to find out if you have malware installed on your computer, and install Microsoft Security Essentials (this is a free program. If someone calls you to install this product and then charge you for it, this is also a scam.)

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