Students–don’t miss out on free funding this year!

Herald Scotland

by Iona Bain

Scottish students could miss out on thousands of pounds offered through independent scholarships just as colleges prepare to see their bursary budgets slashed by £7m.

The Scholarship Hub website has revealed that many of this year’s freshers could be eligible for generous grants based on all kinds of unlikely factors, such as their writing skills, their parents’ jobs and even a passion for TV. But many do not realise this extra funding exists, with experts fearing that students will struggle on at a time when financial support from colleges is drying up.

The National Union of Students is currently investigating college grants in the hope that it can expose “cracks in the system” and trigger widespread reform. It is calling for students to submit their views as part of its Student Poverty Project, offering £100 to five random contributors as an incentive.

It follows the revelation in February that the SNP would not maintain extra funding for college bursaries, worth £10.4m, that had been provided in 2014, a decision described by the NUS as “disappointing”.

Meanwhile in the general election campaign, the SNP is backing Labour’s pledge to cut English tuition fees by a third to £6000.

Gordon Maloney, president of NUS Scotland, has said that the failure to renew extra funding North of the Border means that “college students will see a significant and damaging cut in funding for their vital bursaries next year”.

Karen Kennard, director of the Scholarship Hub, encouraged students to look beyond their chosen university or degree for a financial lifeline.

She said: “When you apply to university, the institution concerned will advise you about the scholarships they have available, but not all students will realise that they could be eligible scholarships are not linked to your university or your subject choices.”

Ms Kennard argued that universities lacked time and resources to track down “every available funding opportunity”, so the onus was on students to investigate what is out there. “There are an increasing number of scholarships now being offered, including more and more from America opening to UK students. These grants can really help to reduce your student debt and, in some cases, even provide you with mentoring and work experience.”

To read the rest, click here

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Filed under Debt, Education, Personal Finance, Politics, Scotland, Student Finance

LETTER on how to cut wedding costs

I READ with interest your article the rising cost of weddings (“Spiralling cost of the bug day putting hole in our pockets”, The Herald, April 18).

The enormous cost of weddings is no surprise, and given the publicity surrounding Andy Murray’s recent wedding, many couples are likely to want something similar.

Your article mentioned the large number of humanist celebrants charging nearly £400, not counting time for a rehearsal and travel costs. Readers may not realise that Church of Scotland ministers like myself conduct weddings (and funerals) for no fee whatsoever as part of our calling to serve in a parish.

A Must-Take Photo of the Bride with her Dad Before the Ceremony Begins #wedding

Church buildings are normally available for ceremonies for a modest cost to cover heating and so on plus a fee for an organist and we are happy to spend time with the couple beforehand to get to know their hopes and ideas. We do not charge for rehearsals.

The bride and groom may plan to spend whatever they like on clothes, reception or honeymoon but they do not need to pay anything for a minister.

Rev Catherine Collins,

Broughty Ferry New Kirk,

25 Ballinard Gardens,

Broughty Ferry, Dundee.

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Filed under Bargain hunting, Budgeting, Consumer Affairs, Personal Finance, Shopping, Social pressures, Weddings

The spiralling cost of weddings–how much would YOU pay for your big day?

Herald Scotland

Iona Bain

Scottish couples are increasingly compelled to splash out as much as £20,000 on their wedding if they want to keep up with the likes of Andy Murray, who tied the knot recently in Dunblane.

The tennis ace and his bride Kim Sears hosted their reception at Cromlix Hotel, which was bought by the couple in 2013 and is now being advertised as a luxury wedding venue for hire on the back of the Murray nuptials.

It doesn’t come cheap. The hotel costs £8500 to hire between April and October, should you wish to invite between 28 and 65 guests, while a bigger party would involve the additional (undisclosed) cost of a marquee on the front lawn. Guests hoping to stay the night can expect to pay £250 for a small double room.

But those prices haven’t stopped couples from snapping up the hotel’s last dates this season. Scotland does a roaring trade in weddings; official statistics indicate that Gretna Green is still one of the most popular places to get married in the UK. The industry is thought to have boosted the Scottish economy by £537m in 2013.

But showy weddings can place a big strain on our budgets. The average wedding in 2013 cost £19,507, up 4 per cent on the year before, according to the Scottish Wedding Census. Couples typically spent £7,627 on a reception, £2,771 on the honeymoon and £1,963 on rings. Other expenses included photographers and filmmakers (£1,311), the bride’s dress (£1,118) and entertainment (£928).

19 Stunning Lighting Ideas for Fantastic Wedding Pictures - this particular picture with hanging string lights make you feel like you're in an enchanted forest

Many are also borrowing money to walk down the aisle. A report by Lloyds Bank last year found that the average couple is funding half of their wedding costs this way, while 9 per cent are borrowing the total amount. Less than half manage to fund their wedding entirely from savings.



Filed under Budgeting, Dating, Personal Finance, Relationships, Scotland, Social pressures

Hey extreme spender; what an unwanted letter from tells us about our ‘buy now pay later’ culture


Have you ever seen a coat, pair of shoes, shirt or bag – and felt love at first sight? Isn’t it wonderful? We all catch fashion fever sometimes and resistance is futile. We just have to have that item, and we cannot explain the urge on any rational level. We know deep down that we don’t really need that extra addition to our wardrobe, but hey! Style isn’t about common sense. It’s about being fun and fabulous and splashing out when the moment takes us.

Well, that’s the popular theory anyway. That’s what the fashion industry would like us to believe. Have you noticed how clothes – and keeping up appearances generally – have become one of the nation’s few acceptable addictions?

Since I started researching my first book on managing money, I have noticed the same old trope in many other books in this field. Women, it seems, just love to buy shoes, most of which end up in the back of the cupboard gathering dust and sparking marital rows.

This is the problem with New York - too much amazingness #manoloblahnik by tashsefton

But in many people’s eyes, this trend isn’t particularly worrying. Never mind that extreme shopping can lead to devastating levels of debt and can be a signifier of bipolar disorder and other mental illnesses. No, we tend to treat this as a common source of light-hearted comedy, rooted in the belief that overspending on clothes is normal behaviour.

Think about it. We feel enormous pity for people who struggle to give up drink, smoking, porn and overeating but laugh with those who keep buying clothes they don’t need. Young women who lust over Louboutins and pine for Prada are the norm. I blame Carrie Bradshaw. The main character in TV’s Sex and the City was bursting into the mainstream just as I and millions of other girls were growing up, with her famous (or should that be notorious?) obsession with high heels. It didn’t really matter that the low-earning columnist maxed out credit cards and couldn’t get a loan because she didn’t save and bought stilettos that cost her entire monthly rent. The show wore that very dark theme in the lightest manner possible. (Don’t forget that everything works out wonderfully in the end – Ms Bradshaw gets a book contract and bags a wealthy husband.)

Similarly, have you noticed that Confessions of Shopaholic was a laugh-a-minute romcom about a young fashion addict who spends her way into crippling debt before rehabilitating herself and becoming a responsible financial journalist? If the film was about a young woman who almost drinks herself to death before turning things around, it would be the most serious drama you’ve ever seen. In fact, this film has already been made – Smashed – and I highly recommend it.

(By the way, any similarities between the redheaded financial journalist in Confessions and me are entirely coincidental. Honest.)

Clothes are characterised as the financial Achilles heel of women everywhere. This pervasive narrative means that we tell ourselves that the occasional shoe splurge is natural, even if those wedges fall out of favour faster than a Lib Dem deputy prime minister. Many of us make fashion a big exception in any careful spending rules we form. We might count the pounds on a night out or compare prices in supermarkets. But many of us throw out budgets up in the air at the sight of a swing coat.

It is against this backdrop that a very popular clothing brand sent me a letter last week. – an online store I have never used – has somehow obtained my personal details so they could invite me to take out a Very Credit Account, giving me £20 off my first credit order of at least £40. They have even informed me that I can spread my payments, should I take up their alluring offer, over three months without paying any interest.

2015-04-04 11.28.02

Of course, should I miss those payments for whatever reason, I will have to pay a representative interest rate of 39.9 per cent APR.

It wouldn’t necessarily cross my mind to use or its credit account if that missive hadn’t dropped on my doormat. After all, it’s a big enough job to stay away from all those online stores in my spare time in an economic climate where wages have flatlined and job security has become more precarious. So this store puts – very helpfully – one more spending temptation my way, on top of all the other advertisements and inducements to part with my money that I see in any given week or month. So that £33 that could have gone into an emergency savings account, pension or insurance plan could be put towards Carvela’s latest Lux Animal Skate Shoes (originally priced at £99 when I got this letter but now half price. Anyone who bought the shoes at full price will be fuming now…)

2015-04-04 15.32.08


Of course, letters like this don’t make my life, as a normal young woman who wants to look good without breaking the bank, harder. And I am sure that no-one, absolutely no-one, who accepts this deal could end up spending more than they bargained on and/or missing payments, thus making a tidy profit in interest.

By ‘discovering’, I also discover a new way to avoid saving up for what I want. I discover how to avoid walking away from purchases outside my budget, waiting for payday or finding out if there are cheaper options out there. I discover that no trade-offs are necessary, no dilemmas about how to live within my means while having everything that marketers make me feel I need.

Debt charities were not able to disclose the true level of store card debt when I was researching a story on this topic earlier this year. Perhaps that is because experts now deem store cards and credit accounts to be a thing of the past. Not so.

According to the aptly named middleman Pay4Later, the amount lent through its panel to customers at big high street stores was 123 per cent higher this winter compared to last. Moreover, it expects “strong growth” according to a cheery press release issued last month, as over a third of retailers expect store credit sales to grow by at least 10 per cent. So clearly the death of store credit, predicted after immediate discounts for new applicants were banned in 2011, has been exaggerated.

A spokesman for the  FCA – Britain’s big financial watchdog – told me that this market won’t be central to its consumer credit review, a huge investigation into whether consumer credit is sold responsibly in the UK.

pink sign

So does that mean that this kind of mass marketing from will NOT be scrutinised by the FCA? If so, this review will be hopelessly inadequate.

It looks like fashionistas who don’t want to ‘buy now pay later’ will be facing an uphill battle to resist our fast’n’easy credit culture for many years to come. Let’s hope that more shoppers remember how much debt is like weight – incredibly easy to acquire and incredibly difficult to shift.

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Filed under Credit, Debt, Fashion, Opinion, Shopping

GENERAL ELECTION 2015: The Hashtag Revolution and why the Twitter generation is one to be reckoned with

As the General Election campaign kicks off today, Helen Lawless looks at what young people stand to gain financially from voting.

By Helen Lawless

Twitter has proved that young people are a political force to be reckoned with.

Young people are often accused of not being interested in serious subjects like politics and the economy, but last week’s “Battle for Number 10”, indicates that this is simply not the case. The television programme, which aired on Channel 4 and Sky News, featured Ed Miliband and David Cameron each being grilled by Jeremy Paxman and a studio audience. And it is concrete evidence that young people are indeed switched on, quite literally. Why? Because of the storm it caused on social media.

The debate trended on Twitter within minutes, and political engagement think tank Demos described it as “one of the biggest digital moments in British political history”. There were 2,700 tweets per minute under the #BattleForNumber10 and related hashtags. That is monumental. That is 2,700 opinions, 2,700 examples of direct political engagement a minute. And a sizeable chunk of that is almost certainly young people. Why? Because vastly more young people tweet in general. According to the Pew Research Center, one of the leading independent authorities on internet technology, 37% of Twitter users in 2014 were between 18 and 24 years old. This is the first generation that grew up expressing themselves routinely on social media, and now they are voicing their political views the same way.

Now obviously social media engagement does not translate perfectly into votes; this phenomenon does not guarantee that young people will go to the polls, but it does indicate they are much more likely to do so than is often predicted. It means that politicians should ignore young people over the next month at their peril. Many people assumed that the let down over the Liberal Democrats and tuition fees would exasperate political apathy amongst young people, and perhaps in some cases that’s true, but for many young people the legendary broken promise simply informed them how high the stakes are.

According to government figures, approximately 743,000 young people aged 16 and 24 were unemployed in January 2015. The rate of improvement in the unemployment of young people has been painfully slower than the overall decrease. This is the generation who became politically aware some time between the Iraq war, the financial crisis, and the introduction of unprecedented levels of austerity. This is not a group who take these matters lightly. They are the ones who have felt the implications of recent political and macroeconomic events most sharply, and that gives them more motivation than most to scrutinise the potential occupants of Number 10.

The evidence demonstrating the political potency of young people speaks for itself. The Greens, who according to YouGov were tied with the Conservatives in January 2015 as the most popular party amongst 18-24 year olds, are running in more seats than ever before. And they are going to be included in the televised leadership debates for the first time. Furthermore, according to the latest projections by the Guardian, which amalgamate all constituency and nation-wide polling data, the Liberal Democrats are expected to lose 31 seats this election. If that isn’t concrete evidence I don’t know what is. Young people made Nick Clegg the king-maker: now they’re sending him to the guillotine.

What this means is that when Cameron promises to fix youth unemployment, when Miliband pledges to lower tuition fees to £6,000 a year, and when both of them regularly claim they will provide enough government sponsored apprenticeships to give all young people a decent chance in life, they should not do so lightly. Young people have proved that they possess two political hallmarks: energy and retaliation. Whoever is elected will have to consider how their decisions will affect the lives of young people. Otherwise there’s plenty of time for a few more heads to roll.

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Filed under Economy, Opinion, Politics

BOOK REVIEW: BLAIR INC. The Man Behind The Mask


We part with convention here on the blog by publishing a fascinating review of a new book about Tony Blair, written by Simon Bain, personal finance editor at the Herald newspaper. Read on to discover what the former prime minister has REALLY been up to since leaving office…

BLAIR INC. The Man Behind The Mask

Francis Beckett, David Hencke, Nick Kochan. John Blake Publishing |£20.

When Tony Blair left Downing Street in June 2007, he told Time magazine that the Tony Blair Faith Foundation was “how I want to spend the rest of my life”.

His seven-strong personal PR team claims the former PM spends “two-thirds” of his time in “pro bono” work, and that his commercial activities fund his philanthropy.

Now Blair Inc., a dogged journalistic investigation into the 10-year Premier’s extraordinarily lucrative after-life, has uncovered an altogether more complex and disturbing picture.

It had to battle a “huge communications department aimed at not publishing anything” , a subject “who instructs his employees and adherents to give no assistance at all to so disrespectful a project”, and fear induced by 20-page employee secrecy agreements.

As former Prime Minister, Blair takes a pension of £64,000, an office subsidy of £84,000 and security protection which costs the taxpayer £250,000. Is it uncharitable to suggest that a man who donated his £4.6m autobiography advance to a service charity (I wonder why), and who may be worth as much as £60m, might perhaps be able to afford to pay for his own security?

But he probably needs it. Although one of his mentors Bill Clinton popped up in Edinburgh two years ago to address the Scottish Business Awards, Mr Blair’s globetrotting private jet itinerary seems unlikely to take in the country where he was brought up and educated (at Fettes College In Edinburgh) anytime soon.

Tony Blair

Aside from fearing a ‘blood on your hands’ Iraq protest, any UK charity event might expect Mr Blair’s fee to go – as Mr Clinton’s £200,000  fee did that night – straight to his African charity. The Clinton Foundation is in partnership with Scottish entrepreneur and philanthropist Sir Tom Hunter to fund projects in Africa which government aid never reaches. But while Mr Blair’s Africa Governance Initiative also does some worthy work, it operates under the same secrecy blanket that covers the whole TB empire. Like the Tony Blair Faith Foundation, its donors are unknown. Do the charities benefit from Mr Blair’s eye-watering speaking fees, and the monster consultancy contracts won by Tony Blair Associates? If so, to what extent?

Neither TBA nor the “entirely separate” charities disclose any such information. They say it’s all above board with the Charity Commission – which has found it necessary to investigate the relationships with Blair’s commercial interests.

But while the Africa Governance Initiative says its aim is to bring “British standards of governance” to Africa, there is a rich irony in that Mr Blair’s own interests are said (by specialist academic Dr Nicholas Allen of University of London) to be in probable breach of six of the seven Nolan principles – the ethical code for public life introduced when Blair himself was PM.

Of course, Blair’s interests are not subject to the Nolan test – or any other code. Officially, he’s just a businessman.

“When Blair left government, he sought to build a global consultancy not unlike the government he had left. He turned himself into an international outsourcing company,” the authors say.

But when he left Downing Street eight years ago, in high dudgeon at the Labour Party having dispensed with him, the fallen idol couldn’t resist taking a high-profile public role as well. He wanted to become President of the EU, but that would have to wait, so he settled for Quartet Representative (QR) in the Middle East. That is supposed to mean “peace envoy” in the region for the US, EU, Russia and the UN.

“I think he does it because he likes to continue to feel like an international statesman and not just a businessman,” says former Tory foreign minister Malcolm Rifkind (recently revealed to be not averse to a bit of paid-for diplomacy).

Critics, including former Labour colleague Lord Hollick, say his agenda of economic investment for the Palestinians is doomed to fail as peace and stability must come first. The authors say: “There is nothing exciting about bus routes, Gaza border openings and security barriers in the West Bank. But this is what being the Quartet negotiator was mean to be about. It is a job to which Blair, with his once over lightly, butterfly approach to diplomacy, was entirely unsuited.”

They go on: “The fact is that it is not peace but money – both real money and pretend money – that is at the heart of what TB does in the Middle East. And that makes it all a chimera because private sector money is not going to flow into Palestine without real political progress towards peace.”

Tony Blair

If Blair had, like his predecessor James Wolfensohn, devoted himself to the job and achieved something reminiscent of his Good Friday agreement in Northern Ireland,“it would be enough for most of us to say, well done Tony”.

But in reality the unpaid envoy’s “one week a month” in the conflict zone typically amounts to “arriving on Monday evening and leaving on Thursday morning”, according to one diplomat. More importantly, he is not trusted by the Palestinians – partly because the Tony Blair Faith Foundation is known to have major donors such as fiercely pro-Israeli lobbyist Saim Haban, one of the billionaire “old chums” who help to fund the Blair empire’s activities. “For the Quartet Representative to be so deeply indebted to Saban, even though wearing another hat, is a serious problem,” the authors say.

But the role enabled Blair to step straight into the role of shadow statesman and fantasy head of state. He turned his two principal homes into clones of number 10 and Chequers, and used two-way recruitment links with two secretive specialist agencies to maximise an international network for his own, private, diplomatic consultancy. 

While his QR effort has arguably borne little fruit, his frequent visits to the Gulf states have been highly productive for his principal business, Tony Blair Associates.

Even the African charity offers “the chance to make contact with and attract the adulation and acclaim of African leaders”, the authors suggest. They do cite one example of Gulf state investment into Guinea, possibly brokered by Mr Blair, while a Blair supporter says he has unlocked some investment for the Palestinians from previously indifferent Gulf states. But which hat he was wearing at the time nobody knows, and all inquiries about the Quartet go straight to Blair’s personal press office.

The envoy can use the Quartet job as a “calling card”, yet is bound by no code of conduct. If he worked for the World Bank, IMF or UN he would have to set out in full all commercial interests – as he would by taking a seat in the House of Lords, to which he is entitled.

In Kuwait, Mr Blair’s introduction to the Emir in 2009 as Quartet Representative, when he was accompanied only by his strictly personal adviser Jonathan Powell, was quickly followed by a consultancy contract for TBA said to be worth £27m , but not disclosed until 2010. At the same time, the Advisory Committee on Business Appointments revealed a TBA contract to advise a consortium involved in an Iraqi oilfield. Mr Blair is a regular caller in Abu Dhabi, where he also has a government contract, and the authors ask: “Which Tony Blair keeps visiting Abu Dhabi?” Of peace envoy, charity patron, and consultancy principal “it generally seems to be the last-named who benefits most”, they suggest.

An opaque web of 12 legal entities – all under Mr Blair’s control – hides everything, including speaking fees said by one charity to “start at £500,000” .

In Qatar, one of the book’s sources alleges, he earned “$5m for one meeting”.

Tony Blair Associates’ known clients, with guesstimates of deal value, include the Emir of Kuwait (£27m) Sheikh Mohammad bin Zayed Al Nahyan of Abu Dhabi (£1m a year) the President of Kazakhstan (£8m a year), US investment bank JP Morgan ($4m a year),  UI Energy which bought the oilfields in Iraq, and LVMH, run by the world’s fourth richest man Bernard Arnault and another old chum.

How does he rake in so much?

US billionaire and “former chum” Tim Collins says Blair’s $4m a year from JPMorgan is for “opening doors… the idea he is giving advice to anyone seems to me a stretch”.

The authors say: “When governments call on Blair they want not only the man but his contacts. This partly explains the eyewatering amounts corporates and wealthy individuals will pay for the Blair mystique…the fact that Blair does little more than pick up the phone to a contact he has recruited through a consultancy never reaches the ears of a deep-pocket who wants a call made or a back scratched”.

The most disturbing dimension of this investigation is the shadowy links forged by Blair with such non-New Labour regimes as Libya under Gaddafi, Qatar, Rwanda, Burma and Azerbaijan. The authors pay particular attention to the human rights records of these autocratic clients, or potential clients, of TBA and suggest that while the spin is all about helping these nations to progress, the reality tends to amount to “burnishing a dictator’s image”.

Blair held six private meetings with Gaddafi before his downfall, and his protégés Baroness Symons and former minister Stephen Byers were active in Gaddafi’s defence right up to his toppling.

In Azerbaijan Blair is reported to have made speeches at £100,000 a throw for politicians who are close to President Aliyev – the man whose 2013 election win was announced before the votes were counted.

Two days before the Scottish referendum, Tony Blair piped up for the Union. But while every other concerned politician was on the stump in Scotland, Blair pontificated from Crimea, where he was guest of Victor Pinchuk, one of Ukraine’s three principal oligarchs and the 255th richest man in the world. Just another of the globetrotting plutocrats – Pinchuk has a mansion in Kensington – who helps to boost the balance sheet of Blair Inc. (Talking of pontiffs, Blair is said to be well out of favour at the Vatican since he took to advising Pope Benedict on doctrinal matters.)

Private consultancies can earn fortunes from advising dubious regimes round the world and keep it nice and quiet. But TBA is different – it is Blair’s.

His corporate empire employs 200 and may have earned £54m in 2013. Tony and Cherie own 36 properties, including five overseas and two blocks of flats, and they could be worth £60m.

James Wolfensohn, who really did dedicate himself to the Quartet job, says discreetly of Blair: “He has helped especially bankers and their clients who want to see the rulers or their leaders. It has allowed him to be very well compensated.That is fair game and that is what a lot of former politicians and leaders do.”

But while Mr Clinton’s wealth is (at present) even greater, and John Major and Margaret Thatcher both took hugely-paid directorships with controversial US companies, all three are relatively untainted. The Daily Telegraph says that’s because Blair is a ‘human cash register’ compared with the feeble efforts of his predecessors – the first Labour Prime Minister Attlee left £7,295 in his Will.

The Cherie Blair Foundation for Women raises a record amount of money and discloses support from American banks.

“Nothing is too grand for the Blairs,” say the authors, who boggle at the couple’s pursuit of money. Cherie suffered severe financial insecurity as a child, they note. “Blair too suffered some childhood insecurity though not as great…how far do these personal factors explain their apparent need to build wealth way beyond their needs? And to what extent is it due to the fact that Blair admires, and is dazzled by, the very rich?”

The FT has suggested that these days it becomes part of the job at an early stage because “most leaders link up with the plutocratic class while still in office”.

Blair certainly tilled the ground well, and is now reaping the harvest. What else he may reap, this founder of a faith foundation and opinionated Roman Catholic, is perhaps not one for the economists, but for the theologians.

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PENSION FREEDOMS: Can we open up pension pots to help first-time buyers?

I’ve been talking about some new research from now: pensions on local radio stations all over the country today. the findings are controversial and should reinvigorate the debate on how to get young people thinking about their future. so what’s the report all about and why is it important?

Iona Bain

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Iona in the studio with Amy Mankelow from NOW: Pensions

· With so many demands on young people’s finances, it’s not surprising that pensions can fall down the priority list

· Auto enrolment will help get more young people into the savings habit but more needs to be done to really incentivise young people to save

· The research shows allowing pensions to be used to help fund a deposit for a first home would help encourage young people to save into a pension

· Come 6 April, older generations will be afforded considerable flexibility in how they access their pension savings

· This is a major shake up to the UK pensions system and fundamentally changes the nature of pension saving

· It could make a BIG difference if some of the flexibility being afforded to older people is extended to younger generations to encourage them to save into pensions

· One of the things which deters people from pension saving is that it’s locked away for a long time

· By increasing flexibility you can build young people’s interest in pensions and also help give them a much needed hand onto the housing ladder

· A similar scheme, the “KiwiSaver” scheme was introduced in New Zealand in 2006 and has been hugely successful

How does it work in New Zealand?

· In New Zealand the first home subsidy already exists as part of the government’s KiwiSaver auto enrolment initiative

· After 3 years of contributing to KiwiSaver, savers can apply for the first home subsidy

· The first home deposit subsidy is $1,000 (£500) for each year you’ve been contributing to KiwiSaver, up to a maximum of $5,000 (£2,500) for five years.

· For couples buying a house together, the combined subsidy could be $10,000 (£5,000).

· The subsidy is paid directly to the buyer’s solicitor on the day the purchase of the property is settled.

How many 18-35 year olds are saving for retirement?

· The research NOW: Pensions conducted shows that over half (58%) of 18-35 year olds aren’t currently saving into a workplace pension (65% of 18-25 year olds and 53% of 26-35 year olds)

· Over time, this percentage should increase as auto enrolment is being introduced which means that anyone over the age of 22 and earning more than £10,000 a year will be automatically put into a company pension scheme without them having to do anything which is good news

· So far it seems that when young people are auto enrolled, they are choosing to stay in the pension schemes rather than opting out which shows that young people understand the importance of long term saving but saving can be challenging

Why are young people not actively saving for their future?

· The main reason generation Y give for side-stepping pension saving is that they are prioritising saving elsewhere (cited by 43%)

· A quarter (25%) say that they simply don’t have enough money left at the end of the month

· For 14% of those surveyed, their debt is too much of a burden to justify saving

What are the implications of this?

· As a result, nearly two thirds (61%) say they are concerned or very concerned that they won’t have enough money when they retire

· At the moment, the State Pension is around £113.10 per week (not very generous)

· The new single tier state pension will be £144 when its introduced in April 2016

· At this level, the State Pension will still only provide a modest income and it’s important to remember that you are only eligible to receive the state pension if you have paid National Insurance for 35 years

How can we encourage or incentivise young people to start saving towards a pension?

· Over half (54%) of young people say they would start saving or would save more if they could access some of the money to help fund a deposit for their first home

· While four in ten (42%) would start putting money aside if a kick start payment was offered by the government

· One in four (25%) say being able to access savings during times of financial hardship or when facing serious illness would encourage them to save or save more into a workplace pension.

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Filed under First-time buyers, Mortgages, Pensions & Retirement, Personal Finance, Politics

Making pensions matter to Generation Y: my blog for Pensions Insight

Pensions Insight

By Iona Bain

As a young financial journalist, I am constantly asked the same question; how can we persuade Generation Y to save into a pension?

We’re all living longer but with no guarantee that the state can afford to pay us generous benefits towards the end of our lives.  A charm offensive is now afoot – the financial sector is desperate to persuade us youngsters to put more into our retirement funds, knowing all too well that minimum contribution rates will be painfully inadequate. 

I’ve got bad news, folks. It’s going to be an uphill struggle all the way.

Auto enrolment champions may point to high opt-in rates but let’s take a rain check when mortgage rates eventually rise, taking up an ever greater share of our stubbornly stagnant wages.

A concurrent rise in interest on our savings would also make Isas a far more appealing option for those who don’t fancy locking away their cash until…well, who knows when?

“In truth, we need vigorous and quick reforms to the industry to put all this right”

Plus, the much-discussed revolution to the pension system, aimed at preventing another wave of disillusionment among bedraggled savers, have mostly served to highlight its vast failings, further putting off a generation who has little to stash away at the end of each month.

Sneaky charges, pathetic annuity rates, meagre long-term returns, the wasteland of small pension pots and the disappearance of more generous defined benefit schemes have all left a sour taste in the mouth.

In truth, we need vigorous and quick reforms to the industry to put all this right, yet it is the consumer who has been expected to change.

“One pension firm admonished us, much like a head teacher, for wasting money on satellite and gym subscriptions”

Since I began writing about money and young people four years ago, I have been amazed at the out-of-touch press releases knocked up by publicity-hungry companies, determined to paint young people as fickle hedonists determined to live for today and doom themselves to an impoverished retirement.

One pension firm admonished us, much like a head teacher, for wasting money on satellite and gym subscriptions while a financial adviser implored a worker on an average salary of £26,000 to save more than £800 a month into a pension, putting them firmly in cloud cuckoo land when you consider the household pressures  facing your typical 30 year old.

Thankfully, there have been fewer demoralising lectures in recent times and more attempts to educate consumers so they can commit to pensions with confidence. Let’s build on that progress with pensions guidance for all employees, not just those in their fifties and sixties.

Pushing Generation Y into workplace schemes and ‘checking in’ just before retirement simply won’t do.

Iona Bain will be part of a panel of twenty-somethings tackling the retirement conundrum and how to get generation Y engaged with pensions at Workplace Pensions Live, the flagship conference hosted by industry publication Pensions Insight, in May.

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BUDGET 2015: What’s the state of play for young finances today?

As the Budget gets underway today, you’re almost certainly wondering how Mr Osborne’s red box of delights will affect you and your personal finances in the near future.

Now seems as good a time as any to take a rain check following five years of tough times for young people’s finances. So what developments have we seen in the last year that boosted our prospects and dragged down our outlook? What’s the state of play today and what we can expect going forward?


Cartoon: Gary Barker

The Chancellor made a huge splash last year, not once but twice, when he decided to free up access to pension pots in the last Budget before reforming stamp duty (not before time!)

One of these decisions was a more obvious shot in the arm for young people’s finances than the other – you can guess which one – but those far reaching pension reforms have completely carpet-bombed the financial agenda in the last year.

I also made the (much contested) point that higher limits on tax-free savings, introduced by Osborne in the last Budget, would be beneficial to young people who need every last incentive to save.

Debt charities have rightly pointed out that raising the ceiling on tax-free savings (to £15,000) is not that relevant to young people. Robbie De Santos, senior public policy advocate at Stepchange, told a charity conference last year:

“We do not necessarily believe that the changes to Isas will benefit those in lower income brackets and young people. Research indicates that these groups do not recognise tax incentives, which tend to appeal to those who are saving regularly and on top of their tax-free allowances.”

Fair play, though I believe that rising tax allowances (with a further one rumoured to be in the pipeline today) have benefited low earners and those at the bottom of the career ladder. But I agree that a more helpful policy might have been to introduce a you-save-we-save policy, whereby the government pledges extra interest or rewards for young people who save.

Sadly, we’ve seen nothing but gloom for savers in this department. The prolonged depression of interest rates, whilst good for those who borrow and are determined to reduce their debt, means there has been very little appetite to squirrel money away. A shocking statistic today from Fraser Nelson at the Spectactor (@FraserNelson) shows that £1000 put away seven years ago would now be worth £916!

On the pus side, stamp duty reform has cut the cost of buying typical starter homes both north and south of the border and will probably result in more long-term, profound ripples in the first time buyer housing market than the much-vaunted Help to Buy scheme. Also, let’s welcome the on-going squeeze on voracious payday lenders and parasites, sorry brokers, who facilitate that self-serving business online.

But here comes the bad news (again): we also saw the Mortgage Market Review take effect last year, resulting in longer waiting times and more stringent lending requirements (leading to perhaps unfair rejection).


Yep, those pension reforms are still the number one talking point for politicos and financial journalists everywhere (believe me, I am just as sick of hearing about them as you are!)

But in some ways, this is need-to-know information for young people, not least because the introduction of pensions ‘guidance’ for those approaching retirement (heavily criticised by the financial sector) has been described as “too little, too late”. Critics (not least me) have wondered why some form of free guidance cannot be made available to people of all ages.

Looking at saving, it seems that low interest rates are here to stay, but thankfully, banks are now being forced to tell us when interest rates plummet (as they so often do after new customers are lured in) and when a better savings product may be available. This is thanks to a regulatory crackdown that couldn’t have come soon enough.

We’ll have to wait and see whether the Independent’s scoop on abolishing tax on savings income – likely to benefit all but the most wealthy – will be confirmed this lunchtime when Osborne takes to the dispatch box.

Meanwhile, things are looking fairly grim on the housing front, as lending to first time buyers fell at the beginning of the year on account of those nasty MMR regs and housing stock being gobbled up by buy-to-let investors.

Thankfully, fuel and food prices have been falling, giving consumers a bit of a break. This has led to lower inflation, and even fears at the Bank of England over possible deflation, but is good news for Osborne who is predicted to have a £6bn windfall to play with today as a result. Will he use this to give further perks to younger consumers and workers on top of that much-welcomed rise in the minimum age?


Those falling prices mean UK consumers will be tempted to splash out much more in the coming weeks and months, according to Money Dashboard.

Us lot are going to be spending more on looking our best and enjoying ourselves in the run-up to the election, with a fall in the cost of essentials likely to lead to an increase in spending on fashion purchases and alcohol, in particular.

Trash To Couture: Trash to Couture's Guide to Thrifting.

Data scientists estimate that spending on clothing will rise 5.7% year on year in the next quarter to an average of £30 a month, as last month’s retail sales growth continues. Being well heeled is an even bigger priority, with a 7% year-on-year rise expected for footwear purchases, with a monthly average of £39 being spent between April and June 2015.

There is also likely to be a rise in spending on alcohol as consumers raise a glass to bigger bank balances, with £9 more being spent on booze each month between April and June, taking average monthly spend to £41.

The strong pound is likely to loosen the purse strings for holiday bookings in the next quarter as well, with an estimated £230 on average being spent on getting away each month.

The extra disposable income is likely to come from the on-going trend of cheaper energy bills and falling prices at the checkout and at the pump, the data shows. The data suggests that a monthly average of just £33 will be spent on fuel in the next quarter, which represents a drop of 5% year on year. Meanwhile, an average of £194 a month will be spent on energy bills in the next quarter, a 3.1% drop on the same period in 2014. There is likely to be a 3.9% drop on food shopping next quarter too, a slight fall of £1 a month on average.

The data shows that reliance on credit in the UK will continue, with credit card repayments likely to increase 8.4% year on year in Q2. This is a rise of £11 on the same period last year, with £137 being repaid each month. Savings are set to be neglected next quarter too as consumers concentrate on living in the present, with a likely £6 drop in average monthly savings to £107 compared to the second quarter of 2014.

It appears that the falling cost of essentials and record employment rates have given us a sense of security that will see us reward ourselves in the next quarter. But it is so important that UK consumers are cautious during this spell of renewed optimism. It is easy at times like these to put more on the credit card and forget about saving, when it’s actually vital that we take the chance to squirrel something away for a rainy day.

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Filed under Consumer Affairs, Credit, Debt, Economy, First-time buyers, Mortgages, Payday loans, Pensions & Retirement, Personal Finance, Politics, Savings Accounts

Freak fires shine light on home insurance; are you underinsured/overinsured/paying too much through price comparison sites?

Herald Scotland

By Iona Bain

Scots are being urged to check their homes – and insurance cover – just in case they fall victim to the so-called ‘magnifying glass’ effect.

Just last month, Glasgow entrepreneur Michelle Mone issued a warning to her Twitter followers after a mirror in her Mayfair home beamed sunlight onto a bean bag, setting it alight.

Not So Shabby - Shabby Chic: Mirror wall is almost complete....

In London in January, novelist Daisy Goodwin came back to find her three-story terraced house gutted by a fire ignited by a shaving mirror.

And last month a house in Twickenham was partially destroyed, and a dog killed, when an empty jar containing hairbands in a girl’s bedroom refracted sunlight onto window blinds.

Last March, Scottish Fire and Rescue Services were called to a house fire in Aberdeen, triggered by the sun shining through a snow globe placed on a windowsill. Watch manager Garry Chalmers said: “It heated the curtains, which then caught fire. The curtains were completely destroyed and there was fire damage to the floor and ceiling.

“This is certainly one of the most unusual causes I have seen during my career as a firefighter, but it highlights the risk of leaving any glass object in direct sunlight, such as mirrors, reading glasses or even drinks glasses.”

The fire service in London has reported 125 such call-outs in the past five years. A spokesman for Scottish Fire and Rescue Service could not give a figure for Scotland but said: “Since 1988 any item containing upholstery sold in the UK has been required to have a permanent label confirming it meets British Standards for fire resistance. If an item of furniture shows signs of being affected by heat – like small scorch-marks or a smell of burning – then it is obviously a risk that shouldn’t be ignored.”


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