Pensions minister Steve Webb has floated the idea of a workplace pension guarantee in order to make pensions more attractive to people worried about losing their money in turbulent stock markets.
Webb has put forward the plan to offer those saving into a workplace pension the option of buying a ‘money safe’ guarantee that would give them at least their contribution back in retirement.
This guarantee could be made available to the millions of workers in the UK who will begin saving into a pension for the first time when auto-enrolment begins in October.
Workers who are earning above £5,564 a year and up to £42,475 a year but not contributing to a workplace pension will automatically be put into the company pension, although they will have the chance to opt out.
Spreading the risk
A ‘money safe’ guarantee would help prevent workers in defined contribution (DC) pension schemes from bearing all the risk of the pension. The income you get from a DC pension is based on the amount of money that you, and your employer, put in. The more you put into a DC scheme the more you will get out, but it also means workers have to bear the burden of a fall in the stock market that may affect their pension pot.
Webb said people had a ‘huge appetite’ for certainty about their pensions and the pensions industry should look for ways to accommodate it.
‘With the dawn of automatic enrolment, the market is growing – so now is the time for the pensions industry to look at the market gap in relation to affordable guarantees and provide the products consumers are seeking,’ Webb said.
‘For example, one end of the spectrum could be providing an affordable "money safe" guarantee where the member would get back at the nominal value of their contributions – individual, employer and tax relief.
‘Another could be offering an investment strategy that reduces the probability of capital lost such as the National Employment Savings Trust [the government-backed pension scheme that many workers will be auto-enrolled into].’
The Department for Work and Pensions will release a consultation later this year to discuss the idea of a ‘collective risk-sharing’ approach to pensions, which would see employers and employees share the risk of pensions.
It will also look at how to tackle savers' aversion to investment losses by using insurance and investment strategies. The paper will also explore how inter-generational risk-sharing with an employer could work.
The Business Finance Store Discusses How the Affordable Care Act Might Affect Entrepreneurs - YAHOO!
The Business Finance Store discusses some of the benefits of the effects of the Affordable Care Act (or Obamacare) on small businesses and entrepreneurs.
Santa Ana, CA (PRWEB) July 04, 2012
Soon after the Supreme Court ruled to uphold President Obama’s healthcare law last week, presidential hopeful Mitt Romney vowed to repeal the law should he be elected in the upcoming presidential election, ABC News reported. The reaction to the Affordable Care Act, commonly dubbed Obamacare, has been mixed. Many entrepreneurs have been wondering how it will potentially affect their business and their bottom line. However, despite all the negative press related to Obamacare, there might be some benefits for entrepreneurs. In the recent blog post “Time to Cut the Strings: The Positive Effect of Obamacare on Entrepreneurs,” The Business Finance Store discusses some of the benefits of the effects of the Affordable Care Act (or Obamacare) on small businesses and entrepreneurs.The idea of having to pay more for healthcare is daunting to many individuals. However, looking beyond the costs can help one see the benefits. Entrepreneurs are consistently looking to make the best of what they have, this situation is no different. Read more about the benefits of the Affordable Care Act to entrepreneurs at The Business Finance Store Blog.
The Business Finance Store is a business financing and consulting firm that offers customized Business Financial Solutions. Seasoned professionals offer assistance in a variety of financial solutions to help small businesses succeed such as: Business Financial Solutions, Legal Solutions, and Accounting Solutions.
The staff at The Business Finance Store understands that starting and growing a business is an exciting time. They keep it exciting by taking care of some of the most difficult aspects, by providing legal advice, helping with vital responsibilities like accounting & bookkeeping, and by obtaining business finance. They can quickly and easily guide entrepreneurs through many different complicated processes and put them on the path to success.
For 10 years The Business Finance Store has been helping startups and other small businesses legally structure their companies, find the right franchises, get the funding they need, and achieve the American Dream of owning their own successful business. Since expanding nationwide in 2007, they have helped thousands of companies and have funded over $60 Million in business credit lines, not including SBA loans. The Business Finance Store sees limitless potential in the current climate, and looks forward to many strong years of growth to come. Take some time to review their services, and give them a call.
For more information, or a free, no-obligation analysis of your business needs, visit The Business Finance Store website: http://www.businessfinancestore.com. A member of their professional staff will contact you to discuss your business' short and long-term goals. Whatever you need, The Business Finance Store is there.
Kelly Rye
The Business Finance Store
(949) 777-5959
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Enough of these banking scandals. I'm moving my money - The Guardian
Nobody needs a lecture on what the banks have done wrong, except possibly the self-justifying bankers themselves (and here's a good one). The lecture we need is the one where we move our money. The movement has a name and everything: it's called Move Your Money. What you do, right, is take your money out of a bank whose behaviour you disapprove of, and move it somewhere else – an ethical bank, a building society, a credit union.
It's not a radical idea, and it's gained some pace recently as the big banks vie for the chance to see what alienates customers the most, between not being able to run a website, not being able see a market without wanting to rig it, not being able to take responsibility for anything and simply not giving a toss. By Tuesday this week, Nationwide had reported an 85% week-on-week rise in its online applications for new accounts. The Co-op had a 25% increase. "It is the people who have the power to change banks, not the politicians and certainly not the regulators," said Bruce Davis, who co-founded Zopa. "It's more than a consumer choice, it is a democratic one. It is about moving the power of money away from those who take it for granted."
I haven't done it, for these reasons, in ascending order of irrationality. First, I have a sense of loyalty to my bank. I chose it because it was where my parents banked. I remember thinking how much more trustworthy a cheque from NatWest looked than one from Lloyds. I remember reading the factette about people being more likely to change their spouse than their bank, and thinking this put me in a nice club, loyal but not uncritical. It would be impossible for a company, however bad its ethos, to infect its staff with those values, so that when you've banked somewhere for 20 years, you're going to have had some good experiences.
There's some cognitive dissonance, where your psyche beefs up those good experiences to make sense of a loyalty that is otherwise craven. You choose your bank at a seminal point in your life, when you're choosing everything: the music that means anything to you; the films you can quote; your favourite smells; if you're a man, your haircut. It's hard to walk away from that, but not that hard. A simple, "it's not even NatWest anymore, it's RBS, we all own it but we suck at running it", should do.
I think the more powerful driver, though, is a fear of being made a fool. John Lanchester described how most people's attitude to finance, of any sort, is to be confused in anticipation, before the explanation has even begun. He described it as being pre-baffled, and I guess you identify as a pre-baffle-ite (if you like …) at roughly the same time as you choose your bank. If you don't believe your judgment to be underpinned by comprehension, the next best thing is to make it the same judgment as everybody else. Realistically, how can you all be wrong?
Even now, when we've seen how easy it is to be all wrong at the same time – indeed, how much likelier it is that, travelling with a herd, you will end up wrong, this fear remains.
It reaches beyond the current account into investment generally – I don't agree with tax breaks on Isas. I think if we're going to approach saving as a social good, which we reward collectively, then it has to do more than simply reward rich people for looking after themselves. The tax breaks have to attach to social investment projects (paradoxically, at the moment, these tax breaks actively exclude social investment). I don't believe in tax breaks on private pensions, for the same reason (they mainly benefit higher rate taxpayers), but also because a lot of the money is skimmed off by fees and charges of pension companies (it pleases me that this point comes not from Left Foot Forward but from Conservative Home).
And yet, when I think of walking away from a pension, I feel a peculiar mix of guilt and humiliation. I picture myself at 80, the idiot who did something faddish instead of what people had always done and can never retire.
This extends beyond the thick individual, into the thick organisation. Ben Simmes is a director at Oikocredit, one of the most successful microcredit organisations in the world. It was set up in 1975 to give an alternative investment vehicle for churches, a way for them to use their money in pursuit of the values they represented, for which people gave them money in the first place.
The churches wouldn't touch it. By the turn of this century, well before the financial crash, it was clear that microfinance delivered returns to match those of mainstream investment. The churches still wouldn't touch it. Now, as the bank demonstrates not just positive social impact but better returns and greater resilience than regular banks, have they changed their minds? "Maybe they invest 5% of their portfolio," Simmes shrugs. Values evaporate around money, not just for the people who get it but also for the people who don't get it. We fear that values will be indistinguishable from gullibility or ignorance.
Luckily, we're at a point where, short of keeping it at home, there is almost nowhere you could move your money that would look more naive than not moving it at all. Just move it. I'm going to move it.
Twitter: @zoesqwilliams
Neil Doncaster calms finance fears after SPL reject Rangers newco - BBC News
Scottish Premier League chief executive Neil Doncaster has played down fears of imminent financial difficulty for top flight clubs due to Rangers' absence.
The Rangers newco's bid to replace the old club was formally rejected by a majority vote of SPL clubs.
Motherwell and St Mirren had expressed concern about the financial impact of not having Rangers in the division.
Neil Doncaster SPL chief executive“The idea of an SPL2 was not discussed at the meeting”
But, when asked if he thought clubs would now face insolvency, Doncaster replied: "I wouldn't have thought so."
And Doncaster added: "The whole issue has an awful lot riding on it, there are some big numbers involved.
"It's important to stress the easy decision would have been to say 'yes' and to allow the newco in and to protect commercial revenues.
"The clubs have not done that, they've decided to be bold and say 'no'."
"Clubs have made a decision that has implications for their bank balances, certainly not a positive decision for their bank balances in the short term, but they have done what they felt they had to do and what many supporters wanted them to do."
Loss of revenue for SPL clubs may stem from changes to television and commercial arrangements now that there will be no Rangers in the league.
"That certainly has to become clearer in the coming weeks," Doncaster said of the league's income streams.
"There are a lot more twists and turns and decisions to be made.
"Ultimately we're in a situation where we are selling a product and the market determines what it wants and what terms it wants that product."
Where Rangers do play is also unclear with the club applying to the Scottish Football League and stating they will play in whatever division the organisation deems fit.
SFL clubs will meet next week to vote on whether Rangers should start next season in Division One, but several member clubs have expressed opposition to the proposal and contend that Division Three should be the entry point.
Raith Rovers vice chairman Turnbull Hutton has speculated that there may be an attempt to form an SPL2 if Rangers are not voted into the second tier of the senior league set-up.
But Doncaster added after Wednesday's summit: "The idea of an SPL2 was not discussed at the meeting."
Meanwhile, BBC Scotland has learned Dundee, who finished runners-up in Division One last season, are likely to be invited to replace Rangers in the SPL.
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