Investments

Boost Your Retirement Fund With Smart Investments

(Full article is below the infographic)

Sell-Pension Investment Infographic - full size

Source: Sell Pension

Explore Higher Yield Alternatives to Poorly Performing Pension Funds

Today’s investors are seeing better returns by cashing in their pension now and reinvesting to make their money work harder.

The crisis that is hitting so many pension funds has been well publicised, with multi-million pound pension deficits being reported by some of the most high-profile and successful companies in the UK. From high street retailers to public transport companies, it seems that nobody is immune.

At the same time, people are living longer and retiring earlier, and today, someone who retires at 55 stands a good chance of spending more years in retirement than they did in work.

Rethinking retirement

It comes as little surprise, then, that the pension model of the 20th Century is no longer fit for purpose. When the Royal Mail announced last year’s cuts, a spokesman described the schemes as “simply unaffordable” in today’s market conditions.

This is why so many people are rethinking the way they fund their retirement. Fortunately, the 2015 Pension Reforms have given investors more freedom than ever to manage their investment the way they want to, in order to make their money work harder for a secure future.

Diversification is King

“Don’t put all your eggs in one basket” is one of the best-known proverbs in the English-speaking world, and it is certainly appropriate when it comes to investments. Spread risk across cash, bonds and other investments for increased financial security.

Many families, and indeed individuals, have multiple pensions, and it can make a lot of sense to leave one in place to provide a regular income and to cash in and reinvest the other.

Property Investment

In the current financial times, you might reasonably ask where else you can invest your money, as pension funds are not the only investments to have struggled in recent years. A growing number of commentators see property investments as one of the safest investments, and one that can realise the best yields.

Unsurprisingly, property in London and the Home Counties has seen the highest increase in values, but other investment hotspots such as Manchester, Birmingham and Liverpool are rapidly catching up.

As prices continue to rise, yet interest rates remain low, it is little wonder that buy-to-let is so popular with investors. Of course, there are downsides too, or everybody would be doing it. Property investment brings a number of responsibilities with it, and being a landlord might not be for everyone. Also, property is, of course, a low liquidity investment, so prepare for your money to be tied up.

Bonds

Bonds are a hugely popular type of investment, and around half the UK population has almost £50 billion invested. Yet in late 2016, government bonds, which were seen to be as safe as “money in the bank,” started to yield negative returns, and put many investors into a tail spin.

So does this mean that bonds are no longer worth considering?

The answer is that bonds can still bring in a good yield, but investors need to rethink their investment strategies. Despite the events of 2016, safer options might prove a sound long term investment, but for the best returns, a higher risk strategy could be necessary. Corporate bonds are less secure than those issued by governments, but can offer significantly better returns if you know where to invest.

Other investments

From vintage wine to new business startups, the range of investment options out there is almost endless.

For those who choose wisely and spread their risk, the opportunities for a long and prosperous retirement have never been better!

Pru Decides To Stop Workplace Pension Exit Penalties

Prudential logoSavers set to benefit from change in pension rules

Prudential’s plans to scrap controversial early exit fees could offer significant savings to workplace pension customers.

Prudential customers received good news last month with the news that the insurer plans to scrap early exit penalties for workplace pension schemes and reduce charges by an average of 15%.

The move was announced in Prudential’s Independence Governance Committee’s (IGC) first annual statement, and appears to be part of a wider industry trend, with competitors such as Standard Life, Aegon and Scottish Widows also announcing plans to review their penalty and fee policies.

Excessive fees

These changes have been introduced to tackle the somewhat controversial topic of early exit fees.

Early exit clauses force pension holders to pay a percentage of their total pot if they access their pension before a specified age, and are mostly found in pensions contracts issued in the 70s and 80s. It is estimated that around 700,000 people could be affected by these penalties, with some people potentially losing up to 20% of their pension pot.

In January, Chancellor George Osborne announced plans to reform the law to allow customers to have early access to their savings, without being penalised by excessive exit fees. It is thought that these regulations could take up to two years to come into force, but it seems that insurers such as Prudential are getting ahead of the game.

Key changes

So what do these changes mean for savers?

From April 2016, Prudential customers who wish to access their money sooner than their contract stipulates, can do so without facing the prospect of hefty exit penalties – a change which could save some people thousands of pounds.

Alongside the scrapping and capping of fees, customers can also expect to see an increase in the allocation rate to ensure that 100% of contributions are invested, as well as the removal of all charges relating to adviser commissions. These additional changes will come into effect from October this year.

Unfortunately, all these changes currently only apply to workplace pensions, and personal pension customers will not see the same benefits.

Gary Keeley from The Workplace Pension Consultancy, explained: “The IGC has also identified several products which it feels are issuing unfair charges. Both self-invested customers and paid-up members of workplace schemes with less than £10,000 saved have to pay a fixed monthly administration fee which the IGC views as potentially too high. As a result, Prudential has committed to contacting those affected customers to explain their options and give them the opportunity to switch products.”

Those customers with small pension pots have also not been forgotten. Earlier government plans for a ‘pot follows member’ system may have been dropped, but Prudential’s IGC has revealed that it will be looking at ways in which the company can help this particular group of customers.

Ensuring value for money

Prudential’s IGC has been keen to stress that value for the customer has been the driving force behind these changes.

Lawrence Churchill, Chair of the ICG, said: “In our view what ultimately matters is the outcome for members, and I am pleased with the positive strides we have been able to make with Prudential, particularly in relation to charges, to ensure that members are getting value for money from their workplace pension savings.”

And it seems that there are more changes in the pipeline. Over the next year, the IGC will be reviewing the communications and services received by members, as well as examining how and where their money is invested. In this way, they hope to ensure that pension holders receive a high quality service and maximum value for money – which can only be good news for savers.

When Should You Opt Out Of A Workplace Pension?

The Workplace Pensions Workie

The Workplace Pensions Workie

Making The Best Decision For Your Future

Much praise has been heaped upon the government’s new pension laws – but will a workplace pension work for you? 

For many people, a pension is the largest investment they will make, and while the pot is growing, most of your investment will be in stocks and shares. You’ve probably heard a lot about workplace pensions recently – the government has launched a huge advertising campaign to make us all aware of the new laws that employers have to follow, no matter how big or small their business.

So what do these new laws mean for you, and should you opt out of your company pension scheme? Below are some pros and cons to help you decide – and how to opt out if you want to.

What Does A Workplace Pension Do?

The pension will provide you with an additional source of income once you have retired. Most people will be able to claim a state pension that will cover their needs, but it’s always good to have a little extra to fall back on. How much will depend on how much you contribute, and how early you start.

For many people, the workplace pension is an easy way to set up an additional income for their retirement. the help companies set up schemes, The Workplace Pension Consultancy has been set up.

It May Have A Negative Effect

However, being forced to make these pension contributions could leave you out of pocket. This could cause problems if you have existing financial arrangements. It could also take away from and reduce your required salary income. So budget before you start to pay in, and see if you can afford to part with the cash each month.

Who’s Paying In?

When it comes to this kind of scheme, it’s not just you who’s involved. With a workplace pension, you will receive contributions from your employer too. They should provide you with full details of how much they are going to pay into your pension pot each month. If they don’t, you are entitled to remind them that this is something they are obligated to do by law. The UK government will also relieve you of any tax on your own contributions.

What About Those On A Low Income?

For those on low earnings though, their contributions may be too small to be meaningful in the long term, meaning that they are essentially paying out for nothing. Additionally, these contributions could even affect entitlement to some means tested benefits in the future. If you work part time and aren’t bringing home a lot of money, it’s worth thinking about if your workplace pension really works for you.

Opting Out

If you’ve just signed on to your company pension scheme and have decided that it’s not for you, then don’t panic! You can opt out of the pension scheme if you choose to – it’s a legal requirement that your employer lets you do so. Additionally, if you opt out of the scheme within one month, you’ll be able to get a full refund of the money that you have paid in. Again, your employer has to do this. If you are unsure of where you stand, read through the rules laid down by the government, or talk to someone in your HR department.

Making the right decision

There’s no denying that workplace pension schemes can benefit a large number of people. However, like most things in life, they don’t suit everyone. It’s better to be fully informed before you make a decision on whether you want to take part in your company’s scheme. Remember, you can opt in again after you’ve opted out – so there is room for manoeuvre. What’s important though, is that the way you save for your retirement suits you. After all, it’s your money!

Property Investment Trusts Boosted By Rising Demands In London

London propertyLondon Real Estate Investment Trusts Are on the Rise

Many of the real estate investment trusts (Reits) based within the M25 are making positive moves thanks to the continuing demand for high quality office space in the capital. As the demand increases, so too do the rental charges and the asset value of those trusts that hold these much sought after properties.

Despite numerous reassurances from the government that new properties are on the way, supply simply cannot keep up with demand in one of the busiest business cities in the world. Having such a competitive marketplace in which to operate means that London based real estate investment trusts are certainly worth considering if you have money to invest. In fact, many would regard these trusts as being ‘as safe as houses’.

Are There Any Alternatives?

However, as attractive as these London real estate investment trusts may be, any prudent investor knows full well that it is essential to weigh up all of the available options before committing to one course of action. So, what are the other avenues that you can take if you want to invest in the London property market? Let’s take a look.

Become a Landlord

If you are looking for a more hands on approach to your investing then you might consider becoming a landlord yourself instead of putting your trust into a trust, as it were. Managing your own property portfolio can be extremely rewarding, but it can also be hard work too.

While you can certainly employ letting agents to handle the day-to-day chores, such as property maintenance and overdue rent collection, you will still need to spend a considerable amount of time on other tasks associated with your property business.

Many landlords wouldn’t have it any other way, but for some the idea of being so involved simply isn’t viable. Full time work and family commitments can often get in the way of successful property management, so schemes such as real estate investment trusts can be a more attractive proposition. Investing ing a good property investment manager is another option.

Property Crowdfunding

There have been one or two new ways to get involved in the property market of late; the most popular of which is property crowdfunding. Crowdfunding is a term that has been around for quite a few years now and it has really taken hold since the crash of 2007/08 hit. Small businesses owners and entrepreneurs were struggling to raise capital for new ventures via the traditional banking system, and crowdfunding gave those go-getters a viable alternative.

In a nutshell, crowdfunding is pretty much self-explanatory – you are simply borrowing from a large number of individuals as opposed to a single source via an Internet based third party. Property crowdfunding, however, is a relatively new concept, but the principle remains the same.

Again, Internet based intermediaries gather together large groups of people who wish to invest small amounts of money. However, as you have probably already gathered, in this case the investment is property rather than a business, project, or venture that your money will go towards.

This sounds perfect on paper, but it does come with an element of risk attached that is deemed greater than the other investment routes previously discussed. Property crowdfunding platforms are new and nowhere near as established as their Reits counterparts, and some of these companies’ practices leave a lot to be desired.

For instance, you’ll have no control over the amount of rent being charged, who is renting the property, how it is maintained and managed, or the cost calculations. Add to that the fact that some of these intermediaries can borrow against the property should their revenue not be met, and you can see why many investors are shying away from this type of investment scheme.

How and Where To Invest Your Money

investment picIf you have some spare cash sitting under the mattress you may want to consider investing it in a more secure and profitable way. There are many options for investing money and here we provide a brief introduction to some of the most popular ways to invest, and also give you a few ideas for less popular, and sometimes riskier, investment opportunities. There are many ways to invest in the stock market. Although many people still invest in individual stocks there are many ways to spread your risks.

Pay Off Your Mortgage

While paying money into your mortgage account is not generally considered an investment, with interest rates so low it is often better to pay off your mortgage which will likely have a higher rate of interest applied than any cash savings your can get. When paying extra into your mortgage request to have the monthly rate reduced (keep the term the same) so that each month you have more money in your pot. If you pay extra into your mortgage every month, within a few years you will make a significant dent in your outstanding balance. It is the best investment you can make. However, if you have extra money, or your mortgage does not allow over-payments without ludicrous charges, you may wish to invest your money elsewhere.

Pension Plan?

Why do we save and invest money? To secure our future. If you have not got a pension plan in place do not spend your spare money on stock investments. Instead put money into a pension plan. Once your pension fund is looking healthy you can then start to think about stock investments.

Cash Is King – Cash ISAs

Your first investment should be to use up your annual ISA allowance. ISA’s are tax free investments which can make them the highest performing funds, sometimes. Most providers now have online banking options and you can easily make regular payments into a cash ISA each month, or just invest a lump sum once a year. Each year you have an ISA allowance of £11520 (2013 figures) and you may invest half of this in cash – to £5,760. The remaining can be invested in a stocks/shares ISA.

Stocks & Shares ISAs

Once you have used your cash allowance you may want to consider investing in stocks and shares. Again, the advantage is in no tax on income. You may invest all of your annual ISA allowance in shares if you wish. Risk – there is ALWAYS a risk with share investments. Stock prices can go down as well as up! There are too many share ISA options available to discuss here. Speak to your bank or building society about investing your savings into a share ISA before hitting the Internet. There are good deals out there. Charges – as with any stock / shares investment, Share ISAs have additional fees which can make them more expensive to set up. With a cash ISA all of your money is your investment, with a stock ISA some of your money may be used in administration fees. Always read the small print and ask the salesperson. Examples of Annual Charges Most stock ISAs have an annual charge. For example, the Fidelity Moneybuilder UK Index has an annual charge of 0.10% (this fund tracks the FTSE 100 and FTSE250 indexes. Another tracker, the HSBC FTSE 100 Index charges a little more, 0.25% annually. The L&G International Index charges 0.7% a year.

Share Dealing

Once your mortgage is under control and your ISA funds are full, the next option is share dealing. Of course, there are many more ways to invest in shares today than there were when British Gas floated on the stock market in 1986 – who else remembers the “Tell Sid” adverts? Traditional share dealing comes with a lot of fees. If you only have a small amount of cash to invest then buying shares in a single company may be the most expensive option. If you do buy shares in a private company you can either do this yourself, of go via a fund manager who will manage your “private investment”. More accessible types of share investments include investment trusts and unit trusts / OEICs.

Private Investors

Private investors, known as retail clients in the investment industry, make relatively small investments into British companies, however the combined investment of private clients is significant. As with ISAs, your first step should be to talk to your bank about opening a share dealing account. Most banks today provide such accounts and online dealing is now the norm. However you purchase shares expect to pay a fee per transaction, an annual fee plus tax on your dividends and capital gains. Capital gains is the amount of money you make on the investment – the more you make, the more tax you pay.

Example: Halifax Share Dealing Account

The Halifax Share Dealing Account allows you to invest in shares in 7 different countries. Each trade has a fee of £11.95 (plus additional FX charges if you invest overseas). For a small investment (less than £250) this is a significant fee which will impact your returns – you need your investment to rise by 5% before you make a profit. If you invest £2500, you only need to see your investment rise by 0.5% before you make a profit (not counting account fees, tax etc.).

Stock Brokers and Fund Managers

The traditional route to purchasing shares directly in UK businesses is via a stock broker or a fund manager. The large banks have their own stockbrokers, e.g. Barclays Stockbrokers, but there are many smaller firms around the country. Do your research before investing, ask what their fees are. Most will charge a fee per transaction plus an annual account fee. Many fund managers now bundle share investments into more management investment vehicles for smaller investors. These are called investment trusts, unit trusts and OEICs. These allow you to spread risk and reduce account fees while still seeing a good return on investment. Plus you have the added advantage that each fund is managed by an expert who monitors market conditions and buys and sells shares accordingly.

Example: Henderson Global Investors

Henderson are a well established British fund manager. They are based in London and have offices all around the world. Henderson provide a wide range of funds, such as;

  • Henderson All Stocks Credit Fund A Acc
  • Henderson Asia Pacific Capital Growth Fund A Acc
  • Henderson Cautious Managed Fund A Inc
  • Henderson Asian Dividend Income Unit Trust Acc
  • Henderson Fixed Interest Monthly Income Fund Inc
  • Henderson Gartmore Latin American Fund B€ Acc
  • Henderson Horizon European Growth Fund A2 Acc EUR
  • Henderson Institutional UK Gilt A Inc
  • Henderson UK Property Unit Trust Inc

This is a very limited list, but as you can see there are a wide variety of choices, with overseas investment, fixed interests (bonds), UK gilts (UK government bonds), property and “cautious managed funds”. You can spread your risk or just invest all your money in property without having to actually purchase another property of your own.

Exchange Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are a more popular vehicle for asset managers. We talked about them here a few years ago. The allow you to invest in equities, committees and currencies at reduced risk and often lower fees than OEICs and investment trusts. Most ETFs track an index.

For example, HSBC has ETF’s across most markets now, with Euro Stoxx. FTSE100 & 250, MSCI Brazil, China, Pacific and Mexico, and many others. They value daily and trade on the stock market, so are sort of like a combination of a Unit Trust and an Investment Trust. Each has an ISIN. The key is that you can buy and sell portfolio of stocks to spread your risk.

Investment Clubs

Investment clubs are groups of individuals who pool their money and meet to agree on future investments. The advantage is that they can reduce fees. The risk is that they rely on their own knowledge of the stock markets. A great idea if a few people in the club are working in the industry, but it still can get risky. Search the Internet for a local investment club and arrange to meet. There are some online services which will help you to set up a club, such as ProShare Investment Clubs. The Telegraph ran a piece about investment clubs in June 2013; Investment clubs go upmarket. The Telegraph reveals that some investment clubs require individuals to commit around £25,000 a year to the club, and the investments can be very risky and are sometimes in unquoted companies. Trust and knowledge is vital in this industry before parting with your cash.

Investment Trusts, OEICs and Stock ISAs Explained

For many people the best investment option is to chose an investment trust, OEIC or stock ISA. So let’s look a little deeper into the topic. If you chose to invest in companies you are relying on one or a few businesses to perform well to make a return on your investment. Individual shares do have the potential for a much greater increase in value and some companies declare very favourable dividend payments, but if a company has a very bad year you can see your stock investment plummet and your dividend income lost. So to spread risk without building a huge portfolio you can invest your cash in a variety of investment vehicles, of which there are really 2 main options, plus stock ISAs. Stock ISAs are not really any different from choosing an investment trust or OEIC, they just provide you the chance to receive income tax free.

Investment Trusts

Investment trusts are companies which themselves trade on the stock market. Their value is determined by the stock market just like normal equity but they include a wide range of stocks so that you spread your risk. Some Investment Trusts simply track the FTSE100 so that they always contain a balance of shares in line with current market trends. Investment trusts are “closed end” investment vehicles, which means that they have a set amount of capital and shares within them. The share price of an investment trust will not always reflect the changes in share price of the underlying shares. Investment Trusts are usually managed by a third party fund manager who specialises in managing equity portfolios. Many investment houses have their own investment trusts and fund managers. As investment trusts are trading as stocks on the stock exchange they also will generally pay a dividend. However, there are some investment trusts which do not, these are called Zero Dividend Preference shares. With these you are purely investing cash in groups of equities and rely in stock market growth.

Real Estate Investment Trusts (REIT)

In addition to standard investment trusts there are now also Real Estate Investment Trusts (REIT) in the UK. These specialise in the property market and trade on the stock exchange in the same way as investment trusts. However, as they invest in the property market they do not have to pay corporate income tax. They have to distribute at least 90% of their total income to shareholders. REITs have only been around since 2007 however there are already 5 REITs in the FTSE 100: British Land, Hammerson, Land Securities, Liberty International and Slough Estates. These 5 REITs are often referred to as SEGRO.

OEICs

OEICs (pronounced oiks) are Open Ended Investment Companies. Rather than trading on the stock exchange these are valued each day based on the stock value of the underlying shares. They are called “open ended” because the amount of shares held within them is determined by the amount of cash invested in “units”. OEICs are traded in units. Each unit represents a share of the company. As the value of units is determined by the value of the underlying stock, whenever an investor buys new units or sells units the fund manager must use that cash to buy new stocks for the OEIC, or sell some stocks, to maintain a relatively steady value for the other shareholders. OEICs do not just invest in stocks though, they can also invest in fixed interest (bonds) and properties. OEICs have mostly replaced Unit Trusts in the UK. With a Unit Trust the fund manager would manage a trust of funds to make as much profit as possible. Unit Trusts would have a bid and offer price and most of the money made by the fund manager would be in the dealing of units. OEICs have a single unit price.

Fund and Plan Managers

The companies which manage OEICs and Investment Trusts are generally known as Fund Managers or Plan Managers. There are many fund management companies in the UK, you have probably heard of many of them. Here are some of the most popular British fund managers: Schroders Asset Managers Schroders (www.schroders.com, tel: 0800 718 777) manage £201.4 billion of shareholder investments across their portfolio (March 2011 data). They manage a range of Investment Trusts and OEICs.

  • Schroders Investment Trusts – Schroder investment trusts are currently managed by some of the top rated fund managers in the UK, such as Andy Brough, Rosemary Banyard, Matthew Dobbs and Richard Buxton. There investment trusts include the Asia Pacific Fund, Income Growth Fund, Japan Growth Fund plc, Oriental Income Fund, UK Growth Fund and UK Mid Cap Fund plc
  • Schroders Unit Trusts – Schroders have many unit trusts, such as the European Fund, Global Emerging Markets Funds, Income Maximisers and UK Equity Funds.

Jupiter Asset Management Jupiter Asset Management (www.jupiteronline.co.uk, tel: 0844 620 7600) are another major UK asset management house which have a range of unit trusts, investment companies and also “funds of funds” which is another way to spread risk. Their funds of funds are called the Jupiter Merlin Portfolios. Their investment trusts include the popular Jupiter Dividend & Growth Trust PLC and Jupiter European Opportunities Trust PLC. They have a wide range of Unit Trusts also. They also have some environmental finds, such as the Global Fund manager Fund at a glance Jupiter Ecology Fund (UT) which is managed by Charlie Thomas and the Jupiter Environmental Income Fund, managed by Chris Watt. Invesco Perpetual Invesco (itinvestor.invescoperpetual.co.uk) are leaders in UK equity income funds. Their main investment trusts are the Perpetual Income and Growth Trust plc, The Edinburgh Investment Trust plc and Invesco Income Growth Trust plc. If you wish to invest in overseas markets then the Invesco Perpetual Select Trust plc – Global Equity Share Portfolio may be of interest. There are many other fund managers to chose from, these are provided to give you an idea of what is on offer.

The Riskier Investments

There are many risky ways to invest, and every year new ways are emerging. Here is a round up of some new, some popular, and some which are closer to gambling than investing.

Penny Shares

What are penny shares? Quite simply, they are shares that are only worth a few pennies. The idea is that you invest in a company early when its share price is just a few pence, buy a lot of stock, say around £500-£1000 worth, and then hope that the company does well and the shares rocket up into the the teens or twenty’s. Buy shares at 5p each and you can see your investment sky-rocket. Then again, the company may perform badly, go into administration and liquidate, leaving you with nothing but a few worthless share certificates.

Warning; Bid-offer spread is often large (usually over 10%), meaning the cost of buying is much higher than the sale value, so you need a big rise in share price to make a profit. Also, penny shares are cheap for good reason – very few people wish to buy them! Penny shares should be considered a very risky long-term investment.

If you are thinking about penny shares then you should take a look at the FTSE SmallCap Index which includes some very cheap shares.  The LSE lists the constituents of the FTSE Small Cap Index: http://www.lse.co.uk/index-constituents.asp?index=idx:smx&indexname=ftse_small_cap

FOREX Trading

I mention this for one reason only – I see adverts all over the web for it. It is a fact that the money markets are the biggest markets in the world. More cash is traded every day on the money markets than on the share markets. However, FX dealing is very dodgy, with high costs and great risk. While I cannot recommend any FOREX trading platforms (as I have never used any) I would always go with a reputable brand. Barclays have their own FOREX trading service – www.barclaysmarginfx.com – where you can set up an account and start trading.

Bitcoin

Bitcoin is a new form of digital currency which was developed in 2008 as a peer-to-peer money exchange. It was only in March 2013 that the Financial Crimes Enforcement Network (FinCEN) reported that these services were legal as “virtual currencies”. On 9th April 2013 the cost of Bitcoin reached $230, having risen from just $13 at the start of 2013. If you want a very risky investment which few people understand, then Bitcoin is certainly an option.

You can “buy” Bitcoins by cracking very complex algorithms in what are called mining operations. It is basically a way for maths geeks to reward each other. Now hackers are running botnets, apparently, to do their mining and the system is getting more complex and more competitive all the time. Not for the feint hearted. Also, there are no major retailers in the UK at present which accept them, so you have the dilemma of what to do with the investment.

Property Investments Suffer

The property market is still suffering. News today that house prices are still falling and property sales are slow. Although there was a slight increase in mortgage lending earlier this year, overall the markets are still in decline.

There are currently fewer houses going on the market, according to the Royal Institute of Chartered Surveyors. The RICS’ Simon Rubinsohn described the current condition as being stuck in the doldrums.

Summer is usually the time when the housing market picks up, but fewer people are deciding the move. The cost of moving continues to rise and it is harder for many families to improve the size or quality of their homes without either borrowing significantly more money or getting a good pay rise – neither is an option for most people at the moment.

Some analysts are still confident that the housing market will see a revival later in the summer. However, while mortgage lenders remains very cagey with their cash, many people just do not have the option to move up the housing ladder.

There have been fewer new housing developments in recent years due to stagnation in the economy which means that there are fewer new properties for first time buyers entering the market.

Balfour Beatty plc Announces Job Cuts

Balfour Beatty plc. has announced that it will be making job cuts. The construction industry has been hard in the last few years and Balfour Beatty is forced to cut staff to reduce costs.

Balfour Beatty is a vital consurtction firm in the UK, and ranked 15th largestglobally. It is listed on the FTSE 250 Index.

Balfour Beatty employs around 50,000 people globally and 12,000 staff in the UK. At present we do not know how many UK jobs are under threat.

They have built some of the biggest constructions in the UK in recent years, including:

  • The Kielder Dam, Northumberland, 1982
  • The Docklands Light Railway in London, 1985
  • Large parts of the M25 motorway around London, 1986
  • The Channel Tunnel, 1994
  • The Lesotho Highlands Water Project, 2002
  • Nam Cheong Station, Hong Kong, 2003
  • The Pergau Dam hydroelectric project in Malaysia, 2003
  • The M6 Toll, 2003
  • University College London Hospital, 2005
  • Igor I. Sikorsky Memorial Bridge, Connecticut, USA, 2006
  • Burj Mall, Dubai, 2008
  • The King’s Cross St. Pancras tube station Northern Ticket Hall completed in 2009
  • The East London Line, completed in 2010
  • The A3 Hindhead Tunnel completed in 2011
  • The London Aquatics Centre due to complete in 2011
  • The M25 motorway widening J16 to 23 and J27 to 30, due to complete in 2012
  • The Blackfriars station and Bridge Construction Works due to complete in 2012
  • The new main facility for Parkland Memorial Hospital in Dallas, Texas due to complete in 2014
  • Crossrail Liverpool Street station and Whitechapel station due to complete in 2018

They have issued a Press Release today: Balfour Beatty in for the long run – which talks about their continuing plans to support youth sports in the UK.

 

How is Tesco Taking Over the World?

Today, Tesco is a world leader in the grocery market – third largest by revenues in the world, second largest by profits in the world, and with the largest market share across the UK, the Republic of Ireland, Malaysia, and Thailand. Its stores operate across 14 countries in Europe, North America, and Asia. It is hard to imagine a world without Tesco stores offering their wide range of products and service. So where did Tesco come from and how did it achieve such astonishing success?

Tesco was founded by Jack Cohen in 1919 as a market stall in London selling groceries. Ten years later, the very first Tesco shop was opened in Middlesex. In 1947, Tesco floated on the London Stock Exchange and the first Tesco supermarket was opened in 1956. Tesco’s number of stores grew throughout the twentieth century, both in the establishment of new stores and the acquisition of competing grocery stores such as Irwins, Victor Value, Hillards and others. Often, these acquisitions were used to strengthen Tesco’s market share in a particular area, such as with the purchase of the William Low chain of supermarkets in Scotland.

Internationally, Tesco’s strategy has focused on acquisitions of local chains and partnership with local firms. Tesco is known for the high levels of local managers that it appoints throughout the countries it operates in, which allows it to be sensitive to local customs, expectations and market trends.

Tesco’s success takes its beginnings from Jack Cohen’s two mottoes ‘pile it high and sell it cheap’, and ‘you can’t do business sitting on your ass’. Tesco is constantly innovating, expanding and seeking out new market shares. Originally a simple grocer, today Tesco has operations in clothing, finance, insurance, DVDs and other media, software, internet services and mobile phones. Both Tesco’s Clubcard and internet shopping service are highly successful and Tesco even operates filling stations in partnership with Esso.

Customer service and satisfaction are at the heart of Tesco’s success, as epitomised by their drive to seek out only the most stable and reliable of suppliers and service providers, such as Goodman Logistics for warehouses. Tesco constantly uses technology to innovate, such as by introducing self-service tills and camera monitoring of queues to allow the quick introduction of extra staff. In the UK, Tesco also operates six separate styles of shop, running the gamut from quick-stop Tesco Expresses to large out-of-town Tesco Extras.

Of course, many companies place a premium on customer satisfaction. What makes Tesco so successful is its appeal to people from all walks of life – something that industry analysts say is unprecedented in retail. Tesco offers own-brand products that run the gamut from low-cost ‘Value’ to premium ‘Finest’. Both starving students and wealthy couples can find what they need in Tesco, as can those in between. Their expansion from a grocers to offering a variety of products and services further demonstrates their commitment to serve the entire market.

Businesses Get New Powers to Sack Old Employees

Not so long ago people were concerned that the retirement age was forever creeping up higher and higher. Many people felt that their retirement would be just a few short years by the time they can hang up their city hats and call it day. However, these days of austerity and economic catastrophe have led to a new concern – employers are going to have greater opportunity to discriminate against age.

Of course, no business will ever admit that it will even consider such a thing. But as someone who worked in The City for over decade I can say that in many areas the older generation are not wanted. All too often people over the age of 50 are moved from the dynamic and exciting jobs that they have been specialised for years to mundane, often pointless and always thankless tasks which are apparently designed to cause brain rot and insanity.

Well, maybe soon businesses will not have to sideline their staff. Instead they will be able to just give them a negative appraisal and sack them on the spot.

What is most shocking about this news is the Nick Clegg, leader of the liberal dems, champion of the welfare state and support for the elderly, is behind the changes. Nick Clegg said that managers should be able to have “frank discussions” with their staff – there was not actually any mention of age. However, many managers will see this as an invitation from Whitehall to cull the oldies, cut out the (not quite) dead wood and get in some younger, cheaper and less experienced workers.

The TUC general secretary pointed out that it will give managers the go-ahead to bully and intimidate staff. Although to be fair, the managers have been doing this very well for years anyway and HR departments are notorious for taking the side of the management in just about all disputes.

Nick Clegg has said that the idea is so that managers and staff will be able to “to treat each other like human beings and not like potential litigants“. What a noble idea! However, how often does a dismissal end in litigation at the moment? Not often. Few people have the time, energy, money or know-how to take their company to court over an unfair dismissal. Besides, as soon as there is even a half decent payout all talks seem to be off the cards, regardless if you are still keen to work but find yourself unemployable!

Protected Conversations

The buzzword is “protected conversations”. The idea that managers could invite an employee in for a “protected conversation”, give them hell, bully them, make false accusations, give poor appraisal and generalyl make stuff up, and the employees get to sit their and keep very quiet for fear of being dismissed. If they speak out then it will be dismissal for breaching the terms of the “protested conversation”.

Another wonderful idea to give make life harder for the already over worked, stressed and bullied work force.

Why does Britain put up with it? According to the European Commission and the Workplace Employee Relations Survey, Britons work longer hours than any other country in Europe. We have a worse work-life balance, many people face the highest commuting costs and most stressful working conditions. It is estimated that 1 in 3 Britons are overworked. Managers are always looking for ways to squeeze more life out of their workers and now they will have the freedom to say “sorry, you are under-performing, you’re fired.”

Thanks Nick Clegg.

Hey, good news for shareholders I guess!

More on this from around the web:

BP Finally Moving Forward After the 2010 Disaster

BP Plc has announced that third quarter profits for 2011 have risen. After the disaster that was 2010 BP is finally seeing the light at the end of the tunnel. It has recently been granted the right to drill in the Gulf of Mexico again too.

BP 3rd quarter profits for 2011 have been declared at $5.14 billion (£3.2 billion) which represents an increase in profits of around 300 percent on last year. Even then 2010 was a disaster it still made profits, all was not lost in the Gulf of Mexico.

CEO Bob Dudley is confident the BP is regaining much of its lost momentum now. However, although the figures are looking more promising it is still planning to sell off around $45 billion of its assets to help pay for the extremely costly clear-up operation in the Gulf of Mexico.

Less Oil Produced

BP actually produced less oil during the 3rd quarter of 2011. This year it produced around 3.3 million barrels a day which is 12% less than production for the same period in 2010. It is planning to increase production over the next 3 months and hopes that by 2012 production will be back at 100% again.

As a result of the good news shares are up. Pensioners and pension investors alike will be pleased with the news as BP has traditionally been one of the safe UK blue chip stocks that make up a large bulk of pension funds for people approaching retirement.

Latest BP Share Price:

452.15 pence +14.05? pence today (3.21%?)  (last trade price from 15:06 GMT, 25 Oct)

See http://www.google.co.uk/finance?client=ob&q=LON:BP for the latest prices.

Other BP news: