Britons don’t save

According to a recent study, the British are the worst in the developed world at saving for their retirement, with the average worker saving for around seven years of work-free life, when, in all probability, retirement will last for 19 of them.

The study found that the 12-year shortfall was the worst in the world, even though people in the UK are living longer, through tougher economic times. However, for some reason their expectations about their standard of living in retirement remain unchanged and one in five saves nothing at all, which was described in the study as “putting off the inevitable”.

Meanwhile, recent figures from Nest, the state-provided default pension scheme, showed that seven in 10 private sector workers do not currently pay into a retirement scheme.

The number of “active” pension savers in the UK fell from 12.2 million at the peak in 1967 to 8.2 million in 2011, according to the Office for National Statistics.

However, even for those who do save, the picture may be bleak, as the success of Government’s Funding for Lending Scheme (FLS) is hitting savers, as rates continue to be lowered because best-buy deals keep being pulled from the market

For example, although there are 874 standard savings accounts in the market, not a single non-ISA account negates the impact of tax and inflation regardless of the individual’s tax position, while even with the tax advantage; there are only five ISAs that beat inflation.

The impact of inflation on savings means that £10,000 invested five years ago, allowing for average interest and tax at 20 per cent, would have the spending power of just £9,022 today.

While with news today that even the price of gold is falling, anyone with spare cash to invest would be wise to take professional advice on the best returns for their money if they are to enjoy their retirement years in the manner they deserve.

Proposed Business Rate Rises “Madness”

A recent survey by the Federation for Small Businesses (FSB) has revealed that the prospect of a rise in business rates and a property tax on firms, has sparked outrage among London businesses.

The survey revealed that nearly a third of the businesses polled said they would cut levels of staff if business rates increased even in line with inflation, which is projected to be 2.6 per cent, in April 2013.

In addition, nearly half said they would not make any capital investment and nearly one in ten said they would go out of business if the rises were to be implemented.

The businesses argue that the rates are disproportionate, having to be paid regardless of whether the company is making a profit or not. While some firms complain that they pay more on rates than rent.

In some parts of the capital, business rates are as high as rents and are not calculated according to ability to pay, so firms that need larger premises to operate from, such as manufacturers and retailers, tend to get hit with especially large bills.

In fact, one small central London business that was surveyed reported that its business rates have increased by 166 per cent, while rent in the same time frame increased by only 22 per cent.

The survey found that, along with prohibitive parking policies, high business rates are the biggest barrier to small firms’ survival, as many, particularly in London, are based in heavily patrolled streets and often customers cannot even get to them without incurring their own costs.

As a result of the survey, the FSB has called on local authorities to get together and lobby the Government to reduce business rates.