Shocks & Stares » ISAs http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-2/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-2/#comments Fri, 08 Apr 2011 14:49:27 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=26 Hello All and welcome to a very sunny Friday afternoon. Before you all rush out of the door to enjoy a much earned drink, here’s our recap of five of the top financial and political stories of the week. Thanks to Jonathan, Ed, Daisy and Ross for their contributions this week.

National destiny…Two weeks ago, Portugal’s outgoing prime minister ruled out the possibility of asking the European Union for financial assistance. On Wednesday, under mounting pressure, a bailout of €80 billion was however requested. What is telling about the run of events is that to a large extent it is not governments that have the ultimate say over their financial destiny but international debt markets, a feeling reflected by Portuguese media, with the newspaper Jornal de Noticias declaring “Yesterday our country succumbed not only to the pressure of the hated markets but to itself”.

Europe's tangled web - a snapshot by the NY Times

For an indication of just how grim things are, note that the sale of short term Portuguese debt issued on April first required a yield of almost six per cent compared to just over four per cent a month earlier. Also on the continent this week, the ECB increased interest rates by 0.25% to 1.25%. Fiscal tightening has begun and the Bank of England will need to consider whether the UK needs to take similar measures in the coming months.

A weak week in Westminster…Earlier in the week Ed opined:

Probably a fair summation of what was going on, and indeed, after Tuesday it only got worse. Nick Clegg, it transpired, had a former intern who was eager to but the boot in. Oliver Letwin, the Cabinet Office Minister no less, hot on the heels of saying he didn’t “want families from Sheffield flying away on cheap holidays” went one better by apparently confirming that the Government would “run out of ideas by 2012“.

Andrew Lansley meanwhile, diligently trying to regain momentum for NHS reform (which has undertaken a “natural pause“) was helped out in the shooting yourself (or colleague) in the foot stakes by Work and Pensions Secretary, Iain Duncan Smith, who admitted that NHS waiting times have soared under his Government.

Unable to keep the lid on IDS or use the brolly on Olly, SamCam appeared to have the blues…

Cheer up Cams - it can't possibly be as bad next week

The savings industry can breathe again…And so it’s over for another 12 months. The great savings rush ahead of the end of year tax deadline has now passed, which means financial advisers, accountants and business owners can afford to breathe a little easier. Many in the personal finance media will probably be looking forward to writing something a little different as well, after four weeks of ISA coverage.

The ISA rush is over for another year

The big issue on the table for savers remains though – the high rate of inflation, which erodes the value of money stored away. It’s proving a real problem, as the Standard argued on Tuesday, though as the Mail notes, there are still good products out there, being driven in part by the desire to retain as well as recruit savers according to some. One other problem remains however – take-up of ISAs remains low amongst the population; something that the newly relaunched Money Advice Service could help address.

What next for Andrew Lansley?…As we mentioned above, the government has taken a pause on NHS reform while it considers its next move. In a statement to the House of Commons, Health Secretary Andrew Lansley promised to “pause, listen and engage” rather than force through the health and social care bill at breakneck speed.

What this week’s climbdown demonstrates is that whenever an organisation tries to redefine, reorganise or change itself, it invariably encounters resistance. That resistance only dissipates when it can be proven beyond doubt that change will benefit those who protest. As Machiavelli said in The Prince “there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”

The NHS is regularly praised, but also regularly damned, often in the same newspaper article. The challenge for Lansley and co will be to convince people how these changes will benefit them. Otherwise the result could be “pause, listen and disengage”.

The new state pension…Finally, a quick look at the plans unveiled this week by Pensions Minister Steve Webb. Even for those of us who work in this area, the state pension is a fiendishly complicated beast with different levels of benefit paid depending on your work history, level of other retirement income and marital status. In an effort to simplify things, the government has proposed a new, flat-rate pension of £155.

Or have they? Despite a lot of media coverage and hype in the build-up to the announcement, the government’s green paper actually lays out several potential options, only one of which would take this course. The proposal is now open to consultation – expect it to be feisty.

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