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A big pension pot comes to light
There has been much discussion this week over the revelations that the former chief executive of the Royal Bank of Scotland (RBS), Sir Fred Goodwin has a pension pot worth £16million. This comes as RBS have announced record losses of £24.1billion in 2008. Sir Fred Goodwin resigned as the chief executive of RBS in October 2008 after the bank received £20bn from the government, agreeing to take early retirement. What has only come to light recently is that Sir Fred's pension was worth £16million, meaning that he would receive a pension of £693,000 per year. This has once again opened up the debate over whether bankers such as Sir Fred should be receiving astronomical sums of money for contributing to the current financial crisis the UK finds itself in. It appears that Sir Fred has declined to voluntarily forego some, if not this entire pension, so it looks like the government will now act to try and stop him from receiving some, or all of it.
Let’s now review the other top money stories of the past week commencing the 23rd February 2009.
Monday 23rd February
Disposable income has fallen – A report conducted by the Centre for Economics and Business Research (CEBR) on behalf of ASDA has indicated that on average, families could find themselves having £150 less per year to spend on non-essential items. The research showed that in January 2009 the average family had £143 a week to spend on items such as holidays, eating out and other discretionary items, down from £146 per week in January 2008. This reduction in disposable income has been attributed to the increase in essential expenses such as mortgages and groceries in 2008. If you are feeling the pinch and want to take control of your finances, try making/updating a budget. moneybasics can provide you with a handy budget sheet to help you track your spending. From the homepage you can also download the Spendometer onto your mobile which enables you to keep track of your spending whilst on the go.
Northern Rock to start lending – The Chancellor, Alistair Darling, has announced that Northern Rock will begin to offer mortgages again. Northern Rock will lend up to £5bn in 2009 and £9bn in 2010 to new homeowners. This increased lending will be part funded by a further £10bn injection from the government. This is one of a few new measures that are being put in place by the government to encourage lending. This marks a change in policy for Northern Rock from when it was nationalised (moved from shareholder control to being under government control) last year, the bank has been winding down its mortgage lending in order to repay its government loan. Northern Rock has successfully paid back £18bn of their loan. Yet because the lack of credit in the economy is being cited as a key reason as to why the housing market and the economy in general is struggling, the government are using Northern Rock to try and invigorate the markets and increase lending.
Let’s now review the other top money stories of the past week commencing the 23rd February 2009.
Monday 23rd February
Disposable income has fallen – A report conducted by the Centre for Economics and Business Research (CEBR) on behalf of ASDA has indicated that on average, families could find themselves having £150 less per year to spend on non-essential items. The research showed that in January 2009 the average family had £143 a week to spend on items such as holidays, eating out and other discretionary items, down from £146 per week in January 2008. This reduction in disposable income has been attributed to the increase in essential expenses such as mortgages and groceries in 2008. If you are feeling the pinch and want to take control of your finances, try making/updating a budget. moneybasics can provide you with a handy budget sheet to help you track your spending. From the homepage you can also download the Spendometer onto your mobile which enables you to keep track of your spending whilst on the go.
Northern Rock to start lending – The Chancellor, Alistair Darling, has announced that Northern Rock will begin to offer mortgages again. Northern Rock will lend up to £5bn in 2009 and £9bn in 2010 to new homeowners. This increased lending will be part funded by a further £10bn injection from the government. This is one of a few new measures that are being put in place by the government to encourage lending. This marks a change in policy for Northern Rock from when it was nationalised (moved from shareholder control to being under government control) last year, the bank has been winding down its mortgage lending in order to repay its government loan. Northern Rock has successfully paid back £18bn of their loan. Yet because the lack of credit in the economy is being cited as a key reason as to why the housing market and the economy in general is struggling, the government are using Northern Rock to try and invigorate the markets and increase lending.
Tuesday 24th February
Mortgage approvals rise in January –There were 23,376 mortgages approved last month according to the British Bankers' Association (BBA). This reflects an increase from the 22,416 mortgages approved in December. Despite this rise from December, overall mortgage approvals in January were down by 43% from the number approved in January 2008.
Pawnbrokers benefiting from the crisis -Albermarle & Bond, the second biggest pawnbroker in Britain have reported a 19% increase in their takings in the last 6 months of 2008. Albermarle & Bond have said that reduced bank lending has increased demand for their services, as people look to get short-term loans. Cash Converters - one of its rivals- has reported an astronomical 120% increase in takings during the same period. Cash Convertors also attribute their growth to banks’ unwillingness to lend, which has forced many people to seek credit from other channels to help them during this difficult time.
Mortgage approvals rise in January –There were 23,376 mortgages approved last month according to the British Bankers' Association (BBA). This reflects an increase from the 22,416 mortgages approved in December. Despite this rise from December, overall mortgage approvals in January were down by 43% from the number approved in January 2008.
Pawnbrokers benefiting from the crisis -Albermarle & Bond, the second biggest pawnbroker in Britain have reported a 19% increase in their takings in the last 6 months of 2008. Albermarle & Bond have said that reduced bank lending has increased demand for their services, as people look to get short-term loans. Cash Converters - one of its rivals- has reported an astronomical 120% increase in takings during the same period. Cash Convertors also attribute their growth to banks’ unwillingness to lend, which has forced many people to seek credit from other channels to help them during this difficult time.
Wednesday 25th February
Public dip into savings –UK savers have withdrawn record amounts from their savings accounts in January. During January £2.28billion was withdrawn from personal savings accounts, which is the highest monthly figure on record since the British Bankers' Association (BBA) started recording over 10 years ago. This dramatic increase in withdrawals has been largely attributed to people choosing to spend rather than save as a result of the large falls in savings rates. A falling return on your savings reflects the large cuts made by the Bank of England to interest rates, which currently stands at 1%. Many people in the UK have also been forced to use their savings to service their day-to-day expenditure, as a result of finding themselves recently unemployed due to the economic downturn.
Public dip into savings –UK savers have withdrawn record amounts from their savings accounts in January. During January £2.28billion was withdrawn from personal savings accounts, which is the highest monthly figure on record since the British Bankers' Association (BBA) started recording over 10 years ago. This dramatic increase in withdrawals has been largely attributed to people choosing to spend rather than save as a result of the large falls in savings rates. A falling return on your savings reflects the large cuts made by the Bank of England to interest rates, which currently stands at 1%. Many people in the UK have also been forced to use their savings to service their day-to-day expenditure, as a result of finding themselves recently unemployed due to the economic downturn.
Thursday 26th February
Rents plummet as homeowners struggle to sell –Over recent months there has been a dramatic increase in the number of houses available to rent, as many homeowners struggle to sell their property. This huge increase in the supply of rental properties has driven down average rent prices dramatically. According to Globrix, a property search engine, average rental prices across the UK in February dropped to £795 per month, down from £950 per month in May last year. This marks a fall of 16.3%. FindaProperty reported a fall in average rental prices from £872 per month in 2008, to £830 during February 2009.
Rents plummet as homeowners struggle to sell –Over recent months there has been a dramatic increase in the number of houses available to rent, as many homeowners struggle to sell their property. This huge increase in the supply of rental properties has driven down average rent prices dramatically. According to Globrix, a property search engine, average rental prices across the UK in February dropped to £795 per month, down from £950 per month in May last year. This marks a fall of 16.3%. FindaProperty reported a fall in average rental prices from £872 per month in 2008, to £830 during February 2009.
Friday 27th February
RBS pledge to lend £25bn to individuals and businesses –The Royal Bank of Scotland (RBS) is set to receive a further £25.5bn from the government to supplement the £20bn that the bank received in October. In turn, RBS have pledged to lend £25bn to individuals and businesses during 2009. Of this £25bn, £16bn will be lent to businesses, with the remaining £9bn to be lent in the form of mortgages. This £25bn will be in addition to any existing lending plans. A further £25bn will be lent during 2010. This announcement is great news for many businesses and individuals who have been struggling to access credit.
RBS pledge to lend £25bn to individuals and businesses –The Royal Bank of Scotland (RBS) is set to receive a further £25.5bn from the government to supplement the £20bn that the bank received in October. In turn, RBS have pledged to lend £25bn to individuals and businesses during 2009. Of this £25bn, £16bn will be lent to businesses, with the remaining £9bn to be lent in the form of mortgages. This £25bn will be in addition to any existing lending plans. A further £25bn will be lent during 2010. This announcement is great news for many businesses and individuals who have been struggling to access credit.
| Top Money Stories February 23rd - 27th 2009 |
