The Most Expensive Word In The World?

I love this……but for all the wrong reasons!

 

You would be forgiven for failing to notice that the financial regulator, the Financial Services Authority (FSA), has been dismantled and replaced with the Financial Conduct Authority (FCA).

 

But here’s the thing……the dismantling leaves the new FCA with: 

 

• The same remit
• The same address
• The same company registration number
• The same staff
• The same lack of accountability

 

The cost of the dismantling has jumped to £44 million, up from the £25 million originally estimated.

 

Question: Other than a new sign above the door and a now logo on the stationery, what exactly do we get for £44 million?

 

Answer: The word ‘service’ replaced with the word ‘conduct’.

 

One word at a cost of £44 million.

 

Genius.

Pension Time Bomb

Some damning data on the state of the pension sector has been released over the past week.

 

The number of people in Company Pension Schemes has fallen to 2.9 million. To put this into perspective, this number was 12.2 million in 1967 and remained above 10m until 2000.

 

The current figures are the lowest since records began in 1953.

 

The most perplexing thing is that HMRC spent £34.9 billion in lost tax revenue by offering tax breaks to encourage participation in Company Pension Schemes.

 

There is a pretty simple solution here if anyone at Westminster has the balls to take this on……take the £34.9 billion and use it to make an outstanding State Pension for all, taking the onus / cost / responsibility of staff pensions away from companies. 

 

Just a really simple thought that all at Whitehall are scared to accept……because they don’t trust themselves to deliver a solution successfully. Shameful. 

 

If these figures do not give all at Westminster a sharp jolt into action, nothing will.
 

 

 

Beastly Bonuses

It appears that it is not just the bankers that court controversy with their bonus culture……the regulator of the banks is also embroiled.

 

That’s right......the regulator that has slammed a bonus culture has itself a bonus culture. 

 

The Financial Services Authority (the city regulator) announced this week from the published accounts that:

 

Hector Sants (former COO) received a £300,178 bonus on leaving employment as part of his ‘contractual entitlement’.

 

Adair Turner (former Chairman) received a bonus payment of £252,000.

 

Martin Wheatley (Chief Executive) received a £86,000 bonus on top on his £429,999 basic salary.

Perhaps more alarmingly, total director pay reached £2.4 million over 2012 / 2013, up 20% from the previous year.

 

I guess opinion can be given from many different angles on this, but here’s my Top 3.

1. How is success measured to warrant a ‘bonus’? Fining aggressively? Allowing only so many mis-selling scandals? Keeping tax payer bailouts below a certain level?                                                                                                                                    
2. The UK is currently gripped for another taxpayer funded bailout for Co-operative Bank. The regulator failed to recognise or address this last year leading up to the current issue. Should their bonuses not part fund their bailout?
3. Why is nobody challenging these bonuses? Quite simply……the regulator is a non-profit making organisation funded by the companies they regulate.

Enough said.

A shameful reality.

Passive Pads

As we fast approach the 5^th anniversary of the start of the banking collapse, it is evident that the biggest impact to the common person has been the housing market.

 

From a buying perspective, the average age of a first time buyer is now 37 given the demands of raising a deposit to meet lending criteria. Property analysts Oxford Economics predict that by 2020, the average deposit required for a first time buyer will be £100,000!

 

Whilst I do not agree with the banking philosophy of 5 years ago (the only criteria to borrow money was “are you breathing?”), the U turn that banks have made with lending money is nothing short of staggering.

 

The upshot of all of this is an inflated (more like bloated) rental market, with the BBC’s latest report confirming that 33% of the UK is now unaffordable for low to middle income families (from a rental perspective).

 

The housing market is an issue that won’t go away and the Government’s ‘Help To Buy’ Scheme is anything but. 

 

Outside the box thinking from Westminster is required……not something they are famed for!