FCA suggests half of individuals in the UK are ‘financially vulnerable’

FCA suggests half of individuals in the UK are ‘financially vulnerable’

A survey carried out by the Financial Conduct Authority (FCA) has suggested that 50% of individuals in the UK are ‘financially vulnerable’, with many having to make use of loans in order to pay bills and make ends meet.

Image result for financially vulnerable uk adultsAccording to the FCA’s Financial Lives Survey, 25.6 million UK adults ‘display one or more characteristics that signal their potential vulnerability’.

The FCA found that 13% of individuals aged between 25 and 34 are in financial difficulty, whilst single parents aged between 18 and 34 are the most likely to use high-cost loans.

In addition, 24% of UK adults stated that they have ‘little or no confidence’ in managing their finances, with a further 46% of individuals reporting that they have ‘low knowledge’ of financial issues.

Meanwhile, only 35% of those aged between 45 and 54 have thought about how they will manage financially once they retire.

Commenting on the findings, Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: ‘Just because individuals could be vulnerable doesn’t necessarily mean they will experience actual harm, but these results help regulators and firms alike to understand where we should target our efforts.’

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Significant number of UK business leaders ‘in the dark’ about new GDPR

Significant number of UK business leaders ‘in the dark’ about new GDPR

A survey carried out by the Institute of Directors (IoD) has suggested that almost a third of UK business leaders have not heard of the new General Data Protection Regulation (GDPR).

Image result for gdprThe GDPR comes into effect on 25 May 2018, and will strengthen the obligations on all businesses in regard to the safeguarding of individuals’ personal information. Firms must be accountable for their data usage, and must identify a lawful basis for processing personal data.

The IoD surveyed almost 900 businesses and found that four in ten company directors don’t know if their business will be affected by the new data protection rules.

It also discovered that half of directors have not discussed GDPR compliance arrangements with individuals with whom they share data.

Commenting on the findings, Jamie Kerr, Head of External Affairs at the IoD, said: ‘It was clear from the outset that this would be a mammoth task for small and large businesses alike, but the scale of the challenge has not necessarily translated into preparedness for the new regulation, despite the huge costs of non-compliance.

‘It is crucial everyone understands just how big this regulatory change will be for business leaders over the next few months.

‘We urge the regulator to step up its engagement with businesses to ensure that they are spreading the message far and wide.’

Businesses who fail to comply with the GDPR will face fines of up to €20 million, or up to 4% of total annual worldwide revenue, whichever is the greater.

UK could lose £400 billion as result of ‘hard Brexit’, study suggests

UK could lose £400 billion as result of ‘hard Brexit’, study suggests

A ‘hard Brexit’ could cost the UK up to £400 billion by 2030, a study carried out by Rabobank has suggested.

18% of Gross Domestic Product (GDP) growth could be lost by 2030 if the UK leaves the EU without a trade agreement. The study also suggested that British residents could be out of pocket to the tune of £11,500 as a result of a hard Brexit.

The bank analysed the consequences of three separate Brexit scenarios, including where Britain leaves the EU with a trade agreement, where it leaves without a trade agreement and where it obtains a so-called ‘soft Brexit’ and leaves the Single Market, but not the customs union.

If the UK leaves the EU without a trade deal in 2019, Britain could enter a two-year recession, and GDP would fall to 2.4%, Rabobank suggested.

However, a recession would be inevitable. If Britain leaves with an agreement, or experiences a soft Brexit, then a ‘milder and much more short-lived’ recession would take place.

Hugo Erken, Senior Economist at Rabobank, commented: ‘By looking at dynamics such as innovation, competition, knowledge and human capital, how they will change and what effects this will have on the structural makeup of the UK and European economy, our research shows that the long-lasting impact of Brexit is likely to be more severe than initially anticipated.’

CBI publishes Autumn Budget submission

CBI publishes Autumn Budget submission

The Confederation of British Industry (CBI) has published its Autumn Budget wishlist, outlining a range of measures that it believes will help the UK to ‘grow its way out of austerity’.

Image result for confederation of british industryThe business group has highlighted a host of strategies, designed to fuel business investment, spur innovation and promote competitiveness in the UK tax system.

It has called for the government to ensure that business rates ‘incentivise productive investment’, redesign the Apprenticeship Levy to ‘boost productivity growth’ and outline long-term plans for Insurance Premium Tax (IPT) and the corporation tax surcharge, with a view to phasing this out over time.

The CBI has also called for HM Revenue & Customs (HMRC) to be ‘properly resourced’ to ensure that the correct amount of tax is paid at the right time, in order to allow business owners to concentrate on running their business.

In terms of infrastructure, the CBI has urged the government to ‘immediately distribute’ the £490 million Spring Budget pledge to help ‘improve local infrastructure networks’.

Commenting on the submission, Carolyn Fairbairn, Director General of the CBI, said: ‘Faltering consumer and business confidence risks lowering living standards, so it’s important the government sends firms the right signals they need to continue investing and growing.

‘Ministers need to build on the basics to get our economy in shape for the challenges ahead by demonstrating a continuing commitment to free markets, a pro-enterprise environment and maintaining a relentless focus on the drivers of productivity.’

Chancellor suggests ‘staircase tax’ could be abolished

Chancellor suggests ‘staircase tax’ could be abolished

Chancellor Philip Hammond has suggested that the so-called ‘staircase tax’ could be abolished by the end of this year.

Image result for tax abolishmentDuring a Treasury Select Committee hearing, the Chancellor admitted that the tax has been putting additional stress on businesses. He told the Committee that he is ‘certainly looking at’ the legislative steps that can be taken to abolish the tax.

Termed the ‘staircase tax’, businesses with offices on multiple floors of a commercial property have been receiving separate business rates bills for each floor they occupy, provided the areas separating the offices are communal. Some firms in England and Wales have seen their business rates rise as a result.

Business rates are calculated separately in Scotland using the rateable value, which is set by a local assessor, and the ‘poundage rate’, which is set by the Scottish government.

In a recent letter to Melissa Tatton, Chief Executive of the Valuation Office Agency (VOA), Nicky Morgan, Chair of the Treasury Select Committee, labelled the sending of backdated staircase tax bills to firms as ‘unfair’.

In response, Ms Tatton revealed that, of the 11,000 rates that had to be reviewed, 5,500 firms saw their rateable value rise as a result of the staircase tax, 4,100 experienced an increase of less than 10%, and 1,400 saw a rise of more than 10%.

The Federation of Small Businesses (FSB) had previously called for the staircase tax to be axed. The business group welcomed the Chancellor’s remarks: Mike Cherry, National Chairman of the FSB, said: ‘The staircase tax has heaped misery on thousands of small businesses that happen to occupy split workspaces.

‘The Chancellor’s words will come as welcome relief to the desperate firms who had absolutely no idea that bill hikes were coming down the line.’

Individuals ‘should be set pensions savings targets’ to secure comfortable retirement

Individuals ‘should be set pensions savings targets’ to secure comfortable retirement

The Pensions and Lifetime Savings Association (PLSA) has called for savings targets to be put into place in order to help individuals save adequate funds for their retirement.

Image result for Individuals 'should be set pensions savings targets' to secure comfortable retirementAccording to research published by the PLSA, more than 13 million people have not saved enough for a comfortable retirement.

In addition, 78% of people aged between 18 and 64 are unsure of where to look to find out if they are on track with their retirement savings.

The trade association has suggested that the UK could look to implement retirement income targets, similar to those used in Australia.

Commenting on the issue, Graham Vidler, Director of External Affairs at the PLSA, said: ‘We all know we need to save for retirement, but few of us know how much we might need to live on or whether we are on track to hit that target.

‘We are . . . looking to develop a new set of retirement income targets that will empower savers by providing tangible targets for them to achieve. We look forward to working closely with stakeholders to build a retirement savings market which is truly focused on the end users – savers.’

The PLSA has launched a consultation on the matter, which will run until January 2018.

Brexit ‘could increase number of business insolvencies’, ICAEW suggests

Brexit ‘could increase number of business insolvencies’, ICAEW suggests

A survey carried out by the Institute of Chartered Accountants in England and Wales (ICAEW) has suggested that the number of businesses declaring insolvency could potentially rise as a result of the impact of Brexit on the UK economy.

Image result for insolvencyThe survey revealed that 73% of individuals working in the insolvency and business restructuring industry believe that Brexit poses the ‘biggest threat’ to businesses over the coming years. Meanwhile, 56% of those surveyed also believe that a rise in interest rates presents a risk to UK businesses.

The survey suggested that the retail sector could be the worst affected by insolvency, with 77% of respondents believing that it would be the sector most likely to experience ‘increased financial difficulty’.

Affected firms should seek early help in a bid to restructure their finances, business processes or management, the ICAEW stated.

Reflecting on the issue, Bob Pinder, Regional Director at the ICAEW, said: ‘We are in no doubt that businesses in the UK face difficult times ahead. A sharp and unexpected rise in the cost of doing business can make managing liquidity tough.

‘We believe that a change in attitudes is critical in order to successfully avoid substantially increased corporate insolvencies – confronting business issues, rather than being ashamed of them.’