STANDARD LIFE'S plans to demutualise and float on the stock market have been cast into doubt as it is reported by the Scotsman a majority of the insurer's own policyholders oppose the move.
Research by the Edinburgh-based insurer suggests only one-third of its 2.6m with-profit policy holders - eligible to vote in Spring 2006 - actively support the board’s plan to demutualise, compared to around half who were against.
Ronnie Sloan, former principal of actuarial consultants Punter Southall & Co, told the Scotsman Standard Life would have difficulty persuading policy holders to vote in favour of demutualisation.
"I can’t see how they’re going to persuade 75% [the required majority] to vote in favour by 2006. I think they’ll fail,” Sloan is quoted as saying.
MANY HOMEOWNERS with interest-only or endowment mortgage are having difficulty re-paying their mortgages and could lose their homes because they are not saving enough to pay off the amount they borrowed, reports the Scotsman.
A report published this morning and commissioned by Abbey three in ten Scottish borrowers (28%) in Scotland with interest-only mortgages are not saving enough to repay the amount borrowed, while the situation is worse nationally, as the number of people not saving enough climbs to 37%.
One in five people who are not saving to repay their interest-only mortgages have no idea how they will eventually pay back the amount borrowed, says the study while a further 12% say they are relying solely on their property value rising in order to cover the loan.
Internet and telephone mortgage broker Purely Mortgages has gone one step further and is now advising people to avoid interest-only mortgages altogether.
CONSERVATIVE PARTY officials claims government debt would soar from the official figure of 33% of gross domestic product (GDP) to 85% if promises to pay unfunded public sector pensions are met, reports this morning’s Daily Telegraph.
Ahead of this Thursday’s pre-Budget report, The Tories have challenged chancellor Gordon Brown’s claim to prudence by suggesting figures from independent actuaries at Watson Wyatt reveal the true extent of the funding crisis, which is not measured in the national debt.
Brown’s camp and the Treasury responded by stating no goverment shows the cost of promises – thought to be anything between £380bn and £580bn - to pay pensions to public sector employees as part of the national debt.
AND THE TREASURY could lose more than £1bn a year in tax revenue as companies are increasingly adopting what is thought to be a perfectly legal ‘tax dodge’, reports the Times.
Companies such as British Telecom, Tesco, J Sainsbury, LogicaCMG and Ernst & Young are already adopting the technique, which reduces national insurance (NI) bills for both company and staff.
Savings are made by ‘rejigging’ staff pension arrangements, says the Times, so employees are no longer required to contribute to their pension scheme.
Instead, the company agrees to take on the commitment itself, but docks the employee’s salary by an equivalent amount, and in the process can save companies like BT something in the region of £10m in NI payments each year.IFAonline
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