Yesterday's publication of the personal accounts White Paper designed to boost pensions savings has failed to silence critics, writes The Guardian.
It says the plans failed to persuade critics it would leave the poorest-paid any better off at the end of the day, particularly as it sidestepped provisions to ensure FSA oversight to reduce the chances of another pensions mis-selling scandal.
The paper quotes pensions guru Steve Bee of Scottish Life saying the proposals would do little for several categories of savers because of the linked stripping away of means-tested benefits.
“Mr Bee said regulations would need to be put in place to safeguard families from locking money they could ill-afford into a pension,” the paper writes.
It quotes Bee stating: "But the government has said in the white paper that it will be an occupational scheme. If it was a personal pensions scheme, which we were originally led to believe it would be, the FSA would regulate the selling process and insist literature explained the suitability. Under this scheme, it is not clear how they will get redress for mis-selling."
The LibDems make the point there could be a massive problem ahead if people do lose money given the government has essentially forced them through auto-enrolment to join.
INFLATION FEARS are being stoked by pay negotiations expected over the New Year, after latest figures suggested prices for wages rose to an annualised rate of 4% over the past month, writes The Guardian.
As such, negotiators hold the fate of interest rates in their hands, because the Bank of England is likely to see any further increases in the rate of wage increases as a trigger to up interest rates again in the first quarter of next year.
“January is the key month for pay settlements and, after the MPC's decisions to raise interest rates by 0.25 percentage points in both August and November, the City's money markets expect a similar-sized rise - to 5.25% - in February,” the paper writes.
LINKED TO THIS story is news Goldman Sachs is set to tee off bonus season with a massive payout for its staff.
Following another record year of investment banking business, the firm looks set to pay out some £8.4bn globally to its 26,000 staff, averaging out at some £320,000 each.
Some are more equal than others, of course, meaning some 25 of its most senior bankers look set to receive some $50m, writes the Telegraph.
Full year profits at the bank gained some 70% to more than $9.5bn, on turnover up 50% to more than $37bn. Earnings per share almost equalled those for 2004 and 2005 combined, the paper adds.
THINGS ARE LESS rosy for the global economy, the Telegraph continues, as the World Bank is predicting a slight slowdown through next year.
Led by the US, growth will drop to a rate of 4.5%, down from 5.2% this year. Breaking down the picture further reveals some interesting changes, however, with most growth expected to come from so-called developing countries.
Growth in the developed countries by contrast could fall to just 2.4% next year from 3.1% this year, before recovering slightly to 2.8% by 2008, the Bank predicts.
POOR GROWTH IS not the only challenge to government receipts as The Times follows up on a story highlighted yesterday, noting the government is set to lose some £400m in tax receipts following a European Court of Justice ruling relating to dividends earned abroad.
The case centred on cigarette maker BAT, which had seen dividends from European subsidiaries subject to corporation tax, but those from UK subsidiaries not. The Court ruled that dividends across the EU would have to be treated in the same manner by tax authorities, particularly as shareholders would also suffer as they would not be entitled to a tax credit.
The Times estimates some 20 companies would benefit to the tune of some £400m from the decision, considerably less than the £4.7bn argued by government lawyers during the case.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till