MOST OF THE national press this morning are dissecting the impact of yesterday's Bank of England base rate rise, however, the Times has the most innovative take on the matter, by suggesting it is not house prices which could drop, but BIRTH rates.
REPRESENTATIVES OF financial services bodies yesterday told MPs the Government's proposed low-cost "Sandler" savings products are "potentially dangerous" and could result in mis-selling claims against the industry, according to the Daily Telegraph.
The National Association of Pension Funds and the Investment Managers' Association blamed the Government for the current savings crisis at a meeting of the Treasury Select Committee, which is examining long-term savings.
Farnish said the state pension system was now so complicated it would be impossible to offer simple, low-cost pension products to those on low incomes because they included no margin for the cost of advice.
NEW STAR’S John Duffield is also quoted in the Daily Telegraph as saying he now regrets allowing independent financial advisers to buy shares in New Star Asset Management, which he is planning to float by the end of September.
It is believed, according to the Telegraph, four IFA firms were offered the chance to buy shares in New Star – three are so far thought to have agreed a deal.
However, Duffield quantifies his comments a little more stating his regret is ‘marginal’ "because people read into it something that is not there".
ELSEWHERE, PRUDENTIAL is in the firing line this morning after refusing to compensate steel workers who have lost two-thirds of their pension because Pru’s venture capital arm put it into administration, says the Times, while the Telegraph focuses on shareholder anger about the huge payouts to its directors.
Jonathan Bloomer, Pru’s chief executive, insisted the insurer had no "legal or moral obligation" to compensate United Engineering Forgings workers – who previously worked for Corus – even though Pru bought the firm in 1997 and then put it into administration in 2001.
This was less than two months after actuaries explained the £12m pension fund deficit needed larger employer contributions, but Bloomer is quoted in the Times as saying it would be "robbing Peter to pay Paul".
Those workers are now expecting to receive just 35% of their original pension benefits, but ministers are still working to try and come up with a solution.
Following yesterday’s annual shareholder meeting, one investor is quoted by the Daily Telegraph as saying: "Operating earnings fell 23%, basic earnings fell 56%, shareholder funds fell 8.3% and the dividend fell 38.5%.
"In spite of this marvellous performance, [Prudential US chief] Clark Manning's pay increased by 42%, while the lowest increase of any executive director was 9.6%. The non-executives did even better."
Clearly shareholder are not happy about Manning's pay and bonus totallingd £1.3m, and the 10% for chief executive Jonathan Bloomer to £1.1m. Michael McLintock, chief executive of Prudential's fund management arm M&G, also saw his package jump 43% to £1.9m, including £372,000 from an long-term incentive plan.IFAonline
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