Moneyblog

The news for landlords seems to keep getting worse. Following a clampdown on tax relief and a huge hike in stamp duty on rental properties, the Bank of England announced yesterday that lenders will soon be forced to introduce substantially tougher borrowing standards when it comes to buy-to-let mortgages. The Bank’s Prudential Regulation Authority (PRA) revealed that banks and building societies will be required to be far more cautious when it comes to loans for landlords. This means tighter checks on whether borrowers will be able to cope with higher mortgage rates, as well as greater scrutiny of owners of multiple rental properties. The PRA’s announcement is the latest attempt by policymakers to

When the government implemented radical new pension freedoms a year ago, it was the most fundamental reform to the system in almost a century. And, like so many eye-catching changes, it was given a political spin. ‘Freedom and choice in pensions’ was how it became known. Sounds good, doesn’t it? It’s hard to argue with words like ‘freedom’ and ‘choice’, but there were plenty of people who doubted the efficacy of the new regime. Put simply, ministers abolished the requirement to buy an annuity and introduced new ways to access pension savings. As in the past, pension holders can still take 25 per cent of their pension pot as a lump

Do you trust your grown-up children with money? Apparently a lot of us don’t. More than half of the grandparents who plan to leave an inheritance to their grandchildren ring-fence the money so their own children can’t get their hands on it, according to data from insurer Sun Life. But is it any wonder? British adults have become addicted to debt. The Office for Budget Responsibility has warned we’re on course to spend more than we earn for the rest of the decade. In total, our overspend is expected to be £58 billion this year alone and £68 billion in 2019. We’re plugging the gap between what we earn and

No-one in their right mind would have willingly created the monster that is now the country’s current pension system. It has become the financial Hydra of modern day Britain. Bizarrely, it is deterring most of us from saving for retirement because we are intimidated by its many heads of poisonous anti-saving rules. Governments past and present – red, blue and in-between – are primarily to blame for turning what should be a saver’s friend into a foe. Greedy pension providers with their rapacious charges haven’t helped either. Politicians have meddled furiously, justifying it on the grounds that pension savers enjoy generous – and costly – tax privileges. In doing so, they

It’s officially Spring, bringing it with the prospect of sunshine, longer days and warmer weather. So you could be forgiven for breathing a sigh of relief over falling energy bills. Not so fast. Thousands of homeowners are set for energy bill hikes in the next two weeks, with 29 fixed-rate tariffs due to expire at the end of March. According to the price comparison website MoneySuperMarket, customers on these tariffs are likely to face automatic bill increases of up to £252, with providers rolling them onto standard tariffs, which are typically their most expensive. Given the historic nefarious practices of some energy companies, it should come as no surprise that

Chancellors of the Exchequer love to play God. But the hardest lesson they have to learn is that the most imaginative financial innovations usually have the most surprising unintended consequences. In his latest Budget, George Osborne, torn over whether to peck at the UK pensions regime or completely overhaul it, has tried to have it both ways: he has left pensions alone but created the Lifetime ISA – immediately nicknamed LISA – that might have replaced them entirely. As Spectator Money adroitly pointed out last week, pensions had become a farce worthy of Alan Ayckbourn, in which the desire to tinker was hard to resist. And, like Oscar Wilde, Osborne has

Was it good for you? George Osborne’s 2016 Budget, delivered to a packed House of Commons on Wednesday, has drawn criticism over a looming £55 billion black hole in public finances. But what does it mean for your money? We published a guide to the main changes yesterday. Today Spectator Money looks at reaction to a Budget lauded for pleasing middle England. Income tax More than half a million people will save £400 a year thanks to a rise in the 40p higher rate tax threshold to £45,000 from next April (with the Chancellor sticking to a pre-election pledge to hike the threshold towards £50,000 by the end of the parliament). Iain McCluskey

A song is buzzing around my head. ‘It’s the same the whole world over: It’s the poor what gets the blame. It’s the rich what gets the pleasure; Ain’t it all a bloomin’ shame?’ It was triggered by grim new research from the think tank Resolution Foundation claiming that 85 per cent of benefits from promised income tax cuts would go to the wealthiest half of Britain. The Foundation says even when the tax-free personal allowance on income is raised – from £10,600 to £12,500 by 2020 – it will be the better-off who will be the winners because our 4.6 million lowest paid workers earn under £10,600. And, rubbing salt

I usually take a stern view of corporate pay packets that are out of line with profits and shareholder value, but I’m prepared to make an exception for Bob Dudley. The American-born chief executive of BP collected $19.6 million last year, up 20 per cent on his 2014 remuneration, while the embattled oil giant clocked up a record loss of $6.5 billion and shed thousands of jobs. But even in the rugged world of oil and gas, few men have survived tougher career challenges than Dudley, who in his previous role as head of the Russian joint venture TNK-BP was so threatened by hostile locals that he had to operate from

I haven’t taken much notice of International Women’s Day since I flirted with radical feminism as a student, ahem, quite a while ago. But my inner Germaine Greer has been springing into life again due to a survey by recruitment consultants Robert Half marking IWD today. It found men are likely to earn £300,000 more than women over a lifetime, and that’s difficult to dismiss with a dainty shrug. Let’s face it, in most parts of the country, it’s a house. Yes ladies, employers think we are worth a whole three-bedroom-semi less than a bloke. It’s enough to drive a girl to dredge up those Doc Martens and dungarees from the dusty recesses of

Regulation as red tape that ties up business and strangles the economy. It is a transatlantic political trope. Said Javid, the ambitious business secretary, is just the latest to attempt to garner political capital by promising to cut through it and save £10 billion as a result. However, on the same day came a report that demonstrated how very necessary some regulation is. The Financial Conduct Authority, which regulates the financial services industry, published a review yesterday of the treatment of people holding old fashioned life insurance policies – pensions, endowments, bonds and their like. Those that hold them are often locked in for the long term. If they want to take their

In a past life I lived in a flat with a communal hallway. Among the post permanently littering the floor was the usual junk mail detritus: estate agent leaflets, double-glazing pamphlets and takeaway menus. In a development I don’t like to talk about at parties, I used to receive envelopes from the local takeaway addressed to ‘Pizza Eater’. All these missives contained was a menu. Nothing else. It was a shameful indictment on my love of Hawaiian specials. But it’s behaviour like mine that has boosted sales at Domino’s. Today the pizza chain revealed ‘excellent’ results thanks in large part to a massive increase in online orders. Reporting a pre-tax profit of

Is there a genuinely independent go-to guide for anyone who cares about the future of the UK economy but isn’t sure how to cast their vote in the Brexit referendum? Two-thirds of voters are said by unreliable pollsters to have made up their minds already, which leaves at least a third undecided. As the strident rhetoric and tendentious factoids of the two campaigns intensify, the need for dispassionate analysis could not be greater. So it seems a good time to take counsel from one of the City’s wisest greybeards. Rodney Leach — Lord Leach of Fairford — did as much as anyone, as a leader of Business for Sterling, to