Stock market sell-off could signal turning point for bull market, as Dow plunges again

In a span of six treacherous days on Wall Street, the mood of the stock market has turned from giddy optimism to gloomy pessimism.

Pinpointing major shifts in markets is an inexact science. But some Wall Street pros say the current one has reached a turning point, as the low interest rates that powered stocks higher over the last decade give way to higher borrowing costs and heightened risks.

A swift 1,776 point, or 6.6 percent, dive in the Dow Jones industrial average just a week after it hit a record high shows just how edgy and uncertain the investing environment has become. 

Investors, who a week ago were talking up the market's prospects thanks to a strengthening economy, are now noticing a worrisome shift in its behavior.

"Has the market hit an inflection point? I think it has," says Jim Paulsen, chief investment strategist at The Leuthold Group, a Minneapolis-based money-management firm.

This market downturn, he predicts, will likely be more severe than the 10.2 percent drop the market suffered in February. But he's still not sold on the idea that the break will lead to a bear market, or 20 percent drop, from the market's recent high.

The debate about whether the market vibe has flipped from bullish to bearish centers around a few key issues: They include risks to the economy caused by a rise in interest rates; trade frictions with China; the recent drubbing of technology stocks; and increasingly high investor expectations that could lead to easy disappointment.

Some Wall Street pros, including Amanda Agati, co-chief investment strategist at PNC Financial Services Group, say the recent carnage on Wall Street was long overdue and is a "short-term blip" that will settle down quickly. She stresses that the U.S. economy remains strong and the threat of recession is low. The mood of investors will brighten, she predicts, when companies start reporting their third-quarter results.

"I think earnings will be really strong and provide an underlying support for the market and be a positive catalyst," she says. The current downdraft has a different feel than the sell-off in February, she adds. That drop was caused by too many investors making a big bet on the stock market remaining calm, which backfired when volatility roared back, catching them on the wrong side of the trade.

Still, others worry that the market is entering a more difficult phase, one that will have a much different, more challenging feel to it.

So what changed in the past week that has investors so worried?

The biggest change has been an acknowledgement that rising interest rates could cool a strong U.S. economy and also put a dent in corporate earnings. The combination of the Federal Reserve hiking short-term rates last month and another increase expected in December, coupled with a spike in the 10-year U.S. government bond to a seven-year high has made stocks less attractive compared with lower-risk bonds. 

Low rates and cheap money resulted in a flood of money into stocks in recent years, as people searched for bigger returns.

"The wave of money that was moving into the market is now reversing," says Savita Subramanian, head of U.S. equity strategy at Bank of America Merrill Lynch. "As liquidity is withdrawn from the market, it amplifies market volatility" and price swings.

Higher borrowing costs also make it tougher for Americans to afford houses and buy cars on credit, analysts say.

The protectionist trade policies of President Donald Trump and his administration's tariff fight with China have upended the long era of free trade. That has unintended consequences, ranging from a disruption in global supply chains for technology to higher costs for businesses that either have to eat the costs or pass them along to shoppers through higher prices. 

"The trade war is no longer abstract economics, we're now starting to see it is real-world stuff showing up in the earnings results of companies," says Hugh Johnson, chairman and chief investment officer at Hugh Johnson Advisors in Albany, New York.

He notes that companies ranging from luxury retailer Tiffany to auto parts maker Delphi Technologies have warned that their profits will take a hit due to cost pressures related to tariffs.

After years of leading the market higher, fast-growing and innovative tech companies like Netflix and Apple have come under intense pressure in the recent sell-off, signaling that investors are becoming more risk averse and taking a more defensive stance.

"The sell-off has attacked the leadership of the market, and that's a significant change," says Paulsen. "These are the names that most people own and feel really good about. You are kind of punching investors in the gut where it hurts."

The tech stock drubbing, which also has been driven by increasing fears of regulatory scrutiny from government amid privacy breaches, shows "investors are getting a bit more defensive," Agati says. 

Consumer confidence is at an 18-year high. And small-business optimism is at its highest level since 1983. And why not? The economy's 4.2 percent growth in the second quarter was the fastest in four years, and the nation's jobless rate is near a 50-year low of 3.7 percent.

The good times might lift investor expectations too high, which raises the risk that incoming good news on earnings or the economy won't be good enough. "That is a higher-risk, lower-reward market," says Paulsen.

Indeed, all that confidence can lead to complacency and dangerous risk-taking that can lead to bad outcomes, he adds.

"Confidence reflects greed," Paulsen says. "It reflects complacency. It leads to behavior that lends itself to people getting out over their skis, whether borrowing too much money or getting too exposed to risky parts of the market or piling into the popular stocks that are working." 

Despite all the bad news piling up on the market, it "doesn't mean investors should see equities wholesale," says Subramanian of Bank of America.

 

October 12, 2018

Sources: USA Today

Related news

  • HAMISH MCRAE: It's time to grow up and finally listen to business! 

    HAMISH MCRAE: It's time to grow up and finally listen to business! 

    ons on Tuesday and more about that in a moment. </p><p>But there have also been the vicious movements in share prices around the world, which in the case of the UK have wiped out all the gains of the past two years. And not just in Britain. </p><p>The Facebook share price is back to its level in the spring of 2017 and the price of even the mighty Apple is where it was in January.</p><p>Concerns: 'There is political disruption, there is financial market disruption and there is the growing evidence of a trade war between the world’s largest and second largest economies'</p><p>The trigger for these collywobbles was the detention of a woman in Canada.</p><p>That might seem bizarre, but Meng Wanzhou is Chinese commercial royalty. She is the daughter and potential successor of Huawei founder Ren Zhengfei. She is also chief financial officer of Huawei, the second largest manufacturer of communications equipment in the world.</p><p>So her detention and request for extradition to the United States, reportedly on Huawei’s exports to Iran, was a red rag. Suddenly, the idea of a lull in the trade war between the two countries evaporated.</p><p>So we have three elements to the chaos. There is political disruption, certainly in the UK but also elsewhere (look at France where the government has been shaken by protests around the country by campaigners in yellow jackets). There is financial market disruption. And there is the growing evidence of a trade war between the world’s largest and second largest economies.</p><p>Lord King, Mervyn King, the former governor of the Bank of England, has likened the UK political situation to that of the late-1930s and the 1970s, two earlier periods when the political establishment lost control. </p><p>When one of the great economists of our generation says something like that, you sit up. But I think the analogies are unhelpful.</p><p>Very few people alive now remember the 1930s, but I do recall my parents talking about their sense of despair about the policy of appeasement, and how they felt Chamberlain’s Munich accord with Hitler would make war inevitable.</p><p>But whatever view you take of Europe’s negotiating tactics over Brexit (and I think they have behaved both unpleasantly and stupidly), this is not Munich.</p><p>Nor is this the 1970s, when I started work. That decade saw the break-up of the fixed exchange rate system; the oil price shocks; the secondary banking crisis; interest rates hitting 15 per cent; inflation touching 25 per cent in 1975; the Government bowing to the International Monetary Fund’s programme in 1976; and the decade ending in the ‘winter of discontent’ strikes – a level of chaos that led to the election of Margaret Thatcher’s Government in 1979. </p><p>If you think things are bumpy now, it is nothing like the mess we faced when we hit the job market in the 1970s.</p><p>Warning to the government: 'Politicians should care to listen to the people who are still driving the economy forward – and respect their views.'</p><p>Nor is the geopolitical situation so fragile. The Meng Wanzhou detention reminds us that we are entering into a period of trade tension as the two giants, the US and China, square up for a series of economic fights. </p><p>In about ten years’ time, China will pass the US to become the world’s largest economy, but the US will remain the dominant power. This is not a recipe for harmony.</p><p>But a trade war is only a trade war. The Cold War was much more dangerous. The memory of the Cuban Missile Crisis of 1962 lingered on into the 1970s. The US and the Soviet Union were so alarmed by what might have happened, that they agreed the first arms reduction treaty, SALT 1, in 1972. But a more comprehensive treaty was not reached until 1991. Now see Brexit in this context.</p><p>You may think that the more extreme scenarios in the event of a no-deal Brexit painted by Lord King’s successor, Mark Carney, are absurdly negative. </p><p>You may agree with Lord King that it would indeed be madness to ‘align the country indefinitely with laws over which it has no influence’.</p><p>But when you get a substantial majority of UK businesses supporting the compromise that has been negotiated, then we should take that seriously. This is only the exit deal. Future trade relations will evolve, and almost certainly away from Europe because the rest of the world will grow faster.</p><p>But this weekend, politicians should care to listen to the people who are still driving the economy forward – and respect their views.</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • Manic Tuesday as firms such as Barclays and JP Morgan gear up for big vote turmoil

    Manic Tuesday as firms such as Barclays and JP Morgan gear up for big vote turmoil

    ghter as investors grapple with the fallout from the crucial vote on Theresa May’s Brexit deal.</p><p>Banks, stockbrokers and advisers are braced for a night of chaos on trading floor.</p><p>The vote will be held late on Tuesday, with the outcome due after the London stock market closes.</p><p>Pressure: Barclays and JP Morgan have both called on bankers to stay late into the night to make sure clients can continue to trade stock futures and currency as the result comes in</p><p>Barclays and JP Morgan have both called on bankers to stay late into the night to make sure clients can continue to trade stock futures and currency as the result comes in.</p><p>If events drag on to the early hours, JP Morgan’s teams in the New York office will take over from London colleagues.</p><p>In Barclays’ investment bank, traders will be in the office earlier on Tuesday to prepare ahead of the vote, while analysts and economists will be on standby to brief clients.</p><p>Currency trading will be the focus overnight as markets deliver a verdict on what the vote means for the UK economy.</p><p>One source at a major spreadbetting firm, which allows individual investors to bet on market movements, said last night they would be ordering pizzas to keep staff from going hungry through the night. They have also booked out rooms at a hotel next door so traders can take short naps during quieter periods.</p><p>Traders at Samuel &amp; Co Trading have even set up a mini golf course to keep staff entertained and will bring sleeping bags into the office.</p><p>On Wednesday, domestic stocks will take centre stage as traders analyse the political fallout, the chances of a no-deal Brexit or even a General Election, which might lead to a Labour government under Jeremy Corbyn.</p><p>How will the Brexit deal vote affect business? A run-down of the most likely scernarios </p><p>Investment platforms such as AJ Bell and Hargreaves Lansdown are gearing up for a spike in online traffic when the market opens on Wednesday.</p><p>Danny Cox, of Hargreaves Lansdown, said: ‘We are increasing staffing levels on our helpdesk and support functions on the Wednesday morning by around 40 per cent to cater for what could be a very busy opening period of trading.’</p><p>Away from the trading floor, bankers and consultants are teeing-up to help clients plan for the weeks ahead.</p><p>Lloyds bankers will be staying late on Tuesday and coming in early on Wednesday to monitor events and take check-in calls with any concerned clients.</p><p>Accounting giant PwC is hosting internal briefings to make sure its consultants are up to date on events so they can advise clients, both in the UK and abroad.</p><p>While PwC hasn’t made any specific predictions about how the vote will pan out, the organisation has spent time scenario planning so that it is prepared for all possible outcomes and can inform clients through webcasts, briefing notes and newsletters sent out as events unfold.</p><p>James Stewart, KPMG’s head of Brexit, said there had been a significant pick-up in calls in recent weeks as clients try to understand what the vote means for their businesses.</p><p>Stewart added: ‘We are seeing much more client activity around Brexit over the past two weeks. That’s a mix of small businesses who have only just realised they need to act, and larger businesses who are activating their plans.’</p><p>They were already betting against the fashion brand, but raised their short positions in the FTSE 250 firm on Monday after the hugging scandal.</p><p>Data from analyst IHS Markit shows a notable increase in short interest positions from 6.6 per cent on Friday last week to 7.4 per cent on Monday in a wager worth about £50 million. Short-sellers, who in this case include New York-headquartered BlackRock and London-based Marshall Wace, borrow shares, sell them and then buy them back at what they hope is a lower price, pocketing the difference in the process.</p><p>Just minutes before the markets closed on Friday, the company revealed that Kelvin was to take a ‘leave of absence’ while the allegations are investigated.</p><p>The share price took a sharp dive, but could have further to go when markets reopen tomorrow morning, meaning that the short-sellers could cash in again.</p><p>Thomas Cook blamed the warm UK summer for stopping people travelling abroad in search of sun. But scribblers at City broker Bernstein think TUI is a very different business with cruises and hotels that are less reliant on one or two crucial seasons.</p><p>They reckon TUI’s annual results on Thursday could kick-start the shares after a slump of nearly 40 per cent since May.</p><p>Bernstein says the shares are so cheap that any new investors would be getting TUI’s tour division for free.</p><p>The shares tanked by about 60 per cent amid a slowdown in the UK market, even though it expanded abroad.</p><p>Rival Emoov, which earlier this year merged with Sarah Beeny’s Tepilo and online lettings agency Urban, went into administration last week, underlining the scale of the challenge for online agents.</p><p>Purplebricks reveals first-half results on Thursday. Could it perhaps decide to snap up Emoov’s property listings which are up for grabs?</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • MIDAS SHARE TIPS: Why pawn shops that sell jewels could put sparkle in your shares portfolio

    MIDAS SHARE TIPS: Why pawn shops that sell jewels could put sparkle in your shares portfolio

    s for the foreseeable future</p><p>In 2001, when Peter Kenyon joined Ramsdens, the company consisted of three pawnbrokers. Last week, Kenyon opened his 136th store, in Worksop, Nottinghamshire.</p><p>Unlike many on the High Street, Ramsdens is thriving – and at £1.66 the shares are a bargain. </p><p>The number of stores is growing, customer numbers are increasing and there is plenty of potential for expansion. The balance sheet is rock-solid too, so shareholders should expect decent dividends for the foreseeable future.</p><p>Ramsdens has branched out over the years as well. Today, the stores offer foreign currency for customers going on holiday. </p><p>They sell attractive new jewellery, as well as unclaimed pawn items. And they buy jewellery from consumers who no longer want it, selling the precious metal at face value or reconditioning items for resale in store.</p><p>There is a fast-growing online business too, with dedicated websites for foreign currency and jewellery. Both divisions are flourishing but online jewellery is making particularly strong progress, with sales up more than 120 per cent in the first six months of Ramsdens’ financial year.</p><p>Interim figures, published late last month, highlighted Ramsdens’ resilience. Even though the exceptionally hot summer kept many holidaymakers at home, the group delivered a 10 per cent increase in revenues to £24 million for the six months to September 30, while gross profits rose 4 per cent to £16.7 million. Pawnbroking and precious metal purchases showed steady progress and jewellery profits rose by an impressive 23 per cent.</p><p>Investment in the business – opening new stores, training staff and such like – meant that pre-tax profits slipped 3 per cent to £5 million but the dividend still rose 9 per cent to 2.4p, reflecting Kenyon’s confidence in the future.</p><p>Having opened four new stores during the six-month period, the company is on schedule to open 12 by March 2019, expanding at a similar pace for several years to come. Recently opened sites have been performing above management expectations and there is a strong pipeline of potential new shops.</p><p>Ramsdens is based in Middlesbrough and most of its stores are in the North of England, with a cluster in Wales and Scotland. </p><p>More than 800,000 customers visit the shops each year, attracted by Ramsden’s competitive foreign exchange offering and increasingly attractive shop fronts. Once filled mainly with unclaimed pawn items, the focus on new jewellery is playing out well, expanding Ramsdens’ customer base and driving sales.</p><p>Ramsdens is based in Middlesbrough and most of its stores are in the North of England, with a cluster in Wales and Scotland. More than 800,000 customers visit the shops each year</p><p>The group benefits from weak competition too, as peers have been hit by payday loan problems and other issues. Ramsdens only lends money against pawn items and 85 per cent of customers repay their loans and retrieve their jewellery, often within a few weeks. The average borrowing is £220 but some customers take out considerably more, such as £30,000 as down payment for a new Ferrari.</p><p>On the foreign exchange side, most customers take out money to see them through the first few days of their holiday, generally around £350. </p><p>Holidaymakers are increasingly using cards and online apps for overseas spending but Ramsdens supplies travel cards too and offers international money transfer services for consumers who need to make large purchases abroad.</p><p>Stores are invariably bright and attractive, financial transactions take place in special booths and staff are highly trained, with a focus on friendly, efficient service. </p><p>Kenyon takes a great deal of time ensuring that sites are well located and decently priced. A banker by profession, he is known for his caution, supported by the rest of the board, all of whom are former chartered accountants.</p><p>Brokers expect annual sales to rise at least 12 per cent to £45 million with pre-tax profits flat at £6.5 million, rising to £7 million in 2020. A dividend of 7.1p has been pencilled in for the current year, increasing to 7.8p in 2020.</p><p>The shares of flooring group Victoria were £8.35 in November 2017. On Friday, they closed at £4.60. Yet the business has grown substantially since then.</p><p>The company recently unveiled half-year figures to September, showing a 44 per cent increase in sales to £273 million and an 82 per cent increase in underlying profit to £28 million. Brokers predict further strong results for the full year, with sales of £600 million and profits of more than £66 million.</p><p>The company came a cropper in October, when it tried to raise money in the bond market and admitted that profit margins were growing less rapidly than chairman Geoff Wilding had previously indicated. The shares fell almost 40 per cent in less than a week and the bond issue was pulled.</p><p>Wilding has been trying to reassure the market ever since and the interim figures gave him the chance to show in numbers that the company is financially robust. He also bought a million shares in Victoria, spending almost £5 million to underline his faith in the business. Two other board directors also bought shares, dipping into their own pockets to do so.</p><p>So who is right, Wilding and his colleagues or the market?</p><p>There is little doubt that Victoria is doing a lot of good things. It is gaining market share, driving down costs and moving into fancy tiles to complement the core carpet business. The group has also launched a value range, to broaden its appeal and sales have responded well. Yet the shares continue to be pummelled, as investors fret about economic conditions and Wilding’s ability to continue delivering growth.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • Embattled Patisserie Valerie chairman Luke Johnson now faces his bakery firm Gail's going stale

    Embattled Patisserie Valerie chairman Luke Johnson now faces his bakery firm Gail's going stale

    d out last year, delivering another blow to the embattled entrepreneur as he fights to fix the mess at his Patisserie Valerie chain.</p><p>The parent company of Gail’s Bakery, chaired by Johnson, saw profits tumble to just £142,000 in the year to February 2018, down from £2 million the year before.</p><p>That was despite revenues at Bread Holdings rising from £79 million to £86.4 million, accounts filed at Companies House reveal.</p><p>Luke Johnson, Chairman of Risk Capital Partners Ltd. The British serial entrepreneur is best known for his involvement with Pizza Express.</p><p>As well as Gail’s, Johnson’s umbrella company also includes the Bread Factory which supplies Waitrose and Ocado.</p><p>London-based Bread Holdings cited competition in both the retail bakery and wholesale markets for its fall in profits.</p><p>Risk Capital Partners, Johnson’s private equity firm, backed a management buyout of Bread Holdings in 2011 and owns around half of the firm. </p><p>He had been eyeing a sale of the company, but the process has been put on hold until after Brexit. </p><p>Earlier this year, it was rumoured scandal-hit Patisserie Holdings – the parent of cake and cafe chain Patisserie Valerie – considered buying Bread Holdings.</p><p>A tough year: The cafe and restaurant sector has faced a tough year, with Prezzo, Byron Hamburgers, Jamie’s Italian, and Carluccio’s all closing restaurants</p><p>Gail’s has 47 bakeries, mainly in London, but it is now expanding further afield. It grew 25 per cent last year, while the Bread Factory grew by just 2 per cent.</p><p>Last week, AIM-listed Patisserie Holdings hired Nick Perrin as interim chief financial officer. He succeeds Chris Marsh, who has quit over the discovery of a £40 million black hole that is being investigated by the Serious Fraud Office. Perrin joins new chief executive Steve Francis.</p><p>The cafe and restaurant sector has faced a tough year, with Prezzo, Byron Hamburgers, Jamie’s Italian, and Carluccio’s all closing restaurants.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • ME & MY MONEY: The worst part of crossing the Amazon jungle? I came out of it £54,000 in debt 

    ME & MY MONEY: The worst part of crossing the Amazon jungle? I came out of it £54,000 in debt 

    l. It taught me to be thrifty and save, because if you know that you have got reserves in the bank, you can relax,' he says</p><p>My parents were not good with money. They were hard-working, middle-class solicitors who adopted me when I was eight weeks old. They paid for me to have an expensive private education – I went to prep school and boarding school – but they were always in the red and money was tight. </p><p>Sometimes, I remember that Dad would get stressed about it all. It taught me to be thrifty and save, because if you know that you have got reserves in the bank, you can relax.</p><p>When I was eight, I worked for a local farmer at weekends, hauling hay bales and opening gates. He would give me 50p for a morning’s work and I would spend it on a 99 ice cream with a flake.</p><p>In between finishing university and joining the Army, I worked in a metalwork factory for £3 an hour while trying to pay off a student loan. I did not have much money left at the end of each month and it was mind-numbingly boring. </p><p>I thought I would prefer the Army – outdoors, rolling around in the mud and doing physical stuff. But being told what to do was not my cup of tea.</p><p>Yes, doing motivational talks. Since becoming the first person to walk the length of the Amazon river, I can charge upwards of £5,000. I have even been paid £14,000 for a half-hour talk. It is the sort of money that makes you get up in the morning and pinch yourself. </p><p>But to put that in context, when I came out of the Amazon I was £54,000 in debt.</p><p>The expedition took two-and-a- half years. I slept in hammocks, washed in rivers and fished piranhas for food. But I had to pay an expert guide to travel with me and that cost a lot. There was also insurance, satellite communications, a website and a public relations campaign to pay for. I received donations but the expedition cost £108,000 and midway through my sponsor pulled out.</p><p>Success: Now a veteran TV star, Ed  earns a six-figure salary from his work as a TV presenter and explorer on the Discovery Channel, for which he's filmed seven series</p><p>Yes. I did not want to stop the expedition because we had run out of money.</p><p>One day, after I had been trudging through the swamps getting bitten by mosquitoes, I received an email from a guy in Hong Kong whom I had never met. He said he was donating £5,000 and even apologised for not having given earlier. He had been unemployed, he said.</p><p>I remember reading his email and crying – sobbing in the middle of the jungle. That money enabled us to keep walking for another two months and buy return flights and sort out costs I had been stressed about.</p><p>This one. I have just finished filming my seventh series for the Discovery Channel and now earn a six-figure sum.</p><p>It was a £45,000 bespoke Antarctic pulk – a sledge you drag behind you made from carbon kevlar. It was for a world-first expedition to cross the Antarctic alone on foot that never came off.</p><p>I poured my own money into designing it but no one agreed to sponsor the expedition so I just had to suck up the loss.</p><p>Moving out of London just as house prices started to dip in 2016. I sold for £85,000 less than I had paid 18 months previously.</p><p>'The expedition took two-and-a- half years. I slept in hammocks, washed in rivers and fished piranhas for food. But I had to pay an expert guide to travel with me and that cost a lot,' he says</p><p>No. I am not a fan of pensions and I do not have any spare cash to invest in the stock market.</p><p>Yes. Home is a four-bedroom Grade II-listed grange in Leicestershire. It was built in 1693 and has its own priest hole and an attic that used to be the servants’ quarters.</p><p>Not at the moment due to the cost of designing that Antarctic pulk. I have not quite recovered from that, but I am chipping away at my debts.</p><p>Reading a magazine in the bath with a glass of Guinness. I am away so often for the Discovery Channel, sleeping on a mountain or in a jungle, that when I come home I like to relax.</p><p>Given I am an ex-military man, the issue that troubles me is homelessness. A large number are ex-military because people sometimes fall apart when they leave the Forces.</p><p>I would invest in better resettlement programmes that hold people’s hands when they come out of the army until they are able to look after themselves.</p><p>Not to have to worry about my income when I am too old and knackered to be on the television.</p><p>Thousands of UK holidaymakers will be owed compensation of up to £530 this Christmas and New Year as a result of flight delays and cancellations.</p><p>But there is widespread uncertainty about entitlement to compensation.</p><p>This means many travellers do not claim when they could and should. Such confusion over passenger rights will not be helped by the current court battle between budget airline Ryanair and aviation watchdog the Civil Aviation Authority, which centres on claims made under EU Regulation 261. The Irish airline argues it does not owe compensation to passengers affected by strike action staged by employees earlier this year. Ryanair refunded those passengers whose flights were cancelled, but has steadfastly refused to pay customers who experienced delays and officially complained.</p><p>It says the strike action amounted to ‘extraordinary circumstances’ and it is therefore not liable. The authority disagrees and is aiming to enforce its position in court. The rules generally dictate that passengers are owed compensation if their flights land at their destination more than three hours late.</p><p>This applies when the airline is at fault – but not as a result of ‘extraordinary circumstances’ such as extreme weather.</p><p>A spokesman for the authority says: ‘Passengers who think they are due compensation because of a delay they have suffered should appeal directly to their airline. If an airline rejects a claim, passengers can refer their case to an independent dispute resolution body.’</p><p>The sums owed depend on the length of flight: €250 (£222) for short-haul; €400 (£354) for medium-haul; and €600 (£530) for long-haul.</p><p>Delays of more than five hours mean a customer can abandon plans to travel and request a full refund for the flight’s cost. If an airline cancels a flight, it has to provide customers with an alternative option, even if it is a flight with another carrier – known as re-routing. Details of how to make a flight delay claim can be obtained either from an airline or from the Civil Aviation Authority website at caa.co.uk.</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • THE READERS' CHAMPION: Beware the energy provider that's very economical with its refunds 

    THE READERS' CHAMPION: Beware the energy provider that's very economical with its refunds 

    d circulating misinformation, we would like to provide assurance that we at Economy Energy have no intention of closing our doors. We will pay our outstanding ROCs obligation in full.’</p><p>The situation at Economy Energy is worrying. As complaints have mounted – many from customers who have overpaid and want refunds – the Coventry-based utility company has even issued the following statement: ‘In response to the recent speculation and circulating misinformation, we would like to provide assurance that we at Economy Energy have no intention of closing our doors. We will pay our outstanding ROCs obligation in full and business will continue as usual for our customers.’</p><p>ROCs are industry jargon for renewables obligation certificates – a ‘green tax’ to be paid to the industry regulator Ofgem. Last weekend, The Mail on Sunday revealed that Economy Energy owes Ofgem £15.5 million.</p><p>The company’s latest published accounts show that in the year to March 2017, its profits were only a fraction over £2 million. Normally it should have filed its 2018 accounts by now, but directors have asked Companies House for a six-month extension.</p><p>There is a saying in the accountancy world that bad figures take longer to add up than good ones – and I would not disagree with that for a minute.</p><p>But where does this leave you and your missing £577? I asked Economy Energy and an official confirmed you had been chasing your refund since last April.</p><p>He explained: ‘At the time that Mr M requested his final refund, we were in the process of changing our internal procedure around authorising and releasing funds.</p><p>‘This was being done to make the process more timely and efficient. Unfortunately, due to this, Mr M’s refund was raised by a colleague of mine incorrectly which did delay it being released. It then needed to be chased by Mr M to be rectified.’ So again – where does this leave the matter of your missing £577?</p><p>'There is a saying in the accountancy world that bad figures take longer to add up than good ones – and I would not disagree with that for a minute,'</p><p>I was assured by the same official: ‘I do accept that this has now been ongoing for too long and the service Mr M has received is far from the level we aim towards. I have now chased Mr M’s refund to ensure this is received into his bank account this week.’</p><p>Sadly, that conversation was on November 19 – and still you have not received a penny of your missing money.</p><p>To make matters worse Economy Energy will now not speak to me.</p><p>I wish I could assure you that I know the company is sound, but it owes millions to Ofgem and its bank, HSBC, has a charge over all the company’s assets, giving it first bite at anything left if the business collapses.</p><p>If any gas or electricity supplier fails, customers are not cut off. Ofgem organises a switch to a new supplier. But this is no help to you. You have already switched.</p><p>Anyone considering moving to the Coventry company should take warning. Existing customers should keep an eye on their direct debits and not run up a big credit balance.</p><p>'Customer service is a top priority for us and this includes providing maximum clarity around charges,' insist car hire company Avis</p><p>When you contacted Avis and explained that you knew nothing about a windscreen protection charge, the car hire firm apologised and offered you a voucher for €60 towards your next rental. You turned this down as you have no current plans that would require a hire car.</p><p>I asked Avis to comment and a spokesman told me: ‘Customer service is a top priority for us and this includes providing maximum clarity around charges. Wherever possible, overseas rental paperwork is provided in the customer’s preferred language as well as the local language, to avoid any misunderstandings and to provide our customers with complete transparency around their booking.’</p><p>But this says nothing about what actually happened to you. I pressed Avis and it then added that while a separate, unsigned page of the rental agreement is indeed in English, and counter staff at the airport should have advised you to study this before signing the top page in Spanish, it could not be sure that staff followed this procedure. Hence the apology and the offer of a voucher.</p><p>So, let me add a few words of my own for Avis: Es legal, pero no es justicia. It’s legal, but it’s not justice.</p><p>Business Secretary Greg Clark has taken legal action to shut down a company exposed by The Mail on Sunday for ripping off firms that thought they were sponsoring an anti-drugs charity.</p><p>DATA Northern Limited, based in Stockport, cold- called small businesses giving the impression they were a charity connected to the police.</p><p>In 2013 I reported that this company was a commercial enterprise, not a charity, and that it was closely linked to a similar profit-making venture called TIB (North) Limited that asked businesses to pay for booklets warning teenagers against sexually transmitted infections.</p><p>In 2017, I warned again that DATA Northern was not a charity. This was after a reader who was asked to pay ‘one ninety-nine’ for drug awareness booklets to be sent to a local school found himself billed for £199 for just 30 cheap booklets.</p><p>TIB (North) Limited was closed down by the High Court in 2014. Now DATA Northern has been placed in provisional liquidation following an investigation by the Insolvency Service. The Official Receiver has taken control of the company and its assets ahead of a full court hearing in February.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • How you can stream your Christmas TV - for free! 

    How you can stream your Christmas TV - for free! 

    watch online paid-for subscription channels – for free.</p><p>More than a third of households now watch shows over the internet – ‘streaming’ them to their TVs and computers. This provides additional viewing choice to traditional terrestrial television.</p><p>Providers such as Netflix, Amazon and Now TV can charge £8 a month for access to their channels. But in a bid to lure in new customers, these paid-for services are offering trials with up to 30 days of free viewing before charges are introduced. </p><p>Did you know? More than a third of households now watch shows over the internet – ‘streaming’ them to their TVs and computers</p><p>Cancel during this period and it will cost you nothing, although of course you may choose to keep the service and start paying.</p><p>Most new televisions sold are now ‘smart’ – allowing immediate access to online TV. Older sets can also be brought up to date by plugging into their back either an internet-connected set-top box or something called a wi-fi dongle – a mini version of a streaming player – costing £30.</p><p>Netflix gives access to hundreds of movies as well as popular shows such as House Of Cards and The Crown. Although a subscription costs between £5.99 and £9.99 a month – more if you want to watch in high definition – Netflix offers a free trial month. </p><p>Cancel at any point and you still get the rest of the 30 days offered from the moment you signed up at no cost.</p><p>Amazon Prime has a similar offer. Although it usually costs £7.99 a month you can also try it out with a 30-day trial – again cancelling at any point during this period to avoid having regular payments taken out of your bank account. </p><p>It has lots of movies from which to choose as well as a selection of shows such as Jeremy Clarkson’s The Grand Tour. Another popular video-on-demand option is Sky-owned Now TV. It has a shorter 14-day free trial period before a £7.99 a month charge kicks in. </p><p>It also provides access to movies as well as shows such as The Handmaid’s Tale.</p><p>Warning: Be aware that if you fail to cancel a deal during a trial period with Netflix, Amazon and Now TV, you can end up paying for a monthly subscription through a continuous payment authority rather than a direct debit with the bank</p><p>Film fans might be tempted by a specialist movie-streaming provider such as Mubi. But you will only get seven days of free films before a £7.99-a-month charge is applied. Dani Warner, TV expert at comparison website uSwitch, says: ‘Providers rely on you staying put to make money – which could be £79 if you agree to Amazon Prime for a year.</p><p>‘So, turn off any auto-renew option via your online account settings. While Netflix sends an email reminder three days before its trial ends, others do not.’</p><p>Be aware that if you fail to cancel a deal during a trial period with Netflix, Amazon and Now TV, you can end up paying for a monthly subscription through a continuous payment authority rather than a direct debit with the bank.</p><p>These allow money to be taken directly from your debit or credit card. A provider can take more if it puts up prices.</p><p>For internet streaming, you will need a minimum download speed of two megabits per second – five megabits if you want to watch in sharper high definition.</p><p>For those with poor internet speed, you are better off renting DVDs to watch at home. Film rental provider Cinema Paradiso offers a free 14-day trial period – just enough for the festive season.</p><p>After this you must pay from £5.18 a month to enjoy DVDs being posted to your home.</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • How local councils profit from student debts 

    How local councils profit from student debts 

    investing in student loans sold off on the cheap by the Government, The Mail on Sunday can reveal.</p><p>To raise cash last December, Ministers ordered the Student Loans Company to sell debt estimated to be worth £3.3 billion.</p><p>The Government later drew stinging criticism from MPs for accepting just £1.7 billion from investors.</p><p>Revealed: The Government’s own figures show the loans will return £1.6 billion more to investors than they paid. Ministers have refused to name those in line to profit.</p><p>Hedge funds, private banks and asset managers were among 59 buyers which will be passed any repayments made by students along with the interest accruing on their loans.</p><p>Official figures show the investors are in line to pocket annual returns of about 6.5 per cent a year with some reaping as much as 13 per cent.</p><p>The Government’s own figures show the loans will return £1.6 billion more to investors than they paid. Ministers have refused to name those in line to profit.</p><p>Now an investigation by The Mail on Sunday can reveal that 17 per cent of the loans have ended up in the hands of powerful investment companies.</p><p>These include Fidelity, Prudential, Invesco, UBS and Wells Fargo banks and asset manager Amundi, which is owned by French bank Credit Agricole.</p><p>Furthermore, analysis of Bloomberg data shows a number of councils – Hounslow and Greenwich in London along with Dorset, Highland and Scottish Borders – invest in funds which receive income from student loans.</p><p>Some of Hounslow’s pension fund, for example, is invested in the Fidelity Investment Multi Asset Income Fund, which holds student debt.</p><p>Scottish Borders invests part of its pension fund in the M&amp;G Alpha Opportunities Fund, which is owned by Prudential and holds £340,000 of the loans.</p><p>The UK’s student loan system has long drawn criticism from campaigners with most graduates in England leaving university owing tens of thousands of pounds.</p><p>Interest rates on loans currently being issued to students to cover fees of up to £9,250 a year have risen to 6.3 per cent. The Government has said it intends to privatise all of the loans which were issued to students before 2012 and it is weighing up whether to sell off more.</p><p>Lucrative: Official figures show the investors are in line to pocket annual returns of about 6.5 per cent a year with some reaping as much as 13 per cent</p><p>A spokesman for the National Union of Students said: ‘The sale of student loans itself has already led to a significant loss of future income for the public purse and students are once again being asked to pick up the bill.</p><p>‘That students may be racking up enormous levels of personal debts to supply profits to private investment firms is troubling enough. If funds are also used to prop up struggling local authorities it would demonstrate how morally bankrupt our current funding model actually is.’</p><p>Angus Hanton, co-founder of the charity Intergenerational Foundation, said: ‘After successive governments stacked the cards against young people with sky high interest rates and harsh loans terms, you now have pension funds smelling high returns – which will go in the main to their older members.’</p><p>The tranche of debt sold off by the Government relates to students who graduated between 2001 and 2005.</p><p>At the time, young people could borrow up to £1,000 a year to cover fees. They began repaying the loans when they started work, handing back 9 per cent of earnings above £18,000 a year. They are currently being charged interest at 1.75 per cent. All repayments are collected by the taxman and passed to the new owners of the loans.</p><p>The Government had been trying to privatise its 2001-2005 student loan book since 2013. After it pressed ahead last year, the influential Public Accounts Committee of MPs blasted the Department for Education and UK Government Investments, which manages state assets, for getting only 48p for every £1 of supposed value in the loan book.</p><p>The committee said the Government had failed to demonstrate ‘how the deal is in the best long-term interests of the taxpayer’ and attacked officials for refusing to name those who would collect the profits.</p><p>In a heated exchange in the House of Commons, civil servant Jonathan Slater argued that ‘you get a better price if you apply the confidentiality rule than if you do not’.</p><p>In response, the committee called on the Government to release the names of investors in any future sales.</p><p>The Mail on Sunday submitted Freedom of Information requests asking for the list of those successful in last year’s auction. But officials refused and cited an exemption where the ‘commercial interests of any person’ may be compromised.</p><p>Councils defended their investments last night, saying the funds ‘maximised’ returns in the interest of their members. </p><p>Dorset County Council said it was a priority to ‘maximise the value of investments’. Highland Council said investment decisions are made in line with principles which govern where it can invest.</p><p>Greenwich Borough Council said a panel was tasked with finding the best way to pay pensions to beneficiaries. Scottish Borders Council said its holdings were part of a ‘balanced portfolio’. </p><p>Hounslow Borough Council did not respond to requests for comment.</p><p>Profits at Luke Johnson’s artisan bakery were nearly wiped out last year, delivering another blow to the embattled entrepreneur as he fights to fix the mess at his Patisserie Valerie chain.</p><p>The parent company of Gail’s Bakery, chaired by Johnson, saw profits tumble to just £142,000 in the year to February 2018, down from £2 million the year before.</p><p>That was despite revenues at Bread Holdings rising from £79 million to £86.4 million, accounts filed at Companies House reveal.</p><p>Luke Johnson, Chairman of Risk Capital Partners Ltd. The British serial entrepreneur is best known for his involvement with Pizza Express.</p><p>As well as Gail’s, Johnson’s umbrella company also includes the Bread Factory which supplies Waitrose and Ocado.</p><p>London-based Bread Holdings cited competition in both the retail bakery and wholesale markets for its fall in profits.</p><p>Risk Capital Partners, Johnson’s private equity firm, backed a management buyout of Bread Holdings in 2011 and owns around half of the firm. He had been eyeing a sale of the company, but the process has been put on hold until after Brexit. Earlier this year, it was rumoured scandal-hit Patisserie Holdings – the parent of cake and cafe chain Patisserie Valerie – considered buying Bread Holdings.</p><p>Gail’s has 47 bakeries, mainly in London, but it is now expanding further afield. It grew 25 per cent last year, while the Bread Factory grew by just 2 per cent.</p><p>Last week, AIM-listed Patisserie Holdings hired Nick Perrin as interim chief financial officer. He succeeds Chris Marsh, who has quit over the discovery of a £40 million black hole that is being investigated by the Serious Fraud Office. Perrin joins new chief executive Steve Francis.</p><p>The cafe and restaurant sector has faced a tough year, with Prezzo, Byron Hamburgers, Jamie’s Italian, and Carluccio’s all closing restaurants.</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • CASH IN THE ATTIC: Are there forgotten treasures gathering dust in your home?

    CASH IN THE ATTIC: Are there forgotten treasures gathering dust in your home?

    recently sold for $855,000 – £670,000 – at auction.</p><p>The three small fragments, sold together, were no more than two inches long and had been bought by the seller 25 years earlier for $442,500.</p><p>Rock collectors are occasionally lucky enough to find bits of the Moon that arrived on Earth as a result of outer space collisions, but you are more likely to discover a bit of meteorite.</p><p>A 2.5-gram finger nail-sized piece of the Barwell meteorite that fell in a Leicestershire village on Christmas Eve in 1965 now changes hands for £200.</p><p>That's astronomical! Moon rock picked up by a Russian space probe in 1970 was recently sold for $855,000 – £670,000 – at auction</p><p>A half-inch fragment of the 25kg Wold Cottage meteorite that alarmed people in East Yorkshire on December 13, 1795, can sell for £250. Such pieces of rock have increased in value because of their auspicious history.</p><p>If you find an unusual rock and wonder if it may be of value – a piece of meteorite can look like slag metal – contact the Natural History Museum.</p><p>- Get a £5 credit on your American Express credit card bill when you spend £10 or more in store at participating local shops until December 16. Register your card and find shops at amexshopsmall.co.uk.</p><p>- Claim a £50 Amazon e-voucher for free when you switch insurance, energy, TV and broadband or mobile deals via home management website Hoppy. When switching visit hoppy.co.uk to log-in or register and use the promo code AMAZON50.</p><p>Ker-ching! If you find an unusual rock and wonder if it may be of value – a piece of meteorite can look like slag metal – contact the Natural History Museum.</p><p>- Spend £15 on ‘3 for 2’ gifts at Boots via shopping website TopCashback and the money-saving website will cover the cost. Applies to new members. Visit topcashback.co.uk/boots-dec18-tcb.</p><p>- Cut food bills when you dine out with Saga’s membership programme. It has added ‘dining possibilities’ to its benefits, which includes discounts at restaurant chains nationwide, including 25 per cent off at Café Rouge and 30 per cent off at Beefeater. </p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018
  • JEFF PRESTRIDGE: How to stop your little darling blowing every penny when they land their first job

    JEFF PRESTRIDGE: How to stop your little darling blowing every penny when they land their first job

    sity is fraught with anxiety and worries – often as much for parents as for young adults.</p><p>Will the newly employed enjoy their job or come back saying it is not for them? </p><p>It is an issue I am grappling with at the moment as my youngest starts a short-term contract with a film and memorabilia company. Will it be the making of him – after all, he loves films? Or will he decide it’s not for him, resulting in a change in career path and more worry for myself and his mother Susan?</p><p>Costly mistakes? Although many young adults adapt effortlessly to full-time work, employment also triggers other issues, mainly of a financial nature</p><p>Although many young adults adapt effortlessly to full-time work, employment also triggers other issues, mainly of a financial nature. </p><p>Work brings a degree of independence and a series of key money decisions to make. Choices that are often made against a backdrop of little knowledge of money – and a financial services industry that seems intent on making the simple complicated.</p><p>Should they join the company pension scheme as instructed or would it be wiser to opt out while money is tight? How do they arrange finances so they do not slip into debt? Should they try to save?</p><p>Charity MyBnk has done a lot of groundbreaking work helping young people get to grips with money issues. Fiona Montgomery, educational manager, says: ‘For a young person, embarking on a career is exciting, but it can also be overwhelming and stressful. They are faced with paying taxes, maybe living independently and, of course, enjoying the relative freedom of being a young adult earning money. This time is one where good or bad money habits are formed.’</p><p>So what are the key financial issues we should be encouraging our children to get to grips with as they embark on their career?</p><p>While a monthly salary may bring sudden financial independence, it is vital you urge your grown-up children to budget – and not blow every penny they earn on their new-found ‘wealth’. Even if they live far away from the family home and you have to deliver your promptings by email or phone.</p><p>Warren Shute is a successful chartered financial planner who has spent his life trying to debunk personal finance. </p><p>He is author of The Money Plan (Amazon, £11.79) that aims to help people achieve ‘financial mastery’ irrespective of where they are on their personal finance journey.</p><p>He advises newbies in the workplace to get to grips with their payslips, analysing the deductions (income tax and national insurance) that reduce their gross pay down to a net sum. Budgeting is then the order of the day. ‘As a parent, you do not need to tell them to become a budgeting nerd,’ says Shute. ‘You just have to gently push them to take control of their finances.’</p><p>He advises that new workers try to pay all their main bills by direct debit or standing order from their bank account – for example core expenses such as rent, gas, electricity, council tax and water rates.</p><p>He then recommends that they pay themselves a weekly allowance into a separate ‘spending’ account – for example, an instant access savings account. Regular withdrawals can then be used to buy food and fund social activities.</p><p>While a monthly salary may bring financial independence, it is vital you urge your grown-up children to budget – and not blow every penny they earn on their new-found ‘wealth’</p><p>‘When the weekly allowance has gone, it is time to stop spending,’ says Shute. ‘Using such a system will ensure someone never overspends or misses a payment.’</p><p>He advises: ‘Never spend more than you earn and never borrow money to cover your lifestyle.’</p><p>Modern digital banks such as Monzo provide spending summaries and allow customers to set budgets. A free budget planner is available at website Moneyadviceservice.org.uk</p><p>For those aged 22 or over and earning more than £10,000, an employer will automatically enrol them into the work pension scheme.</p><p>This means that as a minimum, the employee will pay two per cent of their salary into the pension with the Government and employer adding a further contribution equivalent to three per cent. These contributions are based on earnings between £6,032 and £46,350.</p><p>From next April, overall minimum contributions will rise to eight per cent, with employees paying three per cent.</p><p>Plans for the future: For those aged 22 or over and earning more than £10,000, an employer will automatically enrol them into the work pension scheme</p><p>Holly Mackay, founder of money website Boring Money, says: ‘In most cases, opting out of a company pension scheme makes no sense.</p><p>‘As a solid base for long-term savings, it represents a good bet. In effect a worker gets a free pension top-up from their employer and the Government, the benefit of which will just tick away in the background for years.’</p><p>She says that some big employers may also match any extra contributions a worker is prepared to make. An attractive ‘perk’ for those happy to receive a little less net pay.</p><p>Getting a job is often a good time to reassess whether it is time to change bank accounts.</p><p>A few banks such as Nationwide and Santander (123 account) now pay interest on a slice of any credit balance provided a salary comes into the account.</p><p>In addition, some such as Santander pay cashback if certain bills are paid through the account by direct debit. Those who are comfortable doing their banking digitally should look at the likes of Monzo and Starling. Switching bank accounts is now straightforward. Websites such as Moneysupermarket.com and Money.co.uk can help find suitable accounts.</p><p>Tip: Getting a job is often a good time to reassess whether it is time to change bank accounts</p><p>Those dependent upon a car to drive to work can keep a lid on insurance costs by accepting a higher excess – a slice of any claim that they must pay – or opting for a telematics-based policy where premiums are dependent upon how well a motorist drives. Even a job title can influence premiums – cover for an editor is invariably cheaper than for a journalist as it is for a personal assistant rather than a secretary. </p><p>Also, do not forget that some attractive travel discounts are still available after university – such as the £30 16-to-25 railcard that provides a 30 per cent discount on train fares.</p><p>For most graduates, debt is an inevitable consequence of spending three years at university.</p><p>At some stage repayments on any outstanding student loan will have to be made although this will happen automatically with deductions made from gross pay.</p><p>Repayments are equivalent to nine per cent of any salary above a threshold of £25,000. So earnings of £27,000 will result in an annual payment of £180 – a monthly £15 reduction in salary. The earliest any payments can be taken are from the start of the next tax year after graduation. So someone who graduated this year could start making repayments from April 6 next year.</p><p>Good advice: If credit card debt has been accumulated, paying this down should be a priority</p><p>If credit card debt has been accumulated, paying this down should be a priority. Financial planner Warren Shute says: ‘Repaying debt is an essential first step – before saving towards a house deposit or investing for the future.’</p><p>Shute is a fan of the ‘snowball debt repayment method’ for young workers with multiple debts. ‘As a parent, encourage them to repay the smallest debt first before moving on towards the next,’ he says. ‘This will keep them motivated to repay all their debts as they see loans cleared and real progress made.’</p><p>While saving – on top of pension contributions – may not be a priority for someone starting work, it can reap long-term rewards. A tax-efficient Individual Savings Account, invested in shares or investment funds, is an ideal starting place. They can be set up online and are flexible to use.</p><p>Shute encourages young workers to adopt the ‘100 minus age rule’. This means that someone who is aged 25 should have 75 per cent of their Isa in equities – the rest in fixed interest bonds. He is also a big advocate of the use of low-cost funds that track the performance of a stock market. Big brands include BlackRock and Vanguard.</p><p>Mackay is a fan of the ‘pay yourself first’ rule. This involves diverting 20 per cent of any pay rise in the future into an Isa. She adds: ‘By doing this a worker does not miss what they never had.’</p><p>For new workers with one eye on a home, a tax-friendly Lifetime Isa is also an option. This allows anyone between the ages of 18 and 40 to save a maximum £4,000 a tax year – with the Government providing a ‘free’ 25 per cent top-up. Providers include building societies Newcastle, Nottingham and Skipton.</p><p>A Help to Buy Isa is an alternative – details at helptobuy.gov.uk.</p><p> The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. </p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p>Your comment will be posted to MailOnline as usual.</p><p>Do you want to automatically post your MailOnline comments to your Facebook Timeline?</p><p> We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.</p><p>Part of the Daily Mail, The Mail on Sunday &amp; Metro Media Group</p>

    1 December 09, 2018

Comments

Earn free bitcoin