Wednesday, March 18, 2020

Savings warning: 'First step' to reduce 'financial shock' risk during coronavirus pandemic

The coronavirus outbreak has seen 2,626 cases being confirmed in the UK, as of 9am on March 18, Public Health England has said. In addition to the health aspects of the outbreak, the pandemic is affecting – or could affect – many when it comes to personal finances.

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For some, unfortunately, the pandemic could see some struggle to make ends meet.

Worryingly, research from Aldermore Bank, shared exclusively with Express.co.uk, has found that almost half of 55 to 64 year olds (43 percent) have no savings set aside for major life events – such as bereavement, illness, legal trouble, or periods of unemployment.

Earlier this week, Sara Willcocks, Head of Communications at Turn2us, spoke to Express.co.uk about options people may have if they’re struggling with the economic impact.

“There is financial support available to people struggling with money due to COVID-19,” Ms Willcocks said.

“People can claim benefits like Universal Credit or ESA from the government, or alternatively they could get Statutory Sick Pay from their employer.

“There are also millions of pounds available in grants from charities which you don’t have to pay back.

“Charitable funds exist to support people in the face of life changing events like this.

“We urge anyone who is affected financially by the coronavirus outbreak to visit the Turn2us website and find out what benefits they are entitled to and what grants they are eligible for.”

Elsewhere this week, Gordon Andrews, Quilter financial planning expert, has commented on the importance of cash savings.

Mr Andrews said: “Unfortunately, the impact of this virus is likely to have a lasting financial impact on households across the UK.

“It seems inevitable that some employers will come under pressure and job security may become a concern for people. And there will be worries for people about the financial impact if they or a family member were to contract the virus and suffer complications.”

So, is there a way in which people can prepare for an unprecedented financial setback?

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“Preparing for a financial shock like this is extremely difficult, particularly when combined with the obvious concerns about our own health and the consequences of this pandemic on wider society,” the financial planning expert explained.

“However, there are steps that can be taken and those that have some defences in place will at least have reassurance that from a financial perspective they’re braced for what could be a bumpy ride ahead.

“It is absolutely crucial to have a cash savings buffer in place.

“Without some cash readily available, families can be extremely vulnerable to a financial shock and will struggle severely if they were to lose their job, or confront an unexpected bill.

“Research from the UK’s national Money & Pensions Service shows that 71 percent of UK adults get an unexpected bill each year, and an estimated 11.5 million people have less than £100 in cash savings to fall back on.”

Mr Andrews went on to suggest actions which a person may be able to take in order to cope during this time.

“The first step is to calculate your monthly outgoings on essential items like bills, mortgage payments and food,” he said.

“Use those calculations to work out your costs for three to four months and try to keep that much in easily accessible cash savings at all times.

“If you don’t already have those savings in place, try to build on any cash reserves you do have.

“This can provide a crucial buffer against a financial shock, preventing the need to turn to short term borrowing, such as credit cards, to meet day to day expenses.”

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Tuesday, March 17, 2020

State pension: What are different deferral rates for basic and new state pension?

State pension currently falls into two categories. There is the new state pension and the basic state pension. What kind a person falls into depends on when they reached state pension age. The main difference between the two is how much income they pay out.

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Basic state pension can be claimed if the person is a man born before 6 April, 1951 or a woman born before 6 April, 1953.

Under this state pension, the most a person can receive is £129.20 per week which requires 30 years of national insurance contributions.

The new state pension can be claimed by a man born on or after 6 April, 1951 or by women born on or after 6 April, 1953.

The payments available from the new state pension are higher but they require more national insurance contributions. The full amount that can be received here is £168.60 per week but this will require a minimum of 35 years of national insurance contributions.

While people receiving basic state pension will likely get less than people on the new system, they will have beneficial elements in other areas.

Some people on the basic state pension may be in the process of delaying their payments, which will increase their amounts.

If a person qualifies for full basic state pension and they defer their payments for 52 weeks they’ll get an extra £13.44 a week.

This is a boost of 10.4 percent which is nearly double the rate offered under the new state pension.

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The new state pension can also have payments deferred and raised but they will be at a lower rate.

Under the new system, state pension will increase by just under 5.8 percent for every 52 weeks of deferment.

With both systems, the person involved will usually not need to take any action to differ their payments.

State pension is not paid automatically, it has to be claimed.

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People will usually receive a letter from the state around two months before they reach state pension age.

This letter will detail what the persons options are and what they’ll need to do next.

If a person wishes to defer they will not have to do anything. State pension payments will automatically be deferred until they are claimed.

It should be noted that any extra payments from deferment could induce a tax charge.

Once a person is ready to receive income they will need to take action to claim a deferred pension.

If the person has deferred for less than a year, they will be able to claim their state pension online.

However, if a person has deferred for more than a year they will need to contact the pension service to claim.

It is possible in certain circumstances to inherit a state pension from a partner, however this can only be done if the person involved has reached state pension age.

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Sunday, March 15, 2020

RPT-Wall St Week Ahead-Investors hope Fed can help calm markets as big rate cut expected

NEW YORK, March 13 (Reuters) – Interest rate cuts won’t cure the coronavirus but investors are still hoping the Federal Reserve can take some actions to help soothe the roiled stock market.

Only days after a rare emergency rate cut, the Fed is expected at its regularly scheduled meeting next Wednesday to slash its target rate another 75 to 100 basis points to near zero, according to the CME FedWatch website.

The U.S. central bank also may announce measures to ensure sufficient liquidity and lending or to purchase assets by restarting the quantitative easing that the Fed employed during the financial crisis.

A move like that could offer some comfort to investors after Thursday’s bruising decline, in which the Dow Jones Industrial Average notched its biggest one-day drop since 1987.

“If the market feels the Fed is responding appropriately and is helping investors and consumers, and feel like somebody is in charge, maybe that can help settle things down,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

Indeed, stocks briefly pared losses on Thursday after the New York Fed said on it will introduce $1.5 trillion in new repo operations this week and start purchasing a range of maturities as part of its monthly Treasury purchases. But the rebound was short lived and the S&P 500 ended down 9.5% on the day.

Expectations for a more significant rate cut have increased this week as the market decline deepened over fears about the economic fallout of the coronavirus crisis. As of Thursday, the S&P 500 had fallen more than 26% from its Feb. 19 record closing high, including a drop of more than 16% so far for the week.

Traders currently expect the Fed to cut its target rate from its current range of 1-1.25% to as low as 0-0.25%. Some market watchers wonder if the central bank could even eventually go into negative territory.

“Central banks must bolster confidence that they are willing to test the limits of where they view the effective bound on rates,” JPMorgan Chase economists said in a note this week.

Markets will respond “poorly” should the Fed fail to cut rates, said Nela Richardson, investment strategist at Edward Jones, but added that “the risk of aggressive action now is that you sacrifice valuable ammunition in the short term to boost short-term market sentiment.”

“You might need the ammunition further down the road if unemployment increases or deflation starts,” Richardson said.

Of course, rate cuts may not help equities. The S&P 500 ended up falling 2.8% on March 3 despite the Fed’s surprise half-percentage point cut, which boosted sentiment but also led investors to speculate on what other actions the Fed could take.

Boston Fed President Eric Rosengren said last week that the central bank needed “to think broadly about what tools we would use” if the virus continues to weigh, and that it “could be important” to let the Fed buy assets other than U.S. Treasury and mortgage-backed securities.

Such asset purchases aimed at stimulating the economy, known as quantitative easing (QE), were a key tool used by the Fed to emerge from the 2007-2009 financial crisis.

“Should the Fed gauge that reducing rates is not providing for easier financial conditions, we expect it to quickly turn to quantitative easing,” Morgan Stanley economists said in a note.

Whatever actions the Fed takes, some investors said they are ultimately secondary to the responses of the world’s governments.

In the United States, partisan gridlock threatens to derail the government’s ability to contain the economic damage. Democrats in the House of Representatives have unveiled a plan that would expand programs including food assistance and unemployment aid. The Republican-led Senate will delay its recess to work next week on its own legislation.

“While we think central bank policy is important, we think the fiscal is much more important at this stage,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management. (Reporting by Lewis Krauskopf; Editing Ira Iosebashvili and Sonya Hepinstall)

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Nadine Dorries' fears for elderly mother after both diagnosed with coronavirus

Health Minister Nadine Dorries has spoken of her fears for her 84-year-old mother after both were diagnosed with coronavirus.

The Tory minister said confirmation she had contracted Covid-19 was like "iced water trickling down my spine".

Ms Dorries is self-isolating at home after testing positive for Covid-19 earlier this week and wrote in the Sunday Times of the news being a "game-changer" as she had not been abroad or come into contact with anyone who had.

The MP for Mid Bedfordshire also wrote of her fears for her 84-year-old mother who "is not in the best of health".

She wrote in the paper of her diagnosis: "I stopped listening for a second as the thought flew through my mind: my mum is going to get it and it's my fault. I had brought Covid-19 home from Westminster and had unwittingly passed it on to her.


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"It felt as though the clocks had stopped. I knew that everything was about to change and I wanted to hold time where it stood."

She said her symptoms included a persistent cough, achy muscles and intermittent night sweats.

Ms Dorries, best known by many for her stint on I'm A Celebrity… Get Me Out of Here, advised people to think of everything as being contaminated.

She said: "Every lift button, shopping-trolley handle, wait-button on a zebra crossing – and every cup in a cafe. Wash your hands for 20 seconds. Carry hand-sanitiser and use it over and over. Resist the urge to hug or shake hands with anyone."

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Wesfarmers to pay coronavirus leave for casual staff who miss shifts

Thousands of casual workers at Officeworks, Kmart and Target will be paid up to two weeks' wages for shifts missed if they are required to self-isolate or care for others due to the coronavirus, retail conglomerate Wesfarmers has said.

One day after supermarket giant Woolworths announced its 55,000 casual employees they would not be disadvantaged by absences caused by the fast-spreading outbreak, Wesfarmers notified its staff of similar updates to its leave arrangements on Friday.

Wesfarmers will pay casual retail staff who miss shifts due to coronavirus.Credit:

"If casual team members are required to be quarantined, or care for loved ones due to COVID-19, they will be paid for a maximum of up to 14 days based on their agreed and rostered hours for that period," an email to Officeworks staff said.

"This will be paid at the same rate as the rostered shifts, inclusive of penalty rates and loadings."

Wesfarmers, which owns some of Australia's largest biggest employers, said it was letting team members known that the group was committed to supporting both permanent and casual staff.

"They will not be disadvantaged because of their employment status if they are unable to work because of public health requirements related to coronavirus," Wesfarmers managing director Rob Scott said on Sunday.

Full-time and part-time workers would be eligible for a one-off basis to access to additional paid leave if they have exhausted or insufficient accrued personal leave.

Another Wesfarmers-owned retailer, Bunnings, said its casual team members had access to personal and carers' leave through their ordinary entitlements, which they would be able to access in the event of coronavirus-related absences.

Managing director Mike Schneider said Bunnings, unlike many other Australian retailers, employed the "significant majority" of its team members on a permanent basis.

"However, Bunnings' casual team members in Australian warehouses, smaller format stores and trade centres also accrue personal/carer's leave and will have access to this as needed," he said.

On Sunday, Prime Minister Scott Morrison hardened the government's coronavirus containment measures, announcing all international arrivals into Australia will have to self-isolate for 14 days from Monday.

Trade union officials on Sunday welcomed Wesfarmers' move, saying the group joined a list of other major employers including the Victorian government banks and tertiary institutions who had opted to "support staff in this manner".

The Australian Council of Trade Unions said Australia had one of the most casualised workforces in the world, and renewed calls for the Morrison government to underwrite two weeks of paid leave for all workers facing an economic impact of coronavirus.

"For many Australians, the COVID-19 pandemic is both a health emergency and a financial one, the ACTU said.

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Saturday, March 14, 2020

State pension age changes: The huge disadvantages WASPI women faced - are you affected?

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The changes are considered controversial, with many campaigning against the way in which they were introduced, and the impact the changes are having on the women born in the 1950s who were affected by the changes to the state pension age.

This includes the campaign group WASPI – which supports the principle of equalisation of the state pension age but does not agree with the way the changes were implemented.

Backto60 are also campaigning on the matter, with this group’s focus being full restitution, damages and compensation.

During an interview with Express.co.uk last year, Joananne Welch, Backto60 campaigns director, said: “50s women have suffered lifelong inequality, like the pension gap, the pay gap, the maternity gap. It’s like, ‘Mind the Gap’.

“You’d have to be a 50s woman to actually understand these gaps.

“Women weren’t even entitled to occupational pensions. It was seriously as bad as that.”

WASPI has also discussed the inequalities women born in the 1950s have faced.

A spokesperson for the campaign group told Express.co.uk: “WASPI women were at the forefront of the fight for equality in the workplace.

“We suffered from unequal pay and a lack of opportunities and battled sexism and discrimination head on.

“WASPI women are proud of the progress that has been made but we still have a long way to go.

“We never had equal pay in the workplace which makes the Government’s mismanagement of changes to the state pension age even more devastating.

“We are a generation of women who relied on getting our state pension at 60 and we were not given enough notice to put in place alternative measures.”

While gender inequality still exists in many forms today, life for 1950s women no doubt looked different to younger generations today.

So, what was their experience like? WASPI explains to Express.co.uk that many women of this generation left school at 16 to get jobs, and there were strong perceptions about a women’s role in the workplace and at home.

On top of that, WASPI explains women born in the 1950s frequently encountered sexism and discrimination in traditionally male dominated roles, resulting in unequal pay and opportunities.

In the past, many women were not allowed to join company private pension schemes, with many WASPI women working part time to balance family responsibilities but not permitted to join private pension schemes or access company beneifts – leaving many dependent on the state pension.

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This is a generation of women who were actively discriminated against in the workplace if they were perceived to be “at risk” of having a baby in the near future, WASPI says, adding that many women of this generation were denied jobs on this basis.

Expanding on this, the campaigners say they’ve heard many many examples of women being asked very personal questions in job interviews.

In the workplace, career progression could differ. One woman has recalled how men doing the same role as her were offered management training, but the opportunity wasn’t ever offered to women.

Traditionally, women have assumed caring responsibilities for elderly parents or dependents too, which affects their ability to have a full working life or private pension contributions.

Shockingly, the gender pay gap and the gender pension gap still exist in the modern day, and research by Chip has found that over a lifetime, men have £5,365 more disposable income to save than women.

Despite a record number of women being in employment (72.4 percent) – the highest since records began – the average annual private pension income for men aged 65 and over is £8,620 while for women it’s £3,920, research by PPI revealed by NOW: Pensions has shown.

This represents a gap of £4,700 or a 55 percent decrease.

Women typically taking on caring responsibilities is something which has been identified as a significant factor in the gender pension gap today.

According to the report, the gender pensions gap is because women are more likely to work part-time in their career while caring for children, or – further down the line – for elderly relatives.

The result can mean both interrupted pension contributions and limited earning opportunities, and consequently women, on average, face a pension pot £100,000 less than the average man’s, the Pensions Policy Institute has found.

Baroness Jeannie Drake, one of the architects of automatic enrolment, said: “Millions of savers miss out on workplace pension contributions when they are caring for children or elderly relatives.

“This is why I lodged an amendment in the Lords to the Pension Schemes Bill just last week, seeking a review by the Secretary of State of how auto-enrolment provisions could address the pension penalty in retirement that relevant carers experience.

“A ‘carer top-up’ for those who are missing out on workplace contributions would make a real contribution towards their pensions.

“This would help approximately three million women, in addition to 300,000 men, to top up their pension savings whilst taking time out of work to be carers.

“I sincerely hope that the Government is receptive to the amendment and recognises that we need to act to help more women save for their own futures and close the gender pensions gap.”

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Buffett’s Dinner Date Clashes With Devotees of Steemit Website

Controversial Chinese cryptocurrency entrepreneur Justin Sun, who paid $4.57 million for acharity dinner with Warren Buffett, is facing a revolt over a niche company he recently purchased.

In the past few weeks, the 29-year-old Sun has been called “a dictator” and worse on Twitter and in more than1,500 comments. A boycott of the blogging company Sun acquired is in full swing, and a number of its employees have resigned. Two of the world’s largest crypto exchanges are distancing themselves from Sun. That has the crypto sphere debating the growing role of exchanges, and whether some types of digital ledgers called blockchains are secure enough.

It all blew up after Sun bought Steemit Inc., one of the world’s most popular blockchain-based blogging sites. Since being launched four years ago, Steemit has held a large stake of Steem Power, a digital coin used in voting on issues such as software upgrades for the underlying blockchain called Steem. According to an informal agreement, Steemit was not to vote with its so-called ninja stake, Steem’s community claims. After Sun acquired Steemit, community-elected leaders in charge of the network temporarily froze the ninja stake via a software update to make sure Sun honors the provision.

In response, Sun embarked on an intervention not seen before in the crypto world. He contacted two of the world’s largest exchanges, Binance and Huobi (whose representatives attended his Buffett meeting in January), and told them that Steem was being attacked by hackers. On March 2, the exchanges, plus Poloniex, which is partly owned by Sun, used their customers’ Steem Power coins to help reverse the software change that froze up the ninja stake.

“I’m mixed on this,” said Ryan Selkis, chief executive officer of crypto researcher Messsari. “On the one hand, it’s unclear to me that the Steem community had the right to strip rights away from another token holder simply because they didn’t like the Tron-Steem transaction. On the other, it looks like Tron exercised the nuclear option” instead of talking with the community, he said.

Following an outcry from Steem Power owners, two of the exchanges quickly reversed their decisions anddistanced themselves from Sun, who they say misrepresented what was happening.

“We thought it was just another hard fork upgrade, and just went along with it,” Changpeng Zhao, CEO of Binance, said in an email. “Later, we found out the community was split behind it, we reversed our operation. We always respect the users.” Huobi soon followed suit.

“Huobi’s goal was not to interfere with the governance of a blockchain,” said Huobi spokesperson Mark Lee. Problem is, Steem Power functions in such a way, it could take months for the users that parked the coins on these exchanges to retrieve their funds.

The possibility of exchanges playing god is making many crypto enthusiasts cringe. Bitcoin took off because it’s not controlled by any central party. But as cryptocurrency users began parking their funds on exchanges, those entities turned into centralized superpowers.

A number of other blockchains including EOS, Aelf, Lisk, Wax, BitShares and Ark are built in a similar way to Steem, allowing someone with a large swath of coins to influence decision making. And they could also potentially be affected by exchanges in a similar way.

Sun continues negotiating with the Steem community.

“My idea here is deescalation and increased communication,” Sun said during a Steem town hall, which about 80 people dialed into on March 6.

Winning the Steem community back may prove tough, however. One key member, Luke Stokes, said in a recent podcast that he isn’t sure he’d want to play ball with Sun.

“We are having serious discussions within the community,” he said. “Do we want to create a brand new chain with a brand new token and then have it listed? As far as the Steam community, it’s never been more united.”

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