Money week

0 Comments | Sunday Herald, The, Aug 8, 2004

Bad news of the week Careless driving could be costing the UK economy almost (pounds) 17 billion a year. According to a report by Privilege Insurance, road traffic accidents caused by careless driving cost the NHS (pounds) 500 million in 2003, including ambulance and medical expenses. Police charges added another (pounds) 27m to the total. Damage to vehicles and property came in at (pounds) 5.2bn for 2003, with those injured in careless driving accidents losing (pounds) 2.4bn in immediate and future earnings.

Quote of the week "This is not a call for more regulation. It is a call for chief executives, shareholders and senior managers of those organisations to put a proportion of their profits back into the community to help those who might be affected by financial hardship. People who find themselves in debt need to be able to access independent financial advice as soon as they are in difficulty." Liberal Democrat leader Charles Kennedy, calling on UK banks to use some of their record profits to fund debt counselling services. With UK banks reporting total profits of (pounds) 27.2 billion in 2003, Kennedy argued that even a 0.01% contribution would generate millions for such services.

Savings deal of the week Bristol & West is including two minimum- return products, also offering a capital guarantee, in its Guaranteed Equity Bond range. Leeds & Holbeck increased its online saver rate to 5.3%. Abbey, Virgin Money, Tesco and AA all raised their savings rates in line with the bank rate.

Council tax rise The Scottish Executive announced that, from April 2005, local authorities can raise the council tax rate on second homes and long-term empty properties from 50% to 90%. The move, which could raise (pounds) 25 million, is an attempt to improve the supply of affordable housing.

Pensions update Public sector pensions funds in the UK could require an additional (pounds) 50 billion over the next three decades to cover the cost of members of the schemes living significantly longer than their predecessors. According to actuaries Lane, Clark & Peacock, current estimates of future life expectancy are possibly two years out, and tax levels may have to be increased in order meet the pensions shortfall. They also warned that, while the pensions deficit of FTSE-100 companies had fallen from (pounds) 55bn to (pounds) 42bn, contributions may have to be increased by (pounds) 20bn to cope with people living longer.

This week ...

The Council of Mortgage Lenders reports the buy-to-let mortgage lending statistics for the first half of 2004 on Wednesday, the same day that the latest UK unemployment figures and the Bank of England's inflation report are released.