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There is just one week left for prospective volunteers to step forward and become one of 15,000 needed to welcome visitors to the 2014 Commonwealth Games in Glasgow. The organisers say that the search for volunteers has had a fantastic response since applications opened on 14th January 2013. However, there is still time to put your name forward by completing the online application form before the final closing date of Thursday 28th February.

No previous experience is necessary for the majority of roles with the emphasis on finding people who are friendly, welcoming and dedicated to making the Games a success. Those suited to more specialist roles can list their skills on the form while there is a wide range of general opportunities in areas such as Transport, Spectator Services and Sport Competition. All applications will be reviewed at the end of the process with around 25,000 successful applicants then invited for informal interviews from April 2013 onwards. Around 1,000 interviews a week will take place at the purpose-built Volunteer Centre until the end of the year.

The contribution of the Games Makers during the London 2012 Olympic and Paralympic Games was widely recognised as a positive and volunteers again have the opportunity to be at the heart of an unforgettable Glasgow 2014 Commonwealth Games. Applicants need to be 16 or older to apply, be eligible to work in the UK and must be available for at least eight days during the Games between 23rd July and 3rd August in 2014 as well as to come to Glasgow for an interview, training and uniform collection ahead of the Games.

According to Valerie Mitchell (left), Head of Games Workforce at Glasgow 2014, “the clock really is ticking now. We have just one week to go until the application process finishes and once it closes that’s it so if people don’t want to miss out on the opportunity to be part of the Games apply now. We have been really inspired by the application process so far and the huge enthusiasm and excitement we have had from people so we want to ensure that everyone who wants to volunteer makes the most of this chance. There is no need to have volunteered before – what matters most is a smiling face, a winning attitude and friendly banter – all qualities which people here have in abundance!”

by Prof. Philip Booth, Editorial Director at the Institute of Economic Affairs

The coalition government – despite the best intentions of Iain Duncan Smith – is stumbling about in no-man’s land in its attempts to reform the benefits system. The introduction of Universal Credit is an important administrative change but it will do nothing to remove the worst features of the benefit system. If we take a family of two adults and three children, that family loses 75 pence in taxes and reduced benefits for every extra pound it earns until income reaches nearly £39,000. Furthermore, the way in which the tax and benefits systems interact strongly penalises marriage.

The government is indulging in further family bashing by its decision to withdraw child benefit from those families with somebody earning more than £50,000. This is direct discrimination against couple families – especially single-earner couple families. It is probably the single most incompetent change to the benefits system since the Second World War.

Instead of tinkering, the government’s political capital should be used to radically reform the benefits system. We need a single means-tested benefit provided to working families on very low incomes – this should not encompass two-thirds of the working population as current means-tested benefits do. We should then abolish child benefit altogether and use the £12bn to create a system of family-based transferable tax allowances – essentially a modernised and extended version of the system that existed until the late 1970s. Now – as then – families with a working adult on average earnings should pay little or no direct tax. This would help end the discrimination against marriage and family formation in the tax and benefits system. Given that only two per cent of families with two adults where one of them is in full-time work and one in part-time work are living in poverty, it is crazy that our tax and benefits system discourage both work and marriage.

<em>Picture: Images_of_Money</em>

Picture: Images_of_Money

The UK’s first Green Investment Bank will be shared between Edinburgh and London. The main headquarters will be in Edinburgh after the city beat off competition from another 31 bids. The news was confirmed by Business Secretary, Vince Cable, who added however that the transaction team would be located in London.

He said that harnessing the strengths of the two financial centres would “support the Green Investment Bank’s ambition to become a world leader. Edinburgh has a thriving green sector and respected expertise in areas such as asset management. London, as the world’s leading financial centre, will ensure that the GIB’s transaction team can hit the ground running. This decision will allow the GIB to operate effectively and achieve its mission of mobilising the additional investment needed to accelerate the UK’s transition to a green economy.”

The news has been welcomed by the Scottish business community. The bank’s objective is to accelerate private sector investment in ‘green’ projects. It’s expected to employ 50-70 full-time staff across the two sites, with the number of staff based in Edinburgh expected to rise from 2015.

The Chief Executive of Scottish Financial Enterprise, Owen Kelly, said it was “tremendous news” for Edinburgh. “The Edinburgh Green Investment Bank Group represented a broad range of interests from public and private sectors and the bid’s success is testament to the strength of this collaborative approach,” he explained.

“The establishment of the Green Investment Bank is a real step forward in the commercialisation of low carbon technologies in the UK and I am delighted that it will be based in Edinburgh.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce, agreed that it was “fantastic news for Edinburgh and for Scotland. The decision to headquarter the Green Investment Bank in Scotland is testament to the city’s continuing reputation for excellence in the fields of finance and energy and is recognition of the central role that Scotland has to play in the development of renewable energy technologies.”

The chairman of Scottish Enterprise, Crawford Gillies, also described it as “fantastic news for Edinburgh and for Scotland. The Green Investment Bank will be an enduring institution supporting the growth of the UK’s renewable energy and low carbon sectors.

“Being headquartered in Edinburgh will enable the bank to draw on the city’s world class financial services expertise as well as Scotland’s renowned capabilities in the development of renewable and low carbon technologies. Not only will this help ensure to ensure the long term success of the Green Investment Bank but it will also further enhance Scotland’s renewable ambitions, making it the world’s leading location for renewable energy.”

In the view of Dr Lesley Sawers, SCDI Chief Executive, “The arrival of the Green Investment Bank is great news for Edinburgh and Scotland’s renewables industry, and the culmination of a long campaign actively supported by SCDI.

“Access to sufficient and unprecedented levels of capital is the most important factor in the installation and development of renewable technologies and the Green Investment Bank must play a key role as soon as possible. The UK Government should consider whether the new Bank’s borrowing powers will be needed sooner than currently projected.

“Maximising the value of Scotland’s renewable assets is a key priority in re-building our economy. The Green Investment Bank will therefore accelerate Scotland’s economic recovery, create jobs and help to deliver a sustainable energy future.”

Jenny Dawe, Edinburgh City Council’s leader, said that “we made a compelling case based on Edinburgh’s financial strength and rapidly developing clean energy hub. As the Business Secretary said, Edinburgh’s strengths will enable the bank to become a world leader in its field, supporting investment in a greener economy.

“This wouldn’t have been possible without the support of the Edinburgh business community, the Scottish Government, other Scottish councils and a range of organisations that have given their backing to the city’s bid. I’m hugely grateful for all the hard work that has gone in to securing the bank for Scotland.”

Friends of the Earth’s economics campaigner, David Powell, said: “Choosing the HQ for the Green Investment Bank has been like arguing about where to put the cherry on a half-baked cake. This is great news for Edinburgh, but George Osborne’s inadequate support means it will start life as a lame duck.

“A flourishing Green Investment Bank is vital to unlock the huge potential of clean British energy and create thousands of new jobs. The Chancellor’s Budget must free the bank from his vice-like grip by allowing it to borrow and lend from the markets from day one.”

However, Scottish Secretary Michael Moore welcomed the news, saying “I am delighted that the Green Investment Bank will be headquartered in Edinburgh. Scotland has enormous green energy potential and its capital is the UK’s second biggest financial centre.”

The bank is being set up with £3bn of public money to help firms finance early-stage renewable energy schemes. The Government explained that the first priorities would be offshore wind power generation, commercial and industrial waste processing and recycling, energy from waste generation and non-domestic energy efficiency.

Bank of England <em>Picture: moppet65535</em>

Bank of England Picture: moppet65535

How many reports does it take to get the message across that the UK private pension system is “not fit for purpose”? Those of us nearing retirement age have started looking at how much we will have to live on and realising that it’s less than we had hoped for – much less. This means continuing to work into our 70s just to live, much less enjoy the never-ending holiday promised by the brochures.

It started at the end of last year with a report from the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA). The report’s author was David Pitt-Watson, chairman of Hermes Focus Asset Management, and he didn’t mince his words. He was the first to state that the sector was “not fit for purpose”, but also “hugely inefficient”, with up to 40 per cent of the money we pay into funds being swallowed by charges.

His report, Building the consensus for a People’s Pension in Britain, drew comparisons between people in the UK and other countries in Europe. It says that if someone from the UK and someone in a similar position in the Netherlands saved the same amount for their pension, the Dutch person would receive 50 per cent more income on retirement.

Pitt-Watson wants to see the whole system reformed, and he proposed a “best practice” low-cost system in which there was a limited number of large suppliers. Savers would put their money into collective schemes, cutting out the need to administer and report individual performance – something that causes your money to earn much less than you expect.

The report suggests the Pension Schemes Act 1993 should be clarified. The law should allow what are known as “collective defined contribution pensions”, similar to those in the Netherlands and Denmark which have the lowest levels of pensioner poverty in Europe. It says that political parties, employers, unions and pension funds should agree to implement a “pensions architecture” that brings the UK in line with those countries.

But Pitt-Watson is not alone. Enter Jason Riddle, co-founder of Save Our Savers. He too believes that the current system is “not fit for purpose”. But he also argues people heading for retirement are “facing a bleak future” and have every right to feel “double crossed”. The stock market crash, low interest rates and rising inflation have had a drastic impact on people’s future income.

Riddle believes that the private sector “should be stronger in voicing opinions on pensions and savings. It is being given a hard time, yet it is essential to a robust economy. Annuity rates have fallen by 45 per cent over the past 16 years, so all a typical pensioner can afford is a fixed income, guaranteeing that living standards will fall. Workers in the private sector feel so helpless.”

Riddle says that this is just one idea intended to spark a wider debate about how to improve the country’s savings rate. He plans to take his case to the Bank of England when the Monetary Policy Committee meets this Thursday, and he has invited anyone who feels aggrieved to join a protest in Threadneedle Street.

“It is now time for action,” Riddle says, “and getting politicians and the finance industry on board and to mobilise savers to protest against not being treated fairly. The private saver may not have the fearful bite of the public sector unions but the consequences of disregarding their needs will have a far more lasting and damaging effect on the economy.”

Last month, a survey from AXA – its Big Money Index” – showed that, for those nearing retirement, confidence in their financial future was low, with 35 per cent saying they don’t have enough money to retire on. To make matters worse, people under the age of 50 are cutting back on savings and borrowing more to fund their lifestyle.

But another survey from Baring Asset Management shows that 39 per cent of British adults have never made a change to the risk profile of their pension plan. The research also revealed that 17 per cent of people are unaware of the level of risk involved with investments. It agreed that more than a third of the population said they didn’t have enough money to save for retirement.

Little in the Pensions Reform Bill currently going through parliament will make any difference, since it focuses on the state system. However, it will at least this easier to understand. As Iain Duncan Smith, the secretary of state for work and pensions, said earlier this year: “We have to fundamentally simplify the system. And we have to make it crystal clear to young savers that it pays to save.”

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A still from Juliet Chappell's HSBC bursary video

A still from Juliet Chappell's HSBC bursary video

The university quarter in the centre of Edinburgh may be bustling with tourists and Festival-goers, but they will soon be heading home and the start of the academic year is just around the corner.

Lecturers are starting to return from their summer break, often spent in part on research on some treasured project. But more importantly, the students, especially south of the border, will know this week if they have secured at place at their preferred institution with the publication of A-level results.

Once the euphoria of that passes – all too quickly – there comes the reality of knowing how their families are going to pay for this higher education. Two reports just published show how far their expectations are from reality. The first, from Standard Life, shows that more than half of parents underestimate the maximum amount of debt their child could leave university with.

This survey focuses mainly on England, where some universities will be charging top-whack tuition fees, £9,000 a year, from 2012. It asked parents to work out how much would be involved if they then added other costs such as living expenses, interest on bank loans etc. As many as 58 per cent thought the total would be £40,000 or less – in fact, many put it at a lot less. But the latest figures from the Edinburgh-based financial institution put the actual maximum debt at a massive £54,000.

As a result, just over a fifth of parents have started to make regular savings to help ease the costs of their children’s university education. Nearly a quarter are putting money aside on special occasions, such as birthdays, or making one-off windfall payments. Over half of those with children aged nine or younger are putting money aside for their child’s university costs. However, 70 per cent of parents with children aged between 14 and 17 aren’t doing the same.

According to Julie Hutchison, head of international technical insight at Standard Life, some parents “have identified the need to save for their children’s time at university. Unfortunately their expectations of what that cost could be and therefore the target amount they want to save might actually be too low.”

The research shows that over half of parents who save on a regular basis are putting aside less than £50 a month towards their child’s university costs. Just over a quarter are saving £50–£100, while only 4 per cent are saving more than £200.

“Attending university,” Hutchison added, “can be expensive with the costs of tuition fees, living costs and course material all adding up over the years. Even though a student loan can be taken to cover all these outgoings, parents can also seriously help reduce these costs. Parents will need to decide when they want to gift the money to their child, as this will determine which savings method they should use. Do they give them the entire fund before they go to university, make partial withdrawals to help cover certain costs such as accommodation fees, or keep the money invested and help them clear their debt following graduation?”

It’s an important decision because the Lloyds TSB Student Finance Report suggests that 57 per cent of students are struggling to make ends meet. 17 per cent of full-time students, it says, do not have enough money to get through the month and a further 40 per cent are only just managing their finances. Over half of all students have now taken on paid work, mainly in a bid to support themselves at university, but many of these admitted that it was having a negative impact on their studies

The report shows that, on average, students have an annual income of under £6,000 a year, half of which is derived from student loans. Those in Scotland survive with the lowest incomes, while those in London and Wales are in receipt of 4 per cent above this average. With such limited incomes, it is hardly surprising that so many students are struggling financially.

40 per cent are only just meeting monthly outgoings, while almost a fifth of full-time students do not have enough to cover all their essential spending each month. The majority of students say that last year they sacrificed going out or spending on non-essential items to help make ends meet. More than one in three say that they raided their savings to help get by, a similar number to those who say they went for help to friends or family to get through the month.

“Going to university is meant to be a once in a lifetime experience, but students today not only have the worry of taking on a large debt burden,” says Jatin Patel, director of personal current accounts at Lloyds TSB, “but the rising cost of living means many are also struggling to make ends meet whilst they are still studying.

“Paid work can be a huge benefit to students as it can give them valuable experience for later on in life; however, it should not be impacting their studies. With finances so tight students need to ensure they are making use of all the discounts and money management tools available to them to help them manage their finances.”

However, for a few lucky students, there is an alternative. For the last four years, HSBC has been running a competition where students can win a £15,000 bursary. The competition, hosted on the social networking site Facebook, is open to all UK students starting their first year of university this autumn. Entrants have to create and upload a 90-second video to YouTube, and submit a short application form that answers the question: “How would £15,000 help you make your mark on the world?” The competition entry deadline is 15 September.

Juliet Chappell, won one of the HSBC student bursaries in 2010 because of her passion for her subject area and her commitment to using her time at university to benefit others. She posted a video describing her passion to set up a theatre in education company to work with counsellors to develop and run workshops to help bereaved children of all ages.

Helen Gentry, head of student banking at HSBC, explained that the competition allowed “eight students to win peace of mind while they study, so they can pursue a dream project of their making. We were overwhelmed by the creativity and altruism of last year’s entrants – I’m very excited to see more great ideas from this year’s videos.”

The top 15 videos, as voted on Facebook, along with a further five selected by HSBC, will then be shortlisted and the final eight winners will be decided upon by a panel of judges including Usman Ali (vice-president of the National Union of Students), Emerson Osmond (head of information and advice at UCAS), Brendan Cook (UK general manager, HSBC) and two past winners of the bursary, Juliet Chappell and Ibrahim Khan.

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<em>Picture: Dotonegroup</em>

Picture: Dotonegroup

The UK has an ageing population. The figures speak for themselves. About ten years ago, one in every three people in the UK was aged over 50. Within the next 20 years, this is likely to rise to two-fifths. This group is relatively well off. Something like £260bn, around 40 per cent of total UK annual consumer spending, comes from the pockets of the over 50s.

Understanding the 50+ market is critical to business. But a recent report from Lloyds TSB suggests that this is one message that at least part of the insurance industry has decided to ignore. The report found that a quarter of holidaymakers in this age group are struggling to get adequate travel insurance for various reasons.

The research shows that the main cause for holidaymakers aged 50 and over being refused cover is an existing illness or injury. 15 per cent have been refused cover for this reason, rising to 16 per cent for those 60 and over. Similarly, over one in ten (11 per cent) has difficulty buying insurance due to their age, rising to one in six (17 per cent) for the 60 and overs.

And yet, this is one of the most active groups in the UK’s population. Nine out of ten say they go on holiday regularly, with half of those taking more than one holiday in a year. Despite the economy, around one-third say that they are travelling more now than in previous years. But around one in four has experienced difficulties when buying insurance for their holiday.

According to Jatin Patel, director of personal current accounts at Lloyds TSB, “no one should be grounded from travelling because of their age. It is clear that age holds no barriers for those wanting to explore new frontiers, so age shouldn’t prevent older holidaymakers from accessing adequate travel cover at a reasonable price.”

Clearly, the bank wanted to use the research to help sell its own travel insurance services. But there is a growing number of specialist providers whose entire raison d’être is to meet the needs of the over 50s.

The granddaddy is of course Saga. Many people know it for its magazine, but it is also a major financial services provider. The firm offers insurance cover for anyone over 50, with most pre-existing medical conditions included. If you do have a medical issue, the company lets you go through the screening process online.

The charity Age UK, which came out of the merger between Age Concern and Help the Aged, provides travel insurance with no upper age limit. It too provides cover which includes a wide range of health issues. It even offers cover for winter sports for the active and adventurous. Then there’s AllClear and Gnu Insurance, both of which insist that they provide cover whatever your age or medical history.

Lloyds TSB does provide an excellent travel insurance service for its silver surfers – literal as well as metaphoric. But other banks see this as part of their service to customers. The Clydesdale Bank’s Signature Account, for instance, comes complete with cover for anyone up to 75, again with most pre-existing medical conditions included.

The Co-operative Bank goes even further with its Privilege and Privilege Premier accounts, both of which include travel insurance up to the age of 80, or 65 for winter sports. The Santander Reward current account includes annual worldwide family travel insurance, covering you up to the age of 64.

In each case, it’s a question of balancing whether the benefits (of which travel insurance is but one) can justify the monthly fee you have to pay for these accounts. The Clydesdale will charge you £12.50 a month. That compares with £9.50 a month for a Co-op Privilege Account, £13 a month for the Co-op Privilege Premier Account or £10 a month for the Santander Reward Account.

However, don’t be misled into thinking you have cover just because you have acquired one of the new European Health Insurance Cards (the replacement for the old E111 form). You don’t! The EHIC doesn’t offer any form of insurance but provides emergency access to state-provided healthcare throughout Europe either free of charge or at least at a discount. The card is an essential thing to carry, but it is not an alternative to travel insurance.

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Model car crashThe insurance sector has been reacting to today’s ruling by the European Court of Justice banning gender discrimination when it comes to insurance policies. They believe it will affect two groups in particular: women drivers whose premiums will rise and men coming up for retirement who may see the returns on their annuities fall.

Dr Ros Altmann, Director General of The Saga Group, warned that it could push more UK pensioners into poverty. “In defiance of common sense and logic,” she explained, “insurers will be barred from pricing their products on the basis of risk. The delay to 2012 is a bit of relief, but not much comfort for those who will be affected. And of course 2012 is the year that the UK will start to automatically enrol all workers into pension schemes.”

The point here is that four-fifths of annuities are bought by men. As a result of the ruling, annuities will become more expensive for the vast majority of buyers. Currently, men buy around eight out of every ten annuities sold in the UK and all of them risk receiving much lower pensions as a result of this decision.

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In Dr Altmann’s view, “this means that future UK pensioners will be even poorer than they otherwise would be. If an insurance company does not know whether the person buying the annuity is male or female, it is inevitable that they will increase the risk margin ‘just in case’ they are selling to a woman, so men will all face potentially worse annuity rates and, therefore, will receive much lower pensions for the rest of their life.”

UK pensioners, she concludes, will be “hit worst as other countries don’t have mandatory annuitisation (sic). This will hit future UK pensioners much harder than the rest of Europe, because it is only in this country that Government rules tend to require people to annuitise their pension funds. Our state pension is already about the lowest in Europe so the impact here is very worrying.”

Her view is shared by Malcolm Small, Director of Policy at TISA, who said that this was “not a good consumer outcome. I anticipate that annuity rates for women – who are already under pensioned, compared to men – will fall as a result. Decisions made by Europe are adding another layer to an already complex regulatory framework for pensions. We need an urgent debate on the level of regulation as we have reached a potential overkill situation with no discernable benefit to the consumer.”

MGM Advantage, the retirement income specialist, claim that men could see their annuity rates fall by up to 5% while women’s rates could rise by nearly 8%. The company’s sales and marketing director, Aston Goodey, points out that the annuity industry had “…been moving towards pricing that is far more individual and therefore fairer to the customer. While this gender ruling will create winners and losers, the truth is that it’s another blow to the conventional annuity and thousands of people approaching retirement. The downward trend in annuity rates is forcing more and more people to look at other options such as flexible annuities in order to stand a chance of making their money last in retirement.”

On the wider issues, the Association of British Insurers describes the ruling as “disappointing news for UK insurance customers”. It points out that they’d fought against the possibility of this for the last decade and will now do everything possible to manage negative effects for customers.

Its acting director general, Maggie Craig, explained that the “judgment ignores the fact that taking a person’s gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance. It will be crucial to ensure this news does not put people off having vital insurance that protects them against accident or illness, or provides an income in retirement.

“Adaptation during this transition period until December 2012 will be challenging, but all insurers will be doing everything they can to ensure as smooth a change as possible for customers. Insurers will comply with the law and work proactively with the Financial Services Authority to ensure stability for the UK insurance market, its customers and investors.”

Its own research confirms that the changes will be substantial. For example, women under the age of 25 could see an average rise of 25 per cent to their motor insurance premiums. Men approaching retirement could see an 8 per cent reduction in annuity rates while rates for women approaching retirement could rise by six per cent. Women could see a rise of as much as 20 per cent in the cost of life insurance cover, while men could see a fall of 10 per cent.

The companies offering motor insurance had the harshest words on the judgement. Adrian Brown, UK Chief Executive of RSA and its direct arm MORE TH>N, insisted that the Court’s decision “flies in the face of common sense. It is completely disadvantageous to the very people it was intended to protect and prevents insurers from using a legitimate rating factor. Once again consumers are going to have to pay the price for an illogical change in the law.”

The marketing director of confused.com, Mike Hoban, described the ruling as “effectively a gender tax on women. It is extremely unfair and illiberal that women will be penalised for the fact they cause less serious accidents and make less expensive claims than their male counterparts. Gender is an important factor in determining the risk of a driver making a claim and by not taking it into account women are being unjustly taxed.”

Gocompare.com’s director, John Miles, said that few drivers would welcome this ruling. “It won’t make insurance fairer,” he explained, “but it will make it more expensive in many cases and make the calculation of premiums less transparent for everyone.

“While insurers have been preparing for this outcome for some time, no one knows exactly how they are going to price for it and different insurers may take different approaches. If they are unable to use gender as a risk, they may need to increase prices to cover the risk of losses. In the longer term, drivers will be looking to insurers to develop more innovative solutions. Telematics based ‘pay-as-you-drive’ products could be further developed to allow insurers to more accurately match a driver’s insurance premium to their actual risk.”

There is of course only one insurance provider whose products are aimed almost exclusively at women drivers: “Sheilas’ Wheels”. In a statement, it warned that the ruling would cause premiums to rise artificially in a way that no longer truly reflects women’s risk as drivers or the cost of their claims.

Its head of communications, Adrian Webb, said that the company had “always insured men but most males simply aren’t attracted to our brand and we don’t see this changing. We brought car insurance up to date by including benefits designed with women in mind that were absent in the market. Our handbag cover recognises that even a handbag, let alone its contents, is worth more than most policies’ personal possessions limits.

“Despite this ruling, we will continue to market to women and to celebrate our pink brand because it does not prevent female-focused marketing. Over the course of the transition, we will make the changes necessary to comply but the huge proportion of women already with (us) will help us to maintain our highly competitive position.”

The ruling in full
As reported in The Caledonian Mercury last month, the European Court of Justice has ruled that taking the gender of an insured individual into account as a risk factor in insurance contracts constitutes discrimination. Its judgement means that unisex premiums and benefits will apply with effect from 21 December 2012. This is the ruling in full.

Court of Justice of the European Union: Directive 2004/113/EC1 prohibits all discrimination based on sex in the access to and supply of goods and services.

Thus, in principle, the Directive prohibits the use of gender as a factor in the calculation of insurance premiums and benefits in relation to insurance contracts entered into after 21 December 2007. By way of derogation2, however, the Directive provides that Member States may, as from that date, permit exemptions from the rule of unisex premiums and benefits, so long as they can ensure that the underlying actuarial and statistical data on which the calculations are based are reliable, regularly updated and available to the public. Member States may allow such an exemption only if the unisex rule has not already been applied by national legislation. Five years after the transposition of the Directive into national law – that is to say, on 21 December 2012 – Member States must re-examine the justification for those exemptions, taking into account the most recent actuarial and statistical data and a report to be submitted by the Commission three years after the date of transposition of the Directive.

The Association Belge des Consommateurs Test-Achats ASBL and two individuals brought an action before the Belgian Constitutional Court for annulment of the Belgian law transposing the Directive. It is within the context of that action that the Belgian court asked the Court of Justice to assess the validity of the derogation provided for in the Directive in the light of higher-ranking legal rules and, in particular, in the light of the principle of equality for men and women enshrined in EU law.

In today’s judgment, the Court first points out that, under Article 8 TFEU, the European Union is to aim, in all its activities, to eliminate inequalities and to promote equality between men and women. In the progressive achievement of that equality, it is for the EU legislature to determine, having regard to the development of economic and social conditions within the European Union, precisely when action must be taken. Thus it was – the Court states – that the EU legislature provided in the Directive that the differences in premiums and benefits arising from the use of sex as a factor in the calculation thereof must be abolished by 21 December 2007 at the latest. However, as the use of actuarial factors related to sex was widespread in the provision of insurance services at the time when the Directive was adopted, it was permissible for the legislature to implement the rule of unisex premiums and benefits gradually, with appropriate transitional periods.

In that regard, the Court notes that the Directive derogates from the general rule of unisex premiums and benefits established by the Directive, by granting Member States the option of deciding, before 21 December 2007, to permit proportionate differences in individuals’ premiums.

Any decision to make use of that option is to be reviewed five years after 21 December 2007, account being taken of a Commission report, but, ultimately, given that the Directive is silent as to the length of time during which those differences may continue to be applied, Member States which have made use of the option are permitted to allow insurers to apply the unequal treatment without any temporal limitation.

Accordingly, the Court states, there is a risk that EU law may permit the derogation from the equal treatment of men and women, provided for by the Directive, to persist indefinitely. A provision which thus enables the Member States in question to maintain without temporal limitation an exemption from the rule of unisex premiums and benefits works against the achievement of the objective of equal treatment between men and women and must be considered to be invalid upon the expiry of an appropriate transitional period.

Consequently, the Court rules that, in the insurance services sector, the derogation from the general rule of unisex premiums and benefits is invalid with effect from 21 December 2012.

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<em>Picture: Magnusb D</em>

Picture: Magnusb D

In his Scottish Technology Forecast a few weeks ago, David Mitchell, the senior research fellow from Ovum, identified a number of world-beating companies to watch in the course of 2011. They included obvious names like Microsoft, Dell and Google. But one which took some people by surprise was Groupon.

Mitchell defined it as “social media meets bulk buying”; others call it the “daily-deals website”. Since then, it hardly seems to have been out of my ken, either professionally or personally. In a little over two years, this Chicago-based start-up has shown quite astonishing growth.

Mitchell talked of it turning down an approach from Google last year. At that point, it was valued at $6 billion. Figures, seen by the Wall Street Journal, claim that the past year’s performance has seen “phenomenal growth”. The company’s revenues have apparently grown to $760 million in 12 months, up from a mere $33 million in 2009.

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The firm has also secured massive investment. Just last month, it got $950 million in new backing from ten investors. Since then, it’s raised a further $16 million, bringing the total equity raised since 2007 to well over $1 billion. They need this kind of cash to fund the people they need on the ground to make deals on their members’ behalf.

It currently operates in over 35 countries around the world and has in excess of 40 million subscribers. Within the last few days, it’s added China to that list by opening up a site called Gaopeng.com. It’s said to offer services in some 300 different markets. So what does Groupon actually do?

Its name is an amalgamation of “group” and “coupon”. Its business model is based on the purchasing power of a large number of people. Members are offered the chance to buy a voucher for a product or service within a given time. But they sometimes have to wait until a stated number of others have also bought it before their voucher becomes valid. This is usually not a problem.

In the UK, there have been various estimates over how much consumers spend on services like this – Groupon is not alone in the market. One figure suggests that we’re spending some £12m a month buying such goods and services at up to 90 per cent off the normal retail price. So why are people flocking in their thousands to sign up at £69 a head? The simplest answer to this was to try it.

That is why I spent this past weekend at Keavil House Hotel in Fife. My wife had already joined Groupon and, between Christmas and New Year, was given about 72 hours to decide on whether to accept what looked like a bargain: “Cosy Getaway For Two: For £99 Instead of £247.50, Enjoy a Luxury Overnight Stay with Full Scottish Breakfast, Buffet lunch, and 3 course Meal [sic]“.

In the depth of winter, it sounded like an ideal break – even though we would not normally have gone to a hotel so close to home. The deal had to be taken by the end of February and excluded the nights around Valentine’s Day. The result was that we only took the decision towards the end of the offer period. Thankfully, it was the first weekend when you really wanted to be out and about!

The hotel is part of the Best Western Group, a group of independent hotels which get together to share the cost of sales and marketing. It’s located in Crossford, about two miles west of Dunfermline, and is based around an old mansion with loads of history and atmosphere. But you can understand why it would want to be part of a deal – it’s not exactly on the main drag!

But was it actually the bargain claimed in the Groupon advert? It was claiming 60 per cent off the headline rate. But on checking in, there were leaflets in the rooms pointing out that the hotel’s “Winter Sale” was on. £99 would buy you dinner, bed and breakfast for two. The Groupon deal also gave you a bottle of wine and a two-course lunch. But the saving can only have been 20 per cent.

So it may not have quite been the value for money it first appeared. But the value in other ways was considerable. It took us away at a time of year when we probably wouldn’t even have thought about it. It gave us a rest when we badly needed one. It restored our faith in Scottish hotels and it particular their staff. We’d go there again.

The daily deals – they’re different in all the main Scottish cities and members have access to all of them – offer a wide range of products and services. I thought long and hard about the Supercar Driving Experience in the Highlands. My wife has been tempted by the Garra Rufa fish pedicure and a trip to the Falconry Experience. She’s even booked up for a pole dancing course!

Not all of the experiences have been positive however. We’re still in discussion with Groupon by email about a “Cooking Mania” event. All attempts to contact the organisers by phone and email were futile. The contact phone number demanded a “security code” which we didn’t have and all emails failed to elicit response. We await that outcome.

Groupon is said to be planning to float on the US Stock Markets later this year. It’s reported to have been deep in discussions with a number of merchant bankers. Talk of an IPO (Initial Public Offering) abounds with fairly eye-watering valuations being suggested. Understandably, the company itself won’t comment on such speculation.

Its problem could be that neither the concept nor the technology are unique. There are few barriers to entry. It already has a rival in the US called LivingSocial, which persuaded Amazon to invest $175m last year. Here in the UK, there’s a company called Keynoir which launched at the end of March 2010. It started in London and arrived north of the Border last autumn.

A more serious challenge however could soon appear. At the end of last week, the FT reported that Virgin was exploring the launch of such a “daily deals” service. The paper said that a former Virgin executive had approached Sir Richard Branson last year about “using its brand to enter the white-hot but crowded market for e-mailed, limited-time shopping coupons”.

Any launch would be conditional on raising external funding. According to the FT, the former executive has been pitching “Virgin Deals” to potential investors in the US and UK in recent months, according to people familiar with the plans. If the required funding is secured, the service will be launched in the UK later this year.

In the meantime, consumers can enjoy the fun of trying new things at a discount and can look forward to increased competition in this seemingly lucrative market.

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SagittariusWhat do you imagine of when you think of people in the financial services sector? Forget the size of their bonuses for a moment and consider their personalities. A little cautious perhaps? Prudent (if that word has been too debased by our former Chancellor/Prime Minister)? A good sense of humour probably doesn’t figure high on the list.

The American company Equifax describes itself as “a global leader in information solutions”. Customers have trusted Equifax for over 100 years to deliver business and financial information.

“Businesses – large and small – rely on us for consumer and business credit intelligence, portfolio management, fraud detection, decisioning technology [sic], marketing tools, and much more. We empower individual consumers to manage their personal credit information, protect their identity, and maximize their financial well-being.”

Their news releases are normally about consumer confidence, identity theft or the level of business and personal bankruptcy. The last is an important issue; so what follows came as a complete surprise. It is an unedited press release issued this month, proving that these folk do have a GSOH and recognise when the holiday season is upon us.

Sagittarians top the league table for bankrupts; Capricorns are the least likely to be declared bankrupt according to new Equifax analysis.

London, 10th December 2010 – Leading credit information expert, Equifax, has analysed data on bankrupts to reveal some interesting patterns in financial management, according to star signs.

Research on a sample of the UK population suggests that Sagittarians have the highest percentage of bankruptcies and IVAs. Could this be because their birthdays are close to Christmas and there is a tendency to spend more as a result? This star sign has a love of spending and risk-taking which, based on the Equifax analysis, appears to increase their chances of getting into financial difficulties.

However, sitting next to Sagittarians in the astrological chart, Capricorns can take solace from the Equifax analysis. They are at opposite end of the bankruptcy league. The Goat is the shrewdest at making and keeping money, added to which their cautious nature means they are likely to have some sort of nest egg to see them through any financial hardship.

At number two in the Equifax bankruptcy rankings are Virgos, followed by Leos in third. Cancerians and Librans are close behind Capricorns at being the least likely to go bankrupt.

bankruptcy star chart

Whilst the analysis is relatively light-hearted – clearly lenders do NOT assess new credit applications by star signs – it does serve to highlight the long-term impact of being declared bankrupt which some considering this option as a route out of debt may not realise as Neil Munroe, external affairs director, Equifax, explained: “The fact of someone being declared bankrupt will stay on their credit file for six years – even though the actual bankrupt status may only last for one year.

“That means that well after they are no longer registered as bankrupt, individuals could still find it really difficult to get access to even the most simple credit arrangements – such as a mobile phone line rental, or paying by instalments for key services like utilities or insurance. And where they are able to get credit, they could find that they are charged higher premiums because lenders will regard the bankruptcy history as a credit risk.

“Bankruptcy really should be seen as the absolute last resort – and not an easy ‘fix’. We would advise everyone to look into all the alternatives before they go down this route. It may seem like an easy way to walk away from your debts, but there are long-term consequences. It’s always better to gain control of your finances and find a way to manage debts to avoid getting into desperate circumstances.”

Neil Munroe concludes, “No matter which star sign you are, Christmas is an expensive time of year and it’s easy to let spending get out of hand. This new analysis might, therefore, be a good prompt for Sagittarians, Virgos and Leos to keep a closer eye on their finances. However, we advise people to consult their Credit Report, rather than their horoscope when it comes to gaining an insight into their financial situation and staying out of debt!”

<em>Picture: Steve Punter</em>

Picture: Steve Punter

When do you want to retire? The glib answer would probably be “immediately”. But it’s a very active debate. The government has announced plans to abolish what is known as the DRA or “Default Retirement Age”. Put simply, employers can insist that you leave when you turn 65, whether you want to go and despite the fact that you may be taking valuable experience with you.

However, there’s been an outburst of anger against the CBI when it suggested that the reforms should be delayed. The employers’ organisation does have a point when it suggests that companies will face “huge uncertainty and greater risk of tribunal claims if the government does not tackle the unintended consequences of the decision”.

It says that the removal of the DRA will be one of the biggest changes to employment law in 2011. But the way things stand at present, the Government hasn’t explained the detail of what will be put in its place. It argues that the rules around retirement will be less clear for employers and their staff, and the resulting process potentially less dignified and more complicated.

Its director-general designate, John Cridland, said: “The ageing population and the shortfall in pension savings make it inevitable that people will want to continue working for longer. Employers understand this, and businesses value the skills, experience and loyalty that older workers bring.

“However, in certain jobs, especially physically-demanding ones, working beyond 65 is not going to be possible for everyone. The DRA has helped staff think about when it is right to retire, and has also enabled employers to plan more confidently for the future. With the scrapping of the DRA in April, a legislative void is opening up. We need to modernise our employment law framework to ensure that it is fit for purpose.”

That prompted howls of outrage from organisations like Saga. Its director general, Ros Altmann, dismissed the existing system as “a huge waste of our national resources. Longer working lives are an essential element of overcoming our pensions crisis … [People's] pensions have not worked out in the way they had expected, and they are still fit and healthy. If they are forced out of the labour market, they will end up poorer in retirement and that will impact the economy as a whole, as they will have less money to spend. The timetable must certainly not slip.”

She insisted that employers should handle their workforce appropriately, not just sack people for being “old” when they still have so much to contribute. “The Default Retirement Age should have been abolished years ago. Ageism has no place in a modern labour market.”

Others agree with this assessment. Chris Ball, chief executive of The Age and Employment Network, argued that re-opening the debate on the DRA would be “backward looking and unhelpful”.

“The simple fact is that this is a wasteful provision that forces people to stop working when they are ready and able to continue. Moreover, most employers have shown that they don’t really need it. The CBI’s concerns about the diminishing work capacity of people doing heavy manual work is sometimes valid but it is a mistake to imagine that the only answer is in compelling people to leave the workplace when there are other jobs they could well do.”

Michelle Mitchell, charity director of Age UK, added that “very often, they are the people who need to work longer because they don’t have sufficient savings or pension arrangements. It is particularly important that employers and government address this challenge of supporting people to work longer in practical ways, by encouraging retraining and redirecting careers, for example. The sensible employer who values the skills and talents of older workers will be looking for ways of keeping these employees by making adjustments to their work and working conditions.

“Keeping an unfair and outdated legislation in place for one more year is not the answer; swift action by the government to provide businesses with the support they need is. There are many countries which manage perfectly well without a legal right to retire people, so why is the UK different?”

Even some successful entrepreneurs have dismissed the CBI’s thinking as “ridiculous”. Charlie Mullins has been in the news a lot recently because of the unusual way he runs Pimlico Plumbers. Over 20 per cent of his workforce are aged over 55 and many of them have no plans to go. He told the Fresh Business Thinking Blog that business organisations should be supporting the reform not disrupting its abolition.

He accused the CBI of “becoming increasingly irrelevant as postponing the scrapping of the default retirement age is not in the best interest of business. To say that firms have not had enough time to adapt to the brave new world where you only let someone go if they are no longer able to perform what they are employed to do is complete rubbish.

“Businesses need people who can do the job, whatever age they are. It’s about knowing when someone isn’t capable to do a particular job anymore. You don’t need guidelines and legislation for this, just effective personal management and a decent touch of common sense. There isn’t, has never been, and never will be, any replacement for experience and the sooner these clueless bureaucrats get that fact into their heads the better the country and the economy will be.”