The average cost of childcare for the under twos has risen by a third in the past five years, a new report reveals.
The most recent annual survey by the Family and Childcare Trust, shows that the cost of a part-time place at a nursery for babies and toddlers has increased by 33 per cent since 2010. Part-time places now cost over £6,000 per year and have gone up by 5 per cent in the last twelve months.
The charitable trust has urged all political parties to join together to review childcare provision in the UK, particularly for the under twos. The coalition government says that it has increased free childcare places for pre-school children of three and four years old.
The fourteenth survey by the Family and Childcare Trust was based on responses by 196 UK local authorities regarding the cost of twenty five hours of childcare and fifty hours in nurseries or with childminders. The report said that nursery costs have risen by 32.8 per cent for the under twos during a period when wages, in real terms, have stayed the same.
The trust revealed last year that for many parents, the cost of childcare was higher than their mortgages.
Although the government introduced increased aid for parents with the cost of childcare through a new tax free childcare scheme and universal credit in 2013, prices have risen at a rate above inflation and wages have remained static. Consequently, the report indicates, the help from these initiatives has been virtually wiped out, particularly in the south east of England and in London, where one part-time nursery place costs £7,907.
Stephen Dunmore, chief executive of the Family and Childcare Trust, said that all political parties should agree to a full review of childcare provision in the UK, where a new, simpler system is required.
Nearly one in five adults does not have any savings and one in ten admits that they use their overdraft facilities every month in order to make ends meet, according to a recent survey.
The survey by financial solutions company, Baines and Ernst, of 2,000 British adults also found that 56 per cent admitted that they do not follow a monthly budget.
One in three of those questioned had savings of between £1,000 and £6,000 but one is seven had debts of up to £10,000. One in fourteen had debts of more than £10,000. Those between 35 and 44 had the most debt, closely followed by those in the 25 – 34 age group.
The survey gives a revealing picture of how many Brits are managing their finances. As many as 12 per cent of young people under 24 admit to not checking their bank balance because they are afraid that they will not have enough money to spend. Only four per cent of adults over 55 admit to ignoring their financial difficulties in this way.
Other studies have indicated that almost one third of UK adults rely on their bank’s overdraft facilities in order to afford everyday essentials.
Baines and Ernst managing director, Shaz Sulaman, said that an alarming number of adults are using credit to pay for essentials. Borrowing in this way can be an effective short term solution but debts can rapidly spiral out of control, leading to much larger financial difficulties that can seem insurmountable.
Sulaman’s advice for avoiding a downward debt spiral is to budget. Adults should, she said, draw up a detailed account of their income and spending each month. It is only by doing this that it becomes possible to identify where economies can be made and realistic budgets set.
The shadow chancellor has promised that should Labour win the next election, the party will come down hard on what it calls ‘systemic tax evasion.’ His comments followed revelations that HSBC bank has helped hundreds of wealthy business men and women to avoid paying tax.
Ed Balls said that there is a clear difference between families who plan their tax affairs and those who arrange tax evading ‘false structures.’ Speaking on the Andrew Marr show on the BBC, he went on to accuse the coalition government of turning a blind eye to tax evaders.
Mr Balls pointed out that some schemes to lower taxes are legal, such as ISAs and tax relief for entrepreneurs, and that it is possible to reduce your tax bill to plan for your children and their inheritance when you die. However, he went on to say that those who set up false structures to reduce their tax bill or who move to Switzerland in order to avoid paying taxes altogether, need to be dealt with.
The shadow chancellor acknowledged that HM Revenue and Customs (HMRC), is currently under huge pressure because its staff has been reduced. But he promised that under a Labour government, HMRC would have the resources it needed to tackle tax evasion.
Labour leader, Ed Miliband, has said that his party would carry out a thorough review of HMRC because he felt it could do a much better job in tracking down those guilty of tax evasion.
Chief Secretary to the Treasury, Danny Alexander, has already revealed that he has asked HMRC if it requires extra powers or if there should be new laws, to enable it to tackle those conspiring to allow tax evasion. Danny Alexander was speaking on the Sunday Politics show on the BBC and promised to ensure that HMRC will have all the legal powers it needs.
The success of the left wing party, Syriza, in Greece has sent the euro tumbling against the pound.
The pound is now worth €1.337 compared to €1.25 only eight weeks ago. This is not good news for companies exporting their products to countries within the Eurozone, but it is good news for all of us planning on spending some time on the continent this summer. European holidays now offer the best value for money in over a decade.
Eighteen months ago during the summer of 2013, the cost of buying €500 was £440. Today, €500 only costs £375 to buy, 15 per cent less than it was in 2013.
If you are thinking of a holiday in the USA, however, your holiday money will be more expensive to buy. The dollar has done even better against the euro and, consequently, has gone up against sterling too. In July 2014, for every £1, you could buy $1.71. Today, £1 will buy you just $1.51, a fall of 12 per cent. In fact, a holiday in the USA is currently at its most expensive in four years.
If you are concerned that the euro might recover some ground between now and this summer, you could lock into the current exchange rate by buying a pre-paid currency card. However, it is not guaranteed that the euro will recover; it could, of course, fall further. The euro was much weaker ten years ago. For a short period of time in 2004, £1 would buy €1.5 and the pound was worth 1.4 euros for many months before the financial crash of 2008.
If a holiday in Spain or France isn’t enough for you, buying a holiday home in a Eurozone country is a much more attractive prospect than it has been for some time. A €100,000 property in Spain will cost £75,000 today as opposed to £90,000 in 2012.
UK inflation dropped to a record low of 0.3 per cent in January, according to Consumer Price Index figures released by the Office for National Statistics. Cheap petrol and low food prices brought the rate down by 0.2 per cent from 0.5 per cent in December.
January’s Consumer Price Index figure for inflation is the lowest since records began in 1988.
The Bank of England has already said that a short period of deflation, also known as negative inflation, is probable at some point during the second quarter of this year.
The inflation rate when measured by the Retail Price Index is higher, at 1.1 per cent. It, too, dropped from December when it was 1.6 per cent.
Statistician for the Office for National Statistics, Phil Gooding, said that the price of petrol fell during January, along with the price for milk, fruit, games and toys. The price of alcohol slowed, rising at a slower rate than in previous months, which also added to the overall low rate of inflation. The price of furniture and clothes, however, rose.
Lower inflation is great news for the consumer according to Howard Archer, chief economist at IHS Global Insights. He believes consumers will see their purchasing power improve during 2015, with earnings growing and inflation falling still further.
Core inflation actually rose during January, from December’s figure of 1.3 per cent, to 1.4 per cent. Core inflation does not include food, fuel, tobacco and alcohol prices. Howard Archer said that the fact that core inflation is rising shows that the UK is not heading for a lengthy period of deflation.
George Osborne, Chancellor of the Exchequer, said that January’s low inflation rate was a milestone for the UK economy.
The UK is edging towards negative inflation for the first time in more than fifty years, the Bank of England has said and should be prepared for a rise in interest rates.
The dramatic fall in the price of oil as well a drop in food prices means that inflation is likely to reach zero during the second and third quarters of this year.
Although inflation may even reach negative figures for a month or two during the second quarter of 2015, the UK’s current strong economic growth should mean that a deflationary spiral is avoided, the Bank of England has said in its latest inflation report for February.
The last time Britain had negative inflation was 55 years ago, in March 1960, according to figures from the Office of National Statistics.
Inflation was as low as 0.5 per cent at the end of last year, substantially below the Bank of England’s target of 2 per cent. Governor of the Bank, Mark Carney, said in the quarterly report that inflation will fall further, possibly reaching negative figures in the spring and staying at zero for the rest of the year.
The Bank has revised its forecasts for growth during the next two years which has helped to strengthen the pound against the euro. Sterling is now at its highest point against the Eurozone currency for seven years, with one euro now worth 73.71 pence.
The slump in the price of oil and food should keep inflation down in the short term but lower oil prices are expected to increase consumer spending which should in turn boost economic growth and push inflation upwards in the medium term.
Carney said that the fall in the price of oil was ‘unambiguously’ beneficial for the global economy and that borrowers should be prepared for an interest rate rise. Rates have remained at 0.5 per cent since March 2009.
The Institute of Fiscal Studies, (IFS) has said that more spending cuts lie ahead for the UK. In its Green Budget, published ahead of next month’s Budget, it says that the UK economy still has a long way to go and that many more spending cuts are needed.
Government departments must save a total of £51.4 billion or 14.1 per cent of their overall budget during the next Parliament. Cuts for the current Parliament will reach £38.4 billion or 9.5 per cent by the time Parliament is dissolved prior to the general election in May.
According to the IFS, the UK is making more spending cuts than any of the other 32 advanced economies. Public spending will fall to its lowest as a proportion of the national income since 1948. There will be fewer people working in the public sector than before 1971.
The IFS report is positive in its summary of the UK economy, predicting zero inflation and growth of 3 per cent in 2015.
Senior economist at Oxford Economics, Andrew Goodwin, co-wrote a chapter of the Green Budget. He said that the prognosis for the British economy was very good and that household finances were likely to improve dramatically for many during 2015.
Paul Johnson, IFS director, said that spending cuts have so far been fewer that George Osborne’s rhetoric implied. Spending on social security has not been reduced and both capital spending and departmental investment spending have only been cut by half as much as originally planned. As a result, George Osborne or his successor will have much to do during the next parliament if public finances are to recover fully from the financial crisis of 2008.
The IFS report cited the poor performance of the economy at the start of this parliament in 2010 as the cause of the current high deficit.
Men’s pay has fallen much further in real terms than women’s pay, according to new figures from the Institute for Fiscal Studies (IFS).
The IFS think tank studied pay for both sexes over the last seven years and found that, taking inflation into account, the average hourly wage for both men and women is still 4.7 per cent lower than it was in 2008, at the time of the financial crisis.
The drop in wages for women in real terms has been 2.5 per cent but, for men, it has been almost three times bigger, at 7.3 per cent.
The report by the IFS is based on its analysis of the Annual Survey of Hours and Earnings (ASHE). The survey looks at one in every hundred of all income tax returns from UK employees. The IFS compared the ASHE data from 2008 with the data from 2014.
One likely reason for the discrepancy between men and women’s earnings is that more women work in the public sector, where wages have fallen significantly less than earnings in the private sector.
The Institute for Fiscal Studies also found that the average wage of younger employees, that is those between 20 and 29, has fallen in real terms by as much as 9 per cent since 2008. The average wage of employees in their sixties, however, is now back at its 2008 level.
The number of employees who work part-time because their employers have not offered them more hours is nearly twice as high as in 2008.
The top ten per cent of earners have seen their earnings drop by nearly twice as much as the bottom ten per cent of earners. Those earning the highest wages have seen a fall in real terms of 6.4 per cent, in comparison with the bottom ten per cent, whose wages have only fallen by 3.3 per cent.
The recent cuts to energy bills made by the big six energy suppliers should have been made earlier and should have been much bigger, says the consumer watchdog, Which?
Which? said that the energy firms had failed to keep their standard tariffs in line with oil and gas wholesale prices for at least two years. Consequently, those households following a standard energy tariff found themselves £145 worse off by the end of 2014. The six major energy firms, therefore, charged their customers a total of £2.9 billion more than they could have done.
Energy UK, the industry body, responded to the criticism saying that firms cut their prices as soon as they possibly can.
Richard Lloyd, chief executive for Which?, said that their research questions the process used by energy suppliers to set their prices during the last twenty four months. He also feels that they needed to explain why their bills have not fallen further despite the dramatic drop in wholesale prices.
The six major energy firms are Scottish Power, RWE Npower, Centrica, E.On, EDF Energy and SSE. They dominate the energy supply market, only 5 per cent of which is supplied by smaller companies.
Which? said that these smaller suppliers are offering lower prices and yet are not able to put enough pressure on the big six to cut their prices.
Lawrence Slade, chief executive for Energy UK, said that the big energy firms buy wholesale gas on the futures market, ‘hedging’ or protecting themselves against future price increases. As a result, they do not immediately benefit from lower prices themselves and so are not able to pass any savings onto their clients. When companies can afford to pass their savings on, they do so, he said.
The UK economy grew by 2.6 per cent during 2014, the fastest growth for seven years, rising from 1.7 per cent in 2013.
However, official figures indicate that the pace of growth slowed towards the end of last year. Figures from the Office for National Statistics (ONS), show that the economy increased by 0.5 per cent in the final quarter of 2014, a slowdown of 0.2 per cent on the previous three months.
Economists are unsure if the slowdown is temporary or likely to be prolonged. Chief economist of the ONS, Joe Grice, said that it was too early to be sure if the slowdown is likely to last. Whilst the services sector is strong, construction, mining and energy supply sectors have contracted, he added.
According to chief investment officer at Close Brothers Asset Management, Nancy Curtin however, the figure for the last quarter of 2014 shows that the economy is definitely slowing.
The services sector increased by 0.8 per cent in the fourth quarter but construction contracted by 1.8 per cent. Manufacturing’s performance was its worse since the first quarter of 2013, growing by just 0.1 per cent.
However, Chancellor of the Exchequer, George Osborne, said that the economy was on track and that the figures from the ONS bore this out. He went on to warn that as the international economy is worsening, Britain must continue with its own economic strategy.
Despite the slowdown at the end of the year, the ONS figures show that Britain has one of the strongest performing economies in the world today. The overall economic growth figure for the US is soon to be published and is estimated to be 2.4 per cent.
The International Monetary Fund (IMF) estimates that UK growth for this year, 2015, will be 2.7 per cent.
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Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
